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EXHIBIT 4(b)
SIXTH SUPPLEMENTAL INDENTURE
DATED AS OF _________ __, 1998
____________________
This Sixth Supplemental Indenture, dated as of the ____ day of
_________, 1998 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 "Indenture Trustee") and having its
principal Corporate Trust Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000.
WITNESSETH:
WHEREAS, the Issuer and the Indenture 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 Indenture
Trustee without
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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 Indenture Trustee to join
with it in the execution and delivery of this Sixth 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 "Extendible Tenor Rate-Adjusted Securities" (the
"X-TRAS"), providing for the issuance of the X-TRAS and amending and adding
certain provisions thereof for the benefit of the Holders of the X-TRAS; and
WHEREAS, the Issuer and the Indenture Trustee desire to enter
into this Sixth 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 Indenture Trustee with a
copy of the resolutions of its Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of this Sixth Supplemental
Indenture; and
WHEREAS, all things necessary to make this Sixth Supplemental
Indenture a valid agreement of the Issuer and the Indenture Trustee and a valid
supplement to the Original Indenture have been done,
NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
X-TRAS to be issued hereunder by holders thereof, the Issuer and the Indenture
Trustee mutually
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covenant and agree, for the equal and proportionate benefit of the respective
holders from time to time of the X-TRAS, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture
together with this Sixth 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 X- TRAS,
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 X-TRAS (or portion
thereof) being redeemed at any time, the excess of (A) the present value at
such time of the principal amount of such X-TRAS (or portion thereof) being
redeemed plus all interest payments due on such X-TRAS (or portion thereof) to
the Initial Maturity Date, which present value shall be computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over
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(B) the principal amount of such X-TRAS (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.
"Calculation Agent" means Xxxxxx Xxxxxxx Capital Services, Inc.,
or such other calculation agent as may be provided from time to time under the
ISDA Master Agreement. All determinations made by the Calculation Agent will
be at the sole discretion of the Calculation Agent and will, in the absence of
manifest error, be conclusive for all purposes and binding on the Issuer.
"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
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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 are not
considered Capital Stock for purposes of this definition.
"Certificate" or "Certificates" shall have the meaning ascribed
thereto under the Pass Through Trust Agreement.
"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
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corporation consolidates with or merges into the Issuer, in either event
pursuant to a transaction in which the outstanding Voting Stock of the Issuer
is changed into or exchanged for cash, securities, or other property, other
than any such transaction in which (A) the outstanding Voting Stock of the
Issuer is changed into or exchanged for Voting Stock of the surviving
corporation and (B) the holders of the Voting Stock of the Issuer immediately
prior to such transaction retain, directly or indirectly, substantially
proportionate ownership of the Voting Stock of the surviving corporation
immediately after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission and Storage" means CMS Gas Transmission and
Storage Company, a Michigan corporation and wholly-owned subsidiary of
Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan corporation
and wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"Consolidated Assets" means, at any date of determination, the
aggregate assets of the Issuer and its Consolidated Subsidiaries determined
on a consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Capital" means, at any date of determination, the
sum of (a) Consolidated Indebtedness, (b) consolidated equity of the common
stockholders of the Issuer and the Consolidated Subsidiaries, (c) consolidated
equity of the preference stockholders of
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the Issuer and the Consolidated Subsidiaries and (d) consolidated equity of the
preferred stockholders of the Issuer and the Consolidated Subsidiaries, in each
case determined at such date in accordance with generally accepted accounting
principles.
"Consolidated Coverage Ratio" with respect to any period means
the ratio of (i) the aggregate amount of Operating Cash Flow for such period to
(ii) the aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Current Liabilities" means, for any period, the
aggregate amount of liabilities of the Issuer and its Consolidated Subsidiaries
which may properly be classified as current liabilities (including taxes
accrued as estimated), after (i) eliminating all inter- company items between
the Issuer and any Consolidated Subsidiary and (ii) deducting all current
maturities of long-term Indebtedness, all as determined in accordance with
generally accepted accounting principles.
"Consolidated Indebtedness" means, at any date of determination,
the aggregate Indebtedness of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles; 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
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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
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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
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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
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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 Sixth 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.
"Early Redemption Option" shall have the meaning set forth in
Section 7.01(b).
"Event of Default" with respect to the X-TRAS has the meaning
specified in Article V of this Sixth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchangeable Stock" means any Capital Stock of a corporation
that is exchangeable or convertible into another security (other than Capital
Stock of such corporation that is neither Exchangeable Stock or Redeemable
Stock).
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"Exercise Date" means the 90th day prior the Settlement Date.
"Extended Stated Maturity" shall have the meaning set forth in
Section 2.01.
"Extension Option Buyer" means Xxxxxx Xxxxxxx Capital Services,
Inc.
"FD Redemption Option" shall have the meaning set forth in
Section 7.01(c).
"Final Distribution" shall have the meaning set forth in the
Pass Through Trust Agreement.
"Final Distribution Date" shall have the meaning set forth in the
Pass Through Trust Agreement.
"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 Issuer or Consumers in exchange for
subordinated debt issued by the Issuer 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 Issuer 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.
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"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 Issuer or Consumers) at all times by the Issuer 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 Issuer or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"ISDA Amount" shall mean such amount as may be due and payable by
the Pass Through Trustee under the ISDA Master Agreement under the circumstances
contemplated thereby as notified to the Issuer, the Indenture Trustee and the
Pass Through Trustee by the Calculation Agent or the Extension Option Buyer.
"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
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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.
"Initial Stated Maturity" means, with respect to the X-TRAS,
___________ __, 200_.
"Interest Payment Date" means [_______ __,] 1998 and each
[__________ __] and [___________] in each year thereafter.
"ISDA Master Agreement" means the ISDA Master Agreement, Schedule
and Confirmation dated as of ___________ [ ], 1997 entered into by the Pass
Through Trust and the Extension Option Buyer, as amended from time to time.
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"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
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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.
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"Operating Cash Flow" means, for any period, with respect to the
Issuer and its Consolidated Subsidiaries, the aggregate amount of Consolidated
Net Income after adding thereto Consolidated Interest Expense (adjusted to
include costs recognized on early retirement of debt), income taxes,
depreciation expense, Amortization Expense and any noncash amortization of debt
issuance costs, any nonrecurring, noncash charges to earnings and any negative
accretion recognition.
"Other Rating Agency" shall mean any one of Duff & Xxxxxx Credit
Rating Co., Fitch Investors Service, L.P. or Xxxxx'x Investors Service, Inc.,
and any successor to any of these organizations which is a nationally
recognized statistical rating organization.
"Pass Through Trust" means the CMS Energy X-TRASsm Pass Through
Trust I created under the Pass Through Trust Agreement, as holder of the X-TRAS
from the Original Issue Date to the Initial Stated Maturity.
"Pass Through Trust Agreement" means the Amended and Restated
Pass Through Trust Agreement dated as of ________ __, 1998 between the Issuer
and the Pass Through Trustee.
