EXHIBIT (4)(b)
FIFTH SUPPLEMENTAL INDENTURE
dated as of November 4, 1997
____________________
This Fifth Supplemental Indenture, dated as of the 4th day
of November, 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 Fifth 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 3/8% Senior Unsecured Notes Due 2000, Series A" (the
"Series A Notes"), providing for the issuance of the Series A Notes and
amending and adding certain provisions thereof for the benefit of the
Holders of the Series A Notes; and
WHEREAS, the Issuer and certain purchasers of the Series A
Notes are entering into a Registration Rights Agreement dated as of
November 7, 1997 which requires the Issuer to use its best efforts to make
an Exchange Offer which would enable Holders of Series A Notes to exchange
such Series A Notes for Securities not subject to certain restrictions
under the Securities Act or to cause a Shelf Registration Statement to
become effective with respect to the Series A Notes (in each case as
defined in such Registration Rights Agreement); and
WHEREAS, the Issuer wishes to establish the forms and
terms of a series of Securities to be issued in exchange for Series A
Notes as so contemplated, such Securities to be known as the Issuer's "7 3/8%
Senior Unsecured Notes Due 2000, Series B" (the "Series B Notes"), provide
for the issuance of such Notes and amend and add certain provisions to the
Original Indenture for the benefit of the Holders of the Series B Notes;
and
WHEREAS, the Issuer and the Trustee desire to enter into
this Fifth 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 Fifth Supplemental
Indenture; and
WHEREAS, all things necessary to make this Fifth
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 FIFTH SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase
of the Series A Notes and the Series B Notes (such Series A Notes and
Series B Notes being sometimes referred to herein as the "2000 Notes") to
be issued hereunder by holders thereof, the Issuer and the Trustee
mutually covenant and agree, for the equal and proportionate benefit of
the respective holders from time to time of such 2000 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. STANDARD PROVISIONS. The Original
Indenture together with this Fifth 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 2000
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 2000 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 2000 Note (or
portion thereof) being redeemed plus all interest payments due on such
2000 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 2000 Note (or portion thereof) being
redeemed at such time. For purposes of this definition, the present
values of interest and principal payments will be determined in accordance
with generally accepted principles of financial analysis.
"Average Life" means, as of the date of determination,
with respect to any Indebtedness, the quotient obtained by dividing (i)
the sum of the products of (x) the number of years from the date of
determination to the dates of each successive scheduled principal payment
of such Indebtedness and (y) the amount of such principal payment by (ii)
the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any
obligation that is required to be classified and accounted for as a
capital lease on the face of a balance sheet of such Person prepared in
accordance with generally accepted accounting principles; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with generally accepted accounting principles; the stated
maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or
assets to which such lease relates.
"Capital Stock" means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) corporate stock, including any
Preferred Stock or Letter Stock; provided that Hybrid Preferred Securities
shall not be considered Capital Stock for purposes of this definition.
"Change in Control" means an event or series of events by
which (i) the Issuer ceases to own beneficially, directly or indirectly,
at least 80% of the total voting power of all classes of Capital Stock
then outstanding of Consumers (whether arising from issuance of securities
of the Issuer or Consumers, any direct or indirect transfer of securities
by the Issuer or Consumers, any merger, consolidation, liquidation or
dissolution of the Issuer or Consumers or otherwise); (ii) any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as such term is used in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or
group shall be deemed to have "beneficial ownership" of all shares that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii)
the Issuer consolidates with or merges into another corporation or
directly or indirectly conveys, transfers or leases all or substantially
all of its assets to any Person, or any corporation consolidates with or
merges into the Issuer, in either event pursuant to a transaction in which
the outstanding Voting Stock of the Issuer is changed into or exchanged
for cash, securities, or other property, other than any such transaction
in which (A) the outstanding Voting Stock of the Issuer is changed into or
exchanged for Voting Stock of the surviving corporation and (B) the
holders of the Voting Stock of the Issuer immediately prior to such
transaction retain, directly or indirectly, substantially proportionate
ownership of the Voting Stock of the surviving corporation immediately
after such transaction.
"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 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 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 Fifth Supplemental
Indenture which is designated a Designated Enterprises Subsidiary by the
Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to each series of 2000
Notes has the meaning specified in Article VI of this Fifth 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 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 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 May 15, 1998 and each
November 15 and May 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 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 Enterprises.
"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
2000 Notes on behalf of the Issuer. Initially, the Paying Agent for each
series of 2000 Notes shall be the Trustee.
"Predecessor Note" with respect to any particular 2000
Note means every previous 2000 Note evidencing all or a portion of the
same debt as that evidenced by such particular 2000 Note; and, for the
purposes of this definition, any 2000 Note authenticated and delivered
under Section 2.9 of the Indenture in exchange for or in lieu of a
mutilated, destroyed, lost or stolen 2000 Note of the same series shall be
deemed to evidence the same debt as such mutilated, destroyed, lost or
stolen 2000 Note.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation; provided that Hybrid Preferred Securities shall
not be considered Preferred Stock for purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its
terms or otherwise is required to be redeemed prior to the first
anniversary of the Stated Maturity of the Outstanding 2000 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 2000 Notes.
"Restricted Subsidiary" means any Subsidiary (other than
Consumers and its subsidiaries) of the Issuer which, as of the date of the
Issuer's most recent quarterly consolidated balance sheet, constituted at
least 10% of the total Consolidated Assets of the Issuer and its
Consolidated Subsidiaries and any other Subsidiary which from time to time
is designated a Restricted Subsidiary by the Board of Directors provided
that no Subsidiary may be designated a Restricted Subsidiary if,
immediately after giving effect thereto, an Event of Default or event
that, with the lapse of time or giving of notice or both, would constitute
an Event of Default would exist or the Issuer and its Restricted
Subsidiaries could not incur at least one dollar of additional
Indebtedness under Section 5.04, and (i) any such Subsidiary so designated
as a Restricted Subsidiary must be organized under the laws of the United
States or any State thereof, (ii) more than 80% of the Voting Stock of
such Subsidiary must be owned of record and beneficially by the Issuer or
a Restricted Subsidiary and (iii) such Restricted Subsidiary must be a
Consolidated Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Group, a division of McGraw Hill Inc., and any successor thereto which is
a nationally recognized statistical rating organization, or if such entity
shall cease to rate the Outstanding 2000 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 Fifth Supplemental
Indenture or thereafter incurred) which is contractually subordinated or
junior in right of payment to the 2000 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 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
2000 Notes; provided, however, that if the average life to stated maturity
of the 2000 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 Fifth Supplemental Indenture, are defined in those
Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE SERIES A NOTES; FORMS
SECTION 2.01. ESTABLISHMENT OF SERIES. (a) There is
hereby created a series of Securities to be known and designated as the
"7 3/8% Senior Unsecured Notes Due 2000, Series A" and limited in aggregate
principal amount (except as contemplated in Section 2.3(f)(2) of the
Indenture) to $300,000,000. The Stated Maturity of the Series A Notes is
November 15, 2000.
