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EXHIBIT (4)(a)
TWELFTH SUPPLEMENTAL INDENTURE
DATED AS OF JULY 2, 2001
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This Twelfth Supplemental Indenture, dated as of the 2nd day
of July, 2001 between CMS Energy Corporation, a corporation duly organized and
existing under the laws of the State of Michigan (hereinafter called the
"Issuer") and having its principal xxxxxx xx Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0000,
000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, and Bank One Trust Company,
N.A., a national banking association (hereinafter called the "Trustee") and
having its Corporate Trust Office at 1 BankOne Plaza, Mail Code ILI-0823,
Xxxxxxx, XX. 00000.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (formerly known as NBD
Bank, N.A.) entered into an Indenture, dated as of September 15, 1992 (the
"Original Indenture"), pursuant to which one or more series of debt securities
of the Issuer (the "Securities") may be issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the
terms of any series of Securities to be established in an indenture supplemental
to the Original Indenture; and
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WHEREAS, Section 8.1(e) of the Original Indenture provides
that a supplemental indenture may be entered into by the Issuer and the Trustee
without the consent of any Holders of the Securities to establish the form and
terms of the Securities of any series; and
WHEREAS, the Issuer has requested the Trustee to join with it
in the execution and delivery of this Twelfth Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things, establishing
the form and terms of a series of Securities to be known as the Issuer's " 8.9%
Senior Notes Due 2008" (the "2008 Notes"), providing for the issuance of the
2008 Notes and amending and adding certain provisions thereof for the benefit of
the Holders of the 2008 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this
Twelfth Supplemental Indenture for the purposes set forth in Sections 2.3 and
8.1(e) of the Original Indenture as referred to above; and
WHEREAS, the Issuer has furnished the Trustee with a copy of
the resolutions of its Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of this Twelfth Supplemental
Indenture; and
WHEREAS, all things necessary to make this Twelfth
Supplemental Indenture a valid agreement of the Issuer and the Trustee and a
valid supplement to the Original Indenture have been done,
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NOW, THEREFORE, for and in consideration of the premises and
the purchase of the 2008 Notes to be issued hereunder by holders thereof, the
Issuer and the Trustee mutually covenant and agree, for the equal and
proportionate benefit of the respective holders from time to time of the 2008
Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture
together with this Twelfth Supplemental Indenture and all previous indentures
supplemental thereto entered into pursuant to the applicable terms thereof are
hereinafter sometimes collectively referred to as the "Indenture." All
capitalized terms which are used herein and not otherwise defined herein are
defined in the Indenture and are used herein with the same meanings as in the
Indenture.
SECTION 1.02. Definitions. Section 1.1 of the Original
Indenture is amended to insert the new definitions applicable to the 2008 Notes,
in the appropriate alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts
recognized during such period as amortization of capital leases, depletion,
nuclear fuel, goodwill and assets classified as intangible assets in accordance
with generally accepted accounting principles.
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"Applicable Premium" means, with respect to a 2008 Note (or
portion thereof) being redeemed at any time, the excess of (A) the present value
at such time of the principal amount of such 2008 Note (or portion thereof)
being redeemed plus all interest payments due on such 2008 Note (or portion
thereof), which present value shall be computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (B) the principal amount of such
2008 Note (or portion thereof) being redeemed at such time. For purposes of this
definition, the present values of interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of (x) the number of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness and
(y) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Capital Lease Obligation" of a Person means any obligation
that is required to be classified and accounted for as a capital lease on the
face of a balance sheet of such Person prepared in accordance with generally
accepted accounting principles; the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with generally accepted
accounting principles; the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty; and such obligation shall be deemed secured by a Lien on any property
or assets to which such lease relates.
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"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered Capital
Stock for purposes of this definition.
"Change in Control" means an event or series of events by
which (i) the Issuer ceases to own beneficially, directly or indirectly, at
least 80% of the total voting power of all classes of Capital Stock then
outstanding of Consumers (whether arising from issuance of securities of the
Issuer or Consumers, any direct or indirect transfer of securities by the Issuer
or Consumers, any merger, consolidation, liquidation or dissolution of the
Issuer or Consumers or otherwise); (ii) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the
"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), directly or indirectly, of more than 35% of the Voting Stock of the
Issuer; or (iii) the Issuer consolidates with or merges into another corporation
or directly or indirectly conveys, transfers or leases all or substantially all
of its assets to any Person, or any corporation consolidates with or merges into
the Issuer, in either event pursuant to a transaction in which the outstanding
Voting Stock of the Issuer is changed into or exchanged for cash, securities, or
other property, other than any such transaction in which (A) the outstanding
Voting Stock of the Issuer is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Issuer
immediately prior
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to such transaction retain, directly or indirectly, substantially proportionate
ownership of the Voting Stock of the surviving corporation immediately after
such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission" means CMS Gas Transmission Company
(formerly known as CMS Gas Transmission and Storage Company), a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Oil & Gas" means CMS Oil & Gas Co. (formerly known as CMS
NOMECO Oil & Gas Co.), a Michigan corporation and wholly-owned subsidiary of
Enterprises.
"Consolidated Assets" means, at any date of determination, the
aggregate assets of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles.
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"Consolidated Coverage Ratio" with respect to any period means
the ratio of (i) the aggregate amount of Operating Cash Flow for such period to
(ii) the aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Current Liabilities" means, for any period, the
aggregate amount of liabilities of the Issuer and its Consolidated Subsidiaries
which may properly be classified as current liabilities (including taxes accrued
as estimated), after (i) eliminating all inter-company items between the Issuer
and any Consolidated Subsidiary and (ii) deducting all current maturities of
long-term Indebtedness, all as determined in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date of
determination, the aggregate Indebtedness of the Issuer and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles; provided that Consolidated Indebtedness shall
not include any subordinated debt owned by any Hybrid Preferred Securities
Subsidiary.