"Pass Through Trustee" means the Pass Through Trustee appointed
from time to time under the Pass Through Trust Agreement (which initially shall
be Wilmington Trust Company).
"Paying Agent" means any person authorized by the Issuer to pay
the principal of (and premium, if any) or interest on any of the X-TRAS on
behalf of the Issuer. Initially, the Paying Agent is the Indenture Trustee.
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"Predecessor X-TRAS" of any particular X-TRAS means all previous
X-TRAS evidencing all or a portion of the same debt as that evidenced by such
particular X-TRAS; and, for the purposes of the definition, any X-TRAS
authenticated and delivered under Section 2.9 of the Indenture in exchange for
or in lieu of a mutilated, destroyed, lost or stolen X-TRAS shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen X-TRAS.
"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 are not considered
Preferred Stock for purposes of this definition.
"Premium Termination Date" means the 90th day prior to the
Initial Stated Maturity.
"Put Option" shall have the meaning set forth in Section 7.02.
"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 X-TRAS 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 X-TRAS.
"Reference Treasury Note Yield" means the yield on the 7-year
U.S. Treasury Note used to determine the interest rate applicable to the
X-TRAS from the date of original issuance of the X-TRAS to the Initial Stated
Maturity.
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"Remarketing Agent" means Xxxxxx Xxxxxxx & Co. Incorporated or
such other investment banking institution as shall be selected in accordance
with Section 8.02 in connection with a remarketing of the X-TRAS.
"Remarketing Deadline" means the fifteenth day prior to the
Initial Stated Maturity or such earlier date as may be mutually agreed by the
Issuer, the Indenture Trustee, the Pass Through Trustee and the Extension
Option Buyer.
"Remarketing Procedure" shall have the meaning set forth in
Section 8.02.
"Required Remarketing Proceeds" shall have the meaning set forth
in Section 8.01.
"Restricted Subsidiary" means any Subsidiary (other than
Consumers and its subsidiaries) of the Issuer which, as of the date of the
Issuer's most recent quarterly consolidated balance sheet, constituted at least
10% of the total Consolidated Assets of the Issuer and its Consolidated
Subsidiaries and any other Subsidiary which from time to time is designated a
Restricted Subsidiary by the Board of Directors provided that no Subsidiary may
be designated a Restricted Subsidiary if, immediately after giving effect
thereto, an Event of Default or event that, with the lapse of time or giving of
notice or both, would constitute an Event of Default would exist or the Issuer
and its Restricted Subsidiaries could not incur at least one dollar of
additional Indebtedness under Section 4.03, and (i) any such Subsidiary so
designated as a Restricted Subsidiary must be organized under the laws of the
United States or any State thereof, (ii) more than 80% of the Voting Stock of
such Subsidiary must be owned of record and
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beneficially by the Issuer or a Restricted Subsidiary and (iii) such Restricted
Subsidiary must be a Consolidated Subsidiary.
"Settlement Date" means the settlement date under the ISDA
Master Agreement (which is the Initial Stated Maturity).
"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 X-TRAS 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 Indenture
Trustee.
"Subordinated Indebtedness" means any Indebtedness of the Issuer
(whether outstanding on the date of this Sixth Supplemental Indenture or
thereafter incurred) which is contractually subordinated or junior in right of
payment to the X-TRAS.
"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
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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) (the "Statistical Release") 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
X-TRAS; provided, however, that if the average life to stated maturity of the
X-TRAS is not equal to the constant maturity of a United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given.
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"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).
"Yield" means the yield-to-maturity on the then current 7-year
U.S. Treasury Note as determined by linear interpolation of the 5- year and
10-year then current offered-side yields for the on-the-run most recently
issued U.S. Treasury Notes, as published on Telerate page 500 as of
approximately [12:30 p.m.], New York City time, on the Exercise Date. If
Telerate 500 is unavailable, "Yield" shall be the arithmetic mean of
offered-side yields for the then current 7-year U.S. Treasury Note as
determined by linear interpolation of the 5-year and 10-year then current
offered-side yields for the on-the-run most recently issued U.S. Treasury
Notes, without regards to highest and lowest yields, quoted as of approximately
[12:30 p.m.], New York City time, on the Exercise Date by five primary dealers
in U.S. Treasury Notes selected by the Calculation Agent.
Certain terms, used principally in Articles Three and Four of
this Sixth Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE X-TRAS; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby
created a series of Securities to be known and designated as the "Extendible
Tenor Rate-Adjusted Securities" and limited in aggregate principal amount
(except as contemplated in Section 2.3(f)(2) of the Indenture) to
[$150,000,000]. If the Yield on the Exercise Date is equal to or greater than
the
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Reference Treasury Note Yield,the X-TRAS will mature on _____________ __,
200_ (the "Initial Stated Maturity"). If the Yield on the Exercise
Date is less than the Reference Treasury Note Yield, the maturity of the X-TRAS
will be extended until ______________ __, 201_ (the "Extended Stated
Maturity").
(b) During the period commencing on the Original Issue Date
and ending on the Initial Stated Maturity, the X-TRAS will bear interest from
the Original Issue Date, or from the most recent date to which interest has
been paid or duly provided for, at the rate of ____% per annum stated therein
until the principal thereof is paid or made available for payment. In the
event the X-TRAS are extended until the Extended Stated Maturity, the X-TRAS
will bear interest from the Initial Stated Maturity or from the most recent
date to which interest has been paid or duly provided for, at such rate per
annum as may be established pursuant to Article X, 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
X-TRAS 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 X-TRAS payable on any Interest
Payment Date (other than at Maturity) shall be the first 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 X-TRAS shall not be secured by a security interest in any
property.
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(e) The X-TRAS shall be redeemable at the option of the Issuer
as provided in Section 8.01(b) and (c) hereof. The holders of X-TRAS shall not
be entitled to any sinking fund payments. The X-TRAS shall be purchased by the
Issuer at the option of the Holders thereof as provided in Sections 3.01, 4.05
and 8.02 hereof.
(f) The X-TRAS shall not be convertible.
(g) The X-TRAS will not be subordinated to the payment of
Senior Debt.
(h) The Issuer will not pay any additional amounts on the
X-TRAS 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 X-TRAS shall include the events specified in Article Five of this Sixth
Supplemental Indenture. In addition to the covenants set forth in Article
Three of the Original Indenture, the Holders of the X- TRAS shall have the
benefit of the covenants of the Issuer set forth in Article Four hereto.
(j) In the event the X-TRAs are extended until the Extended
Maturity Date, then, unless the Issuer exercises the FD Redemption Option
(which option the Issuer shall be entitled to exercise until the Remarketing
Deadline), the interest rate borne by the X-TRAS will be reset in order that
the X-TRAS may be remarketed so as to yield proceeds at least sufficient to
make available to the Pass Through Trustee on the Final Distribution Date an
amount in cash equal to 100% of the principal amount thereof together with
accrued interest to the Initial Stated Maturity plus the ISDA Amount. The
remarketing of the X-TRAS will be conducted in accordance with the provisions
of Article X hereof.
