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Exhibit 4(d)(i)
SEVENTH SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 25, 1999
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This Seventh Supplemental Indenture, dated as of the 25th day of
January, 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 Seventh 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 " 7.5%
Senior Notes Due 2009" (the "2009 Notes"), providing for the issuance of the
2009 Notes and amending and adding certain provisions thereof for the benefit of
the Holders of the 2009 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this
Seventh 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 Seventh Supplemental Indenture; and
WHEREAS, all things necessary to make this Seventh 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 SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
2009 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 2009 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
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SECTION 1.01. Standard Provisions. The Original Indenture together
with this Seventh 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 2009 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.
"Applicable Premium" means, with respect to a 2009 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 2009 Note (or portion thereof)
being redeemed plus all interest payments due on such 2009 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
2009 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
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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; 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
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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.
"CMS Oil & Gas" means CMS Oil & Gas Co. (formerly known as CMS
NOMECO Oil & Gas Co.), a Michigan corporation and wholly-owned subsidiary of
Enterprises.
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"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.
"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
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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:
(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
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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 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
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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 Seventh 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.
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"Event of Default" with respect to the 2009 Notes has the meaning
specified in Article V of this Seventh 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 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
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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 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
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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.
"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
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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.
"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.
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"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 2009 Notes on
behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.
"Predecessor 2009 Note" of any particular 2009 Note means every
previous 2009 Note evidencing all or a portion of the same debt as that
evidenced by such particular 2009 Note; and, for the purposes of the definition,
any 2009 Note authenticated and delivered under Section 2.9 of the Indenture in
exchange for or in lieu of a mutilated, destroyed, lost or stolen 2009 Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen 2009 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.
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"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 2009 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 2009 Notes.
"Restricted Subsidiary" means any Subsidiary (other than Consumers
and its subsidiaries) of the Issuer which, as of the date of the Issuer's most
recent quarterly consolidated balance sheet, constituted at least 10% of the
total Consolidated Assets of the Issuer and its Consolidated Subsidiaries and
any other Subsidiary which from time to time is designated a Restricted
Subsidiary by the Board of Directors provided that no Subsidiary may be
designated a Restricted Subsidiary if, immediately after giving effect thereto,
an Event of Default or event that, with the lapse of time or giving of notice or
both, would constitute an Event of Default would exist or the Issuer and its
Restricted Subsidiaries could not incur at least one dollar of additional
Indebtedness under Section 4.04, and (i) any such Subsidiary so designated as a
Restricted Subsidiary must be organized under the laws of the United States or
any State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary
must be owned of record and beneficially by the Issuer or a Restricted
Subsidiary and (iii) such Restricted Subsidiary must be a Consolidated
Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings 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 2009 Notes or shall cease to exist and there shall be no such successor
thereto, any other nationally recognized statistical rating organization
selected by the Issuer which is acceptable to the Trustee.
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"Subordinated Indebtedness" means any Indebtedness of the Issuer
(whether outstanding on the date of this Seventh Supplemental Indenture or
thereafter incurred) which is contractually subordinated or junior in right of
payment to the 2009 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.
"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
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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 2009
Notes; provided, however, that if the average life to stated maturity of the
2009 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 Seventh Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE 2009 NOTES; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby created
a series of Securities to be known and designated as the "7.5% Senior Notes Due
2009" and limited in aggregate principal amount (except as contemplated in
Section 2.3(f)(2) of the Indenture) to $480,000,000. The Stated Maturity of the
2009 Notes is January 15, 2009.
(b) The 2009 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 7.5% per annum stated therein until the principal
thereof is paid or made available
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for payment. Interest will be payable semiannually on each Interest Payment Date
and at Maturity, as provided in the form of the 2009 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 2009 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 2009 Notes shall not be secured by a security interest in any property.
(e) The 2009 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 2009 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 2009
Notes plus accrued interest to the redemption date. The 2009 Notes shall be
purchased by the Issuer at the option of the Holders thereof as provided in
Sections 3.01 and 4.06 hereof.
(f) The 2009 Notes shall not be convertible.
(g) The 2009 Notes will not be subordinated to the payment of
Senior Debt.
