Document:

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                                                                    EXHIBIT 4(h)

                                                                  EXECUTION COPY

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                                CREDIT AGREEMENT

                            Dated as of May 22, 2003

                                      among

                             CMS ENERGY CORPORATION,

                    THE FINANCIAL INSTITUTIONS NAMED HEREIN,

                         UNION BANK OF CALIFORNIA, N.A.
                             as Documentation Agent,

                                       and

                                  BANK ONE, NA,
                             as Administrative Agent

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                         BANC ONE CAPITAL MARKETS, INC.

                          Lead Arranger and Book Runner

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                                TABLE OF CONTENTS

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ARTICLE I
DEFINITIONS.....................................................................................................     2
         1.1      Definitions...................................................................................     2
         1.2      Other Interpretive Provisions.................................................................    17
         1.3      Accounting Terms..............................................................................    17
ARTICLE II
THE ADVANCES....................................................................................................    17
         2.1      Commitment....................................................................................    17
         2.2      Required Payments.............................................................................    18
         2.3      Ratable Loans.................................................................................    18
         2.4      Types of Advances.............................................................................    18
         2.5      Commitment Fee and Reductions of Commitment...................................................    18
         2.6      Minimum Amount of Advances....................................................................    18
         2.7      Optional Principal Payments...................................................................    18
         2.8      Method of Selecting Types and Interest Periods for New Advances...............................    19
         2.9      Conversion and Continuation of Outstanding Advances...........................................    19
         2.10     Interest Rates, Interest Payment Dates........................................................    20
         2.11     Rate after Maturity...........................................................................    20
         2.12     Method of Payment.............................................................................    20
         2.13     Record-keeping; Noteless Agreement; Telephonic Notices........................................    21
         2.14     Lending Installations.........................................................................    22
         2.15     Non-Receipt of Funds by the Agent.............................................................    22
ARTICLE III
LETTER OF CREDIT FACILITY.......................................................................................    22
         3.1      Issuance......................................................................................    22
         3.2      Participations................................................................................    22
         3.3      Notice........................................................................................    23
         3.4      LC Fees.......................................................................................    23
         3.5      Administration; Reimbursement by Banks........................................................    23
         3.6      Reimbursement by Company......................................................................    24
         3.7      Obligations Absolute..........................................................................    24
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         3.8      Actions of LC Issuer..........................................................................    25
         3.9      Indemnification...............................................................................    25
         3.10     Banks' Indemnification........................................................................    25
         3.11     Rights as a Bank..............................................................................    26
ARTICLE IV
CHANGE IN CIRCUMSTANCES.........................................................................................    26
         4.1      Yield Protection..............................................................................    26
         4.2      Replacement Bank..............................................................................    27
         4.3      Availability of Eurodollar Rate Loans.........................................................    27
         4.4      Funding Indemnification.......................................................................    28
         4.5      Taxes.........................................................................................    28
         4.6      Bank Certificates, Survival of Indemnity......................................................    30
ARTICLE V
REPRESENTATIONS AND WARRANTIES..................................................................................    30
         5.1      Incorporation and Good Standing...............................................................    30
         5.2      Corporate Power and Authority: No Conflicts...................................................    30
         5.3      Governmental Approvals........................................................................    31
         5.4      Legally Enforceable Agreements................................................................    31
         5.5      Financial Statements..........................................................................    31
         5.6      Litigation....................................................................................    31
         5.7      Insurance.....................................................................................    32
         5.8      ERISA.........................................................................................    32
         5.9      Casualty......................................................................................    32
         5.10     Taxes.........................................................................................    32
         5.11     Consumers Dividends...........................................................................    32
         5.12     Ownership.....................................................................................    32
         5.13     Solvency......................................................................................    32
         5.14     Investment Company Act........................................................................    32
         5.15     Use of Proceeds...............................................................................    32
         5.16     Public Utility Holding Company Act............................................................    33
         5.17     Material Adverse Change.......................................................................    33
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ARTICLE VI
AFFIRMATIVE COVENANTS...........................................................................................    33
         6.1      Payment of Taxes, Etc.........................................................................    33
         6.2      Maintenance of Insurance......................................................................    33
         6.3      Preservation of Existence, Etc................................................................    33
         6.4      Compliance with Laws, Etc.....................................................................    33
         6.5      Inspection Rights.............................................................................    34
         6.6      Keeping of Books..............................................................................    34
         6.7      Maintenance of Properties, Etc................................................................    34
         6.8      Use of Proceeds...............................................................................    34
         6.9      Consolidated Leverage Ratio...................................................................    34
         6.10     Cash Dividend Coverage Ratio..................................................................    34
         6.11     Pledged Collateral; Further Assurances........................................................    35
ARTICLE VII
NEGATIVE COVENANTS..............................................................................................    35
         7.1      Liens.........................................................................................    35
         7.2      Enterprises Debt..............................................................................    37
         7.3      Lease Obligations.............................................................................    38
         7.4      Investments in Other Persons..................................................................    38
         7.5      Compliance with ERISA.........................................................................    39
         7.6      Transactions With Affiliates..................................................................    39
         7.7      Restricted Payments...........................................................................    39
         7.8      Mergers, Etc..................................................................................    40
         7.9      Sales, Etc., of Assets........................................................................    40
         7.10     Maintenance of Ownership of Subsidiaries......................................................    41
         7.11     Amendment of Tax Sharing Agreement............................................................    41
         7.12     Prepayments of Indebtedness...................................................................    41
         7.13     Conduct of Business...........................................................................    42
         7.14     Organizational Documents......................................................................    42
         7.15     Off-Balance Sheet Liabilities.................................................................    42
ARTICLE VIII
REPORTING REQUIREMENTS..........................................................................................    42
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ARTICLE IX
EVENTS OF DEFAULT...............................................................................................    45
         9.1      Events of Default.............................................................................    45
         9.2      Remedies......................................................................................    47
ARTICLE X
WAIVERS, AMENDMENTS AND REMEDIES................................................................................    48
         10.1     Amendments....................................................................................    48
         10.2     Preservation of Rights........................................................................    48
ARTICLE XI
CONDITIONS PRECEDENT............................................................................................    49
         11.1     Initial Credit Extension......................................................................    49
         11.2     Each Credit Extension.........................................................................    50
ARTICLE XII
GENERAL PROVISIONS..............................................................................................    50
         12.1     Successors and Assigns........................................................................    50
         12.2     Survival of Representations...................................................................    52
         12.3     Governmental Regulation.......................................................................    52
         12.4     Taxes.........................................................................................    52
         12.5     Choice of Law.................................................................................    52
         12.6     Headings......................................................................................    52
         12.7     Entire Agreement..............................................................................    52
         12.8     Expenses; Indemnification.....................................................................    53
         12.9     Severability of Provisions....................................................................    53
         12.10    Setoff........................................................................................    53
         12.11    Ratable Payments..............................................................................    53
         12.12    Nonliability of Bank..........................................................................    54
         12.13    Investment of Pledged Collateral..............................................................    54
ARTICLE XIII
THE AGENT.......................................................................................................    54
         13.1     Appointment...................................................................................    54
         13.2     Powers........................................................................................    54
         13.3     General Immunity..............................................................................    55
         13.4     No Responsibility for Loans, Recitals, Etc....................................................    55
         13.5     Action on Instructions of Banks...............................................................    55
         13.6     Employment of Agents and Counsel..............................................................    55
         13.7     Reliance on Documents; Counsel................................................................    55
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         13.8     Agent's Reimbursement and Indemnification.....................................................    55
         13.9     Rights as a Bank..............................................................................    56
         13.10    Bank Credit Decision..........................................................................    56
         13.11    Successor Agent...............................................................................    56
         13.12    Agent and Arranger Fees.......................................................................    56
ARTICLE XIV
    NOTICES.....................................................................................................    57
         14.1     Giving Notice.................................................................................    57
         14.2     Change of Address.............................................................................    57
ARTICLE XV
COUNTERPARTS....................................................................................................    57
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SCHEDULES

Schedule I          Commitments
Schedule II         Material Liabilities
Schedule III        Existing Letters of Credit

EXHIBITS

Exhibit A           Form of Note
Exhibit B           Required Opinion from Michael D. VanHemert
Exhibit C           Form of Compliance Certificate
Exhibit D           Form of Assignment and Assumption Agreement
Exhibit E           Form of Pledge Agreement
Exhibit F           Form of Issuance/Modification Request
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                                CREDIT AGREEMENT

         This Credit Agreement, dated as of May 22, 2003, is among CMS Energy
Corporation, a Michigan corporation (the "Company"), the financial institutions
listed on the signature pages hereof (together with their respective successors
and assigns, the "Banks"), Union Bank of California, N.A., as Documentation
Agent, and Bank One, NA, a national banking association having its principal
office in Chicago, Illinois, as Administrative Agent and LC Issuer.

                              W I T N E S S E T H:

         WHEREAS, the Company has requested, and the Banks have agreed to enter
into, a credit facility in an aggregate amount of $185,000,000;

         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.

         "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.

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including all directors and officers of such
Person), controlled by, or under direct or indirect common control with such
Person. A Person shall be deemed to control another entity if such Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such entity, whether through the ownership of
voting securities, by contract, or otherwise.

         "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 Credit Agreement.

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         "AIG Pledge Agreement" means the Pledge and Security Agreement, dated
as of January 8, 2003, by and among Enterprises and other grantors parties
thereto in favor of American Home Assurance Company, as collateral agent.

         "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.

         "Arranger" - see Section 13.12.

         "Assignment Agreement" - see Section 12.1(e).

         "Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.

         "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.

         "Borrowing Date" means a date on which Loans are made hereunder.

         "Borrower Interest Expense" means at any date, the total interest
expense in respect of Debt of the Company for the four calendar quarters
immediately preceding such date, including, without duplication, (i) interest
expense attributable to Capital Leases, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) cash and noncash payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under interest rate swap, "cap",
"collar" or other hedging agreements (including amortization of discount) and
(vii) interest expense in respect of obligations of Persons deemed to be Debt of
the Company under clause (ix) of the definition of Debt, provided that Borrower
Interest Expense shall exclude any costs otherwise included in interest expense
recognized on early retirement of debt.

         "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

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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.

         "Cash Dividend Income" means, for any period, the amount of all cash
dividends received by the Company from its Subsidiaries during such period that
are paid out of the net income or loss (without giving effect to: any
extraordinary gains in excess of $25,000,000, the amount of any write-off or
write-down of assets, including write-offs or write-downs related to the sale of
assets, impairment of assets and loss on contracts, in each case in accordance
with GAAP consistently applied, and up to $200,000,000 of other non-cash
write-offs) of such Subsidiaries during such period.

         "Closing Date" means May 22, 2003.

         "CMS 2003 Credit Agreement" means the Second Amended and Restated
Credit Agreement, dated as of March 30, 2003, by and among the Company, as
borrower, the lenders from time to time parties thereto, and CUSA, as
administrative agent.

         "Code" means the Internal Revenue Code of 1986.

         "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 Schedule I
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, for any period for which such rate is to
be calculated, (a) if the average daily Unused Commitment during such period was
$20,000,000 or less, 0.15% per annum, and (b) otherwise, 0.30% per annum.

         "Company" - see the preamble.

         "Consolidated Debt" means, without duplication, as determined on a
consolidated basis in accordance with GAAP, at any date of determination, the
sum of the aggregate Debt of the Company plus the aggregate debt (as such term
is construed in accordance with GAAP) of the Consolidated Subsidiaries; provided
that:

         (a)      Consolidated Debt shall not include any Support Obligation
described in clause (iv) or (v) of the definition thereof if such Support
Obligation or the primary obligation so

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supported is not fixed or conclusively determined or is not otherwise reasonably
quantifiable as of the date of determination;

         (b)      Consolidated Debt shall not include (i) any Junior
Subordinated Debt owned by any Hybrid Preferred Securities Subsidiary or (ii)
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 H to the CMS
2003 Credit Agreement, or pursuant to other terms and conditions satisfactory to
the Majority Banks;

         (c)      for purposes of this definition only, the 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 that shall be considered Consolidated Debt shall be
agreed by the Agent and the Company (and consented to by the Majority Banks) and
shall be based on, among other things, the treatment (if any) given to such
hybrid securities by the rating agencies;

         (d)      with respect to any Support Obligations provided by the
Company in connection with a purchase or sale by MS&T or its Subsidiaries of
natural gas, natural gas liquids, gas condensates, electricity, oil, propane,
coal, any other commodity, weather derivatives or any derivative instrument with
respect to any commodity with any other Person (a "Counterparty"), Consolidated
Debt shall include only the excess, if any, of (A) the aggregate amount of any
Support Obligations provided by the Company in respect of MS&T's or any of its
Subsidiary's obligations under any such purchase or sale transaction (a
"Covering Transaction") entered into by MS&T or any of its Subsidiaries in
connection with such purchase or sale over (B) the aggregate amount of (i) any
Support Obligations provided by the direct or indirect parent company of such
Counterparty (the "Counterparty Guarantor") and (ii) any irrevocable letter of
credit provided by any financial institution for the account of such
Counterparty or Counterparty Guarantor, in each case for the benefit of MS&T or
any of its Subsidiaries in support of such Counterparty's payment obligations to
MS&T or such Subsidiary arising from such purchase or sale, provided that (x)
the senior, unsecured, non-credit enhanced indebtedness of such Counterparty
Guarantor or such financial institution (as the case may be) is rated BBB- (or
its equivalent) or higher by any two of S&P, Fitch and Moody's, provided that in
the event that such Counterparty Guarantor has no such rated indebtedness, Dun &
Bradstreet Inc. has rated such Counterparty Guarantor at least investment grade,
(y) no default by such Counterparty Guarantor in respect of any such Support
Obligations provided by such Counterparty Guarantor has occurred and is
continuing and (z) such Counterparty Guarantor is not the Company or any
Affiliate of the Company or any of its Subsidiaries;

         (e)      Consolidated Debt shall not include any Project Finance Debt
of the Company or any Consolidated Subsidiary; and

         (f)      Consolidated Debt shall not include the principal amount of
any Securitized Bonds.

         "Consolidated EBITDA" means, with reference to any period, the pretax
operating income of the Company and its Subsidiaries ("Pretax Operating Income")
for such period plus,

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to the extent deducted in determining Pretax Operating Income (without
duplication), (i) depreciation, depletion and amortization, and (ii) any
non-cash write-offs and write-downs contained in the Company's Pretax Operating
Income, including write-offs or write-downs related to the sale of assets,
impairment of assets and loss on contracts, in each case in accordance with GAAP
consistently applied, all calculated for the Company and its Subsidiaries on a
consolidate basis for such period; provided that Consolidated EBITDA shall not
include any operating income attributable to that portion of the revenues of
Consumers dedicated to the repayment of the Securitized Bonds.

          "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,
any Note, the Pledge Agreement and any account control agreement or similar
document issued in connection with the Pledge Agreement.

         "Credit Extension" means the making of an Advance or the issuance or
Modification (other than a reduction in the amount) of a Facility LC.

         "Consumers" means Consumers Energy Company, a Michigan corporation, all
of whose common stock is on the Closing Date owned by the Company.

         "Consumers Credit Facility" means, collectively, Consumers' existing
(i) $300,000,000 term loan facility, (ii) $150,000,000 term loan B facility,
(iii) $140,000,000 term loan facility and (iv) $250,000,000 revolving loan
facility, as in effect on the date hereof.

         "Consumers Dividend Restriction" means any restriction enacted or
imposed after October 1, 1992 upon the ability of Consumers to pay cash
dividends to the Company in respect of Consumers' capital stock, whether such
restriction is imposed by statute, regulation, decisions or rulings by the
Michigan Public Service Commission or the Federal Energy Regulatory Commission
(or any successor agency or agencies), final judgments of any court of competent
jurisdiction, indentures, agreements, contracts or ,restrictions to which
Consumers is a party or by which it is bound or otherwise; provided that no
restriction on such dividends existing on October 1, 1992 shall be a Consumers
Dividend Restriction at any time.

         "CUSA" means Citicorp USA, Inc.

         "Debt" means, for any Person, without duplication, any and all
indebtedness, liabilities and other monetary obligations of such Person (whether
for principal, interest, fees, costs, expenses or otherwise, and whether
contingent or otherwise) (i) for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments, (ii) to pay the deferred
purchase price of property or services (except trade accounts payable arising in
the ordinary course of business which are not overdue), (iii) as lessee under
leases which shall have been or should be, in accordance with GAAP, recorded as
capital leases, (iv) under reimbursement or similar agreements with respect to
letters of credit issued thereunder (except reimbursement obligations and
letters of credit that are cash collateralized), (v) under any interest rate
swap, "cap", "collar" or other hedging agreements; provided that for purposes of
the calculation of Debt for this clause (v) only, the actual amount of Debt of
such Person shall be determined on a

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net basis to the extent such agreements permit such amounts to be calculated on
a net basis, (vi) to pay rent or other amounts under leases entered into in
connection with sale and leaseback transactions involving assets of such Person
being sold in connection therewith, (vii) arising from any accumulated funding
deficiency (as defined in Section 412(a) of the Code) for a Plan, (viii) arising
in connection with any withdrawal liability under ERISA to any Multiemployer
Plan and (ix) arising from (A) direct or indirect guaranties in respect of, and
obligations to purchase or otherwise acquire, or otherwise to warrant or hold
harmless, pursuant to a legally binding agreement, a creditor against loss in
respect of, Debt of others referred to in clauses (i) through (viii) above and
(B) other guaranty or similar financial obligations in respect of the
performance of others, including Support Obligations. Notwithstanding the
foregoing, solely for purposes of the calculation required under Section 6.10,
Debt shall not include any Junior Subordinated Debt issued by the Company and
owned by any Hybrid Preferred Securities Subsidiary.

         "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.

         "Dividend Coverage Ratio" means, at any date, the ratio of (i) Pro
Forma Dividend Amounts to (ii) Borrower Interest Expense.

         "Effective Date" means the date on which all conditions precedent to
the initial Credit Extension have been satisfied.

         "Enterprises" means CMS Enterprises Company, a Michigan corporation,
all of whose common stock is on the Closing Date owned by the Company.

         "Enterprises 2003 Credit Agreement" means, collectively, (i) the
revolving Credit Agreement, dated as of March 30, 2003, by and among
Enterprises, as borrower, the Company, the lenders from time to time parties
thereto and CUSA, as administrative agent, and (ii) the revolving Credit
Agreement, dated as of April 21, 2003, by and among Enterprises, as borrower,
the Company, the lenders from time to time parties thereto and CUSA, as
administrative agent.

         "Equity Distributions" means, for any period, the aggregate amount of
cash received by the Company from its Subsidiaries during such period that are
paid out of proceeds from the sale of common equity of Subsidiaries of the
Company.

         "ERISA" means the Employee Retirement Income Security Act of 1974.

         "ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of a commonly controlled
trade or business under Sections 414(b), (c), (m) and (o) of the Code.

         "Eurodollar Advance" means an Advance consisting of Eurodollar Rate
Loans.

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         "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) 1.50%.

         "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.

         "Exchange Act" means the Securities Exchange Act of 1934.

         "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.

         "Existing Letters of Credit" means the letters of credit listed on
Schedule III.

         "Facility LC" - see Section 3.1.

         "Facility LC Application" - see Section 3.3.

         "Fair Market Value" means, with respect to any asset, the value of the
consideration obtainable in a sale of such asset in the open market, assuming a
sale by a willing seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of time, each having
reasonable knowledge of the nature and characteristics of such asset, neither
being under any compulsion to act, and, if in excess of $50,000,000, as
determined in good faith by the Board of Directors of the Company.

         "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 day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

         "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 0.50%, changing when and as the Alternate Base Rate changes.

         "Floating Rate Advance" means an Advance consisting of Floating Rate
Loans.

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<PAGE>

         "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" - see Section 1.3.

         "Governmental Approval" means any authorization, consent, approval,
license, permit, certificate, exemption of, or filing or registration with, any
governmental authority or other legal or regulatory body, required in connection
with (i) the execution, delivery, or performance of any Credit Document by the
Company, (ii) the grant and perfection of any Lien in favor of the Agent
contemplated by the Credit Documents, or (iii) the exercise by any Agent (on
behalf of the Banks) of any right or remedy provided for under the Credit
Documents.

         "Hazardous Substance" means any waste, substance, or material
identified as hazardous, dangerous or toxic by any office, agency, department,
commission, board, bureau, or instrumentality of the United States or of the
State or locality in which the same is located having or exercising jurisdiction
over such waste, substance or material.

         "Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics:

         (i)      such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such preferred securities
to the Company or a wholly-owned direct or indirect Subsidiary of the Company in
exchange for Junior Subordinated Debt issued by the Company or such wholly-owned
direct or indirect Subsidiary, respectively;

         (ii)     such preferred securities contain terms providing for the
deferral of interest payments corresponding to provisions providing for the
deferral of interest payments on the Junior Subordinated Debt; and

         (iii)    the Company or a wholly-owned direct or indirect Subsidiary of
the Company (as the case may be) makes periodic interest payments on the Junior
Subordinated Debt, which interest payments are in turn used by the Hybrid
Preferred Securities Subsidiary to make corresponding payments to the holders of
the preferred securities.

         "Hybrid Preferred Securities Subsidiary" means any Delaware business
trust (or similar entity) (i) all of the common equity interest of which is
owned (either directly or indirectly through one or more wholly-owned
Subsidiaries of the Company) at all times by the Company or a wholly-owned
direct or indirect Subsidiary of the Company, (ii) that has been formed for the
purpose of issuing Hybrid Preferred Securities and (iii) substantially all of
the assets of which consist at all times solely of Junior Subordinated Debt
issued by the Company or a wholly-owned direct or indirect Subsidiary of the
Company (as the case may be) and payments made from time to time on such Junior
Subordinated Debt.

         "Indenture" means the Indenture, dated as of September 15, 1992,
between the Company and the Trustee (as such term is defined in the Indenture).

                                        9
<PAGE>

         "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 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 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.

         "Issuance/Modification Request" - see Section 3.3.

         "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 G to the CMS 2003 Credit
Agreement, 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.

         "Lien" is defined in Section 7.1.

         "Loan" - see Section 2.1.

         "Loan Party" has the meaning assigned thereto in the CMS 2003 Credit
Agreement as in effect on the date hereof and without giving effect to any
amendment thereto (unless the same shall be consented to in a writing signed by
the Majority Banks) or termination thereof.

         "Majority Banks" means, as of any date of determination, Banks in the
aggregate having more than 50% of the Aggregate Commitment as of such date or,
if the Aggregate Commitment has been terminated, Banks in the aggregate holding
more than 50% of the aggregate unpaid principal amount of the Aggregate
Outstanding Credit Exposure as of such date. Any

                                       10
<PAGE>

determination of those Banks constituting Majority Banks shall be made by the
Agent and shall be conclusive and binding on all parties absent manifest error.

         "Material Adverse Change" means any event, development or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, property, financial condition, results of
operations or prospects of the Company and its Subsidiaries, considered as a
whole, (b) the Company's ability to perform its obligations under this Agreement
or any other Credit Document to which it is or will be a party or (c) the
validity or enforceability of any Credit Document or the rights or remedies of
any Agent or the Banks hereunder.

         "Material Subsidiary" means Consumers and each Restricted Subsidiary.

         "Measurement Quarter" - see Section 6.9.

         "Modify" and "Modification" - see Section 3.1.

         "Moody's" means Moody's Investors Service, Inc. or any successor
thereto.

         "MS&T" means CMS Marketing, Services and Trading Company, a Michigan
corporation, all of whose capital stock is on the Closing Date owned by
Enterprises.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA.

         "Net Proceeds" means, with respect to any sale, assignment or other
disposition of (but not a lease or license of) any property, or with respect to
any sale or issuance of securities or incurrence of Debt, by any Person, gross
cash proceeds received by such Person or any Subsidiary of such Person from such
sale, assignment, disposition, issuance or incurrence (including cash received
as consideration for the assumption or incurrence of liabilities incurred in
connection with or in anticipation of such transaction) after (i) provision for
all income or other taxes measured by or resulting from such transaction, (ii)
payment of all 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 with such transaction, (iii) all
amounts used to repay Debt (and any premium or penalty thereon) secured by a
Lien on any asset disposed of in such sale, assignment or other disposition or
which is or may be required (by the express terms of the instrument governing
such Debt or by applicable law) to be repaid in connection with such sale,
assignment, or other disposition, and (iv) deduction of appropriate amounts to
be provided by such Person or a Subsidiary of such Person as a reserve, in
accordance with GAAP consistently applied, against any liabilities associated
with the assets sold, transferred or disposed of in such transaction and
retained by such Person or Subsidiary of such Person after such transaction,
provided that "Net Proceeds" shall include on a dollar-for-dollar basis all
amounts remaining in such reserve after such liability shall have been satisfied
in full or terminated; and provided, further, that notwithstanding the
foregoing, "Net Proceeds" shall exclude (a) any amounts received or deemed to be
received by the Company for the purchase of the Company's capital stock in
connection with the Company's dividend reinvestment program and (b) amounts
received by the Company or any Subsidiary of the

                                       11
<PAGE>

Company pursuant to any transaction with the Company or any Subsidiary of the
Company otherwise permitted hereunder.

         "Net Worth" means, with respect to any Person, the excess of such
Person's total assets over its total liabilities, total assets and total
liabilities each to be determined in accordance with GAAP consistently applied,
excluding, however, from the determination of total assets (i) goodwill,
organizational expenses, research and development expenses, trademarks, trade
names, copyrights, patents, patent applications, licenses and rights in any
thereof, and other similar intangibles, (ii) cash held in a sinking or other
analogous fund established for the purpose of redemption, retirement or
prepayment of capital stock or Debt, and (iii) any items not included in clauses
(i) or (ii) above, that are treated as intangibles in conformity with GAAP.

         "Non-U.S. Bank" - see Section 4.5(d).

         "Note" means any promissory note issued at the request of a Bank
pursuant to Section 2.13 to evidence its Loans.

         "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.

         "OECD" means the Organization for Economic Cooperation and Development.

         "Off-Balance Sheet Liability" of a Person shall mean any of the
following obligations of appearing on such Person's consolidated balance sheet:
(i) all lease obligations, leveraged leases, sale and leasebacks and other
similar lease arrangements of such Person (ii) any liability under any so called
"synthetic lease" or "tax ownership operating lease" transaction entered into by
such Person, and (iii) any obligation arising with respect to any other
transaction if and to the extent that such obligation is the functional
equivalent of borrowing but that does not constitute a liability on the
consolidated balance sheet of such Person.

         "Operating Lease" of a Person means any lease of Property (other than a
Capital Lease) by such Person as lessee.

         "Other Taxes" - see Section 4.5(b).

         "Outstanding 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.

         "Ownership Interest" of the Company in any Consolidated Subsidiary
means, at any date of determination, the percentage determined by dividing (i)
the aggregate amount of Project Finance Equity in such Consolidated Subsidiary
owned or controlled, directly or indirectly, by the Company and any other
Consolidated Subsidiary on such date, by (ii) the aggregate amount of Project
Finance Equity in such Consolidated Subsidiary owned or controlled, directly or
indirectly, by all Persons (including the Company and the Consolidated
Subsidiaries) on such

                                       12
<PAGE>

date. Notwithstanding anything to the contrary set forth above, if the
"Ownership Interest," calculated as set forth above, is 50% or less, such
percentage shall be deemed to equal 0%.

         "Panhandle" means Panhandle Eastern Pipe Line Company, a Delaware
corporation, all of whose capital stock is on the Closing Date owned indirectly
by Enterprises.

         "Payment Date" means the second Business Day of each calendar quarter.

         "PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.

         "Permitted Investments" means each of the following so long as no such
Permitted Investment shall have a final maturity later than six months from the
date of investment therein:

                  (i)      direct obligations of the United States, or of any
         agency thereof, or obligations guaranteed as to principal and interest
         by the United States or any agency thereof;

                  (ii)     certificates of deposit or bankers' acceptances
         issued, or time deposits held, or investment contracts guaranteed, by
         any Bank, any nationally-recognized securities dealer or any other
         commercial bank, trust company, savings and loan association or savings
         bank organized under the laws of the United States, or any State
         thereof, or of any other country which is a member of the OECD, or a
         political subdivision of any such country, and in each case having
         outstanding unsecured indebtedness that (on the date of acquisition
         thereof) is rated AA- or better by S&P or Aa3 or better by Moody's (or
         an equivalent rating by another nationally-recognized credit rating
         agency of similar standing if neither of such corporations is then in
         the business of rating unsecured bank indebtedness);

                  (iii)    obligations with any Bank, any other bank or trust
         company described in clause (ii), above, or any nationally-recognized
         securities dealer, in respect of the repurchase of obligations of the
         type described in clause (i), above, provided that such repurchase
         obligations shall be fully secured by obligations of the type described
         in said clause (i) and the possession of such obligations shall be
         transferred to, and segregated from other obligations owned by, such
         Bank, such other bank or trust company or such securities dealer;

                  (iv)     commercial paper rated (on the date of acquisition
         thereof) A-1 or P-1 or better by S&P or Moody's, respectively (or an
         equivalent rating by another nationally-recognized credit rating agency
         of similar standing if neither of such corporations is then in the
         business of rating commercial paper);

                  (v)      any eurodollar certificate of deposit issued by any
         Bank or any other commercial bank, trust company, savings and loan
         association or savings bank organized under the laws of the United
         States, or any State thereof, or of any county which is a member of the
         OECD, or a political subdivision of any such county, and in each case
         having outstanding unsecured indebtedness that (on the date of
         acquisition thereof) is rated AA- or better by S&P or Aa3 or better by
         Moody's (or an equivalent rating by

                                       13
<PAGE>

         another nationally-recognized credit rating agency of similar standing
         if neither of such corporations is then in the business of rating
         unsecured bank indebtedness); and

                  (vi)     interests in any money market mutual fund which at
         the date of investment in such fund has the highest fund rating by each
         of Moody's and S&P which has issued a rating for such fund (which, for
         S&P, shall mean a rating of AAAm or AAAmg).

         "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, with respect to any Person, an "employee benefit plan" as
defined in Section 3(3) of ERISA (other than a Multiemployer Plan) maintained
for employees of such Person or any ERISA Affiliate of such Person that is
subject to Title IV of ERISA and has "unfunded benefit liabilities" as
determined under Section 4001(a)(18) of ERISA.