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SECTION 2.02. Forms Generally. The X-TRAS and Indenture
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 X- TRAS, as evidenced by their
execution thereof.
The definitive X-TRAS 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 X-TRAS, as evidenced by their
execution thereof.
SECTION 2.03. Form of Face of X-TRAS.
CMS ENERGY CORPORATION
____% EXTENDIBLE TENOR RATE-ADJUSTED SECURITIES ("X-TRAS(SM)")
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
____________ __, 200_ ("Initial Stated Maturity") or, in the event the
X-TRAS are extended to the Extended Maturity Date, _____________ __, 201_
and to pay interest thereon from [________ __,] 1998 (the "Original Issue
Date") or from the most recent
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Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on [______ __] and [_________ __] in each year, commencing
[______ __,] 1998 (i) to ________________ __, 200_ at the rate of __% per
annum, and (ii) in the event the X-TRAS are extended to the Extended Maturity
Date, to ______________ __, 201_ at such rate as may be established pursuant
to the Remarketing Procedure, 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 Extendible Tenor Rate-Adjusted Security ("Security")
(or one or more Predecessor X-TRAS) is registered at the close of business on
the Record Date for such interest, which shall be the first 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 the Initial Stated
Maturity or Extended Stated Maturity shall be the date of such Initial Stated
Maturity or Extended Stated 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 Security
(or one or more Predecessor X-TRAS) 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 Indenture Trustee, notice whereof shall
be given to Holders of X-TRAS not less than 15 days preceding such subsequent
Record Date.
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Payment of the principal of (and premium, if any) and interest,
if any, on this Security will be made at the office or agency of the Issuer
maintained for that purpose in New York, New York (the "Place of Payment"), in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that at the option of the Issuer payment of interest (other than interest
payable at Maturity) may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or by
wire transfer to an account designated by such Person not later than ten days
prior to the date of such payment. If the date on which payment of principal
or interest on this Security becomes due is not a Business Day, then such
principal or interest shall be due and payable on the next succeeding Business
Day.
Reference is hereby made to the further provisions of this
Security 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 Indenture Trustee referred to on the reverse hereof by manual signature,
this Security 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:__________________________
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Its:
By:__________________________
Its:
Attest:
SECTION 2.04. Form of Reverse of Security.
This ____% Extendible Tenor Rate-Adjusted Security is one of a
duly authorized issue of securities of the Issuer (herein called the "X-TRAS"),
issued and to be issued under an Indenture, dated as of September 15, 1992, as
supplemented by certain supplemental indentures, including the Sixth
Supplemental Indenture, dated as of _______ __, 1998 (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
Indenture Trustee (herein called the "Indenture 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 Indenture Trustee, the Holders of the X-TRAS and of the terms
upon which the X-TRAS are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited in
aggregate principal amount to [$150,000,000].
The X-TRAS will be redeemable at the Issuer's option (the "Early
Redemption Option"), in whole or in part, at any time and from time from the
date hereof to the 91st day
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prior to the Initial Stated Maturity, at a redemption price equal to the sum of
(i) 100% of the principal amount of the X-TRAS being redeemed plus the
Applicable Premium, together with accrued interest, if any, thereon to the
Redemption Date if such redemption occurs on or prior to the Premium
Termination Date (but interest installments whose Stated Maturity is on or
prior to the Redemption Date will be payable to the Holder thereof of record at
the close of business on the relevant Record Date referred to on the face
hereof all as provided in the Indenture) plus (ii) the ISDA Amount, if
any, as determined by the Extension Option Buyer and notified to the Issuer,
the Indenture Trustee and the Pass Through Trustee [five] Business Days prior
to the Redemption Date ("Early Redemption Price"). In no event will the Early
Redemption Price calculated pursuant to the foregoing clause (ii) ever be less
than 100% of the principal amount of the X-TRAS plus accrued interest to the
Redemption Date.
The following definitions are used to determine the
Applicable Premium:
"Applicable Premium" means, with respect to X-TRAS (or portion
thereof) being redeemed at any time, the excess of (A) the present value at
such time of the principal amount of such X-TRAS (or portion thereof) being
redeemed plus all interest payments due on such X-TRAS (or portion thereof) to
the Initial Stated Maturity, 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 X-TRAS (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.
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"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) (the "Statistical Release") 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
X-TRAS; provided, however, that if the average life to stated maturity of the
X-TRAS 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 the X-TRAS in part, new X-TRAS for
the unredeemed portion thereof will be issued in the name of the Holder thereof
upon cancellation hereof.
In addition, the X-TRAS will be redeemable at the Issuer's option
(the "FD Redemption Option"), in whole, at any time and from time from and
after the 90th day prior to the Initial Stated Maturity until the Remarketing
Deadline, by irrevocable notice given to the Indenture Trustee, the Pass
Through Trustee, the Extension Option Buyer and the Calculation Agent not later
than the Remarketing Deadline, at a Redemption Price equal (in the aggregate)
to the sum of (i) 100% of the unpaid principal amount thereof together with
accrued interest, if any, thereon to the Initial Stated Maturity plus (ii) the
ISDA Amount as of the Exercise
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Date as determined by the Extension Option Buyer and notified to the Issuer,
the Indenture Trustee and the Pass Through Trustee within [five] Business Days
thereafter.
If a Change in Control occurs, the Issuer shall notify the Holder
of this Security, the Indenture Trustee, the Pass Through Trustee and the
Extension Option Buyer of such occurrence and each Holder shall have the right
to require the Issuer to make a Required Repurchase of all or any part of this
Security at a Change in Control Purchase Price equal to 101% of the
principal amount of the X-TRAS to be so purchased together with accrued
interest thereon to the date of repurchase, plus (in the aggregate with all
other X-TRAS repurchased pursuant to such Required Repurchase) the ISDA Amount,
if any, as of such date of repurchase as determined by the Extension Option
Buyer and notified to the Issuer, the Indenture Trustee and the Pass Through
Trustee by 10 a.m., New York City time, on such date, 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 Security, a new
Security or Notes for the unrepurchased portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
In the event that the Issuer has Excess Proceeds from an Asset
Sale, it shall be required to make an offer to purchase from Holders on a pro
rata basis an aggregate principal amount of X-TRAS equal to the Excess
Proceeds, at a purchase price equal to the sum of (i) 100% of the principal
amount of and unpaid interest, if any, to the purchase date on such X-TRAS,
plus (ii) the ISDA Amount as determined by the Extension Option Buyer and
notified to the Issuer, the Indenture Trustee and the Pass Through Trustee by
10 a.m., New York City
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time, on such date of repurchase. The procedures to be followed by the Issuer
in making such an offer, and for the acceptance of such offer by Holders, shall
be the same as those set forth in the Indenture with respect to a Change in
Control.
Holders of the X-TRAS have the right to require the Issuer to
repurchase (the "Put Option") on the Initial Stated Maturity all of the X-TRAS
at a purchase price equal to 100% of the principal amount thereof together with
accrued interest, if any, thereon, to the Initial Stated Maturity.