(b) The Series A Notes will bear interest from the
Original Issue Date, or from the most recent date to which interest has
been paid or duly provided for, at the rate of 7 3/8% per annum stated
therein until the principal thereof is paid or made available for payment.
Interest will be payable semiannually on each Interest Payment Date and at
Maturity, as provided in the form of the Series A Note in Section 2.03
hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of
the Indenture for the payment of the interest on any Series A Note payable
on any Interest Payment Date (other than at Maturity) shall be the 1st day
(whether or not a Business Day) of the calendar month in which such
Interest Payment Date occurs and, in the case of interest payable at
Maturity, the Record Date shall be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the Series A Notes shall not be secured by a security interest
in any property.
(e) The Series A Notes shall be redeemable at the option
of the Issuer, in whole or in part, at any time and from time to time, at
a redemption price equal to 100% of the principal amount of such Series A
Notes being redeemed plus the Applicable Premium, if any, thereon at the
time of redemption, together with accrued interest, if any, thereon to the
redemption date. In no event will the redemption price ever be less than
100% of the principal amount of the Series A Notes plus accrued interest
to the redemption date. The Series A Notes shall be purchased by the
Issuer at the option of the Holders thereof as provided in Sections 4.01
and 5.06 hereof.
(f) The Series A Notes shall not be convertible.
(g) The Series A Notes will not be subordinated to the
payment of Senior Debt.
(h) The Issuer will not pay any additional amounts on the
Series A Notes held by a Person who is not a U.S. Person in respect of any
tax, assessment or government charge withheld or deducted.
(i) The events specified in Events of Default with respect
to the Series A Notes shall include the events specified in Article Six of
this Fifth Supplemental Indenture. In addition to the covenants set forth
in Article Three of the Original Indenture, the Holders of the Series A
Notes shall have the benefit of the covenants of the Issuer set forth in
Article Five hereto.
SECTION 2.02. FORMS GENERALLY. The Series A Notes and
Trustee's certificates of authentication shall be in substantially the
form set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Series
A Notes, as evidenced by their execution thereof.
The definitive Series A Notes shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers executing such Series
A Notes, as evidenced by their execution thereof.
SECTION 2.03. FORM OF FACE OF SERIES A NOTE.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ANY OF ITS SUBSIDIARIES,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "U.S. PERSONS" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION
S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING.
CMS ENERGY CORPORATION
7 3/8% SENIOR UNSECURED NOTE DUE 2000, SERIES A
No. ________ $__________
CMS Energy Corporation, a corporation duly organized and
existing under the laws of the State of Michigan (herein called the
"Issuer", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________________________, or registered assigns, the principal
sum of ____________________ Dollars on November 15, 2000 ("Maturity") and
to pay interest thereon from November 7, 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 15 and November 15 in each
year, commencing May 15, 1998 and at Maturity at the rate of 7 3/8% per
annum, until the principal hereof is paid or made available for payment.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Series A Note (or one or more Predecessor Notes)
is registered at the close of business on the Record Date for such
interest, which shall be the 1st day of the calendar month in which such
Interest Payment Date occurs (whether or not a Business Day) except that
the Record Date for interest payable at Maturity shall be the date of
Maturity. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Record Date and
may either be paid to the Person in whose name this Series A Note (or one
or more Predecessor Series A Notes) is registered at the close of business
on a subsequent Record Date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest) for the
payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Series A Notes not less than 15 days
preceding such subsequent Record Date.
Payment of the principal of (and premium, if any) and
interest, if any, on this Series A Note will be made at the office or
agency of the Issuer maintained for that purpose in New York, New York
(the "Place of Payment"), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Issuer
payment of interest (other than interest payable at Maturity) may be made
by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an
account designated by such Person not later than ten days prior to the
date of such payment; and provided, further, that if this Series A Note is
a Global Note within the meaning of the Indenture, then each payment
hereunder shall be made by wire transfer to an account or accounts
designated by the Person entitled thereto not later than ten days prior to
the date of such payment.
Reference is hereby made to the further provisions of this
Series A Note set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Series A Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By____________________________
Its:
By____________________________
Its:
Attest:
SECTION 2.04. FORM OF REVERSE OF SERIES A NOTE.
This 7 3/8% Senior Unsecured Note Due 2000, Series A is one
of a duly authorized issue of securities of the Issuer (herein called the
"Series A Notes"), issued and to be issued under an Indenture, dated as of
September 15, 1992, as supplemented by certain supplemental indentures,
including the Fifth Supplemental Indenture, dated as of November 4, 1997
(herein collectively referred to as the "Indenture"), between the Issuer
and NBD Bank, a Michigan banking corporation (formerly known as NBD Bank,
National Association), as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Trustee, and the Holders of the
Series A Notes and of the terms upon which the Series A Notes are, and are
to be, authenticated and delivered. This Series A Note is one of the
series designated on the face hereof, limited in aggregate principal
amount to $300,000,000.
