EXHIBIT (4)(a)
THIRD SUPPLEMENTAL INDENTURE
dated as of May __, 1997
____________________
This Third Supplemental Indenture, dated as of the __th
day of May, 1997 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
WHEREAS, the Issuer has requested the Trustee to join with
it in the execution and delivery of this Third 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 "__% Senior Unsecured Notes Due 2002" (the "2002
Notes"), providing for the issuance of the 2002 Notes and amending and
adding certain provisions thereof for the benefit of the Holders of the
2002 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into
this Third 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 Third Supplemental
Indenture; and
WHEREAS, all things necessary to make this Third
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 THIRD SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase
of the 2002 Notes to be issued hereunder by holders thereof, the Issuer
and the Trustee mutually covenant and agree, for the equal and
proportionate benefit of the respective holders from time to time of the
2002 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.011. Standard Provisions. The Original
Indenture together with this Third 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 1.012. Definitions. Section 1.1 of the Original
Indenture is amended to insert the new definitions applicable to the 2002
Notes, in the appropriate alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts
recognized during such period as amortization of capital leases,
depletion, nuclear fuel, goodwill and assets classified as intangible
assets in accordance with generally accepted accounting principles.
"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.
"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.
"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.
"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.
"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 Capital" means, at any date of
determination, the sum of (a) Consolidated Indebtedness, (b) consolidated
equity of the common stockholders of the Issuer and the Consolidated
Subsidiaries, (c) consolidated equity of the preference stockholders of
the Issuer and the Consolidated Subsidiaries and (d) consolidated equity
of the preferred stockholders of the Issuer and the Consolidated
Subsidiaries, in each case determined at such date 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.
"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.
"Consolidated Interest Expense" means, for any period, the
total interest expense in respect of 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, NOMECO, 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, NOMECO, 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:
(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, NOMECO, 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 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) any cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities.
"Consolidated Net Worth" of any Person means the total of
the amounts shown on the consolidated balance sheet of such Person and its
consolidated subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, as of any date
selected by such Person not more than 90 days prior to the taking of any
action for the purpose of which the determination is being made (and
adjusted for any material events since such date), as (i) the par or
stated value of all outstanding Capital Stock plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained
earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable
to Exchangeable Stock.
"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 Third Supplemental
Indenture which is designated a Designated Enterprises Subsidiary by the
Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to the 2002 Notes has the
meaning specified in Article V of this Third 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).
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of
(A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable arising in the
ordinary course of business);
(iv) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, bankers' acceptance or
similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations
described in clauses (i) through (iii) above) entered into in the
ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third
Business Day following 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 November 1, 1997 and each
May 1 and November 1 in each year thereafter.
"Interest Rate Protection Agreement" means any interest
rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect the Issuer or any Subsidiary
against fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is intended to reflect the separate 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' 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.
"NOMECO" means, CMS NOMECO Oil & Gas Co., a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"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
2002 Notes on behalf of the Issuer.
"Predecessor 2002 Note" of any particular 2002 Note means
every previous 2002 Note evidencing all or a portion of the same debt as
that evidenced by such particular 2002 Note; and, for the purposes of the
definition, any 2002 Note authenticated and delivered under Section 2.9 of
the Indenture in exchange for or in lieu of a mutilated, destroyed, lost
or stolen 2002 Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen 2002 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.
"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 2002 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 2002 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 $1 of additional Indebtedness under
Section 4.03, and (i) any such Subsidiary so designated as a Restricted
Subsidiary must be organized under the laws of the United States or any
State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary
must be owned of record and beneficially by the Issuer or a Restricted
Subsidiary and (iii) such Restricted Subsidiary must be a Consolidated
Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings
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 2002 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 Third Supplemental
Indenture or thereafter incurred) which is contractually subordinated or
junior in right of payment to the 2002 Notes.
"Support Obligations" means, for any person, without
duplication, any financial obligation, contingent or otherwise, of such
person guaranteeing or otherwise supporting any debt or other obligation
of any other person in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such debt,
(ii) to purchase property, securities or services for the purpose of
assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable the
primary obligor to pay such debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements (to the extent that such
obligation to provide equity capital does not otherwise constitute debt),
or (v) to perform, or arrange for the performance of, any non-monetary
obligations or non-funded debt payment obligations of the primary obligor.
"Tax-Sharing Agreement" means the Amended and Restated
Agreement for the Allocation of Income Tax Liabilities and Benefits, dated
January 1, 1994, as amended or supplemented from time to time, by and
among Issuer, each of the members of the Consolidated Group (as defined
therein), and each of the corporations that become members of the
Consolidated Group.