"Consolidated Interest Expense" means, for any period, the
total interest expense in respect of Consolidated Indebtedness of the Issuer and
its Consolidated Subsidiaries, including, without duplication, (i) interest
expense attributable to capital leases, (ii) amortization of debt discount,
(iii) capitalized interest, (iv) cash and noncash interest 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
Protection Agreements
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(including amortization of discount) and (vii) interest expense in respect of
obligations of other Persons deemed to be Indebtedness of the Issuer or any
Consolidated Subsidiaries under clause (v) or (vi) of the definition of
Indebtedness, provided, however, that Consolidated Interest Expense shall
exclude (a) any costs otherwise included in interest expense recognized on early
retirement of debt and (b) any interest expense in respect of any Indebtedness
of any Subsidiary of Consumers, CMS Generation, CMS Oil & Gas, CMS Electric and
Gas, CMS Gas Transmission, CMS MST or any other Designated Enterprises
Subsidiary, provided that such Indebtedness is without recourse to any assets of
the Issuer, Consumers, Enterprises, CMS Generation, CMS Oil & Gas, CMS Electric
and Gas, CMS Gas Transmission, CMS MST or any other Designated Enterprises
Subsidiary.
"Consolidated Net Income" means, for any period, the net
income of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles;
provided, however, that there shall not be included in such Consolidated Net
Income:
(i) any net income of any Person if such Person is not a
Subsidiary, except that (A) the Issuer's equity in the net income of
any such Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by
such Person during such period to the Issuer or a Consolidated
Subsidiary as a dividend or other distribution and (B) the Issuer's
equity in a net loss of any such Person for such period shall be
included in determining such Consolidated Net Income;
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(ii) any net income of any Person acquired by the Issuer or a
Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition;
(iii) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment of the Issuer or its
Consolidated Subsidiaries which is not sold or otherwise disposed of in
the ordinary course of business and any gain or loss realized upon the
sale or other disposition of any Capital Stock of any Person; and
(iv) any net income of any Subsidiary of Consumers, CMS
Generation, CMS Oil & Gas, CMS Electric and Gas, CMS Gas Transmission,
CMS MST or any other Designated Enterprises Subsidiary whose interest
expense is excluded from Consolidated Interest Expense, provided,
however, that for purposes of this subsection (iv), any cash, dividends
or distributions of any such Subsidiary to the Issuer shall be included
in calculating Consolidated Net Income.
"Consolidated Net Tangible Assets" means, for any period, the
total amount of assets (less accumulated depreciation or amortization,
allowances for doubtful receivables, other applicable reserves and other
properly deductible items) as set forth on the most recently available quarterly
or annual consolidated balance sheet of the Issuer and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, and after giving effect to purchase accounting
and after deducting therefrom, to the extent otherwise included, the amounts of:
(i) Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Issuer or
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a Restricted Subsidiary; (iii) excess of cost over fair value of assets of
businesses acquired, as determined in good faith by the Board of Directors as
evidenced by Board resolutions; (iv) any revaluation or other write-up in value
of assets subsequent to December 31, 1996, as a result of a change in the method
of valuation in accordance with generally accepted accounting principles; (v)
unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses
organization or developmental expenses and other intangible items; (vi) treasury
stock; and (vii) any cash set apart and held in a sinking or other analogous
fund established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated Current
Liabilities.
"Consolidated Net Worth" of any Person means the total of the
amounts shown on the consolidated balance sheet of such Person and its
consolidated subsidiaries, determined on a consolidated basis in accordance with
generally accepted accounting principles, as of any date selected by such Person
not more than 90 days prior to the taking of any action for the purpose of which
the determination is being made (and adjusted for any material events since such
date), as (i) the par or stated value of all outstanding Capital Stock plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable to
Exchangeable Stock.
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"Consolidated Subsidiary" means, any Subsidiary whose accounts
are or are required to be consolidated with the accounts of the Issuer in
accordance with generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan
corporation, all of whose common stock is on the date hereof owned by the
Issuer.
"Designated Enterprises Subsidiary" means any wholly-owned
subsidiary of Enterprises formed after the date of this Twelfth Supplemental
Indenture which is designated a Designated Enterprises Subsidiary by the Board
of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to the 2008 Notes has the
meaning specified in Article V of this Twelfth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchangeable Stock" means any Capital Stock of a corporation
that is exchangeable or convertible into another security (other than Capital
Stock of such corporation that is neither Exchangeable Stock or Redeemable
Stock).
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"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 Consumers in
exchange for subordinated debt issued by the Company or
Consumers respectively;
(ii) such preferred securities contain terms providing for the
deferral of distributions corresponding to provisions
providing for the deferral of interest payments on such
subordinated debt; and
(iii) the Company or Consumers (as the case may be) makes
periodic interest payments on such subordinated debt, which
interest payments are in turn used by the Hybrid Preferred
Securities Subsidiary to make corresponding payments to the
holders of the Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any 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 or Consumers) at all times by the Company or
Consumers, (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
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subordinated debt issued by the Company or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for
the payment of which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
and all obligations under any title retention agreement (but excluding
trade accounts payable arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, bankers' acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
clauses (i) through (iii) above) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following
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receipt by such Person of a demand for reimbursement following payment
on the letter of credit);
(v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons and all dividends of other Persons for
the payment of which, in either case, such Person is responsible or
liable as obligor, guarantor or otherwise; and
(vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons secured by any Lien on any property or
asset of such Person (whether or not such obligation is assumed by such
Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets or the amount of the obligation so
secured.
"Interest Payment Date" means January 15, 2002 and each
January 15 and July 15 in each year thereafter.