The Series A Notes are subject to redemption at the option
of the Issuer, in whole or in part, upon not more than 60 nor less than 30
days' notice as provided in the Indenture at any time and from time to
time, at a redemption price equal to 100% of the principal amount of such
Series A Notes being redeemed plus the Applicable Premium, if any, thereon
at the time of redemption, together with accrued interest, if any, thereon
to the redemption date, but interest installments whose Stated Maturity is
on or prior to such redemption date will be payable to the Holder of
record at the close of business on the relevant Record Date referred to on
the face hereof, all as provided in the Indenture. In no event will the
redemption price ever be less than 100% of the principal amount of the
Series A Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable
Premium:
"Applicable Premium" means, with respect to a Series A
Note (or portion thereof) being redeemed at any time, the excess of
(A) the present value at such time of the principal amount of such Series
A Note (or portion thereof) being redeemed plus all interest payments due
on such Series A Note (or portion thereof), which present value shall be
computed using a discount rate equal to the Treasury Rate plus 50 basis
points, over (B) the principal amount of such Series A Note (or portion
thereof) being redeemed at such time. For purposes of this definition,
the present values of the interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two
business days prior to the redemption date or, in the case of defeasance,
prior to the date of deposit (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most
nearly equal to the then remaining average life to stated maturity of the
Series A Notes; provided, however, that if the average life to stated
maturity of the Series A Notes is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to
the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.
In the event of redemption of this Series A Note in part
only, a new Series A Note for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.
If a Change in Control occurs, the Issuer shall notify the
Holder of this Series A Note of such occurrence and such Holder shall have
the right to require the Issuer to make a Required Repurchase of all or
any part of this Series A Note at a Change in Control Purchase Price equal
to 101% of the principal amount of this Series A Note to be so purchased
as more fully provided in the Indenture and subject to the terms and
conditions set forth therein. In the event of a Required Repurchase of
only a portion of this Series A Note, a new Series A Note or Notes for the
unrepurchased portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default with respect to this Series A Note
shall occur and be continuing, the principal of this Series A Note may be
declared due and payable in the manner and with the effect provided in the
Indenture.
In any case where any Interest Payment Date, repurchase
date, Stated Maturity or Maturity of any Series A Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of the Indenture or this Series A Note), payment of interest or
principal (and premium, if any) need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at such
Place of Payment with the same force and effect as if made on the Interest
Payment Date, repurchase date or at the Stated Maturity or Maturity;
provided that no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, redemption date,
repurchase date, Stated Maturity or Maturity, as the case may be, to such
Business Day.
The Indenture contains provisions for defeasance at any
time of (i) the entire indebtedness of this Series A Note or (ii) certain
restrictive covenants and Events of Default with respect to this Series A
Note, in each case upon compliance with certain conditions set forth
therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of all Outstanding
Series A Notes under the Indenture at any time by the Issuer and the
Trustee with the consent of the Holders of not less than a majority in
principal amount of Securities of all series then Outstanding and affected
(voting as one class).
The Indenture permits the Holders of not less than a
majority in principal amount of Securities of all series at the time
Outstanding with respect to which a default shall have occurred and be
continuing (voting as one class) to waive on behalf of the Holders of all
Outstanding Securities of such series any past default by the Issuer,
provided that no such waiver may be made with respect to a default in the
payment of the principal of or the interest on any Security of such series
or the default by the Issuer in respect of certain covenants or provisions
of the Indenture, the modification or amendment of which must be consented
to by the Holder of each Outstanding Security of each series affected.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Series A Note will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default, the Holders of not less than 25%
in principal amount of the Outstanding Securities of each affected series
(voting as one class) shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Securities of each
affected series (voting as one class) a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days;
provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of
(and premium, if any) or any interest on this Series A Note on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of
this Series A Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Series A Note at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein and herein set forth, the transfer of this Series A
Note is registerable in the Security Register, upon surrender of this
Series A Note for registration of transfer at the office or agency of the
Issuer in any place where the principal of and any premium and interest on
this Series A Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Series A Notes
of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Series A Notes are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Series A Notes are exchangeable for a like aggregate
principal amount of Series A Notes and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Issuer shall not be required to (a) issue, exchange or
register the transfer of this Series A Note for a period of 15 days next
preceding the mailing of the notice of redemption of Series A Notes or (b)
exchange or register the transfer of any Series A Note or any portion
thereof selected, called or being called for redemption, except in the
case of any Series A Note to be redeemed in part, the portion thereof not
so to be redeemed.
Prior to due presentment of this Series A Note for
registration of transfer, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this Series A
Note is registered as the owner hereof for all purposes, whether or not
this Series A Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
All terms used in this Series A Note without definition
which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
CERTIFICATE OF TRANSFER
7 3/8% Senior Unsecured Note due 2000, Series A
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO __________________________ PLEASE INSERT SOCIAL SECURITY
NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
---------------------
_____________________
(Please print or typewrite name and address including postal zip code, of
assignee)
the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.
The undersigned certifies that said Note is being resold, pledged or
otherwise transferred as follows: (check one)
___ to the Issuer;
___ to a Person whom the undersigned reasonably believes is a
qualified institutional buyer within the meaning of Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act") purchasing for its own account or for the account of a
qualified institutional buyer to whom notice is given that the
resale, pledge or other transfer is being made in reliance on Rule
144A;
___ in an offshore transaction in accordance with Rule 903 or 904 of
Regulation S under the Securities Act;
___ to an institution that is an "accredited investor" as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
acquiring this Note for investment purposes and not for
distribution; (attach a copy of an Investment Letter For
Institutional Accredited Investors in the form annexed signed by
an authorized officer of the transferee)
___ as otherwise permitted by the non-registration legend appearing on
this Note; or
___ as otherwise agreed by the Issuer, confirmed in writing to the
Trustee, as follows: (describe)
Dated:
FORM OF INVESTMENT LETTER FOR INSTITUTIONAL ACCREDITED INVESTORS
[Transferor, Trustee and Issuer Names and Addresses]
Ladies and Gentlemen:
In connection with our proposed purchase of 7 3/8% Senior Unsecured Notes
due 2000, Series A (the "Notes") issued by CMS Energy Corporation
("Issuer"), we confirm that:
1. We have received a copy of the Offering
Memorandum (the "Offering Memorandum") relating to the Notes and
such other information as we deem necessary in order to make our
investment decision. We acknowledge that we have read and agree to
the matters stated under the caption NOTICE TO INVESTORS in such
Offering Memorandum, and the restrictions on duplication or
circulation of, or disclosure relating to, such Offering
Memorandum.
