EXHIBIT (4)
THIRD SUPPLEMENTAL INDENTURE
dated as of May 6, 1997
____________________
This Third Supplemental Indenture, dated as of the 6th day
of May, 1997 between CMS Energy Corporation, a corporation duly organized
and existing under the laws of the State of Michigan (hereinafter called
the "Issuer") and having its principal xxxxxx xx Xxxxxxxx Xxxxx Xxxxx,
Xxxxx 0000, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, and NBD Bank,
a Michigan banking corporation (hereinafter called the "Trustee") and
having its principal Corporate Trust Office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (formerly known as NBD
Bank, National Association) entered into an Indenture, dated as of
September 15, 1992 (the "Original Indenture"), pursuant to which one or
more series of debt securities of the Issuer (the "Securities") may be
issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the
terms of any series of Securities to be established in an indenture
supplemental to the Original Indenture; and
WHEREAS, Section 8.1(e) of the Original Indenture provides
that a supplemental indenture may be entered into by the Issuer and the
Trustee without the consent of any Holders of the Securities to establish
the form and terms of the Securities of any series; and
WHEREAS, the Issuer has requested the Trustee to join with
it in the execution and delivery of this Third Supplemental Indenture in
order to supplement and amend the Original Indenture by, among other
things, establishing the form and terms of a series of Securities to be
known as the Issuer's "8-1/8% Senior Unsecured Notes Due 2002" (the "2002
Notes"), providing for the issuance of the 2002 Notes and amending and
adding certain provisions thereof for the benefit of the Holders of the
2002 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into
this Third Supplemental Indenture for the purposes set forth in Sections
2.3 and 8.1(e) of the Original Indenture as referred to above; and
WHEREAS, the Issuer has furnished the Trustee with a copy
of the resolutions of its Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of this Third Supplemental
Indenture; and
WHEREAS, all things necessary to make this Third
Supplemental Indenture a valid agreement of the Issuer and the Trustee and
a valid supplement to the Original Indenture have been done,
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase
of the 2002 Notes to be issued hereunder by holders thereof, the Issuer
and the Trustee mutually covenant and agree, for the equal and
proportionate benefit of the respective holders from time to time of the
2002 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. STANDARD PROVISIONS. The Original
Indenture together with this Third Supplemental Indenture and all previous
indentures supplemental thereto entered into pursuant to the applicable
terms thereof are hereinafter sometimes collectively referred to as the
"Indenture." All capitalized terms which are used herein and not
otherwise defined herein are defined in the Indenture and are used herein
with the same meanings as in the Indenture.
SECTION 1.02. Definitions. Section 1.1 of the Original
Indenture is amended to insert the new definitions applicable to the 2002
Notes, in the appropriate alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts
recognized during such period as amortization of capital leases,
depletion, nuclear fuel, goodwill and assets classified as intangible
assets in accordance with generally accepted accounting principles.
"Average Life" means, as of the date of determination,
with respect to any Indebtedness, the quotient obtained by dividing (i)
the sum of the products of (x) the number of years from the date of
determination to the dates of each successive scheduled principal payment
of such Indebtedness and (y) the amount of such principal payment by (ii)
the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any
obligation that is required to be classified and accounted for as a
capital lease on the face of a balance sheet of such Person prepared in
accordance with generally accepted accounting principles; the amount of
such obligation shall be the capitalized amount thereof, determined in
accordance with generally accepted accounting principles; the stated
maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or
assets to which such lease relates.
"Capital Stock" means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) corporate stock, including any
Preferred Stock or Letter Stock.
"Change in Control" means an event or series of events by
which (i) the Issuer ceases to own beneficially, directly or indirectly,
at least 80% of the total voting power of all classes of Capital Stock
then outstanding of Consumers (whether arising from issuance of securities
of the Issuer or Consumers, any direct or indirect transfer of securities
by the Issuer or Consumers, any merger, consolidation, liquidation or
dissolution of the Issuer or Consumers or otherwise); (ii) any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as such term is used in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or
group shall be deemed to have "beneficial ownership" of all shares that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii)
the Issuer consolidates with or merges into another corporation or
directly or indirectly conveys, transfers or leases all or substantially
all of its assets to any Person, or any corporation consolidates with or
merges into the Issuer, in either event pursuant to a transaction in which
the outstanding Voting Stock of the Issuer is changed into or exchanged
for cash, securities, or other property, other than any such transaction
in which (A) the outstanding Voting Stock of the Issuer is changed into or
exchanged for Voting Stock of the surviving corporation and (B) the
holders of the Voting Stock of the Issuer immediately prior to such
transaction retain, directly or indirectly, substantially proportionate
ownership of the Voting Stock of the surviving corporation immediately
after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company,
a Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission and Storage" means CMS Gas
Transmission and Storage Company, a Michigan corporation and wholly-owned
subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading
Company, a Michigan corporation and wholly-owned subsidiary of
Enterprises.
"Consolidated Assets" means, at any date of determination,
the aggregate assets of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated Capital" means, at any date of
determination, the sum of (a) Consolidated Indebtedness, (b) consolidated
equity of the common stockholders of the Issuer and the Consolidated
Subsidiaries, (c) consolidated equity of the preference stockholders of
the Issuer and the Consolidated Subsidiaries and (d) consolidated equity
of the preferred stockholders of the Issuer and the Consolidated
Subsidiaries, in each case determined at such date in accordance with
generally accepted accounting principles.
"Consolidated Coverage Ratio" with respect to any period
means the ratio of (i) the aggregate amount of Operating Cash Flow for
such period to (ii) the aggregate amount of Consolidated Interest Expense
for such period.
"Consolidated Current Liabilities" means, for any period,
the aggregate amount of liabilities of the Issuer and its Consolidated
Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after (i) eliminating all inter-
company items between the Issuer and any Consolidated Subsidiary and (ii)
deducting all current maturities of long-term Indebtedness, all as
determined in accordance with generally accepted accounting principles.
"Consolidated Indebtedness" means, at any date of
determination, the aggregate Indebtedness of the Issuer and its
Consolidated Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means, for any period, the
total interest expense in respect of Indebtedness of the Issuer and its
Consolidated Subsidiaries, including, without duplication, (i) interest
expense attributable to capital leases, (ii) amortization of debt
discount, (iii) capitalized interest, (iv) cash and noncash interest
payments, (v) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (vi) net
costs under Interest Rate Protection Agreements (including amortization of
discount) and (vii) interest expense in respect of obligations of other
Persons deemed to be Indebtedness of the Issuer or any Consolidated
Subsidiaries under clause (v) or (vi) of the definition of Indebtedness,
provided, however, that Consolidated Interest Expense shall exclude (a)
any costs otherwise included in interest expense recognized on early
retirement of debt and (b) any interest expense in respect of any
Indebtedness of any Subsidiary of Consumers, CMS Generation, NOMECO, CMS
Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any other
Designated Enterprises Subsidiary, provided that such Indebtedness is
without recourse to any assets of the Issuer, Consumers, Enterprises, CMS
Generation, NOMECO, CMS Electric and Gas, CMS Gas Transmission and
Storage, CMS MST or any other Designated Enterprises Subsidiary.