"Interest Rate Protection Agreement" means any interest rate
swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Issuer or any Subsidiary against
fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is intended to reflect the separate
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performance of certain of the businesses or operations conducted by such
corporation or any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security interest,
conditional sale, title retention agreement or other charge or encumbrance of
any kind.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale,
the aggregate proceeds of such Asset Sale including the fair market value (as
determined by the Board of Directors and net of any associated debt and of any
consideration other than Capital Stock received in return) of property other
than cash, received by the Issuer, net of (i) brokerage commissions and other
fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Issuer and
its Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Issuer or any Restricted Subsidiary of the Issuer as a reserve
against any liabilities associated with such Asset Sale including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with generally accepted accounting principles and (b) with respect to any
issuance or sale or contribution in respect of Capital Stock, the aggregate
proceeds of such issuance, sale or contribution, including the fair
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market value (as determined by the Board of Directors and net of any associated
debt and of any consideration other than Capital Stock received in return) of
property other than cash, received by the Issuer, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such issuance or sale and net of taxes paid or payable as a result thereof,
provided, however, that if such fair market value as determined by the Board of
Directors of property other than cash is greater than $25 million, the value
thereof shall be based upon an opinion from an independent nationally recognized
firm experienced in the appraisal or similar review of similar types of
transactions.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock other than Preferred Stock of such corporation; provided, however,
that Non-Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to
the Issuer and its Consolidated Subsidiaries, the aggregate amount of
Consolidated Net Income after adding thereto Consolidated Interest Expense
(adjusted to include costs recognized on early retirement of debt), income
taxes, depreciation expense, Amortization Expense and any noncash amortization
of debt issuance costs, any nonrecurring, noncash charges to earnings and any
negative accretion recognition.
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"Other Rating Agency" shall mean any one of Fitch Inc. or
Xxxxx'x Investors Service, Inc., and any successor to any of these organizations
which is a nationally recognized statistical rating organization.
"Paying Agent" means any person authorized by the Issuer to
pay the principal of (and premium, if any) or interest on any of the 2008 Notes
on behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.
"Predecessor 2008 Note" of any particular 2008 Note means
every previous 2008 Note evidencing all or a portion of the same debt as that
evidenced by such particular 2008 Note; and, for the purposes of the definition,
any 2008 Note authenticated and delivered under Section 2.9 of the Indenture in
exchange for or in lieu of a mutilated, destroyed, lost or stolen 2008 Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen 2008 Note.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation; provided that Hybrid Preferred Securities shall not be considered
Preferred Stock for purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms
or otherwise is required to be redeemed prior to the first anniversary of the
Stated Maturity of the outstanding
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2008 Notes or is redeemable at the option of the holder thereof at any time
prior to the first anniversary of the Stated Maturity of the outstanding 2008
Notes.
"Restricted Subsidiary" means any Subsidiary (other than
Consumers and its subsidiaries) of the Issuer which, as of the date of the
Issuer's most recent quarterly consolidated balance sheet, constituted at least
10% of the total Consolidated Assets of the Issuer and its Consolidated
Subsidiaries and any other Subsidiary which from time to time is designated a
Restricted Subsidiary by the Board of Directors; provided that no Subsidiary may
be designated a Restricted Subsidiary if, immediately after giving effect
thereto, an Event of Default or event that, with the lapse of time or giving of
notice or both, would constitute an Event of Default would exist or the Issuer
and its Restricted Subsidiaries could not incur at least one dollar of
additional Indebtedness under Section 4.04, and (i) any such Subsidiary so
designated as a Restricted Subsidiary must be organized under the laws of the
United States or any State thereof, (ii) more than 80% of the Voting Stock of
such Subsidiary must be owned of record and beneficially by the Issuer or a
Restricted Subsidiary and (iii) such Restricted Subsidiary must be a
Consolidated Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc., and any successor
thereto which is a nationally recognized statistical rating organization, or if
such entity shall cease to rate the 2008 Notes or shall cease to exist and there
shall be no such successor thereto, any other nationally recognized statistical
rating organization selected by the Issuer which is acceptable to the Trustee.
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"Subordinated Indebtedness" means any Indebtedness of the
Issuer (whether outstanding on the date of this Twelfth Supplemental Indenture
or thereafter incurred) which is contractually subordinated or junior in right
of payment to the 2008 Notes.
"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, without
limitation, any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such debt or
to purchase (or to 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
January 1, 1994, as amended or supplemented from time to time, by and among
Issuer, each of the members of the Consolidated Group (as defined therein), and
each of the corporations that become members of the
Consolidated Group.
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"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the redemption date or, in the case of defeasance, prior to the date of
deposit (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the then
remaining average life to stated maturity of the 2008 Notes; provided, however,
that if the average life to stated maturity of the 2008 Notes is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given.
"Voting Stock" means securities of any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for corporate directors (or persons performing similar functions).
Certain terms, used principally in Articles Three, Four and
Seven of this Twelfth Supplemental Indenture, are defined in those Articles.
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ARTICLE II
DESIGNATION AND TERMS OF THE 2008 NOTES; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby
created a series of Securities to be known and designated as the "8.9% Senior
Notes Due 2008" and limited in aggregate principal amount (except as
contemplated in Section 2.3(f)(2) of the Indenture) to $269,000,000. The Stated
Maturity of the 2008 Notes is July 15, 2008.
(b) The 2008 Notes will bear interest from the Original Issue
Date, or from the most recent date to which interest has been paid or duly
provided for, at the rate of 8.9% per annum stated therein until the principal
thereof is paid or made available for payment. Interest will be payable
semiannually on each Interest Payment Date and at Maturity, as provided in the
form of the 2008 Note in Section 2.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of the
Indenture for the payment of the interest on any 2008 Note payable on any
Interest Payment Date (other than at Maturity) which shall be the 1st day of the
calendar month in which such Interest Payment Date occurs (whether or not a
Business Day) except that the Record Date for interest payable at Maturity shall
be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the 2008 Notes shall not be secured by a security interest in any
property.
(e) The 2008 Notes shall be redeemable at the option of the
Issuer, in whole or in part, at any time and from time to time, or not less than
30 days' notice at a redemption price
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equal to 100% of the principal amount of such 2008 Notes being redeemed plus the
Applicable Premium, if any, thereon at the time of redemption, together with
accrued interest, if any, thereon to the redemption date. In no event will the
redemption price ever be less than 100% of the principal amount of the 2008
Notes plus accrued interest to the redemption date. The 2008 Notes shall be
purchased by the Issuer at the option of the Holders thereof as provided in
Sections 3.01 and 4.06 hereof.
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(f) The 2008 Notes shall not be convertible.
(g) The 2008 Notes will not be subordinated to the payment of
Senior Debt.