         "Plan Termination Event" means, (i) with respect to any Plan, a
"reportable event" within the meaning of 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 a
"reportable event" for which the provision for the 30-day notice to the PBGC
under such regulations has been waived), or (ii) the withdrawal by 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 resulting in
liability to the Company or any of its ERISA Affiliates under Section 4063 or
4064 of ERISA, or (iii) the filing of a notice of intent to terminate a Plan or
the termination of a Plan under Section 4041 of ERISA, or (iv) the institution
of proceedings to terminate a Plan by the PBGC, or (v) any other event or
condition which is reasonably likely to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.

         "Pledge Agreement" means a Pledge Agreement executed by Enterprises in
favor of the Agent on behalf of the Banks, substantially in the form of Exhibit
E.

         "Pledged Collateral" means cash and other investment property in which
a security interest has been granted to the Agent pursuant to the Pledge
Agreement.

         "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.

         "Pro Forma Dividend Amount" means, from and after any date of any
Consumers Dividend Restriction, the sum of (a) the aggregate amount which
Consumers could have paid to the Company during the four calendar quarters
immediately preceding such date had such Consumers Dividend Restriction been in
effect during such quarters plus (b) cash dividends received by the Company from
any other Subsidiary during such quarters.

         "Project Finance Debt" means Debt of any Person that is non-recourse to
such Person (unless such Person is a special-purpose entity) and each Affiliate
of such Person, other than with respect to the interest of the holder of such
Debt in the collateral, if any, securing such Debt.

                                       14
<PAGE>

         "Project Finance Equity" means, at any date of determination,
consolidated equity of the common, preference and preferred stockholders of the
Company and the Consolidated Subsidiaries relating to any obligor with respect
to Project Finance Debt.

         "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.

         "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.

         "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 of the FRB on
Eurocurrency liabilities.

         "Restricted Subsidiary" means (i) Enterprises and (ii) any other
Subsidiary of the Company (other than Consumers and its Subsidiaries) that, on a
consolidated basis with any of its Subsidiaries as of any date of determination,
accounts for more than 10% of the consolidated assets of the Company and its
Consolidated Subsidiaries.

         "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.

         "Securitized Bonds" means any nonrecourse bonds or similar asset-backed
securities issued by a special-purpose subsidiary of Consumers 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
qualified costs.

         "Single Employer Plan" means a Plan maintained by the Company or any
ERISA Affiliate for employees of the Company or any ERISA Affiliate.

         "6.75% Senior Notes" means the Company's 6.75% Senior Notes due January
2004, the aggregate outstanding principal amount of which was equal to
$287,025,000 as of February 8, 2003.

         "Solvent" means, when used with respect to any Person, that at the time
of determination:

                  (i)      the fair market value of its assets is in excess of
         the total amount of its liabilities (including net contingent
         liabilities); and

                                       15
<PAGE>

                  (ii)     it is then able and expects to be able to pay its
         debts (including contingent debts and other commitments) as they
         mature; and

                  (iii)    it has capital sufficient to carry on its business as
         conducted and as proposed to be conducted.

For purposes of this definition, the amount of contingent liabilities at any
time shall be computed as amount that, in light of all the facts and
circumstances known to such Person at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.

         "Subsidiary" means, with respect to any Person, any corporation or
unincorporated entity of which more than 50% of the outstanding capital stock
(or comparable interest) having ordinary voting power (irrespective of whether
at the time capital stock (or comparable interest) of any other class or classes
of such corporation or entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
said Person (whether directly or through one or more other Subsidiaries). In the
case of an unincorporated entity, a Person shall be deemed to have more than 50%
of interests having ordinary voting power only if such Person's vote in respect
of such interests comprises more than 50% of the total voting power of all such
interests in the unincorporated entity.

         "Support Obligations" means, for any Person, without duplication, any
financial obligation, contingent or otherwise, of such Person guaranteeing or
otherwise supporting any Debt or other obligation of any other Person in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect (including letters of credit and surety bonds in
connection therewith), (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or to purchase (or advance or supply funds
for the purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the owner of such
Debt of the payment of such Debt, (iii) to maintain working capital, equity
capital, available cash or other financial statement condition of the primary
obligor so as to enable the primary obligor to pay such Debt, (iv) to provide
equity capital under or in respect of equity subscription arrangements (to the
extent that such obligation to provide equity capital does not otherwise
constitute Debt), or (v) to perform, or arrange for the performance of, any
non-monetary obligations or non-funded debt payment obligations of the primary
obligor.

         "Tax Sharing Agreement" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated as of January 1,
1994, by and among the Company, each of the members of the Consolidated Group
(as defined therein), and each of the corporations that become members of the
Consolidated Group.

         "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.

          "Termination Date" means the earlier of (i) May 21, 2004 or (ii) the
date on which the Commitments are terminated.

         "Type" - see Section 2.4.

                                       16
<PAGE>

         "Unused Commitment" means, at any time, the Aggregate Commitment then
in effect minus the Aggregate Outstanding Credit Exposure at such time.

         1.2      Other Interpretive Provisions. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of such terms.

         (b)      Article, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

         (c)      The term "including" is not limiting and means "including
without limitation."

         (d)      Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Credit Document, and (ii) references to any statute or
regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such statute or regulation.

         1.3      Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 5.5 ("GAAP"). If any changes in
generally accepted accounting principles are hereafter required or permitted and
are adopted by the Company or any of its Subsidiaries, or the Company or any of
its Subsidiaries shall change its application of generally accepted accounting
principles with respect to any Off-Balance Sheet Liabilities, in each case, with
the agreement of its independent certified public accountants, and such changes
result in a change in the method of calculation of any of the financial
covenants, tests, restrictions or standards herein or in the related definitions
or terms used therein ("Accounting Changes"), the parties hereto agree, at the
Company's request, to enter into negotiations, in good faith, in order to amend
such 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 that until such provisions are
amended in a manner reasonably satisfactory to the Agent 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.
Notwithstanding the foregoing, all financial statements to be delivered by the
Company pursuant to Article VIII shall be prepared in accordance with generally
accepted accounting principles in effect at such time.

                                   ARTICLE II

                                  THE ADVANCES

         2.1      Commitment. From and including the Effective 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

                                       17
<PAGE>

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 Aggregate 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. 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 Closing
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 a minimum amount of $5,000,000 (or
any higher integral multiple of $1,000,000), 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.

         2.6      Minimum Amount of Advances. Each Advance shall be in the
amount of $5,000,000 (or a higher integral multiple of $1,000,000), 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 an aggregate amount of $5,000,000 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 an aggregate amount of $5,000,000 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

                                       18
<PAGE>

that if after giving effect to any such prepayment the principal amount of any
Eurodollar Advance is less than $5,000,000, such Eurodollar Advance shall
automatically convert into a Floating Rate Advance.

         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 for 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.

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

                                       19
<PAGE>

         (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.

provided that no Advance may be continued as, or converted into, a Eurodollar
Advance if (x) such continuation or conversion would violate any provision of
this Agreement or (y) a Default or Event of Default exists.

         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 or any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Floating Rate.

         (b)      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
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 (unless, in the case of a Eurodollar Advance,
such next succeeding Business Day falls in a new calendar month, in which case
such payment shall be due on the immediately preceding 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

                                       20
<PAGE>

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     Record-keeping; Noteless Agreement; Telephonic Notices.

         (a)      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.

         (b)      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 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.

         (c)      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 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.

         (d)      Any Bank may request that its Loans be evidenced by a Note. In
such event, the Company shall prepare, execute and deliver to such Bank a Note,
payable to the order of such Bank, substantially in the form of Exhibit A.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.1) be represented
by a Note payable to the order of the payee named therein or any assignee
pursuant to Section 12.1, except to the extent that any such Bank or assignee
subsequently returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in paragraphs (a) and (b) above.

         (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.

                                       21

<PAGE>

         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.

                                   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 (together with the Existing Letters of Credit, collectively the
"Facility LCs" and individually 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 Closing Date
and prior to the Termination Date upon the request of the Company; provided that
(a) unless otherwise agreed by all Banks, each Facility LC shall be issued to
support obligations of Enterprises or a Subsidiary of Enterprises; and (b)
immediately after each Facility LC is issued or Modified, the Aggregate
Outstanding Credit Exposure shall not exceed the Aggregate Commitment. Unless
otherwise agreed by all Banks in writing, no Facility LC shall have an expiry
date later than the fifth Business Day prior to the scheduled Termination Date
(and the Banks hereby agree that Irrevocable Standby Letter of Credit No. 331042
dated March 11, 2003 in the face amount of $2,026,689 issued by Bank One in
favor of Consumers Energy Company shall qualify as a Facility LC notwithstanding
the June 9, 2004 expiry date thereof). All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto and, from and after the Closing Date,
shall be subject to and governed by the terms and conditions hereof.

         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

                                       22

<PAGE>

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 a notice substantially in the form of Exhibit F (an
"Issuance/Modification Request") prior to 11:00 a.m. (Chicago time) at least
three Business Days prior to the proposed date of issuance or Modification of
any Facility LC, specifying (a) in the case of the issuance of a Facility LC,
the beneficiary, the stated amount, the proposed date of issuance and the expiry
date of such Facility LC, and describing conditions under which such Facility LC
may be drawn; (b) in the case of the Modification of a Facility LC, the
requested date of modification, the Facility LC to be modified and the terms of
such Modification; and (c) in each case, such other information as the LC Issuer
may reasonably request. 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 (the "LC Fee") at 0.30% per annum on the average daily
undrawn stated amount under each Facility LC, such fee to be payable in arrears
on each Payment Date and the Termination Date (and, if applicable, thereafter on
demand). The Company shall also pay to the LC Issuer for its own account the
fees and charges set forth in the fee letter referred to in Section 13.12.

         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

                                       23

<PAGE>

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
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.

         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

                                       24

<PAGE>

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 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
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

                                       25

<PAGE>

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 any reserve
costs under Regulation D of the FRB with respect to Eurocurrency liabilities (as
defined in such Regulation D)), or

         (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

                                       26

<PAGE>

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.

         (b)      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 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

                                       27

<PAGE>

         (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 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 Note or any 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 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 Note or any Facility LC Application or from the execution or delivery of, or
otherwise with respect to, this Agreement or any Note 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 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 Closing Date, or, if later,
not more than ten Business Days after becoming a Bank

                                       28

<PAGE>

hereunder, (i) deliver to each of the Company and the Agent two 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 any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form or amendment
with respect to it and such Bank advises the Company and the Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.

         (e)      For any period during which a Non-U.S. Bank has failed to
provide the Company with an appropriate form pursuant to clause (d), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Bank shall not be entitled to
indemnification under this Section 4.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Bank which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (d) above, the
Company shall take such steps as such Non-U.S. Bank shall reasonably request to
assist such Non-U.S. Bank to recover such Taxes.

         (f)      Any Bank that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement 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

                                       29

<PAGE>

(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:

         5.1      Incorporation and Good Standing. Each of the Company and each
Material Subsidiary is duly organized, validly existing and in good standing
under the laws of the state of its organization and is duly qualified to do
business in, and is in good standing in, all other jurisdictions where the
nature of its business or the nature of property owned or used by it makes such
qualification necessary.

         5.2      Corporate Power and Authority: No Conflicts. The execution,
delivery and performance by the Company and Enterprises of each Credit Document
to which it is or will be a party (i) are within the corporate powers of the
Company and Enterprises, (ii) have been duly authorized by all necessary
corporate or other organizational action or proceedings on the part of the
Company and Enterprises and (iii) do not and will not (A) require any consent or
approval of the stockholders (or other applicable holder of equity) of the
Company or Enterprises (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 of the Company or Enterprises or of law, (C) violate any
legal restriction binding on or affecting the Company or Enterprises, (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 Company or
Enterprises is a party or by which it is or its properties may be bound or
affected, or (E) result in or require the creation of any Lien (other than any
Lien in favor of the Agent) upon or with respect to any of the properties of the
Company or Enterprises.

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<PAGE>

         5.3      Governmental Approvals. No Governmental Approval is required
for the due execution, delivery and performance by the Company or Enterprises of
any Credit Document to which it is or will be a party, other than filings
necessary to perfect security interests in the Pledged Collateral.

         5.4      Legally Enforceable Agreements. Each Credit Document to which
the Company or Enterprises is a party constitutes a legal, valid and binding
obligation of such entity, enforceable against such entity 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. (i) The consolidated balance sheet of
the Company and its Consolidated Subsidiaries as at December 31, 2002, and the
related consolidated statements of income, retained earnings and cash flows of
the Company and its Consolidated Subsidiaries for the fiscal year then ended,
included in the Company's Annual Report on Form 10-K for the fiscal year ended
December 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 date and the results of operations of the Company and its
Consolidated Subsidiaries for the fiscal year ended on such date, all in
accordance with generally accepted accounting principles consistently applied;
(ii) the consolidated balance sheet of Consumers and its consolidated
Subsidiaries as at December 31, 2002, and the related consolidated statements of
income, retained earnings and cash flows of Consumers and its consolidated
Subsidiaries for the fiscal year then ended, included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, copies of each
of which have been furnished to each Bank, fairly present the financial
condition of Consumers and its consolidated Subsidiaries as at such date and the
results of operations of Consumers and its consolidated Subsidiaries for the
period ended on such date, all in accordance with generally accepted accounting
principles consistently applied; (iii) since December 31, 2002, there has been
no Material Adverse Change; and (iv) the Company has no material liabilities or
obligations except as reflected in the foregoing financial statements and in
Schedule II, as evidenced by the Credit Documents and as may be incurred, in
accordance with the terms of this Agreement, in the ordinary course of business
(as presently conducted) following the Closing Date.

         5.6      Litigation. Except (i) as disclosed in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, 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
Annual Report filed with the SEC set forth in clause (i) above (all such matters
in clauses (i) and (ii), the "Disclosed Matters"), there are no pending or
threatened actions, suits or proceedings against or, to the knowledge of the
Company, affecting the Company or any of its Subsidiaries or the properties of
the Company or any of its Subsidiaries before any court, governmental agency or
arbitrator, that would, if adversely determined, reasonably be expected to
materially adversely affect the financial condition, properties, business or
operations of the Company and its Subsidiaries, considered as a whole, or affect
the legality, validity or enforceability of this Agreement or any other Credit
Document. There have been no adverse developments with respect to the Disclosed
Matters that have had or could reasonably be expected to result in a Material
Adverse Change.

                                       31

<PAGE>

         5.7      Insurance. All insurance required by Section 6.2 is in full
force and effect.

         5.8      ERISA. No Plan Termination Event has occurred or is reasonably
expected to occur with respect to any Plan of the Company or any of its ERISA
Affiliates which would result in a material liability to the Company, except as
disclosed and consented to by the Majority Banks in writing from time to time.
Except as disclosed in the Company's Annual Report on Form 10-K for the period
ended December 31, 2002, since the date of the most recent Schedule B (Actuarial
Information) to the annual report of the Company (Form 5500 Series), if any,
there has been no material adverse change in the funding status of the Plans
referred therein and no "prohibited transaction" has occurred with respect
thereto which is reasonably expected to result in a material liability to the
Company. Neither the Company nor any of its ERISA Affiliates has incurred nor
reasonably expects to incur any material withdrawal liability under ERISA to any
Multiemployer Plan, except as disclosed and consented to by the Majority Banks
in writing from time to time.

         5.9      Casualty. No fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (except for any such circumstance, if any,
which is covered by insurance which coverage has been confirmed and not disputed
by the relevant insurer) affecting the properties, business or operations of the
Company or any Material Subsidiary has occurred that could reasonably be
expected to have a material adverse effect on the business, assets, property,
financial condition, results of operations or prospects of (A) the Company and
its Subsidiaries, considered as a whole, or (B) Consumers and its Subsidiaries,
considered as a whole.

         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     Consumers Dividends. No extraordinary judicial, regulatory or
other legal constraints exist which limit or restrict Consumers' ability to
declare or pay cash dividends with respect to its capital stock, other than
pursuant to the Consumers Credit Facility.

         5.12     Ownership. The Company owns not less than 80% of the
outstanding shares of common stock of (i) Enterprises and (ii) Consumers.

         5.13     Solvency. After giving effect to each Credit Extension (and,
in the case of Loans, the disbursement of the proceeds of such Loans pursuant to
the Company's instructions), the Company and its Subsidiaries, taken as a whole,
are Solvent.

         5.14     Investment Company Act. The Company is not an investment
company (within the meaning of the Investment Company Act of 1940).

         5.15     Use of Proceeds. (a) No proceeds of any Credit Extension will
be used to acquire any security in any transaction without the approval of the
board of directors of the Person issuing such security if (i) the acquisition of
such security would cause the Company to

                                       32

<PAGE>

own, directly or indirectly, 5.0% or more of any outstanding class of securities
issued by such Person, or (ii) such security is being acquired in connection
with a tender offer.

         (a)      After giving effect to each Credit Extension, not more than
25% of the value of the assets of the Company and its Subsidiaries on a
consolidated basis will be margin stock (as defined in Regulation U of the FRB).

         5.16     Public Utility Holding Company Act. The Company is not a
registered "holding company" or a "subsidiary" or an "affiliate" of a registered
"holding company," as such terms are defined in the Public Utility Holding
Company Act of 1935.

         5.17     Material Adverse Change. The Company has not withheld any fact
from the Agent or the Banks in regard to the occurrence of any Material Adverse
Change.

                                   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, and each of its
Subsidiaries shall pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges, royalties or levies imposed
upon it or upon its property except, in the case of taxes, to the extent the
Company or any Subsidiary, as the case may be, is contesting the same in good
faith and by appropriate proceedings and has set aside adequate reserves for the
payment thereof in accordance with GAAP.

         6.2      Maintenance of Insurance. Maintain, and each of its Material
Subsidiaries shall maintain, insurance covering their respective properties in
effect at all times in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general geographical area in which the Company and its Material
Subsidiaries operates, either with reputable insurance companies or, in whole or
in part, by establishing reserves of one or more insurance funds, either alone
or with other corporations or associations.

         6.3      Preservation of Existence, Etc. Except as otherwise permitted
by Article VII, the Company shall preserve and maintain, and each Material
Subsidiary shall preserve and maintain, its corporate or limited liability
company existence, material rights (statutory and otherwise) and franchises, and
take such other action as may be necessary or advisable to preserve and maintain
its right to conduct its business in the states where it shall be conducting its
business.

         6.4      Compliance with Laws, Etc. Comply, and each Material
Subsidiary shall comply, in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any governmental authority,
including any such laws, rules, regulations and orders relating to zoning,
environmental protection, use and disposal of Hazardous Substances, land use,
construction and building restrictions, and employee safety and health matters
relating to business operations.

                                       33

<PAGE>

         6.5      Inspection Rights. Subject to the requirements of laws or
regulations applicable to the Company or its Subsidiaries, as the case may be,
and in effect at the time, at any time and from time to time upon reasonable
notice, the Company shall permit (i) the Agent and its agents and
representatives to examine and make copies of and abstracts from the records and
books of account of and the properties of, the Company or any of its
Subsidiaries and (ii) the Agent, each of the Banks, and their respective agents
and representatives to discuss the affairs, finances and accounts of the Company
and its Subsidiaries with the Company and its Subsidiaries and their respective
officers, directors and accountants. Each such visitation and inspection
described in the preceding sentence by or on behalf of any Bank shall, unless
occurring at a time when a Default or Event of Default shall be continuing, be
at such Bank's expense; all other such inspections and visitations shall be at
the Company's expense.

         6.6      Keeping of Books. From and after December 31, 2002, the
Company shall keep, and each of its Subsidiaries shall keep, proper records and
books of account, in which full and correct entries shall be made of all
financial transactions of, and of the assets and business of the Company and its
Subsidiaries, in each case sufficient to prepare financial statements in
accordance with GAAP.

         6.7      Maintenance of Properties, Etc. The Company shall maintain,
and each of its Restricted Subsidiaries shall maintain, in substantial
conformity with all laws and material contractual obligations, good and
marketable title to all of its properties which are used or useful in the
conduct of its business; provided that the foregoing shall not restrict the sale
of any asset of the Company or any Restricted Subsidiary to the extent not
prohibited by Section 7.9. In addition, the Company shall preserve, maintain,
develop and operate, in substantial conformity with all laws and material
contractual obligations, all of its material properties which are used or useful
in the conduct of its business in good working order and condition, ordinary
wear and tear excepted.

         6.8      Use of Proceeds. The Company shall use each Loan solely for
purposes of making loans or advances to, or capital contributions in, or
otherwise for the benefit of, Enterprises or any Subsidiary thereof; and the
Company shall request the issuance of Facility LCs solely for purposes of
supporting obligations of Enterprises or any Subsidiary thereof.

         6.9      Consolidated Leverage Ratio. The Company shall maintain, as of
the last day of each fiscal quarter (in each case, the "Measurement Quarter"), a
maximum ratio of (i) Consolidated Debt for the immediately preceding
four-fiscal-quarter period ending on the last day of such Measurement Quarter
(calculated exclusive of Panhandle and its Subsidiaries), to (ii) Consolidated
EBITDA for such period (calculated exclusive of Panhandle and its Subsidiaries),
of not more than 7.00 to 1.00, commencing with the period ending June 30, 2003.

         6.10     Cash Dividend Coverage Ratio. The Company shall maintain, as
of the last day of each Measurement Quarter, a minimum ratio of (i) the sum of
(A) Cash Dividend Income for the four-fiscal-quarter period ending on such day,
plus (B) 25% of the amount of Equity Distributions received by the Company
during such period but in no event in excess of $10,000,000 to (ii) an amount
equal to (A) interest expense (excluding all arrangement, underwriting and other
similar fees payable in connection with this Agreement, the CMS 2003 Credit
Agreement and each of the Enterprises 2003 Credit Agreements) accrued by the
Company

                                       34

<PAGE>

in respect of all Debt during such period, minus (B) cash interest income
received by the Company and its Subsidiaries from Persons other than the Company
or any of its Subsidiaries, minus (C) all amounts received by the Company from
its Subsidiaries and Affiliates during such period constituting reimbursement of
interest expense and commitment, guaranty and letter of credit charges of the
Company to such Subsidiary or Affiliate, of not less than 1.20 to 1.00,
commencing with the Measurement Quarter ending on June 30, 2003; provided that
the Company shall be deemed not to be in breach of the foregoing covenant if,
during the Measurement Quarter, it has permanently reduced the principal amount
outstanding under this Agreement and the Notes, such that the amount determined
pursuant to clause (ii) above, when recalculated on a pro forma basis assuming
that the amount of such reduced principal amount outstanding under such
agreements and promissory notes were in effect at all times during such
four-fiscal-quarter period, would result in the Company being in compliance with
such ratio.

         6.11     Pledged Collateral; Further Assurances. Beginning on the
Effective Date and continuing until the Commitments have terminated and all
Obligations have been paid in full, cause Enterprises: (a) to maintain at all
times Pledged Collateral in an amount equal to or greater than 100.5% of the
Aggregate Outstanding Credit Exposure; (b) to execute and deliver any instrument
or document, and take any further action, as may be necessary or as any Bank
through the Agent may reasonably request in order to establish and maintain in
favor of the Agent a perfected, first-priority security interest in all Pledged
Collateral; and (c) to keep all Pledged Collateral free and clear of any Lien
other than the security interest of 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. (1) Create, incur, assume or suffer to exist, or permit
any other Loan Party to create, incur, assume or suffer to exist, any lien,
security interest, or other charge or encumbrance (including the lien or
retained security title of a conditional vendor) of any kind, or any other type
of arrangement intended or having the effect of conferring upon a creditor a
preferential interest upon or with respect to any of its properties of any
character (including capital stock and other ownership interests of the
Company's directly-owned Subsidiaries, intercompany obligations and accounts)
(any of the foregoing being referred to herein as a "Lien"), whether now owned
or hereafter acquired, or (2) file, or permit any other Loan Party to file,
under the Uniform Commercial Code of any jurisdiction a financing statement
which names the Company or any other Loan Party as debtor (other than financing
statements that do not evidence a Lien), or (3) sign, or permit any other Loan
Party to sign, any security agreement authorizing any secured party thereunder
to file any such financing statement, or (4) assign, or permit any other Loan
Party to assign, accounts, excluding, however, from the operation of the
foregoing restrictions Liens created under the Credit Documents and the
following:

         (a)      Liens for taxes, assessments or governmental charges or levies
to the extent not past due;

                                       35

<PAGE>

         (b)      cash pledges or deposits to secure (i) obligations under
workmen's compensation laws or similar legislation, (ii) public or statutory
obligations of the Company or any other Loan Party, (iii) Support Obligations of
the Company or any other Loan Party, or (iv) obligations of Enterprises or MS&T
in respect of hedging arrangements and commodity purchases and sales (including
any cash margins with respect thereto); provided that with respect to clauses
(iii) and (iv) above the aggregate amount of cash pledges or deposits securing
such Support Obligations and such obligations of Enterprises or MS&T shall not
exceed $400,000,000 at any one time outstanding;

         (c)      Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's liens and other similar Liens arising in
the ordinary course of business securing obligations which are not overdue or
which have been fully bonded and are being contested in good faith;

         (d)      Liens securing the obligations under the "Loan Documents" as
defined in the CMS 2003 Credit Agreement or the Enterprises 2003 Credit
Agreements and any refinancing of either of the foregoing;

         (e)      Liens securing Off-Balance Sheet Liabilities (and all
refinancings and recharacterizations thereof permitted under Section 7.2(d)) in
an aggregate amount not to exceed $775,000,000;

         (f)      purchase money Liens or purchase money security interests upon
or in property acquired or held by the Company or any other Loan Party in the
ordinary course of business to secure the purchase price of such property or to
secure indebtedness incurred solely for the purpose of financing the acquisition
of any such property to be subject to such Liens or security interests, or Liens
or security interests existing on any such property at the time of acquisition,
or extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount, provided that no such Lien or security interest shall extend to
or cover any property other than the property being acquired and no such
extension, renewal or replacement shall extend to or cover property not
theretofore subject to the Lien or security interest being extended, renewed or
replaced, and provided, further, that the aggregate principal amount of the Debt
at any one time outstanding secured by Liens permitted by this clause (f) shall
not exceed $15,000,000;

         (g)      Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Company or any other Loan Party;

         (h)      Liens existing on any capital asset of any Person at the time
such Person is merged or consolidated with or into, or otherwise acquired by,
the Company or any other Loan Party and not created in contemplation of such
event, provided that such Liens do not encumber any other property or assets and
such merger, consolidation or acquisition is otherwise permitted under this
Agreement;

                                       36

<PAGE>

         (i)      Liens existing on any capital asset prior to the acquisition
thereof by the Company or any other Loan Party and not created in contemplation
thereof; provided that such Liens do not encumber any other property or assets;

         (j)      Liens existing as of the Closing Date;

         (k)      Liens securing Project Finance Debt otherwise permitted under
this Agreement;

         (l)      Liens arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses (g), (h), (i), (j) or (k); provided that (a) such Debt is not secured by
any additional assets and (b) the amount of Debt secured by any such Lien is
otherwise permitted under this Agreement;

         (m)      Liens on accounts receivable (other than intercompany
receivables) and other contract rights of MS&T and its Subsidiaries arising on
or after the Closing Date in favor of any Person (other than an Affiliate of the
Company or any of its Subsidiaries) that facilitates the origination of such
accounts receivable or other contract rights;

         (n)      Liens granted pursuant to the terms of the AIG Pledge
Agreement; and

         (o)      Liens arising out of the refinancing, extension, renewal or
refunding of the 6.75% Senior Notes, the Company's reset put securities due July
1, 2003 and the Company's general term notes due in 2003.

         7.2      Enterprises Debt. Permit Enterprises or any Subsidiary of
Enterprises (other than Panhandle and its Subsidiaries) to create, incur, assume
or suffer to exist any debt (as such term is construed in accordance with GAAP)
other than:

         (a)      debt arising by reason of the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of Enterprises' or its Subsidiaries' business;

         (b)      in the form of indemnities in respect of unfiled mechanics'
liens and Liens affecting Enterprises' or its Subsidiaries' properties permitted
under Section 7.1(c);

         (c)      debt arising under (i) the "Loan Documents" as defined in the
CMS 2003 Credit Agreement, (ii) the "Loan Documents" as defined in the
Enterprises 2003 Credit Agreement described in clause (i) of the definition
thereof in a principal amount not to exceed $441,000,000 minus any principal
payments (but with respect to principal payments of revolving loans prior to the
"Conversion Date" thereunder, only to the extent of any concurrent reduction or
termination of the "Commitments" as defined therein) made from time to time
thereunder, and (iii) the "Loan Documents" as defined in the Enterprises 2003
Credit Agreement described in clause (ii) of the definition thereof in a
principal amount not to exceed $75,000,000 minus any principal payments (but
with respect to principal payments of revolving loans prior to the "Conversion
Date" thereunder, only to the extent of any concurrent reduction or termination
of the "Commitments" as defined therein) made from time to time thereunder;

                                       37

<PAGE>

         (d)      debt constituting Off-Balance Sheet Liabilities (including any
recharacterization thereof as debt pursuant to any changes in generally accepted
accounting principles hereafter required or permitted and which are adopted by
the Company or any of its Subsidiaries with the agreement of its independent
certified public accountants) to the extent permitted by Section 7.15, and any
extensions, renewals, refundings or replacements thereof, provided that any such
extension, renewal, refunding or replacement is in an aggregate principal amount
not greater than the principal amount of, is an obligation of the same Person
that is the obligor in respect of, and has a weighted average life to maturity
not less than the weighted average life to maturity of, the debt so extended,
renewed, refunded or replaced;

         (e)      other debt of Enterprises and its Subsidiaries outstanding as
of March 31, 2003 (including the debt of the Loan Parties as of February 28,
2003 as set forth on Schedule II), and any extensions, renewals, refundings or
replacements thereof, provided that any such extension, renewal, refunding or
replacement is in an aggregate principal amount not greater than the principal
amount of, is an obligation of the same Person that is the obligor in respect
of, and has a weighted average life to maturity not less than the weighted
average life to maturity of, the debt so extended, renewed, refunded or
replaced;

         (f)      (i) unsecured, subordinated debt owed (A) to the Company by
Enterprises, (B) to Enterprises or CMS Capital, L.L.C. (or any successor by
merger to CMS Capital, L.L.C.) and (C) to any Grantor (as such term is defined
in the CMS 2003 Credit Agreement) by any Loan Party, and (ii) unsecured debt
owed to any Subsidiary of Enterprises (other than a Grantor) by CMS Capital,
L.L.C. (or any successor by merger to CMS Capital, L.L.C.), and (iii) unsecured
debt of any Foreign Subsidiary (as such term is defined in the CMS 2003 Credit
Agreement) of Enterprises owed to another Foreign Subsidiary of Enterprises
provided that the proceeds of any repayment of such debt are remitted to a Loan
Party;

         (g)      Project Finance Debt of any Loan Party or any of its
Subsidiaries incurred on or after the Closing Date; and

         (h)      capital lease obligations and other Debt secured by purchase
money Liens to the extent such Liens shall be permitted under Section 7.1(f).

