1
EXHIBIT 4(a)(vi)
FIFTH SUPPLEMENTAL INDENTURE
DATED AS OF AUGUST ____, 1998
____________________
This Fifth Supplemental Indenture, dated as of the _____ day of August,
1998 between CMS Energy Corporation, a corporation duly organized and existing
under the laws of the State of Michigan (hereinafter called the "Company") and
having its principal office at Fairlane Plaza South, 000 Xxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, and The Chase Manhattan Bank, a New York
banking corporation (hereinafter called the "Trustee") and having its principal
Corporate Trust Office at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
WITNESSETH:
WHEREAS, the Company and the Trustee entered into an Indenture, dated
as of January 15, 1994 (the "Original Indenture"), pursuant to which one or
more series of debt securities of the Company (the "Securities") may be issued
from time to time; and
WHEREAS, Section 301 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 901(7) of the Original Indenture provides that a
supplemental indenture may be entered into by the Company 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 Company has requested the Trustee to join with it in the
execution and delivery of this Fifth Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things, establishing
the form and terms of a series of Securities to be known as the Company's
2
"General Term Notes(R), Series E (the "General Term Notes"), providing for the
issuance of the General Term Notes and amending and adding certain provisions
thereof for the benefit of the Holders of the General Term Notes; and
WHEREAS, the Company and the Trustee desire to enter into this Fifth
Supplemental Indenture for the purposes set forth in Sections 301 and 901(7) of
the Original Indenture as referred to above; and
WHEREAS, all things necessary to make this Fifth Supplemental Indenture
a valid agreement of the Company and the Trustee and a valid supplement to the
Original Indenture have been done,
---------------------------
(R) Registered servicemark of X. X. Xxxxx & Company
2
3
NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
General Term Notes to be issued hereunder by holders thereof, the Company and
the Trustee mutually covenant and agree, for the equal and proportionate benefit
of the respective holders from time to time of the General Term Notes, as
follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 101. Standard Provisions. The Original Indenture together with
this Fifth Supplemental Indenture and all indentures supplemental thereto
entered into pursuant to the applicable terms thereof are hereinafter sometimes
collectively referred to as the "Indenture." All of the terms, conditions,
covenants and provisions contained in the Original Indenture as heretofore
supplemented are incorporated herein by reference in their entirety and, except
as specifically noted herein or unless the context otherwise requires, shall be
deemed to be a part hereof to the same extent as if such provisions had been set
forth in full herein. 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 102. Definitions. Section 101 of the Indenture is amended to
insert the new definitions applicable to the General Term 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.
3
4
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (i) the sum of the products
of (x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or assets to
which such lease relates.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered Capital
Stock for purposes of this definition.
"Change in Control" means an event or series of events by which (i) the
Company 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 Company or Consumers, any
direct or indirect transfer of securities by the Company or Consumers, any
merger, consolidation, liquidation or dissolution of the Company or Consumers or
otherwise); (ii) any "person" or "group" (as such terms are used in Sections
4
5
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 30% of the Voting Stock of the Company; or (iii) the
Company 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 Company,
in either event pursuant to a transaction in which the outstanding Voting Stock
of the Company 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 Company is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Company
immediately prior to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
"Consolidated Assets" means, at any date of determination, the
aggregate assets of the Company 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 Company and the Consolidated Subsidiaries, (c) consolidated
equity of the preference stockholders of the Company and the Consolidated
Subsidiaries (d) consolidated equity of the preferred stockholders of the
Company and the Consolidated Subsidiaries and (e) the aggregate amount of all
Hybrid Preferred Securities, in each case determined at such date in accordance
with generally accepted accounting principles.
5
6
"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 Indebtedness" means, at any date of determination, the
aggregate Indebtedness of the Company and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles provided, however 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 Company 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 Company
or any Consolidated Subsidiaries under clause (v) or (vi) of the definition of
Indebtedness, provided, however, that Consolidated Interest Expense shall
exclude any costs otherwise included in interest expense recognized on early
retirement of debt.
"Consolidated Leverage Ratio" means, at any date of determination, the
ratio of Consolidated Indebtedness to Consolidated Capital.
6
7
"Consolidated Net Income" means, for any period, the net income of the
Company 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 Company'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 Company or a Consolidated
Subsidiary as a dividend or other distribution and (B) the Company'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 Company or a
Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition; and
(iii) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment of the Company 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.
"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
7
8
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 Company 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 Company.
"Enterprises" means CMS Enterprises Company, a Michigan corporation.
"Event of Default" with respect to the General Term Notes has the
meaning specified in Article VI of this Fifth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital Stock of
such corporation that is neither Exchangeable Stock, or Redeemable Stock).
"Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of such
preferred securities to the Company or Consumers in exchange
for
8
9
subordinated debt issued by the Company or Consumers,
respectively;
(ii) such preferred securities contain terms providing for the
deferral of distributions corresponding to provisions
providing for the deferral of interest payments on such
subordinated debt; and
(iii) the Company or Consumers (as the case may be) makes periodic
interest payments on such subordinated debt, which interest
payments are in turn used by the Hybrid Preferred Securities
Subsidiary to make corresponding payments to the holders of
the Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any business trust (or
similar entity)(i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of the
Company or Consumers)at all times by the Company or Consumers, (ii) that has
been formed for the purpose of issuing Hybrid Preferred Securities and (iii)
substantially all of the assets of which consist at all times solely of
subordinated debt issued by the Company or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
9
10
(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 Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Subsidiary against
fluctuations in interest rates.