(h) The Issuer will not pay any additional amounts on the 2008
Notes held by a Person who is not a U.S. Person in respect of any tax,
assessment or government charge withheld or deducted.
(i) The events specified in Events of Default with respect to
the 2008 Notes shall include the events specified in Article Five of this
Twelfth Supplemental Indenture. In addition to the covenants set forth in
Article Three of the Original Indenture, the Holders of the 2008 Notes shall
have the benefit of the covenants of the Issuer set forth in Article Four
hereto.
SECTION 2.02. Forms Generally. The 2008 Notes and Trustee's
certificates of authentication shall be in substantially the form set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by the Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such 2008 Notes, as evidenced by their execution thereof.
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The definitive 2008 Notes shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such 2008 Notes, as evidenced by their
execution thereof.
SECTION 2.03. Form of Face of 2008 Note.
CMS ENERGY CORPORATION
___% SENIOR NOTES DUE 2___
No. ________ $269,000,000
CMS Energy Corporation, a corporation duly organized and
existing under the laws of the State of Michigan (herein called the "Issuer",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________________,
or registered assigns, the principal sum of ____________________ Dollars on July
15, 2008 ("Maturity") and to pay interest thereon from July 2, 2001 (the
"Original Issue Date") or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on January 15 and
July 15 in each year, commencing on January 15, 2002 and at Maturity at the rate
of 8.9% per annum, until the principal hereof is paid or made available for
payment. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. The interest so
payable, and punctually paid or duly provided for, on any Interest
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Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this 2008 Note (or one or more Predecessor 2008 Notes) is registered at the
close of business on the Record Date for such interest, which shall be the 1st
day of the calendar month in which such Interest Payment Date occurs (whether or
not a Business Day) except that the Record Date for interest payable at Maturity
shall be the date of Maturity. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and may either be paid to the Person in whose name this 2008 Note (or one
or more Predecessor 2008 Notes) is registered at the close of business on a
subsequent Record Date (which shall be not less than five Business Days prior to
the date of payment of such defaulted interest) for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given to
Holders of 2008 Notes not less than 15 days preceding such subsequent Record
Date.
Payment of the principal of (and premium, if any) and
interest, if any, on this 2008 Note will be made at the office or agency of the
Issuer maintained for that purpose in New York, New York (the "Place of
Payment"), in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Issuer payment of interest (other
than interest payable at Maturity) may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or by wire transfer to an account designated by such Person not later
than ten days prior to the date of such payment.
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Reference is hereby made to the further provisions of this
2008 Note set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this 2008 Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed under its corporate seal. Dated:
CMS ENERGY CORPORATION
By____________________________
Its:
By____________________________
Its:
Attest:
SECTION 2.04. Form of Reverse of 2008 Note.
This 8.9% Senior Note Due 2008 is one of a duly authorized
issue of securities of the Issuer (herein called the "2008 Notes"), issued and
to be issued under an Indenture, dated as of September 15, 1992, as supplemented
by certain supplemental indentures, including the
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Twelfth Supplemental Indenture, dated as of July 2, 2001 (herein collectively
referred to as the "Indenture"), between the Issuer and Bank One Trust Company,
N.A., a national banking association (formerly known as NBD Bank, N.A), as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Issuer, the Trustee, and the
Holders of the 2008 Notes and of the terms upon which the 2008 Notes are, and
are to be, authenticated and delivered. This 2008 Note is one of the series
designated on the face hereof, limited in aggregate principal amount to
$269,000,000.
The 2008 Notes are subject to redemption at the option of the
Issuer, in whole or in part, upon not more than 60 nor less than 30 days' notice
as provided in the Indenture at any time and from time to time, at a redemption
price equal to 100% of the principal amount of such 2008 Notes being redeemed
plus the Applicable Premium, if any, thereon at the time of redemption, together
with accrued interest, if any, thereon to the redemption date, but interest
installments whose Stated Maturity is on or prior to such redemption date will
be payable to the Holder of record at the close of business on the relevant
Record Date referred to on the face hereof, all as provided in the Indenture. In
no event will the redemption price ever be less than 100% of the principal
amount of the 2008 Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable Premium:
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"Applicable Premium" means, with respect to a 2008 Note (or
portion thereof) being redeemed at any time, the excess of (A) the present value
at such time of the principal amount of such 2008 Note (or portion thereof)
being redeemed plus all interest payments due on such 2008 Note (or portion
thereof), which present value shall be computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (B) the principal amount of such
2008 Note (or portion thereof) being redeemed at such time. For purposes of this
definition, the present values of the interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two business days prior
to the redemption date or, in the case of defeasance, prior to the date of
deposit (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the then
remaining average life to stated maturity of the 2008 Notes; provided, however,
that if the average life to stated maturity of the 2008 Notes is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given.
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In the event of redemption of this 2008 Note in part only, a
new 2008 Note for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
If a Change in Control occurs, the Issuer shall notify the
Holder of this 2008 Note of such occurrence and such Holder shall have the right
to require the Issuer to make a Required Repurchase of all or any part of this
2008 Note at a Change in Control Purchase Price equal to 101% of the principal
amount of this 2008 Note to be so purchased as more fully provided in the
Indenture and subject to the terms and conditions set forth therein. In the
event of a Required Repurchase of only a portion of this 2008 Note, a new 2008
Note or Notes for the unrepurchased portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to this 2008 Note shall
occur and be continuing, the principal of this 2008 Note may be declared due and
payable in the manner and with the effect provided in the Indenture.
In any case where any Interest Payment Date, repurchase date,
Stated Maturity or Maturity of any 2008 Note shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of the Indenture or
this 2008 Note), payment of interest or principal (and premium, if any) need not
be made at such Place of Payment 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 Interest Payment Date, repurchase date or at the Stated
Maturity or Maturity; provided that no interest shall accrue on the amount so
payable for the period from and
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after such Interest Payment Date, redemption date, repurchase date, Stated
Maturity or Maturity, as the case may be, to such Business Day.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this 2008 Note or (ii) certain restrictive
covenants and Events of Default with respect to this 2008 Note, in each case
upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of all outstanding 2008
Notes under the Indenture at any time by the Issuer and the Trustee with the
consent of the Holders of not less than a majority in principal amount of
Securities of all series then outstanding and affected (voting as one class).