If an Event of Default with respect to this Security shall occur
and be continuing, the principal of this Security may be declared due and
payable in the manner and with the effect provided in the Indenture. If any
such acceleration occurs, the Issuer will also be obligated to pay the
ISDA Amount, if any, as of the date of such acceleration, as determined by
the Extension Option Buyer and notified to the Issuer, the Indenture Trustee
and the Pass Through Trustee within [five] Business Days after the date of such
acceleration.
In any case where any Interest Payment Date, repurchase date,
Stated Maturity or Maturity of any Security shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of the Indenture or
this Security), 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
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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 Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, 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
X-TRAS under the Indenture at any time by the Issuer and the Indenture 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). No such amendment or modification may be made to the Indenture which
has a material adverse effect on the Extension Option Buyer without the consent
of the Extension Option Buyer.
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 or by the Extension Option Buyer, as the case may be.
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As set forth in, and subject to, the provisions of the Indenture,
no Holder of any Securities of any series 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 Indenture 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 Indenture Trustee to institute such proceeding as trustee, and the
Indenture 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 Security on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this
Security 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 Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security 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 Security are payable, duly endorsed by, or
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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 Securities
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 X-TRAS 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, X-TRAS are
exchangeable for a like aggregate principal amount of X-TRAS 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 Security for a period of 15 days next preceding
the mailing of the notice of redemption of X-TRAS or (b) exchange or register
the transfer of any Security or any portion thereof selected, called or being
called for redemption, except in the case of any Security to be redeemed in
part, the portion thereof not so to be redeemed.
Prior to due presentment of this Security for registration of
transfer, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not
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this Security be overdue, and neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
All terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
SECTION 2.05. Form of Indenture Trustee's Certificate of
Authentication. The Indenture 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 Indenture Trustee
By:____________________________
Authorized Officer
ARTICLE III
CHANGE IN CONTROL
SECTION 3.01. 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 X-TRAS shall have the right to
require that the Issuer repurchase (a "Required Repurchase") all or any part of
such Holder's X-TRAS at a repurchase price payable in cash equal to
101% of the principal amount of such X-TRAS plus accrued interest to the Change
in Control Purchase Date (as defined
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below) (the "Change in Control Purchase Price") plus (in the aggregate
with all other X-TRAS repurchased pursuant to this Section 3.01) the ISDA
Amount, if any, as of the Change in Control Purchase Date as determined by the
Extension Option Buyer and notified to the Issuer, the Indenture Trustee and
the Pass Through Trustee by 10 a.m., New York City time, on such date. The
Notional Amount used to determine the Extension Amount shall be equal to the
aggregate principal amount of X-TRAS tendered for repurchase and not withdrawn.
(a) Within 30 days following the Change in Control Date, the
Issuer shall mail a notice (the "Required Repurchase Notice") to each
Holder with copies to the Indenture Trustee, Pass Through Trustee and
Extension Option Buyer 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 X-TRAS 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 "Change in Control
Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause
the X-TRAS to be repurchased, which shall be consistent with this
Section and the Indenture.
(b) Holders electing to have X-TRAS repurchased must deliver
a written notice (the "Change in Control Purchase Notice") to the
Paying Agent (initially the
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Indenture 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 Change in Control Purchase Date.
The Change in Control Purchase Notice shall state: (i) the portion of
the principal amount of any X-TRAS to be repurchased, which portion must
be $1,000 or an integral multiple thereof; (ii) that such X-TRAS are to
be repurchased by the Issuer pursuant to the change in control
provisions of the Indenture; and (iii) unless the X-TRAS are represented
by one or more Global Notes, the certificate numbers of the X-TRAS 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 Change in Control Purchase Date.
The notice of withdrawal shall state the principal amount and, if
applicable, the certificate numbers of the X-TRAS as to which the
withdrawal notice relates and the principal amount of such X-TRAS, if
any, which remains subject to a Change in Control Purchase Notice.
(c) Payment of the Change in Control Purchase Price for X-TRAS
for which a Change in Control Purchase Notice has been delivered and not
withdrawn is conditioned upon delivery of such X-TRAS (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 Change in
Control Purchase Date) after the delivery of such Change in Control
Purchase Notice. Payment of the Change in Control Purchase Price for
such X-TRAS will be made
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promptly following the later of the Change in Control Purchase Date or
the time of delivery of such X-TRAS. 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 X-TRAS on the Business Day
following the Change in Control 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 X-TRAS).
(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 X-TRAS at the option of Holders upon a Change in Control.
(e) No X-TRAS 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 X-TRAS).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE X-TRAS
SECTION 4.01. Limitation on Certain Liens. So long as any of
the X-TRAS 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
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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 X-TRAS shall (so long as any such other
creditor shall be so secured) be equally and ratably secured (along with any
other creditor similarly entitled to be secured) by a direct Lien on all
property subject to such Lien, provided, however, that the foregoing
restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or
levies to the extent not past due;
(ii) pledges or deposits to secure (a) obligations under
workmen's compensation laws or similar legislation, (b) statutory
obligations of the Issuer or (c) Support Obligations at any one time
outstanding;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations which
are not overdue or which have been fully bonded and are being
contested in good faith;
(iv) purchase money Liens upon or in property acquired and held
by the Issuer in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of any such
property to be subject to such Liens, or Liens existing on any such
property at the
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time of acquisition, or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided that no such
Lien shall extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall extend to
or cover property not theretofore subject to the Lien being extended,
renewed or replaced, and provided, further, that the aggregate principal
amount of the Indebtedness at any one time outstanding secured by Liens
permitted by this clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv)
of this Section securing Indebtedness of the Issuer; provided that on
the date such Liens are created, and after giving effect to such
Indebtedness, the aggregate principal amount at maturity of all of the
secured Indebtedness of the Issuer at such date shall not exceed 5% of
Consolidated Net Tangible Assets at such date.
SECTION 4.02. Limitation on Consolidation, Merger, Sale or
Conveyance. So long as any of the X-TRAS are Outstanding and until senior
unsecured debt of the Issuer is rated BBB- or above (or an equivalent rating)
by Standard & Poor's and one Other Rating Agency (or, if Standard & Poor's
shall change its rating system, an equivalent of such rating then employed by
such organization), at which time the Issuer will be permanently released from
the provisions of this Section 4.02, 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
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Consolidated Net Worth of the Issuer immediately prior to the transaction, and
(ii) after giving effect to such transaction, the surviving entity would be
entitled to incur at least one dollar of additional Indebtedness (other than
revolving Indebtedness to banks) without violation of the limitations in
Section 4.03 hereof.