"Consolidated Net Income" means, for any period, the net
income of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting
principles; provided, however, that there shall not be included in such
Consolidated Net Income:
(i) any net income of any Person if such Person is not a
Subsidiary, except that (A) the Issuer's equity in the net income
of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the
Issuer or a Consolidated Subsidiary as a dividend or other
distribution and (B) the Issuer's equity in a net loss of any such
Person for such period shall be included in determining such
Consolidated Net Income;
(ii) any net income of any Person acquired by the Issuer
or a Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition;
(iii) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment of the Issuer or
its Consolidated Subsidiaries which is not sold or otherwise
disposed of in the ordinary course of business and any gain or
loss realized upon the sale or other disposition of any Capital
Stock of any Person; and
(iv) any net income of any Subsidiary of Consumers, CMS
Generation, NOMECO, CMS Electric and Gas, CMS Gas Transmission and
Storage, CMS MST or any other Designated Enterprises Subsidiary
whose interest expense is excluded from Consolidated Interest
Expense, provided, however, that for purposes of this subsection
(iv), any cash, dividends or distributions of any such Subsidiary
to the Issuer shall be included in calculating Consolidated Net
Income.
"Consolidated Net Tangible Assets" means, for any period,
the total amount of assets (less accumulated depreciation or amortization,
allowances for doubtful receivables, other applicable reserves and other
properly deductible items) as set forth on the most recently available
quarterly or annual consolidated balance sheet of the Issuer and its
Consolidated Subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, and after giving
effect to purchase accounting and after deducting therefrom, to the extent
otherwise included, the amounts of: (i) Consolidated Current Liabilities;
(ii) minority interests in Consolidated Subsidiaries held by Persons other
than the Issuer or a Restricted Subsidiary; (iii) excess of cost over fair
value of assets of businesses acquired, as determined in good faith by the
Board of Directors as evidenced by Board resolutions; (iv) any revaluation
or other write-up in value of assets subsequent to December 31, 1996, as a
result of a change in the method of valuation in accordance with generally
accepted accounting principles; (v) unamortized debt discount and expenses
and other unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, licenses organization or
developmental expenses and other intangible items; (vi) treasury stock;
and (vii) any cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities.
"Consolidated Net Worth" of any Person means the total of
the amounts shown on the consolidated balance sheet of such Person and its
consolidated subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, as of any date
selected by such Person not more than 90 days prior to the taking of any
action for the purpose of which the determination is being made (and
adjusted for any material events since such date), as (i) the par or
stated value of all outstanding Capital Stock plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained
earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable
to Exchangeable Stock.
"Consolidated Subsidiary" means, any Subsidiary whose
accounts are or are required to be consolidated with the accounts of the
Issuer in accordance with generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan
corporation, all of whose common stock is on the date hereof owned by the
Issuer.
"Designated Enterprises Subsidiary" means any wholly-owned
subsidiary of Enterprises formed after the date of this Third Supplemental
Indenture which is designated a Designated Enterprises Subsidiary by the
Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to the 2002 Notes has the
meaning specified in Article V of this Third Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchangeable Stock" means any Capital Stock of a
corporation that is exchangeable or convertible into another security
(other than Capital Stock of such corporation that is neither Exchangeable
Stock or Redeemable Stock).
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of
(A) indebtedness of such Person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale
obligations and all obligations under any title retention
agreement (but excluding trade accounts payable arising in the
ordinary course of business);
(iv) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, bankers' acceptance or
similar credit transaction (other than obligations with respect to
letters of credit securing obligations (other than obligations
described in clauses (i) through (iii) above) entered into in the
ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit);
(v) all obligations of the type referred to in clauses
(i) through (iv) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is
responsible or liable as obligor, guarantor or otherwise; and
(vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation
is assumed by such Person), the amount of such obligation being
deemed to be the lesser of the value of such property or assets or
the amount of the obligation so secured.
"Interest Payment Date" means November 15, 1997 and each
May 15 and November 15 in each year thereafter.
"Interest Rate Protection Agreement" means any interest
rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect the Issuer or any Subsidiary
against fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is intended to reflect the separate performance of
certain of the businesses or operations conducted by such corporation or
any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security
interest, conditional sale, title retention agreement or other charge or
encumbrance of any kind.
"Net Cash Proceeds" means, (a) with respect to any Asset
Sale , the aggregate proceeds of such Asset Sale including the fair market
value (as determined by the Board of Directors and net of any associated
debt and of any consideration other than Capital Stock received in return)
of property other than cash, received by the Issuer, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes (whether or not such taxes will actually be paid
or are payable) as a result of such Asset Sale without regard to the
consolidated results of operations of the Issuer and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness
or any other obligation outstanding at the time of such Asset Sale that
either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts
to be provided by the Issuer or any Restricted Subsidiary of the Issuer as
a reserve against any liabilities associated with such Asset Sale
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset Sale, all
as determined in conformity with generally accepted accounting principles
and (b) with respect to any issuance or sale or contribution in respect of
Capital Stock, the aggregate proceeds of such issuance, sale or
contribution, including the fair market value (as determined by the Board
of Directors and net of any associated debt and of any consideration other
than Capital Stock received in return) of property other than cash,
received by the Issuer, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof,
provided, however, that if such fair market value as determined by the
Board of Directors of property other than cash is greater than $25
million, the value thereof shall be based upon an opinion from an
independent nationally recognized firm experienced in the appraisal or
similar review of similar types of transactions.
"NOMECO" means, CMS NOMECO Oil & Gas Co., a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock other than Preferred Stock of such corporation; provided,
however, that Non-Convertible Capital Stock shall not include any
Redeemable Stock or Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect
to the Issuer and its Consolidated Subsidiaries, the aggregate amount of
Consolidated Net Income after adding thereto Consolidated Interest Expense
(adjusted to include costs recognized on early retirement of debt), income
taxes, depreciation expense, Amortization Expense and any noncash
amortization of debt issuance costs, any nonrecurring, noncash charges to
earnings and any negative accretion recognition.
"Other Rating Agency" shall mean any one of Duff & Xxxxxx
Credit Rating Co., Fitch Investors Service, L.P. or Xxxxx'x Investors
Service, Inc., and any successor to any of these organizations which is a
nationally recognized statistical rating organization.
"Paying Agent" means any person authorized by the Issuer
to pay the principal of (and premium, if any) or interest on any of the
2002 Notes on behalf of the Issuer.
"Predecessor 2002 Note" of any particular 2002 Note means
every previous 2002 Note evidencing all or a portion of the same debt as
that evidenced by such particular 2002 Note; and, for the purposes of the
definition, any 2002 Note authenticated and delivered under Section 2.9 of
the Indenture in exchange for or in lieu of a mutilated, destroyed, lost
or stolen 2002 Note shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen 2002 Note.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.
"Redeemable Stock" means any Capital Stock that by its
terms or otherwise is required to be redeemed prior to the first
anniversary of the Stated Maturity of the Outstanding 2002 Notes or is
redeemable at the option of the holder thereof at any time prior to the
first anniversary of the Stated Maturity of the Outstanding 2002 Notes.