"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 Third Supplemental Indenture, are defined in those
Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE 2002 NOTES; FORMS
SECTION 2.011. Establishment of Series. (a) There is
hereby created a series of Securities to be known and designated as the
"__% Senior Unsecured Notes Due 2002" 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 2002 Notes is May 1, 2002.
(b) The 2002 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 __% 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 2002 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 2002 Note payable on
any Interest Payment Date (other than at Maturity) shall be the 15th day
(whether or not a Business Day) of the calendar month preceding the 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 2002 Notes shall not be secured by a security interest in
any property.
(e) The 2002 Notes shall not be redeemable. The 2002
Notes shall be purchased by the Issuer at the option of the Holders
thereof as provided in Sections 3.01 and 4.05 hereof.
(f) The 2002 Notes shall not be convertible.
(g) The 2002 Notes will not be subordinated to the payment
of Senior Debt.
(h) The Issuer will not pay any additional amounts on the
2002 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 2002 Notes shall include the events specified in Article Five of
this Third Supplemental Indenture. In addition to the covenants set forth
in Article Three of the Original Indenture, the Holders of the 2002 Notes
shall have the benefit of the covenants of the Issuer set forth in Article
Four hereto.
SECTION 2.012. Forms Generally. The 2002 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 2002
Notes, as evidenced by their execution thereof.
The definitive 2002 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 2002 Notes, as
evidenced by their execution thereof.
SECTION 2.013. Form of Face of 2002 Note.
CMS ENERGY CORPORATION
__% SENIOR UNSECURED NOTES DUE 2002
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 ______________, 2002 and to pay
interest thereon from ________________, 1997 (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 1 and November 1 in each
year, commencing November 1, 1997 and at Maturity at the rate of ____% per
annum, until the principal hereof is paid or made available for payment.
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 2002 Note (or one or more Predecessor 2002
Notes) is registered at the close of business on the Record Date for such
interest, which shall be the 15th day of the calendar month preceding the
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
2002 Note (or one or more Predecessor 2002 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 2002 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 2002 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. If the date on which payment of principal or interest on
this 2002 Note becomes due is not a Business Day, then such principal or
interest shall be due and payable on the next succeeding Business Day.
Reference is hereby made to the further provisions of this 2002
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 2002 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By _____________________
Its:
By ______________________
Its:
Attest:
SECTION 2.014. Form of Reverse of 2002 Note.
This __% Senior Unsecured Note Due 2002 is one of a duly
authorized issue of securities of the Issuer (herein called the "2002
Notes"), issued and to be issued under an Indenture, dated as of September
15, 1992, as supplemented by certain supplemental indentures, including
the Third Supplemental Indenture, dated as of May __, 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, the Holders of the 2002 Notes and
of the terms upon which the 2002 Notes are, and are to be, authenticated
and delivered. This 2002 Note is one of the series designated on the face
hereof, limited in aggregate principal amount to $300,000,000.
The 2002 Notes are not subject to redemption.
If a Change in Control occurs, the Issuer shall notify the
Holder of this 2002 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 2002 Note at a Change in Control Purchase Price equal to 101%
of the principal amount of this 2002 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 2002 Note, a new 2002 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 2002 Note shall
occur and be continuing, the principal of this 2002 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 2002 Note shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of the
Indenture or this 2002 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.
The Indenture contains provisions for defeasance at any time of
(i) the entire indebtedness of this 2002 Note or (ii) certain restrictive
covenants and Events of Default with respect to this 2002 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
2002 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 2002 Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default, the Holders of not less than 25%
in principal amount of the Outstanding Securities of each affected series
(voting as one class) shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Securities of each
affected series (voting as one class) a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days;
provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of
(and premium, if any) or any interest on this 2002 Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
2002 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 2002 Note at the times, place and rate,
and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this 2002 Note is registerable in the
Security Register, upon surrender of this 2002 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 2002 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 2002 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 2002 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, 2002 Notes are exchangeable for a like aggregate principal amount
of 2002 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 (i) to issue, register the
transfer of or exchange this 2002 Note for a period of 15 days next
preceding the first mailing of publication of notice of redemption of 2002
Notes, or (ii) to register the transfer of or exchange any 2002 Note
selected, called or being called for redemption, in whole or in part,
except, in the case of any 2002 Note to be redeemed in part, the portion
thereof not to be redeemed.
