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Exhibit 4(d)(ii)
EIGHTH SUPPLEMENTAL INDENTURE
DATED AS OF FEBRUARY 3, 1999
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This Eighth Supplemental Indenture, dated as of the 3rd day of
February, 1999 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 NBD Bank, a Michigan
banking corporation (hereinafter called the "Trustee") and having its principal
Corporate Trust Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (formerly known as NBD Bank,
National Association) 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
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
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WHEREAS, the Issuer has requested the Trustee to join with it in
the execution and delivery of this Eighth 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 "6.75%
Senior Notes Due 2004, Series A" (the "Series A Notes"), providing for the
issuance of the Series A Notes and amending and adding certain provisions
thereof for the benefit of the Holders of the Series A Notes; and
WHEREAS, the Issuer and certain purchasers of the Series A Notes
are entering into a Registration Rights Agreement dated as of February 3, 1999
which requires the Issuer to use its best efforts to make an Exchange Offer
which would enable Holders of Series A Notes to exchange such Series A Notes for
Securities not subject to certain restrictions under the Securities Act or to
cause a Shelf Registration Statement to become effective with respect to the
Series A Notes (in each case as defined in such Registration Rights Agreement);
and
WHEREAS, the Issuer wishes to establish the forms and terms of a
series of Securities to be issued in exchange for Series A Notes as so
contemplated, such Securities to be known as the Issuer's "6.75% Senior Notes
Due 2004, Series B" (the "Series B Notes"), provide for the issuance of such
Notes and amend and add certain provisions to the Original Indenture for the
benefit of the Holders of the Series B Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this
Eighth 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 Eighth Supplemental Indenture; and
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WHEREAS, all things necessary to make this Eighth Supplemental
Indenture a valid agreement of the Issuer and the Trustee and a valid supplement
to the Original Indenture have been done,
NOW, THEREFORE, THIS EIGHTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Series A Notes and the Series B Notes (such Series A Notes and Series B Notes
being sometimes referred to herein as the "2004 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 such 2004 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture
together with this Eighth 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 2004 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
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classified as intangible assets in accordance with generally accepted accounting
principles.
"Applicable Premium" means, with respect to a 2004 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 2004 Note (or portion thereof)
being redeemed plus all interest payments due on such 2004 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
2004 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 to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
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"CMS Electric and Gas" means CMS Electric and Gas Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission and Storage" means 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., 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.
"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.
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"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 (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 and Storage, 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 and Storage, 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:
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(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;
(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
and Storage, 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
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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 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) 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 Eighth 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 each series of 2004 Notes has
the meaning specified in Article VI of this Eighth 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).
"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
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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
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
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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 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 July 15, 1999 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.
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"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 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 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'
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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.
"Other Rating Agency" shall mean any one of Duff & Xxxxxx Credit
Rating Co., Fitch Investors Service, L.P. 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 2004 Notes on
behalf of the Issuer. Initially, the Paying Agent for each series of 2004 Notes
shall be the Trustee.
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"Predecessor Note" with respect to any particular 2004 Note means
every previous 2004 Note evidencing all or a portion of the same debt as that
evidenced by such particular 2004 Note; and, for the purposes of this
definition, any 2004 Note authenticated and delivered under Section 2.9 of the
Indenture in exchange for or in lieu of a mutilated, destroyed, lost or stolen
2004 Note of the same series shall be deemed to evidence the same debt as such
mutilated, destroyed, lost or stolen 2004 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 2004 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 2004 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 5.04, and (i) any such Subsidiary so designated as a
Restricted Subsidiary must be
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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 Group, a
division of McGraw Hill Inc., and any successor thereto which is a nationally
recognized statistical rating organization, or if such entity shall cease to
rate the outstanding 2004 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.
"Subordinated Indebtedness" means any Indebtedness of the Issuer
(whether outstanding on the date of this Eighth Supplemental Indenture or
thereafter incurred) which is contractually subordinated or junior in right of
payment to the 2004 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
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xxxxxxxxx xxxxxxxxxx xxxx), xx (x) 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.
