Exhibit 4(a)
ELEVENTH SUPPLEMENTAL INDENTURE
dated as of March 29th, 2001
____________________
This Eleventh Supplemental Indenture, dated as of the 29th day of March,
2001 between CMS Energy Corporation, a corporation duly organized and existing
under the laws of the State of Michigan (hereinafter called the "Issuer") and
having its principal xxxxxx xx Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0000, 000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxx 00000, and Bank One Trust Company, N.A., a national
banking association (hereinafter called the "Trustee") and having its Corporate
Trust Office at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (formerly known as NBD Bank, N.A.)
entered into an Indenture, dated as of September 15, 1992 (the "Original
Indenture"), pursuant to which one or more series of debt securities of the
Issuer (the "Securities") may be issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Original Indenture; and
WHEREAS, Section 8.1(e) of the Original Indenture provides that a
supplemental indenture may be entered into by the Issuer and the Trustee without
the consent of any Holders of the Securities to establish the form and terms of
the Securities of any series; and
WHEREAS, the Issuer has requested the Trustee to join with it in the
execution and delivery of this Eleventh Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things, establishing
the form and terms of a series of Securities to be known as the Issuer's " 8.50%
Senior Notes Due 2011" (the "2011 Notes"), providing for the issuance of the
2011 Notes and amending and adding certain provisions thereof for the benefit of
the Holders of the 2011 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this Eleventh
Supplemental Indenture for the purposes set forth in Sections 2.3 and 8.1(e) of
the Original Indenture as referred to above; and
WHEREAS, the Issuer has furnished the Trustee with a copy of the
resolutions of its Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of this Eleventh Supplemental Indenture; and
WHEREAS, all things necessary to make this Eleventh Supplemental Indenture
a valid agreement of the Issuer and the Trustee and a valid supplement to the
Original Indenture have been done,
NOW, THEREFORE, for and in consideration of the premises and the purchase
of the 2011 Notes to be issued hereunder by holders thereof, the Issuer and the
Trustee mutually covenant and agree, for the equal and proportionate benefit of
the respective holders from time to time of the 2011 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture together with
this Eleventh Supplemental Indenture and all previous indentures supplemental
thereto entered into pursuant to the applicable terms thereof are hereinafter
sometimes collectively referred to as the "Indenture." All capitalized terms
which are used herein and not otherwise defined herein are defined in the
Indenture and are used herein with the same meanings as in the Indenture.
SECTION 1.02. Definitions. Section 1.1 of the Original Indenture is amended
to insert the new definitions applicable to the 2011 Notes, in the appropriate
alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts recognized during
such period as amortization of capital leases, depletion, nuclear fuel, goodwill
and assets classified as intangible assets in accordance with generally accepted
accounting principles.
"Applicable Premium" means, with respect to a 2011 Note (or portion
thereof) being redeemed at any time, the excess of (A) the present value at such
time of the principal amount of such 2011 Note (or portion thereof) being
redeemed plus all interest payments due on such 2011 Note (or portion thereof),
which present value shall be computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such 2011
Note (or portion thereof) being redeemed at such time. For purposes of this
definition, the present values of interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or assets to
which such lease relates.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered Capital
Stock for purposes of this definition.
"Change in Control" means an event or series of events by which (i) the
Issuer ceases to own beneficially, directly or indirectly, at least 80% of the
total voting power of all classes of Capital Stock then outstanding of Consumers
(whether arising from issuance of securities of the Issuer or Consumers, any
direct or indirect transfer of securities by the Issuer or Consumers, any
merger, consolidation, liquidation or dissolution of the Issuer or Consumers or
otherwise); (ii) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as such
term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person or group shall be deemed to have "beneficial ownership" of all shares
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii) the
Issuer consolidates with or merges into another corporation or directly or
indirectly conveys, transfers or leases all or substantially all of its assets
to any Person, or any corporation consolidates with or merges into the Issuer,
in either event pursuant to a transaction in which the outstanding Voting Stock
of the Issuer is changed into or exchanged for cash, securities, or other
property, other than any such transaction in which (A) the outstanding Voting
Stock of the Issuer is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Issuer
immediately prior to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission" means CMS Gas Transmission Company (formerly known
as CMS Gas Transmission and Storage Company), a Michigan corporation and
wholly-owned subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan corporation and
wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS Oil & Gas" means CMS Oil & Gas Co. (formerly known as CMS NOMECO Oil &
Gas Co.), a Michigan corporation and wholly-owned subsidiary of Enterprises.