"Restricted Subsidiary" means any Subsidiary (other than
Consumers and its subsidiaries) of the Issuer which, as of the date of the
Issuer's most recent quarterly consolidated balance sheet, constituted at
least 10% of the total Consolidated Assets of the Issuer and its
Consolidated Subsidiaries and any other Subsidiary which from time to time
is designated a Restricted Subsidiary by the Board of Directors provided
that no Subsidiary may be designated a Restricted Subsidiary if,
immediately after giving effect thereto, an Event of Default or event
that, with the lapse of time or giving of notice or both, would constitute
an Event of Default would exist or the Issuer and its Restricted
Subsidiaries could not incur at least $1 of additional Indebtedness under
Section 4.03, and (i) any such Subsidiary so designated as a Restricted
Subsidiary must be organized under the laws of the United States or any
State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary
must be owned of record and beneficially by the Issuer or a Restricted
Subsidiary and (iii) such Restricted Subsidiary must be a Consolidated
Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings
Group, a division of McGraw Hill Inc., and any successor thereto which is
a nationally recognized statistical rating organization, or if such entity
shall cease to rate the 2002 Notes or shall cease to exist and there shall
be no such successor thereto, any other nationally recognized statistical
rating organization selected by the Issuer which is acceptable to the
Trustee.
"Subordinated Indebtedness" means any Indebtedness of the
Issuer (whether outstanding on the date of this Third Supplemental
Indenture or thereafter incurred) which is contractually subordinated or
junior in right of payment to the 2002 Notes.
"Support Obligations" means, for any person, without
duplication, any financial obligation, contingent or otherwise, of such
person guaranteeing or otherwise supporting any debt or other obligation
of any other person in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such debt,
(ii) to purchase property, securities or services for the purpose of
assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable the
primary obligor to pay such debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements (to the extent that such
obligation to provide equity capital does not otherwise constitute debt),
or (v) to perform, or arrange for the performance of, any non-monetary
obligations or non-funded debt payment obligations of the primary obligor.
"Tax-Sharing Agreement" means the Amended and Restated
Agreement for the Allocation of Income Tax Liabilities and Benefits, dated
January 1, 1994, as amended or supplemented from time to time, by and
among Issuer, each of the members of the Consolidated Group (as defined
therein), and each of the corporations that become members of the
Consolidated Group.
"Voting Stock" means securities of any class or classes
the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for corporate directors (or persons performing similar
functions).
Certain terms, used principally in Articles Three, Four
and Seven of this Third Supplemental Indenture, are defined in those
Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE 2002 NOTES; FORMS
SECTION 2.01. ESTABLISHMENT OF SERIES. (a) There is
hereby created a series of Securities to be known and designated as the
"8-1/8% Senior Unsecured Notes Due 2002" and limited in aggregate
principal amount (except as contemplated in Section 2.3(f)(2) of the
Indenture) to $350,000,000. The Stated Maturity of the 2002 Notes is May
15, 2002.
(b) The 2002 Notes will bear interest from the Original
Issue Date, or from the most recent date to which interest has been paid
or duly provided for, at the rate of 8-1/8% per annum stated therein until
the principal thereof is paid or made available for payment. Interest
will be payable semiannually on each Interest Payment Date and at
Maturity, as provided in the form of the 2002 Note in Section 2.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of
the Indenture for the payment of the interest on any 2002 Note payable on
any Interest Payment Date (other than at Maturity) shall be the 1st day
(whether or not a Business Day) of the calendar month in which such
Interest Payment Date occurs and, in the case of interest payable at
Maturity, the Record Date shall be the date of Maturity.
(d) The payment of the principal of, premium (if any) and
interest on the 2002 Notes shall not be secured by a security interest in
any property.
(e) The 2002 Notes shall not be redeemable. The 2002
Notes shall be purchased by the Issuer at the option of the Holders
thereof as provided in Sections 3.01 and 4.05 hereof.
(f) The 2002 Notes shall not be convertible.
(g) The 2002 Notes will not be subordinated to the payment
of Senior Debt.
(h) The Issuer will not pay any additional amounts on the
2002 Notes held by a Person who is not a U.S. Person in respect of any
tax, assessment or government charge withheld or deducted.
(i) The events specified in Events of Default with respect
to the 2002 Notes shall include the events specified in Article Five of
this Third Supplemental Indenture. In addition to the covenants set forth
in Article Three of the Original Indenture, the Holders of the 2002 Notes
shall have the benefit of the covenants of the Issuer set forth in Article
Four hereto.
SECTION 2.02. FORMS GENERALLY. The 2002 Notes and
Trustee's certificates of authentication shall be in substantially the
form set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such 2002
Notes, as evidenced by their execution thereof.
The definitive 2002 Notes shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such 2002 Notes, as
evidenced by their execution thereof.
18
SECTION 2.03. FORM OF FACE OF 2002 NOTE.
CMS ENERGY CORPORATION
8-1/8% SENIOR UNSECURED NOTES DUE 2002
No. ________ $__________
CMS Energy Corporation, a corporation duly organized and
existing under the laws of the State of Michigan (herein called the
"Issuer", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________________________________, or registered assigns, the principal
sum of ____________________ Dollars on May 15, 2002 ("Maturity") and to
pay interest thereon from May 6, 1997 (the "Original Issue Date") or from
the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on May 15 and November 15 in each year,
commencing November 15, 1997 and at Maturity at the rate of 8-1/8% per
annum, until the principal hereof is paid or made available for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this 2002 Note (or one or more Predecessor 2002
Notes) is registered at the close of business on the Record Date for such
interest, which shall be the 1st day of the calendar month in which such
Interest Payment Date occurs (whether or not a Business Day) except that
the Record Date for interest payable at Maturity shall be the date of
Maturity. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Record Date and
may either be paid to the Person in whose name this 2002 Note (or one or
more Predecessor 2002 Notes) is registered at the close of business on a
subsequent Record Date (which shall be not less than five Business Days
prior to the date of payment of such defaulted interest) for the payment
of such defaulted interest to be fixed by the Trustee, notice whereof
shall be given to Holders of 2002 Notes not less than 15 days preceding
such subsequent Record Date.
Payment of the principal of (and premium, if any) and
interest, if any, on this 2002 Note will be made at the office or agency
of the Issuer maintained for that purpose in New York, New York (the
"Place of Payment"), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
and private debts; provided, however, that at the option of the Issuer
payment of interest (other than interest payable at Maturity) may be made
by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an
account designated by such Person not later than ten days prior to the
date of such payment. If the date on which payment of principal or
interest on this 2002 Note becomes due is not a Business Day, then such
principal or interest shall be due and payable on the next succeeding
Business Day.
Reference is hereby made to the further provisions of this
2002 Note set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual
signature, this 2002 Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By____________________________
Its:
By____________________________
Its:
Attest:
19
SECTION 2.04. FORM OF REVERSE OF 2002 NOTE.