Prior to due presentment of this 2002 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 2002 Note is registered as
the owner hereof for all purposes, whether or not this 2002 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 2002 Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
SECTION 2.05. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
_____________________________,
as Trustee
By ___________________________
Authorized Officer
ARTICLE III
CHANGE OF CONTROL
SECTION 3.011. Change of Control. Upon the occurrence of a
Change in Control (the effective date of such Change in Control being the
"Change in Control Date"), each Holder of a 2002 Note shall have the right
to require that the Issuer repurchase (a "Required Repurchase") all or any
part of such Holder's 2002 Note at a repurchase price payable in cash
equal to 101% of the principal amount of such 2002 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 2002 Notes at the Change of Control
Purchase Price;
(ii) the Change of 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
2002 Notes to be repurchased, which shall be consistent with
this Section and the Indenture.
b. Holders electing to have a 2002 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 2002 Notes to be
repurchased, which portion must be $1,000 or an integral multiple
thereof; (ii) that such 2002 Notes are to be repurchased by the
Issuer pursuant to the change in control provisions of the Indenture;
and (iii) unless the 2002 Notes are represented by one or more Global
Notes, the certificate numbers of the 2002 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 2002 Notes as to which the withdrawal
notice relates and the principal amount of such 2002 Notes, if any,
which remains subject to a Change in Control Purchase Notice.
If a 2002 Note is represented by a Global Note (as described in
Article VI below), the Depositary or its nominee will be the Holder
of such 2002 Note and therefore will be the only entity that can
elect a Required Repurchase of such 2002 Note. To obtain repayment
pursuant to this Section 3.01 with respect to such 2002 Note, the
beneficial owner of such 2002 Note must provide to the broker or
other entity through which it holds the beneficial interest in such
2002 Note (i) the Change in Control Purchase Notice signed by such
beneficial owner, and such signature must be guaranteed by a member
firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or trust
company having an office or correspondent in the United States, and
(ii) instructions to such broker or other entity to notify the
Depositary of such beneficial owner's desire to obtain repayment
pursuant to this Section 3.01. Such broker or other entity will
provide to the Paying Agent (i) the Change of Control Purchase Notice
received from such beneficial owner and (ii) a certificate
satisfactory to the Paying Agent from such broker or other entity
stating that it represents such beneficial owner. Such broker or
other entity will be responsible for disbursing any payments it
receives pursuant to this Section 3.01 to such beneficial owner.
(c) Payment of the Change of Control Purchase Price for a 2002
Note for which a Change in Control Purchase Notice has been delivered
and not withdrawn is conditioned (except in the case of a 2002 Note
represented by one or more Global Notes) upon delivery of such 2002
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 of Control Purchase
Price for such 2002 Note will be made promptly following the later of
the Purchase Date or the time of delivery of such 2002 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
2002 Note on the Business Day following the Purchase Date, then, on
and after such date, interest will cease accruing, and all other
rights of the Holder shall terminate (other than the right to receive
the Change of Control Purchase Price upon delivery of the 2002 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 2002 Notes at the option of Holders upon a Change in
Control.
(e) No 2002 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 2002 Notes).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2002 NOTES
SECTION 4.011. Limitation on Certain Liens. (a) So long as
any of the 2002 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 2002 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;
(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 at any one time outstanding;
(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 4.012. Limitation on Consolidation, Merger, Sale or
Conveyance. So long as any of the 2002 Notes are Outstanding and until
the 2002 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), and subject also to Article Nine of the Indenture,
at which time the Issuer will be permanently released from the provisions
of this Section 4.02, the Issuer shall not consolidate with or merge into
any other Person or sell, lease or convey the property of the Issuer in
the entirety or substantially as an entirety, unless (i) immediately after
giving effect to such transaction the Consolidated Net Worth of the
surviving entity is at least equal to the Consolidated Net Worth of the
Issuer immediately prior to the transaction, and (ii) after giving effect
to such transaction, the surviving entity would be entitled to incur at
least one dollar of additional Indebtedness (other than revolving
Indebtedness to banks) without violation of the limitations in Section
4.03 hereof.
SECTION 4.013. Limitation on Consolidated Indebtedness.