"Consolidated Assets" means, at any date of determination, the aggregate
assets of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Consolidated Coverage Ratio" with respect to any period means the ratio of
(i) the aggregate amount of Operating Cash Flow for such period to (ii) the
aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Current Liabilities" means, for any period, the aggregate
amount of liabilities of the Issuer and its Consolidated Subsidiaries which may
properly be classified as current liabilities (including taxes accrued as
estimated), after (i) eliminating all inter-company items between the Issuer and
any Consolidated Subsidiary and (ii) deducting all current maturities of
long-term Indebtedness, all as determined in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date of determination, the
aggregate Indebtedness of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that Consolidated Indebtedness shall not include
any subordinated debt owned by any Hybrid Preferred Securities Subsidiary.
"Consolidated Interest Expense" means, for any period, the total interest
expense in respect of Consolidated Indebtedness of the Issuer and its
Consolidated Subsidiaries, including, without duplication, (i) interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii)
capitalized interest, (iv) cash and noncash interest payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under Interest Rate Protection
Agreements (including amortization of discount) and (vii) interest expense in
respect of obligations of other Persons deemed to be Indebtedness of the Issuer
or any Consolidated Subsidiaries under clause (v) or (vi) of the definition of
Indebtedness, provided, however, that Consolidated Interest Expense shall
exclude (a) any costs otherwise included in interest expense recognized on early
retirement of debt and (b) any interest expense in respect of any Indebtedness
of any Subsidiary of Consumers, CMS Generation, CMS Oil & Gas, CMS Electric and
Gas, CMS Gas Transmission, CMS MST or any other Designated Enterprises
Subsidiary, provided that such Indebtedness is without recourse to any assets of
the Issuer, Consumers, Enterprises, CMS Generation, CMS Oil & Gas, CMS Electric
and Gas, CMS Gas Transmission, CMS MST or any other Designated Enterprises
Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Issuer and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a Subsidiary, except
that (A) the Issuer's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such
period to the Issuer or a Consolidated Subsidiary as a dividend or other
distribution and (B) the Issuer's equity in a net loss of any such Person
for such period shall be included in determining such Consolidated Net
Income;
(ii) any net income of any Person acquired by the Issuer or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such
acquisition;
(iii)any gain or loss realized upon the sale or other disposition of any
property, plant or equipment of the Issuer or its Consolidated Subsidiaries
which is not sold or otherwise disposed of in the ordinary course of
business and any gain or loss realized upon the sale or other disposition
of any Capital Stock of any Person; and
(iv) any net income of any Subsidiary of Consumers, CMS Generation, CMS Oil &
Gas, CMS Electric and Gas, CMS Gas Transmission, CMS MST or any other
Designated Enterprises Subsidiary whose interest expense is excluded from
Consolidated Interest Expense, provided, however, that for purposes of this
subsection (iv), any cash, dividends or distributions of any such
Subsidiary to the Issuer shall be included in calculating Consolidated Net
Income.
"Consolidated Net Tangible Assets" means, for any period, the total amount
of assets (less accumulated depreciation or amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible
items) as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, and after giving effect to purchase accounting and after
deducting therefrom, to the extent otherwise included, the amounts of: (i)
Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary;
(iii) excess of cost over fair value of assets of businesses acquired, as
determined in good faith by the Board of Directors as evidenced by Board
resolutions; (iv) any revaluation or other write-up in value of assets
subsequent to December 31, 1996, as a result of a change in the method of
valuation in accordance with generally accepted accounting principles; (v)
unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses
organization or developmental expenses and other intangible items; (vi) treasury
stock; and (vii) any cash set apart and held in a sinking or other analogous
fund established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated Current
Liabilities.
"Consolidated Net Worth" of any Person means the total of the amounts shown
on the consolidated balance sheet of such Person and its consolidated
subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, as of any date selected by such Person not more
than 90 days prior to the taking of any action for the purpose of which the
determination is being made (and adjusted for any material events since such
date), as (i) the par or stated value of all outstanding Capital Stock plus (ii)
paid-in capital or capital surplus relating to such Capital Stock plus (iii) any
retained earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable to
Exchangeable Stock.
"Consolidated Subsidiary" means, any Subsidiary whose accounts are or are
required to be consolidated with the accounts of the Issuer in accordance with
generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan corporation, all of
whose common stock is on the date hereof owned by the Issuer.