This 8-1/8% Senior Unsecured Note Due 2002 is one of a
duly authorized issue of securities of the Issuer (herein called the "2002
Notes"), issued and to be issued under an Indenture, dated as of September
15, 1992, as supplemented by certain supplemental indentures, including
the Third Supplemental Indenture, dated as of May 6, 1997 (herein
collectively referred to as the "Indenture"), between the Issuer and NBD
Bank, a Michigan banking corporation (formerly known as NBD Bank, National
Association), as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Issuer, the Trustee, the Holders of the 2002 Notes and
of the terms upon which the 2002 Notes are, and are to be, authenticated
and delivered. This 2002 Note is one of the series designated on the face
hereof, limited in aggregate principal amount to $350,000,000.
The 2002 Notes are not subject to redemption.
If a Change in Control occurs, the Issuer shall notify the
Holder of this 2002 Note of such occurrence and such Holder shall have the
right to require the Issuer to make a Required Repurchase of all or any
part of this 2002 Note at a Change in Control Purchase Price equal to 101%
of the principal amount of this 2002 Note to be so purchased as more fully
provided in the Indenture and subject to the terms and conditions set
forth therein. In the event of a Required Repurchase of only a portion of
this 2002 Note, a new 2002 Note or Notes for the unrepurchased portion
hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to this 2002 Note
shall occur and be continuing, the principal of this 2002 Note may be
declared due and payable in the manner and with the effect provided in the
Indenture.
In any case where any Interest Payment Date, repurchase
date, Stated Maturity or Maturity of any 2002 Note shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of
the Indenture or this 2002 Note), payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment
Date, repurchase date or at the Stated Maturity or Maturity; provided that
no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, redemption date, repurchase date, Stated
Maturity or Maturity, as the case may be, to such Business Day.
The Indenture contains provisions for defeasance at any
time of (i) the entire indebtedness of this 2002 Note or (ii) certain
restrictive covenants and Events of Default with respect to this 2002
Note, in each case upon compliance with certain conditions set forth
therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of all Outstanding
2002 Notes under the Indenture at any time by the Issuer and the Trustee
with the consent of the Holders of not less than a majority in principal
amount of Securities of all series then Outstanding and affected (voting
as one class).
The Indenture permits the Holders of not less than a
majority in principal amount of Securities of all series at the time
Outstanding with respect to which a default shall have occurred and be
continuing (voting as one class) to waive on behalf of the Holders of all
Outstanding Securities of such series any past default by the Issuer,
provided that no such waiver may be made with respect to a default in the
payment of the principal of or the interest on any Security of such series
or the default by the Issuer in respect of certain covenants or provisions
of the Indenture, the modification or amendment of which must be consented
to by the Holder of each Outstanding Security of each series affected.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any 2002 Note will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written
notice of a continuing Event of Default, the Holders of not less than 25%
in principal amount of the Outstanding Securities of each affected series
(voting as one class) shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Securities of each
affected series (voting as one class) a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days;
provided, however, that such limitations do not apply to a suit instituted
by the Holder hereof for the enforcement of payment of the principal of
(and premium, if any) or any interest on this 2002 Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of
this 2002 Note or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of
and any premium and interest on this 2002 Note at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this 2002 Note is
registerable in the Security Register, upon surrender of this 2002 Note
for registration of transfer at the office or agency of the Issuer in any
place where the principal of and any premium and interest on this 2002
Note are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Issuer and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new 2002 Notes of this series and of
like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The 2002 Notes are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, 2002 Notes are exchangeable for a like aggregate
principal amount of 2002 Notes and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration
of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this 2002 Note for
registration of transfer, the Issuer, the Trustee and any agent of the
Issuer or the Trustee may treat the Person in whose name this 2002 Note is
registered as the owner hereof for all purposes, whether or not this 2002
Note be overdue, and neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
All terms used in this 2002 Note without definition which
are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
SECTION 2.05. Form of Trustee's Certificate of
Authentication. The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
________________________________________,
as Trustee
By______________________________________
Authorized Officer
ARTICLE III
CHANGE OF CONTROL
SECTION 3.01. CHANGE OF CONTROL. Upon the occurrence of
a Change in Control (the effective date of such Change in Control being
the "Change in Control Date"), each Holder of a 2002 Note shall have the
right to require that the Issuer repurchase (a "Required Repurchase") all
or any part of such Holder's 2002 Note at a repurchase price payable in
cash equal to 101% of the principal amount of such 2002 Note plus accrued
interest to the Purchase Date (the "Change in Control Purchase Price").
(a) Within 30 days following the Change in Control Date,
the Issuer shall mail a notice (the "Required Repurchase Notice")
to each Holder with a copy to the Trustee stating:
(i) that a Change in Control has occurred and
that such Holder has the right to require the Issuer to
repurchase all or any part of such Holder's 2002 Notes at
the Change of Control Purchase Price;
(ii) the Change of Control Purchase Price;
(iii) the date on which any Required Repurchase
shall be made (which shall be no earlier than 60 days nor
later than 90 days from the date such notice is mailed)
(the "Purchase Date");
(iv) the name and address of the Paying Agent;
and
(v) the procedures that Holders must follow to
cause the 2002 Notes to be repurchased, which shall be
consistent with this Section and the Indenture.
(b) Holders electing to have a 2002 Note repurchased must
deliver a written notice (the "Change in Control Purchase Notice")
to the Paying Agent (initially the Trustee) at its corporate trust
office in Detroit, Michigan, or any other office of the Paying
Agent maintained for such purposes, not later than 30 days prior
to the Purchase Date. The Change in Control Purchase Notice shall
state: (i) the portion of the principal amount of any 2002 Notes
to be repurchased, which portion must be $1,000 or an integral
multiple thereof; (ii) that such 2002 Notes are to be repurchased
by the Issuer pursuant to the change in control provisions of the
Indenture; and (iii) unless the 2002 Notes are represented by one
or more Global Notes, the certificate numbers of the 2002 Notes to
be delivered by the Holder thereof for repurchase by the Issuer.
Any Change in Control Purchase Notice may be withdrawn by the
Holder by a written notice of withdrawal delivered to the Paying
Agent not later than three Business Days prior to the Purchase
Date. The notice of withdrawal shall state the principal amount
and, if applicable, the certificate numbers of the 2002 Notes as
to which the withdrawal notice relates and the principal amount of
such 2002 Notes, if any, which remains subject to a Change in
Control Purchase Notice.
If a 2002 Note is represented by a Global Note (as
described in Article VI below), the Depositary or its nominee will
be the Holder of such 2002 Note and therefore will be the only
entity that can elect a Required Repurchase of such 2002 Note. To
obtain repayment pursuant to this Section 3.01 with respect to
such 2002 Note, the beneficial owner of such 2002 Note must
provide to the broker or other entity through which it holds the
beneficial interest in such 2002 Note (i) the Change in Control
Purchase Notice signed by such beneficial owner, and such
signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States, and (ii)
instructions to such broker or other entity to notify the
Depositary of such beneficial owner's desire to obtain repayment
pursuant to this Section 3.01. Such broker or other entity will
provide to the Paying Agent (i) the Change of Control Purchase
Notice received from such beneficial owner and (ii) a certificate
satisfactory to the Paying Agent from such broker or other entity
stating that it represents such beneficial owner. Such broker or
other entity will be responsible for disbursing any payments it
receives pursuant to this Section 3.01 to such beneficial owner.