2. We understand that any subsequent transfer of the
Notes is subject to certain restrictions and conditions set forth
in the Indenture relating to Notes (the "Indenture") and that any
subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth under NOTICE TO INVESTORS in
the Offering Memorandum and the undersigned agrees to be bound by,
and not to resell, pledge or otherwise transfer the Notes except
in compliance with such restrictions and conditions and the
Securities Act of 1933, as amended ("Securities Act").
3. We understand that the offer and sale of the
Notes have not been registered under the Securities Act, and that
the Notes may not be offered or sold except as permitted in the
following sentence. We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that
if we sell any Senior Notes, we will do so only (A) to the Issuer,
(B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior
to such transfer, furnishes to the Trustee (as defined in the
Indenture) a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Notes
(substantially in the form of this letter) and, if such transfer
is in respect of an aggregate principal amount of Notes at the
time of transfer of less than $250,000, an opinion of counsel
acceptable to the Issuer that such transfer is in compliance with
the Securities Act, (D) outside the United States in accordance
with Rule 903 or 904 of Regulation S under the Securities Act, (E)
pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (F) pursuant to an
effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing any of the Notes
from us a notice advising such purchaser that resales of the Notes
are restricted as stated herein.
4. We understand that, on any proposed resale of any
Notes, we will be required to furnish to the Trustee and Issuer
such certifications, legal opinions and other information as the
Trustee and Issuer may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
5. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and have such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the
economic risk of our or its investment.
6. We are acquiring the Notes purchased by us for
our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You, the Issuer and the Trustee are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.
Very truly yours,
By: ____________________
Name:
Title:
[END OF FORM]
SECTION 2.05. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION. The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
_____________________________,
as Trustee
By ____________________________
Authorized Officer
SECTION 2.06. The Series A Notes will be initially issued
as Global Notes registered in the name of Cede & Co. (as nominee for the
Depository Trust Company ("DTC"), New York, New York). The Series A Notes
shall contain restrictions on transfer, substantially as described in the
form set forth in Section 2.03. Each Series A Note, whether in the form
of a Global Note or in certificated form, shall bear a non-registration
legend and a Certificate of Transfer, in each case in substantially the
form set forth in such form.
It is contemplated that beneficial interests in Series A
Notes owned by qualified institutional buyers (as defined in Rule 144A
under the Securities Act)("QIBs") or sold to QIBs in reliance upon Rule
144A under the Securities Act will be represented by one or more global
certificates registered in the name of Cede & Co., as registered owner and
as nominee for DTC; beneficial interests in Series A Notes acquired by
foreign purchasers pursuant to Regulation S under the Securities Act will
be evidenced by one or more separate global certificates (each the
"Regulation S Global Certificate"), also registered in the name of Cede &
Co., as registered owner and as nominee for DTC for the accounts of
Euroclear and Cedel Bank; prior to the 40th day after the date of initial
issuance of the Series A Notes, beneficial interests in the Regulation S
Global Certificate may be held only through Euroclear or Cedel Bank;
Series A Notes acquired by Institutional Accredited Investors (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) ("IAIs") and
other eligible transferees, who are not QIBs and who are not foreign
purchasers pursuant to Regulation S under the Securities Act, will be in
certificated form. The Trustee and the Issuer will have no responsibility
under the Indenture for transfers of beneficial interests in the Series A
Notes. The Trustee shall authenticate and issue new Series A Notes upon a
registration of transfer only upon receipt of a Transfer Certificate in
the form set forth in Section 2.04. The Trustee shall refuse to register
any transfer of a Series A Note in violation of the legend set forth on
such Series A Note and without appropriate completion of the Transfer
Certificate on such Series A Note.
ARTICLE III
DESIGNATION AND TERMS OF THE SERIES B NOTES; FORMS
SECTION 3.01. ESTABLISHMENT OF SERIES. (a) There is
hereby created a series of Securities to be known and designated as the
"7 3/8% Senior Unsecured Notes Due 2000, Series B" and limited in aggregate
principal amount (except as contemplated in Section 2.3(f)(2) of the
Indenture) to $300,000,000 (the "Series B Notes"). The Stated Maturity of
the Series B Notes is November 15, 2000.
(b) The Series B Notes will bear interest from the
Original Issue Date, or from the most recent date to which interest has
been paid or duly provided for, at the rate of 7 3/8% per annum stated
therein until the principal thereof is paid or made available for payment.
Interest will be payable semiannually on each Interest Payment Date and at
Maturity, as provided in the form of the Series B Note in Section 3.03
hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of
the Indenture for the payment of the interest on any Series B Note payable
on any Interest Payment Date (other than at Maturity) shall be the 1st day
(whether or not a Business Day) of the calendar month in which such
Interest Payment Date occurs and, in the case of interest payable at
Maturity, the Record Date shall be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the Series B Notes shall not be secured by a security interest
in any property.
(e) The Series B Notes shall be redeemable at the option
of the Issuer, in whole or in part, at any time and from time to time, at
a redemption price equal to 100% of the principal amount of such Series B
Notes being redeemed plus the Applicable Premium, if any, thereon at the
time of redemption, together with accrued interest, if any, thereon to the
redemption date. In no event will the redemption price ever be less than
100% of the principal amount of the Series B Notes plus accrued interest
to the redemption date. The Series B Notes shall be purchased by the
Issuer at the option of the Holders thereof as provided in Sections 4.01
and 5.06 hereof.
(f) The Series B Notes shall not be convertible.
(g) The Series B Notes will not be subordinated to the
payment of Senior Debt.
(h) The Issuer will not pay any additional amounts on the
Series B Notes held by a Person who is not a U.S. Person in respect of any
tax, assessment or government charge withheld or deducted.
(i) The events specified in Events of Default with respect
to the Series B Notes shall include the events specified in Article Six of
this Fifth Supplemental Indenture. In addition to the covenants set forth
in Article Three of the Original Indenture, the Holders of the Series B
Notes shall have the benefit of the covenants of the Issuer set forth in
Article Five hereto.
SECTION 3.02. FORMS GENERALLY. The Series B Notes and
Trustee's certificates of authentication shall be in substantially the
form set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Series
B Notes, as evidenced by their execution thereof.