         7.3      Lease Obligations. Create, incur, assume or suffer to exist,
any obligations as lessee for the rental or hire of real or personal property of
any kind under leases or agreements to lease (other than leases which constitute
Debt) having an original term of one year or more which would cause the
aggregate direct or contingent liabilities of the Company and the other Loan
Parties in respect of all such obligations payable in any period of 12
consecutive calendar months to exceed $50,000,000.

         7.4      Investments in Other Persons. Make, or permit any of the other
Loan Parties to make, any loan or advance to any Person, or purchase or
otherwise acquire any capital stock, obligations or other securities of, make
any capital contribution to, or otherwise invest in, any Person, other than (i)
Permitted Investments, (ii) pursuant to the contractual or contingent
obligations of the Company or any other Loan Party as in effect as of the
Closing Date and in amounts not to exceed the estimated amounts as set forth on
Schedule II (whether such obligation is conditioned upon a change in the ratings
of the securities issued by such Person or

                                       38

<PAGE>

otherwise) and, in each case, in an amount not to exceed such contractual or
contingent obligation as in effect on the Closing Date, (iii) investments,
directly or indirectly, by any Loan Party (x) in the capital of any Subsidiary
of the Company that is a Loan Party and (y) in assets contributed to such Loan
Party, (iv) investments in the capital stock or other ownership interests of any
of the Company's Subsidiaries arising from the conversion of intercompany
indebtedness to equity, (v) intercompany loans and advances to the extent the
corresponding debt is permitted under Section 7.2(f), (vi) investments
constituting non-cash consideration received in connection with the sale of any
asset permitted under Section 7.9 and (vii) additional loans, advances,
purchases, contributions and other investments in an amount not to exceed
$340,000,000 in the aggregate at any time; provided that investments described
in clauses (iv) (solely with respect to investments made in any Subsidiary that
is not a Loan Party) and (vii) above shall not be permitted to be made at a time
when either a Default or an Event of Default shall be continuing or would result
therefrom; provided, further, that, notwithstanding the foregoing, neither the
Company nor any other Loan Party shall make any loans or advances to any of the
Company's Subsidiaries other than, to the extent otherwise permitted hereunder,
Enterprises or any Subsidiary of Enterprises.

         7.5      Compliance with ERISA. (i) Permit to exist any "accumulated
funding deficiency" (as defined in Section 412(a) of the Code), (ii) terminate,
or permit any ERISA Affiliate to terminate, any Plan or withdraw from, or permit
any ERISA Affiliate to withdraw from, any Multiemployer Plan, so as to result in
any material (in the opinion of the Majority Banks) liability of the Company,
any other Loan Party or Consumers to such Plan, Multiemployer Plan or the PBGC,
or (iii) permit to exist any occurrence of any Reportable Event (as defined in
Title IV of ERISA), or any other event or condition, which presents a material
(in the opinion of the Majority Banks) risk of such a termination by the PBGC of
any Plan or withdrawal from any Multiemployer Plan so as to result in a material
liability to the Company, any other Loan Party or Consumers.

         7.6      Transactions With Affiliates. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with any of its Affiliates unless
such transaction is on terms no less favorable to the Company or such Subsidiary
than if the transaction had been negotiated in good faith on an arm's-length
basis with a non-Affiliate; provided that (x) the purchase by, or other transfer
to, Trunkline Field Services Company of certain assets of CMS Field Services,
Inc. as described to the Agent and the Banks prior to the date hereof shall be
permitted hereunder and (y) any transactions permitted under Sections 7.6 and
7.7 shall be permitted hereunder.

         7.7      Restricted Payments. Declare or pay, directly or indirectly,
any dividend, payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any share of any class of capital stock
or other ownership interests of the Company or any of the other Loan Parties
(other than (1) stock splits and dividends payable solely in nonconvertible
equity securities of the Company (other than Redeemable Stock or Exchangeable
Stock (as such terms are defined in the Indenture on the Closing Date)) and (2)
dividends and distributions made to the Company or any other Loan Party), or
purchase, redeem, retire, or otherwise acquire for value, any shares of any
class of capital stock or other ownership interests of the Company or any
warrants, rights, or options to acquire any such shares, now or hereafter
outstanding, any distribution of assets to any of its shareholders (other than
distributions to the Company) (any such dividend, payment, distribution,
purchase, redemption, retirement or

                                       39

<PAGE>

acquisition being hereinafter referred to as a "Restricted Payment") other than
(i) pursuant to the terms of any class of capital stock of the Company issued
and outstanding (and as in effect on) the Closing Date, any purchase or
redemption of capital stock of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, capital stock of the Company
(other than Redeemable Stock or Exchangeable Stock (as such terms are defined in
the Indenture on the Closing Date)); and (ii) payments made by the Company
pursuant to the Tax Sharing Agreement.

         7.8      Mergers, Etc. Merge with or into or consolidate with or into,
or permit any of the other Loan Parties or Consumers to merge with or into or
consolidate with or into, any other Person, except that (i) (x) any Loan Party
may merge with or into any other Loan Party, (y) any Subsidiary of a Loan Party
that is not a Loan Party may merge into such Loan Party or with or into any
other Subsidiary of any Loan Party, provided that (a) in any such merger with or
into the Company, the Company is the surviving corporation, (b) in any such
merger into a Loan Party under clause (y) above, the Loan Party is the survivor
thereof, (c) no Default or Event of Default shall be continuing or result
therefrom and (d) such Loan Party 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
or any other Credit Document on the date of such transaction, and (ii) any Loan
Party may merge with or into any other Person, provided that (a) the Loan Party
is the survivor thereof, or, in the case of any Loan Party that is a corporation
reconstituting itself as limited liability company, such limited liability
company shall be the survivor thereof and shall be thereafter deemed to be a
Loan Party hereunder, (b) no Default or Event of Default shall be continuing or
result therefrom, (c) such Loan Party 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 or any other Credit Document on the date of such transaction, and (d)
immediately after giving effect to such merger, the Net Worth of such Loan Party
shall be equal to or greater than the Net Worth of such Loan Party as of the
last day of the fiscal quarter immediately preceding the date of such merger.

         7.9      Sales, Etc., of Assets. Sell, lease, transfer, assign, or
otherwise dispose of all or any substantial part of its assets, or permit any of
the other Loan Parties (other than MS&T) to sell, lease, transfer, or otherwise
dispose of all or any substantial part of its assets, except (i) to give effect
to a transaction permitted by Section 7.8 above or Section 7.10 below, and (ii)
with respect to Enterprises or any of its Subsidiaries, as permitted under the
Enterprises 2003 Credit Agreements; provided, further, that neither the Company
nor any of the other Loan Parties (other than MS&T) shall sell, assign,
transfer, lease, convey or otherwise dispose of any property, whether now owned
or hereafter acquired, or any income or profits therefrom, or enter into any
agreement to do so, except:

         (a)      the sale of property for consideration not less than the Fair
Market Value thereof;

         (b)      the transfer of property from a Loan Party to any other Loan
Party;

         (c)      the transfer of property constituting an investment otherwise
permitted under Section 7.4;

                                       40

<PAGE>

         (d)      the sale of electricity and natural gas and other property in
the ordinary course of Company's and its Subsidiaries respective businesses
consistent with past practice;

         (e)      any transfer of an interest in receivables and related
security, accounts or notes receivable on a limited recourse basis in connection
with the incurrence of Off-Balance Sheet Liabilities, provided that such
transfer qualifies as a legal sale and as a sale under GAAP and the incurrence
of such Off-Balance Sheet Liabilities is permitted under Section 7.15;

         (f)      the transfer of property constituting not more than two
percent (2%) of the ownership interests held by the Company and its Subsidiaries
as of the Closing Date in CMS International Ventures, L.L.C. to CMS Energy
Foundation and/or Consumers Foundation and/or any other third-party 501(c)(3)
charitable organization;

         (g)      the disposition of equipment if such equipment is obsolete or
no longer useful in the ordinary course of the Company's or such Subsidiary's
business;

         (h)      the sale of substantially all of the capital stock and assets
of Panhandle; provided that such sale shall be consummated substantially in
accordance with, and on terms not materially more adverse to the interests of
the Agent and the Banks than the terms and conditions set forth in, the Stock
Purchase Agreement, dated as of December 21, 2002, by and among CMS Gas
Transmission Company, AIG Highstar Capital, L.P., AIG Highstar II Funding Corp.,
Southern Union Company and Southern Union Panhandle Corp. (the "Panhandle Sale
Agreement"); provided that any modifications to the Panhandle Sale Agreement to
reflect purchase price adjustments in the aggregate not to exceed $50,000,000
and otherwise on terms and conditions reasonably acceptable to the Agent shall
be deemed to be permitted hereunder.

         7.10     Maintenance of Ownership of Subsidiaries. Sell, transfer,
assign or otherwise dispose of any shares of capital stock or other ownership
interests of any of the other Loan Parties or Consumers (other than preferred or
preference stock of Consumers) or any warrants, rights or options to acquire
such capital stock or other ownership interests, or permit any other Loan Party
or Consumers to issue, sell, transfer, assign or otherwise dispose of any shares
of its capital stock (other than preferred or preference stock of Consumers) or
other ownership interests or the capital stock or other ownership interests of
any other Loan Party or any warrants, rights or options to acquire such capital
stock or other ownership interests, except (i) to give effect to a transaction
permitted by Section 7.8 and 7.9 above, and (ii) in connection with foreclosure
of any Liens permitted under Section 7.1(c).

         7.11     Amendment of Tax Sharing Agreement. Directly or indirectly,
amend, modify supplement, waive compliance with, seek a waiver under, or assent
to noncompliance with, any term, provision or condition of the Tax Sharing
Agreement if the effect of such amendment, modification, supplement, waiver or
assent is to (i) reduce materially any amounts otherwise payable to, or increase
materially any amounts otherwise owing or payable by, the Company thereunder, or
(ii) change materially the timing of any payments made by or to the Company
thereunder.

         7.12     Prepayments of Indebtedness. Make or agree to pay or make, or
permit any of the other Loan Parties to make or agree to pay or make, directly
or indirectly, any payment or other

                                       41

<PAGE>
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Debt, or any payment or other distribution
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Debt (other than the obligations
of the Loan Parties under the Credit Documents), other than (i) any payments on
account of (a) any Debt when and as such payment was due (including at the
maturity thereof if the initial stated maturity thereof is on or prior to May
21, 2004) pursuant to the mandatory payment provisions applicable to such Debt
at the time it was incurred (including regularly scheduled payment dates for
principal, interest, fees and other amounts due thereon) or any extension
thereof thereafter granted by the holder of such Debt, (b) refinancings of Debt
otherwise permitted under this Agreement, (c) any Debt owed to the Company or
any of its Subsidiaries, (d) Debt secured by a Lien on assets subject to an
asset sale permitted by Section 7.6 and (e) the extinguishment of any
intercompany Debt in connection with a dividend or distributions permitted under
Section 7.7, (ii) payments constituting the exchange of the Company's common
stock (other than Redeemable Stock or Exchangeable Stock (as such terms are
defined in the Indenture on the Closing Date)) for the Company's outstanding
Debt (and any cash payments made in lieu of the issuance of fractional shares)
to the extent such exchange is permitted under the Securities and Exchange Act
of 1934 and (iii) prepayments of (x) the Company's reset put securities due July
1, 2003 and the Company's general term notes due in 2003, (y) if the aggregate
principal amount of the Loans shall be less than $250,000,000 any securities
with maturities on or after January 1, 2004 but prior to April 1, 2004, and (z)
if the aggregate principal amount of the Loans shall be less than $175,000,000,
any securities with maturities on or after January 1, 2004.

         7.13     Conduct of Business. Engage, or permit any Restricted
Subsidiary to engage, in any business other than (a) the business engaged in by
the Company and its Subsidiaries on the date hereof, and (b) any business or
activities which are substantially similar, related or incidental thereto.

         7.14     Organizational Documents. Amend, modify or otherwise change,
or permit any Restricted Subsidiary to amend, modify or otherwise change any of
the terms or provisions, in any of their respective certificate of incorporation
and by-laws (or comparable constitutive documents) as in effect on the Closing
Date in any manner adverse to the interests of the Banks.

         7.15     Off-Balance Sheet Liabilities. Create, incur, assume or suffer
to exist, or permit any Subsidiary (other than Consumers and its Subsidiaries)
to create, incur, assume or suffer to exist, Off-Balance Sheet Liabilities
(exclusive of lease obligations otherwise permitted under Section 7.3) in the
aggregate in excess of $775,000,000 at any time.

                                  ARTICLE VIII

                             REPORTING REQUIREMENTS

         So long as any of the Obligations shall remain unpaid or any Bank shall
have any Commitment, the Company will, unless the Majority Banks shall otherwise
consent in writing, furnish to the Agent (with sufficient copies for each Bank),
the following:

                                       42

<PAGE>

         (a)      as soon as possible and in any event within five days after
the Company knows or should have reason to know of the occurrence of each
Default or Event of Default continuing on the date of such statement, a
statement of the chief financial officer or chief accounting officer of the
Company setting forth details of such Default or Event of Default and the action
that the Company proposes to take with respect thereto;

         (b)      as soon as available and in any event within 60 days after the
end of each of the first three quarters of each fiscal year of the Company,
commencing with the fiscal quarter ending on March 31, 2003, a consolidated
balance sheet and consolidated statements of income and retained earnings and of
cash flows of the Company and its Subsidiaries as at the end of such quarter and
for the period commencing at the end of the previous fiscal year and ending with
the end of such quarter (which requirement shall be deemed satisfied by the
delivery of the Company's quarterly report on Form 10-Q for such quarter), all
in reasonable detail and duly certified (subject to year-end audit adjustments)
by the chief financial officer or chief accounting officer of the Company as
having been prepared in accordance with GAAP, together with (A) a compliance
certificate (substantially in the form of Exhibit C appropriately completed) of
(1) the computations used by the Company for the periods ending June 30, 2003
and thereafter in determining compliance with the covenants contained in
Sections 6.9 and 6.10 and the ratio set forth in Section 9.1(j), (2) all Project
Finance Debt of the Consolidated Subsidiaries, together with the Company's
Ownership Interest in each such Consolidated Subsidiary and (3) all Support
Obligations of the Company of the types described in clauses (iv) and (v) of the
definition of Support Obligations (whether or not each such Support Obligation
or the primary obligation so supported is fixed, conclusively determined or
reasonably quantifiable) to the extent such Support Obligations have not been
previously disclosed as "Consolidated Debt" pursuant to clause (1) above, and
(B) a certificate of said officer stating that no 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 action that the
Company proposes to take with respect thereto;

         (c)      as soon as available and in any event within 120 days after
the end of each fiscal year of the Company and its Subsidiaries, commencing with
the fiscal year ending on December 31, 2003, a copy of the Annual Report on Form
10-K (or any successor form) for the Company and its Subsidiaries for such year,
including therein a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and consolidated statements of
income and retained earnings and of cash flows of the Company and its
Subsidiaries for such fiscal year, accompanied by a report thereon of a
nationally-recognized independent public accounting firm, together with (1) a
schedule in form satisfactory to the Majority Banks of (A) the computations used
by such accounting firm in determining, as of the end of such fiscal year,
compliance with the covenants contained in Sections 6.9 and 6.10 and the ratio
set forth in Section 9.1(j), (B) all Project Finance Debt of the Consolidated
Subsidiaries, together with the Company's Ownership Interest in each such
Consolidated Subsidiary and (C) all Support Obligations of the Company of the
types described in clauses (iv) and (v) of the definition of Support Obligations
(whether or not each such Support Obligation or the primary obligation so
supported is fixed, conclusively determined or reasonably quantifiable) to the
extent such Support Obligations have not been previously disclosed as
"Consolidated Debt" pursuant to clause (A) above, and (2) a certificate of the
chief financial officer or chief accounting officer of the Company stating that
no Default or Event of Default has occurred and is continuing or, if a Default
or Event of Default has

                                       43

<PAGE>

occurred and is continuing, a statement as to the nature thereof and the action
that the Company proposes to take with respect thereto;

         (d)      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,
commencing with the fiscal quarter ending on March 31, 2003, a balance sheet and
statements of income and retained earnings and of cash flows of the Company as
at the end of such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, all in reasonable
detail and duly certified (subject to year-end audit adjustments) by the chief
financial officer or chief accounting officer of the Company as having been
prepared in accordance with GAAP;

         (e)      as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, commencing with the fiscal year
ending on December 31, 2003, a balance sheet of the Company as at the end of
such fiscal year and statements of income and retained earnings and of cash
flows of the Company for such fiscal year, all in reasonable detail and duly
certified (subject to year end audit adjustments) by the chief financial officer
or chief accounting officer of the Company as having been prepared in accordance
with GAAP;

         (f)      as soon as possible and in any event (A) within 30 days after
the Company knows or has reason to know that any Plan Termination Event
described in clause (i) of the definition of Plan Termination Event with respect
to any Plan of the Company or any ERISA Affiliate of the Company has occurred
and could reasonably be expected to result in a material liability to the
Company, (B) within 10 days after the Company knows or has reason to know that
any other Plan Termination Event with respect to any Plan of the Company or any
ERISA Affiliate of the Company has occurred and could reasonably be expected to
result in a material liability to the Company, a statement of the chief
financial officer or chief accounting officer of the Company describing such
Plan Termination Event and the action, if any, which the Company proposes to
take with respect thereto;

         (g)      except as may arise in connection with the sale of Panhandle,
promptly after receipt thereof by the Company or any of its ERISA Affiliates
from the PBGC copies of each notice received by the Company or any such ERISA
Affiliate of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan;

         (h)      except as may arise in connection with the sale of Panhandle,
promptly and in any event within 30 days after the filing thereof with the
Internal Revenue Service, copies of each Schedule B (Actuarial Information) to
the annual report (Form 5500 Series) with respect to each Plan (if any) to which
the Company is a contributing employer;

         (i)      promptly after receipt thereof by the Company or any of its
ERISA Affiliates from a Multiemployer Plan sponsor, a copy of each notice
received by the Company or any of its ERISA Affiliates concerning the imposition
or amount of withdrawal liability in an aggregate principal amount of at least
$250,000 pursuant to Section 4202 of ERISA in respect of which the Company is
reasonably expected to be liable;

         (j)      promptly after the Company becomes aware of the occurrence
thereof, notice of all actions, suits, proceedings or other events of the type
described in Section 5.6;

                                       44

<PAGE>

         (k)      promptly after the sending or filing thereof, notice to the
Agent and each Bank of any sending or filing of all proxy statements, financial
statements and reports which the Company sends to its public security holders
(if any), all regular, periodic and special reports which the Company files with
the Securities and Exchange Commission or any governmental authority which may
be substituted therefor, or with any national securities exchange, pursuant to
the Exchange Act, and all final prospectuses with respect to any securities
issued or to be issued by the Company or any of its Subsidiaries;

         (l)      as soon as possible and in any event within five 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 business, assets, property, financial condition, results of
operations or prospects of the Company and its Subsidiaries, considered as a
whole, any of which is continuing on the date of such certificate, a certificate
of the 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

         (m)      promptly after requested, such other information respecting
the business, properties, condition or operations, financial or otherwise, of
the Company and its Subsidiaries as any Agent or the Majority Banks may from
time to time reasonably request in writing.

         The Company shall be deemed to have fulfilled its obligations pursuant
to clauses (b), (c), (d), (e) and (k) above to the extent the Agent (and the
Banks, if applicable) receives an electronic copy of the requisite document or
documents in a format reasonably acceptable to the Agent, provided that (1) an
executed, tangible copy of any report required pursuant to clause (e) above is
delivered to the Agent at the time of any such electronic delivery, and (2) a
tangible copy of each requisite document delivered electronically is made
available by the Company promptly upon request by any Agent or Bank.

                                   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 Loan
when due, or (ii) any Reimbursement Obligation within one Business Day after the
same becomes due, or (iii) any interest on any Advance or any fee or other
Obligations payable hereunder within two Business Days after such interest, fees
or other amounts shall have become due; or

         (b)      Any representation or warranty made by or on behalf of the
Company in any Credit Document or certificate or other writing delivered
pursuant thereto shall prove to have been incorrect in any material respect when
made or deemed made; or

         (c)      The Company or any of its Subsidiaries shall fail to perform
or observe any term or covenant on its part to be performed or observed
contained in Section 6.3, 6.8, 6.9 or 6.10, or in Article VII hereof (and the
Company, each Bank and each Agent hereby agrees that an Event

                                       45

<PAGE>

of Default under this subsection (c) shall be given effect as if the defaulting
Subsidiary were a party to this Agreement); or

         (d)      The Company or any of its Subsidiaries shall fail to perform
or observe any other term or covenant on its part to be performed or observed
contained in any Credit Document and any such failure shall remain unremedied,
after written notice thereof shall have been given to the Company by the Agent,
for a period of 10 Business Days (and the Company, each Bank and each Agent
hereby agrees that an Event of Default under this subsection (d) shall be given
effect as if the defaulting Subsidiary were a party to this Agreement); or

         (e)      The Company or any Material Subsidiary shall fail to pay any
of its Debt (including any interest or premium thereon but excluding Debt
incurred under this Agreement) (i) under the CMS 2003 Credit Agreement, (ii)
under either of the Enterprises 2003 Credit Agreements, or (iii) otherwise
aggregating, in the case of the Company and each Restricted Subsidiary,
$6,000,000 or more or, in the case of Consumers, $25,000,000 or more, 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 any agreement or instrument relating to such Debt; or any
other default under any agreement or instrument relating to any such Debt
(including any "amortization event" or event of like import in connection with
any Off-Balance Sheet Liabilities), or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default or event is (i) to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such Debt shall
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof;
unless in each such case the obligee under or holder of such Debt shall have
waived in writing such circumstance so that such circumstance is no longer
continuing, or (ii) with respect to any such event occurring in connection with
any Off-Balance Sheet Liabilities aggregating $6,000,000 or more, to terminate
the reinvestment of collections or proceeds of receivables and related security
under any agreements or instruments related thereto (other than a termination
resulting solely from the request of the Company or its Subsidiaries); or

         (f)      (i) The Company or any Material Subsidiary shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make an assignment for the benefit of
creditors; or (ii) any proceeding shall be instituted by or against the Company
or any Material Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of its debts under any law relating to
bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar official for it or for any substantial part of its property and, in the
case of a proceeding instituted against the Company, either such proceeding
shall remain undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including the entry of an order for relief
against the Company or any Material Subsidiary or the appointment of a receiver,
trustee, custodian or other similar official for the Company, such Material
Subsidiary or any of its property) shall occur; or (iii) the Company or any
Material Subsidiary shall take any corporate or other action to authorize any of
the actions set forth above in this subsection (f); or

                                       46

<PAGE>

         (g)      Any judgment or order for the payment of money in excess of
$6,000,000 shall be rendered against the Company or Enterprises and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 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; or

         (h)      Any material provision of any Credit Document, after execution
hereof or delivery thereof under Article XI, shall for any reason other than the
express terms hereof or thereof cease to be valid and binding on any party
thereto; or any Loan Party shall so assert in writing; or

         (i)      Any "Event of Default" shall occur under and as defined in the
AIG Pledge Agreement as in effect on January 8, 2003 (and without giving effect
to any amendment or other modification thereto); or

         (j)      There shall be imposed or enacted any Consumers Dividend
Restriction, the result of which is that the Dividend Coverage Ratio shall be
less than 1.15 to 1.0 at any time after the imposition of such Consumers
Dividend Restriction; or

         (k)      At any time, for any reason (except due to any failure by the
Agent to take any action on its part to be performed under applicable law in
order to maintain the perfection or priority of its security interest under the
Pledge Agreement), (i) the Agent shall fail to have, for the benefit of the
Banks, a perfected, first-priority security interest in Pledged Collateral, free
and clear of all other Liens, in an amount equal to or greater than 100.5% of
the Aggregate Outstanding Credit Exposure or (ii) the Company or Enterprises
seeks to render the Agent's security interest invalid, unenforceable or
unperfected.

         9.2      Remedies. If any Event of Default has occurred and is
continuing, then the Agent shall at the request, or may with the consent, of the
Majority Banks, upon 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 or be suspended, as the
case may be, (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, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Company, and/or (iii) in addition to the continuing right to demand
payment of all amounts payable under this agreement, exercise in respect of any
and all Pledged Collateral all of the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of New York and
in effect in any other jurisdiction in which collateral is located at that time;
provided that in the event of an actual or deemed entry of an order for relief
with respect to the Company or Enterprises under the Federal Bankruptcy Code,
(A) the Commitments and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically be terminated and (B) the Obligations shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Company.

                                       47

<PAGE>

                                    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 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 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.

                                       48

<PAGE>

                                   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 each of
the Company and Enterprises, together with all amendments, certified by the
Secretary or an Assistant Secretary of the applicable entity, 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 applicable entity, of bylaws of each of the Company and Enterprises and
of Board of Directors' resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for any Bank) of each of the Company and Enterprises
authorizing the execution, delivery and performance of the Credit Documents to
which such entity is a party.

         (c)      An incumbency certificate from each of the Company and
Enterprises, executed by the Secretary or an Assistant Secretary of the
applicable entity, which shall identify by name and title and bear the original
or facsimile signature of the officers of such entity authorized to sign the
Credit Documents to which such entity is a party and, in the case of the
Company, the officers or other employees authorized to make borrowings and
request Facility LCs hereunder, upon which certificates the Banks shall be
entitled to rely until informed of any change in writing by the Company or
Enterprises, as applicable.

         (d)      A certificate, signed by a Designated Officer of the Company,
stating that on the Closing Date no Default or Event of Default has occurred and
is continuing.

         (e)      The Pledge Agreement signed by Enterprises, together with such
account control agreements and other agreements and documents as the Agent or
any Bank may reasonably request to create and perfect the security interest of
the Agent in all Pledged Collateral.

         (f)      Any Note requested by a Bank pursuant to Section 2.13 payable
to the order of each such requesting Bank.

         (g)      A favorable legal opinion of Michael D. VanHemert, Esq.,
Deputy General Counsel of the Company, as to the matters set forth in Exhibit B
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.

         (h)      Evidence satisfactory to the Agent that prior to or
concurrently with the initial Credit Extension, all non-contingent amounts owed
to Bank One in connection with the Existing Letters of Credit have been or will
be paid in full.

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<PAGE>

         (i)      Evidence, in form and substance satisfactory to the Agent,
that each of the Company and Enterprises has obtained all governmental
approvals, if any, necessary for it to enter into the Credit Documents to which
it is a party.

         (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 Effective 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 date of such Credit Extension (i) no Default
or Event of Default exists, (ii) the representations and warranties contained in
Article V are true and correct as of such date, (iii) after giving effect to
such Credit Extension, the value of the Pledged Collateral will be equal to or
greater than 100.5% of the Aggregate Outstanding Credit Exposure 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
Issuance/Modification Request 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 date of the requested Credit Extension. 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.

         (b)      Any Bank may sell participations to one or more banks or other
entities (each a "Participant") in all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitment and its Outstanding Credit Exposure), provided that
(i) such Bank's obligations under this Agreement (including 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, 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

                                       50

<PAGE>

Document. The Company agrees that each Participant shall be deemed to have the
right of setoff provided in Section 12.10 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 12.10 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 12.10, 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 12.10 as if each Participant were a Bank. The Company further
agrees that each Participant shall be entitled to the benefits of Sections 4.1,
4.3, 4.4 and 4.5 to the same extent as if it were a Bank and had acquired its
interest by assignment pursuant to Section 12.1(c), provided that (i) a
Participant shall not be entitled to receive any greater payment under Section
4.1, 4.3, 4.4 or 4.5 than the Bank who sold the participating interest to such
Participant would have received had it retained such interest for its own
account, unless the sale of such interest to such Participant is made with the
prior written consent of the Company, and (ii) any Participant not incorporated
under the laws of the United States of America or any State thereof agrees to
comply with the provisions of Section 4.5 to the same extent as if it were a
Bank.

         (c)      Any Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more financial
institutions all or any part of its rights and obligations under this Agreement,
provided that (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 and any Note 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.

         (d)      Any Bank may, in connection with any sale or participation or
proposed sale or participation pursuant to this Section 12.1, disclose to the
purchaser or participant or proposed purchaser or participant any information
relating to the Company furnished to such Bank by or on behalf of the Company,
provided that prior to any such disclosure of non-public information, the
purchaser or participant or proposed purchaser or participant (which purchaser
or participant is not an affiliate of a Bank) shall agree to preserve the
confidentiality of any confidential

                                       51

<PAGE>

information (except any such disclosure as may be required by law or regulatory
process) relating to the Company received by it from such Bank.

         (e)      Assignments under this Section 12.1 shall be made pursuant to
an agreement ("Assignment Agreement") substantially in the form of Exhibit D 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 and any Note 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.

         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

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<PAGE>

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 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
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     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.

         12.10    Setoff. In addition to, and without limitation of, any rights
of the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Event of Default occurs, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
purchaser or participant under Section 12.1 may, to the fullest extent permitted
by law, exercise all its rights of payment with respect to such purchase or
participation as if it were the direct creditor of the Company in the amount of
such purchase or participation.

         12.11    Ratable Payments. If any Bank, whether by setoff or otherwise,
has payment made to it upon its Outstanding 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

                                       53

<PAGE>

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.