10
11
"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 Proceeds" means, 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 Company, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts, or commissions and
brokerage, consultant and other fees actually 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 Company.
"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.
11
12
"Operating Cash Flow" means, for any period, with respect to the
Company 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" means any 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.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation; provided that Hybrid Preferred Securities shall not be considered
"Preferred Stock" for purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
Maturity of any Outstanding General Term Notes or is redeemable at the option of
the holder thereof at any time prior to the first anniversary of the Maturity of
any Outstanding General Term Notes.
"Restricted Subsidiary" means any Subsidiary (other than Consumers and
its subsidiaries) of the Company which, as of the date of the Company's most
recent quarterly consolidated balance sheet, constituted at least 10% of the
12
13
total Consolidated Assets of the Company 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 Company and its
Restricted Subsidiaries could not incur at least $1 of additional Indebtedness
under Section 510, 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 Company or a Restricted Subsidiary, (iii) such
Restricted Subsidiary must be a Consolidated Subsidiary, and (iv) such
Subsidiary must not theretofore have been designated as a Restricted 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 General Term Notes or shall cease to exist and there shall be no such
successor thereto, any other nationally recognized statistical rating
organization selected by the Company which is acceptable to the Trustee.
"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
13
14
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 Company, each of the
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
Certain terms, used principally in Articles Three, Four and Seven of
this Fifth Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE GENERAL TERM NOTES; FORMS
SECTION 201. Establishment of Series. There is hereby created a series
of Securities to be known and designated as the "General Term Notes(R), Series E
and limited in aggregate principal amount (except as contemplated in Section
301(2) of the Indenture) to $400,000,000.
Each General Term Note will be dated and issued as of the date of its
authentication by the Trustee. Each General Term Note shall also bear an
Original Issue Date (as hereinafter defined) which, with respect to any General
Term Note (or any portion thereof), shall mean the date of its original issue,
as specified in such General Term Note (the "Original Issue Date"), and such
14
15
Original Issue Date shall remain the same if such General Term Note is
subsequently issued upon transfer, exchange, or substitution of such General
Term Note regardless of its date of authentication. Principal on any General
Term Note shall become due and payable from nine months to twenty-five years
from the Original Issue Date of such General Term Note, as specified on such
General Term Note.
Each General Term Note 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 per annum stated therein until the principal thereof is paid or
made available for payment. Interest will be payable either monthly, quarterly
or semi-annually on each Interest Payment Date and at Maturity, as specified
below and in each General Term Note. Interest will be payable to the person in
whose name a General Term Note is registered at the close of business on the
Regular Record Date next preceding each Interest Payment Date; provided,
however, interest payable at Maturity will be payable to the person to whom
principal shall be payable. Interest on the General Term Notes will be computed
on the basis of a 360-day year of twelve 30-day months.
The Interest Payment Dates for a General Term Note that provides for
monthly interest payments shall be the fifteenth day of each calendar month;
provided, however, that in the case of a General Term Note issued between the
first and fifteenth day of a calendar month, interest otherwise payable on the
fifteenth day of such calendar month will be payable on the fifteenth day of the
next succeeding calendar month. In the case of a General Term Note that provides
for quarterly interest payments, the Interest Payment Dates shall be the
fifteenth day of each of the months specified in such General Term Note,
commencing on the day that is three months from (i) the day on which such
General Term Note is issued, if such General Term Note is issued on the
fifteenth day of a calendar month, or (ii) the fifteenth day of the calendar
month immediately
15
16
preceding the calendar month in which such General Term Note is issued, if such
General Term Note is issued prior to the fifteenth day of a calendar month, or
(iii) the fifteenth day of the calendar month in which such General Term Note is
issued, if such General Term Note is issued after the fifteenth day of a
calendar month. In the case of a General Term Note that provides for semi-annual
interest payments, the Interest Payment Dates shall be the fifteenth day of each
of the months specified in such General Term Note, commencing on the day that is
six months from (i) the day on which such General Term Note is issued, if such
General Term Note is issued on the fifteenth day of a calendar month, or (ii)
the fifteenth day of the calendar month immediately preceding the calendar month
in which such General Term Note is issued, if such General Term Note is issued
prior to the fifteenth day of a calendar month, or (iii) the fifteenth day of
the calendar month in which such General Term Note is issued, if such General
Term Note is issued after the fifteenth day of a calendar month.
Payment of principal of the General Term Notes (and premium, if any)
and, unless otherwise paid as hereinafter provided, any interest thereon will be
made at the office or agency of the Company in New York, New York; provided,
however, that payment of interest (other than interest at Maturity) may be made
at the option of the Company by check or draft mailed to the Person entitled
thereto at such Person's address appearing 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.
The Regular Record Date referred to in Section 301 of the Indenture for
the payment of the interest on any General Term Note 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
as is specified in such General Term Note, and, in the case of interest payable
at Maturity, the Regular Record Date shall be the date of Maturity. Unless
16
17
otherwise specified in such General Term Notes, the cities of New York, New York
and Chicago, Illinois shall be the reference cities for determining a Business
Day.