The definitive Series B Notes shall be printed,
lithographed or engraved on steel engraved borders or may be produced in
any other manner, all as determined by the officers executing such Series
B Notes, as evidenced by their execution thereof.
SECTION 3.03. FORM OF FACE OF SERIES B NOTE.
CMS ENERGY CORPORATION
7-3/8% SENIOR UNSECURED NOTE DUE 2000, SERIES B
No. ________ $__________
CMS Energy Corporation, a corporation duly organized and
existing under the laws of the State of Michigan (herein called the
"Issuer", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________________________, or registered assigns, the principal
sum of ____________________ Dollars on November 15, 2000 ("Maturity") and
to pay interest thereon from November 7, 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 15 and November 15 in each
year, commencing May 15, 1998 and at Maturity at the rate of 7-3/8% per
annum, until the principal hereof is paid or made available for payment.
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. The
interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Series B Note (or one or more Predecessor Series
B Notes) is registered at the close of business on the Record Date for
such interest, which shall be the 1st day of the calendar month in which
such Interest Payment Date occurs (whether or not a Business Day) except
that the Record Date for interest payable at Maturity shall be the date of
Maturity. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Record Date and
may either be paid to the Person in whose name this Series B Note (or one
or more Predecessor Series B Notes) is registered at the close of business
on a subsequent Record Date (which shall be not less than five Business
Days prior to the date of payment of such defaulted interest) for the
payment of such defaulted interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Series B Notes not less than 15 days
preceding such subsequent Record Date.
Payment of the principal of (and premium, if any) and
interest, if any, on this Series B Note will be made at the office or
agency of the Issuer maintained for that purpose in New York, New York
(the "Place of Payment"), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Issuer
payment of interest (other than interest payable at Maturity) may be made
by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an
account designated by such Person not later than ten days prior to the
date of such payment; and provided, further, that if this Series B Note is
a Global Note within the meaning of the Indenture, then each payment
hereunder shall be made by wire transfer to an account or accounts
designated by the Person entitled thereto not later than ten days prior to
the date of such payment.
Reference is hereby made to the further provisions of this
Series B Note set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this Series B Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By ____________________________
Its:
By ____________________________
Its:
Attest:
SECTION 3.04. FORM OF REVERSE OF SERIES B NOTE.
This 7-3/8% Senior Unsecured Note Due 2000, Series B is
one of a duly authorized issue of securities of the Issuer (herein called
the "Series B Notes"), issued and to be issued under an Indenture, dated
as of September 15, 1992, as supplemented by certain supplemental
indentures, including the Fifth Supplemental Indenture, dated as of
November 4, 1997 (herein collectively referred to as the "Indenture"),
between the Issuer and NBD Bank, a Michigan banking corporation (formerly
known as NBD Bank, National Association), as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Issuer, the Trustee, and
the Holders of the Series B Notes and of the terms upon which the Series B
Notes are, and are to be, authenticated and delivered. This Series B Note
is one of the series designated on the face hereof, limited in aggregate
principal amount to $300,000,000.
The Series B Notes are subject to redemption at the option
of the Issuer, in whole or in part, upon not more than 60 nor less than 30
days' notice as provided in the Indenture at any time and from time to
time, at a redemption price equal to 100% of the principal amount of such
Series B Notes being redeemed plus the Applicable Premium, if any, thereon
at the time of redemption, together with accrued interest, if any, thereon
to the redemption date, but interest installments whose Stated Maturity is
on or prior to such redemption date will be payable to the Holder of
record at the close of business on the relevant Record Date referred to on
the face hereof, all as provided in the Indenture. In no event will the
redemption price ever be less than 100% of the principal amount of the
Series B Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable
Premium:
"Applicable Premium" means, with respect to a Series B
Note (or portion thereof) being redeemed at any time, the excess of
(A) the present value at such time of the principal amount of such Series
B Note (or portion thereof) being redeemed plus all interest payments due
on such Series B Note (or portion thereof), which present value shall be
computed using a discount rate equal to the Treasury Rate plus 50 basis
points, over (B) the principal amount of such Series B Note (or portion
thereof) being redeemed at such time. For purposes of this definition,
the present values of the interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) which has become publicly available at least two
business days prior to the redemption date or, in the case of defeasance,
prior to the date of deposit (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most
nearly equal to the then remaining average life to stated maturity of the
Series B Notes; provided, however, that if the average life to stated
maturity of the Series B Notes is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given,
the Treasury Rate shall be obtained by linear interpolation (calculated to
the nearest one-twelfth of a year) from the weekly average yields of
United States Treasury securities for which such yields are given.
In the event of redemption of this Series B Note in part
only, a new Series B Note for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.
If a Change in Control occurs, the Issuer shall notify the
Holder of this Series B Note of such occurrence and such Holder shall have
the right to require the Issuer to make a Required Repurchase of all or
any part of this Series B Note at a Change in Control Purchase Price equal
to 101% of the principal amount of this Series B Note to be so purchased
as more fully provided in the Indenture and subject to the terms and
conditions set forth therein. In the event of a Required Repurchase of
only a portion of this Series B Note, a new Series B Note or Notes for the
unrepurchased portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default with respect to this Series B Note
shall occur and be continuing, the principal of this Series B Note may be
declared due and payable in the manner and with the effect provided in the
Indenture.
In any case where any Interest Payment Date, repurchase
date, Stated Maturity or Maturity of any Series B Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of the Indenture or this Series B Note), payment of interest or
principal (and premium, if any) need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at such
Place of Payment with the same force and effect as if made on the Interest
Payment Date, repurchase date or at the Stated Maturity or Maturity;
provided that no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date, 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 Series B Note or (ii) certain
restrictive covenants and Events of Default with respect to this Series B
Note, in each case upon compliance with certain conditions set forth
therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of all Outstanding
Series B Notes under the Indenture at any time by the Issuer and the
Trustee with the consent of the Holders of not less than a majority in
principal amount of Securities of all series then Outstanding and affected
(voting as one class).