(h) The Issuer will not pay any additional amounts on the 2009
Notes held by a Person who is not a U.S. Person in respect of any tax,
assessment or government charge withheld or deducted.
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(i) The events specified in Events of Default with respect to the
2009 Notes shall include the events specified in Article Five of this Seventh
Supplemental Indenture. In addition to the covenants set forth in Article Three
of the Original Indenture, the Holders of the 2009 Notes shall have the benefit
of the covenants of the Issuer set forth in Article Four hereto.
SECTION 2.02. Forms Generally. The 2009 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 2009 Notes, as evidenced by their execution thereof.
The definitive 2009 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 2009 Notes, as evidenced by their
execution thereof.
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SECTION 2.03. Form of Face of 2009 Note.
CMS ENERGY CORPORATION
7.5% SENIOR NOTES DUE 2009
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, 2009
("Maturity") and to pay interest thereon from January 15, 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 7.5% 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 2009 Note (or one or
more Predecessor 2009 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 2009 Note (or one
or more Predecessor 2009 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
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defaulted interest to be fixed by the Trustee, notice whereof shall be given to
Holders of 2009 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 2009 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.
Reference is hereby made to the further provisions of this 2009
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 2009
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 2009 Note.
This 7.5% Senior Note Due 2009 is one of a duly authorized issue
of securities of the Issuer (herein called the "2009 Notes"), issued and to be
issued under an Indenture, dated as of September 15, 1992, as supplemented by
certain supplemental indentures, including the Seventh Supplemental Indenture,
dated as of January 25, 1999 (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 2009
Notes and of the terms upon which the 2009 Notes are, and are to be,
authenticated and delivered. This 2009 Note is one of the series designated on
the face hereof, limited in aggregate principal amount to $480,000,000.
The 2009 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 2009 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.
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In no event will the redemption price ever be less than 100% of the principal
amount of the 2009 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 2009 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 2009 Note (or portion thereof)
being redeemed plus all interest payments due on such 2009 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
2009 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 2009 Notes; provided, however,
that if the average life to stated maturity of the 2009 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 2009 Note in part only, a new
2009 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 2009 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 2009
Note at a Change in Control Purchase Price equal to 101% of the principal amount
of this 2009 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 2009 Note, a new 2009 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 2009 Note shall occur
and be continuing, the principal of this 2009 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 2009 Note shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of the Indenture or
this 2009 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 2009 Note or (ii) certain restrictive
covenants and Events of Default with respect to this 2009 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 2009
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 2009 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 2009 Note on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provision of this 2009
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 2009 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 2009 Note is registerable in the
Security Register, upon surrender of this 2009 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 2009 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 2009 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 2009 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,
2009 Notes are exchangeable for a like aggregate principal amount of 2009 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 2009 Note for a period of 15 days next preceding
the mailing of the notice of redemption of 2009 Notes or (b) exchange or
register the transfer of any 2009 Note or any portion thereof selected, called
or being called for redemption, except in the case of any 2009 Note to be
redeemed in part, the portion thereof not so to be redeemed.
Prior to due presentment of this 2009 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 2009 Note is registered as the owner hereof
for all purposes, whether or not this 2009 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 2009 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
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Authorized Officer
ARTICLE III
CHANGE OF CONTROL
SECTION 3.01. Change of Control. Upon the occurrence of a Change
in Control (the effective date of such Change in Control being the "Change in
Control Date"), each Holder of a 2009 Note shall have the right to require that
the Issuer repurchase (a "Required Repurchase") all or any part of such Holder's
2009 Note at a repurchase price payable in cash equal to 101% of the principal
amount of such 2009 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 2009 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
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(v) the procedures that Holders must follow to cause the 2009
Notes to be repurchased, which shall be consistent with this
Section and the Indenture.
(b) Holders electing to have a 2009 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 2009 Notes to be
repurchased, which portion must be $1,000 or an integral multiple thereof; (ii)
that such 2009 Notes are to be repurchased by the Issuer pursuant to the change
in control provisions of the Indenture; and (iii) unless the 2009 Notes are
represented by one or more Global Notes, the certificate numbers of the 2009
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 2009 Notes
as to which the withdrawal notice relates and the principal amount of such 2009
Notes, if any, which remains subject to a Change in Control Purchase Notice.