The Indenture permits the Holders of not less than a majority
in principal amount of Securities of all series at the time outstanding with
respect to which a default shall have occurred and be continuing (voting as one
class) to waive on behalf of the Holders of all outstanding Securities of such
series any past default by the Issuer, provided that no such waiver may be made
with respect to a default in the payment of the principal of or the interest on
any Security of such series or the default by the Issuer in respect of certain
covenants or provisions of the Indenture, the modification or amendment of which
must be consented to by the Holder of each outstanding Security of each series
affected.
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As set forth in, and subject to, the provisions of the
Indenture, no Holder of any 2008 Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default, the Holders of not less than 25% in principal
amount of the outstanding Securities of each affected series (voting as one
class) shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the outstanding
Securities of each affected series (voting as one class) a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal of (and premium, if any) or any interest on this 2008 Note on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
2008 Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and any
premium and interest on this 2008 Note at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this 2008 Note is registerable in
the Security Register, upon surrender of this 2008 Note for registration of
transfer at the office or agency of the Issuer in any place where the principal
of and any premium and interest on this 2008 Note are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the
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Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new 2008 Notes of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The 2008 Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
2008 Notes are exchangeable for a like aggregate principal amount of 2008 Notes
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Issuer shall not be required to (a) issue, exchange or
register the transfer of this 2008 Note for a period of 15 days next preceding
the mailing of the notice of redemption of 2008 Notes or (b) exchange or
register the transfer of any 2008 Note or any portion thereof selected, called
or being called for redemption, except in the case of any 2008 Note to be
redeemed in part, the portion thereof not so to be redeemed.
Prior to due presentment of this 2008 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this
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2008 Note is registered as the owner hereof for all purposes, whether or not
this 2008 Note be overdue, and neither the Issuer, the Trustee nor any such
agent shall be affected by notice to the contrary.
All terms used in this 2008 Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
SECTION 2.05. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By__________________________
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Authorized Officer
ARTICLE III
CHANGE OF CONTROL
SECTION 3.01. Change of Control. Upon the occurrence of a
Change in Control (the effective date of such Change in Control being the
"Change in Control Date"), each Holder of a 2008 Note shall have the right to
require that the Issuer repurchase (a "Required Repurchase") all or any part of
such Holder's 2008 Note at a repurchase price payable in cash equal to 101% of
the principal amount of such 2008 Note plus accrued interest to the Purchase
Date (the "Change in Control Purchase Price").
(a) Within 30 days following the Change in Control Date, the
Issuer shall mail a notice (the "Required Repurchase Notice") to each
Holder with a copy to the Trustee stating:
(i) that a Change in Control has occurred and that
such Holder has the right to require the Issuer to repurchase
all or any part of such Holder's 2008 Notes at the Change of
Control Purchase Price;
(ii) the Change of Control Purchase Price;
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(iii) the date on which any Required Repurchase shall
be made (which shall be no earlier than 60 days nor later than
90 days from the date such notice is mailed) (the "Purchase
Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause
the 2008 Notes to be repurchased, which shall be consistent
with this Section and the Indenture.
(b) Holders electing to have a 2008 Note repurchased must
deliver a written notice (the "Change in Control Purchase Notice") to
the Paying Agent (initially the Trustee) at its corporate trust office
in Chicago, Illinois, or any other office of the Paying Agent
maintained for such purposes, not later than 30 days prior to the
Purchase Date. The Change in Control Purchase Notice shall state: (i)
the portion of the principal amount of any 2008 Notes to be
repurchased, which portion must be $1,000 or an integral multiple
thereof; (ii) that such 2008 Notes are to be repurchased by the Issuer
pursuant to the change in control provisions of the Indenture; and
(iii) unless the 2008 Notes are represented by one or more Global
Notes, the certificate numbers of the 2008 Notes to be delivered by the
Holder thereof for repurchase by the Issuer. Any Change in Control
Purchase Notice may be withdrawn by the Holder by a written notice of
withdrawal delivered to the Paying Agent not later than three Business
Days prior to the Purchase Date. The notice of withdrawal shall state
the principal amount and, if applicable, the certificate numbers of the
2008 Notes as to which the withdrawal notice relates and the
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principal amount of such 2008 Notes, if any, which remains subject to a
Change in Control Purchase Notice.
If a 2008 Note is represented by a Global Note (as described
in Article VI below), the Depositary or its nominee will be the Holder
of such 2008 Note and therefore will be the only entity that can elect
a Required Repurchase of such 2008 Note. To obtain repayment pursuant
to this Section 3.01 with respect to such 2008 Note, the beneficial
owner of such 2008 Note must provide to the broker or other entity
through which it holds the beneficial interest in such 2008 Note (i)
the Change in Control Purchase Notice signed by such beneficial owner,
and such signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having
an office or correspondent in the United States, and (ii) instructions
to such broker or other entity to notify the Depositary of such
beneficial owner's desire to obtain repayment pursuant to this Section
3.01. Such broker or other entity will provide to the Paying Agent (i)
the Change of Control Purchase Notice received from such beneficial
owner and (ii) a certificate satisfactory to the Paying Agent from such
broker or other entity stating that it represents such beneficial
owner. Such broker or other entity will be responsible for disbursing
any payments it receives pursuant to this Section 3.01 to such
beneficial owner.
(c) Payment of the Change of Control Purchase Price for a 2008
Note for which a Change in Control Purchase Notice has been delivered
and not withdrawn is
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conditioned (except in the case of a 2008 Note represented by one or
more Global Notes) upon delivery of such 2008 Note (together with
necessary endorsements) to the Paying Agent at its office in Chicago,
Illinois, or any other office of the Paying Agent maintained for such
purpose, at any time (whether prior to, on or after the Purchase Date)
after the delivery of such Change in Control Purchase Notice. Payment
of the Change of Control Purchase Price for such 2008 Note will be made
promptly following the later of the Purchase Date or the time of
delivery of such 2008 Note. If the Paying Agent holds, in accordance
with the terms of the Indenture, money sufficient to pay the Change in
Control Purchase Price of such 2008 Note on the Business Day following
the Purchase Date, then, on and after such date, interest will cease
accruing, and all other rights of the Holder shall terminate (other
than the right to receive the Change of Control Purchase Price upon
delivery of the 2008 Note).