"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 2004 Notes; provided, however,
that if the average life to stated maturity of the 2004 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 Eighth Supplemental Indenture, are defined in those Articles.
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ARTICLE II
DESIGNATION AND TERMS OF THE SERIES A NOTES; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby created
a series of Securities to be known and designated as the "6.75% Senior Notes Due
2004, Series A" and limited in aggregate principal amount (except as
contemplated in Section 2.3(f)(2) of the Indenture) to $300,000,000. The Stated
Maturity of the Series A Notes is January 15, 2004.
(b) The Series A 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 6.75% 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 Series A 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 Series A Note payable on any
Interest Payment Date (other than at Maturity) shall be the 1st day (whether or
not a Business Day) of the calendar month in which such Interest Payment Date
occurs and, in the case of interest payable at Maturity, the Record Date shall
be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the Series A Notes shall not be secured by a security interest in
any property.
(e) The Series A Notes shall be redeemable at the option of the
Issuer, in whole or in part, at any time and from time to time, upon not less
than 30 days' notice to the Holders of the Notes at a redemption price equal to
100% of the principal amount of such Series A 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
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date. In no event will the redemption price ever be less than 100% of the
principal amount of the Series A Notes plus accrued interest to the redemption
date. The Series A Notes shall be purchased by the Issuer at the option of the
Holders thereof as provided in Sections 4.01 and 5.06 hereof.
(f) The Series A Notes shall not be convertible.
(g) The Series A Notes will not be subordinated to the payment
of Senior Debt.
(h) The Issuer will not pay any additional amounts on the Series
A 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 Series A Notes shall include the events specified in Article Six of this
Eighth Supplemental Indenture. In addition to the covenants set forth in Article
Three of the Original Indenture, the Holders of the Series A Notes shall have
the benefit of the covenants of the Issuer set forth in Article Five hereto.
SECTION 2.02. Forms Generally. The Series A 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 Series A Notes, as evidenced by their execution thereof.
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The definitive Series A 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 Series A Notes, as evidenced by
their execution thereof.
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SECTION 2.03. Form of Face of Series A Note.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE
SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C)
IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER)
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "U.S. PERSONS" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING.
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CMS ENERGY CORPORATION
6.75% SENIOR NOTE DUE 2004, SERIES A
No. $
-------- ----------
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 January 15, 2004 ("Maturity") and to pay interest thereon from February 3,
1999 (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 May 15
and November 15 in each year, commencing July 15, 1999 and at Maturity at the
rate of 6.75% 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 Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Series A Note (or one or more Predecessor 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 Series A Note (or
one or more Predecessor Series A 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 Series A Notes not less than 15 days preceding such subsequent Record
Date.
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Payment of the principal of (and premium, if any) and interest, if
any, on this Series A 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; and provided, further, that if this Series A Note
is a Global Note within the meaning of the Indenture, then each payment
hereunder shall be made by wire transfer to an account or accounts designated by
the Person entitled thereto not later than ten days prior to the date of such
payment.
Reference is hereby made to the further provisions of this Series
A 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
Series A 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:
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By
----------------------------
Its:
Attest:
SECTION 2.04. Form of Reverse of Series A Note.
This 6.75% Senior Note Due 2004, Series A is one of a duly
authorized issue of securities of the Issuer (herein called the "Series A
Notes"), issued and to be issued under an Indenture, dated as of September 15,
1992, as supplemented by certain supplemental indentures, including the Eighth
Supplemental Indenture, dated as of November 4, 1997 (herein collectively
referred to as the "Indenture"), between the Issuer and NBD Bank, a Michigan
banking corporation (formerly known as NBD Bank, National Association), 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 Series A Notes and of the terms upon which the Series A Notes
are, and are to be, authenticated and delivered. This Series A Note is one of
the series designated on the face hereof, limited in aggregate principal amount
to $300,000,000.
The Series A 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 Series A 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
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Indenture. In no event will the redemption price ever be less than 100% of the
principal amount of the Series A Notes plus accrued interest to the redemption
date.