The General Term Notes may be issued only as registered notes, without
coupons, in denominations of $1,000 and any larger denomination which is in an
integral multiple of $1,000.
Upon the execution of this Fifth Supplemental Indenture, or from time
to time thereafter, General Term Notes may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said General Term Notes in accordance with the
procedures set forth in or upon a Company Order complying with Sections 301 and
303 of the Indenture.
SECTION 202. Forms Generally. The General Term Notes 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 General Term
Notes, as evidenced by their execution thereof.
The definitive General Term 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 General Term Notes, as evidenced by
their execution thereof.
17
18
SECTION 203. Form of Face of General Term Note.
[Insert any legend required by the Internal Revenue
Code and the regulations thereunder.]
CMS ENERGY CORPORATION
GENERAL TERM NOTE(R), Series E
No. ________ $__________
[Initial Redemption Date]
CMS Energy Corporation, a corporation duly organized and existing under
the laws of the State of Michigan (herein called the "Company", 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
__________________________ and to pay interest thereon from _____________ (the
"Original Issue Date") or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [choose one of the following --
monthly/quarterly/semi-annually [insert as applicable -- on ___________
[________, ____________] and _________ in each [year/month], commencing
______________, and at Maturity at the rate of ____% per annum, until the
principal hereof is paid or made available for payment [if applicable, insert
--, and at the rate of ___% per annum on any overdue principal and premium and
on any overdue installment of interest]. 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 General Term Note (or
one or more Predecessor Securities) is registered at the close of business on
the Regular 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) next preceding such Interest Payment Date except that the Regular
Record Date for interest payable at Maturity shall be the date of Maturity. Any
such interest not so punctually paid or duly
18
19
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this General Term
Note (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of General
Term Notes not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the General Term Notes may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
said Indenture.
[If the General Term Note is not to bear interest prior to Maturity,
insert -- The principal of this General Term Note shall not bear interest except
in the case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity and in such case the overdue principal of this
General Term Note shall bear interest at the rate of ___% per annum, which shall
accrue from the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue principal
shall be payable on demand. Any such interest on any overdue principal that is
not so paid on demand shall bear interest at the rate of ____% per annum, which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of the principal of (and premium, if any) and interest, if any,
on this General Term Note will be made at the office or agency of the Company
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 Company 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
19
20
designated by such Person not later than ten days prior to the date of such
payment.
Reference is hereby made to the further provisions of this General Term
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 General
Term Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By_______________________________
Attest:
_________________________
SECTION 204. Form of Reverse of General Term Note.
This General Term Note(R), Series E is one of a duly authorized issue
of securities of the Company (herein called the "General Term Notes"), issued
and to be issued in one or more series under an Indenture, dated as of January
15, 1994, as supplemented by certain supplemental indentures, including the
Fifth Supplemental Indenture, dated as of ________, 1998 (herein collectively
referred to as the "Indenture"), between the Company and The Chase Manhattan
Bank, a New York banking corporation, as Trustee (herein called the "Trustee",
which term
20
21
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 Company, the Trustee, the Holders of the General Term Notes and of the terms
upon which the General Term Notes are, and are to be, authenticated and
delivered. This General Term Note is one of the series designated on the face
hereof, limited in aggregate principal amount to $400,000,000.
[If applicable, insert -- The General Term Notes of this series are
subject to redemption upon not more than 60 nor less than 30 days' notice as
provided in the Indenture, at any time [on or after __________, _____,] as a
whole or in part from time to time, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed [on or before _____________, ___%, and if redeemed] during the
12-month period beginning ____________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such General Term
Notes, or one or more Predecessor Securities, of record at the close of business
on the relevant Record Dates referred to on the face hereof, all as provided in
the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
__________, redeem this General Term Note as a part of, or in anticipation of,
any refunding
21
22
operation by the application, directly or indirectly, of moneys borrowed having
an effective interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than the effective interest cost
to the Company (similarly calculated) of this General Term Note.]
[If the General Term Note is subject to redemption, insert -- In the
event of redemption of this General Term Note in part only, a new General Term
Note or Notes of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
If a Change in Control occurs, the Company shall notify the Holder of
this General Term Note of such occurrence and such Holder shall have the right
to require the Company to make a Required Repurchase of all or any part of this
General Term Note at a Change in Control Purchase Price equal to 101% of the
principal amount of this General Term 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 General
Term Note, a new General Term Note or Notes for the unrepurchased portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.