"Designated Enterprises Subsidiary" means any wholly-owned subsidiary of
Enterprises formed after the date of this Eleventh Supplemental Indenture which
is designated a Designated Enterprises Subsidiary by the Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan corporation and
wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to the 2011 Notes has the meaning specified
in Article V of this Eleventh Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital Stock of
such corporation that is neither Exchangeable Stock or Redeemable Stock).
"Hybrid Preferred Securities" means any preferred securities issued by a
Hybrid Preferred Securities Subsidiary, where such preferred securities have the
following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends substantially all of the
proceeds from the issuance of such preferred securities to the Company or
Consumers in exchange for subordinated debt issued by the Company or
Consumers respectively;
(ii) such preferred securities contain terms providing for the deferral of
distributions corresponding to provisions providing for the deferral of
interest payments on such subordinated debt; and
(iii)the Company or Consumers (as the case may be) makes periodic interest
payments on such subordinated debt, which interest payments are in turn
used by the Hybrid Preferred Securities Subsidiary to make corresponding
payments to the holders of the Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any business trust (or
similar entity) (i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of the
Company or Consumers) at all times by the Company or Consumers, (ii) that has
been formed for the purpose of issuing Hybrid Preferred Securities and (iii)
substantially all of the assets of which consist at all times solely of
subordinated debt issued by the Company or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii)all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction (other
than obligations with respect to letters of credit securing obligations
(other than obligations described in clauses (i) through (iii) above)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement following
payment on the letter of credit);
(v) all obligations of the type referred to in clauses (i) through (iv) of
other Persons and all dividends of other Persons for the payment of which,
in either case, such Person is responsible or liable as obligor, guarantor
or otherwise; and
(vi) all obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such property
or assets or the amount of the obligation so secured.
"Interest Payment Date" means October 15, 2001 and each April 15 and
October 15 in each year thereafter.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Issuer or any Subsidiary against
fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) which is intended to
reflect the separate performance of certain of the businesses or operations
conducted by such corporation or any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security interest, conditional
sale, title retention agreement or other charge or encumbrance of any kind.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
aggregate proceeds of such Asset Sale including the fair market value (as
determined by the Board of Directors and net of any associated debt and of any
consideration other than Capital Stock received in return) of property other
than cash, received by the Issuer, net of (i) brokerage commissions and other
fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Issuer and
its Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Issuer or any Restricted Subsidiary of the Issuer as a reserve
against any liabilities associated with such Asset Sale including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with generally accepted accounting principles and (b) with respect to any
issuance or sale or contribution in respect of Capital Stock, the aggregate
proceeds of such issuance, sale or contribution, including the fair market value
(as determined by the Board of Directors and net of any associated debt and of
any consideration other than Capital Stock received in return) of property other
than cash, received by the Issuer, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof, provided, however, that if
such fair market value as determined by the Board of Directors of property other
than cash is greater than $25 million, the value thereof shall be based upon an
opinion from an independent nationally recognized firm experienced in the
appraisal or similar review of similar types of transactions.
"Non-Convertible Capital Stock" means, with respect to any corporation, any
non-convertible Capital Stock of such corporation and any Capital Stock of such
corporation convertible solely into non-convertible Capital Stock other than
Preferred Stock of such corporation; provided, however, that Non-Convertible
Capital Stock shall not include any Redeemable Stock or Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to the Issuer and
its Consolidated Subsidiaries, the aggregate amount of Consolidated Net Income
after adding thereto Consolidated Interest Expense (adjusted to include costs
recognized on early retirement of debt), income taxes, depreciation expense,
Amortization Expense and any noncash amortization of debt issuance costs, any
nonrecurring, noncash charges to earnings and any negative accretion
recognition.
"Other Rating Agency" shall mean any one of Fitch Inc. or Xxxxx'x Investors
Service, Inc., and any successor to any of these organizations which is a
nationally recognized statistical rating organization.
"Paying Agent" means any person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on any of the 2011 Notes on
behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.
"Predecessor 2011 Note" of any particular 2011 Note means every previous
2011 Note evidencing all or a portion of the same debt as that evidenced by such
particular 2011 Note; and, for the purposes of the definition, any 2011 Note
authenticated and delivered under Section 2.9 of the Indenture in exchange for
or in lieu of a mutilated, destroyed, lost or stolen 2011 Note shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen 2011 Note.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation; provided that Hybrid Preferred Securities shall not be considered
Preferred Stock for purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms or otherwise
is required to be redeemed prior to the first anniversary of the Stated Maturity
of the outstanding 2011 Notes or is redeemable at the option of the holder
thereof at any time prior to the first anniversary of the Stated Maturity of the
outstanding 2011 Notes.