The following definitions are used to determine the Applicable
Premium:
"Applicable Premium" means, with respect to a Series A 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 Series A Note (or portion thereof)
being redeemed plus all interest payments due on such Series A 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
Series A 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 Series A Notes; provided,
however, that if the average life to stated maturity of the Series A 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 Series A Note in part only, a
new Series A 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 Series A 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
Series A Note at a Change in Control Purchase Price equal to 101% of the
principal amount of this Series A 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 Series A Note, a
new Series A 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 Series A Note shall
occur and be continuing, the principal of this Series A 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 Series A Note shall not be a Business Day at
any Place of Payment, then (notwithstanding any other provision of the Indenture
or this Series A 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 after such Interest Payment Date, redemption
date, repurchase date, Stated Maturity or Maturity, as the case may be, to such
Business Day.
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The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this Series A Note or (ii) certain restrictive
covenants and Events of Default with respect to this Series A 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
Series A 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.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Series A 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
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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 Series A Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Series A 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 Series A 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 and herein set forth, the transfer of this Series A Note is registerable
in the Security Register, upon surrender of this Series A 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 Series A Note are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Series A 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 Series A 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,
Series A Notes are exchangeable for a like aggregate principal amount of Series
A Notes and of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.
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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 Series A Note for a period of 15 days next
preceding the mailing of the notice of redemption of Series A Notes or (b)
exchange or register the transfer of any Series A Note or any portion thereof
selected, called or being called for redemption, except in the case of any
Series A Note to be redeemed in part, the portion thereof not so to be redeemed.
Prior to due presentment of this Series A 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 Series A Note is registered as the owner
hereof for all purposes, whether or not this Series A 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 Series A Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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CERTIFICATE OF TRANSFER
6.75% SENIOR NOTE DUE 2004, SERIES A
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO PLEASE INSERT SOCIAL SECURITY NUMBER
OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
----------------------------
----------------------------
------------------------------------------------
--------------------
-------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code, of
assignee)
-------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
----------------------------------
-------------------------------------------------------------------------
to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.
The undersigned certifies that said Note is being resold, pledged or otherwise
transferred as follows: (check one)
[_] to the Issuer;
[_] to a Person whom the undersigned reasonably believes is a qualified
institutional buyer within the meaning of Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act") purchasing
for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or other transfer
is being made in reliance on Rule 144A;
[_] in an offshore transaction in accordance with Rule 903 or 904 of
Regulation S under the Securities Act;
[_] to an institution that is an "accredited investor" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring
this Note for investment purposes and not for distribution; (attach a
copy of an Investment Letter For Institutional Accredited Investors in
the form annexed signed by an authorized officer of the transferee)
[_] as otherwise permitted by the non-registration legend appearing on this
Note; or
[_] as otherwise agreed by the Issuer, confirmed in writing to the Trustee,
as follows: (describe)
----------------------------------------------------------------
----------------------------------------------------------------
Dated:
------------------- -------------------------
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FORM OF INVESTMENT LETTER FOR INSTITUTIONAL ACCREDITED INVESTORS
[Transferor, Trustee and Issuer Names and Addresses]
Ladies and Gentlemen:
In connection with our proposed purchase of 6.75% Senior Notes due 2004,
Series A (the "Notes") issued by CMS Energy Corporation ("Issuer"), we confirm
that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum") relating to the Notes and such other information
as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agree to the matters stated under the
caption NOTICE TO INVESTORS in such Offering Memorandum, and the
restrictions on duplication or circulation of, or disclosure relating
to, such Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the
Indenture relating to Notes (the "Indenture") and that any subsequent
transfer of the Notes is subject to certain restrictions and conditions
set forth under NOTICE TO INVESTORS in the Offering Memorandum and the
undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with such
restrictions and conditions and the Securities Act of 1933, as amended
("Securities Act").
3. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes may not be
offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we sell any Senior Notes, we will
do so only (A) to the Issuer, (B) in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes to the Trustee (as
defined in the Indenture) a signed letter containing certain
representations and agreements relating to the restrictions on transfer
of the Notes (substantially in the form of this letter) and, if such
transfer is in respect of an aggregate principal amount of Notes at the
time of transfer of less than $250,000, an opinion of counsel
acceptable to the Issuer that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule
903 or 904 of Regulation S under the Securities Act, (E) pursuant to
the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree
to provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as
stated herein.