The Indenture permits the Holders of not less than a
majority in principal amount of Securities of all series at the time
Outstanding with respect to which a default shall have occurred and be
continuing (voting as one class) to waive on behalf of the Holders of all
Outstanding Securities of such series any past default by the Issuer,
provided that no such waiver may be made with respect to a default in the
payment of the principal of or the interest on any Security of such series
or the default by the Issuer in respect of certain covenants or provisions
of the Indenture, the modification or amendment of which must be consented
to by the Holder of each Outstanding Security of each series affected.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Series B Note will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default, the Holders of not less than 25%
in principal amount of the Outstanding Securities of each affected series
(voting as one class) shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Securities of each
affected series (voting as one class) a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days;
provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of
(and premium, if any) or any interest on this Series B Note on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of
this Series B Note or of the Indenture shall alter or impair the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Series B Note at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein and herein set forth, the transfer of this Series B
Note is registerable in the Security Register, upon surrender of this
Series B Note for registration of transfer at the office or agency of the
Issuer in any place where the principal of and any premium and interest on
this Series B Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Series B Notes
of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Series B Notes are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Series B Notes are exchangeable for a like aggregate
principal amount of Series B Notes and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Issuer shall not be required to (a) issue, exchange or
register the transfer of this Series B Note for a period of 15 days next
preceding the mailing of the notice of redemption of Series B Notes or (b)
exchange or register the transfer of any Series B Note or any portion
thereof selected, called or being called for redemption, except in the
case of any Series B Note to be redeemed in part, the portion thereof not
so to be redeemed.
Prior to due presentment of this Series B Note for
registration of transfer, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this Series B
Note is registered as the owner hereof for all purposes, whether or not
this Series B Note be overdue, and neither the Issuer, the Trustee nor any
such agent shall be affected by notice to the contrary.
All terms used in this Series B Note without definition
which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELL(S), ASSIGN(S) AND
TRANSFER(S) UNTO __________________________ PLEASE INSERT SOCIAL SECURITY
NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________
________________
(Please print or typewrite name and address including postal zip code, of
assignee)
the within Note and all rights thereunder, and hereby
irrevocably constitutes and appoints
to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.
Dated:
[END OF FORM]
SECTION 3.05. FORM OF TRUSTEE'S CERTIFICATE OF
AUTHENTICATION. The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
____________________________,
as Trustee
By _________________________
Authorized Officer
ARTICLE IV
CHANGE IN CONTROL
SECTION 4.01. CHANGE IN CONTROL. Upon the occurrence of
a Change in Control (the effective date of such Change in Control being
the "Change in Control Date"), each Holder of a 2000 Note shall have the
right to require that the Issuer repurchase (a "Required Repurchase") all
or any part of such Holder's 2000 Note at a repurchase price payable in
cash equal to 101% of the principal amount of such 2000 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 2000 Notes at
the Change in Control Purchase Price;
(ii) the Change in Control Purchase Price;
(iii) the date on which any Required Repurchase
shall be made (which shall be no earlier than 60 days nor
later than 90 days from the date such notice is mailed)
(the "Purchase Date");
(iv) the name and address of the Paying Agent;
and
(v) the procedures that Holders must follow to
cause the 2000 Notes to be repurchased, which shall be
consistent with this Section and the Indenture.
(b) Holders electing to have a 2000 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 2000 Notes
to be repurchased, which portion must be $1,000 or an integral
multiple thereof; (ii) that such 2000 Notes are to be repurchased
by the Issuer pursuant to the change in control provisions of the
Indenture; and (iii) unless the 2000 Notes are represented by one
or more Global Notes, the certificate numbers of the 2000 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 2000 Notes as
to which the withdrawal notice relates and the principal amount of
such 2000 Notes, if any, which remains subject to a Change in
Control Purchase Notice.
If a 2000 Note is represented by a Global Note (as
described in Article VII below), the Depositary or its nominee
will be the Holder of such 2000 Note and therefore will be the
only entity that can elect a Required Repurchase of such 2000
Note. To obtain repayment pursuant to this Section 4.01 with
respect to such 2000 Note, the beneficial owner of such 2000 Note
must provide to the broker or other entity through which it holds
the beneficial interest in such 2000 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 4.01. Such broker or other entity will
provide to the Paying Agent (i) the Change in Control Purchase
Notice received from such beneficial owner and (ii) a certificate
satisfactory to the Paying Agent from such broker or other entity
stating that it represents such beneficial owner. Such broker or
other entity will be responsible for disbursing any payments it
receives pursuant to this Section 4.01 to such beneficial owner.
(c) Payment of the Change in Control Purchase Price
for a 2000 Note for which a Change in Control Purchase Notice has
been delivered and not withdrawn is conditioned (except in the
case of a 2000 Note represented by one or more Global Notes) upon
delivery of such 2000 Note (together with necessary endorsements)
to the Paying Agent at its office in Detroit, Michigan, or any
other office of the Paying Agent maintained for such purpose, at
any time (whether prior to, on or after the Purchase Date) after
the delivery of such Change in Control Purchase Notice. Payment
of the Change in Control Purchase Price for such 2000 Note will be
made promptly following the later of the Purchase Date or the time
of delivery of such 2000 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 2000 Note on the
Business Day following the Purchase Date, then, on and after such
date, interest will cease accruing, and all other rights of the
Holder shall terminate (other than the right to receive the Change
in Control Purchase Price upon delivery of the 2000 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 2000 Notes at the option of Holders upon
a Change in Control.
(e) No 2000 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 2000 Notes).
ARTICLE V
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2000 NOTES
SECTION 5.01. EXISTENCE. So long as any of the 2000
Notes are Outstanding, subject to Article Nine of the Original Indenture,
the Issuer will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence.
SECTION 5.02. LIMITATION ON CERTAIN LIENS. (a) So long
as any of the 2000 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
2000 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;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations which are not
overdue or which have been fully bonded and are being contested in good
faith;
(iv) purchase money Liens upon or in property acquired and held
by the Issuer in the ordinary course of business to secure the purchase
price of such property or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such property to be subject to
such Liens, or Liens existing on any such property at the time of
acquisition, or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that no such Lien
shall extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall extend to or
cover property not theretofore subject to the Lien being extended, renewed
or replaced, and provided, further, that the aggregate principal amount of
the Indebtedness at any one time outstanding secured by Liens permitted by
this clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of
this Section securing Indebtedness of the Issuer; provided that on the
date such Liens are created, and after giving effect to such Indebtedness,
the aggregate principal amount at maturity of all of the secured
Indebtedness of the Issuer at such date shall not exceed 5% of
Consolidated Net Tangible Assets at such date.