[If this General Term Note is subject to redemption upon exercising a
Survivor's Option, insert -- As more fully provided in the Indenture and subject
to the terms and conditions set forth therein, the Company will repay this
General Term Note (or portion thereof) properly tendered for repayment by or on
behalf of the person (the "Representative") that has authority to act on behalf
of a deceased owner of the beneficial interest in this General Term Note under
the laws of the appropriate jurisdiction (including, without limitation, the
personal representative or executor of such deceased beneficial owner) at a
price equal to 100% of the principal amount hereof plus accrued interest to the
date of such repayment. Notwithstanding the foregoing, the Survivor's Option
will not be
22
23
available to persons who are surviving joint tenants or surviving tenants by the
entirety. The Company may, in its sole discretion, limit the aggregate principal
amount of all outstanding General Term Notes as to which exercises of this
option (the "Survivor's Option") will be accepted in any calendar year to one
percent (1%) of the outstanding principal amount of all General Term Notes as of
the end of the most recent fiscal year, but not less than $500,000 in any such
calendar year, or such greater amount as the Company in its sole discretion may
determine for any calendar year, and may limit to $100,000, or such greater
amount as the Company in its sole discretion may determine for any calendar
year, the aggregate principal amount of General Term Notes (or portions thereof)
as to which exercise of the Survivor's Option will be accepted in such calendar
year with respect to any individual deceased owner of beneficial interests in
such General Term Notes. Notwithstanding the foregoing, the Survivor's Option
will not be available to persons who are surviving joint tenants or surviving
tenants by the entirety.
[If the General Term Note is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to this General Term Note shall
occur and be continuing, the principal of this General Term 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, Redemption Date, Repayment
Date, Stated Maturity or Maturity of any General Term Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of the Indenture or this General Term 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,
Redemption Date or Repayment 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
23
24
Payment Date, Redemption Date, Repayment Date, Stated Maturity or Maturity, as
the case may be, to such Business Day.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of all Outstanding Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in principal amount of all Outstanding
Securities affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of all Outstanding
Securities, on behalf of the Holders of all Outstanding Securities, to waive
compliance by the Company with certain provisions of the Indenture. Any such
consent or waiver by the Holder of this General Term Note shall be conclusive
and binding upon such Holder and upon all future Holders of this General Term
Note and of any General Term Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this General Term Note.
The Indenture permits the Holders of not less than a majority in
principal amount of all Outstanding Securities of any series thereunder to waive
on behalf of the Holders of all Outstanding Securities of such series any past
default by the Company, provided that no such waiver may be made with respect to
a default in the payment of the principal of or premium, if any, or the interest
on any Security of such series or the default by the Company 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 General Term Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
24
25
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 General Term Notes shall have made written request, and offered
satisfactory 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 General Term Notes 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 General Term Note on or after the
respective due dates expressed herein.
No reference herein to the Indenture and no provision of this General
Term Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this General Term 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 General Term Note is registerable in the
Security Register, upon surrender of this General Term Note for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this General Term Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new General Term 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 General Term Notes of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof.
25
26
As provided in the Indenture and subject to certain limitations therein set
forth, General Term Notes of this series are exchangeable for a like aggregate
principal amount of General Term Notes of this series 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 Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
[If this General Term Note is redeemable at the option of the Company,
insert -- The Company shall not be required (i) to issue, register the transfer
of or exchange this General Term Note if this General Term Note may be among
those selected for redemption during a period beginning at the opening of
business 15 days before selection of the General Term Notes to be redeemed under
Section 1103 of the Indenture and ending at the close of business on the day of
the mailing of the relevant notice of redemption, (ii) to register the transfer
of or exchange any General Term Note so selected for redemption in whole or in
part, except, in the case of any General Term Note to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to issue, register the transfer of
or exchange any General Term Note which has been surrendered for repayment at
the option of the Holder, except the portion, if any, of such General Term Note
not to be so repaid.]
Prior to due presentment of this General Term Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this General Term Note is registered as the
owner hereof for all purposes, whether or not this General Term Note be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
26
27
All terms used in this General Term Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
______________________________
(R) Registered servicemark of X. X. Xxxxx & Company
________________________
SECTION 205. Form of Legend for Global Notes. Any Global Note (as
defined in Article VII below) authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Security is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This General Term Note is not exchangeable for
General Term Notes registered in the name of a Person other than the
Depositary or its nominee except in the limited circumstances described in
the Indenture, and no transfer of this General Term Note (other than a
transfer of this General Term Note as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary) may be registered except
in the limited circumstances described in the Indenture."
SECTION 206. 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 General Term Notes of the series designated therein
referred to in the within-mentioned Indenture.
_________________________________,
as Trustee
By _______________________________
Authorized Officer
27
28
ARTICLE III
REDEMPTION OF GENERAL TERM NOTES; CHANGE OF CONTROL
SECTION 301. Redemption of General Term Notes. (a) Each General Term
Note may be redeemed by the Company in whole or in part if so provided in, and
in accordance with, the terms of such General Term Note issued by the Company.
The Company may redeem any General Term Note which by its terms is redeemable
prior to Stated Maturity without also redeeming any other General Term Note
which is redeemable prior to Stated Maturity.
(b) 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 General Term Note shall have the right to require that the
Company repurchase (a "Required Repurchase") all or any part of such Holder's
General Term Note at a repurchase price payable in cash equal to 101% of the
principal amount of such General Term Note plus accrued interest to the Purchase
Date (the "Change in Control Purchase Price").
(1) Within 30 days following the Change in Control Date, the Company
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 Company to repurchase all or any part of
such Holder's General Term Notes at the Change of Control Purchase
Price;
(ii) the Change of Control Purchase Price;
28
29
(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
General Term Notes to be repurchased, which shall be consistent with
this Section and the Indenture.