SECTION 4.03. Limitation on Consolidated Indebtedness. (a) So
long as any of the X-TRAS are Outstanding and until senior unsecured debt of
the issuer is rated BBB- or above (or an equivalent rating) by Standard
& Poor's and one Other Rating Agency (or, if Standard & Poor's shall change its
rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from the
provisions of this Section 4.03, the Issuer shall not, and shall not permit any
Consolidated Subsidiary of the Issuer to, issue, create, assume, guarantee,
incur or otherwise become liable for (collectively, "issue"), directly or
indirectly, any Indebtedness unless the Consolidated Coverage Ratio of the
Issuer and its Consolidated Subsidiaries for the four consecutive fiscal
quarters immediately preceding the issuance of such Indebtedness (as shown by a
pro forma consolidated income statement of the Issuer and its Consolidated
Subsidiaries for the four most recent fiscal quarters ending at least 30 days
prior to the issuance of such Indebtedness after giving effect to (i) the
issuance of such Indebtedness and (if applicable) the application of the net
proceeds thereof to refinance other Indebtedness as if such Indebtedness was
issued at the beginning of the period, (ii) the issuance and retirement of any
other Indebtedness since the first day of the period as if such Indebtedness
was issued or retired at the beginning of the period and (iii) the acquisition
of any company or business acquired by the Issuer or any Subsidiary since the
first day of the period (including
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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 Sixth
Supplemental Indenture, as set forth on Schedule 4.03(b)(2) attached
hereto and made a part hereof, and Indebtedness issued in exchange for,
or the proceeds of which are used to refund or refinance, any
Indebtedness permitted by this clause (2); provided, however, that (i)
the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of the Indebtedness so issued shall not exceed the
principal amount (or accreted value in the case of Indebtedness issued
at a discount) of, premium, if any, and accrued but unpaid interest on,
the Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated maturity
of the Indebtedness so exchanged, refunded or refinanced, (B) shall have
an Average Life equal to or greater than the remaining Average Life of
the Indebtedness so exchanged, refunded or refinanced and (C) if the
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Indebtedness to be exchanged, refunded or refinanced is subordinated to
the X-TRAS, the Indebtedness is subordinated to the X-TRAS 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 X-TRAS, the Indebtedness so issued is
subordinated to the X-TRAS in right of payment;
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(5) Indebtedness of a Restricted Subsidiary issued in exchange
for, or the proceeds of which are used to refund or refinance,
Indebtedness of a Restricted Subsidiary issued in accordance with
Subsection (a) of this Section, provided that (i) the principal amount
(or accreted value in the case of Indebtedness issued at a discount) of
the Indebtedness so issued shall not exceed the principal amount (or
accreted value in the case of Indebtedness issued at a discount) of,
premium, if any, and accrued but unpaid interest on, the Indebtedness so
exchanged, refunded or refinanced and (ii) the Indebtedness so issued
(A) shall not mature prior to the stated maturity of the Indebtedness so
exchanged, refunded or refinanced and (B) shall have an Average Life
equal to or greater than the remaining Average Life of the Indebtedness
so exchanged, refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued to
acquire, develop, improve, construct or to provide working capital for a
gas, oil or electric generation, exploration, production, distribution,
storage or transmission facility and related assets, provided that such
Indebtedness is without recourse to any assets of the Issuer, Consumers,
Enterprises, CMS Generation, 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;
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(8) Indebtedness issued by the Issuer not to exceed
$150,000,000 in aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in respect of
rate reduction bonds issued to recover electric restructuring
transition costs of Consumers provided that such Indebtedness is without
recourse to the assets of Consumers.
SECTION 4.04. Limitation on Restricted Payments. (a) So long
as the X-TRAS are Outstanding and until senior unsecured debt of the
Issuer is rated BBB- or above (or an equivalent rating) by Standard &
Poor's and one Other Rating Agency (or, if Standard & Poor's shall change its
rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from the
provisions of this Section 4.04, the Issuer shall not, and shall not permit any
Restricted Subsidiary of the Issuer, directly or indirectly, to (i) declare or
pay any dividend or make any distribution on the Capital Stock of the Issuer to
the direct or indirect holders of its Capital Stock (except dividends or
distributions payable solely in its Non-Convertible Capital Stock or in
options, warrants or other rights to purchase such Non-Convertible Capital
Stock and except dividends or distributions payable to the Issuer or a
Subsidiary), (ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Issuer, or (iii) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity or scheduled
repayment thereof, any Subordinated Indebtedness (any such dividend,
distribution, purchase, redemption, repurchase, defeasing, other acquisition or
retirement being hereinafter referred to as a "Restricted Payment") if at the
time the Issuer or such Subsidiary makes such Restricted Payment:
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(1) an Event of Default, or an event that with the lapse of
time or the giving of notice or both would constitute an Event of
Default, shall have occurred and be continuing (or would result
therefrom); or
(2) the aggregate amount of such Restricted Payment and all
other Restricted Payments made since May 6, 1997 would exceed the sum
of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued during the
period (treated as one accounting period) from May 6, 1997 to the
end of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or, in case such
sum shall be a deficit, minus 100% of the deficit); and
(C) the aggregate Net Cash Proceeds received by the
Issuer from the issue or sale of or contribution with respect to
its Capital Stock subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not in the
form of cash, the amount shall be the fair value of such Restricted Payment as
determined in good faith by the Board of Directors, provided that if the value
of the non-cash portion of such Restricted Payment as determined by the Board
of Directors is in excess of $25 million, such value shall be based on the
opinion from a nationally recognized firm experienced in the appraisal of
similar types of transactions.
(b) The provisions of Section 4.04(a) shall not prohibit:
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(i) any purchase or redemption of Capital Stock of the
Issuer made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Issuer
(other than Redeemable Stock or Exchangeable Stock); provided,
however, that such purchase or redemption shall be excluded from
the calculation of the amount of Restricted Payments;
(ii) dividends or other distributions paid in respect of
any class of the Issuer's Capital Stock issued in respect of the
acquisition of any business or assets by the Issuer or a
Restricted Subsidiary if the dividends or other distributions
with respect to such Capital Stock are payable solely from the
net earnings of such business or assets;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend
would have complied with this Section; provided, however, that at
the time of payment of such dividend, no Event of Default shall
have occurred and be continuing (or result therefrom), and
provided further, however, that such dividends shall be included
(without duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.05. Limitation on Asset Sales. So long as any of the
X-TRAS 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
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(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 X-TRAS 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 (the "Excess Proceeds Offer"), within 30 days after the end of the
Application Period, to purchase (the "Excess Proceeds Repurchase") from the
Holders on a pro rata basis an aggregate principal amount of X-TRAS on the
Excess Proceeds Purchase Date (as defined herein) equal to the Excess Proceeds
on such date, at a purchase price equal to 100% of the principal
amount of the X-TRAS on the Excess Proceeds Purchase Date and unpaid interest,
if any, to such date (the "Excess Proceeds Purchase Price") plus the ISDA
Amount, if any, as of the Excess Proceeds Purchase Date as determined by the
Extension Option Buyer as of such date and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee by 10 a.m., New York City time,
on such date. The Notional Amount used to determine the ISDA Amount shall be
equal to the aggregate principal amount of X-TRAS tendered for repurchase and
not withdrawn. The Issuer shall only be required to make an offer to purchase
X-TRAS from Holders pursuant to subsection (iii) if the Excess Proceeds equal
or exceed $25,000,000 at any given time.