4. We understand that, on any proposed resale of any Notes, we
will be required to furnish to the Trustee and Issuer such
certifications, legal opinions and other information as the Trustee and
Issuer may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that
the Notes purchased by us will bear a legend to the foregoing effect.
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5. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its
investment.
6. We are acquiring the Notes purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You, the Issuer and the Trustee are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
By:
--------------------
Name:
Title:
[END OF FORM]
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.
----------------------------------------,
as Trustee
By
--------------------------------------
Authorized Officer
SECTION 2.06. The Series A Notes will be initially issued as
Global Notes registered in the name of Cede & Co. (as nominee for the Depository
Trust Company ("DTC"), New York, New York). The Series A Notes shall contain
restrictions on transfer, substantially as described in the form set forth in
Section 2.03. Each Series A Note, whether in the form of a Global Note or in
certificated form, shall bear a non-registration legend and a Certificate of
Transfer, in each case in substantially the form set forth in such form.
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It is contemplated that beneficial interests in Series A Notes
owned by qualified institutional buyers (as defined in Rule 144A under the
Securities Act)("QIBs") or sold to QIBs in reliance upon Rule 144A under the
Securities Act will be represented by one or more global certificates registered
in the name of Cede & Co., as registered owner and as nominee for DTC;
beneficial interests in Series A Notes acquired by foreign purchasers pursuant
to Regulation S under the Securities Act will be evidenced by one or more
separate global certificates (each the "Regulation S Global Certificate"), also
registered in the name of Cede & Co., as registered owner and as nominee for DTC
for the accounts of Euroclear and Cedel Bank; prior to the 40th day after the
date of initial issuance of the Series A Notes, beneficial interests in the
Regulation S Global Certificate may be held only through Euroclear or Cedel
Bank; Series A Notes acquired by Institutional Accredited Investors (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) ("IAIs") and other
eligible transferees, who are not QIBs and who are not foreign purchasers
pursuant to Regulation S under the Securities Act, will be in certificated form.
The Trustee and the Issuer will have no responsibility under the Indenture for
transfers of beneficial interests in the Series A Notes. The Trustee shall
authenticate and issue new Series A Notes upon a registration of transfer only
upon receipt of a Transfer Certificate in the form set forth in Section 2.04.
The Trustee shall refuse to register any transfer of a Series A Note in
violation of the legend set forth on such Series A Note and without appropriate
completion of the Transfer Certificate on such Series A Note.
ARTICLE III
DESIGNATION AND TERMS OF THE SERIES B NOTES; FORMS
SECTION 3.01. Establishment of Series. (a) There is hereby created
a series of Securities to be known and designated as the "6.75% Senior Notes Due
2004, Series B" and limited in aggregate principal amount (except as
contemplated in Section
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2.3(f)(2) of the Indenture) to $300,000,000 (the "Series B Notes"). The Stated
Maturity of the Series B Notes is January 15, 2004.
(b) The Series B 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 6.75% 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 Series B Note in Section 3.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of the
Indenture for the payment of the interest on any Series B Note payable on any
Interest Payment Date (other than at Maturity) shall be the 1st day (whether or
not a Business Day) of the calendar month in which such Interest Payment Date
occurs and, in the case of interest payable at Maturity, the Record Date shall
be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the Series B Notes shall not be secured by a security interest in
any property.
(e) The Series B Notes shall be redeemable at the option of the
Issuer, in whole or in part, at any time and from time to time, at a redemption
price equal to 100% of the principal amount of such Series B 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 Series B Notes plus accrued interest to the redemption date. The Series B
Notes shall be purchased by the Issuer at the option of the Holders thereof as
provided in Sections 4.01 and 5.06 hereof.
(f) The Series B Notes shall not be convertible.
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(g) The Series B Notes will not be subordinated to the payment
of Senior Debt.