(2) Holders electing to have a General Term Note repurchased must
deliver a written notice (the "Change in Control Purchase Notice") to the
Paying Agent (initially the Trustee) at its office in The City of New York,
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
General Term Notes to be repurchased, which portion must be $1,000 or an
integral multiple thereof; (ii) that such General Term Notes are to be
repurchased by the Company pursuant to the change in control provisions of
the Indenture; and (iii) unless the General Term Notes are represented by
one or more Global Notes, the certificate numbers of the General Term Notes
to be delivered by the Holder thereof for repurchase by the Company. 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 General Term Notes as to which the withdrawal notice relates
and the principal amount of such General Term Notes, if any, which remains
subject to a Change in Control Purchase Notice.
29
30
If a General Term Note is represented by a Global Note (as described in
Article VII below), the Depositary or its nominee will be the Holder of
such General Term Note and therefore will be the only entity that can elect
a Required Repurchase of such General Term Note. To obtain repayment
pursuant to this Section 301(b) with respect to such General Term Note, the
beneficial owner of such General Term Note must provide to the broker or
other entity through which it holds the beneficial interest in such General
Term 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 301(b). 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 301(b) to such beneficial owner.
(3) Payment of the Change of Control Purchase Price for a General Term
Note for which a Change in Control Purchase Notice has been delivered and
not withdrawn is conditioned (except in the case of a General Term Note
represented by one or more Global Notes) upon delivery of such General Term
Note (together with necessary endorsements) to the Paying Agent at its
office in The City of New York, 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 General
Term Note will be made promptly following the later of the Purchase Date or
the time of delivery
30
31
of such General Term 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 General Term Note on the Business Day
following the Purchase Date, then, on and after such date, interest will
cease accruing, and, if applicable, amounts will no longer accrue on any
such General Term Note that is an Original Issue Discount Security, whether
or not such General Term Note is delivered to the Paying Agent, 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 General Term
Note).
(4) The Company shall comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act, which may then be
applicable and shall file Schedule 13E-4 or any other schedule required
thereunder in connection with any offer by the Company to repurchase
General Term Notes at the option of Holders upon a Change in Control.
(5) No General Term Note may be repurchased by the Company 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 General Term Notes).
ARTICLE IV
REPAYMENT UPON DEATH
If so specified in any General Term Note, the Holder of such General
Term Note will have the option (the "Survivor's Option") to elect repayment of
such General Term Note prior to its Stated Maturity in the event of the death of
the beneficial owner of such General Term Note.
31
32
Pursuant to exercise of the Survivor's Option, if applicable, the
Company will repay any General Term Note (or portion thereof) properly tendered
for repayment by or on behalf of the person (the "Representative") that has
authority to act on behalf of the deceased beneficial owner of such General Term
Note under the laws of the appropriate jurisdiction (including, without
limitation, the personal representative or executor of such deceased beneficial
owner) at a price equal to one-hundred percent (100%) of the principal amount of
the beneficial interest of the deceased owner of such General Term Note plus
accrued interest to the date of such payment, subject to the following
limitations. Notwithstanding the foregoing, the Survivor's Option will not be
available to persons who are surviving joint tenants or surviving tenants by the
entirety. The Company may, in its sole discretion, limit the aggregate principal
amount of General Term Notes as to which exercises of the Survivor's Option will
be accepted in any calendar year (the "Annual Put Limitation") to one percent
(1%) of the outstanding principal amount of the General Term Notes as of the end
of the most recent fiscal year, but not less than $500,000 in any such calendar
year, or such greater amount as the Company in its sole discretion may determine
for any calendar year, and may limit to $100,000, or such greater amount as the
Company in its sole discretion may determine for any calendar year, the
aggregate principal amount of General Term Notes (or portions thereof) as to
which exercise of the Survivor's Option will be accepted in such calendar year
with respect to any individual deceased owner of beneficial interests in such
General Term Notes (the "Individual Put Limitation"). Moreover, the Company will
not make principal repayments pursuant to exercise of the Survivor's Option in
amounts that are less that $1,000, and, in the event that the limitations
described in the preceding sentence would result in the partial repayment of any
General Term Note, the principal amount of such General Term Note remaining
outstanding after repayment must be at least $1,000 (the minimum authorized
denomination of the General Term Notes). Any General Term Note (or portion
thereof) tendered pursuant to exercise of the Survivor's Option may be
32
33
withdrawn by a written request of its Holder received by the Trustee prior to
its repayment.
Each General Term Note (or portion thereof) that is tendered pursuant
to a valid exercise of the Survivor's Option will be accepted promptly in the
order all such General Term Notes are tendered, except for any General Term Note
(or portion thereof) the acceptance of which would contravene (i) the Annual Put
Limitation, if applied, or (ii) the Individual Put Limitation, if applied, with
respect to the relevant individual deceased owner of beneficial interests
therein. If, as of the end of any calendar year, the aggregate principal amount
of General Term Notes (or portions thereof) that have been accepted pursuant to
exercise of the Survivor's Option for such year has not exceeded the Annual Put
Limitation, if applied, for such year, any exercise(s) of the Survivor's Option
with respect to General Term Notes (or portions thereof) not accepted during
such calendar year because such acceptance would have contravened the Individual
Put Limitation, if applied, with respect to an individual deceased owner of
beneficial interests therein will be accepted in the order all such General Term
Notes (or portions thereof) were tendered, to the extent that any such exercise
would not exceed the Annual Put Limitation, if applied, for such calendar year.