         12.12    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 sue for,
any special, indirect, consequential or punitive damages suffered by the Company
in connection with, arising out of, or in any way related to the Credit
Documents or the transactions contemplated thereby.

         12.13    Investment of Pledged Collateral. The Agent shall invest the
Pledged Collateral from time to time in such investments as Enterprises shall
reasonably request and are reasonably satisfactory to the Agent. Unless
otherwise agreed among the Company, Union Bank of California, N.A., Bank One and
the Agent, approximately 50% of such investments shall be maintained with Bank
One and approximately 50% of such investments shall be maintained with Union
Bank of California, N.A.

                                  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

                                       54

<PAGE>

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

                                       55

<PAGE>

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 Bank. 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, the LC Issuer and Banc One Capital Markets, Inc. (the "Arranger"), for
their respective accounts, the fees agreed to by the Company, the Agent, the LC
Issuer and the Arranger pursuant to the letter agreement dated May 21, 2003, or
as otherwise agreed from time to time.

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<PAGE>

                                   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.

                                   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.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       57

<PAGE>

         IN WITNESS WHEREOF, the Company, the Banks, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.

                                        CMS ENERGY CORPORATION

                                        By: /s/ Paul Stadnikia
                                            -----------------------------------
                                            Name: Paul Stadnikia
                                            Title: Assistant Treasurer

                                        One Energy Plaza, EP11-291
                                        Jackson, Michigan 49201

                                        Attention: Treasurer
                                        Facsimile No.: (517) 788-1409
                                        Confirmation (Phone) No: (517) 788-7090
                                        E-Mail Address: bsburger@cmsenergy.com

                                              Signature Page to Credit Agreement

                                       58

<PAGE>

                                        BANK ONE, NA (MAIN OFFICE - CHICAGO),
                                        Individually and as Agent and as
                                        LC Issuer

                                        By: /s/ Jane Beck
                                            -------------------------------
                                            Name: Jane Beck
                                            Title: Director

                                        ADDRESS:
                                        Bank One Plaza
                                        Chicago, Illinois 60670
                                        Attention:
                                        Facsimile No.: (312) 732-
                                        Confirmation (Phone) No: (312) 732-
                                        E-Mail Address:

                                              Signature Page to Credit Agreement

                                       59

<PAGE>

                                        UNION BANK OF CALIFORNIA, N.A.
                                        Individually and as Documentation Agent

                                        By: /s/ Dennis G. Blank
                                            -----------------------------------
                                            Name: Dennis G. Blank
                                            Title: Vice President

                                        ADDRESS:
                                        445 South Figueroa Street
                                        15th Floor
                                        Los Angeles, California  90071
                                        Attention:  Kevin M. Zitar
                                        Facsimile No.:  (    )   -
                                        Confirmation (Phone) No: (213) 236-5503
                                        E-Mail Address: Kevin.Zitar@uboc.com

                                              Signature Page to Credit Agreement

                                       60

<PAGE>

                                    EXHIBIT A

                                      NOTE

                                                                          [Date]

         CMS Energy Corporation, a Michigan corporation (the "Company"),
promises to pay to the order of ____________________________________ (the
"Bank") the aggregate unpaid principal amount of all Loans made by the Bank to
the Company pursuant to Section 2.1 of the Agreement (as hereinafter defined),
in immediately available funds at the main office of Bank One, NA in Chicago,
Illinois, as Agent, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Company shall pay
the principal of and accrued and unpaid interest on the Loans in full on the
Termination Date.

         The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.

         This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of May 19, 2003 (which, as it may
be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Company, the lenders party thereto, including the Bank,
and Bank One, NA, as Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Note, including the terms
and conditions under which this Note may be prepaid or its maturity date
accelerated. Capitalized terms used herein and not otherwise defined herein are
used with the meanings attributed to them in the Agreement.

                                        CMS ENERGY CORPORATION

                                        By:_____________________________________
                                        Print Name:_____________________________
                                        Title:__________________________________

<PAGE>

                   SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
                                       TO
                         NOTE OF CMS ENERGY CORPORATION,
                               DATED MAY __, 2003,

<TABLE>
<CAPTION>
              Principal        Maturity     Principal
              Amount of      of Interest      Amount           Unpaid
Date            Loan            Period         Paid            Balance
----            ----            ------         ----            -------
<S>           <C>            <C>            <C>                <C>
</TABLE>

<PAGE>

                                    EXHIBIT B

                             REQUIRED OPINIONS FROM

                      DEPUTY GENERAL COUNSEL OF THE COMPANY

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 Company and Enterprises of the Credit
         Documents to which it is a party and the performance by the Company and
         Enterprises of their respective obligations thereunder have been duly
         authorized by all necessary corporate action and proceedings on the
         part of the Company and Enterprises and will not:

                           (a)      contravene Restated Articles of
                  Incorporation, as amended, or bylaws of the Company or the
                  Restated Articles of Incorporation, as amended, or bylaws of
                  Enterprises;

                           (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 Enterprises; or

                           (c)      result in or require the creation of any
                  Lien upon or with respect to any of the properties of the
                  Company or Enterprises, except the security interest in favor
                  of the Agent under the Pledge Agreement.

3.       Each Credit Document to which the Company or Enterprises is a party
         constitutes a legal, valid and binding obligation of the Company or
         Enterprises, as applicable, enforceable against the Company or
         Enterprises, as applicable, 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).

4.       Each of the Company and Enterprises has duly executed and delivered
         each Credit Document to which it is a party.

5.       To the best of my knowledge, there is no pending or threatened action
         or proceeding against the Company or any of its Consolidated
         Subsidiaries before any court, governmental agency or arbitrator
         (except (i) to the extent described in the Company's annual report on
         Form 10-K/A for the year ended December 31, 2002 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 referred to 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 ability of the Company or
         Enterprises

<PAGE>

         to perform its obligations under any Credit Document to which it is a
         party. To the best of my knowledge, there is no litigation challenging
         the validity or the enforceability of any of the Credit Documents.

6.       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 or
         Enterprises of any Credit Document.

7.       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.

8.       The Company is not a registered "holding company" or a "subsidiary" or
         an "affiliate" of a registered "holding company", as such terms are
         defined in the Public Utility Holding Company Act of 1935.

9.       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).

<PAGE>

                                    EXHIBIT C

                         FORM OF COMPLIANCE CERTIFICATE

         I, _________________, ______________ of CMS Energy Corporation, a
Michigan corporation (the "Company"), DO HEREBY CERTIFY in connection with the
Credit Agreement dated as of May 19, 2003 (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 6.9 of the Credit Agreement provides that the Company shall
         maintain a consolidated leverage ratio of not greater than 7.00 to 1.0.

         The following calculations are made in accordance with Section 6.9 and
are correct and accurate as of _____________, 200__:

A.       CONSOLIDATED DEBT:

         (a)     Debt of Company and Consolidated Subsidiaries            $
                 (excluding Panhandle and Subsidiaries)

minus    (b)     Support Obligations described in clause (iv) or (v)      $
                 of the definition of Support Obligations

minus    (c)     Junior Subordinated Debt owned by Hybrid Preferred       $
                 Securities Subsidiaries

minus    (d)     Subordinated guarantees provided by the Company with     $
                 respect to Hybrid Preferred Securities

minus    (e)     Agreed upon percentage of Net Proceeds from issuance     $
                 of hybrid debt/equity securities (other than Junior
                 Subordinated Debt and Hybrid Preferred Securities)

plus     (f)     Specified Support Obligations provided by the            $
                 Company in respect of obligations of MS&T

minus    (g)     Project Finance Debt of the Company or any               $
                 Consolidated Subsidiary

minus    (h)     Principal amount of any Securitized Bonds                $

                                                   TOTAL                  $
<PAGE>

B.     CONSOLIDATED EBITDA:

       (a)   Pretax Operating Income of the Company and its       $
             Subsidiaries

plus   (b)   Depreciation, depletion and amortization             $

plus   (c)   Non-cash write-offs and write-downs contained in     $
             the Company's Pretax Operating Income, including
             write-offs or write-downs related to the sale of
             assets, impairment of assets and loss on contracts

minus  (d)   Revenues of Consumers dedicated to repayment of      $
             Securitized Bonds

                                                   TOTAL          $
C.     CONSOLIDATED LEVERAGE RATIO:                                  ___ TO 1.00
       (TOTAL OF A DIVIDED BY TOTAL OF B)

II.    Section 6.10 of the Credit Agreement provides that the Company shall
       maintain a cash dividend coverage ratio of not less than 1.20 to 1.0.

       The following calculations are made in accordance with Section 6.10 and
       are correct and accurate as of _____________, 200__:

A.     DIVIDEND INCOME:

       (a)     Cash Dividend Income                                     $

plus   (b)     25% of Equity Distributions received by the Company      $
               (up to $10,000,000)
                                                     TOTAL              $

<PAGE>
B.     INTEREST EXPENSE:

       (a)   Interest expense (excluding arrangement,           $
             underwriting and similar fees payable in
             connection with the Agreement, CMS 2003 Credit
             Agreement and Enterprises 2003 Credit Agreements)

minus  (b)   Cash interest income received by the Company and   $
             its Subsidiaries from Persons other than the
             Company or any of its Subsidiaries

minus  (c)   Amounts received by the Company from Subsidiaries  $
             and Affiliates as reimbursement of interest
             expense and commitment, guaranty and letter
             of credit charges of the Company to such
             Subsidiary or Affiliate

                                                   TOTAL        $

C.     CASH DIVIDEND COVERAGE RATIO:                               _____ TO 1.00

       (TOTAL OF A DIVIDED BY TOTAL OF B)

       IN WITNESS WHEREOF, I have signed this Certificate this ___ day
         of _________, ___.

<PAGE>

                                    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 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 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: CMS ENERGY CORPORATION

4.       Agent: Bank One, NA, as the Agent under the Credit Agreement.

5.       Credit Agreement: The Credit Agreement dated as of May 19, 2003 among
CMS Energy Corporation, the Banks party thereto, and Bank One, NA, as Agent.

                                      D-1

<PAGE>
6.       Assigned Interest:

<TABLE>
<CAPTION>
                     Aggregate Amount of
                   Commitment/ Outstanding     Amount of Commitment/        Percentage Assigned of
                   Credit Exposure for all  Outstanding Credit Exposure  Commitment/ Outstanding Credit
Facility Assigned         Banks*                    Assigned*                      Exposure(2)
-------------------------------------------------------------------------------------------------------
<S>                <C>                      <C>                          <C>
____________       $                        $                                       _______%
-------------------------------------------------------------------------------------------------------
____________       $                        $                                       _______%
-------------------------------------------------------------------------------------------------------
____________       $                        $                                       _______%
-------------------------------------------------------------------------------------------------------
</TABLE>

7. Trade Date:________________________________________ (3)

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](4) Accepted:
BANK ONE, NA, as Agent

By:_________________________________________
Title:

[Consented to:](5)
[NAME OF RELEVANT PARTY]

By:_________________________________________
Title:

-------------------
*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.

(3) Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.

(4) To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.

(5) 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.

<PAGE>

                                     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 (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 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
(ii) it will

                                    Annex 1-1

<PAGE>

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.

                                    Annex 1-2

<PAGE>

                                    EXHIBIT E

                            FORM OF PLEDGE AGREEMENT

                                PLEDGE AGREEMENT

         This Pledge Agreement (this "Pledge Agreement") dated as of May __,
2003 is made by CMS Enterprises Company (the "Pledgor"), in favor of Bank One,
NA, as agent under the Credit Agreement referred to below (in such capacity, the
"Administrative Agent").

                              W I T N E S S E T H:

         WHEREAS, CMS Energy Corporation (the "Company"), various financial
institutions and the Administrative Agent have entered into a Credit Agreement
dated as of May __, 2003 (the "Credit Agreement"; capitalized terms used but not
defined here have the respective meanings ascribed to such terms in the Credit
Agreement);

         WHEREAS, pursuant to the Credit Agreement, the Company may obtain funds
to make loans or advances to, or obtain letters of credit to support obligations
of, the Pledgor and/or one or more of the Pledgor's Subsidiaries;

         WHEREAS, to secure payment by the Company of all Obligations, the
Pledgor has agreed to pledge certain collateral to the Administrative Agent,
including certain investments previously pledged to Bank One, NA, in its
individual capacity pursuant to an Amended and Restated Pledge Agreement between
the Pledgor and Bank One, NA dated as of April 30, 2003;

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Pledgor and the Administrative
Agent agree as follows:

         1.       The term "Collateral" means (a) all shares of the One Group
Institutional Prime Money Market Fund, Account #701121622 (the "Bank One
Account") held at State Street Bank and Trust Company, (b) Account #4430001049,
titled "Bank One, NA, as Administrative Agent, f/b/o CMS Enterprises Company"
and maintained with Union Bank of California, N.A. (the "UBOC Account" and,
together with the Bank One Account, each an "Account" and collectively the
"Accounts") and all funds deposited therein and interest thereon and (c) all
investment property, securities entitlements, commodity accounts, commodities,
instruments, investments, cash, other funds and other assets of any nature and
description at any time held in or credited to either Account, together with all
substitutions, replacements, additions, proceeds, products and supporting
obligations of or related to the foregoing. The foregoing grant also includes
any stock rights, stock dividends, liquidating dividends, new securities and
other property to which the Pledgor may become entitled because it owns any of
the property described above. Any securities, investment property or other
property of the Pledgor at any time in the custody, possession or control of the
Administrative Agent or any Bank shall also constitute Collateral unless the
Administrative Agent or such Bank holds such property solely in a fiduciary
capacity.

<PAGE>

         2.       To secure the prompt and complete payment of all Obligations,
the Pledgor hereby pledges, assigns, delivers and sets over to the
Administrative Agent, and hereby grants to the Administrative Agent a security
interest in, all of the Collateral and all proceeds thereof.

         3.       The Pledgor agrees to execute and deliver from time to time
such documents and instruments, and take such other actions, as are necessary or
appropriate to ensure that the Administrative Agent has a first perfected
security interest in the Collateral to secure the Obligations (and, without
limiting the foregoing, the Pledgor hereby authorizes the Administrative Agent
to file, at the Pledgor's expense, financing statements, continuations thereof
and similar documents in any public office reasonably deemed appropriate by the
Administrative Agent).

         4.       (a) If any Event of Default has occurred and is continuing,
the Administrative Agent may: (i) require all interest and dividends on, and
other cash proceeds of, the Collateral to be deposited in a special non-interest
bearing cash collateral account with the Administrative Agent or any designee
thereof and/or (ii) at its option, apply any of the collected balances in such
cash collateral account to the payment of the Obligations, whether or not the
Obligations shall then be due, or hold such cash collateral account as further
security for the Obligations. The Pledgor shall have no control whatsoever over
any such cash collateral account and hereby grants to the Administrative Agent a
security interest in each such cash collateral account if and when created.

                  (b)      If the Pledgor shall become entitled to receive or
shall receive any instrument or deposit (whether certificated or uncertificated)
in substitution or exchange for any of the Collateral, the Pledgor agrees to
accept the same as the Administrative Agent's agent and to hold the same in
trust for the Administrative Agent and to deliver the same forthwith to the
Administrative Agent in the exact form received, with the endorsement of the
Pledgor when necessary, to be held by the Administrative Agent, subject to the
terms hereof, as further security for the Obligations.

         5.       If any amount payable by the Company under or in connection
with the Credit Agreement is not paid when due (by acceleration or otherwise),
then the Administrative Agent shall have the right, without any notice, to
forthwith appropriate and realize upon the Collateral, or any part thereof. Such
realization may include (a) the redemption of shares in the Bank One Account
and/or (b) the withdrawal of funds from the UBOC Account, and the net proceeds
of any such redemption and/or withdrawal (which, in the aggregate, shall not
exceed the total amount of the Obligations) shall be forwarded directly to the
Administrative Agent for application to the Obligations as provided below. If,
for any reason, the Administrative Agent is unable or elects not to effect such
a redemption or withdrawal, the Administrative Agent may avail itself of any and
all other rights and remedies provided by any law or this Pledge Agreement,
including but not limited to the rights and remedies of a secured party under
the Uniform Commercial Code as in effect from time to time in the State of New
York. The Pledgor agrees and acknowledges that, as a result of applicable
securities laws, the Administrative Agent may not be able to effect a public
sale of the Collateral, and sales at a private sale may be on terms and at a
price less favorable than if the Collateral were sold at a public sale. The
Pledgor agrees that all private sales made under these circumstances shall be
construed to have been made in a commercially reasonable manner. The
Administrative Agent's compliance with any applicable state or federal law
requirement in connection with the disposition of the Collateral will

<PAGE>
not adversely affect the commercial reasonableness of any sale or other
disposition of the Collateral. If the Pledgor is entitled to any notice, that
requirement will be met if the Administrative Agent sends notice at least ten
(10) days prior to the date of the sale, disposition or other event requiring
notice, and such notice shall be deemed commercially reasonable.

         The proceeds of any appropriation of or realization upon the Collateral
shall be applied first, to the costs and expenses of every kind (including,
without limitation, the fees and expenses of outside and in-house counsel to the
Administrative Agent) incurred by the Administrative Agent in connection with
the safekeeping or liquidation of the Collateral and the collection and
enforcement of the Obligations, second, to payment of any accrued and unpaid
interest and fees on the Obligations, third, to payment of the principal of the
Obligations and, then, to the Pledgor or any other party entitled thereto under
applicable law.

         6.       The Pledgor represents and warrants that (a) as of the date
hereof it is the direct and beneficial owner of all of the Collateral, free and
clear of any Lien except for the security interest granted to the Administrative
Agent hereunder, (b) this Pledge Agreement creates a valid security interest in
favor of the Administrative Agent in all of the Collateral and (c) the
Administrative Agent has a perfected first-priority security interest in all
Collateral in the Bank One Account and, upon the deposit of funds therein as
contemplated by the Credit Agreement, the Administrative Agent will have a
perfected first-priority security interest in all Collateral in the UBOC
Account, in each case subject to no other Liens.

         7.       (a) The Pledgor covenants and agrees that so long as any
Obligations are unpaid, any Facility LC is outstanding or any Bank has any
Commitment, the Pledgor will not (i) liquidate, withdraw or otherwise dispose of
any of the Collateral (except as permitted pursuant to clause (c) below) or (ii)
create, incur or permit to exist any Lien on any of the Collateral other than
the security interest in favor of the Administrative Agent created hereby.

                  (b)      The Pledgor warrants and will defend the right, title
and security interest of the Administrative Agent in and to the Collateral
against the claims of any other Person.

                  (c)      The Pledgor covenants and agrees that so long as any
Obligations are unpaid, any Facility LC is outstanding or any Bank has any
Commitment, the amount of the Collateral shall at all times be equal to or
exceed 100.5% of the stated amount of the undrawn and unexpired Facility LCs
(the "Required Amount"). The Administrative Agent shall at all times have the
right to require that the Pledgor deliver to the Administrative Agent (for
deposit in the Accounts) additional Collateral so that the amount of the
Collateral shall not be less than the Required Amount. The Administrative Agent
agrees that, so long as no Default or Event of Default exists, it will from time
to time, upon written request of the Pledgor, release to the Pledgor any of the
Collateral in excess of the Required Amount.

         8.       No course of dealing between the Pledgor and the
Administrative Agent or any Bank, nor any failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Bank, any right,
power or privilege hereunder or under the Credit Agreement or any other Credit
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or thereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies

<PAGE>
herein provided and provided in the other Credit Documents and in all other
agreements, instruments and documents delivered, or to be delivered, in
connection therewith are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law, including, without limitation, the
rights and remedies of a secured party under the Uniform Commercial Code. The
provisions of this Pledge Agreement are severable and if any clause or provision
hereof shall be held invalid or unenforceable in whole or in part then such
invalidity or unenforceability shall attach only to such clause or provision, or
part thereof, and shall not in any manner affect such clause or provision in any
other jurisdiction or any other clause or provision in this Pledge Agreement in
any jurisdiction.

          9.      This Pledge Agreement shall inure to the benefit of the
Pledgor and the Administrative Agent and their respective successors and
assigns, except that the Pledgor shall not assign this Pledge Agreement without
the prior written consent of the Administrative Agent.

         10.      The Pledgor agrees to reimburse the Administrative Agent
promptly upon demand for any and all costs and out-of-pocket expenses (including
attorneys' fees) paid or incurred by the Administrative Agent in connection with
the amendment, modification, collection and enforcement of this Pledge
Agreement. The obligations of the Pledgor under this Section 10 shall survive
the termination of this Pledge Agreement.

         11.      THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF NEW YORK.

         12.      THE PLEDGOR HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL,
STATE, OR FEDERAL COURT LOCATED WITHIN THE CITY OF NEW YORK, NEW YORK AND WAIVES
ANY OBJECTION WHICH THE PLEDGOR MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND CONSENTS THAT
ALL SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO IT AT THE
ADDRESS SET FORTH BELOW ITS SIGNATURE HERETO. NOTHING CONTAINED IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE PLEDGOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION. THE PLEDGOR AND THE ADMINISTRATIVE AGENT WAIVE THEIR RIGHT TO
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING RELATING TO OR IN ANY WAY ARISING OUT
OF THIS PLEDGE AGREEMENT.

         13.      All notices and other communications provided to any party
hereto under this Pledge Agreement shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address set forth
below its signature hereto or at such other address as may be designated by such
party in a notice to the other party. Any notice, if mailed and properly
addressed with postage prepaid, shall be deemed given when received; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes and electronic or telephonic
confirmation in the case of facsimiles). Either party hereto may each change its
address for notices by a written notice to the other party.

<PAGE>
         14.      The Administrative Agent or any Bank may, from time to time,
at its sole discretion and without notice to the Pledgor, take any or all of the
following actions without affecting the obligations of the Pledgor hereunder:
(a) retain or obtain a security interest in any property to secure any of the
Obligations, (b) retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to the Pledgor, with respect to any of the
Obligations, (c) extend or renew any of the Obligations for one or more periods
(whether or not longer than the original period), alter or exchange any of the
Obligations, or release or compromise any obligation of any obligor with respect
to any of the Obligations, (d) release its security interest in, or surrender,
release or permit any substitution or exchange for, all or any part of any
property of any other person or entity securing any of the Obligations, or
extend or renew for one or more periods (whether or not longer than the original
period) or release, compromise, alter or exchange any obligations of any nature
of any obligor with respect to any such property, and (e) resort to the Pledgor
for payment of any of the Obligations when due, whether or not the
Administrative Agent or such Bank shall have resorted to any property securing
any of the Obligations or shall have proceeded against any other obligor
primarily or secondarily obligated with respect to any of the Obligations.

         The Pledgor hereby expressly waives: (a) notice of the existence or
creation or non-payment of all or any of the Obligations, (b) presentment,
demand, notice of dishonor, protest and all other notices whatsoever and (c) all
diligence in collection or protection of or realization upon any Obligations or
any security for or guaranty of any Obligations.

         Notwithstanding any application of any Collateral to the payment of any
of the Obligations, the Pledgor shall not be subrogated to any right of the
Administrative Agent or any Bank until such time as the Administrative Agent and
the Banks shall have received final payment in cash of the full amount of all
Obligations.

         15.      This Pledge Agreement shall remain in full force effect until
all Facility LCs have expired, been fully drawn or otherwise been terminated,
all Obligations have been paid in full in cash and all Commitments have
terminated. Thereafter, the Administrative Agent shall, promptly upon request by
the Pledgor, execute and deliver (at the Pledgor's expense) such documents and
instruments as the Pledgor may reasonably request to release the Administrative
Agent's security interest in the remaining Collateral, to cause such release to
be evidenced on all appropriate public records and to cause all remaining
Collateral to be returned to the Pledgor (or such other Person as may be
entitled thereto under applicable law).

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the Pledgor has executed this Pledge Agreement in
favor of the Administrative Agent as of the date first above written.

                                           CMS ENTERPRISES COMPANY

                                           By:__________________________________
                                           Title:_______________________________
                                                 One Energy Plaza
                                                 Jackson, MI 49201
                                                 Attention: Treasurer

Accepted:

BANK ONE, NA, as Administrative Agent

By:___________________________________
Title:________________________________
         1 Bank One Plaza
         Suite 0363
         Chicago, Illinois  60670
         Attention: Jane Bek

<PAGE>

                                    EXHIBIT F

                      FORM OF ISSUANCE/MODIFICATION REQUEST

Bank One, NA, as LC Issuer under
         the Credit Agreement referred to below

Attention:__________________

Ladies and Gentlemen:

         Please refer to the Credit Agreement dated as of May 19, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"; capitalized terms used but not defined herein have the respective
meanings ascribed thereto in the Credit Agreement) among CMS Energy Corporation
(the "Company"), various financial institutions and Bank One, NA as LC Issuer
and as Agent. Pursuant to Section 3.3 of the Credit Agreement, the Company
hereby requests the [issuance/Modification] of a Facility LC (the "Specified
LC") [in substantially the form attached hereto][in accordance with the
following terms]:

                         INSERT THESE ITEMS FOR ISSUANCE

         (i)      The requested date of issuance of the Specified LC
is_______________.(1)

         (ii)     The expiration date of the Specified LC is _________.(2)

         (iii)    The proposed stated amount of the Specified LC is
_______________.

         (iv)     The beneficiary of the Specified LC is: [insert name and
address of beneficiary].

         (v)      The conditions under which a drawing may be made under the
Specified LC are as follows: ______________.

                       INSERT THESE ITEMS FOR MODIFICATION

         (i)      The requested date of [extension] [increase] [decrease]
[modification] of the Specified LC is ______________.(1)

         (ii)     The [expiration date for the] [stated amount of the] Specified
LC is to be [extended to ___________] [increased to ___________] [decreased to
___________] [modified as follows: ________________].

         (iii) Attached hereto as Annex A is a consent to the requested
[decrease] [modification] executed by the beneficiary of the Specified LC.(3)

---------------------------
(1)        Must be a Business Day.

(2)        Not later than the fifth Business Day preceding the Termination Date.

(3)        Include only if required.
<PAGE>

         INSERT INFORMATION REGARDING SPECIAL CONDITIONS / INSTRUCTIONS (IF ANY)

         (i)      _____________________________________________________________.

         (ii)     _____________________________________________________________.