(c) Payment of the Change of Control Purchase Price
for a 2002 Note for which a Change in Control Purchase Notice has
been delivered and not withdrawn is conditioned (except in the
case of a 2002 Note represented by one or more Global Notes) upon
delivery of such 2002 Note (together with necessary endorsements)
to the Paying Agent at its office in Detroit, Michigan, or any
other office of the Paying Agent maintained for such purpose, at
any time (whether prior to, on or after the Purchase Date) after
the delivery of such Change in Control Purchase Notice. Payment
of the Change of Control Purchase Price for such 2002 Note will be
made promptly following the later of the Purchase Date or the time
of delivery of such 2002 Note. If the Paying Agent holds, in
accordance with the terms of the Indenture, money sufficient to
pay the Change in Control Purchase Price of such 2002 Note on the
Business Day following the Purchase Date, then, on and after such
date, interest will cease accruing, and all other rights of the
Holder shall terminate (other than the right to receive the Change
of Control Purchase Price upon delivery of the 2002 Note).
(d) The Issuer shall comply with the provisions of
Regulation 14E and any other tender offer rules under the Exchange
Act, which may then be applicable in connection with any offer by
the Issuer to repurchase 2002 Notes at the option of Holders upon
a Change in Control.
(e) No 2002 Note may be repurchased by the Issuer as
a result of a Change in Control if there has occurred and is
continuing an Event of Default (other than a default in the
Payment of the Change in Control Purchase Price with respect to
the 2002 Notes).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2002 NOTES
SECTION 4.01. LIMITATION ON CERTAIN LIENS. (a) So long
as any of the 2002 Notes are outstanding, the Issuer shall not create,
incur, assume or suffer to exist any lien, mortgage, pledge, security
interest, conditional sale, title retention agreement or other charge or
encumbrance of any kind, or any other type of arrangement intended or
having the effect of conferring upon a creditor of the Issuer or any
Subsidiary a preferential interest (hereinafter in this Section referred
to as a "Lien") upon or with respect to any of its property of any
character, including without limitation any shares of Capital Stock of
Consumers or Enterprises, without making effective provision whereby the
2002 Notes shall (so long as any such other creditor shall be so secured)
be equally and ratably secured (along with any other creditor similarly
entitled to be secured) by a direct Lien on all property subject to such
Lien, provided, however, that the foregoing restrictions shall not apply
to:
(i) Liens for taxes, assessments or governmental charges or
levies to the extent not past due;
(ii) pledges or deposits to secure (a) obligations under
workmen's compensation laws or similar legislation, (b) statutory
obligations of the Issuer or (c) Support Obligations at any one time
outstanding;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations which are not
overdue or which have been fully bonded and are being contested in good
faith;
(iv) purchase money Liens upon or in property acquired and held
by the Issuer in the ordinary course of business to secure the purchase
price of such property or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such property to be subject to
such Liens, or Liens existing on any such property at the time of
acquisition, or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that no such Lien
shall extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall extend to or
cover property not theretofore subject to the Lien being extended, renewed
or replaced, and provided, further, that the aggregate principal amount of
the Indebtedness at any one time outstanding secured by Liens permitted by
this clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of
this Section securing Indebtedness of the Issuer; provided that on the
date such Liens are created, and after giving effect to such Indebtedness,
the aggregate principal amount at maturity of all of the secured
Indebtedness of the Issuer at such date shall not exceed 5% of
Consolidated Net Tangible Assets at such date.
SECTION 4.02. LIMITATION ON CONSOLIDATION, MERGER, SALE
OR CONVEYANCE. So long as any of the 2002 Notes are Outstanding and until
the 2002 Notes are rated BBB- or above (or an equivalent rating) by
Standard & Poor's and one Other Rating Agency (or, if Standard & Poor's
shall change its rating system, an equivalent of such rating then employed
by such organization), and subject also to Article Nine of the Indenture,
at which time the Issuer will be permanently released from the provisions
of this Section 4.02, the Issuer shall not consolidate with or merge into
any other Person or sell, lease or convey the property of the Issuer in
the entirety or substantially as an entirety, unless (i) immediately after
giving effect to such transaction the Consolidated Net Worth of the
surviving entity is at least equal to the Consolidated Net Worth of the
Issuer immediately prior to the transaction, and (ii) after giving effect
to such transaction, the surviving entity would be entitled to incur at
least one dollar of additional Indebtedness (other than revolving
Indebtedness to banks) without violation of the limitations in Section
4.03 hereof.
SECTION 4.03. LIMITATION ON CONSOLIDATED INDEBTEDNESS.
(a) So long as any of the 2002 Notes are Outstanding and until the 2002
Notes are rated BBB- or above (or an equivalent rating) by Standard &
Poor's and one Other Rating Agency (or, if Standard & Poor's shall change
its rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from
the provisions of this Section 4.013, the Issuer shall not, and shall not
permit any Consolidated Subsidiary of the Issuer to, issue, create,
assume, guarantee, incur or otherwise become liable for (collectively,
"issue"), directly or indirectly, any Indebtedness unless the Consolidated
Coverage Ratio of the Issuer and its Consolidated Subsidiaries for the
four consecutive fiscal quarters immediately preceding the issuance of
such Indebtedness (as shown by a pro forma consolidated income statement
of the Issuer and its Consolidated Subsidiaries for the four most recent
fiscal quarters ending at least 30 days prior to the issuance of such
Indebtedness after giving effect to (i) the issuance of such Indebtedness
and (if applicable) the application of the net proceeds thereof to
refinance other Indebtedness as if such Indebtedness was issued at the
beginning of the period, (ii) the issuance and retirement of any other
Indebtedness since the first day of the period as if such Indebtedness was
issued or retired at the beginning of the period and (iii) the acquisition
of any company or business acquired by the Issuer or any Subsidiary since
the first day of the period (including giving effect to the pro forma
historical earnings of such company or business), including any
acquisition which will be consummated contemporaneously with the issuance
of such Indebtedness, as if in each case such acquisition occurred at the
beginning of the period) exceeds a ratio of 1.7 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Issuer
or any Restricted Subsidiary may issue, directly or indirectly, the
following Indebtedness:
(1) Indebtedness of the Issuer to banks not to exceed
$1,000,000,000 in aggregate outstanding principal amount at any
time;
(2) Indebtedness (other than Indebtedness described in
clause (1) of this Subsection) outstanding on the date of this
Third Supplemental Indenture, as set forth on Schedule 4.03(b)(2)
attached hereto and made a part hereof, and Indebtedness issued in
exchange for, or the proceeds of which are used to refund or
refinance, any Indebtedness permitted by this clause (2);
provided, however, that (i) the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of the
Indebtedness so issued shall not exceed the principal amount (or
accreted value in the case of Indebtedness issued at a discount)
of, premium, if any, and accrued but unpaid interest on, the
Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated
maturity of the Indebtedness so exchanged, refunded or refinanced,
(B) shall have an Average Life equal to or greater than the
remaining Average Life of the Indebtedness so exchanged, refunded
or refinanced and (C) if the Indebtedness to be exchanged,
refunded or refinanced is subordinated to the 2002 Notes, the
Indebtedness is subordinated to the 2002 Notes in right of
payment;
(3) Indebtedness of the Issuer owed to and held by a