(a) Within 30 days after the end of the Application Period,
the Issuer shall mail a notice (the "Excess Proceeds Repurchase Notice")
to each Holder with copies to the Indenture Trustee, Pass Through
Trustee and Extension Option Buyer stating:
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(i) that the Issuer is making an Excess Proceeds Offer
pusuant to Section 4.05 of the Sixth Supplemental Indenture;
(ii) the Excess Proceeds Purchase Price;
(iii) the date on which any Exceeds Proceeds 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 "Excess
Proceeds Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause
the X-TRAS to be repurchased, which shall be consistent with this
Section and the Indenture.
(b) Holders electing to have X-TRAS repurchased must deliver
a written notice (the "Excess Proceeds Purchase Notice") to the
Paying Agent (initially the Indenture 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 Excess
Proceeds Purchase Date. The Excess Proceeds Purchase Notice shall
state: (i) the portion of the principal amount of any X-TRAS to be
repurchased, which portion must be $1,000 or an integral multiple
thereof; (ii) that such X-TRAS are to be repurchased by the Issuer
pursuant to the Exceeds Proceeds Offer provisions of the Indenture; and
(iii) unless the X-TRAS are represented by one or more Global Notes, the
certificate numbers of the X-TRAS to be delivered by the Holder thereof
for repurchase by the Issuer. Any Excess Proceeds Purchase Notice may
be withdrawn by the Holder by a written notice of withdrawal delivered
to the Paying Agent not later than three
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Business Days prior to the Excess Proceeds Purchase Date. The notice of
withdrawal shall state the principal amount and, if applicable, the
certificate numbers of the X-TRAS as to which the withdrawal notice
relates and the principal amount of such X-TRAS, if any, which remains
subject to a Excess Proceeds Purchase Notice.
(c) Payment of the Excess Proceeds Purchase Price for X-TRAS
for which a Excess Proceeds Purchase Notice has been delivered and not
withdrawn is conditioned upon delivery of such X-TRAS (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 Excess Proceeds
Purchase Date) after the delivery of such Excess Proceeds Purchase
Notice. Payment of the Excess Proceeds Purchase Price for such X-TRAS
will be made promptly following the later of the Excess Proceeds
Purchase Date or the time of delivery of such X- TRAS. If the Paying
Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Excess Proceeds Purchase Price of such X-TRAS on
the Business Day following the Excess Proceeds 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
Excess Proceeds Purchase Price upon delivery of the X-TRAS).
(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 Excess Proceeds Offer.
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ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE X-TRAS
SECTION 5.01. Definition. All of the events specified in
clauses (a) through (h) of Section 5.1 of the Original Indenture shall be
"Events of Default" with respect to the X-TRAS. In addition, it shall be an
Event of Default if the Issuer fails to pay the Redemption Price on the
applicable Redemption Date for the X-TRAS after exercising the Early Redemption
Option or the FD Redemption Option.
SECTION 5.02. Amendments to Section 5.1 of the Original
Indenture. (a) Solely for the purpose of determining Events of Default with
respect to the X-TRAS, 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) Solely for purposes of determining waivers of defaults and
their consequences in respect of the X-TRAS, the penultimate paragraph of
Section 5.1 of the Original Indenture shall be amended such that no such waiver
may be made of any such default in respect of a covenant or provision of the
Sixth Supplemental Indenture which cannot be modified or amended without the
consent of each Holder of the X-TRAS or the Extension Option Buyer without the
consent of such Holder or buyer, respectively.
(c) Solely for purposes of determining the application of
proceeds in respect of defaults under the X-TRAS, paragraphs SECOND and THIRD
of Section 5.3 of the Original Indenture shall be amended to provide that
proceeds paid thereunder shall be applied on a pro rata basis to (i) the
payment in full of the aggregate unpaid principal amount of the X-TRAS and
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all accrued but unpaid interest on the X-TRAS to the Interest Payment Date and
(ii) the payment of the amount due under Section 5.03 of this Sixth
Supplemental Indenture.
SECTION 5.03. Payment of ISDA Amount upon Acceleration of
X-TRAS. If an Event of Default resulting in acceleration of the X-TRAS occurs,
the Issuer shall pay to the Indenture Trustee, in addition to such amounts as
may be due in respect of the principal of, Applicable Premium, if any, and
accrued interest on the X-TRAS pursuant to Article V of the Original Indenture
and this Sixth Supplemental Indenture, an amount equal to the ISDA Amount
as of the date of acceleration of the X-TRAS (as calculated by the Calculation
Agent as of such date and notified to the Issuer, the Indenture Trustee and the
Pass Through Trustee within five Business Days thereafter).
ARTICLE VI
DEFEASANCE
SECTION 6.01. General. All of the provisions of Article Ten of
the Original Indenture shall be applicable to the X-TRAS.
SECTION 6.02. Satisfaction and Discharge. The provisions of
Section 10.1(A) of the Original Indenture are amended to provide that, in
addition to the requirements set forth therein for obtaining the satisfaction
and discharge of the Issuer's obligations under the Indenture in respect
of the X-TRAS, the Issuer shall, on the date of deposit referred to in
Section 10.1(A)(c)(ii) of the Original Indenture, be required to deliver to the
Indenture Trustee for the benefit of the Pass Through Trustee the ISDA
Amount, if any, as determined by the
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Extension Option Buyer as of such date and notified to the Issuer, the Indenture
Trustee and the Pass Through Trustee by 10 a.m., New York City time, on such
date.
SECTION 6.03. Legal Defeasance. (a) Solely for purposes of a
legal defeasance of the X-TRAS, the requirements for a legal
defeasance set forth in Section 10.1(B) of the Original Indenture are amended
to provide that in addition to the requirements set forth in clauses (a)
through (f), the Issuer shall be required to deliver to the Indenture Trustee
on the date of deposit referred to in Section 10.1(B)(a) of the Original
Indenture cash in an amount equal to the ISDA Amount, if any, as determined
by the Extension Option Buyer as of such date and notified to the Issuer,
the Indenture Trustee and the Pass Through Trustee by 10 a.m., New York City
time, on such date.
(b) Upon satisfaction by the Issuer of the requirements of
Section 10.1(B) of the Original Indenture and the foregoing clause (a), in
connection with any legal defeasance of the X-TRAS, the Issuer shall be
released from its obligations under the Original Indenture and under this Sixth
Supplemental Indenture with respect to the X-TRAS, except to the extent
otherwise provided in Section 10.1(b) of the Original Indenture.
SECTION 6.04. Covenant Defeasance. (a) Solely for purposes of
a covenant defeasance of the X-TRAS, the requirements for a covenant defeasance
set forth in Section 10.1(C) of the Original Indenture are amended to provide
that in addition to the requirements set forth in clauses (a) through (f), the
Issuer shall be required to deliver to the Indenture Trustee for the benefit of
the Pass Through Trustee on the date of deposit referred to in Section
10.1(C)(a) of the Original Indenture cash in an amount equal to the ISDA
Amount, if any,
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as determined by the Extension Option Buyer as of such date and notified to the
Issuer, the Indenture Trustee and the Pass Through Trustee by 10 a.m., New York
City time, on such date.