                                           CMS ENERGY CORPORATION

                                           By:__________________________________
                                              Name:
                                              Title:

<PAGE>

                                   SCHEDULE I

<TABLE>
<CAPTION>
            BANK                                 COMMITMENT
            ----                                 ----------
<S>                                             <C>
Bank One, NA                                    $ 92,500,000

Union Bank of California, N.A.                  $ 92,500,000

AGGREGATE COMMITMENT                            $185,000,000
</TABLE>

<PAGE>

                                   SCHEDULE II

                              MATERIAL LIABILITIES

              CMS ENERGY CORPORATION OFF-BALANCE SHEET LIABILITIES
                             AS OF FEBRUARY 28, 2003

<TABLE>
<CAPTION>
                                TYPE                          BENEFICIARY                             AMOUNT
<S>                       <C>                          <C>                                         <C>
CMS ENERGY
                          Letter of Credit             County of Los Angeles                       $    320,507
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank of Tokyo Mitsubishi                       7,000,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             TCF Leasing Inc.                               1,919,470
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Honeywell International                        1,250,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Barclays Bank PLC                              2,500,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Barclays Bank PLC                             70,300,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Royal Bank of Canada                           4,715,075
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Constellation Power Source                     5,000,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Midwest Independent System                     3,500,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Midwest Independent System                     1,900,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Consumers Energy                               1,979,556
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Federal Insurance Company                        350,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             St. Paul Insurance Company                       228,516
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bankers Trust Company                          1,600,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             American Electric Power                        5,000,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             County of Los Angeles                            136,272
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Morgan Stanley Capital Group                   4,000,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Barclays Bank Abu Dhabi                       17,500,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Deutsche Bank Trust Co                         4,800,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Deutsche Bank Trust Co                         2,500,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Deutsche Bank Trust Co                        12,400,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Deutsche Bank Trust Co                         2,086,700
                          -------------------------------------------------------------------------------------
                          Support Obligation           Comerica (Genesse Power)                       3,000,000
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS GENERATION

                          -------------------------------------------------------------------------------------
                          Letter of Credit             Prudential Insurance                           1,338,973
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Prudential Insurance                             546,915
                          -------------------------------------------------------------------------------------
                          Letter of Credit             ICICI Bank Ltd.                                2,966,247
                          -------------------------------------------------------------------------------------
                          Letter of Credit             ICICI Bank Ltd.                                1,165,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             ICICI Bank Ltd.                                1,605,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             ICICI Bank Ltd.                                2,551,290
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bankers Trust Company                          3,000,000
                          -------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                       <C>                          <C>                                           <C>
                          Letter of Credit             Bankers Trust Company                         23,000,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bankers Trust Company                         11,300,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bankers Trust Company                         15,745,500
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank One                                       2,086,700
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank One                                       1,600,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank One                                       4,800,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank One                                       2,500,000
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Bank One                                      12,400,000
                          -------------------------------------------------------------------------------------
                          Support Obligation           ICICI Bank Ltd.                                3,671,072
                          -------------------------------------------------------------------------------------
                          Support Obligation           AFCO Credit Corporation                        2,475,656
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Michigan                                200,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  United States EPA                                 54,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Kansas                                  305,220
                          -------------------------------------------------------------------------------------
                          Surety Bond                  City of Flint                                    100,000
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS ELECTRIC & GAS
                          -------------------------------------------------------------------------------------
                          Service Contract             General Electric                               1,351,866
                          -------------------------------------------------------------------------------------
                          Service Contract             General Electric                               1,803,340
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS GAS TRANSMISSION
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Michigan                                270,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Twp of Addison                                   250,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Oklahoma Tax Commission                           77,691
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Oklahoma Tax Commission                           10,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Railroad Commission of TX                         25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Railroad Commission of TX                         25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Railroad Commission of TX                         25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Walworth County                                  208,500
                          -------------------------------------------------------------------------------------
                          Surety Bond                  McHenry City Hwy Dept.                           260,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Lisbon Twp                                        10,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Ixonia                                    10,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Walworth                                  30,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Concord                                   40,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Sullivan                                 100,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Richmond                                 250,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Whitewater                                40,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Town of Darien                                   300,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  US Corps of Engineers                            200,000
                          -------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                       <C>                          <C>                                          <C>
CMS MARKETING SERVICES &
TRADING
                          -------------------------------------------------------------------------------------
                          Surety Bond                  St. Paul Insurance Company                   175,035,391
                          -------------------------------------------------------------------------------------
                          Surety Bond                  St. Paul Insurance Company                    81,182,179
                          -------------------------------------------------------------------------------------
                          Surety Bond                  St. Paul Insurance Company                    27,385,899
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Texas                                    30,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  United States of America                       9,201,987
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Maryland                             13,603,456
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Arizona                                  40,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Rent                                           1,640,257
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS ENTERPRISES
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Oakland, CA                                      151,145
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Pasadena, CA                                   1,036,571
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Salt Lake City, UT                               127,094
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Ft. Lauderdale, FL                               133,981
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Nashville, TN                                     61,710
                          -------------------------------------------------------------------------------------
                          Lease Obligation-Viron       Troy, MI                                         178,841
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Kansas                                  365,208
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Chambersburg Schools                           4,833,460
                          -------------------------------------------------------------------------------------
                          Surety Bond                  City of Garden Grove                           5,556,848
                          -------------------------------------------------------------------------------------
                          Surety Bond                  St. Louis Symphony                             4,435,600
                          -------------------------------------------------------------------------------------
                          Surety Bond                  City of Manteca                                7,491,530
                          -------------------------------------------------------------------------------------
                          Surety Bond                  U.S. Postal Service                            2,374,918
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Arkansas                                 10,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Mt San Antonio College                           356,319
                          -------------------------------------------------------------------------------------
                          Surety Bond                  University of SA Oklahoma                      6,949,396
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Metro Govt of Nashville, TN                       40,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  County of Los Angeles                          1,329,972
                          -------------------------------------------------------------------------------------
                          Surety Bond                  L.A. Community College                           302,227
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
DEARBORN INDUSTRIAL
GENERATION LLC
                          -------------------------------------------------------------------------------------
                          None
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
DEARBORN INDUSTRIAL
ENERGY LLC
                          -------------------------------------------------------------------------------------
                          None
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                       <C>                          <C>                                           <C>
CMS INTERNATIONAL
VENTURES LLC
                          -------------------------------------------------------------------------------------
                          None
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS CAPITAL LLC
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Michigan                                 87,000
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS GENERATION MICHIGAN
POWER LLC
                          -------------------------------------------------------------------------------------
                          None
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS GAS PROCESSING LLC
                          -------------------------------------------------------------------------------------
                          Lease Obligation             PW, LM, J and MM Barby                               500
                          -------------------------------------------------------------------------------------
                          Lease Obligation             LD & Winona Robins                                   600
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS NATURAL GAS
GATHERING LLC
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Nannie Kirk                                        8,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             A.D. Reed                                          1,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Eddie and Janet Wiley                                500
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
PANHANDLE PIPE LINE
COMPANY
                          -------------------------------------------------------------------------------------
                          Letter of Credit             Prudential Insurance Co                       62,500,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Indiana                                  50,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Oklahoma                                 25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Lenawee County                                     1,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Michigan                                 51,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Illinois Dept of Transp.                          25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  City of Fort Wayne                                 5,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  United States of America                         300,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Harris County, Texas                               5,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Texas Dept of Transp.                             10,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Texas                                    25,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  People of the State of Illinois                   50,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Arkansas                                  1,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Louisiana                                 2,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  United States of America                         350,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Commonwealth of Kentucky                          50,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Michigan                                250,000
                          -------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                       <C>                          <C>                                         <C>
                          Surety Bond                  United States of America                         300,000
                          -------------------------------------------------------------------------------------
                          Lease Obligations            Various                                       49,328,000
                          -------------------------------------------------------------------------------------

                          -------------------------------------------------------------------------------------
CMS FIELD SERVICES, INC.
                          -------------------------------------------------------------------------------------
                          Lease Obligation             K/B Fund IV                                      650,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Canon                                              6,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Ricoh                                             10,000
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Ascom Hasler                                       3,600
                          -------------------------------------------------------------------------------------
                          Lease Obligation             Prairie Land Company                              12,500
                          -------------------------------------------------------------------------------------
                          Surety Bond                  Oklahoma Tax Commission                        1,533,322
                          -------------------------------------------------------------------------------------
                          Surety Bond                  United States of America                         300,000
                          -------------------------------------------------------------------------------------
                          Surety Bond                  State of Wyoming                                  33,000
                          -------------------------------------------------------------------------------------

  TOTAL OFF-BALANCE SHEET DEBT                                                                     $712,512,077

                                                       Surety Bonds                                 350,100,000

                                                       Indebt Sched. Indemnities                    369,700,000
</TABLE>

<PAGE>

                                   SCHEDULE II

                          MATERIAL LIABILITIES (CONT.)

                   CMS ENERGY CORPORATION GAAP DEBT BREAKDOWN
                             AS OF FEBRUARY 28, 2003

<TABLE>
<CAPTION>
      BORROWER                             FACILITY                             CURRENT BALANCE
<S>                       <C>                                        <C>                         <C>
CMS ENERGY

                          $295.8MM Credit Agreement                                              $   123,819,866
                          $300MM Credit Agreement                                                    133,800,000
                          General Term Notes
                                                                     Series D                         79,922,000
                                                                     Series E                        215,955,000
                                                                     Series F                        297,686,000
                          Sr. Unsecured Notes @ 7 5/8%                                               175,815,000
                          Convert. Sub. Debentures                                                   172,500,000
                          Extend. Tenor Rate Adj. Sec.                                               180,000,000
                          Sr. Unsecured Notes @ 7.5%                                                 408,845,000
                          Sr. Unsecured Notes @ 6.75%                                                287,025,000
                          Sr. Notes @ 8.9%                                                           260,475,000
                          Sr. Notes @ 8 3/8%                                                         150,000,000
                          Sr. Notes @ 9.875%                                                         467,558,000
                          Premium Equity Participating Security Units                                220,000,000
                          Sr. Notes @ 8.5%                                                           300,375,000
                          CMS Methanol Company                                                        14,000,000

PANHANDLE EASTERN
PIPE LINE

                          Sr. Notes @ 6.125%                                                         292,500,000
                          Sr. Notes @ 6.5%                                                           158,980,000
                          Sr. Notes @ 7.0%                                                           135,890,000
                          Sr. Notes @ 8.25%                                                           60,000,000
                          Notes @ 7.785%                                                             100,000,000
                          Debentures @ 7.2%                                                           58,000,000
                          Debentures @ 7.95%                                                          76,500,000
                          Citibank Bridge Loan                                                        40,000,000

</TABLE>

<PAGE>

<TABLE>
<S>                       <C>                                                                        <C>
CMS ENTERPRISES
                          None

CMS GENERATION COMPANY

                          CMS Capital LLC                                                              4,957,214

CMS GAS TRANSMISSION

                          CMS Capital LLC                                                             11,394,197
                          Antrim Gas Term Loan with BOM                                               22,625,000
                          Jackson Pipeline RCF with Tor Dom                                            2,687,000

CMS ELECTRIC & GAS

                          None

CMS MARKETING SERVICES & TRADING

                                  CMS Capital LLC                                                    127,353,473

CMS INTERNATIONAL VENTURES LLC

                                  None

DEARBORN INDUSTRIAL ENERGY LLC

                                  None

CMS GENERATION MICHIGAN POWER LLC

                                  None

DEARBORN INDUSTRIAL GENERATION

                                  CMS Capital LLC                                                     13,337,242

CMS FIELD SERVICES

                                  The CIT Group                                                          731,204

CMS GAS PROCESSING LLC

                                  CMS Capital LLC                                                      6,036,529

CMS NATURAL GAS GATHERING LLC

                                  CMS Capital LLC                                                      3,346,852

</TABLE>

<PAGE>

<TABLE>
<S>                               <C>                                                                <C>
PANHANDLE PIPE LINE COMPANY
                                  Trunkline Gas Company S-T                                          100,000,000
                                  Trunkline Gas Company L-T                                          100,000,000

CMS CAPITAL LLC

                                  CMS Enterprises Company                                             11,197,420
                                  CMSG Filer City Operating Company                                      413,815
                                  CMSG Honey Lake Company                                                462,258
                                  CMS Jackson Pipeline Company                                            91,705
                                  CMS Bay Area Pipeline Company                                        1,054,924
                                  CMSG Graying Holdings Company                                        1,164,325
                                  CMSG Operating Company                                               1,323,669
                                  CMSG Mon Valley Company                                                 11,563
                                  CMS Saginaw Bay Lateral Company                                        276,140
                                  CMS Antrim Gas LLC                                                   1,370,523
                                  CMSG Holdings Company                                                1,206,958
                                  CMSG Altoona Company                                                   182,228
                                  CMSG Genesee Company                                                 1,513,182
                                  CMS Resource Development                                             2,855,881
                                  CMSG Recycling Company                                                 371,025
                                  CMSG Lyonsdale Company                                                  20,160
                                  Mon Valley Energy                                                          113
                                  CMSG Chateaugay Company                                                 35,096
                                  CMS Grands Lacs LLC                                                  1,400,457
                                  HYDRA-CO Enterprises, Inc.                                           1,696,027
                                  CMSG Operating Company II                                            1,055,368
                                  HCE Appomattox, Inc.                                                   341,816
                                  HCE Jamaica Development, Inc.                                            5,780
                                  HCO Jamaica, Inc.                                                      164,957
                                  CMS Electric & Gas Company                                           4,036,096
                                  CMS Texon Company                                                      632,042
                                  CMS Marysville Gas Liquids Company                                     670,134
                                  CMSG Stratton Company                                                   72,258
                                  CMS Field Services, Inc.                                            34,262,090
                                  CMS Laverne Gas Processing, LLC                                         64,085
                                  Panhandle Eastern Pipeline Company                                 308,744,037
                                  Taweeelah A2 Operating Company                                         810,173
                                  Dearborn Generation Operating, LLC                                   3,955,220
                                  CMS Capital Financial Services, Inc.                                   602,157
</TABLE>

<PAGE>

<TABLE>
<S>                               <C>                                                             <C>
                                  CMSG Michigan Power, LLC                                               804,292
                                  CMS Enterprises Data Mart                                              243,398
                                  CMS MS&T Michigan, LLC                                              15,991,117
                                  CMS Energy UK Limited                                                1,879,798
                                  CMS MicroPower Systems, LLC                                          3,422,229
                                  CMSG Investment Company I                                              808,707
                                  CMS Business Development, LLC                                        3,266,068
                                  CMS Enterprises Development, LLC                                       232,701
                                  CMS International Ventures, LLC                                      3,436,843
                                  CMS Enterprise Oil & Gas Company                                   108,856,818
                                  CMSG Investment Company V                                            1,553,780

  Total Gaap Debt                                                                                 $5,324,674,009
</TABLE>

<PAGE>

                                   SCHEDULE II

                          MATERIAL LIABILITIES (CONT.)

      CMS ENERGY CORPORATION INVESTMENTS IN SUBSIDIARIES AND OTHER PERSONS
      (INCLUDING INTERCOMPANY INVESTMENTS AND PLANNED CAPITAL EXPENDITURE /
                       EQUITY CONTRIBUTIONS TO SUCH SUBS)

<TABLE>
<S>                                                                               <C>
CMS FIELD SERVICES

 Investee - 18 month Capex

 Bighorn Gas Gathering, L.L.C. (50% of "Common Membership
 Interests" and all of Preferred B Units) (1% of the Common
 Membership Interests are owned by CMS Field Services
 Holdings Company)                                                                $8,000,000
 Bradshaw Energy, L.L.C. (97.5%)                                                           0
 CBC/Leon Limited Partnership (89%)                                                        0
 CMS Cherokee Gas Processing, L.L.C. (100%)                                          500,000
 CMS Gas Processing, L.L.C. (100%)                                                   700,000
 CMS Field Services Holdings Company (100%)                                                0
 CMS Gulf Coast Field Services, L.L.C. (100%)                                              0
 CMS Hydrocarbons, L.L.C. (100%)                                                           0
 CMS Laverne Gas Processing, L.L.C. (100%)                                                 0
 CMS Natural Gas Gathering, L.L.C. (100%)                                            900,000
 CMS Oklahoma Natural Gas Gathering, L.L.C. (100%)                                   200,000
 CMS Taurus Holdings Company, L.L.C. (100%)                                                0
 CMS Taurus Field Services, L.P. (99% limited partnership
 interest) (the remaining 1% general partnership interest
 is owned by CMS Field Services Holdings Company)                                    750,000
 Fort Union Gas Gathering, L.L.C. (33.33%)                                         1,000,000
 Leon Limited Partnership (50%)                                                            0

CMS GENERATION

 Investee
 Benton Falls                                                                      4,330,000
 Salt Lake City                                                                    3,000,000
 Lake Wood                                                                         4,000,000
 Filbman Tire Sale                                                                 6,000,000
 Shuweihat                                                                        70,300,000
 Shuweihat L/C fees                                                                1,724,000
 Development Offices                                                               1,500,000
 Overheads Jackson/Dearbon                                                         2,150,000

PANHANDLE HOLDINGS

 Partnership contributions to Guardian                                             1,533,000

  TOTAL INVESTMENTS                                                             $106,587,000
</TABLE>

<PAGE>

                                  SCHEDULE III

                           EXISTING LETTERS OF CREDIT

<TABLE>
<CAPTION>
LC NUMBER              BENEFICIARY                               AMOUNT         FACILITY LC #
---------              -----------                               ------         -------------
<S>          <C>                                            <C>                 <C>
 330024      Deutsche Bank Trust Co. of Americas            $     4,800,000
 330025      Deutsche Bank Trust Co. of Americas            $     2,500,000
 330026      Deutsche Bank Trust Co. of Americas            $    12,400,000
 330911      Deutsche Bank Trust Co. of Americas            $     2,086,700
 331042      Consumers Energy Company                       $     2,026,689
SB00122      TCF Leasing                                    $     1,919,470        751207
SB00118      Bank of Tokyo/Mitsubishi Trust                 $     7,000,000        751219
SB00117      Constellation Power Source                     $     5,000,000        751204
SB00130      Honeywell                                      $     1,250,000        751206
SB00131      Shuweihat                                      $    70,300,000        751218
SB00132      Shuweihat                                      $     2,500,000        751217
SB00136      City of Los Angeles                            $    320,507.39        751216
SB00138      Midwest Independent System Operator, Inc.      $     3,500,000        751211
SB00139      Midwest Independent System Operator, Inc.      $     1,900,000        751212
SB00147      Bankers Trust                                  $     3,000,000        751210
SB00184      Jorf Lasfar                                    $     1,600,000        751205
SB00148      Jorf Lasfar                                    $    23,000,000        751215
SB00149      Jorf Lasfar                                    $    11,300,000        751214
SB00150      Jorf Lasfar                                    $    16,209,000        751213
SB00188      County of Los Angeles                          $    136,271.81        332014
SB00226      Federal Insurance Company                      $       350,000        751209
SB00228      St.Paul Insurance Company                      $       228,516        751208

                                               TOTAL        $173,327,154.20

                                          Bank One Share    $ 86,663,577.10
                                         Union Bank Share   $ 86,663,577.10
</TABLE><PAGE>

                                                                    EXHIBIT 4(i)

                           CERTIFICATE OF DESIGNATION
                                       OF
                  4.50% CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                       OF
                             CMS ENERGY CORPORATION

         Pursuant to Section 302(4) of the Michigan Business Corporation Act,
MCLA Section 450.1302(4):

         CMS ENERGY CORPORATION, a Michigan corporation (the "Corporation"),
does hereby certify that the following resolution was duly adopted pursuant to
the authority of the Board of Directors of the Corporation, with the provisions
thereof fixing the number of shares of the series and the dividend rate being
set through a Special Financing Committee of the Board of Directors:

         RESOLVED: That, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions of Article
III of the Restated Articles of Incorporation of the Corporation , as amended
from time to time (the "Articles of Incorporation"), and pursuant to Section
302(4) of the Michigan Business Corporation Act, the Board of Directors hereby
establishes a series of the preferred stock of the Corporation and hereby states
that the series' voting powers, designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof (in addition to the provisions set forth in the Articles
of Incorporation which are applicable to the preferred stock of all series),
shall be as follows:

         1.       Designation and Amount; Ranking.

         (a)      There shall be created from the 10,000,000 shares of preferred
stock, par value $0.01 per share, of the Corporation authorized to be issued
pursuant to the Articles of Incorporation, a series of preferred stock,
designated as the "4.50% Cumulative Convertible Preferred Stock," par value
$0.01 per share (the "Preferred Stock"), and the number of shares of such series
shall be 5,000,000. Such number of shares may be decreased by resolution of the
Board of Directors; provided that no decrease shall reduce the number of shares
of Preferred Stock to a number less than that of the shares of Preferred Stock
then outstanding plus the number of shares issuable upon exercise of options or
rights then outstanding.

         (b)      The Preferred Stock will, with respect to both dividend rights
and rights upon the liquidation, winding-up or dissolution of the Corporation,
rank (i) senior to all Junior Stock and (ii) on a parity with all other Parity
Stock.

         2.       Definitions. As used herein, the following terms shall have
the following meanings:

                  "Accumulated Dividends" shall mean, with respect to any share
         of Preferred Stock, as of any date, the aggregate accumulated and
         unpaid dividends on such share from and including the most recent
         Dividend Payment Date to which dividends have been paid (or the Issue
         Date, if such date is prior to the first Dividend Payment Date) to but
         not including such date.

                  "Additional Dividends" shall have the meaning given to it in
         Section 3(b).

                  "Affiliate" shall have the meaning ascribed to it, on the date
         hereof, under Rule 405 of the Securities Act..

                  "Agent Members" shall have the meaning given to it in Section
         11(a)(ii).

                  "Board of Directors" shall mean the Board of Directors of the
         Corporation or, with respect to any action to be taken by the Board of
         Directors, any committee (special or otherwise) of the Board of
         Directors duly authorized to take such action.

                                       1

<PAGE>

                  "Business Day" shall mean any day other than a Saturday,
         Sunday or other day on which commercial banks in The City of New York
         are authorized or required by law or executive order to close.

                  "Certificate of Designation" means this certificate of
         designation designating the Preferred Stock.

                  "Certificated Preferred Stock" shall have the meaning given to
         it in Section 4(f).

                  "Common Equity" of any Person means capital stock of such
         Person that is generally entitled to (i) vote in the election of
         directors of such Person or (ii) if such Person is not a corporation,
         vote or otherwise participate in the selection of the governing body,
         partners, managers or others that will control the management or
         policies of such Person.

                  "Common Stock" shall mean the common stock, par value $0.01
         per share, of the Corporation, or any other class of stock resulting
         from successive changes or reclassifications of such common stock
         consisting solely of changes in par value, or from par value to no par
         value, or as a result of a subdivision, combination or merger,
         consolidation or similar transaction in which the Corporation is a
         constituent corporation.

                  "Continuing Director" means a director who either was a member
         of the Board of Directors on December 5, 2003 or who becomes a member
         of the Board of Directors subsequent to that date and whose
         appointment, election or nomination for election by the Corporation's
         shareholders is duly approved by a majority of the Continuing Directors
         on the Board of Directors at the time of such approval, either by a
         specific vote or by approval of the proxy statement issued by the
         Corporation on behalf of the Board of Directors in which such
         individual is named as nominee for director.

                  "Conversion Agent" means the office or agency designated by
         the Corporation where Preferred Stock may be presented for conversion.
         Initially, the Conversion Agent shall be the Corporation located at One
         Energy Plaza, Jackson, Michigan 49201.

                  "Conversion Date" shall have the meaning given to it in
         Section 7(b).

                  "Conversion Notice" shall have the meaning given to it in
         Section 7(a).

                  "Conversion Price" shall mean $9.893 per share of Common
         Stock.

                  "Conversion Rate" shall mean the number of shares of Common
         Stock issuable upon conversion of a share of Preferred Stock per
         Liquidation Preference. The initial Conversion Rate is 5.0541 shares of
         Common Stock issuable upon conversion of a share of Preferred Stock per
         Liquidation Preference.

                  "Corporation Notice" shall have the meaning given to it in
         Section 4(e).

                  "Corporation Notice Date" shall have the meaning given to it
         in Section 4(e).

                  "Distributed Assets or Securities" shall have the meaning
         given to it in Section 7(f)(iii).

                  "Dividend Payment Date" shall mean March 1, June 1, September
         1 and December 1 of each year, commencing March 1, 2004.

                  "Dividend Rate" shall have the meaning given to it in Section
         3(a).

                  "Dividend Record Date" shall mean February 15, May 15, August
         15 and November 15 of each year.

                   "DTC" or "Depository" means The Depository Trust Company.

                                       2

<PAGE>

                  "Equity Interests" means any capital stock, partnership, joint
         venture, member or limited liability or unlimited liability company
         interest, beneficial interest in a trust or similar entity or other
         equity interest or investment of whatever nature.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
         as amended, and the rules and regulations promulgated thereunder.

                  "Fair Market Value" means the amount which a willing buyer
         would pay a willing seller in an arm's length transaction.

                  A "Fundamental Change" shall be deemed to have occurred at
         such time after the original issuance of the Preferred Stock that any
         of the following occurs: (i) the Common Stock or other capital stock
         into which the Preferred Stock is convertible is neither listed for
         trading on a United States national securities exchange nor approved
         for trading on the NASDAQ National Market or another established
         automated over-the-counter trading market in the United States; (ii) a
         "person" or "group" within the meaning of Section 13(d) of the Exchange
         Act, other than the Corporation, any subsidiary of the Corporation or
         any employee benefit plan of the Corporation or any such subsidiary,
         files a Schedule TO (or any other schedule, form or report under the
         Exchange Act) disclosing that such person or group has become the
         direct or indirect ultimate "beneficial owner" (as such term is used in
         Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or
         group shall be deemed to have "beneficial ownership" of all shares that
         such Person or group has the right to acquire whether such right is
         exercisable immediately or only after the passage of time) of Common
         Equity of the Corporation representing more than 50% of the voting
         power of the Corporation's Common Equity; (iii) consummation of any
         share exchange, consolidation or merger of the Corporation pursuant to
         which the Common Stock will be converted into cash, securities or other
         property or any sale, lease or other transfer (in one transaction or a
         series of transactions) of all or substantially all of the consolidated
         assets of the Corporation and its subsidiaries, taken as a whole, to
         any Person (other than the Corporation or one or more of the
         Corporation's subsidiaries); provided, however, that a transaction
         where the holders of the Corporation's Common Equity immediately prior
         to such transaction own, directly or indirectly, more than 50% of the
         aggregate voting power of all classes of Common Equity of the
         continuing or surviving corporation or transferee immediately after
         such event shall not be a Fundamental Change; or (iv) Continuing
         Directors cease to constitute at least a majority of the Board of
         Directors; provided, however, that a Fundamental Change shall not be
         deemed to have occurred in respect of any of the foregoing if either
         (A) the Last Reported Sale Price per share of Common Stock for any five
         Trading Days within the period of 10 consecutive Trading Days ending
         immediately before the later of the Fundamental Change or the public
         announcement thereof shall equal or exceed 105% of the Conversion Price
         in effect immediately before the Fundamental Change or the public
         announcement thereof or (B) at least 90% of the consideration
         (excluding cash payments for fractional shares) in the transaction or
         transactions constituting the Fundamental Change consists of shares of
         capital stock traded on a national securities exchange or quoted on the
         NASDAQ National Market (or which shall be so traded or quoted when
         issued or exchanged in connection with such Fundamental Change) (such
         securities being referred to as "Publicly Traded Securities") and as a
         result of such transaction or transactions the Preferred Stock becomes
         convertible into such Publicly Traded Securities (excluding cash
         payments for fractional shares).

                  "Fundamental Change Purchase Date" shall have the meaning
         given to it in Section 4(a).

                  "Fundamental Change Purchase Notice" shall have the meaning
         given to it in Section 4(c).

                  "Fundamental Change Purchase Price" shall have the meaning
         given to it in Section 4(a).

                  "Global Preferred Stock" shall have the meaning given to it in
         Section 11(a)(i).

                  "Holder" or "holder" shall mean a holder of record of the
         Preferred Stock.

                  "Issue Date" shall mean December 5, 2003, the original date of
         issuance of the Preferred Stock.

                                       3

<PAGE>

                  "Junior Stock" shall mean all classes of common stock of the
         Corporation and each other class of capital stock or series of
         preferred stock established after the Issue Date, by the Board of
         Directors, the terms of which do not expressly provide that such class
         or series ranks senior to or on parity with the Preferred Stock as to
         dividend rights or rights upon the liquidation, winding-up or
         dissolution of the Corporation.

                  "Last Reported Sale Price" of Common Stock on any date means
         the closing sale price per share (or, if no closing sale price is
         reported, the average of the bid and ask prices or, if more than one in
         either case, the average of the average bid and the average ask prices)
         on that date as reported in composite transactions for the principal
         U.S. securities exchange on which Common Stock is traded or, if the
         Common Stock is not listed on a U.S. national or regional securities
         exchange, as reported by the NASDAQ National Market. If the Common
         Stock is not listed for trading on a U.S. national or regional
         securities exchange and not reported by the NASDAQ National Market on
         the relevant date, the Last Reported Sale Price shall be the last
         quoted bid price for Common Stock in the over-the-counter market on the
         relevant date as reported by the National Quotation Bureau or similar
         organization. If the Common Stock is not so quoted, the Last Reported
         Sale Price will be the average of the mid-point of the last bid and ask
         prices for the Common Stock on the relevant date from each of at least
         three nationally recognized independent investment banking firms
         selected by the Corporation for this purpose.

                  "Liquidation Preference" shall mean, with respect to each
         share of Preferred Stock, $50.

                  "Mandatory Conversion Date" shall have the meaning given to it
         in Section 8(b).

                  "Market Price" means the average of the Last Reported Sales
         Price per share of Common Stock for the 20 Trading Day period ending on
         the applicable date of determination (if the applicable date of
         determination is a Trading Day or, if not, then on the last Trading Day
         prior to such applicable date of determination), appropriately adjusted
         to take into account the occurrence, during the period commencing on
         the first of the Trading Days during such 20 Trading Day period and
         ending on the applicable date of determination, of any event that would
         result in an adjustment of the Conversion Rate under this Certificate
         of Designation.

                  "Market Value" shall mean the average closing price of the
         Common Stock for a five consecutive Trading Day period on the NYSE (or
         such other national securities exchange or automated quotation system
         on which the Common Stock is then listed or authorized for quotation
         or, if the Common Stock is not so listed or authorized for quotation,
         an amount determined in good faith by the Board of Directors to be the
         fair value of the Common Stock).

                  "Maximum Conversion Rate" shall have the meaning given to it
         in Section 7(f)(viii).

                  "NYSE" shall mean the New York Stock Exchange, Inc.

                  "Officer" means the Chairman of the Board of Directors, the
         President, any Vice President, the Treasurer, the Secretary or any
         Assistant Secretary of the Corporation.

                  "Officers' Certificate" means a certificate signed by two
         Officers.

                  "Opinion of Counsel' means a written opinion from legal
         counsel who is acceptable to the Transfer Agent. The counsel may be an
         employee of or counsel to the Corporation or the Transfer Agent.

                  "Parity Stock" shall mean any class of capital stock or series
         of preferred stock established as of or after the Issue Date by the
         Board of Directors, the terms of which expressly provide that such
         class or series will rank on parity with the Preferred Stock as to
         dividend rights or rights upon the liquidation, winding-up or
         dissolution of the Corporation.

                  "Paying Agent" means any Person authorized by the Corporation
         to pay the dividends or Fundamental

                                       4

<PAGE>

         Change Purchase Price on any of the shares of Preferred Stock on behalf
         of the Corporation. Initially, the Paying Agent shall be the
         Corporation.

                  "Person" shall mean any individual, corporation, general
         partnership, limited partnership, limited liability partnership, joint
         venture, association, joint-stock company, trust, limited liability
         company, unincorporated organization or government or any agency or
         political subdivision thereof.

                  "Registration Default" shall have the meaning given to it in
         Section 3(b).

                  "Registration Rights Agreement" means the Registration Rights
         Agreement dated as of December 5, 2003, among the Corporation,
         Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
         Incorporated and the certain other initial purchasers of the Preferred
         Stock.

                  "SEC" or "Commission" shall mean the Securities and Exchange
         Commission.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Security Register" means the security register recording the
         holders of Preferred Stock kept at the offices of the Corporation.

                  "Security Registrar" shall be the Person holding the Security
         Register, and the Corporation will initially be designated as the
         Security Registrar.

                  "Senior Stock" shall mean each class of capital stock or
         series of preferred stock established after the Issue Date by the Board
         of Directors, the terms of which expressly provide that such class or
         series will rank senior to the Preferred Stock as to dividend rights or
         rights upon the liquidation, winding-up or dissolution of the
         Corporation.

                  "Shelf Registration Statement" shall mean a shelf registration
         statement filed with the SEC to cover resales of Transfer Restricted
         Securities by holders thereof, as required by the Registration Rights
         Agreement.

                  "Spin-Off Market Price" per share of Common Stock of the
         Corporation or the Equity Interests in a Subsidiary or other business
         unit of the Corporation on any day means the average of the daily Last
         Reported Sale Prices for the 10 consecutive Trading Days commencing on
         and including the fifth Trading Day after the ex date with respect to
         the issuance or distribution requiring such computations. As used
         herein, the term "ex date," when used with respect to any issuance or
         distribution, shall mean the first date on which the security trades
         regular way on the NYSE or such other national regional exchange or
         market in which the security trades without the right to receive such
         issuance or distribution.

                  "Subsidiary" means a Person more than 50% of the outstanding
         voting stock of which is owned, directly or indirectly, by the
         Corporation or by one or more other Subsidiaries, or by the Corporation
         and one or more other Subsidiaries. For the purposes of this
         definition, "voting stock" means stock which ordinarily has voting
         power of the election of directors, whether at all times or only so
         long as no senior class of stock has such voting power by reason of any
         contingency.