If a 2009 Note is represented by a Global Note (as described in
Article VI below), the Depositary or its nominee will be the Holder of such 2009
Note and therefore will be the only entity that can elect a Required Repurchase
of such 2009 Note. To obtain repayment pursuant to this Section 3.01 with
respect to such 2009 Note, the beneficial owner of such 2009 Note must provide
to the broker or other entity through which it holds the beneficial interest in
such 2009 Note (i) the Change in Control Purchase Notice signed by such
beneficial owner, and such
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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 2009
Note for which a Change in Control Purchase Notice has been delivered and not
withdrawn is conditioned (except in the case of a 2009 Note represented by one
or more Global Notes) upon delivery of such 2009 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 2009 Note will be made promptly following the later of the
Purchase Date or the time of delivery of such 2009 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 2009 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 2009
Note).
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(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 2009 Notes
at the option of Holders upon a Change in Control.
(e) No 2009 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 2009 Notes).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2009 NOTES
SECTION 4.01. Existence. So long as any of the 2009 Notes are
outstanding, subject to Article 9 of the Original Indenture, the Issuer will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION 4.02. Limitation on Certain Liens. So long as any of the
2009 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 2009
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
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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;
(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,
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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 4.03. Limitation on Consolidation, Merger, Sale or
Conveyance. So long as any of the 2009 Notes are outstanding and until the 2009
Notes are rated BBB- or above (or an equivalent rating) by Standard & Poor's and
one Other Rating Agency (or, if Standard & Poor's shall change its rating
system, an equivalent of such rating then employed by such organization), at
which time the Issuer will be permanently released from the provisions of this
Section 4.03, and subject also to Article Nine of the Indenture, the Issuer
shall not consolidate with or merge into any other Person or sell, lease or
convey the property of the Issuer in the entirety or substantially as an
entirety, unless (i) immediately after giving effect to such transaction the
Consolidated Net Worth of the surviving entity is at least equal to the
Consolidated Net Worth of the Issuer immediately prior to the transaction, and
(ii) after giving effect to such transaction, the surviving entity would be
entitled to incur at least one dollar of additional Indebtedness (other than
revolving Indebtedness to banks) without violation of the limitations in Section
4.04 hereof.
SECTION 4.04. Limitation on Consolidated Indebtedness. So long as
any of the 2009 Notes are outstanding and until the 2009 Notes are rated BBB- or
above (or an equivalent rating) by Standard & Poor's and one Other Rating Agency
(or, if Standard & Poor's shall change its rating system, an equivalent of such
rating then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.04, the Issuer shall
not, and shall not permit any Consolidated Subsidiary of the Issuer to, issue,
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
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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 Seventh
Supplemental Indenture, as set forth on Schedule 4.04(b)(2) attached
hereto and made a part hereof, and Indebtedness issued in exchange for,
or the proceeds of which are used to refund or refinance, any
Indebtedness permitted by this clause (2); provided, however, that (i)
the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of the Indebtedness so issued shall not exceed
the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid
interest on, the Indebtedness so exchanged, refunded
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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 2009 Notes,
the Indebtedness is subordinated to the 2009 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 2009 Notes, the Indebtedness so
issued is subordinated to the 2009 Notes in right of payment;
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(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, CMS Oil & Gas, CMS Electric and
Gas, CMS Gas Transmission and Storage, CMS MST or any other Designated
Enterprises Subsidiary;
(7) Indebtedness issued by the Issuer not to exceed $150,000,000
in aggregate principal amount at any time; and
(8) 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;
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(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 4.05. Limitation on Restricted Payments. So long as the
2009 Notes are outstanding and until the 2009 Notes are rated BBB- or above (or
an equivalent rating) by Standard & Poor's and one Other Rating Agency (or, if
Standard & Poor's shall change its rating system, an equivalent of such rating
then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.05, the Issuer shall
not, and shall not permit any Restricted Subsidiary of the Issuer, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on the
Capital Stock of the Issuer to the direct or indirect holders of its Capital
Stock (except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such
Non-Convertible Capital Stock and except dividends or distributions payable to
the Issuer or a Subsidiary), (ii) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity or scheduled repayment thereof, any Subordinated Indebtedness (any such
dividend, distribution, purchase, redemption, repurchase, defeasing, other
acquisition or retirement being hereinafter referred to as a "Restricted
Payment") if at the time the Issuer or such Subsidiary makes such Restricted
Payment:
(1) an Event of Default, or an event that with the lapse of
time or the giving of notice or both would constitute an Event of
Default, shall have occurred and be continuing (or would result
therefrom); or
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(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 4.05(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Issuer
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Issuer (other than
Redeemable Stock or Exchangeable Stock); provided, however, that
such purchase or redemption shall be excluded from the calculation
of the amount of Restricted Payments;
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(ii) dividends or other distributions paid in respect of any
class of the Issuer's Capital Stock issued in respect of the
acquisition of any business or assets by the Issuer or a
Restricted Subsidiary if the dividends or other distributions with
respect to such Capital Stock are payable solely from the net
earnings of such business or assets;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with this Section; provided, however, that at
the time of payment of such dividend, no Event of Default shall
have occurred and be continuing (or result therefrom), and
provided further, however, that such dividends shall be included
(without duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.06. Limitation on Asset Sales. So long as any of the
2009 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 2009 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 2009 Notes on
the relevant purchase date equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the principal
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amount of the 2009 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 2009 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 2009 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 2009 NOTES
SECTION 5.01. Definition. All of the events specified in clauses
(a) through (h) of Section 5.1 of the Original Indenture shall be "Events of
Default" with respect to the 2009 Notes.
SECTION 5.02. Amendments to Section 5.1 of the Original Indenture.
Solely for the purpose of determining Events of Default with respect to the 2009
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 2009 Notes will be issued initially in the form of Global
Notes. "Global Note" means a registered 2009 Note evidencing one or more 2009
Notes issued to a depositary (the "Depositary") or its nominee, in accordance
with this Article and
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bearing the legend prescribed in this Article. One or more Global Notes will
represent all 2009 Notes. The Issuer shall execute and the Trustee shall, in
accordance with this Article and the Issuer Order with respect to the 2009
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 2009 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 the Global 2009 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 2009 Note issued is
registered in the name of a nominee of the Depository, or in such other name as
is requested by an authorized representative of the Depository (and any payment
is made to the nominee of the Depository, or to such other entity as is
requested by an authorized representative of the Depository), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is
wrongful inasmuch as the registered owner hereof has an interest herein."
Notwithstanding Section 2.8 of the Indenture, unless and until it
is exchanged in whole or in part for 2009 Notes in definitive form, a Global
Note representing one or more 2009 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 2009 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2009 Notes is unwilling or
unable to continue as Depositary for the 2009 Notes, the Issuer shall appoint a
successor Depositary with respect to the 2009 Notes. If a successor Depositary
for the 2009 Notes is not appointed by the Issuer by the earlier of (i) 90 days
from the date the Issuer receives
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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 2009 Notes, will authenticate and
deliver 2009 Notes in definitive form in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such 2009 Notes in
exchange for such Global Note or Notes.
The Issuer may at any time and in its sole discretion determine
that the 2009 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 2009 Notes, will authenticate and
deliver 2009 Notes in definitive form in an aggregate principal amount equal to
the principal amount of the Global Note or Notes representing such 2009 Notes in
exchange for such Global Note or Notes.
The Depositary for such 2009 Notes may surrender a Global Note or
Notes for such 2009 Notes in exchange in whole or in part for 2009 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 2009
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
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Note and the aggregate principal amount of 2009 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 2009 Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for 2009 Notes in definitive
form, such Global Note shall be cancelled by the Trustee. 2009 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 2009 Notes to the persons in whose
names such 2009 Notes are so registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture
shall be applicable to the 2009 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 Seventh Supplemental Indenture
with respect to the 2009 Notes.
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ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Seventh Supplemental Indenture is a supplement to the
Original Indenture. As supplemented by this Seventh Supplemental Indenture, the
Original Indenture is in all respects ratified, approved and confirmed, and the
Original Indenture and this Seventh Supplemental Indenture shall together
constitute one and the same instrument.
TESTIMONIUM
This Seventh 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 Seventh
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
/s/ A.M. Xxxxxx
Xxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
Attest:
NBD BANK,
as Trustee
/s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Vice President
Attest:
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