Subsidiary and Indebtedness of a Subsidiary owed to and held by
the Issuer; provided, however, that, in the case of Indebtedness
of the Issuer owed to and held by a Subsidiary, (i) any subsequent
issuance or transfer of any Capital Stock that results in any such
Subsidiary ceasing to be a Subsidiary or (ii) any transfer of such
Indebtedness (except to the Issuer or a Subsidiary) shall be
deemed for the purposes of this Subsection to constitute the
issuance of such Indebtedness by the Issuer;
(4) Indebtedness of the Issuer issued in exchange for, or
the proceeds of which are used to refund or refinance,
Indebtedness of the Issuer issued in accordance with
Subsection (a) of this Section, provided that (i) the principal
amount (or accreted value in the case of Indebtedness issued at a
discount) of the Indebtedness so issued shall not exceed the
principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid
interest on, the Indebtedness so exchanged, refunded or refinanced
and (ii) the Indebtedness so issued (A) shall not mature prior to
the stated maturity of the Indebtedness so exchanged, refunded or
refinanced, (B) shall have an Average Life equal to or greater
than the remaining Average Life of the Indebtedness so exchanged,
refunded or refinanced and (C) if the Indebtedness to be
exchanged, refunded or refinanced is subordinated to the 2002
Notes, the Indebtedness so issued is subordinated to the 2002
Notes in right of payment;
(5) Indebtedness of a Restricted Subsidiary issued in
exchange for, or the proceeds of which are used to refund or
refinance, Indebtedness of a Restricted Subsidiary issued in
accordance with Subsection (a) of this Section, provided that (i)
the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of the Indebtedness so issued
shall not exceed the principal amount (or accreted value in the
case of Indebtedness issued at a discount) of, premium, if any,
and accrued but unpaid interest on, the Indebtedness so exchanged,
refunded or refinanced and (ii) the Indebtedness so issued (A)
shall not mature prior to the stated maturity of the Indebtedness
so exchanged, refunded or refinanced and (B) shall have an Average
Life equal to or greater than the remaining Average Life of the
Indebtedness so exchanged, refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued
to acquire, develop, improve, construct or to provide working
capital for a gas, oil or electric generation, exploration,
production, distribution, storage or transmission facility and
related assets, provided that such Indebtedness is without
recourse to any assets of the Issuer, Consumers, Enterprises, CMS
Generation, NOMECO, CMS Electric and Gas, CMS Gas Transmission and
Storage, CMS MST or any other Designated Enterprises Subsidiary;
(7) Indebtedness of a Person existing at the time at
which such person became a Subsidiary and not incurred in
connection with, or in contemplation of, such Person becoming a
Subsidiary. Such Indebtedness shall be deemed to be incurred on
the date the acquired Person becomes a Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed
$150,000,000 in aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in
respect of rate reduction bonds issued to recover electric
restructuring transition costs of Consumers provided that such
Indebtedness is without recourse to the assets of Consumers.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. (a) So
long as the 2002 Notes are Outstanding and until the 2002 Notes are rated BBB-
or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which
time the Issuer will be permanently released from the provisions of this
Section 4.04, the Issuer shall not, and shall not permit any Restricted
Subsidiary of the Issuer, directly or indirectly, to (i) declare or pay
any dividend or make any distribution on the Capital Stock of the Issuer
to the direct or indirect holders of its Capital Stock (except dividends
or distributions payable solely in its Non-Convertible Capital Stock or in
options, warrants or other rights to purchase such Non-Convertible Capital
Stock and except dividends or distributions payable to the Issuer or a
Subsidiary), (ii) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity or scheduled repayment thereof, any Subordinated
Indebtedness (any such dividend, distribution, purchase, redemption,
repurchase, defeasing, other acquisition or retirement being hereinafter
referred to as a "Restricted Payment") if at the time the Issuer or such
Subsidiary makes such Restricted Payment:
(1) an Event of Default, or an event that with
the lapse of time or the giving of notice or both would constitute
an Event of Default, shall have occurred and be continuing (or
would result therefrom); or
(2) the aggregate amount of such Restricted
Payment and all other Restricted Payments made since the date of
this Third Supplemental Indenture would exceed the sum of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued
during the period (treated as one accounting period) from
the date of this Third Supplemental Indenture to the end
of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or, in case
such sum shall be a deficit, minus 100% of the deficit);
and
(C) the aggregate Net Cash Proceeds received by
the Issuer from the issue or sale of or contribution with
respect to its Capital Stock subsequent to the date of
this Third Supplemental Indenture.
For the purpose of determining the amount of any Restricted Payment not in
the form of cash, the amount shall be the fair value of such Restricted
Payment as determined in good faith by the Board of Directors, provided
that if the value of the non-cash portion of such Restricted Payment as
determined by the Board of Directors is in excess of $25 million, such
value shall be based on the opinion from a nationally recognized firm
experienced in the appraisal of similar types of transactions.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock
of the Issuer made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock of
the Issuer (other than Redeemable Stock or Exchangeable
Stock); provided, however, that such purchase or
redemption shall be excluded from the calculation of the
amount of Restricted Payments;
(ii) dividends or other distributions paid in
respect of any class of the Issuer's Capital Stock issued
in respect of the acquisition of any business or assets by
the Issuer or a Restricted Subsidiary if the dividends or
other distributions with respect to such Capital Stock are
payable solely from the net earnings of such business or
assets;
(iii) dividends paid within 60 days after the
date of declaration thereof if at such date of declaration
such dividend would have complied with this Section;
provided, however, that at the time of payment of such
dividend, no Event of Default shall have occurred and be
continuing (or result therefrom), and provided further,
however, that such dividends shall be included (without
duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing
Agreement.
SECTION 4.05. LIMITATION ON ASSET SALES. So long as any
of the 2002 Notes are outstanding, the Issuer may not sell, transfer or
otherwise dispose of any property or assets of the Issuer, including
Capital Stock of any Consolidated Subsidiary, in one transaction or a
series of transactions in an amount which exceeds $50,000,000 (an "Asset
Sale") unless the Issuer shall (i) apply an amount equal to such excess
Net Cash Proceeds to permanently repay Indebtedness of a Consolidated
Subsidiary or Indebtedness of the Issuer which is pari passu with the 2002
Notes or (ii) invest an equal amount not so used in clause (i) in property
or assets of related business within 24 months after the date of the Asset
Sale (the "Application Period") or (iii) apply such excess Net Cash
Proceeds not so used in (i) or (ii) (the "Excess Proceeds") to make an
offer, within 30 days after the end of the Application Period, to purchase
from the Holders on a pro rata basis an aggregate principal amount of 2002
Notes on the relevant purchase date equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of the principal amount of the
2002 Notes on the relevant purchase date and unpaid interest, if any, to
the purchase date. The Issuer shall only be required to make an offer to
purchase 2002 Notes from Holders pursuant to subsection (iii) if the
Excess Proceeds equal or exceed $25,000,000 at any given time.
The procedures to be followed by the Issuer in making an
offer to purchase 2002 Notes from the Holders with Excess Proceeds, and
for the acceptance of such offer by the Holders, shall be the same as
those set forth in Section 3.01 herein with respect to a Change in
Control.
ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2002 NOTES
SECTION 5.01. 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 2002 Notes.
SECTION 5.02. AMENDMENTS TO SECTION 5.1 OF THE ORIGINAL
INDENTURE. Solely for the purpose of determining Events of Default with
respect to the 2002 Notes, paragraphs (e), (f) and (h) of Section 5.1 of
the Original Indenture shall be amended such that each and every reference
therein to the Issuer shall be deemed to mean either the Issuer or
Consumers.
ARTICLE VI
GLOBAL NOTES
The 2002 Notes will be issued initially in the form of
Global Notes. "Global Note" means a registered 2002 Note evidencing one
or more 2002 Notes issued to a depositary (the "Depositary") or its
nominee, in accordance with this Article and bearing the legend prescribed
in this Article. One or more Global Notes will represent all 2002 Notes.
The Issuer shall execute and the Trustee shall, in accordance with this
Article and the Issuer Order with respect to the 2002 Notes, authenticate
and deliver one or more Global Notes in temporary or permanent form that
(i) shall represent and shall be denominated in an aggregate amount equal
to the aggregate principal amount of the 2002 Notes to be represented by
such Global Note or Notes, (ii) shall be registered in the name of the
Depositary for such Global Note or Notes or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2002 Note is
presented by an authorized representative of the Depository to the Issuer
or its agent for registration of transfer, exchange or payment, and any
2002 Note issued is registered in the name of a nominee of the Depository,
or in such other name as is requested by an authorized representative of
the Depository (and any payment is made to the nominee of the Depository,
or to such other entity as is requested by an authorized representative of
the Depository), any transfer, pledge or other use hereof for value or
otherwise by or to any Person is wrongful inasmuch as the registered owner
hereof has an interest herein."
Notwithstanding Section 2.8 of the Indenture, unless and
until it is exchanged in whole or in part for 2002 Notes in definitive
form, a Global Note representing one or more 2002 Notes may not be
transferred except as a whole by the Depositary, to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such
nominee to a successor Depositary for 2002 Notes or a nominee of such
successor Depositary.
If at any time the Depositary for the 2002 Notes is
unwilling or unable to continue as Depositary for the 2002 Notes, the
Issuer shall appoint a successor Depositary with respect to the 2002
Notes. If a successor Depositary for the 2002 Notes is not appointed by
the Issuer by the earlier of (i) 90 days from the date the Issuer receives
notice to the effect that the Depositary is unwilling or unable to act, or
the Issuer determines that the Depositary is unable to act or (ii) the
effectiveness of the Depositary's resignation or failure to fulfill its
duties as Depositary, the Issuer will execute, and the Trustee, upon
receipt of a Issuer Order for the authentication and delivery of
definitive 2002 Notes, will authenticate and deliver 2002 Notes in
definitive form in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such 2002 Notes in
exchange for such Global Note or Notes.
The Issuer may at any time and in its sole discretion
determine that the 2002 Notes issued in the form of one or more Global
Notes shall no longer be represented by such Global Note or Notes. In
such event the Issuer will execute, and the Trustee, upon receipt of a
Issuer Order for the authentication and delivery of definitive 2002 Notes,
will authenticate and deliver 2002 Notes in definitive form in an
aggregate principal amount equal to the principal amount of the Global
Note or Notes representing such 2002 Notes in exchange for such Global
Note or Notes.
The Depositary for such 2002 Notes may surrender a Global
Note or Notes for such 2002 Notes in exchange in whole or in part for 2002
Notes in definitive form on such terms as are acceptable to the Issuer and
such Depositary. Thereupon, the Issuer shall execute, and the Trustee
shall authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new
2002 Note or Notes, of any authorized denomination as
requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial
interest in the Global Note; and
(ii) to such Depositary a new Global Note in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Global Note and the
aggregate principal amount of 2002 Notes in definitive
form delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer
will execute and the Trustee will authenticate and deliver 2002 Notes in
definitive registered form in authorized denominations.
Upon the exchange of a Global Note for 2002 Notes in
definitive form, such Global Note shall be cancelled by the Trustee. 2002
Notes in definitive form issued in exchange for a Global Note pursuant to
this Article shall be registered in such names and in such authorized
denominations as the Depositary for such Global Note, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or Security Registrar. The Trustee shall deliver
such 2002 Notes to the persons in whose names such 2002 Notes are so
registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original
Indenture shall be applicable to the 2002 Notes. Upon satisfaction by the
Issuer of the requirements of Section 10.1(c) of the Indenture, in
connection with any covenant defeasance (as provided in Section 10.1(c) of
the Indenture), the Issuer shall be released from its obligations under
Article Nine of the Original Indenture and under Articles III and IV of
this Third Supplemental Indenture with respect to the 2002 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Third Supplemental Indenture is a supplement to the
Original Indenture. As supplemented by this Third Supplemental Indenture,
the Original Indenture is in all respects ratified, approved and
confirmed, and the Original Indenture and this Third Supplemental
Indenture shall together constitute one and the same instrument.
TESTIMONIUM
This Third Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Third Supplemental Indenture to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of the day and
year first written above.
CMS ENERGY CORPORATION
By: /s/ A. M. Xxxxxx
Attest: /s/ X. X. XxXxxx
(Corporate Seal)
NBD BANK
as Trustee
By: /s/ Xxxxxx X. Xxxx
Attest: /s/ Xxxxxx X. Xxxxxxx
(Corporate Seal)
1
Rev 05/06/97
SCHEDULE 4.03(B)(2)
INDEBTEDNESS SCHEDULE
As of May 5, 1997
I. CMS ENERGY - DIRECT OBLIGATIONS
A. Letter of Credit dated as of December 9, 1994, issued by Bank of
Tokyo-Mitsubishi pursuant to CMS Energy $450MM Credit Agreement on
behalf of CMS Energy in connection with the obligation of CMS
NOMECO Oil & Gas Co. for the Colon Project in Venezuela.
Beneficiary - Banco Latino Americano de Exportaciones SA (BLADEX).
Termination Date: June 30, 1997
Outstanding
___________
$22,107,168
B. Letter of Credit July 18, 1991, issued by Bank of Tokyo-Mitsubishi
pursuant to CMS Energy $450MM Credit Agreement on behalf of CMS
Energy in connection with the obligation of CMS Generation Co. for
the Chateaugay Project. Beneficiary - New York State Electric &
Gas Corporation. Termination Date: April 29, 1998
Outstanding
___________
$ 6,000,000
C. Deferred Coupon Notes, Series A due 1997 and Series B due 1999.
Outstanding
___________
Series A - $172,000,000
Series B - $175,098,000
D. General Term Notes, various maturities, 3-year, 5-year and 7-year
tenors;
The latest maturity for General Term Notes outstanding as of March
31, 1997 is March 15, 2004.
Outstanding
___________
Series A - $249,637,000
Series B - $ 124,810,000
Series C - $ 40,038,000
E. CMS Energy, as Indemnitor of various CMS subsidiaries' surety
bonds.