                  "Trading Day" means (i) if the applicable security is listed,
         admitted for trading or quoted on the NYSE, the NASDAQ National Market
         or another national security exchange, a day on which the NYSE, the
         NASDAQ National Market or another national security exchange is open
         for business or (ii) if the applicable security is not so listed,
         admitted for trading or quoted, any day other than a Saturday or Sunday
         or a day on which banking institutions in the State of New York are
         authorized or obligated by law, regulation or executive order to close.

                  "Trading Exception" shall have the meaning given to it in
         Section 7(a)(ii).

                                       5

<PAGE>

                  "Trading Price" of the Preferred Stock on any date of
         determination means the average of the secondary market bid quotations
         per share of Preferred Stock obtained by the Conversion Agent for
         $5,000,000 Liquidation Preference of the Preferred Stock at
         approximately 3:30 p.m., New York City time, on such determination date
         from three independent nationally recognized securities dealers the
         Corporation selects, provided that if three such bids cannot reasonably
         be obtained by the Conversion Agent, but two such bids are obtained,
         then the average of the two bids shall be used, and if only one such
         bid can reasonably be obtained by the Conversion Agent, this one bid
         shall be used. If the Conversion Agent cannot reasonably obtain at
         least one bid for $5,000,000 Liquidation Preference of the Preferred
         Stock from a nationally recognized securities dealer, then the Trading
         Price will be deemed to be less than 95% of the product of the sale
         price of Common Stock and the then applicable Conversion Rate.

                  "Transfer Agent" shall mean the Corporation's duly appointed
         transfer agent for the Preferred Stock. Initially, the Corporation will
         be the Transfer Agent.

                  "Transfer Restricted Securities" shall mean each share of
         Preferred Stock (or the shares of Common Stock into which such share of
         Preferred Stock is convertible) until (i) the date on which such
         security or its predecessor has been effectively registered under the
         Securities Act and disposed of in accordance with the Shelf
         Registration Statement, (ii) the date on which such security or
         predecessor is distributed to the public pursuant to Rule 144 under the
         Securities Act or is saleable pursuant to Rule 144(k) under the
         Securities Act or (iii) the date that such Preferred Stock ceases to be
         outstanding.

                  "Voting Rights Class" shall have the meaning given to it in
         Section 5(a)(i).

                  "Voting Rights Triggering Event" shall mean the failure of the
         Corporation to pay dividends on the Preferred Stock with respect to six
         or more quarterly periods (whether or not consecutive).

                  "Voting Stock" shall mean, with respect to any Person,
         securities of any class or classes of Capital Stock in such Person
         entitling the holders thereof (whether at all times or only so long as
         no senior class of stock has voting power by reason of contingency)
         generally to vote in the election of members of the Board of Directors
         or other governing body of such Person. For purposes of this
         definition, "Capital Stock" shall mean, with respect to any Person, any
         and all shares, interests, participations or other equivalents (however
         designated) of corporate stock or partnership interests and any and all
         warrants, options and rights with respect thereto (whether or not
         currently exercisable), including each class of common stock and
         preferred stock of such Person.

         3.       Dividends.

         (a)      The holders of shares of the outstanding Preferred Stock shall
be entitled, when, as and if declared by the Board of Directors out of funds of
the Corporation legally available therefor, to receive cumulative cash dividends
at the rate per annum of 4.50% per share on the Liquidation Preference
(equivalent to $2.25 per annum per share), payable quarterly in arrears (the
"Dividend Rate"). The Dividend Rate may be increased in the circumstances
described in Section 3(b) below. Dividends payable for each full dividend period
will be computed by dividing the Dividend Rate by four and shall be payable in
arrears on each Dividend Payment Date (commencing March 1, 2004) for the
quarterly period ending immediately prior to such Dividend Payment Date, to the
holders of record of Preferred Stock at the close of business on the Dividend
Record Date applicable to such Dividend Payment Date. Such dividends shall be
cumulative from the most recent date as to which dividends shall have been paid
or, if no dividends have been paid, from the Issue Date (whether or not in any
dividend period or periods the Board of Directors shall have declared such
dividends or there shall be funds of the Corporation legally available for the
payment of such dividends) and shall accumulate on a day-to-day basis, whether
or not earned or declared, from and after the Issue Date. Dividends payable for
any partial dividend period shall be computed on the basis of days elapsed over
a 360-day year consisting of twelve 30-day months. Accumulated unpaid dividends
accrue and cumulate dividends at the annual rate of 4.50% and are payable in the
manner provided in this Section 3.

                                       6

<PAGE>

         (b)      If (i) by November 5, 2004, the Shelf Registration Statement
has not been filed with the Commission, (ii) by March 5, 2005, the Shelf
Registration Statement has not been declared effective by the Commission, (iii)
after the Shelf Registration Statement has been declared effective the
Corporation fails to file a post-effective amendment, prospectus supplement,
amendment or supplement to any document incorporated by reference into such
prospectus or document if required by applicable law with the SEC within five
business days after a Holder provides the Corporation with certain required
information, if such filing is necessary to enable the Holder to deliver the
prospectus to purchasers of such Holder's Transfer Restricted Securities, (iv)
the Shelf Registration Statement ceases to be effective or fails to be usable
without being succeeded within 30 days by a post-effective amendment or an
additional registration statement filed and declared effective (other than as
permitted in (iii) above) pursuant to the Exchange Act that cures the failure of
the registration statement to be effective or usable, and (v) the aggregate
duration of any suspension periods in any period exceeds certain limits
described in the Registration Rights Agreement (each such event referred to in
clauses (i), (ii), (iii), (iv) and (v) a "Registration Default"), additional
dividends shall accumulate on the Preferred Stock, from and including the date
on which any such Registration Default shall occur to, but excluding, the date
on which the Registration Default has been cured, at the rate of 0.25% per year
for the first 90 days following such date and at a rate of 0.50% per year
thereafter ("Additional Dividends"). With respect to shares of Common Stock
issued upon conversion of the Preferred Stock, Additional Dividends will
accumulate on the then applicable conversion price from and including the date
on which any such Registration Default shall occur to, but excluding, the date
on which the Registration Default has been cured, at the rate of 0.25% per year
for the first 90 days following such date and at a rate of 0.50% per year
thereafter. Except as mentioned above, the Corporation will have no other
liabilities for monetary damages with respect to its registration obligations.
The receipt of Additional Dividends will be the sole monetary remedy available
to a Holder if the Corporation fails to meet these obligations.

         (c)      No dividend will be declared or paid upon, or any sum set
apart for the payment of dividends upon, any outstanding share of the Preferred
Stock with respect to any dividend period unless all dividends for all preceding
dividend periods have been declared and paid or declared and a sufficient sum
set apart for the payment of such dividend upon all outstanding shares of
Preferred Stock.

         (d)      No dividends or other distributions (other than a dividend or
distribution payable solely in shares of Parity Stock or Junior Stock (in the
case of Parity Stock) or Junior Stock (in the case of Junior Stock) and other
than cash paid in lieu of fractional shares) may be declared, made or paid, or
set apart for payment upon, any Parity Stock or Junior Stock, nor may any Parity
Stock or Junior Stock be redeemed, purchased or otherwise acquired for any
consideration (or any money paid to or made available for a sinking fund for the
redemption of any Parity Stock or Junior Stock) by or on behalf of the
Corporation (except by conversion into or exchange for shares of Parity Stock or
Junior Stock (in the case of Parity Stock) or Junior Stock (in the case of
Junior Stock)), unless full Accumulated Dividends shall have been or
contemporaneously are declared and paid, or are declared and a sum sufficient
for the payment thereof is set apart for such payment, on the Preferred Stock
and any Parity Stock for all dividend payment periods terminating on or prior to
the date of such declaration, payment, redemption, purchase or acquisition.
Notwithstanding the foregoing, if full dividends have not been paid on the
Preferred Stock and any Parity Stock, dividends may be declared and paid on the
Preferred Stock and such Parity Stock so long as the dividends are declared and
paid pro rata so that the amounts of dividends declared per share on the
Preferred Stock and such Parity Stock will in all cases bear to each other the
same ratio that accumulated and unpaid dividends per share on the shares of
Preferred Stock and such other Parity Stock bear to each other.

         (e)      Holders of shares of Preferred Stock shall not be entitled to
any dividends on the Preferred Stock, whether payable in cash, property or
stock, in excess of full cumulative dividends and Additional Dividends (if any).

         (f)      The holders of shares of Preferred Stock at the close of
business on a Dividend Record Date will be entitled to receive the dividend
payment on those shares on the corresponding Dividend Payment Date
notwithstanding the subsequent conversion thereof or the Corporation's default
in payment of the dividend due on that Dividend Payment Date. However, shares of
Preferred Stock surrendered for conversion during the period between the close
of business on any Dividend Record Date and the close of business on the
Business Day

                                       7

<PAGE>

immediately preceding the applicable Dividend Payment Date must be accompanied
by payment of an amount equal to the dividend payable on the shares on that
Dividend Payment Date; provided, however, that no such payment need be made if
(1) the Corporation has specified a Mandatory Conversion Date that is after a
Dividend Record Date and on or prior to the immediately following Dividend
Payment Date or (2) any accumulated and unpaid dividends exist at the time of
conversion with respect to such shares of Preferred Stock to the extent of such
accumulated and unpaid dividends. A holder of shares of Preferred Stock on a
Dividend Record Date who (or whose transferee) tenders any shares for conversion
on the corresponding Dividend Payment Date will receive the dividend payable by
the Corporation on the Preferred Stock on that date, and the converting holder
need not include payment in the amount of such dividend upon surrender of shares
of Preferred Stock for conversion. Except as provided above with respect to a
voluntary conversion pursuant to Section 7, the Corporation shall make no
payment or allowance for unpaid dividends, whether or not in arrears, on
converted shares or for dividends on the shares of Common Stock issued upon
conversion.

         (g)      In any case where any Dividend Payment Date or Conversion Date
(including upon the occurrence of a Fundamental Change) of any Preferred Stock
shall not be a Business Day, at any place of payment, then payment of dividends
(and Additional Dividends, if any) need not be made on such date, but may be
made on the next succeeding Business Day at such place of payment with the same
force and effect as if made on the dividend payment date or Conversion Date
(including upon the occurrence of a Fundamental Change); and no interest shall
accumulate on the amount so payable for the period from and after such Dividend
Payment Date or Conversion Date, as the case may be, to such Business Day.

         (h)      The Paying Agent shall return to the Corporation upon written
request any money or property held by it for the payment of any amount with
respect to the Preferred Stock that remains unclaimed for two years, provided,
however, that the Paying Agent, before being required to make any such return,
shall at the expense of the Corporation cause to be published once in a
newspaper of general circulation in The City of New York or mail to each such
Holder notice that such money or property remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed money or property then remaining
shall be returned to the Corporation. After return to the Corporation, Holders
entitled to the money or property must look to the Corporation for payment as
general creditors unless an applicable abandoned property law designates another
Person.

         4.       Fundamental Change.

         (a)      Purchase at the Option of the Holder Upon a Fundamental
Change. Each Holder shall have the right, at such Holder's option, to require
the Corporation to purchase any or all of such Holder's Preferred Stock for cash
or a check on the date that is no earlier than 60 days nor later than 90 days
after the date of the Corporation Notice of the occurrence of such Fundamental
Change (subject to extension to comply with applicable law, as provided in
Section 4(h) (the "Fundamental Change Purchase Date"). The Preferred Stock shall
be repurchased in integral multiples of $50.00 (representing the Liquidation
Preference). The Corporation shall purchase such Preferred Stock at a price (the
"Fundamental Change Purchase Price") equal to 100% of the Liquidation Price of
the number of shares of Preferred Stock to be purchased plus accumulated and
unpaid dividends, including Additional Dividends, if any, to the Fundamental
Change Purchase Date.

         (b)      Notice of Fundamental Change. The Corporation, or at its
request (which must be received by the Paying Agent at least three Business Days
(or such lesser period as agreed to by the Paying Agent) prior to the date the
Paying Agent is requested to give such notice as described below), the Paying
Agent, in the name of and at the expense of the Corporation, shall mail to all
Holders a Corporation Notice of the occurrence of a Fundamental Change and of
the purchase right arising as a result thereof, including the information
required by Section 4(e) hereof, on or before the 30th day after the occurrence
of such Fundamental Change.

         (c)      Exercise of Option. For Preferred Stock to be so purchased at
the option of the Holder, the Paying Agent must receive at its office in
Jackson, Michigan, or any other offices of the Paying Agent maintained for such

                                       8

<PAGE>

purposes, such shares of Preferred Stock duly endorsed for transfer, together
with a written notice of purchase in the form attached hereto as Exhibit A (a
"Fundamental Change Purchase Notice") duly completed, on or before the 30th day
prior to the Fundamental Change Purchase Date, subject to extension to comply
with applicable law. The Fundamental Change Purchase Notice shall state:

         (i)      if certificated, the certificate numbers of the shares of
                  Preferred Stock which the Holder shall deliver to be
                  purchased, or, if not certificated, the Fundamental Change
                  Purchase Notice must comply with appropriate Depository
                  procedures;

         (ii)     the number of shares of Preferred Stock which the Holder shall
                  deliver to be purchased, which portion must be $50.00 or an
                  integral multiple thereof; and

         (iii)    that such Preferred Stock shall be purchased as of the
                  Fundamental Change Purchase Date pursuant to the terms and
                  conditions specified in the Preferred Stock and in this
                  Certificate of Designation.

         (d)      Procedures. The Corporation shall purchase from a Holder,
pursuant to this Section 4, shares of Preferred Stock or multiples of $50.00 if
so requested by such Holder.

         Any purchase by the Corporation contemplated pursuant to the provisions
of this Section 4 shall be consummated by the delivery of the Fundamental Change
Purchase Price to be received by the Holder promptly following the later of the
Fundamental Change Purchase Date or the time of book-entry transfer or delivery
of the Preferred Stock.

         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Fundamental Change Purchase Notice contemplated by
Section 4(c) hereof shall have the right at any time prior to the close of
business on the Business Day prior to the Fundamental Change Purchase Date to
withdraw such Fundamental Change Purchase Notice (in whole or in part) by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 4(f) hereof.

         The Paying Agent shall promptly notify the Corporation of the receipt
by it of any Fundamental Change Purchase Notice or written notice of withdrawal
thereof.

         On or before 10:00 a.m. (New York City time) on the Fundamental Change
Purchase Date, the Corporation shall deposit with the Paying Agent (or if the
Corporation or an Affiliate of the Corporation is acting as the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the aggregate
Fundamental Change Purchase Price of the Preferred Stock to be purchased
pursuant to this Section 4. Payment by the Paying Agent of the Fundamental
Change Purchase Price for such Preferred Stock shall be made promptly following
the later of the Fundamental Change Purchase Date or the time of book-entry
transfer or delivery of such Preferred Stock. If the Paying Agent holds, in
accordance with the terms of this Certificate of Designation, money sufficient
to pay the Fundamental Change Purchase Price of such Preferred Stock on the
Business Day following the Fundamental Change Purchase Date, then, on and after
such date, such Preferred Stock shall cease to be outstanding and dividends
(including Additional Dividends, if any) on such Preferred Stock shall cease to
accumulate, whether or not book-entry transfer of such Preferred Stock is made
or such Preferred Stock is delivered to the Paying Agent, and all other rights
of the Holder shall terminate (other than the right to receive the Fundamental
Change Purchase Price upon delivery or transfer of the Preferred Stock). Nothing
herein shall preclude any withholding tax required by law.

         The Corporation shall require each Paying Agent to agree in writing
that the Paying Agent shall hold in trust for the benefit of Holders all money
held by the Paying Agent for the payment of the Fundamental Change Purchase
Price. If the Corporation or an Affiliate of the Corporation acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund.

         All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Preferred Stock pursuant to a Fundamental Change
shall be determined by the Corporation, whose determination shall be final and
binding.

                                       9

<PAGE>

         (e)      Notice of Fundamental Change. The Corporation shall send
notices (each, a "Corporation Notice") to the Holders (and to beneficial owners
as required by applicable law) at their addresses shown in the Security Register
maintained by the Security Registrar, and delivered to the Paying Agent on or
before the 30th day after the occurrence of the Fundamental Change ("Corporation
Notice Date"). Each Corporation Notice shall include a form of Fundamental
Change Purchase Notice to be completed by a Holder and shall state:

         (i)      the applicable Fundamental Change Purchase Price, excluding
                  accumulated and unpaid dividends, Conversion Rate at the time
                  of such notice (and any adjustments to the Conversion Rate)
                  and, to the extent known at the time of such notice, the
                  amount of dividends (including Additional Dividends, if any),
                  if any, that will be payable with respect to the Preferred
                  Stock on the applicable Fundamental Change Purchase Date;

         (ii)     the events causing the Fundamental Change and the date of the
                  Fundamental Change;

         (iii)    the Fundamental Change Purchase Date;

         (iv)     the last date on which a Holder may exercise its purchase
                  right;

         (v)      the name and address of the Paying Agent and the Conversion
                  Agent;

         (vi)     that the Preferred Stock must be surrendered to the Paying
                  Agent to collect payment of the Fundamental Change Purchase
                  Price;

         (vii)    that the Preferred Stock as to which a Fundamental Change
                  Purchase Notice has been given may be converted only if the
                  applicable Fundamental Change Purchase Notice has been
                  withdrawn in accordance with the terms of this Certificate of
                  Designation;

         (viii)   that the Fundamental Change Purchase Price for any of the
                  Preferred Stock as to which a Fundamental Change Purchase
                  Notice has been given and not withdrawn shall be paid by the
                  Paying Agent promptly following the later of the Fundamental
                  Change Purchase Date or the time of book-entry transfer or
                  delivery of such Preferred Stock;

         (ix)     the procedures the Holder must follow under this Section 4;

         (x)      briefly, the conversion rights of the Preferred Stock;

         (xi)     that, unless the Corporation defaults in making payment of
                  such Fundamental Change Purchase Price on the Preferred Stock
                  covered by any Fundamental Change Purchase Notice, dividends
                  (including Additional Dividends, if any) will cease to
                  accumulate on and after the Fundamental Change Purchase Date;

         (xii)    the CUSIP or ISIN number of the Preferred Stock; and

         (xiii)   the procedures for withdrawing a Fundamental Change Purchase
                  Notice.

         In connection with providing such Corporation Notice, the Corporation
will issue a press release and publish a notice containing the information in
such Corporation Notice in a newspaper of general circulation in The City of New
York or publish such information on the Corporation's then existing Web site or
through such other public medium as the Corporation may use at the time.

         At the Corporation's request, made at least five Business Days prior to
the date upon which such notice is to be mailed, and at the Corporation's
expense, the Paying Agent shall give the Corporation Notice in the Corporation's
name; provided, however, that, in all cases, the text of the Corporation Notice
shall be prepared by the Corporation.

                                       10

<PAGE>

         (f)      Effect of Fundamental Change Purchase Notice. Upon receipt by
the Corporation of the Fundamental Change Purchase Notice specified in this
Section 4, the Holder of the Preferred Stock in respect of which such
Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified in this Section 4(f))
thereafter be entitled to receive solely the Fundamental Change Purchase Price
with respect to such Preferred Stock. Such Fundamental Change Purchase Price
shall be paid by the Paying Agent to such Holder promptly following the later of
(x) the Fundamental Change Purchase Date with respect to such Preferred Stock
(provided the conditions in this Section 4 have been satisfied) and (y) the time
of delivery or book-entry transfer of such Preferred Stock to the Paying Agent
by the Holder thereof in the manner required by this Section 4. Preferred Stock
in respect of which a Fundamental Change Purchase Notice has been given by the
Holder thereof may not be converted for shares of Common Stock on or after the
date of the delivery of such Fundamental Change Purchase Notice unless such
Fundamental Change Purchase Notice has first been validly withdrawn as specified
in this Section 4(f). Payment of the Fundamental Change Purchase Price for
shares of Preferred Stock in registered, certificated form ("Certificated
Preferred Stock") for which a Fundamental Change Purchase Notice has been
delivered and not withdrawn is conditioned upon delivery of such Certificated
Preferred Stock (together with necessary endorsements) to the Paying Agent at
its office in Jackson, Michigan, or any other office of the Paying Agent
maintained for such purpose, at any time (whether prior to, on or after the
Fundamental Change Purchase Date) after the delivery of such Fundamental Change
Purchase Notice. Payment of the Fundamental Change Purchase Price for such
Certificated Preferred Stock will be made promptly following the later of the
Fundamental Change Purchase Date or the time of delivery of such Certificated
Preferred Stock.

         If the Paying Agent holds, in accordance with the terms of this
Certificate of Designation, money sufficient to pay the Fundamental Change
Purchase Price of shares of Preferred Stock on the Business Day following the
Fundamental Change Purchase Date for such Preferred Stock, then, on and after
such date, dividends on such Preferred Stock will cease to accumulate, whether
or not such Preferred Stock is delivered to the Paying Agent, and all other
rights of the Holder shall terminate (other than the right to receive the
Fundamental Change Purchase Price upon delivery of the Preferred Stock).

         A Fundamental Change Purchase Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Paying Agent at any
time prior to 5:00 p.m. New York City time on the Business Day prior to the
Fundamental Change Purchase Date to which it relates specifying:

         (i)      if certificated, the certificate number of Preferred Stock in
                  respect of which such notice of withdrawal is being submitted,
                  or, if not certificated, the written notice of withdrawal must
                  comply with appropriate Depository procedures;

         (ii)     the number of shares of Preferred Stock with respect to which
                  such notice of withdrawal is being submitted; and

         (iii)    the number of shares of Preferred Stock, if any, which remains
                  subject to the original Fundamental Change Purchase Notice and
                  which have been or shall be delivered for purchase by the
                  Corporation.

         (g)      Preferred Stock Purchased in Part. Any shares of Preferred
Stock that are to be purchased only in part shall be surrendered (in physical or
book-entry form) at the office of the Paying Agent (with, if the Corporation so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Corporation duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing) and the Corporation shall execute
and the Transfer Agent shall authenticate and deliver to the Holder of such
Preferred Stock, without service charge, new shares of Preferred Stock, as
requested by such Holder in an amount equal to, and in exchange for, the portion
of the Liquidation Preference of the Preferred Stock so surrendered which is not
purchased.

         (h)      Covenant to Comply with Securities Laws Upon Purchase of the
Preferred Stock. In connection with any offer to purchase Preferred Stock under
this Section 4, the Corporation shall, to the extent applicable: (i) comply with
Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange
Act, if applicable; (ii) file the related Schedule TO (or any successor
schedule, form or report) under the Exchange Act, if applicable; and (iii)
otherwise comply with all applicable federal and state securities laws so as to
permit the rights and obligations under this Section 4 hereof to be exercised in
the time and in the manner specified in this Section 4.

                                       11

<PAGE>

         (i)      Repayment to the Corporation. The Paying Agent shall return to
the Corporation any cash or property that remains unclaimed as provided in the
Preferred Stock, together with interest that the Paying Agent has agreed to pay,
if any, held by it for the payment of a Fundamental Change Purchase Price;
provided, however, that to the extent that the aggregate amount of cash or
property deposited by the Corporation pursuant to this Section 4 exceeds the
aggregate Fundamental Change Purchase Price of the Preferred Stock or portions
thereof which the Corporation is obligated to purchase as of the Fundamental
Change Purchase Date, then promptly on and after the Business Day following the
Fundamental Change Purchase Date, the Paying Agent shall return any such excess
to the Corporation together with interest that the Paying Agent has agreed to
pay, if any.

         (j)      Officers' Certificate. At least five Business Days before the
Corporation Notice Date, the Corporation shall deliver an Officers' Certificate
to the Paying Agent (provided, that, at the Corporation's option, the matters to
be addressed in such Officers' Certificate may be divided among two such
certificates) specifying:

         (i)      the manner of payment selected by the Corporation; and

         (ii)     whether the Corporation desires the Paying Agent to give the
                  Corporation Notice required by Section 4(e) hereof.

         5.       Voting.

         (a)      The shares of Preferred Stock shall have no voting rights
except as set forth below or as otherwise required by Michigan law from time to
time:

         (i)      If and whenever at any time or times a Voting Rights
                  Triggering Event occurs, then the holders of shares of
                  Preferred Stock, voting as a single class with any other
                  preferred stock or preference securities having similar voting
                  rights that are exercisable (the "Voting Rights Class"), will
                  be entitled at the next regular or special meeting of
                  shareholders of the Corporation to elect two additional
                  directors of the Corporation, unless the Board of Directors is
                  comprised of fewer than six directors at such time, in which
                  case the Voting Rights Class shall be entitled to elect one
                  additional director. Upon the election of any such additional
                  directors, the number of directors that comprise the Board of
                  Directors shall be increased by such number of additional
                  directors.

         (ii)     Such voting rights may be exercised at a special meeting of
                  the holders of the shares of the Voting Rights Class, called
                  as hereinafter provided, or at any annual meeting of
                  shareholders held for the purpose of electing directors, and
                  thereafter at each such annual meeting until such time as all
                  dividends in arrears on the shares of Preferred Stock shall
                  have been paid in full, at which time or times such voting
                  rights and the term of the directors elected pursuant to
                  Section 5(a)(i) shall terminate.

         (iii)    At any time when such voting rights shall have vested in
                  holders of shares of the Voting Rights Class, an Officer of
                  the Corporation may call, and, upon written request of the
                  record holders of shares representing at least twenty-five
                  percent (25%) of the voting power of the shares then
                  outstanding of the Voting Rights Class, addressed to the
                  Secretary of the Corporation, shall call a special meeting of
                  the holders of shares of the Voting Rights Class. Such meeting
                  shall be held at the earliest practicable date upon the notice
                  required for annual meetings of shareholders at the place for
                  holding annual meetings of shareholders of the Corporation,
                  or, if none, at a place designated by the Board of Directors.
                  Notwithstanding the provisions of this Section 5(a)(iii), no
                  such special meeting shall be called during a period within
                  the 60 days immediately preceding the date fixed for the next
                  annual meeting of shareholders, in which such case the
                  election of directors pursuant to Section 5(a)(i) shall be
                  held at such annual meeting of shareholders.

         (iv)     At any meeting held for the purpose of electing directors at
                  which the holders of the Voting Rights Class shall have the
                  right to elect directors as provided herein, the presence in
                  person or by proxy of the holders of shares representing more
                  than fifty percent (50%) in voting power of the then
                  outstanding shares of the Voting Rights Class shall be
                  required and shall be sufficient to constitute a quorum of
                  such class for the election of directors by such class. The
                  affirmative vote of the holders of shares of Preferred

                                       12

<PAGE>

                  Stock constituting a majority of the shares of Preferred Stock
                  present at such meeting, in person or by proxy shall be
                  sufficient to elect any such director.

         (v)      Any director elected pursuant to the voting rights created
                  under this Section 5(a) shall hold office until the next
                  annual meeting of shareholders (unless such term has
                  previously terminated pursuant to Section 5(a)(ii)) and any
                  vacancy in respect of any such director shall be filled only
                  by vote of the remaining director so elected by holders of the
                  Voting Rights Class, or, if there be no such remaining
                  director, by the holders of shares of the Voting Rights Class
                  at a special meeting called in accordance with the procedures
                  set forth in this Section 5, or, if no such special meeting is
                  called, at the next annual meeting of shareholders. Upon any
                  termination of such voting rights, the term of office of all
                  directors elected pursuant to this Section 5 shall terminate.

         (vi)     So long as any shares of Preferred Stock remain outstanding,
                  unless a greater percentage shall then be required by law, the
                  Corporation shall not, without the affirmative vote or consent
                  of the holders of all of the outstanding Preferred Stock
                  voting or consenting, as the case may be, separately as one
                  class, (i) create, authorize or issue any class or series of
                  Senior Stock (or any security convertible into Senior Stock)
                  or (ii) amend the Articles of Incorporation so as to affect
                  adversely the specified rights, preferences, privileges or
                  voting rights of holders of shares of Preferred Stock.

         (vii)    In exercising the voting rights set forth in this Section
                  5(a), each share of Preferred Stock shall be entitled to one
                  vote.

         (b)      The Corporation may authorize, increase the authorized amount
of, or issue any class or series of Parity Stock or Junior Stock, without the
consent of the holders of Preferred Stock, and in taking such actions the
Corporation shall not be deemed to have affected adversely the rights,
preferences, privileges or voting rights of holders of shares of Preferred
Stock.

         6.       Liquidation Rights.

         (a)      In the event of any liquidation, winding-up or dissolution of
the Corporation, whether voluntary of involuntary, each holder of shares of
Preferred Stock shall be entitled to receive and to be paid out of the assets of
the Corporation available for distribution to its shareholders the Liquidation
Preference plus Accumulated Dividends and Additional Dividends thereon in
preference to the holders of, and before any payment or distribution is made on,
any Junior Stock, including, without limitation, on any Common Stock.

         (b)      Neither the sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or substantially all
the assets or business of the Corporation (other than in connection with the
liquidation, winding-up or dissolution of its business) nor the merger or
consolidation of the Corporation into or with any other Person shall be deemed
to be a liquidation, winding-up or dissolution, voluntary or involuntary, for
the purposes of this Section 6.

         (c)      After the payment to the holders of the shares of Preferred
Stock of full preferential amounts provided for in this Section 6, the holders
of Preferred Stock as such shall have no right or claim to any of the remaining
assets of the Corporation.

         (d)      In the event the assets of the Corporation available for
distribution to the holders of shares of Preferred Stock upon any liquidation,
winding-up or dissolution of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to Section 6(a), no such distribution shall be made on account
of any shares of Parity Stock upon such liquidation, dissolution or winding-up
unless proportionate distributable amounts shall be paid on account of the
shares of Preferred Stock, ratably, in proportion to the full distributable
amounts for which holders of all Preferred Stock and of any Parity Stock are
entitled upon such liquidation, winding-up or dissolution.

                                       13

<PAGE>
         7.       Conversion.