SECTION 5.03. LIMITATION ON CONSOLIDATION, MERGER, SALE
OR CONVEYANCE. So long as any of the 2000 Notes are Outstanding and until
the 2000 Notes are rated BBB- or above (or an equivalent rating) by
Standard & Poor's and one Other Rating Agency (or, if Standard & Poor's
shall change its rating system, an equivalent of such rating then employed
by such organization), at which time the Issuer will be permanently
released from the provisions of this Section 5.03, and subject also to
Article Nine of the Indenture, the Issuer shall not consolidate with or
merge into any other Person or sell, lease or convey the property of the
Issuer in the entirety or substantially as an entirety, unless (i)
immediately after giving effect to such transaction the Consolidated Net
Worth of the surviving entity is at least equal to the Consolidated Net
Worth of the Issuer immediately prior to the transaction, and (ii) after
giving effect to such transaction, the surviving entity would be entitled
to incur at least one dollar of additional Indebtedness (other than
revolving Indebtedness to banks) without violation of the limitations in
Section 5.04 hereof.
SECTION 5.04. LIMITATION ON CONSOLIDATED INDEBTEDNESS.
(a) So long as any of the 2000 Notes are Outstanding and until the 2000
Notes are rated BBB- or above (or an equivalent rating) by Standard &
Poor's and one Other Rating Agency (or, if Standard & Poor's shall change
its rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from
the provisions of this Section 5.04, the Issuer shall not, and shall not
permit any Consolidated Subsidiary of the Issuer to, issue, create,
assume, guarantee, incur or otherwise become liable for (collectively,
"issue"), directly or indirectly, any Indebtedness unless the Consolidated
Coverage Ratio of the Issuer and its Consolidated Subsidiaries for the
four consecutive fiscal quarters immediately preceding the issuance of
such Indebtedness (as shown by a pro forma consolidated income statement
of the Issuer and its Consolidated Subsidiaries for the four most recent
fiscal quarters ending at least 30 days prior to the issuance of such
Indebtedness after giving effect to (i) the issuance of such Indebtedness
and (if applicable) the application of the net proceeds thereof to
refinance other Indebtedness as if such Indebtedness was issued at the
beginning of the period, (ii) the issuance and retirement of any other
Indebtedness since the first day of the period as if such Indebtedness was
issued or retired at the beginning of the period and (iii) the acquisition
of any company or business acquired by the Issuer or any Subsidiary since
the first day 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
Fifth Supplemental Indenture, as set forth on Schedule 5.04(b)(2)
attached hereto and made a part hereof, and Indebtedness issued in
exchange for, or the proceeds of which are used to refund or
refinance, any Indebtedness permitted by this clause (2);
provided, however, that (i) the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of the
Indebtedness so issued shall not exceed the principal amount (or
accreted value in the case of Indebtedness issued at a discount)
of, premium, if any, and accrued but unpaid interest on, the
Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated
maturity of the Indebtedness so exchanged, refunded or refinanced,
(B) shall have an Average Life equal to or greater than the
remaining Average Life of the Indebtedness so exchanged, refunded
or refinanced and (C) if the Indebtedness to be exchanged,
refunded or refinanced is subordinated to the 2000 Notes, the
Indebtedness is subordinated to the 2000 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 2000
Notes, the Indebtedness so issued is subordinated to the 2000
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 5.05. LIMITATION ON RESTRICTED PAYMENTS. (a) So
long as any of the 2000 Notes are Outstanding and until the 2000 Notes are
rated BBB- or above (or an equivalent rating) by Standard & Poor's and one
Other Rating Agency (or, if Standard & Poor's shall change its rating
system, an equivalent of such rating then employed by such organization),
at which time the Issuer will be permanently released from the provisions
of this Section 5.05, the Issuer shall not, and shall not permit any
Restricted Subsidiary of the Issuer, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on the Capital Stock
of the Issuer to the direct or indirect holders of its Capital Stock
(except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such
Non-Convertible Capital Stock and except dividends or distributions
payable to the Issuer or a Subsidiary), (ii) purchase, redeem or otherwise
acquire or retire for value any Capital Stock of the Issuer, or (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity or scheduled repayment thereof, any
Subordinated Indebtedness (any such dividend, distribution, purchase,
redemption, repurchase, defeasing, other acquisition or retirement being
hereinafter referred to as a "Restricted Payment") if at the time the
Issuer or such Subsidiary makes such Restricted Payment:
(1) an Event of Default, or an event that with
the lapse of time or the giving of notice or both would constitute
an Event of Default, shall have occurred and be continuing (or
would result therefrom); or
(2) the aggregate amount of such Restricted
Payment and all other Restricted Payments made since May 6, 1997
would exceed the sum of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued
during the period (treated as one accounting period) from
May 6, 1997 to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such
Restricted Payment (or, in case such sum shall be a
deficit, minus 100% of the deficit); and
(C) the aggregate Net Cash Proceeds received by
the Issuer from the issue or sale of or contribution with
respect to its Capital Stock subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not in
the form of cash, the amount shall be the fair value of such Restricted
Payment as determined in good faith by the Board of Directors, provided
that if the value of the non-cash portion of such Restricted Payment as
determined by the Board of Directors is in excess of $25 million, such
value shall be based on the opinion from a nationally recognized firm
experienced in the appraisal of similar types of transactions.
(b) The provisions of Section 5.05(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock
of the Issuer made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock of
the Issuer (other than Redeemable Stock or Exchangeable
Stock); provided, however, that such purchase or
redemption shall be excluded from the calculation of the
amount of Restricted Payments;
(ii) dividends or other distributions paid in
respect of any class of the Issuer's Capital Stock issued
in respect of the acquisition of any business or assets by
the Issuer or a Restricted Subsidiary if the dividends or
other distributions with respect to such Capital Stock are
payable solely from the net earnings of such business or
assets;
(iii) dividends paid within 60 days after the
date of declaration thereof if at such date of declaration
such dividend would have complied with this Section;
provided, however, that at the time of payment of such
dividend, no Event of Default shall have occurred and be
continuing (or result therefrom), and provided further,
however, that such dividends shall be included (without
duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing
Agreement.