(d) The Issuer shall comply with the provisions of Regulation
14E and any other tender offer rules under the Exchange Act, which may
then be applicable in connection with any offer by the Issuer to
repurchase 2008 Notes at the option of Holders upon a Change in
Control.
(e) No 2008 Note may be repurchased by the Issuer as a result
of a Change in Control if there has occurred and is continuing an Event
of Default (other than a default in the Payment of the Change in
Control Purchase Price with respect to the 2008 Notes).
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ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2008 NOTES
SECTION 4.01. Existence. So long as any of the 2008 Notes are
outstanding, subject to Article 9 of the Original Indenture, the Issuer will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION IV.02. Limitation on Certain Liens. (a) So long as any
of the 2008 Notes are outstanding, the Issuer shall not create, incur, assume or
suffer to exist any lien, mortgage, pledge, security interest, conditional sale,
title retention agreement or other charge or encumbrance of any kind, or any
other type of arrangement intended or having the effect of conferring upon a
creditor of the Issuer or any Subsidiary a preferential interest (hereinafter in
this Section referred to as a "Lien") upon or with respect to any of its
property of any character, including without limitation any shares of Capital
Stock of Consumers or Enterprises, without making effective provision whereby
the 2008 Notes shall (so long as any such other creditor shall be so secured) be
equally and ratably secured (along with any other creditor similarly entitled to
be secured) by a direct Lien on all property subject to such Lien, provided,
however, that the foregoing restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or levies to
the extent not past due;
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(ii) pledges or deposits to secure (a) obligations under workmen's
compensation laws or similar legislation, (b) statutory obligations of the
Issuer or (c) Support Obligations;
(iii) 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;
(iv) purchase money Liens upon or in property acquired and held by the
Issuer 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 Liens
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 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 being
extended, renewed or replaced, and provided, further, that the aggregate
principal amount of the Indebtedness at any one time outstanding secured by
Liens permitted by this clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of this
Section securing Indebtedness of the Issuer; provided that on the date such
Liens are created, and after giving effect to such Indebtedness, the aggregate
principal amount at maturity of all of the secured
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Indebtedness of the Issuer at such date shall not exceed 5% of Consolidated Net
Tangible Assets at such date.
SECTION 4.03. Limitation on Consolidation, Merger, Sale or Conveyance.
So long as any of the 2008 Notes are outstanding and until the 2008 Notes are
rated BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which time the
Issuer will be permanently released from the provisions of this Section 4.03,
and subject also to Article Nine of the Indenture, the Issuer shall not
consolidate with or merge into any other Person or sell, lease or convey the
property of the Issuer in the entirety or substantially as an entirety, unless
(i) immediately after giving effect to such transaction the Consolidated Net
Worth of the surviving entity is at least equal to the Consolidated Net Worth of
the Issuer immediately prior to the transaction, and (ii) after giving effect to
such transaction, the surviving entity would be entitled to incur at least one
dollar of additional Indebtedness (other than revolving Indebtedness to banks)
without violation of the limitations in Section 4.04 hereof.
SECTION 4.04. Limitation on Consolidated Indebtedness. (a) So long
as any of the 2008 Notes are outstanding and until the 2008 Notes are rated BBB-
or above (or an equivalent rating) by Standard & Poor's and one Other Rating
Agency (or, if Standard & Poor's shall change its rating system, an equivalent
of such rating then employed by such organization), at which time the Issuer
will be permanently released from the provisions of this Section 4.04, the
Issuer shall not, and shall not permit any Consolidated Subsidiary of the Issuer
to, issue,
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create, assume, guarantee, incur or otherwise become liable for (collectively,
"issue"), directly or indirectly, any Indebtedness unless the Consolidated
Coverage Ratio of the Issuer and its Consolidated Subsidiaries for the four
consecutive fiscal quarters immediately preceding the issuance of such
Indebtedness (as shown by a pro forma consolidated income statement of the
Issuer and its Consolidated Subsidiaries for the four most recent fiscal
quarters ending at least 30 days prior to the issuance of such Indebtedness
after giving effect to (i) the issuance of such Indebtedness and (if applicable)
the application of the net proceeds thereof to refinance other Indebtedness as
if such Indebtedness was issued at the beginning of the period, (ii) the
issuance and retirement of any other Indebtedness since the first day of the
period as if such Indebtedness was issued or retired at the beginning of the
period and (iii) the acquisition of any company or business acquired by the
Issuer or any Subsidiary since the first day of the period (including giving
effect to the pro forma historical earnings of such company or business),
including any acquisition which will be consummated contemporaneously with the
issuance of such Indebtedness, as if in each case such acquisition occurred at
the beginning of the period) exceeds a ratio of 1.7 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Issuer or any
Restricted Subsidiary may issue, directly or indirectly, the following
Indebtedness:
(1) Indebtedness of the Issuer to banks not to exceed
$1,000,000,000 in aggregate outstanding principal amount at any time;
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(2) Indebtedness (other than Indebtedness described in clause (1)
of this Subsection) outstanding on the date of this Seventh Supplemental
Indenture, as set forth on Schedule 4.04(b)(2) attached hereto and made a
part hereof, and Indebtedness issued in exchange for, or the proceeds of
which are used to refund or refinance, any Indebtedness permitted by this
clause (2); provided, however, that (i) the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of the
Indebtedness so issued shall not exceed the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of, premium, if
any, and accrued but unpaid interest on, the Indebtedness so exchanged,
refunded or refinanced and (ii) the Indebtedness so issued (A) shall not
mature prior to the stated maturity of the Indebtedness so exchanged,
refunded or refinanced, (B) shall have an Average Life equal to or greater
than the remaining Average Life of the Indebtedness so exchanged, refunded
or refinanced and (C) if the Indebtedness to be exchanged, refunded or
refinanced is subordinated to the 2008 Notes, the Indebtedness is
subordinated to the 2008 Notes in right of payment;
(3) Indebtedness of the Issuer owed to and held by a Subsidiary
and Indebtedness of a Subsidiary owed to and held by the Issuer; provided,
however, that, in the case of Indebtedness of the Issuer owed to and held
by a Subsidiary, (i) any subsequent issuance or transfer of any Capital
Stock that results in any such Subsidiary ceasing to be a Subsidiary or
(ii) any transfer of such Indebtedness (except to the Issuer or a
Subsidiary) shall be deemed for the purposes of this Subsection to