         (a)      Conversion Rights. A Holder may convert Preferred Stock into
Common Stock during the periods and upon satisfaction of at least one of the
conditions set forth below:

         (i)      in any calendar quarter (and only during such calendar
                  quarter) if the Last Reported Sale Price for Common Stock for
                  at least 20 Trading Days during the period of 30 consecutive
                  Trading Days ending on the last Trading Day of the previous
                  calendar quarter is greater than or equal to 120% of the
                  Conversion Price per share of Common Stock on such last
                  Trading Day;

         (ii)     during the five Business Days immediately following any ten
                  consecutive Trading Day period in which the Trading Price per
                  Liquidation Preference of Preferred Stock (as determined
                  following a request by a Holder of Preferred Stock in
                  accordance with the procedures described herein) for each day
                  of that period was less than 95% of the product of the sale
                  price of Common Stock and the then applicable Conversion Rate
                  (the "Trading Exception"); provided, however, that a Holder
                  may not convert its Preferred Stock if the average closing
                  sale price of Common Stock for such ten consecutive Trading
                  Day period is between the then current Conversion Price and
                  120% of the then applicable Conversion Price; in connection
                  with any conversion upon satisfaction of such Trading Price
                  condition, the Conversion Agent shall have no obligation to
                  determine the Trading Price unless the Corporation has
                  requested such determination; and the Corporation shall have
                  no obligation to make such request unless the Holder provides
                  reasonable evidence that the Trading Price would be less than
                  95% of the product of the sale price of Common Stock and the
                  then applicable Conversion Rate; at which time, the
                  Corporation shall instruct the Conversion Agent to determine
                  the Trading Price beginning on the next Trading Day and on
                  each successive Trading Day until the Trading Price is greater
                  than or equal to 95% of the product of the sale price of
                  Common Stock and the then applicable Conversion Rate;

         (iii)    the Corporation becomes a party to a consolidation, merger or
                  binding share exchange pursuant to which the Common Stock
                  would be converted into cash or property (other than
                  securities), in which case a Holder may surrender Preferred
                  Stock for conversion at any time from and after the date which
                  is 15 days prior to the anticipated effective date for the
                  transaction until 15 days after the actual effective date of
                  such transaction; or

         (iv)     the Corporation elects to (i) distribute to all holders of
                  Common Stock assets, debt securities or rights to purchase
                  securities of the Corporation, which distribution has a per
                  share value as determined by the Board of Directors exceeding
                  15% of the Last Reported Sale Price of a share of Common Stock
                  on the Trading Day immediately preceding the declaration date
                  for such distribution, or (ii) distribute to all holders of
                  Common Stock rights entitling them to purchase, for a period
                  expiring within 60 days after the date of such distribution,
                  shares of Common Stock at less than the Last Reported Sale
                  Price of Common Stock on the Trading Day immediately preceding
                  the declaration date of the distribution. In the case of the
                  foregoing clauses (i) and (ii), the Corporation must notify
                  the Holders at least 20 Business Days immediately prior to the
                  ex-dividend date for such distribution. Once the Corporation
                  has given such notice, Holders may surrender their Preferred
                  Stock for conversion at any time thereafter until the earlier
                  of the close of business on the Business Day immediately prior
                  to the ex-dividend date or the Corporation's announcement that
                  such distribution will not take place; provided, however, that
                  a Holder may not exercise this right to convert if the Holder
                  may participate in the distribution without conversion. As
                  used herein, the term "ex dividend date," when used with
                  respect to any issuance or distribution, shall mean the first
                  date on which the Common Stock trades regular way on such
                  exchange or in such market without the right to receive such
                  issuance or distribution.

         The initial Conversion Rate is 5.0541 shares of Common Stock per share
of Preferred Stock, subject to adjustment in certain events as described herein.
The Corporation shall deliver cash or a check in lieu of any fractional share of
Common Stock. A Holder may convert fewer than all of its Preferred Stock so long
as the Preferred Stock converted is an integral multiple of the Liquidation
Preference.

         Holders of Preferred Stock at the close of business on a Dividend
Record Date will receive payment of

                                       14

<PAGE>

dividends, payable on the corresponding Dividend Payment Date notwithstanding
the conversion of such Preferred Stock at any time after the close of business
on such Dividend Record Date. Preferred Stock surrendered for conversion by a
Holder during the period from the close of business on any Dividend Record Date
to the opening of business on the immediately following Dividend Payment Date
must be accompanied by payment of an amount equal to the dividend that the
Holder is to receive on such Preferred Stock; provided, however, that no such
payment need be made if (1) the Corporation has specified a Mandatory Conversion
Date that is after a Dividend Record Date and on or prior to the immediately
following Dividend Payment Date or (2) any accumulated and unpaid dividends
exist at the time of conversion with respect to such shares of Preferred Stock
to the extent of such accumulated and unpaid dividends.

         To convert Preferred Stock a Holder must (i) complete and manually sign
the irrevocable conversion notice in the form attached hereto as Exhibit B (a
"Conversion Notice") (or complete and manually sign a facsimile of such notice)
and deliver such notice to the Conversion Agent at its office in Jackson,
Michigan or any other offices of the Conversion Agent maintained by the
Conversion Agent for such purpose, (ii) surrender the shares of Preferred Stock
to the Conversion Agent, (iii) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent or the Corporation and (iv) pay
any transfer or similar tax, if required.

         (b)      Conversion Procedures. To convert Preferred Stock, a Holder
must satisfy the requirements in this Section 7 and in the Preferred Stock. The
date on which the Holder satisfies all those requirements is the conversion date
(the "Conversion Date"). As soon as practicable, but in no event later than the
fifth Business Day following the Conversion Date, the Corporation shall update
the global security representing the shares of Common Stock to record the
Holder's interest in the Common Stock, or deliver to the Holder, through the
Conversion Agent, a certificate for the number of full shares of Common Stock
issuable upon the conversion and cash or a check in lieu of any fractional share
determined pursuant to Section 7(c) hereof. The Person in whose name the
certificate is registered shall be treated as a shareholder of record on and
after the Conversion Date; provided, however, that no surrender of Preferred
Stock on any date when the stock transfer books of the Corporation shall be
closed shall be effective to constitute the Person or Persons entitled to
receive the shares of Common Stock upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares of
Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; such conversion shall be at the Conversion Rate in effect on the date
that such shares of Preferred Stock shall have been surrendered for conversion,
as if the stock transfer books of the Corporation had not been closed. Upon
conversion of Preferred Stock, such Person shall no longer be a Holder of such
Preferred Stock.

         No payment or adjustment shall be made for dividends on or other
distributions with respect to any Common Stock except as provided in Section
7(f) hereof or as otherwise provided in this Certificate of Designation.

         On conversion of Preferred Stock, that portion of Accumulated Dividends
with respect to the converted Preferred Stock will be deemed canceled,
extinguished or forfeited, rather than paid in full to the Holder thereof
through delivery of the Common Stock (together with the cash or check payment,
if any, in lieu of fractional shares) in exchange for the shares of Preferred
Stock being converted pursuant to the provisions hereof, and the Fair Market
Value of such shares of Common Stock (together with any such cash or check
payment in lieu of fractional shares) shall be treated as issued, to the extent
thereof, first in exchange for Accumulated Dividends through the Conversion
Date, and the balance, if any, of such Fair Market Value of such Common Stock
(and any such cash or check payment) shall be treated as issued in exchange for
the Liquidation Preference of the Preferred Stock being converted pursuant to
the provisions hereof.

         Upon surrender of Preferred Stock that is converted in part, the
Corporation shall execute, and the Transfer Agent shall authenticate and deliver
to the Holder, new shares of Preferred Stock in a number equal to the
unconverted portion of the shares of Preferred Stock surrendered.

         If the last day on which Preferred Stock may be converted is a legal
holiday in a place where a Conversion Agent is located, the Preferred Stock may
be surrendered to that Conversion Agent on the next succeeding day that it is
not a legal holiday.

                                       15

<PAGE>

         (c)      Cash or Check Payments in Lieu of Fractional Shares. The
Corporation shall not issue a fractional share of Common Stock upon conversion
of Preferred Stock. Instead the Corporation shall deliver cash (or Corporation's
check) for the current market value of the fractional share. The current market
value of a fractional share shall be determined to the nearest 1/10,000th of a
share by multiplying the Last Reported Sale Price of a full share of Common
Stock on the Trading Day immediately preceding the Conversion Date by the
fractional amount and rounding the product to the nearest whole cent.

         (d)      Taxes on Conversion. If a Holder converts Preferred Stock, the
Corporation shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Common Stock upon the conversion. However, the
Holder shall pay any such tax which is due because the Holder requests the
shares to be issued in a name other than the Holder's name. The Conversion Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Conversion Agent
receives a sum sufficient to pay any tax which shall be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any withholding tax required by law.

         (e)      Covenants of the Corporation. The Corporation shall, prior to
issuance of any Preferred Stock hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Stock a sufficient
number of shares of Common Stock to permit the conversion of the Preferred
Stock.

         All shares of Common Stock delivered upon conversion of the Preferred
Stock shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.

         The Corporation shall endeavor promptly to comply with all federal and
state securities laws regulating the order and delivery of shares of Common
Stock upon the conversion of Preferred Stock, if any, and shall cause to have
listed or quoted all such shares of Common Stock on each United States national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.

         (f)      Adjustments to Conversion Rate. The Conversion Rate shall be
adjusted from time to time, without duplication, as follows:

         (i)      In case the Corporation shall: (a) pay a dividend, or make a
                  distribution, exclusively in shares of its capital stock, on
                  the Common Stock; (b) subdivide its outstanding Common Stock
                  into a greater number of shares; (c) combine its outstanding
                  Common Stock into a smaller number of shares; or (d)
                  reclassify its Common Stock, the Conversion Rate in effect
                  immediately prior to the record date or effective date, as the
                  case may be, for the adjustment pursuant to this Section 7(f)
                  as described below, shall be adjusted so that the Holder of
                  any Preferred Stock thereafter surrendered for conversion
                  shall be entitled to receive the number of shares of Common
                  Stock of the Corporation which such Holder would have owned or
                  have been entitled to receive after the happening of any of
                  the events described above had such Preferred Stock been
                  converted immediately prior to such record date or effective
                  date, as the case may be. An adjustment made pursuant to this
                  Section 7(f) shall become effective immediately after the
                  applicable record date in the case of a dividend or
                  distribution and shall become effective immediately after the
                  applicable effective date in the case of subdivision,
                  combination or reclassification of the Corporation's Common
                  Stock. If any dividend or distribution of the type described
                  in clause (a) above is not so paid or made, the Conversion
                  Rate shall again be adjusted to the Conversion Rate which
                  would then be in effect if such dividend or distribution had
                  not been declared.

         (ii)     In case the Corporation shall issue rights or warrants to all
                  holders of the Common Stock entitling them (for a period
                  expiring within 60 days after the date of issuance of such
                  rights or warrants) to subscribe for or purchase Common Stock
                  at a price per share less than the Market Price per share of
                  Common Stock on the record date fixed for determination of
                  shareholders entitled to receive such rights or warrants, the
                  Conversion Rate in effect immediately after such record date
                  shall be adjusted so that the same shall equal the Conversion
                  Rate determined by multiplying the Conversion Rate in effect
                  immediately after such record date by a fraction of which (a)
                  the numerator shall be the number

                                       16

<PAGE>

                  of shares of Common Stock outstanding on such record date plus
                  the number of additional shares of Common Stock offered for
                  subscription or purchase, and (b) the denominator shall be the
                  number of shares of Common Stock outstanding on such record
                  date plus the number of shares which the aggregate offering
                  price of the total number of shares so offered would purchase
                  at the Market Price per share of Common Stock on the earlier
                  of such record date or the Trading Day immediately preceding
                  the ex-dividend date for such issuance of rights or warrants.
                  Such adjustment shall be made successively whenever any such
                  rights or warrants are issued, and shall become effective
                  immediately after the opening of business on the day following
                  the record date for the determination of shareholders entitled
                  to receive such rights or warrants. To the extent that shares
                  of Common Stock are not delivered after the expiration of such
                  rights or warrants, the Conversion Rate shall be readjusted to
                  the Conversion Rate which would then be in effect had the
                  adjustments made upon the issuance of such rights or warrants
                  been made on the basis of delivery of only the number of
                  shares of Common Stock actually delivered. If such rights or
                  warrants are not so issued, the Conversion Rate shall again be
                  adjusted to be the Conversion Rate which would then be in
                  effect if such record date for the determination of
                  shareholders entitled to receive such rights or warrants had
                  not been fixed. In determining whether any rights or warrants
                  entitle the holders to subscribe for or purchase shares of
                  Common Stock at less than such Market Price, and in
                  determining the aggregate offering price of such shares of
                  Common Stock, there shall be taken into account any
                  consideration received by the Corporation for such rights or
                  warrants, the value of such consideration, if other than cash,
                  to be determined by the Board of Directors.

         (iii)    In case the Corporation shall, by dividend or otherwise,
                  distribute to all holders of Common Stock any assets, debt
                  securities or rights or warrants to purchase any of its
                  securities (excluding (a) any dividend, distribution or
                  issuance covered by those referred to in Section 7(f)(i) or
                  Section 7(f)(ii) hereof and (b) any dividend or distribution
                  paid exclusively in cash) (any of the foregoing hereinafter in
                  this Section 7(f)(iii) called the "Distributed Assets or
                  Securities") in an aggregate amount per share of Common Stock
                  that, combined together with the aggregate amount of any other
                  such distributions to all holders of its Common Stock made
                  within the 12 months preceding the date of payment of such
                  distribution, and in respect of which no adjustment pursuant
                  to this Section 7(f)(iii) has been made, exceeds 15% of the
                  Market Price on the Trading Day immediately preceding the
                  declaration of such distribution, then the Conversion Rate
                  shall be adjusted so that the same shall equal the Conversion
                  Rate determined by multiplying the Conversion Rate in effect
                  immediately prior to the close of business on the record date
                  mentioned below by a fraction of which (A) the numerator shall
                  be the Market Price per share of the Common Stock on the
                  earlier of such record date or the Trading Day immediately
                  preceding the ex-dividend date for such dividend or
                  distribution, and (B) the denominator shall be (1) the Market
                  Price per share of the Common Stock on the earlier of such
                  record date or the Trading Day immediately preceding the
                  ex-dividend date for such dividend or distribution less (2)
                  the Fair Market Value on the earlier of such record date or
                  the Trading Day immediately preceding the ex-dividend date for
                  such dividend or distribution (as determined by the Board of
                  Directors, whose determination shall be conclusive, and
                  described in a certificate filed with the Paying Agent) of the
                  Distributed Assets or Securities so distributed applicable to
                  one share of Common Stock. Such adjustment shall become
                  effective immediately after the record date for the
                  determination of shareholders entitled to receive such
                  distribution; provided, however, that, if (a) the Fair Market
                  Value of the portion of the Distributed Assets or Securities
                  so distributed applicable to one share of Common Stock is
                  equal to or greater than the Market Price of the Common Stock
                  on the record date for the determination of shareholders
                  entitled to receive such distribution or (b) the Market Price
                  of the Common Stock on the record date for the determination
                  of shareholders entitled to receive such distribution is
                  greater than the Fair Market Value per share of such
                  Distributed Assets or Securities by less than $1.00, then, in
                  lieu of the foregoing adjustment, adequate provision shall be
                  made so that each Holder shall have the right to receive upon
                  conversion, in addition to the shares of Common Stock, the
                  kind and amount of assets, debt securities, or rights or
                  warrants comprising the Distributed Assets or Securities the
                  Holder would have received had such Holder converted such
                  Preferred Stock immediately prior to the record date for the
                  determination of shareholders entitled to receive such
                  distribution. In the event that such distribution is not so
                  paid or made, the Conversion Rate shall again

                                       17

<PAGE>

                  be adjusted to the Conversion Rate which would then be in
                  effect if such distribution had not been declared.

         (iv)     In case the Corporation shall make (a) any distributions, by
                  dividend or otherwise, during any quarterly fiscal periods
                  consisting exclusively of cash to all holders of outstanding
                  shares of Common Stock in an aggregate amount that, together
                  with (b) other all-cash or all-check distributions made to all
                  holders of outstanding shares of Common Stock during such
                  quarterly fiscal period, and (c) any cash and the Fair Market
                  Value, as of the expiration of any tender or exchange offer
                  (other than consideration payable in respect of any odd-lot
                  tender offer) of consideration payable in respect of any
                  tender or exchange offer by the Corporation or any of the
                  Corporation's Subsidiaries for all or any portion of shares of
                  Common Stock concluded during such quarterly fiscal period,
                  exceed the product of $0 multiplied by the number of shares of
                  Common Stock outstanding on the record date for such
                  distribution, then, and in each such case, the Conversion Rate
                  shall be adjusted so that the same shall equal the Conversion
                  Rate determined by multiplying the Conversion Rate in effect
                  immediately prior to the close of business on the record date
                  fixed for the determination of holders of Common Stock
                  entitled to receive such distribution by a fraction of which
                  (A) the numerator shall be the Market Price per share of the
                  Common Stock on the earlier of such record date or the Trading
                  Day immediately preceding the ex-dividend date for such
                  dividend or distribution and (B) the denominator shall be (1)
                  the Market Price per share of Common Stock on the earlier of
                  such record date or the Trading Day immediately preceding the
                  ex-dividend date for such dividend or distribution plus (2) $0
                  less (3) an amount equal to the quotient of (x) the combined
                  amount distributed or payable in the transactions described in
                  clauses (a), (b) and (c) above during such quarterly fiscal
                  period and (y) the number of shares of Common Stock
                  outstanding on such record date, such adjustment to become
                  effective immediately after the record date for the
                  determination of shareholders entitled to receive such
                  distribution.

         (v)      With respect to Section 7(f)(iii) hereof, in the event that
                  the Corporation makes any distribution to all holders of
                  Common Stock consisting of Equity Interests in a Subsidiary or
                  other business unit of the Corporation, the Conversion Rate
                  shall be adjusted so that the same shall equal the Conversion
                  Rate determined by multiplying the Conversion Rate in effect
                  immediately prior to the close of business on the record date
                  fixed for the determination of holders of Common Stock
                  entitled to receive such distribution by a fraction of which
                  (i) the numerator shall be (x) the Spin-off Market Price per
                  share of the Common Stock on such record date plus (y) the
                  Spin-off Market Price per Equity Interest of the Subsidiary or
                  other business unit of the Corporation on such record date and
                  (ii) the denominator shall be the Spin-off Market Price per
                  share of the Common Stock on such record date, such adjustment
                  to become effective 10 Trading Days after the effective date
                  of such distribution of Equity Interests in a Subsidiary or
                  other business unit of the Corporation.

         (vi)     Upon conversion of the Preferred Stock, the Holders shall
                  receive, in addition to the Common Stock issuable upon such
                  conversion, the rights issued under any future shareholder
                  rights plan the Corporation implements (notwithstanding the
                  occurrence of an event causing such rights to separate from
                  the Common Stock at or prior to the time of conversion)
                  unless, prior to conversion, the rights have expired,
                  terminated or been redeemed or exchanged in accordance with
                  such rights plan. If, and only if, the Holders of Preferred
                  Stock receive rights under such shareholder rights plans as
                  described in the preceding sentence upon conversion of their
                  Preferred Stock, then no other adjustment pursuant to this
                  Section 7(f) shall be made in connection with such shareholder
                  rights plans.

         (vii)    For purposes of this Section 7(f), the number of shares of
                  Common Stock at any time outstanding shall not include shares
                  held in the treasury of the Corporation but shall include
                  shares issuable in respect of scrip certificates issued in
                  lieu of fractions of shares of Common Stock. The Corporation
                  shall not pay any dividend or make any distribution on shares
                  of Common Stock held in the treasury of the Corporation.

                                       18

<PAGE>

         (viii)   Notwithstanding the foregoing, in no event shall the
                  Conversion Rate exceed the maximum conversion rate specified
                  under this Section 7(f)(viii) (the "Maximum Conversion Rate")
                  as a result of an adjustment pursuant to Section 7(f)(iii) or
                  Section 7(f)(iv) hereof. The Maximum Conversion Rate shall
                  initially be 6.5703 and shall be appropriately adjusted from
                  time to time for any stock dividends on or subdivisions or
                  combinations of the Common Stock. The Maximum Conversion Rate
                  shall not apply to any adjustments made pursuant to any of the
                  events in Section 7(f)(i) or Section 7(f)(ii) hereof.

         (g)      Calculation Methodology. No adjustment in the Conversion Price
need be made unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price then in effect, provided that any adjustment
that would otherwise be required to be made shall be carried forward and taken
into account in any subsequent adjustment. Except as stated in this Section 7,
the Conversion Rate will not be adjusted for the issuance of Common Stock or any
securities convertible into or exchangeable for Common Stock or carrying the
right to purchase any of the foregoing. Any adjustments that are made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under Section 4 and Section 7(f) hereof and this Section 7(g) shall
be made to the nearest cent or to the nearest 1/10,000th of a share, as the case
may be.

         (h)      When No Adjustment Required. No adjustment to the Conversion
Rate need be made:

         (i)      upon the issuance of any shares of Common Stock pursuant to
                  any present or future plan providing for the reinvestment of
                  dividends or interest payable on securities of the Corporation
                  and the investment of additional optional amounts in shares of
                  Common Stock under any plan;

         (ii)     upon the issuance of any shares of Common Stock or options or
                  rights to purchase those shares pursuant to any present or
                  future employee, director or consultant benefit plan or
                  program of or assumed by the Corporation or any of its
                  Subsidiaries;

         (iii)    upon the issuance of any shares of Common Stock pursuant to
                  any option, warrant, right, or exercisable, exchangeable or
                  convertible security not described in clause (ii) above and
                  outstanding as of the date of this Certificate of Designation;

         (iv)     for a change in the par value or no par value of the Common
                  Stock;

         (v)      for accumulated and unpaid dividends (including Additional
                  Dividends, if any); or

         (vi)     if Holders are to participate in a merger or consolidation on
                  a basis and with notice that the Board of Directors determines
                  to be fair and appropriate in light of the basis and notice on
                  which holders of Common Stock participate in the transaction;
                  provided that the basis on which the Holders are to
                  participate in the transaction shall not be deemed to be fair
                  if it would require the conversion of securities at any time
                  prior to the expiration of the conversion period specified for
                  such securities.

         To the extent the Preferred Stock becomes convertible into cash, assets
or property (other than capital stock of the Corporation or securities to which
Section 7(l) hereof applies), no adjustment shall be made thereafter as to the
cash, assets or property. Interest shall not accumulate on such cash.

         (i) Notice of Adjustment. Whenever the Conversion Rate is adjusted, the
Corporation shall promptly mail to Holders a notice of the adjustment. The
Corporation shall file with the Conversion Agent such notice. The certificate
shall, absent manifest error, be conclusive evidence that the adjustment is
correct. No Conversion Agent shall be under any duty or responsibility with
respect to any such certificate except to exhibit the same to any Holder
desiring inspection thereof.

         (j) Voluntary Increase. The Corporation may make such increases in the
Conversion Rate, in addition to those required by Section 7(f) hereof, as the
Board of Directors considers to be advisable to avoid or diminish any income tax
to holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. To the

                                       19

<PAGE>

extent permitted by applicable law, the Corporation may from time to time
increase the Conversion Rate by any amount, temporarily or otherwise, for any
period of at least 20 days if the increase is irrevocable during the period and
the Board of Directors shall have made a determination that such increase would
be in the best interests of the Corporation, which determination shall be
conclusive. Whenever the Conversion Rate is so increased, the Corporation shall
mail to Holders and file with the Conversion Agent a notice of such increase.
The Conversion Agent shall not be under any duty or responsibility with respect
to any such notice except to exhibit the same to any holder desiring inspection
thereof. The Corporation shall mail the notice at least 15 days before the date
the increased Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it shall be in effect.

         (k)      Notice to Holders Prior to Certain Actions. In case:

         (i)      the Corporation shall declare a dividend (or any other
                  distribution) on its Common Stock that would require an
                  adjustment in the Conversion Rate pursuant to Section 7(f)
                  hereof;

         (ii)     the Corporation shall authorize the granting to all or
                  substantially all the holders of its Common Stock of rights or
                  warrants to subscribe for or purchase any share of any class
                  or any other rights or warrants;

         (iii)    of any reclassification or reorganization of the Common Stock
                  of the Corporation (other than a subdivision or combination of
                  its outstanding Common Stock, or a change in par value, or
                  from par value to no par value, or from no par value to par
                  value), or of any consolidation or merger to which the
                  Corporation is a party and for which approval of any
                  shareholders of the Corporation is required, or of the sale or
                  transfer of all or substantially all of the assets of the
                  Corporation; or

         (iv)     of the voluntary or involuntary dissolution, liquidation or
                  winding-up of the Corporation,

                  the Corporation shall cause to be filed with the Conversion
                  Agent and to be mailed to each Holder at its address appearing
                  on the Security Register, as promptly as possible but in any
                  event at least 15 days prior to the applicable date
                  hereinafter specified, a notice stating (x) the date on which
                  a record is to be taken for the purpose of such dividend,
                  distribution or rights or warrants, or, if a record is not to
                  be taken, the date as of which the holders of Common Stock of
                  record to be entitled to such dividend, distribution, or
                  rights or warrants are to be determined or (y) the date on
                  which such reclassification, reorganization, consolidation,
                  merger, sale, transfer, dissolution, liquidation or winding-up
                  is expected to become effective or occur, and the date as of
                  which it is expected that holders of Common Stock of record
                  shall be entitled to exchange their Common Stock for
                  securities or other property deliverable upon such
                  reclassification, reorganization, consolidation, merger, sale,
                  transfer, dissolution, liquidation or winding-up. Failure to
                  give such notice, or any defect therein, shall not affect the
                  legality or validity of such dividend, distribution,
                  reclassification, reorganization, consolidation, merger, sale,
                  transfer, dissolution, liquidation or winding-up.

         (l)      Effect of Reclassification, Consolidation, Merger, Binding
Share Exchange or Sale. If any of the following events occur, namely: (i) any
reclassification or change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination); (ii) any
consolidation, merger, combination or binding share exchange of the Corporation
with another Person as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock; or (iii) any sale or
conveyance of the properties and assets of the Corporation as, or substantially
as, an entirety to any other Person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, then the
Corporation or the successor or purchasing Person, as the case may be, shall
cause an amendment to this Certificate of Designation to be executed and filed
in accordance with Michigan law, providing that each share of Preferred Stock
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, binding share
exchange, sale or conveyance by a holder of a number of shares of Common Stock
issuable upon conversion of such Preferred Stock

                                       20

<PAGE>

immediately prior to such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance. Such amended
Certificate of Designation shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 7(l).

         The Corporation shall cause notice of the execution of such amended
Certificate of Designation to be mailed to each Holder, at its address appearing
on the Security Register, within 20 days after filing thereof. Failure to
deliver such notice shall not affect the legality or validity of such
supplemental indenture.

         The above provisions of this Section 7(l) shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
binding share exchanges, sales and conveyances.

         If this Section 7(l) applies to any event or occurrence, Section 7(f)
hereof shall not apply.

         (m)      Responsibility of Conversion Agent. The Conversion Agent shall
not at any time be under any duty or responsibility to any Holder to either
calculate the Conversion Rate or determine whether any facts exist which may
require any adjustment of the Conversion Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any amended Certificate of Designation provided
to be employed, in making the same and shall be protected in relying upon an
Officers' Certificate with respect to the same. The Conversion Agent shall not
be accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities or property, which may at any
time be issued or delivered upon the conversion of any Preferred Stock and the
Conversion Agent makes no representations with respect thereto. The Conversion
Agent shall not be responsible for any failure of the Corporation to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Preferred Stock for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Corporation contained in this Section 7(m). Without limiting
the generality of the foregoing, the Conversion Agent shall not be under any
responsibility to determine the correctness of any provisions contained in any
amended Certificate of Designation entered into pursuant to this Section 7
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders upon the conversion of their
Preferred Stock after any event referred to in this Section 7 or to any
adjustment to be made with respect thereto, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officers' Certificate (which the Corporation shall be
obligated to file with the Conversion Agent prior to the execution of any such
amended Certificate of Designation) with respect thereto.

         (n)      Simultaneous Adjustments. In the event that Section 7(f)
hereof requires adjustments to the Conversion Rate under more than one of
Section 7(f)(i), Section 7(f)(ii), Section 7(f)(iii) or Section 7(f)(iv) hereof,
and the Dividend Record Dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 7(f)(iii) hereof, second, the
provisions of Section 7(f)(i) hereof and third, the provisions of Section
7(f)(ii) hereof; provided, however, that nothing in this Section 7(n) shall be
done to evade the principle set forth in Section 7(f)(viii) hereof that the
Maximum Conversion Rate shall not apply to any adjustments made with respect to
any of the events in Section 7(f)(i) or Section 7(f)(ii) hereof.

         (o)      Successive Adjustments. After an adjustment to the Conversion
Rate under Section 7(f) hereof, any subsequent event requiring an adjustment
under Section 7(f) shall cause an adjustment to the Conversion Rate as so
adjusted.

         (p)      General Considerations. Whenever successive adjustments to the
Conversion Rate are called for pursuant to this Section 7, such adjustments
shall be made to the Market Price as may be necessary or appropriate to
effectuate the intent of this Section 7 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.

         (q)      Corporation Determination Final. Any determination which the
Board of Directors must make pursuant to this Section 7 shall be conclusive and
binding on the Holders.

                                       21

<PAGE>

         8.       Mandatory Conversion.

         (a)      At any time on or after December 5, 2008, the Corporation
shall have the right, at its option, to cause the Preferred Stock, in whole but
not in part, to be automatically converted into that number of whole shares of
Common Stock for each share of Preferred Stock equal to the quotient of (i) the
Liquidation Preference divided by (ii) the Conversion Price then in effect, with
any resulting fractional shares of Common Stock to be settled in accordance with
Section 7(c). The Corporation may exercise its right to cause a mandatory
conversion pursuant to this Section 8(a) only if the Last Reported Sale Price of
the Common Stock equals or exceeds 130% of the Conversion Price then in effect
for at least 20 Trading Days in any consecutive 30-day trading period on the
NYSE (or such other national securities exchange or automated quotation system
on which the Common Stock is then listed or authorized for quotation), including
the last Trading Day of such 30-day period, ending on the Trading Day prior to
the Corporation's issuance of a press release announcing the mandatory
conversion as described in Section 8(b).