(h) The Issuer will not pay any additional amounts on the Series
B 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 Series B Notes shall include the events specified in Article Six of this
Eighth Supplemental Indenture. In addition to the covenants set forth in Article
Three of the Original Indenture, the Holders of the Series B Notes shall have
the benefit of the covenants of the Issuer set forth in Article Five hereto.
SECTION 3.02. Forms Generally. The Series B 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 Series B Notes, as evidenced by their execution thereof.
The definitive Series B 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 Series B Notes, as evidenced by
their execution thereof.
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SECTION 3.03. Form of Face of Series B Note.
CMS ENERGY CORPORATION
6.75% SENIOR NOTE DUE 2004, SERIES B
No. $
-------- ----------
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 January
15, 2004 ("Maturity") and to pay interest thereon from February 3, 1999 (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 July 15, 1999 and at Maturity at the rate of
6.75% 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 Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Series B Note (or one or more Predecessor Series B 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 Series B Note (or
one or more Predecessor Series B 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,
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notice whereof shall be given to Holders of Series B 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 Series B 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; and provided, further, that if this Series B Note
is a Global Note within the meaning of the Indenture, then each payment
hereunder shall be made by wire transfer to an account or accounts designated by
the Person entitled thereto not later than ten days prior to the date of such
payment.
Reference is hereby made to the further provisions of this Series
B 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
Series B Note shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
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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 3.04. Form of Reverse of Series B Note.
This 6.75% Senior Note Due 2004, Series B is one of a duly
authorized issue of securities of the Issuer (herein called the "Series B
Notes"), issued and to be issued under an Indenture, dated as of September 15,
1992, as supplemented by certain supplemental indentures, including the Eighth
Supplemental Indenture, dated as of November 4, 1997 (herein collectively
referred to as the "Indenture"), between the Issuer and NBD Bank, a Michigan
banking corporation (formerly known as NBD Bank, National Association), 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 Series B Notes and of the terms upon which the Series B Notes
are, and are to be, authenticated and delivered. This Series B Note is one of
the series designated on the face hereof, limited in aggregate principal amount
to $300,000,000.
The Series B 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
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the principal amount of such Series B 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
Series B Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable
Premium:
"Applicable Premium" means, with respect to a Series B 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 Series B Note (or portion thereof)
being redeemed plus all interest payments due on such Series B 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
Series B 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 Series B Notes; provided,
however, that if the average life to stated maturity of the Series B Notes is
not equal to the constant maturity of a United States Treasury security for
which a weekly average
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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.
In the event of redemption of this Series B Note in part only, a
new Series B 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 Series B 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
Series B Note at a Change in Control Purchase Price equal to 101% of the
principal amount of this Series B 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 Series B Note, a
new Series B 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 Series B Note shall
occur and be continuing, the principal of this Series B 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 Series B Note shall not be a Business Day at
any Place of Payment, then (notwithstanding any other provision of the Indenture
or this Series B 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 after such Interest Payment Date,
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xxxxxxxxxx xxxx, xxxxxxxxxx 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 Series B Note or (ii) certain restrictive
covenants and Events of Default with respect to this Series B 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
Series B 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.
As set forth in, and subject to, the provisions of the Indenture,
no Holder of any Series B 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
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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 Series B Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Series B 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 Series B 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 and herein set forth, the transfer of this Series B Note is registerable
in the Security Register, upon surrender of this Series B 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 Series B Note are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Series B 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 Series B 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,
Series B Notes are exchangeable for
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a like aggregate principal amount of Series B 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 Series B Note for a period of 15 days next
preceding the mailing of the notice of redemption of Series B Notes or (b)
exchange or register the transfer of any Series B Note or any portion thereof
selected, called or being called for redemption, except in the case of any
Series B Note to be redeemed in part, the portion thereof not so to be redeemed.
Prior to due presentment of this Series B 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 Series B Note is registered as the owner
hereof for all purposes, whether or not this Series B 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 Series B Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO PLEASE INSERT SOCIAL SECURITY NUMBER
OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
----------------------------
----------------------------
------------------------------------------------
--------------------
-------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code, of
assignee)
-------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
----------------------------------
-------------------------------------------------------------------------
to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.