(a) So long as any of the 2002 Notes are Outstanding and until the 2002
Notes are rated BBB- or above (or an equivalent rating) by Standard &
Poor's and one Other Rating Agency (or, if Standard & Poor's shall change
its rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from
the provisions of this Section 4.03, 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 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 Third
Supplemental Indenture, as set forth on Schedule 4.03(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 2002 Notes, the Indebtedness is subordinated to the 2002 Notes
in right of payment;
(3) Indebtedness of the Issuer owed to and held by a Subsidiary
and Indebtedness of a Subsidiary owed to and held by the Issuer;
provided, however, that, in the case of Indebtedness of the Issuer
owed to and held by a Subsidiary, (i) any subsequent issuance or
transfer of any Capital Stock that results in any such Subsidiary
ceasing to be a Subsidiary or (ii) any transfer of such Indebtedness
(except to the Issuer or a Subsidiary) shall be deemed for the
purposes of this Subsection to constitute the issuance of such
Indebtedness by the Issuer;
(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 2002 Notes, the Indebtedness so issued is subordinated to the
2002 Notes in right of payment;
(5) Indebtedness of a Restricted Subsidiary issued in exchange
for, or the proceeds of which are used to refund or refinance,
Indebtedness of a Restricted Subsidiary issued in accordance with
Subsection (a) of this Section, provided that (i) the principal
amount (or accreted value in the case of Indebtedness issued at a
discount) of the Indebtedness so issued shall not exceed the
principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid
interest on, the Indebtedness so exchanged, refunded or refinanced
and (ii) the Indebtedness so issued (A) shall not mature prior to the
stated maturity of the Indebtedness so exchanged, refunded or
refinanced and (B) shall have an Average Life 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, NOMECO, 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 of, such Person becoming a Subsidiary. Such
Indebtedness shall be deemed to be incurred on the date the acquired
Person becomes a Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed
$150,000,000 in aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in respect of
rate reduction bonds issued to recover electric restructuring
transition costs of Consumers provided that such Indebtedness is
without recourse to the assets of Consumers.
SECTION 4.014. Limitation on Restricted Payments. (a) So long
as the 2002 Notes are Outstanding and until the 2002 Notes are rated BBB-
or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which
time the Issuer will be permanently released from the provisions of this
Section 4.04, the Issuer shall not, and shall not permit any Restricted
Subsidiary of the Issuer, directly or indirectly, to (i) declare or pay
any dividend or make any distribution on the Capital Stock of the Issuer
to the direct or indirect holders of its Capital Stock (except dividends
or distributions payable solely in its Non-Convertible Capital Stock or in
options, warrants or other rights to purchase such Non-Convertible Capital
Stock and except dividends or distributions payable to the Issuer or a
Subsidiary), (ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity or scheduled repayment thereof, any Subordinated
Indebtedness (any such dividend, distribution, purchase, redemption,
repurchase, defeasing, other acquisition or retirement being hereinafter
referred to as a "Restricted Payment") if at the time the Issuer or such
Subsidiary makes such Restricted Payment:
(1) an Event of Default, or an event that with the lapse
of time or the giving of notice or both would constitute an Event of
Default, shall have occurred and be continuing (or would result
therefrom); or
(2) the aggregate amount of such Restricted Payment and
all other Restricted Payments made since the date of this Third
Supplemental Indenture 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 the date of this
Third Supplemental Indenture 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 the date of this Third Supplemental
Indenture.
For the purpose of determining the amount of any Restricted Payment not in
the form of cash, the amount shall be the fair value of such Restricted
Payment as determined in good faith by the Board of Directors, provided
that if the value of the non-cash portion of such Restricted Payment as
determined by the Board of Directors is in excess of $25 million, such
value shall be based on the opinion from a nationally recognized firm
experienced in the appraisal of similar types of transactions.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the
Issuer made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Issuer
(other than Redeemable Stock or Exchangeable Stock); provided,
however, that such purchase or redemption shall be excluded from
the calculation of the amount of Restricted Payments;
(ii) dividends or other distributions paid in respect of
any class of the Issuer's Capital Stock issued in respect of the
acquisition of any business or assets by the Issuer or a
Restricted Subsidiary if the dividends or other distributions
with respect to such Capital Stock are payable solely from the
net earnings of such business or assets;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with this Section; provided, however, that
at the time of payment of such dividend, no Event of Default
shall have occurred and be continuing (or result therefrom), and
provided further, however, that such dividends shall be included
(without duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.015. Limitation on Asset Sales. So long as any of
the 2002 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 2002
Notes or (ii) invest an equal amount not so used in clause (i) in property
or assets of related business within 24 months after the date of the Asset
Sale (the "Application Period") or (iii) apply such excess Net Cash
Proceeds not so used in (i) or (ii) (the "Excess Proceeds") to make an
offer, within 30 days after the end of the Application Period, to purchase
from the Holders on a pro rata basis an aggregate principal amount of 2002
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
2002 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 2002 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 2002 Notes from the Holders with Excess Proceeds, and for the
acceptance of such offer by the Holders, shall be the same as those set
forth in Section 3.01 herein with respect to a Change in Control.
ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2002 NOTES
SECTION 5.011. Definition. All of the events specified in
clauses (a) through (h) of Section 5.1 of the Original Indenture shall be
"Events of Default" with respect to the 2002 Notes.
SECTION 5.012. Amendments to Section 5.1 of the Original
Indenture. Solely for the purpose of determining Events of Default with
respect to the 2002 Notes, paragraphs (e), (f) and (h) of Section 5.1 of
the Original Indenture shall be amended such that each and every reference
therein to the Issuer shall be deemed to mean either the Issuer or
Consumers.
ARTICLE VI
GLOBAL NOTES
The 2002 Notes will be issued initially in the form of Global
Notes. "Global Note" means a registered 2002 Note evidencing one or more
2002 Notes issued to a depositary (the "Depositary") or its nominee, in
accordance with this Article and bearing the legend prescribed in this
Article. A single Global Note will represent all 2002 Notes. The Issuer
shall execute and the Trustee shall, in accordance with this Article and
the Issuer Order with respect to the 2002 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 2002 Notes to be represented by such
Global Note or Notes, (ii) shall be registered in the name of the
Depositary for such Global Note or Notes or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged
in whole or in part for 2002 Notes in definitive registered form, this
Global 2002 Note may not be transferred except as a whole by the
Depository to the nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by
the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository."
Notwithstanding Section 2.8 of the Indenture, unless and until
it is exchanged in whole or in part for 2002 Notes in definitive form, a
Global Note representing one or more 2002 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 2002 Notes or a nominee of such successor Depositary.
If at any time the Depositary for the 2002 Notes is unwilling or
unable to continue as Depositary for the 2002 Notes, the Issuer shall
appoint a successor Depositary with respect to the 2002 Notes. If a
successor Depositary for the 2002 Notes is not appointed by the Issuer by
the earlier of (i) 90 days from the date the Issuer receives notice to the
effect that the Depositary is unwilling or unable to act, or the Issuer
determines that the Depositary is unable to act or (ii) the effectiveness
of the Depositary's resignation or failure to fulfill its duties as
Depositary, the Issuer will execute, and the Trustee, upon receipt of a
Issuer Order for the authentication and delivery of definitive 2002 Notes,
will authenticate and deliver 2002 Notes in definitive form in an
aggregate principal amount equal to the principal amount of the Global
Note or Notes representing such 2002 Notes in exchange for such Global
Note or Notes.
The Issuer may at any time and in its sole discretion determine
that the 2002 Notes issued in the form of one or more Global Notes shall
no longer be represented by such Global Note or Notes. In such event the
Issuer will execute, and the Trustee, upon receipt of a Issuer Order for
the authentication and delivery of definitive 2002 Notes, will
authenticate and deliver 2002 Notes in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such 2002 Notes in exchange for such Global Note or Notes.
The Depositary for such 2002 Notes may surrender a Global Note
or Notes for such 2002 Notes in exchange in whole or in part for 2002
Notes in definitive form on such terms as are acceptable to the Issuer and
such Depositary. Thereupon, the Issuer shall execute, and the Trustee
shall authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new 2002
Note or Notes, of any authorized denomination as requested by
such Person in aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Global
Note; and
(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 2002 Notes in definitive form delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer will
execute and the Trustee will authenticate and deliver 2002 Notes in
definitive registered form in authorized denominations.
Upon the exchange of a Global Note for 2002 Notes in definitive
form, such Global Note shall be cancelled by the Trustee. 2002 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 2002 Notes to the persons in whose names such 2002 Notes are so
registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture
shall be applicable to the 2002 Notes. Upon satisfaction by the Issuer of
the requirements of Section 10.1(c) of the Indenture, in connection with
any covenant defeasance (as provided in Section 10.1(c) of the Indenture),
the Issuer shall be released from its obligations under Article Nine of
the Original Indenture and under Articles III and IV of this Third
Supplemental Indenture with respect to the 2002 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Third Supplemental Indenture is a supplement to the
Original Indenture. As supplemented by this Third Supplemental Indenture,
the Original Indenture is in all respects ratified, approved and
confirmed, and the Original Indenture and this Third Supplemental
Indenture shall together constitute one and the same instrument.
TESTIMONIUM
This Third 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.
IN WITNESS WHEREOF, the parties hereto have caused this Third
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: ____________________________
Attest:
(Corporate Seal)
NBD BANK
as Trustee
By: ______________________________
Attest:
(Corporate Seal)
Schedule 4.03(b)(2)
Indebtedness of CMS Energy Corporation outstanding on ______, 1997