         (b)      To exercise the mandatory conversion right described in
Section 8(a), the Corporation must issue a press release for publication on the
Dow Jones News Service prior to the opening of business on the first trading day
following any date on which the conditions described in Section 8(a) are met,
announcing such a mandatory conversion. The Corporation shall also give notice
by mail or by publication (with subsequent prompt notice by mail) to the holders
of Preferred Stock (not more than four Business Days after the date of the press
release) of the mandatory conversion announcing the Corporation's intention to
convert the Preferred Stock. The conversion date will be a date selected by the
Corporation (the "Mandatory Conversion Date") and will be no more than five days
after the date on which the Corporation issues the press release described in
this Section 8(b).

         (c)      In addition to any information required by applicable law or
regulation, the press release and notice of a mandatory conversion described in
Section 8(b) shall state, as appropriate: (i) the Mandatory Conversion Date;
(ii) the number of shares of Common Stock to be issued upon conversion of each
share of Preferred Stock; (iii) the number of shares of Preferred Stock to be
converted; and (iv) that dividends on the Preferred Stock to be converted will
cease to accumulate on the Mandatory Conversion Date.

         (d)      On and after the Mandatory Conversion Date, dividends will
cease to accumulate on the Preferred Stock called for a mandatory conversion
pursuant to Section 8(a) and all rights of holders of such Preferred Stock will
terminate except for the right to receive the whole shares of Common Stock
issuable upon conversion thereof and cash, in lieu of any fractional shares of
Common Stock in accordance with Section 7(c). The dividend payment with respect
to the Preferred Stock called for a mandatory conversion pursuant to Section
8(a) on a date during the period between the close of business on any Dividend
Record Date to the close of business on the corresponding Dividend Payment Date
will be payable on such Dividend Payment Date to the record holder of such share
on such Dividend Record Date if such share has been converted after such
Dividend Record Date and prior to such Dividend Payment Date. Except as provided
in the immediately preceding sentence with respect to a mandatory conversion
pursuant to Section 8(a), no payment or adjustment will be made upon conversion
of Preferred Stock for Accumulated Dividends or for dividends with respect to
the Common Stock issued upon such conversion.

         (e)      The Corporation may not authorize, issue a press release or
give notice of any mandatory conversion pursuant to Section 8(a) unless, prior
to giving the mandatory conversion notice, all Accumulated Dividends on the
Preferred Stock for periods ended prior to the date of such mandatory conversion
notice shall have been paid in cash.

         (f)      In addition to the mandatory conversion right described in
Section 8(a), if there are less than 250,000 shares of Preferred Stock
outstanding, the Corporation shall have the right, at any time on or after
December 5, 2008, at its option, to cause the Preferred Stock to be
automatically converted into that number of whole shares of Common Stock equal
to the quotient of (i) the Liquidation Preference divided by (ii) the lesser of
(A) the Conversion Price then in effect and (B) the Market Value for the period
ending on the second Trading Day immediately prior to the Mandatory Conversion
Date, with any resulting fractional shares of Common Stock to be

                                       22

<PAGE>

settled in cash in accordance with Section 7(c). The provisions of clauses (b),
(c), (d) and (e) of this Section 8 shall apply to any mandatory conversion
pursuant to this clause (f); provided, that (i) the Mandatory Conversion Date
described in Section 8(b) shall not be less than 15 days nor more than 30 days
after the date on which the Corporation issues a press release pursuant to
Section 8(b) announcing such mandatory conversion and (ii) the press release and
notice of mandatory conversion described in Section 8(c) will not state the
number of shares of Common Stock to be issued upon conversion of each share of
Preferred Stock.

         9.       Consolidation, Merger and Sale of Assets.

         (a)      The Corporation, without the consent of the Holders of any of
the outstanding Preferred Stock, may consolidate with or merge into any other
Person or convey, transfer or lease all or substantially all its assets to any
Person or may permit any Person to consolidate with or merge into, or transfer
or lease all or substantially all its properties to, the Corporation; provided,
however, that: (a) the successor, transferee or lessee is organized under the
laws of the United States or any political subdivision thereof; (b) the shares
of Preferred Stock will become shares of such successor, transferee or lessee,
having in respect of such successor, transferee or lessee the same powers,
designations, preferences and relative, participating, optional or other rights
on which, and the qualification, limitations or restrictions thereon, the
Preferred Stock had immediately prior to such transaction; and (c) the
Corporation delivers to the Transfer Agent an Officers' Certificate and an
Opinion of Counsel stating that such transaction complies with this Certificate
of Designation (including without limitation the requirements of Section 7(l).

         (b)      Upon any consolidation by the Corporation with, or merger by
the Corporation into, any other Person or any conveyance, transfer or lease of
all or substantially all the assets of the Corporation as described in Section
9(a), the successor resulting from such consolidation or into which the
Corporation is merged or the transferee or lessee to which such conveyance,
transfer or lease is made will succeed to, and be substituted for, and may
exercise every right and power of, the Corporation under the shares of Preferred
Stock, and, thereafter, except in the case of a lease, the predecessor (if still
in existence) will be released from its obligations and covenants with respect
to the Preferred Stock.

         10.      SEC Reports.

         Whether or not the Corporation is required to file reports with the
Commission, if any shares of Preferred Stock are outstanding, the Corporation
shall file with the Commission all such reports and other information as it
would be required to file with the Commission by Section l3(a) or 15(d) under
the Exchange Act. The Corporation shall supply each holder of Preferred Stock,
upon request, without cost to such holder, copies of such reports or other
information.

         11.      Certificates.

         (a)      Form and Dating. The Preferred Stock and the Transfer Agent's
certificate of authentication shall be substantially in the form of Exhibit C,
which is hereby incorporated in and expressly made a part of this Certificate of
Designation. The Preferred Stock certificate may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Corporation is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Corporation). Each
Preferred Stock certificate shall be dated the date of its authentication. The
terms of the Preferred Stock certificate set forth in Exhibit C are part of the
terms of this Certificate of Designation.

                                       23

<PAGE>

         (i)      Global Preferred Stock. The Preferred Stock shall be issued
                  initially in the form of one or more fully registered global
                  certificates with the global securities legend and restricted
                  securities legend set forth in Exhibit C hereto (the "Global
                  Preferred Stock"), which shall be deposited on behalf of the
                  purchasers represented thereby with DTC (or with such
                  custodian as DTC may direct), and registered in the name of
                  DTC or a nominee of DTC, duly executed by the Corporation and
                  authenticated by the Transfer Agent as hereinafter provided.
                  The number of shares of Preferred Stock represented by Global
                  Preferred Stock may from time to time be increased or
                  decreased by adjustments made on the records of the Transfer
                  Agent and DTC or its nominee as hereinafter provided. With
                  respect to shares of Preferred Stock that are not "restricted
                  securities" as defined in Rule 144 under the Securities Act on
                  a Conversion Date, all shares of Common Stock distributed on
                  such Conversion Date will be freely transferable without
                  restriction under the Securities Act (other than by
                  affiliates), and such shares will be eligible for receipt in
                  global form through the facilities of DTC.

         (ii)     Book-Entry Provisions. In the event Global Preferred Stock is
                  deposited with or on behalf of DTC, the Corporation shall
                  execute and the Transfer Agent shall authenticate and deliver
                  initially one or more Global Preferred Stock certificates that
                  (a) shall be registered in the name of DTC as depository for
                  such Global Preferred Stock or the nominee of DTC and (b)
                  shall be delivered by the Transfer Agent to DTC or pursuant to
                  DTC's instructions or held by the Transfer Agent as custodian
                  for DTC.

                  Members of, or participants in, DTC ("Agent Members") shall
                  have no rights under this Certificate of Designation with
                  respect to any Global Preferred Stock held on their behalf by
                  DTC or by the Transfer Agent as the custodian of DTC or under
                  such Global Preferred Stock, and DTC may be treated by the
                  Corporation, the Transfer Agent and any agent of the
                  Corporation or the Transfer Agent as the absolute owner of
                  such Global Preferred Stock for all purposes whatsoever.
                  Notwithstanding the foregoing, nothing herein shall prevent
                  the Corporation, the Transfer Agent or any agent of the
                  Corporation or the Transfer Agent from giving effect to any
                  written certification, proxy or other authorization furnished
                  by DTC or impair, as between DTC and its Agent Members, the
                  operation of customary practices of DTC governing the exercise
                  of the rights of a holder of a beneficial interest in any
                  Global Preferred Stock.

         (iii)    Certificated Preferred Stock. Except as provided in Section
                  11(c), owners of beneficial interests in Global Preferred
                  Stock will not be entitled to receive Certificated Preferred
                  Stock.

         (b)      Execution and Authentication. Two Officers shall sign the
Preferred Stock certificate for the Corporation by manual or facsimile
signature.

         If an Officer whose signature is on a Preferred Stock certificate no
longer holds that office at the time the Transfer Agent authenticates the
Preferred Stock certificate, the Preferred Stock certificate shall be valid
nevertheless.

         A Preferred Stock certificate shall not be valid until an authorized
signatory of the Transfer Agent and the Security Registrar manually signs the
certificate of authentication on the Preferred Stock certificate. The signature
shall be conclusive evidence that the Preferred Stock certificate has been
authenticated under this Certificate of Designation.

         The Transfer Agent shall authenticate and deliver certificates for up
to 5,000,000 shares of Preferred Stock for original issue upon a written order
of the Corporation signed by two Officers or by an Officer and an Assistant
Treasurer of the Corporation. Such order shall specify the number of shares of
Preferred Stock to be authenticated and the date on which the original issue of
Preferred Stock is to be authenticated.

         The Transfer Agent may appoint an authenticating agent reasonably
acceptable to the Corporation to authenticate the certificates for Preferred
Stock. Unless limited by the terms of such appointment, an authenticating

                                       24

<PAGE>

agent may authenticate certificates for Preferred Stock whenever the Transfer
Agent may do so. Each reference in this Certificate of Designation to
authentication by the Transfer Agent includes authentication by such agent. An
authenticating agent has the same rights as the Transfer Agent or agent for
service of notices and demands.

         (c)      Transfer and Exchange of Global Preferred Stock. The transfer
and exchange of Global Preferred Stock or beneficial interests therein shall be
effected through DTC, in accordance with this Certificate of Designation
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of DTC therefor.

         (i)      Restrictions on Transfer and Exchange of Global Preferred
                  Stock.

                  (1)      Notwithstanding any other provisions of this
                           Certificate of Designation (other than the provisions
                           set forth in Section 11(c)(ii)), Global Preferred
                           Stock may not be transferred as a whole except by DTC
                           to a nominee of DTC or by a nominee of DTC to DTC or
                           another nominee of DTC or by DTC or any such nominee
                           to a successor depository or a nominee of such
                           successor depository.

                  (2)      In the event that the Global Preferred Stock is
                           exchanged for Preferred Stock in definitive
                           registered form pursuant to Section 11(c)(ii) prior
                           to the effectiveness of a Shelf Registration
                           Statement with respect to such securities, such
                           Preferred Stock may be exchanged only in accordance
                           with such procedures as are substantially consistent
                           with the provisions of this Section 11(c) (including
                           the certification requirements set forth in the
                           Exhibits to this Certificate of Designation intended
                           to ensure that such transfers comply with Rule 144A
                           or such other applicable exemption from registration
                           under the Securities Act, as the case may be) and
                           such other procedures as may from time to time be
                           adopted by the Corporation.

                  (3)      The Preferred Stock, and any shares of Common Stock
                           distributed pursuant to the conversion of the
                           Preferred Stock, may not be sold or otherwise
                           transferred until the expiration of two years
                           following the date of payment for and delivery of the
                           Preferred Stock, except (a) pursuant to registration
                           under the Securities Act, (b) in accordance with Rule
                           144 (if available) or Rule 144A under the Securities
                           Act (if available) or (c) in offshore transactions in
                           reliance on Regulation S, and will bear a legend to
                           this effect.

         (ii)     Authentication of Certificated Preferred Stock. If at any
                  time:

                  (1)      DTC notifies the Corporation that DTC is unwilling or
                           unable to continue as depository for the Global
                           Preferred Stock and a successor depository for the
                           Global Preferred Stock is not appointed by the
                           Corporation within 90 days after delivery of such
                           notice;

                  (2)      DTC ceases to be a clearing agency registered under
                           the Exchange Act and a successor depository for the
                           Global Preferred Stock is not appointed by the
                           Corporation within 90 days; or

                  (3)      the Corporation, in its sole discretion, notifies the
                           Transfer Agent in writing that it elects to cause the
                           issuance of Certificated Preferred Stock under this
                           Certificate of Designation,

                           then the Corporation will execute, and the Transfer
                           Agent, upon receipt of a written order of the
                           Corporation signed by two Officers or by an Officer
                           and an Assistant Treasurer of the Corporation
                           requesting the authentication and delivery of
                           Certificated Preferred Stock to the Persons
                           designated by the Corporation, will authenticate and
                           deliver Certificated Preferred Stock equal to the
                           number of shares of Preferred Stock represented by
                           the Global Preferred Stock, in exchange for such
                           Global Preferred Stock.

         (iii)    Cancellation or Adjustment of Global Preferred Stock. At such
                  time as all beneficial interests in Global Preferred Stock
                  have either been exchanged for Certificated Preferred Stock,
                  converted or canceled, such Global Preferred Stock shall be
                  returned to DTC for cancellation or retained and

                                       25

<PAGE>

                  canceled by the Transfer Agent. At any time prior to such
                  cancellation, if any beneficial interest in Global Preferred
                  Stock is exchanged for Certificated Preferred Stock, converted
                  or canceled, the number of shares of Preferred Stock
                  represented by such Global Preferred Stock shall be reduced
                  and an adjustment shall be made on the books and records of
                  the Transfer Agent with respect to such Global Preferred
                  Stock, by the Transfer Agent or DTC, to reflect such
                  reduction.

                           (iv)     Obligations with Respect to Transfers and
                                    Exchanges of Preferred Stock.

                                    (1) To permit registrations of transfers and
                  exchanges, the Corporation shall execute and the Transfer
                  Agent shall authenticate Certificated Preferred Stock and
                  Global Preferred Stock as required pursuant to the provisions
                  of this Section 11(c).

                                    (2) All Certificated Preferred Stock and
                  Global Preferred Stock issued upon any registration of
                  transfer or exchange of Certificated Preferred Stock or Global
                  Preferred Stock shall be the valid obligations of the
                  Corporation, entitled to the same benefits under this
                  Certificate of Designation as the Certificated Preferred Stock
                  or Global Preferred Stock surrendered upon such registration
                  of transfer or exchange.

                                    (3) Prior to due presentment for
                  registration of transfer of any shares of Preferred Stock, the
                  Transfer Agent and the Corporation may deem and treat the
                  Person in whose name such shares of Preferred Stock are
                  registered as the absolute owner of such Preferred Stock and
                  neither the Transfer Agent nor the Corporation shall be
                  affected by notice to the contrary.

                                    (4) No service charge shall be made to a
                  Holder for any registration of transfer or exchange upon
                  surrender of any Preferred Stock certificate or Common Stock
                  certificate at the office of the Transfer Agent maintained for
                  that purpose. However, the Corporation may require payment of
                  a sum sufficient to cover any tax or other governmental charge
                  that may be imposed in connection with any registration of
                  transfer or exchange of Preferred Stock certificates or Common
                  Stock certificates.

                                    (5) Upon any sale or transfer of shares of
                  Preferred Stock (including any Preferred Stock represented by
                  a Global Preferred Stock certificate) or of certificated
                  Common Stock pursuant to an effective registration statement
                  under the Securities Act or pursuant to Rule 144 or another
                  exemption from registration under the Securities Act (and
                  based upon an Opinion of Counsel reasonably satisfactory to
                  the Corporation if it so requests):

                                             (A) in the case of any Certificated
                                    Preferred Stock or certificated Common
                                    Stock, the Corporation and the Transfer
                                    Agent shall permit the holder thereof to
                                    exchange such Preferred Stock or
                                    certificated Common Stock for Certificated
                                    Preferred Stock or certificated Common
                                    Stock, as the case may be, that does not
                                    bear the restrictive legend set forth on
                                    Exhibit C and rescind any restriction on the
                                    transfer of such Preferred Stock or Common
                                    Stock issuable in respect of the conversion
                                    of the Preferred Stock; and

                                             (B) in the case of any Global
                                    Preferred Stock, such Preferred Stock shall
                                    not be required to bear the restrictive
                                    legend set forth on Exhibit C; provided,
                                    however, that with respect to any request
                                    for an exchange of Preferred Stock that is
                                    represented by Global Preferred Stock for
                                    Certificated Preferred Stock that does not
                                    bear a restrictive as set forth on Exhibit C
                                    in connection with a sale or transfer
                                    thereof pursuant to Rule 144 or another
                                    exemption from registration under the
                                    Securities Act (and based upon an Opinion of
                                    Counsel if the Corporation so requests), the
                                    Holder thereof shall certify in writing to
                                    the Transfer Agent that such request is
                                    being made pursuant to such exemption (such
                                    certification to be substantially in the
                                    form of Exhibit D hereto).

         (v)      No Obligation of the Transfer Agent.

                  (1)      The Transfer Agent shall have no responsibility or
                           obligation to any beneficial owner of Global

                                       26

<PAGE>

                           Preferred Stock, a member of, or a participant in,
                           DTC or any other Person with respect to the accuracy
                           of the records of DTC or its nominee or of any
                           participant or member thereof, with respect to any
                           ownership interest in the Preferred Stock or with
                           respect to the delivery to any participant, member,
                           beneficial owner or other Person (other than DTC) of
                           any notice or the payment of any amount, under or
                           with respect to such Global Preferred Stock. All
                           notices and communications to be given to the Holders
                           and all payments to be made to Holders under the
                           Preferred Stock shall be given or made only to the
                           Holders (which shall be DTC or its nominee in the
                           case of the Global Preferred Stock). The rights of
                           beneficial owners in any Global Preferred Stock shall
                           be exercised only through DTC subject to the
                           applicable rules and procedures of DTC. The Transfer
                           Agent may rely and shall be fully protected in
                           relying upon information furnished by DTC with
                           respect to its members, participants and any
                           beneficial owners.

                  (2)      The Transfer Agent shall have no obligation or duty
                           to monitor, determine or inquire as to compliance
                           with any restrictions on transfer imposed under this
                           Certificate of Designation or under applicable law
                           with respect to any transfer of any interest in any
                           Preferred Stock (including any transfers between or
                           among DTC participants, members or beneficial owners
                           in any Global Preferred Stock) other than to require
                           delivery of such certificates and other documentation
                           or evidence as are expressly required by, and to do
                           so if and when expressly required by, the terms of
                           this Certificate of Designation, and to examine the
                           same to determine substantial compliance as to form
                           with the express requirements hereof.

         (d)      Replacement Certificates. If a mutilated Preferred Stock
certificate is surrendered to the Transfer Agent or if the Holder of a Preferred
Stock certificate claims that the Preferred Stock certificate has been lost,
destroyed or wrongfully taken, the Corporation shall issue and the Transfer
Agent shall countersign a replacement Preferred Stock certificate if the
reasonable requirements of the Transfer Agent are met. If required by the
Transfer Agent or the Corporation, such Holder shall furnish an indemnity bond
sufficient in the judgment of the Corporation and the Transfer Agent to protect
the Corporation and the Transfer Agent from any loss which either of them may
suffer if a Preferred Stock certificate is replaced. The Corporation and the
Transfer Agent may charge the Holder for their expenses in replacing a Preferred
Stock certificate.

         12.      Additional Rights of Holders. In addition to the rights
provided to Holders under this Certificate of Designation, Holders shall have
the rights set forth in the Registration Rights Agreement.

         13.      Other Provisions.

         (a) With respect to any notice to a Holder of shares of Preferred Stock
required to be provided hereunder, neither failure to mail such notice, nor any
defect therein or in the mailing thereof, to any particular Holder shall affect
the sufficiency of the notice or the validity of the proceedings referred to in
such notice with respect to the other Holders or affect the legality or validity
of any distribution, rights, warrant, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up, or the vote upon
any such action. Any notice which was mailed in the manner herein provided shall
be conclusively presumed to have been duly given whether or not the Holder
receives the notice.

         (b) Shares of Preferred Stock issued and reacquired will be retired and
canceled promptly after reacquisition thereof and, upon compliance with the
applicable requirements of Michigan law, have the status of authorized but
unissued shares of preferred stock of the Corporation undesignated as to series
and may with any and all other authorized but unissued shares of preferred stock
of the Corporation be designated or redesignated and issued or reissued, as the
case may be, as part of any series of preferred stock of the Corporation, except
that any issuance or reissuance of shares of Preferred Stock must be in
compliance with this Certificate of Designation.

         (c) The shares of Preferred Stock shall be issuable only in whole
shares.

         (d) All notice periods referred to herein shall commence on the date of
the mailing of the applicable notice.

                                       27

<PAGE>

         IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed and attested this 4th day of December, 2003.

                                               CMS ENERGY CORPORATION

                                               By: /S/ Michael D. VanHemert
                                                   --------------------------
                                                   Name: Michael D. VanHemert
                                                   Title: Vice President and
                                                          Secretary

         Attest: /S/ Joyce H. Norkey
                 -------------------
                 Joyce H. Norkey

                                       28

<PAGE>

                                                                       EXHIBIT A

                   FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To: CMS Energy Corporation

         The undersigned registered holder of shares of Preferred Stock hereby
acknowledges receipt of a notice from CMS Energy Corporation (the "Corporation")
as to the occurrence of a Fundamental Change with respect to the Corporation and
requests and instructs the Corporation to repurchase the shares of Preferred
Stock ($50.00 liquidation preference or an integral multiple thereof) designated
below, in accordance with the terms of the Certificate of Designation referred
to in such Preferred Stock and directs that the check of the Corporation, in
payment for these shares of Preferred Stock, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
any portion of these shares of Preferred Stock are not repurchased and are to be
issued in the name of a Person other than the undersigned, the undersigned shall
pay all transfer taxes payable with respect thereto.

Dated:                                      _____________________________
                                                     Signature(s)

                           Signature(s) must be guaranteed by a commercial bank
                           or trust company or a member firm of a major stock
                           exchange if shares of Preferred Stock are to be
                           delivered other than to or in the name of the
                           registered holder.

                                            _____________________________
                                                 Signature Guarantee

Fill in for registration
of Preferred Stock if to
be issued other than to
and in the name of
registered holder:

_________________________             Number of shares of Preferred Stock to be
(Name)                                purchased (if less than all are to be
                                      be purchased):
_________________________
(Street Address)                      _____________________

_________________________             Certificate Number (if shares of Preferred
(City, state and zip code)            Stock are Certificated):
Please print name and address
                                      _____________________

                                      Social Security or other taxpayer number:

                                      _____________________

                                       29

<PAGE>

                                                                       EXHIBIT B

                            FORM OF CONVERSION NOTICE

To: CMS Energy Corporation

         The undersigned registered holder of these shares of Preferred Stock
hereby exercises the option to convert these shares of Preferred Stock, or
portion hereof (which is $50.00 liquidation preference or an integral multiple
thereof) designated below, for shares of Common Stock of CMS Energy Corporation
in accordance with the terms of the Certificate of Designation referred to in
the Preferred Stock, and directs that the shares, if any, issuable and
deliverable upon such conversion, together with any check for cash deliverable
upon such conversion, and any shares of Preferred Stock representing any
unconverted shares hereof, be issued and delivered to the registered holder
hereof unless a different name has been indicated below. If shares or any
portion of the Preferred Stock not converted are to be issued in the name of a
Person other than the undersigned, the undersigned shall pay all transfer taxes
payable with respect thereto.

         This notice shall be deemed to be an irrevocable exercise of the option
to convert these shares of Preferred Stock.

Dated:                                      _____________________________
                                                     Signature(s)

                           Signature(s) must be guaranteed by a commercial bank
                           or trust company or a member firm of a major stock
                           exchange if shares of Common Stock are to be issued,
                           or shares of Preferred Stock to be delivered, other
                           than to or in the name of the registered holder.

                                            _____________________________
                                                 Signature Guarantee

Fill in for registration
of shares if to be
delivered, and shares of
Preferred Stock if to be
issued other than to and
in the name of registered
holder:

_________________________             Number of shares of Preferred Stock to be
(Name)                                converted (if less than all):

_________________________             _____________________
(Street Address)
                                      Certificate Number (if shares of Preferred
_________________________             Stock are Certificated):
(City, state and zip code)
Please print name and address         _____________________

                                      Social Security or other taxpayer number:

                                      _____________________

                                       30

<PAGE>

                                                                       EXHIBIT C

                             FORM OF PREFERRED STOCK
                                FACE OF SECURITY

         THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A")) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (V) TO CMS ENERGY CORPORATION
OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.

         THE HOLDER OF THIS SECURITY AGREES THAT SUCH HOLDER WILL NOT ENGAGE IN
HEDGING TRANSACTIONS INVOLVING THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

         THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR
RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE
LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO
THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.

         THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS
OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF DECEMBER 5, 2003 ENTERED INTO
BY THE COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF SECURITIES FROM TIME TO
TIME.

                                       31

<PAGE>

    Certificate Number                                    Number of Shares
[ ]                                                                    [ ]

                                                         CUSIP NO.: ______

   4.50% Cumulative Convertible Preferred Stock (par value $0.01) (liquidation
                            preference $50 per share)

                                       of

                             CMS Energy Corporation

         CMS Energy Corporation, a Michigan corporation (the `Corporation"),
hereby certifies that [______] (the "Holder") is the registered owner of
[______] fully paid and non-assessable preferred securities of the Corporation
designated the 4.50% Cumulative Convertible Preferred Stock (par value $0.01)
(liquidation preference $50 per share) (the "Preferred Stock"). The shares of
Preferred Stock are transferable on the books and records of the Transfer Agent,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Stock represented hereby are issued and shall in all respects be
subject to the provisions of the Certificate of Designation dated December 4,
2003, as the same may be amended from time to time (the "Certificate of
Designation"). Capitalized terms used herein but not defined shall have the
meaning given them in the Certificate of Designation. The Corporation will
provide a copy of the Certificate of Designation to a Holder without charge upon
written request to the Corporation at its principal place of business.

         Reference is hereby made to select provisions of the Preferred Stock
set forth on the reverse hereof, and to the Certificate of Designation, which
select provisions and the Certificate of Designation shall for all purposes have
the same effect as if set forth at this place.

         Upon receipt of this certificate, the Holder is bound by the
Certificate of Designation and is entitled to the benefits thereunder.

         Unless the Transfer Agent's Certificate of Authentication hereon has
been properly executed, these shares of Preferred Stock shall not be entitled to
any benefit under the Certificate of Designation or be valid or obligatory for
any purpose.

         IN WITNESS WHEREOF, the Corporation has executed this certificate this
____ day of __________, 2003.

                                      CMS ENERGY CORPORATION

                                      By: __________________________________
                                          Name:
                                          Title:

                                      By: __________________________________
                                          Name:
                                          Title:

                                       32

<PAGE>

     TRANSFER AGENT'S AND SECURITY REGISTRAR'S CERTIFICATE OF AUTHENTICATION

         These are shares of the Preferred Stock referred to in the
within-mentioned Certificate of Designation.

         Dated: ______________, 2003

                                      CMS Energy Corporation, as Transfer Agent
                                      and Security Registrar

                                      By: __________________________________
                                          Authorized Signatory

                               REVERSE OF SECURITY

         Cash dividends on each share of Preferred Stock shall be payable at a
rate per annum set forth on the face hereof or as provided in the Certificate of
Designation.

         The shares of Preferred Stock shall be convertible into the
Corporation's Common Stock in the manner and according to the terms set forth in
the Certificate of Designation.

         The Corporation will furnish without charge to each holder who so
requests the powers, designations, preferences and relative, participating,
optional or other rights of each class of stock and the qualifications,
limitations or restrictions of such preferences and/or rights.

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Preferred Stock evidenced hereby to:

         (Insert assignee's social security or tax identification number)

         (Insert address and zip code of assignee)

         and irrevocably appoints ____________ agent to transfer the shares of
Preferred Stock evidenced hereby on the books of the Transfer Agent. The agent
may substitute another to act for him or her.

         Date: _____________________________________________________________

         Signature: ________________________________________________________

         (Sign exactly as your name appears on the other side of this Preferred
         Stock certificate)

         Signature Guarantee: (1) __________________________________________

(1)      (Signature must be guaranteed by an "eligible guarantor institution"
         that is a bank, stockbroker, savings and loan association or credit
         union meeting the requirements of the Transfer Agent, which
         requirements include membership or participation in the Securities
         Transfer Agents Medallion Program ("STAMP") or such other "signature
         guarantee program" as may be determined by the Transfer Agent in
         addition to, or in substitution for, STAMP, all in accordance with the
         Securities Exchange Act of 1934, as amended.)

                                       33

<PAGE>

                                                                       EXHIBIT D

                  CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
                   REGISTRATION OF TRANSFER OF PREFERRED STOCK

         Re:      4.50% Cumulative Convertible Preferred Stock (the "Preferred
                  Stock") of CMS Energy Corporation (the "Corporation")

         This Certificate relates to ____ shares of Preferred Stock held in [ ]
*/ book-entry or [ ] */ definitive form by __________________ (the
"Transferor").

         The Transferor*:

         [ ] has requested the Transfer Agent by written order to deliver in
exchange for its beneficial interest in the Preferred Stock held by the
Depository shares of Preferred Stock in definitive, registered form equal to its
beneficial interest in such Preferred Stock (or the portion thereof indicated
above); or

         [ ] has requested the Transfer Agent by written order to exchange or
register the transfer of Preferred Stock.

         In connection with such request and in respect of such Preferred Stock,
the Transferor does hereby certify that the Transferor is familiar with the
Certificate of Designation relating to the above-captioned Preferred Stock and
that the transfer of this Preferred Stock does not require registration under
the Securities Act of 1933, as amended (the "Securities Act") because */:

         [ ] Such Preferred Stock is being acquired for the Transferor's own
account without transfer.

         [ ] Such Preferred Stock is being transferred to the Corporation.

         [ ] Such Preferred Stock is being transferred to a qualified
institutional buyer (as defined in Rule 144A under the Securities Act), in
reliance on Rule 144A.

         [ ] Such Preferred Stock is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an Opinion of Counsel if the Corporation so
requests).

--------
* /Please check applicable box.

                                            [NAME OF TRANFEROR]

                                            ____________________________________
                                            By:
                                            Its:
Date: ________________

                                       34

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