Any General Term Note (or portion thereof) accepted for repayment pursuant to
exercise of the Survivor's Option will be repaid no later than the first
Interest Payment Date that occurs 20 or more calendar days after the date of
such acceptance. Each General Term Note (or any portion thereof) tendered for
repayment that is not accepted in any calendar year because of the application
of the Annual Put Limitation will be deemed to be tendered in the following
calendar year in the order in which all such General Term Notes (or portions
thereof) were originally tendered, unless any such General Term Note (or portion
thereof) is withdrawn by the Representative for the deceased owner prior to its
repayment. In the event that a General Term Note (or any portion thereof)
tendered for repayment pursuant to valid exercise of the Survivor's Option is
not accepted, the Trustee will deliver a notice by first-class
33
34
mail to the registered Holder thereof at its last known address as indicated in
the Security Register that states the reasons such General Term Note (or portion
thereof) has not been accepted for repayment.
Subject to the foregoing, in order for a Survivor's Option to be
validly exercised with respect to any General Term Note (or portion thereof),
the Trustee must receive from the Representative of the individual deceased
owner of beneficial interests therein (i) a written request for payment signed
by the Representative, 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, (ii) if any such General Term Note is not
represented by a Global Note (as described in Article VII below), tender of the
General Term Note (or portion thereof) to be repaid, (iii) appropriate evidence
satisfactory to the Company and the Trustee that (A) the Representative has
authority to act on behalf of the individual deceased beneficial owner, (B) the
death of such beneficial owner has occurred and (C) the deceased individual was
the owner of a beneficial interest in such General Term Note at the time of
death, (iv) if applicable, a properly executed assignment or endorsement, and
(v) if the beneficial interest in such General Term Note is held by a nominee of
the deceased beneficial owner, a certificate satisfactory to the Trustee from
such nominee attesting to the deceased's ownership of a beneficial interest in
such General Term Note. All questions as to the eligibility or validity of any
exercise of the Survivor's Option will be determined by the Company, in its sole
discretion, which determinations will be final and binding on all parties.
If a General Term Note is represented by a Global Note (as described in
Article VII below), the Depositary or its nominee will be the Holder of such
General Term Note and therefore will be the only entity that can exercise the
Survivor's Option for such General Term Note. To obtain repayment pursuant to
34
35
exercise of the Survivor's Option with respect to such General Term Note, the
Representative must provide to the broker or other entity through which the
beneficial interest in such General Term Note is held by the deceased owner (i)
the documents described in clauses (i) and (iii) of the preceding paragraph and
(ii) instructions to such broker or other entity to notify the Depositary of
such Representative's desire to obtain repayment pursuant to exercise of the
Survivor's Option. Such broker or other entity shall provide to the Trustee (i)
the documents received from the Representative referred to in clause (i) of the
preceding sentence and (ii) a certificate satisfactory to the Trustee from such
broker or other entity stating that it represents the deceased beneficial owner.
Such broker or other entity will be responsible for disbursing any payments it
receives pursuant to exercise of the Survivor's Option to the appropriate
Representative.
ARTICLE V
ADDITIONAL COVENANTS OF THE COMPANY
WITH RESPECT TO THE GENERAL TERM NOTES
SECTION 501. Statement by Officers as to Default. (a) The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Fifth
Supplemental Indenture. For such purposes, such compliance shall be determined
without regard to any period of grace or requirement of notice provided
hereunder and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible and
in any event within 10 days after the Company becomes aware of the occurrence of
an Event of Default or an event which, with notice or the lapse of time or both,
35
36
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which the Company
proposes to take with respect thereto.
SECTION 502. Existence. So long as any of the General Term Notes are
Outstanding, subject to Article 8 of the Indenture, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and all rights (charter and statutory) and franchises
other than rights or franchises the loss of which would not be disadvantageous
in any material respect to the Holders of the General Term Notes.
SECTION 503. Maintenance of Properties. So long as any of the General
Term Notes are Outstanding, the Company will cause all properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Holders.
SECTION 504. Payment of Taxes and Other Claims. So long as any of the
General Term Notes are Outstanding, the Company will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all lawful claims for labor, materials and supplies which,
if
36
37
unpaid, might by law become a Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim the amount of which, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 505. Insurance. So long as any of the General Term Notes are
Outstanding, the Company shall, and each of its Restricted Subsidiaries and
Consumers shall, keep insured by financially sound and reputable insurers all
property of a character usually insured by entities engaged in the same or
similar businesses similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such entities and carry such amounts
of other insurance as is usually carried by such entities.
SECTION 506. Compliance with Laws. So long as any of the General Term
Notes are Outstanding, the Company shall, and each of its Restricted
Subsidiaries and Consumers shall, comply in all material respects with all laws
applicable to the Company or such Restricted Subsidiary or Consumers, as the
case may be, its respective business and properties.