(b) Upon satisfaction by the Issuer of the requirements of
Section 10.1(C) of the Original Indenture, in connection with any covenant
defeasance of the X-TRAS, the Issuer shall be released from its obligations
under Article Nine of the Original Indenture and under Articles III and IV of
this Sixth Supplemental Indenture with respect to the X-TRAS.
ARTICLE VII
REDEMPTION
SECTION 7.01. Redemption at the Option of the Issuer. (a) The
provisions of Article XI of the Original Indenture (other than Sections 11.5
and 11.6) shall be applicable to the X-TRAS.
(b) The X-TRAS will be redeemable at any time, at the option
of the Issuer, if such redemption occurs on or prior to the Premium
Termination Date, in whole or in part, on not less than 30 nor more than 60
days' prior notice to the Indenture Trustee, the Pass Through Trustee and the
Extension Option Buyer, at a redemption price, payable in cash, equal to the
sum of (i) 100% of the principal amount of the X-TRAS 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 plus (ii) the
ISDA Amount, if any, as determined by the Extension Option Buyer and
notified to the Issuer, the Indenture Trustee and the Pass Through Trustee
[five] Business Days prior to the Redemption Date (the "Early
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Redemption Option"). In no event will the Redemption Price ever be less than
100% of the principal amount of the X-TRAS plus accrued interest to the
Redemption Date. The Notional Amount used to determine the ISDA Amount
shall be the aggregate principal amount then outstanding of the X-TRAS, unless
less than all of the X-TRAS are redeemed, in which case the applicable Notional
Amount for purposes of determining the Extension Amount shall be equal to the
aggregate principal amount of X-TRAS redeemed.
(c) If the X-TRAS are extended until the Extended Stated
Maturity, the Issuer shall have the option (the "FD Redemption Option"), in
lieu of permitting the X-TRAS to be remarketed in accordance with Article VIII
of this Sixth Supplemental Indenture, to redeem the X-TRAS in whole on the
Initial Stated Maturity, by irrevocable notice given to the Indenture Trustee,
the Pass Through Trustee, the Extension Option Buyer and the Calculation Agent
not later than the Remarketing Deadline, at a redemption price, payable in
cash, equal to the sum of (i) 100% of the principal amount of the X-TRAS being
redeemed together with accrued interest, if any, thereon to the Initial Stated
Maturity plus (ii) the ISDA Amount, if any, as of the Exercise Date (as
calculated by the Calculation Agent and notified to the Issuer, the Indenture
Trustee and the Pass Through Trustee within five Business Days thereafter),
which redemption price shall be payable at the Initial Stated Maturity. The
Notional Amount used to determine the ISDA Amount shall be the aggregate
principal amount of the X-TRAS outstanding as of the Exercise Date.
SECTION 7.02. Put Option of Holders. If the X-TRAS are
extended until the Extended Stated Maturity and for any reason the Indenture
Trustee does not receive for
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the benefit of the Pass Through Trustee on or prior to the Remarketing Deadline
an amount in cash equal to the sum of (i) 100% of the principal amount of and
accrued interest on the X-TRAS plus (ii) the ISDA Amount, if any, as of
the Exercise Date as calculated by the Calculation Agent and notified to the
Issuer, the Indenture Trustee and the Pass Through Trustee within five Business
Days thereafter, the Issuer shall be required to repurchase (the "Put Option"),
on the Initial Stated Maturity, all of the outstanding X-TRAS at a purchase
price equal to 100% of the principal amount of and accrued interest on the
X-TRAS to the Initial Stated Maturity.
ARTICLE VIII
REMARKETING OF X-TRAS
SECTION 8.01. Remarketing of X-TRAS. In the event that the
X-TRAS are extended until the Extended Stated Maturity, then, unless the Issuer
exercises the FD Redemption Option (which option the Issuer shall be entitled
to exercise until the Remarketing Deadline upon delivery of an irrevocable
notice of redemption), the interest rate borne by the X-TRAS will be
reset effective on and as of the date of pricing of the remarketing in order
that the X-TRAS may be remarketed so as to yield net proceeds in cash at
least equal to the sum of (i) 100% of the principal amount thereof plus (ii)
the Extension Amount as of the Exercise Date as calculated by the
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Calculation Agent and notified to the Issuer, the Indenture Trustee and the
Pass Through Trustee within five Business Days thereafter (collectively, the
"Required Remarketing Proceeds"). As more particularly set forth in the next two
succeeding sentences, it is intended that the portions of the Required
Remarketing Proceeds representing the principal amount of the X-TRAS, together
with other amounts payable by the Issuer, will be sufficient to enable the Pass
Through Trustee to make the Final Distribution on the Certificates. In the
event that the Pass Through Trust ceases to be the Holder of record of the
X-TRAS prior to the Record Date for the final Interest Payment Date, the Issuer
shall be obligated to pay to the Pass Through Trust an amount equal to (x) the
interest that would have accrued on the X-TRAS had they been held by the Pass
Through Trust to the Final Distribution Date, less (y) any amounts earned in
respect of the investment by the Pass Through Trustee of the Required
Remarketing Proceeds in Government Obligations pursuant to clause (d) below.
In the event that the Pass Through Trust ceases to be the Holder of record of
the X-TRAS on or after such Record Date, the Issuer shall be obligated to
pay to the Pass Through Trust, as Holder of record on such Record Date,
the entire amount of interest accrued on the X-TRAS from the previous Interest
Payment Date to the Initial Stated Maturity, and any amounts earned in respect
of the investment by the Pass Through Trustee of the Required Remarketing
Proceeds in Government Obligations shall be for the account of the Issuer. In
either such event, the Issuer shall have no obligation to pay the principal
amount of the X-TRAS to the Pass Through Trust on the Initial Stated Maturity.
SECTION 8.02. Remarketing Procedure. The X-TRAS will be
remarked in accordance with the following procedure (the "Remarketing
Procedure"):
(a) On the Exercise Date and thereafter on the 75th, 60th,
45th, 30th and 15th day prior to the Initial Stated Maturity, Xxxxxx Xxxxxxx &
Co. Incorporated (or, subsequent to the Exercise Date, such other investment
banking institution as may be selected as the Remarketing Agent) will provide
the Issuer with non-binding indications of the interest rate and discount or
premium at which it believes it could remarket the X-TRAS in order to yield the
Required Remarketing Proceeds.
(b) Xxxxxx Xxxxxxx & Co. Incorporated shall act as the
Remarketing Agent for the X-TRAS unless, no later than 60 days prior to the
Initial Stated Maturity, the Issuer shall select another investment banking
institution to remarket the X-TRAS or exercise the FD Redemption Option in
accordance with the provisions of Section 7.01(c) hereof.
(c) No later than 15 days prior to the Remarketing Deadline,
the Remarketing Agent will commence marketing of the X-TRAS to investors.