Dated:
------------------- -------------------------
[END OF FORM]
SECTION 3.05. 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.
----------------------------------------,
as Trustee
By
--------------------------------------
Authorized Officer
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ARTICLE IV
CHANGE IN CONTROL
SECTION 4.01. Change in 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 2004 Note shall have the right to require that
the Issuer repurchase (a "Required Repurchase") all or any part of such Holder's
2004 Note at a repurchase price payable in cash equal to 101% of the principal
amount of such 2004 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 2004 Notes at the Change in Control
Purchase Price;
(ii) the Change in Control Purchase Price;
(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
2004 Notes to be repurchased, which shall be consistent with this
Section and the Indenture.
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(b) Holders electing to have a 2004 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
Detroit, Michigan, 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 2004 Notes to be repurchased, which portion
must be $1,000 or an integral multiple thereof; (ii) that such 2004
Notes are to be repurchased by the Issuer pursuant to the change in
control provisions of the Indenture; and (iii) unless the 2004 Notes
are represented by one or more Global Notes, the certificate numbers of
the 2004 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 2004 Notes as to which the
withdrawal notice relates and the principal amount of such 2004 Notes,
if any, which remains subject to a Change in Control Purchase Notice.
If a 2004 Note is represented by a Global Note (as described in
Article VII below), the Depositary or its nominee will be the Holder of
such 2004 Note and therefore will be the only entity that can elect a
Required Repurchase of such 2004 Note. To obtain repayment pursuant to
this Section 4.01 with respect to such 2004 Note, the beneficial owner
of such 2004 Note must provide to the broker or other entity through
which it holds the beneficial interest in such 2004 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
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beneficial owner's desire to obtain repayment pursuant to this Section
4.01. Such broker or other entity will provide to the Paying Agent (i)
the Change in 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 4.01 to such
beneficial owner.
(c) Payment of the Change in Control Purchase Price for a 2004
Note for which a Change in Control Purchase Notice has been delivered
and not withdrawn is conditioned (except in the case of a 2004 Note
represented by one or more Global Notes) upon delivery of such 2004
Note (together with necessary endorsements) to the Paying Agent at its
office in Detroit, Michigan, 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 in Control Purchase Price for
such 2004 Note will be made promptly following the later of the
Purchase Date or the time of delivery of such 2004 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 2004
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
in Control Purchase Price upon delivery of the 2004 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
2004 Notes at the option of Holders upon a Change in Control.
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(e) No 2004 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 2004 Notes).
ARTICLE V
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2004 NOTES
SECTION 5.01. Existence. So long as any of the 2004 Notes are
outstanding, subject to Article Nine 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 5.02. Limitation on Certain Liens. (a) So long as any of
the 2004 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 2004 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 Indebtedness of the Issuer at
such date shall not exceed 5% of Consolidated Net Tangible Assets at such date.
SECTION 5.03. Limitation on Consolidation, Merger, Sale or
Conveyance. So long as any of the 2004 Notes are outstanding and until the 2004
Notes are rated BBB- or
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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 5.03, 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 5.04 hereof.
SECTION 5.04. Limitation on Consolidated Indebtedness. (a) So long
as any of the 2004 Notes are outstanding and until the 2004 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 5.04, the
Issuer shall not, and shall not permit any Consolidated Subsidiary of the Issuer
to, issue, 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
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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;
(2) Indebtedness (other than Indebtedness described in clause (1)
of this Subsection) outstanding on the date of this Eighth Supplemental
Indenture, as set forth on Schedule 5.04(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 2004 Notes, the Indebtedness is subordinated to the 2004 Notes in
right of payment;
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(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;
(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 2004 Notes, the Indebtedness so
issued is subordinated to the 2004 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
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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
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 and Storage, 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
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of, such Person becoming a Subsidiary. Such Indebtedness shall be
deemed to be incurred on the date the acquired Person becomes a
Consolidated Subsidiary;
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(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.