SECTION 508. Limitation on Certain Liens. (a) So long as any of the
General Term Notes are outstanding, the Company shall not create, incur, assume
or suffer to exist any Lien or any other type of arrangement intended or having
the effect of conferring upon a creditor of the Company or any Subsidiary a
preferential interest (hereinafter in this Section referred to as a "Lien") upon
or with respect to the Capital Stock of Consumers, Enterprises or NOMECO without
making effective provision whereby the General Term 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
37
38
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
Company or (c) Support Obligations not to exceed $30 million 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
Company 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 Company; provided that on the date such
Liens are
38
39
created, and after giving effect to such Indebtedness, the aggregate principal
amount at maturity of all of the secured Indebtedness of the Company at such
date shall not exceed 10% of Consolidated Assets at such date.
SECTION 509. Limitation on Consolidation, Merger, Sale or Conveyance.
In addition to the limitations set forth in Article 8 of the Indenture, so long
as the General Term Notes are Outstanding and until the General Term 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
Company shall be permanently released from the following provisions, the Company
shall not consolidate with or merge into any other Person or sell, lease or
convey the property of the Company 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 Company 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
510 hereof.
SECTION 510. Limitation on Consolidated Indebtedness. (a) So long as
any of the General Term Notes are Outstanding and until the General Term 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
Company shall be permanently released from the provision of this Section 510,
the Company shall not, and shall not permit any Restricted Subsidiary of the
Company to, issue, create, assume, guarantee, incur or otherwise become liable
for (collectively, "issue"), directly or indirectly, any Indebtedness unless (i)
the Consolidated Coverage Ratio of the Company and its Consolidated Subsidiaries
for
39
40
the four consecutive fiscal quarters immediately preceding the issuance of such
Indebtedness (as shown by a pro forma consolidated income statement of the
Company 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
Company 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 1.6 to 1.0 and (ii), immediately
after giving effect to the issuance of such Indebtedness and (if applicable) the
application of the net proceeds thereof to refinance other Indebtedness, the
Consolidated Leverage Ratio is equal to or less than a ratio of 0.75 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Company or any
Restricted Subsidiary may issue, directly or indirectly, the following
Indebtedness:
(1) Revolving Indebtedness to banks not to exceed $1,000,000,000 in the
aggregate outstanding principal amount at any time;
(2) Indebtedness (other than Indebtedness described in clause (1) of
this Subsection) outstanding on the date of the original Indenture, as set
forth on Schedule 510(b)(2) attached hereto and made a part hereof, and
Indebtedness issued in exchange for, or the proceeds of which are used to
40
41
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 General Term Notes, the Indebtedness is subordinated to
the General Term Notes in right of payment;
(3) Indebtedness of the Company owed to and held by a Subsidiary and
Indebtedness of a Subsidiary owed to and held by the Company; provided,
however, that, in the case of Indebtedness of the Company 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 Company or a
Subsidiary) shall be deemed for the purposes of this Subsection to
constitute the issuance of such Indebtedness by the Company;
(4) Indebtedness of the Company issued in exchange for, or the proceeds
of which are used to refund or refinance, Indebtedness of the Company
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
41
42
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 General Term
Notes, the Indebtedness so issued is subordinated to the General Term Notes
in right of payment; and
(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.
SECTION 511. Limitation on Restricted Payments. (a) So long as the
General Term Notes are Outstanding and until the General Term 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
Company shall be permanently released from the provision of this Section 511,
the Company shall not, and shall not permit any Restricted Subsidiary of the
Company, directly or indirectly, to (i) declare or pay any dividend or make any
distribution on the Capital Stock of the Company to the direct or indirect
holders of the Capital Stock
42
43
of the Company (except dividends or distributions payable solely in
Non-Convertible Capital Stock of the Company or in options, warrants or other
rights to purchase such Non-Convertible Capital Stock and except dividends or
distributions payable to the Company or a Subsidiary), (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company (any such
dividend, distribution, purchase, redemption, other acquisition or retirement
being hereinafter referred to as a "Restricted Payment") if at the time the
Company 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 September 30, 1993, would exceed the
sum of:
(A) $120,000,000;
(B) 100% of Consolidated Net Income, accrued during the period
(treated as one accounting period) from September 30, 1993 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 Proceeds received by the Company from the
issue or sale of or contribution with respect to its Capital Stock
subsequent to September 30, 1993.
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
43
44
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 511(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the
Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (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 Company's Capital Stock issued in respect of the
acquisition of any business or assets by the Company 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.
44
45
SECTION 512. Limitation on Transactions with Affiliates. So long as any
of the General Term Notes are Outstanding, the Company shall not directly or
indirectly, conduct any business or enter into any transaction or series of
related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with an Affiliate unless the terms of
such business, transaction or series of transactions are as favorable to the
Company as terms that could be obtainable at the time for a comparable
transaction or series of related transactions in arm's-length dealings with an
unrelated third Person. This Section shall not apply to (x) compensation paid to
officers and directors of the Company which has been approved by the Board of
Directors of the Company or (y) loans to the Company or an Affiliate pursuant to
a global cash management program, which loans mature within one year from the
date thereof.
ARTICLE VI
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE GENERAL TERM NOTES
SECTION 601. Definition. All of the events specified in Section 501 of
the Indenture and the events specified in Section 602 of this Article shall be
"Events of Default" with respect to the General Term Notes.