constitute the issuance of such Indebtedness by the Issuer;
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(4) Indebtedness of the Issuer issued in exchange for, or the
proceeds of which are used to refund or refinance, Indebtedness of the
Issuer issued in accordance with Subsection (a) of this Section, provided
that (i) the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of the Indebtedness so issued shall not
exceed the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid interest
on, the Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated maturity
of the Indebtedness so exchanged, refunded or refinanced, (B) shall have
an Average Life equal to or greater than the remaining Average Life of the
Indebtedness so exchanged, refunded or refinanced and (C) if the
Indebtedness to be exchanged, refunded or refinanced is subordinated to
the 2008 Notes, the Indebtedness so issued is subordinated to the 2008
Notes in right of payment;
(5) Indebtedness of a Restricted Subsidiary issued in exchange
for, or the proceeds of which are used to refund or refinance,
Indebtedness of a Restricted Subsidiary issued in accordance with
Subsection (a) of this Section, provided that (i) the principal amount (or
accreted value in the case of Indebtedness issued at a discount) of the
Indebtedness so issued shall not exceed the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of, premium, if
any, and accrued but unpaid interest on, the Indebtedness so exchanged,
refunded or refinanced and (ii) the Indebtedness so issued (A) shall not
mature prior to the stated maturity of the Indebtedness so exchanged,
refunded or refinanced and (B) shall have an Average Life
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equal to or greater than the remaining Average Life of the Indebtedness so
exchanged, refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued to acquire,
develop, improve, construct or to provide working capital for a gas, oil
or electric generation, exploration, production, distribution, storage or
transmission facility and related assets, provided that such Indebtedness
is without recourse to any assets of the Issuer, Consumers, Enterprises,
CMS Generation, CMS Oil & Gas, CMS Electric and Gas, CMS Gas Transmission,
CMS MST or any other Designated Enterprises Subsidiary;
(7) Indebtedness of a Person existing at the time at which such
person became a Subsidiary and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary. Such Indebtedness
shall be deemed to be incurred on the date the acquired Person becomes a
Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed $150,000,000
in aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in respect of rate
reduction bonds issued to recover electric restructuring transition costs
of Consumers provided that such Indebtedness is without recourse to the
assets of Consumers.
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SECTION 4.05. Limitation on Restricted Payments. (a) So long as the
2008 Notes are outstanding and until the 2008 Notes are rated BBB- or above (or
an equivalent rating) by Standard & Poor's and one Other Rating Agency (or, if
Standard & Poor's shall change its rating system, an equivalent of such rating
then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.05, the Issuer shall
not, and shall not permit any Restricted Subsidiary of the Issuer, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on the
Capital Stock of the Issuer to the direct or indirect holders of its Capital
Stock (except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such
Non-Convertible Capital Stock and except dividends or distributions payable to
the Issuer or a Subsidiary), (ii) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity or scheduled repayment thereof, any Subordinated Indebtedness (any such
dividend, distribution, purchase, redemption, repurchase, defeasing, other
acquisition or retirement being hereinafter referred to as a "Restricted
Payment") if at the time the Issuer or such Subsidiary makes such Restricted
Payment:
(1) an Event of Default, or an event that with the lapse of time
or the giving of notice or both would constitute an Event of Default,
shall have occurred and be continuing (or would result therefrom); or
(2) the aggregate amount of such Restricted Payment and all other
Restricted Payments made since May 6, 1997 would exceed the sum of:
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(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued during the period
(treated as one accounting period) from May 6, 1997 to the end of the
most recent fiscal quarter ending at least 45 days prior to the date of
such Restricted Payment (or, in case such sum shall be a deficit, minus
100% of the deficit); and
(C) the aggregate Net Cash Proceeds received by the Issuer from
the issue or sale of or contribution with respect to its Capital Stock
subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not in the
form of cash, the amount shall be the fair value of such Restricted Payment as
determined in good faith by the Board of Directors, provided that if the value
of the non-cash portion of such Restricted Payment as determined by the Board of
Directors is in excess of $25 million, such value shall be based on the opinion
from a nationally recognized firm experienced in the appraisal of similar types
of transactions.
(b) The provisions of Section 4.05(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the
Issuer made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Issuer (other
than Redeemable Stock or Exchangeable
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Stock); provided, however, that such purchase or redemption shall be
excluded from the calculation of the amount of Restricted Payments;
(ii) dividends or other distributions paid in respect of any
class of the Issuer's Capital Stock issued in respect of the
acquisition of any business or assets by the Issuer or a Restricted
Subsidiary if the dividends or other distributions with respect to such
Capital Stock are payable solely from the net earnings of such business
or assets;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section; provided, however, that at the time of
payment of such dividend, no Event of Default shall have occurred and
be continuing (or result therefrom), and provided further, however,
that such dividends shall be included (without duplication) in the
calculation of the amount of Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.06. Limitation on Asset Sales. So long as any of the
2008 Notes are outstanding, the Issuer may not sell, transfer or otherwise
dispose of any property or assets of the Issuer, including Capital Stock of any
Consolidated Subsidiary, in one transaction or a series of transactions in an
amount which exceeds $50,000,000 (an "Asset Sale") unless the Issuer shall (i)
apply an amount equal to such excess Net Cash Proceeds to permanently repay
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Indebtedness of a Consolidated Subsidiary or Indebtedness of the Issuer which is
pari passu with the 2008 Notes or (ii) invest an equal amount not so used in
clause (i) in property or assets of related business within 24 months after the
date of the Asset Sale (the "Application Period") or (iii) apply such excess Net
Cash Proceeds not so used in (i) or (ii) (the "Excess Proceeds") to make an
offer, within 30 days after the end of the Application Period, to purchase from
the Holders on a pro rata basis an aggregate principal amount of 2008 Notes on
the relevant purchase date equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the principal amount of the 2008 Notes on the
relevant purchase date and unpaid interest, if any, to the purchase date. The
Issuer shall only be required to make an offer to purchase 2008 Notes from
Holders pursuant to subsection (iii) if the Excess Proceeds equal or exceed
$25,000,000 at any given time.