SECTION 5.05. Limitation on Restricted Payments. (a) So long
as any of the 2004 Notes are outstanding and until the 2004 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 5.05, 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 NonConvertible 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:
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(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:
(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 5.05(a) shall not prohibit:
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(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 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 5.06. Limitation on Asset Sales. So long as any of the 2004
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
Indebtedness of a Consolidated Subsidiary or Indebtedness of the Issuer which is
pari passu with the 2004 Notes or (ii) invest an equal amount not
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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
2004 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 2004
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 2004 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 2004 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 4.01 herein with respect to a Change in Control.
ARTICLE VI
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2004 NOTES
SECTION 6.01. 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 each of the 2004 Notes.
SECTION 6.02. Amendments to Section 5.1 of the Original Indenture.
(a) Solely for the purpose of determining Events of Default with
respect to the 2004 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.
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(b) The following event shall be an "Event of Default" with
respect to the 2004 Notes: default in the payment of any Liquidated Damages
pursuant to the Registration Rights Agreement with respect to any such 2004
Note, when due and continuance of such default for a period of 30 days.
ARTICLE VII
GLOBAL NOTES
Each series of 2004 Notes will be issued initially in the form of
Global Notes. "Global Note" means a registered 2004 Note evidencing one or more
2004 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 2004 Notes of a series, except as
provided in Section 2.06. The Issuer shall execute and the Trustee shall, in
accordance with this Article and the Issuer Order with respect to each series of
2004 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 2004 Notes of such series
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
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2004 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 2004 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."
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Notwithstanding Section 2.8 of the Indenture, unless and until it
is exchanged in whole or in part for 2004 Notes in definitive form, a Global
Note representing one or more 2004 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 2004 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2004 Notes is unwilling or
unable to continue as Depositary for the 2004 Notes of such series, the Issuer
shall appoint a successor Depositary with respect to the 2004 Notes of such
series. If (A) a successor Depositary for such 2004 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,
or (B) a Default or Event of Default has occurred with respect to any 2004
Notes, the Issuer will execute, and the Trustee, upon receipt of a Issuer Order
for the authentication and delivery of definitive 2004 Notes of such series,
will authenticate and deliver 2004 Notes of such series in definitive form in an
aggregate principal amount equal to the principal amount of the Global Note or
Notes representing such 2004 Notes in exchange for such Global Note or Notes.
The Issuer may at any time and in its sole discretion determine
that 2004 Notes of either series 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 2004 Notes of such series, will
authenticate and deliver 2004 Notes of such series in definitive form in an
aggregate principal amount equal to the principal amount of the Global Note or
Notes representing such 2004 Notes in exchange for such Global Note or Notes.
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The Depositary for 2004 Notes of either series may surrender a
Global Note or Notes for 2004 Notes of such series in exchange in whole or in
part for 2004 Notes of such series 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 2004
Note or Notes of such series, 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
(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
2004 Notes of such series 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 2004 Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for 2004 Notes in definitive
form, such Global Note shall be canceled by the Trustee. 2004 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 2004 Notes to the persons in whose
names such 2004 Notes are so registered.
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ARTICLE VIII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture
shall be applicable to each series of 2004 Notes. Upon satisfaction by the
Issuer of the requirements of Section 10.1(c) of the Original 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 IV and V of this Eighth
Supplemental Indenture with respect to the 2004 Notes.
ARTICLE IX
SUPPLEMENTAL INDENTURES
This Eighth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Eighth Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Eighth Supplemental Indenture shall together constitute one
and the same instrument.
TESTIMONIUM
This Eighth 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 Eighth
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
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx
Senior Vice President,
Chief Financial Officer and
Treasurer
Attest:
(Corporate Seal)
NBD BANK
as Trustee
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Xxxxxx X. Xxxx
Vice President
Attest: /s/ D.O. Lis
-------------------------
Senior Vice President and
Secretary
(Corporate Seal)
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Schedule 5.04(b)(2)
Indebtedness of CMS Energy Corporation outstanding on October 31, 1997
[CMS Energy to provide]
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