SECTION 5.06. LIMITATION ON ASSET SALES. So long as
any of the 2000 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 2000
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 2000
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
2000 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 2000 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 2000 Notes from the Holders with Excess Proceeds, and
for the acceptance of such offer by the Holders, shall be the same as
those set forth in Section 4.01 herein with respect to a Change in
Control.
ARTICLE VI
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2000 Notes
SECTION 6.01. DEFINITION. All of the events specified in
clauses (a) through (h) of Section 5.1 of the Original Indenture shall be
"Events of Default" with respect to each of the 2000 Notes.
SECTION 6.02. AMENDMENTS TO SECTION 5.1 OF THE ORIGINAL
INDENTURE.
(a) Solely for the purpose of determining Events of
Default with respect to the 2000 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.
(b) The following event shall be an "Event of Default"
with respect to the 2000 Notes: default in the payment of any Liquidated
Damages pursuant to the Registration Rights Agreement with respect to any
such 2000 Note, when due and continuance of such default for a period of
30 days.
ARTICLE VII
GLOBAL NOTES
Each series of 2000 Notes will be issued initially in the
form of Global Notes. "Global Note" means a registered 2000 Note
evidencing one or more 2000 Notes issued to a depositary (the
"Depositary") or its nominee, in accordance with this Article and bearing
the legend prescribed in this Article. One or more Global Notes will
represent all 2000 Notes of a series, except as provided in Section 2.06.
The Issuer shall execute and the Trustee shall, in accordance with this
Article and the Issuer Order with respect to each series of 2000 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 2000 Notes
of such series to be represented by such Global Note or Notes, (ii) shall
be registered in the name of the Depositary for such Global Note or Notes
or the nominee of such Depositary, (iii) shall be delivered by the Trustee
to such Depositary or pursuant to such Depositary's instructions and (iv)
shall bear a legend substantially to the following effect: "Unless the
Global 2000 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 2000 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 2000 Notes in definitive
form, a Global Note representing one or more 2000 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 2000 Notes or a nominee of such
successor Depositary.
If at any time the Depositary for the 2000 Notes is
unwilling or unable to continue as Depositary for the 2000 Notes of such
series, the Issuer shall appoint a successor Depositary with respect to
the 2000 Notes of such series. If (A) a successor Depositary for such
2000 Notes is not appointed by the Issuer by the earlier of (i) 90 days
from the date the Issuer receives notice to the effect that the Depositary
is unwilling or unable to act, or the Issuer determines that the
Depositary is unable to act or (ii) the effectiveness of the Depositary's
resignation or failure to fulfill its duties as Depositary, or (B) a
Default or Event of Default has occurred with respect to any 2000 Notes,
the Issuer will execute, and the Trustee, upon receipt of a Issuer Order
for the authentication and delivery of definitive 2000 Notes of such
series, will authenticate and deliver 2000 Notes of such series in
definitive form in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such 2000 Notes in
exchange for such Global Note or Notes.
The Issuer may at any time and in its sole discretion
determine that 2000 Notes of either series issued in the form of one or
more Global Notes shall no longer be represented by such Global Note or
Notes. In such event the Issuer will execute, and the Trustee, upon
receipt of a Issuer Order for the authentication and delivery of
definitive 2000 Notes of such series, will authenticate and deliver 2000
Notes of such series in definitive form in an aggregate principal amount
equal to the principal amount of the Global Note or Notes representing
such 2000 Notes in exchange for such Global Note or Notes.
The Depositary for 2000 Notes of either series may
surrender a Global Note or Notes for 2000 Notes of such series in exchange
in whole or in part for 2000 Notes of such series in definitive form on
such terms as are acceptable to the Issuer and such Depositary.
Thereupon, the Issuer shall execute, and the Trustee shall authenticate
and deliver, without service charge:
(i) to each Person specified by such Depositary a new
2000 Note or Notes of such series, of any authorized
denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such
Person's beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Note and the
aggregate principal amount of 2000 Notes of such series in
definitive form delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer
will execute and the Trustee will authenticate and deliver 2000 Notes in
definitive registered form in authorized denominations.
Upon the exchange of a Global Note for 2000 Notes in
definitive form, such Global Note shall be cancelled by the Trustee. 2000
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 2000 Notes to the persons in whose names such 2000 Notes are so
registered.
ARTICLE VIII
DEFEASANCE
All of the provisions of Article Ten of the Original
Indenture shall be applicable to each series of 2000 Notes. Upon
satisfaction by the Issuer of the requirements of Section 10.1(c) of the
Original Indenture, in connection with any covenant defeasance (as
provided in Section 10.1(c) of the Indenture), the Issuer shall be
released from its obligations under Article Nine of the Original Indenture
and under Articles IV and V of this Fifth Supplemental Indenture with
respect to the 2000 Notes.
ARTICLE IX
SUPPLEMENTAL INDENTURES
This Fifth Supplemental Indenture is a supplement to the
Original Indenture. As supplemented by this Fifth Supplemental Indenture,
the Original Indenture is in all respects ratified, approved and
confirmed, and the Original Indenture and this Fifth Supplemental
Indenture shall together constitute one and the same instrument.
TESTIMONIUM
This Fifth 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
Fifth Supplemental Indenture to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of the day and
year first written above.
CMS ENERGY CORPORATION
By: /s/ A.M. Xxxxxx
______________________________
Xxxx X. Xxxxxx
Senior Vice President,
Chief Financial Officer and
Treasurer
Attest: /s/ Xxxxxxx X. Xxx Xxxxxx
(Corporate Seal
NBD BANK
as Trustee
By: /s/ Xxxxxx X. Xxxx
____________________________
Xxxxxx X. Xxxx
Vice President
Attest: /s/ Xxxxxxx X. XxXxxxxx
_______________________
Xxxxxxx X. XxXxxxxx
Senior Vice President and Legal Counsel
(Corporate Seal)
SCHEDULE 5.04(B)(2)
Indebtedness of CMS Energy Corporation outstanding on October 31, 1997
[CMS Energy to provide]