The procedures to be followed by the Issuer in making an offer to
purchase 2008 Notes from the Holders with Excess Proceeds, and for the
acceptance of such offer by the Holders, shall be the same as those set forth in
Section 3.01 herein with respect to a Change in Control.
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ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2008 NOTES
SECTION 5.01. Definition. All of the events specified in clauses (a)
through (h) of Section 5.1 of the Original Indenture shall be "Events of
Default" with respect to the 2008 Notes.
SECTION 5.02. Amendments to Section 5.1 of the Original Indenture.
Solely for the purpose of determining Events of Default with respect to the 2008
Notes, paragraphs (e), (f) and (h) of Section 5.1 of the Original Indenture
shall be amended such that each and every reference therein to the Issuer shall
be deemed to mean either the Issuer or Consumers.
ARTICLE VI
GLOBAL NOTES
The 2008 Notes will be issued initially in the form of Global Notes.
"Global Note" means a registered 2008 Note evidencing one or more 2008 Notes
issued to a depositary (the "Depositary") or its nominee, in accordance with
this Article and bearing the legend prescribed in this Article. One or more
Global Notes will represent all 2008 Notes. The Issuer shall execute and the
Trustee shall, in accordance with this Article and the Issuer Order with respect
to the 2008 Notes, authenticate and deliver one or more Global Notes in
temporary or permanent form that (i) shall represent and shall be denominated in
an aggregate amount equal to the aggregate principal amount of the 2008 Notes to
be represented by such Global Note or Notes, (ii) shall be registered in the
name of the Depositary for such Global Note or Notes or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
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pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2008 Note is presented
by an authorized representative of the Depository to the Issuer or its agent for
registration of transfer, exchange or payment, and any 2008 Note issued is
registered in the name of a nominee of the Depository, or in such other name as
is requested by an authorized representative of the Depository (and any payment
is made to the nominee of the Depository, or to such other entity as is
requested by an authorized representative of the Depository), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is
wrongful inasmuch as the registered owner hereof has an interest herein."
Notwithstanding Section 2.8 of the Indenture, unless and until it is
exchanged in whole or in part for 2008 Notes in definitive form, a Global Note
representing one or more 2008 Notes may not be transferred except as a whole by
the Depositary, to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary for 2008 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2008 Notes is unwilling or unable
to continue as Depositary for the 2008 Notes, the Issuer shall appoint a
successor Depositary with respect to the 2008 Notes. If a successor Depositary
for the 2008 Notes is not appointed by the Issuer by the earlier of (i) 90 days
from the date the Issuer receives notice to the effect that the Depositary is
unwilling or unable to act, or the Issuer determines that the Depositary is
unable to act or (ii) the effectiveness of the Depositary's resignation or
failure to fulfill its duties as Depositary, the Issuer will execute, and the
Trustee, upon receipt of a Issuer Order for the authentication and
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delivery of definitive 2008 Notes, will authenticate and deliver 2008 Notes in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Note or Notes representing such 2008 Notes in exchange for such
Global Note or Notes.
The Issuer may at any time and in its sole discretion determine that
the 2008 Notes issued in the form of one or more Global Notes shall no longer be
represented by such Global Note or Notes. In such event the Issuer will execute,
and the Trustee, upon receipt of a Issuer Order for the authentication and
delivery of definitive 2008 Notes, will authenticate and deliver 2008 Notes in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Note or Notes representing such 2008 Notes in exchange for such
Global Note or Notes.
The Depositary for such 2008 Notes may surrender a Global Note or Notes
for such 2008 Notes in exchange in whole or in part for 2008 Notes in definitive
form on such terms as are acceptable to the Issuer and such Depositary.
Thereupon, the Issuer shall execute, and the Trustee shall authenticate and
deliver, without service charge:
(i) to each Person specified by such Depositary a new 2008 Note or
Notes, of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Note; and
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(ii) to such Depositary a new Global Note in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of 2008 Notes in
definitive form delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer will execute
and the Trustee will authenticate and deliver 2008 Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for 2008 Notes in definitive form,
such Global Note shall be cancelled by the Trustee. 2008 Notes in definitive
form issued in exchange for a Global Note pursuant to this Article shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Note, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or Security Registrar. The
Trustee shall deliver such 2008 Notes to the persons in whose names such 2008
Notes are so registered.
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ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture shall be
applicable to the 2008 Notes. Upon satisfaction by the Issuer of the
requirements of Section 10.1(c) of the Indenture, in connection with any
covenant defeasance (as provided in Section 10.1(c) of the Indenture), the
Issuer shall be released from its obligations under Article Nine of the Original
Indenture and under Articles III and IV of this Twelfth Supplemental Indenture
with respect to the 2008 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Twelfth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Twelfth Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Twelfth Supplemental Indenture shall together constitute one
and the same instrument.
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TESTIMONIUM
This Twelfth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Twelfth
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
/s/ Xxxx X. Xxxxxx
----------------------------------
Xxxx X. Xxxxxx
Executive Vice President,
Chief Financial Officer and Chief
Administrative Officer
Attest: /s/ Xxxx Xxxxxxxxx
BANK ONE TRUST COMPANY, N.A.,
as Trustee
/s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx
Attest: /s/ J. Xxxxxxx Xxxxx
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