SECTION 602. Additional Events of Default. As contemplated by Sections
301(15) and 501(7) of the Indenture, any one of the following events (whatever
the reason for such Event of Default and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall be an Event of Default with respect
to the General Term Notes for all purposes of the Indenture:
45
46
(a) a default or event of default in respect of any Indebtedness of the
Company having an aggregate outstanding principal amount at the time of such
default in excess of $25,000,000 shall occur which results in the acceleration
of such Indebtedness or Indebtedness of the Company having an outstanding
principal amount at maturity in excess of $25,000,000 shall not be paid at
maturity thereof, which default shall not have been waived by the holder or
holders of such Indebtedness within 30 days of such default; or
(b) the entry of a final judgment or judgments against the Company
aggregating in excess of $25,000,000 which remain undischarged or unbonded for a
period (during which execution shall not be effectively stayed) of 60 days.
ARTICLE VII
GLOBAL NOTES
The General Term Notes will be issued initially in the form of Global
Notes. "Global Note" means a registered General Term Note evidencing one or more
General Term Notes issued to a depositary (the "Depositary") or its nominee, in
accordance with this Article and bearing the legend prescribed in this Article.
A single Global Note will represent all General Term Notes issued on the same
date and having the same terms, including, but not limited to, the same Interest
Payment Dates, rate of interest, Stated Maturity, and redemption provisions (if
any). The Company shall execute and the Trustee shall, in accordance with this
Article and the Company Order with respect to the General Term 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 General Term 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
46
47
bear a legend substantially to the following effect: "Unless this Global Note is
presented by an authorized representative of the Depositary to the Company or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of the Depositary or in such other name as is
requested by the Depositary, any transfer, pledge or other use hereof for value
or otherwise by or to any person shall be wrongful inasmuch as the registered
owner hereof, the Depositary, has an interest herein."
Notwithstanding Section 305 of the Indenture, unless and until it is
exchanged in whole or in part for General Term Notes in definitive form, a
Global Note representing one or more General Term 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 General Term Notes or a nominee of such successor Depositary.
If at any time the Depositary for the General Term Notes is unwilling
or unable to continue as Depositary for the General Term Notes, the Company
shall appoint a successor Depositary with respect to the General Term Notes. If
a successor Depositary for the General Term Notes is not appointed by the
Company by the earlier of (i) 90 days from the date the Company receives notice
to the effect that the Depositary is unwilling or unable to act, or the Company
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
Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive General Term Notes, will authenticate
and deliver General Term Notes in definitive form in an aggregate principal
amount equal to the principal amount of the Global Note or Notes representing
such General Term Notes in exchange for such Global Note or Notes.
47
48
The Company may at any time and in its sole discretion determine that
the General Term 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 Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive General Term Notes, will authenticate
and deliver General Term Notes in definitive form in an aggregate principal
amount equal to the principal amount of the Global Note or Notes representing
such General Term Notes in exchange for such Global Note or Notes.
The Depositary for such General Term Notes may surrender a Global Note
or Notes for such General Term Notes in exchange in whole or in part for General
Term Notes in definitive form on such terms as are acceptable to the Company and
such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new General
Term 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 General
Term Notes in definitive form delivered to Holders thereof.
In any exchange provided for in this Article, the Company will execute
and the Trustee will authenticate and deliver General Term Notes in definitive
registered form in authorized denominations.
48
49
Upon the exchange of a Global Note for General Term Notes in definitive
form, such Global Note shall be canceled by the Trustee. General Term 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 General Term Notes to the persons in
whose names such General Term Notes are so registered.
ARTICLE VIII
DEFEASANCE
All of the provisions of Article Fourteen of the Original Indenture
shall be applicable to the General Term Notes. Upon satisfaction by the Company
of the requirements of Section 1404 of the Indenture, in connection with any
covenant defeasance (as provided in Section 1403 of the Indenture), the Company
shall be released from its obligations under Article Eight of the Original
Indenture and under Articles III and V of this Fifth Supplemental Indenture with
respect to the General Term Notes.
ARTICLE IX
SUPPLEMENTAL INDENTURES
This Fifth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Fifth Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Fifth Supplemental Indenture shall together constitute one
and the same instrument.
49
50
The Company may, by supplemental indenture, amend this Fifth
Supplemental Indenture to provide for additional definitions, terms and
provisions relating to General Term Notes. Any such supplemental indenture shall
not adversely affect the rights and privileges of Holders of General Term Notes
issued prior to such supplemental indenture. Any such supplemental indenture may
include,
50
51
but is not limited to including, additional provisions permitting payment of
General Term Notes prior to Stated Maturity at the option of the Holders,
issuance of General Term Notes in currencies other than Dollars, and special
provisions relating to interest rate provisions.
TESTIMONIUM
This Fifth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
By:________________________
Attest:
________________________
(Corporate Seal)
THE CHASE MANHATTAN BANK
as Trustee
By:________________________
Attest:
________________________
(Corporate Seal)
51
52
Schedule 510(b)(2)
Indebtedness of CMS Energy Corporation outstanding on January 20, 1994:
1. $146,000,000 of Series A Senior Deferred Coupon Notes due 1997; and
2. $248,000,000 of Series B Senior Deferred Coupon Notes due 1999.
52