Outstanding
___________
$604,000
Oxford Tire Recycling, Inc: $500,000
St Clair Underground Storage: $104,000
F. Amended and Restated Aircraft Lease, dated as of January 29, 1995,
(Supplement No. 1 thereto,), between Fleet Credit Corporation and
CMS Capital; sublease to CMS Energy dated January 29, 1995 [those
rights suspended from June 25, 1996 - May 26, 1997-- the term of a
subsequent sublease to Aetna Life Insurance Company]. The lease
between Fleet Credit Corporation and CMS Capital was subsequently
assigned to MDFC Equipment Leasing Corporation as of June 28, 1995.
Termination Date: January 28, 2000
Cumulative Remaining Lease Payments
___________________________________
$4,092,000
G. Aircraft Lease Agreement, dated as of December 29, 1995, between
Pitney Xxxxx Credit Corporation and CMS Energy Corporation.
Termination Date: April 1, 2006
Cumulative Remaining Lease Payments
___________________________________
$15,150,248
H. Letter of Credit issued by Union Bank of California pursuant to the
terms of the Bank Guaranty, dated as of April 30, 1996 made by BNP
in favor of ONE on behalf of CMS Energy for the purpose of securing
the performance by JLEC of its obligations under the Protocol dated
April 26, 1996 between JLEC and ONE to secure the financial closing
of the project in accordance with the terms of the Protocol.
Termination Date: August 29, 1997
Outstanding
___________
$30,000,000
I. $50MM Letter of Credit Reimbursement Agreement dated as of March
20, 1996 among CMS Energy and The Chase Manhattan Bank as Agent.
Termination Date: March 19, 1999
Outstanding
___________
$21,301,873*
*Of this amount, $0 Direct Obligation of CMS Energy; $21,301,873
Contingent Obligation of CMS Energy. Letters of Credit issued
pursuant to Accession Agreements are as follows:
CMS Generation Grayling Company - $1,264,002
Centrales Termicas Xxxxxxx, X.X. - $10,037,871
Sociedad Inversora En Distribucion
De Electricidad S.A. - $10,000,000
[Contingent Obligations of CMS Energy, Items E, J and K]
II. CMS ENERGY - CONTINGENT OBLIGATIONS
CMS MARKETING, SERVICES AND TRADING
A. CMS Energy Guaranty of CMS Marketing, Services and Trading Company
transportation obligations to Great Lakes Gas Transmission Company
dated October 31, 1990. [See also CMS MS&T - Direct Obligations,
Item A]
B. Credit Agreement for transportation service between ANR and CMS
Marketing, Services and Trading; guaranteed by CMS Energy, dated as
of June 2, 1988. [See also CMS MS&T - Direct Obligations, Item B]
CMS LAND COMPANY
C. $2.3MM Bay Harbor Company, L.L.C. Promissory Note to Holnam Inc.,
dated as of July 14, 1994. CMS Energy Guaranty for not more than
50% of the total note. Termination Date: July 14, 1997 [Direct
obligation of Bay Harbor Company, L.L.C.]
Outstanding
___________
$1,150,000
CMS GENERATION CO. AND ITS SUBSIDIARIES
D. CMS Generation Filer City, Inc. and Western Michigan Cogeneration
Limited Partnership Letter of Credit Reimbursement Agreement, dated
August 31, 1990, with Comerica required to cover a Construction and
Term Loan dated July 1, 1988 (Series A) and July 1, 1990 (Series
B). CMS Energy Corporation, Guarantor. Beneficiary - Prudential
Insurance Company, Trustee - Connecticut Bank & Trust. [Direct
obligation of CMS Generation Filer City, Inc.]
Outstanding
___________
Series A - $3,210,664 (Termination Date: 9/30/97)
Series B - $ 664,756 (Termination Date: 9/30/97)
E. Letter of Credit dated as of July 7, 1993, issued pursuant to CMS
Energy $50MM Letter of Credit Reimbursement Agreement with Chase
Manhattan, dated March 20, 1996, for the account of CMS Generation
Grayling Company (per Accession Agreement dated March 20, 1996) for
the 8 megawatt increase occurring August 13, 1991. Beneficiary -
Consumers Power Company. Termination Date: June 9, 1997 [Direct
obligation of CMS Generation Grayling Company]
Outstanding
___________
$1,264,002
F. CMS Generation Co. (El Chocon Project) Letter of Credit
Reimbursement Agreement, dated as of August 18, 1993 with Chase
Manhattan originally three letters of credit issued under facility
for a total amount of $66,315,934, each letter of credit dated as
of July 14, 1993. CMS Energy Corporation, Guarantor.
Beneficiary - Estado Nacional Argentino.
Termination Date: August 29, 1997 [See also CMS
Generation - Direct Obligations, Item B]
Outstanding
___________
$380,000
G. $56.1MM Credit Agreement dated as of December 15, 1993 between
Hidroelectra El Chocon S.A. and Chase Manhattan. CMS Energy
Corporation, Guarantor of 25%. Beneficiary - Chase Argentina.
[Direct obligation of Hidroelectra El Chocon S.A.] Termination
Date: April 1, 2003
Outstanding
___________
$12,990,100
H. Exeter Energy Limited Partnership ("Exeter") obligation under an
Electricity Purchase Agreement (the "Agreement") with Connecticut
Light and Power ("CL&P") and as additional collateral for CL&P's
financial accommodations to Exeter under the Agreement. CMS Energy
Corporation, Guarantor of such obligations as per Guarantee
Agreement dated as of August 1, 1993. Termination Date: November
1, 2021 [Direct obligation of Exeter Energy Limited Partnership]
Outstanding
___________
$8,600,000
I. Service Fee Support Agreement dated as of March 1, 1994, between
CMS Energy Corporation and Comerica Bank, the Trustee for the
Genesee Power Station Limited Partnership Tax Exempt bond
financing. CMS Energy is required to make support payments to the
Trustee for the benefit of bondholders in the event that Genesee
experiences a debt service deficiency caused by high fuel prices.
Termination Date: 2021 [Direct obligation of Genesee Power Station
Limited Partnership]
Maximum Exposure
________________
$3,000,000
J. Letter of Credit dated August 15, 1996, issued pursuant to CMS
Energy $50MM Letter of Credit Reimbursement Agreement with The
Chase Manhattan Bank, dated March 20, 1996, for the account of
Centrales Termicas Xxxxxxx, X.X. (per Accession Agreement dated
July 31, 1996) in support of gas transportation contract.
Beneficiary - TGN. Termination Date: August 15, 1997 Automatic
one-year extensions. [Direct obligation of Centrales Termicas
Xxxxxxx, X.X. - CMS = 80.55%]
Outstanding
___________
$10,037,871
K. Letter of Credit dated April 10, 1997, issued pursuant to CMS
Energy $50MM Letter of Credit Reimbursement Agreement with The
Chase Manhattan Bank, dated March 20, 1996, for the account of
Sociedad Inversora En Distribucion De Electricidad S.A. in support
of ESEBA bid. Beneficiary - Provincia De Buenos Aires (Ministerio
De Orbras Y Servicios Publicos). Termination Date: June 21, 1997
[Direct obligation of Sociedad Inversora En Distribucion De
Electricidad S.A.]
Outstanding
___________
$5,261,000