(d) Pricing and closing of the remarketed X-TRAS shall occur
at any time within [10] days prior to the Remarketing Deadline, subject to then
prevailing market conditions and settlement cycles. Upon completion of the
remarketing, the proceeds thereof will be deposited with the Pass Through
Trustee
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and invested in Government Obligations having a maturity as close as possible
equal to the number of days between the date of such investment and the
Initial Stated Maturity.
(e) The Remarketing Agent will be entitled to underwriting
commissions, payable at settlement of the Remarketing Procedure, which
will be determined at the time the Remarketing Procedure is commenced and shall
be consistent with then prevailing market practices. In the event that Xxxxxx
Xxxxxxx & Co. Incorporated purchases the X-TRAS pursuant to clause (h) below,
it shall be entitled to underwriting commissions, payable at settlement of such
purchase, which will be determined at the time it gives notice of its offer
pursuant to clause (h) below and shall be consistent with then prevailing
market practices.
(f) The Issuer will cooperate with and provide information
reasonably requested by the Remarketing Agent and (in the event of an offer to
purchase by Xxxxxx Xxxxxxx & Co. Incorporated made pursuant to clause (h)
below) by Xxxxxx Xxxxxxx & Co. Incorporated in connection with the remarketing
or purchase of the X-TRAS, as applicable, including, without limitation, (1)
promptly preparing an offering memorandum or prospectus containing such
disclosures as may be required by applicable law and as may be required by
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the Remarketing Agent or Xxxxxx Xxxxxxx & Co. Incorporated, as applicable, in
its reasonable judgment, (ii) executing and delivering or causing to be
executed and delivered legal documentation (including a purchase agreement or
underwriting agreement and registration rights agreement with customary
indemnities, covenants, representations and warranties, comfort letters and
legal opinions) in form and substance reasonably satisfactory to the
Remarketing Agent or Xxxxxx Xxxxxxx & Co. Incorporated, as applicable, (iii)
providing promptly upon request updated consolidated financial statements to
the date of its latest report filed with the SEC and (iv) to the extent the
Issuer and the Remarketing Agent or Xxxxxx Xxxxxxx & Co. Incorporated, as
applicable, deem reasonably necessary for successful completion of the
Remarketing Procedure or the purchase by Xxxxxx Xxxxxxx & Co. Incorporated, as
applicable, making available senior management of the Issuer for road show and
one-on-one presentations.
(g) The Issuer may, in its sole discretion, elect to cause the
X-TRAS to be remarketed by conducting an underwritten offering or private
placement thereof on a firm-commitment basis. In such event, the Issuer shall
notify the Remarketing Agent of such request no later than [70] days prior to
the Final Distribution Date. The Issuer acknowledges that in no event shall
the Remarketing Agent be deemed by this provision to have made a commitment to
underwrite or place the X-TRAS.
(h) Regardless of whether it has been selected to act as
Remarketing Agent, Xxxxxx Xxxxxxx & Co. Incorporated shall at all times be
permitted to make an offer, on not less than [five] Business Days' notice, to
purchase the X-TRAS bearing a reset interest rate
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specified by Xxxxxx Xxxxxxx & Co. Incorporated) on a date not later than the
Remarketing Deadline for net proceeds in cash equal to the Required
Remarketing Proceeds, which offer the Company and the Trustee shall be
required to accept, unless, on or prior to the date for such purchase specified
in the notice provided by Xxxxxx Xxxxxxx & Co. Incorporated, (i) the Company
shall have delivered an irrevocable notice of redemption pursuant to Section
7.01(c) of this Sixth Supplemental Indenture or (B) any other party shall have
remarketed the X-TRAS bearing a reset interest rate lower than or equal to that
specified by Xxxxxx Xxxxxxx & Co. Incorporated for net proceeds in cash at
least equal to the Required Remarketing Proceeds.
(i) The remarketed X-TRAS will bear interest at the reset
interest rate commencing upon the date of pricing of the remarketing. For the
avoidance of doubt, holders of the remarketed X-TRAS shall not be entitled to
receive any interest thereon for any period prior to the date of pricing of the
remarketing.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Effect on Original Indenture. This Sixth
Supplemental Indenture is a supplement to the Original Indenture. As
supplemented by this Sixth Supplemental Indenture, the Original Indenture is in
all respects ratified, approved and confirmed, and the Original Indenture and
this Sixth Supplemental Indenture shall together constitute one and the same
instrument.
SECTION 9.02. Supplemental Indentures without Consent of
Securityholders. The Issuer and the Indenture Trustee may enter into
supplemental indentures to this Sixth Supplemental Indenture without the
consent of the Holders of the X-TRAS for any of the
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purposes for which execution of a supplemental indenture without the consent of
the Holders of the X-TRAS is authorized as provided in Section 8.1 of the
Original Indenture. In addition, any such supplemental indentures may be
entered into without the consent of the Holders of the X- TRAS for the purpose
of curing any ambiguity or correcting or supplementing any provision which may
be defective or inconsistent with any other provision in the Original
Indenture, the ISDA Master Agreement or the Pass Through Trust Agreement;
provided that no such action adversely affects the interests of the Holders of
Securities of any Series; and provided further that no such supplemental
indenture referred to in the first clause of this sentence and in clauses (a)
through (f) of Section 8.1 of the Original Indenture which has a material
adverse effect on the Extension Option Buyer may be entered into without the
consent of the Extension Option Buyer.
SECTION 9.03. Supplemental Indentures with Consent of
Securityholders. The provisions of Section 8.2 of the Original Indenture are
hereby amended to provide that notwithstanding any consent obtained from the
Holders of X-TRAS in respect of any modification, amendment or supplement to
this Sixth Supplemental Indenture requiring the consent of the Holders of the
X-TRAS pursuant to Section 8.2 of the Original Indenture, no modification,
amendment or supplement may be made to this Sixth Supplemental Indenture that
has a material adverse effect on the Extension Option Buyer without the consent
of the Extension Option Buyer.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities and Coupons. The provisions of Section 14.2
of the Original Indenture are hereby amended to provide that, solely for
purposes of the X-TRAS issued under the Sixth Supplemental Indenture, (i) each
of the Extension Option Buyer and Xxxxxx Xxxxxxx & Co. Incorporated (as
Remarketing Agent) shall be a third party beneficiary of this Agreement and may
enforce the obligations of the Issuer hereunder running in favor of the
Extension Option Buyer and Xxxxxx Xxxxxxx & Co. Incorporated, as applicable,
and (ii) all amounts payable by the Issuer under this Sixth Supplemental
Indenture shall be for the benefit of and enforceable by the Pass Through
Trustee and shall be paid over by the Indenture Trustee to the Pass Through
Trustee promptly upon confirmation of the receipt of funds from the Company by
the Indenture Trustee.
TESTIMONIUM
This Sixth Supplemental Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
By:
Attest:
(Corporate Seal)
NBD BANK
as Indenture Trustee
By:
Attest:
(Corporate Seal)
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Schedule 4.03(b)(2)
Indebtedness of CMS Energy Corporation outstanding on May 6, 1997