"Restricted Subsidiary" means any Subsidiary (other than Consumers and its
subsidiaries) of the Issuer which, as of the date of the Issuer's most recent
quarterly consolidated balance sheet, constituted at least 10% of the total
Consolidated Assets of the Issuer and its Consolidated Subsidiaries and any
other Subsidiary which from time to time is designated a Restricted Subsidiary
by the Board of Directors; provided that no Subsidiary may be designated a
Restricted Subsidiary if, immediately after giving effect thereto, an Event of
Default or event that, with the lapse of time or giving of notice or both, would
constitute an Event of Default would exist or the Issuer and its Restricted
Subsidiaries could not incur at least one dollar of additional Indebtedness
under Section 4.04, and (i) any such Subsidiary so designated as a Restricted
Subsidiary must be organized under the laws of the United States or any State
thereof, (ii) more than 80% of the Voting Stock of such Subsidiary must be owned
of record and beneficially by the Issuer or a Restricted Subsidiary and (iii)
such Restricted Subsidiary must be a Consolidated Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., and any successor thereto which is
a nationally recognized statistical rating organization, or if such entity shall
cease to rate the 2011 Notes or shall cease to exist and there shall be no such
successor thereto, any other nationally recognized statistical rating
organization selected by the Issuer which is acceptable to the Trustee.
"Subordinated Indebtedness" means any Indebtedness of the Issuer (whether
outstanding on the date of this Eleventh Supplemental Indenture or thereafter
incurred) which is contractually subordinated or junior in right of payment to
the 2011 Notes.
"Support Obligations" means, for any person, without duplication, any
financial obligation, contingent or otherwise, of such person guaranteeing or
otherwise supporting any debt or other obligation of any other person in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such person, direct or indirect,(i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such debt or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other financial
statement condition of the primary obligor so as to enable the rimary obligor
to pay such debt, (iv) to provide equity capital under or in respect of equity
subscription arrangements (to the extent that such obligation to provide equity
capital does not otherwise constitute debt), or (v) to perform, or arrange for
the performance of, any non-monetary obligations or non-funded debt payment
obligations of the primary obligor.
"Tax-Sharing Agreement" means the Amended and Restated Agreement for the
Allocation of Income Tax Liabilities and Benefits, dated January 1, 1994, as
amended or supplemented from time to time, by and among Issuer, each of the
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the redemption
date or, in the case of defeasance, prior to the date of deposit (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining average life to
stated maturity of the 2011 Notes; provided, however, that if the average life
to stated maturity of the 2011 Notes is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year from the weekly average yields of United States
Treasury securities for which such yields are given.
"Voting Stock" means securities of any class or classes the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for corporate
directors (or persons performing similar functions).
Certain terms, used principally in Articles Three, Four and Seven of this
Eleventh Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE 2011 NOTES; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby created a series
of Securities to be known and designated as the "8.50% Senior Notes Due 2011"
and limited in aggregate principal amount (except as contemplated in Section
2.3(f)(2) of the Indenture) to $350,000,000. The Stated Maturity of the 2011
Notes is April 15, 2011.
(b) The 2011 Notes will bear interest from the Original Issue Date, or
from the most recent date to which interest has been paid or duly provided for,
at the rate of 8.50% per annum stated therein until the principal thereof is
paid or made available for payment. Interest will be payable semiannually on
each Interest Payment Date and at Maturity, as provided in the form of the 2011
Note in Section 2.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of the Indenture for
the payment of the interest on any 2011 Note payable on any Interest Payment
Date (other than at Maturity) which shall be the 1st day of the calendar month
in which such Interest Payment Date occurs (whether or not a Business Day)
except that the Record Date for interest payable at Maturity shall be the date
of Maturity.
(d) The payment of the principal of, premium (if any) and interest on the
2011 Notes shall not be secured by a security interest in any property.
(e) The 2011 Notes shall be redeemable at the option of the Issuer, in whole
or in part, at any time and from time to time, or not less than 30 days' notice
at a redemption price equal to 100% of the principal amount of such 2011 Notes
being redeemed plus the Applicable Premium, if any, thereon at the time of
redemption, together with accrued interest, if any, thereon to the redemption
date. In no event will the redemption price ever be less than 100% of the
principal amount of the 2011 Notes plus accrued interest to the redemption
date. The 2011 Notes shall be purchased by the Issuer at the option of the
Holders thereof as provided in Sections 3.01 and 4.06 hereof.
(f) The 2011 Notes shall not be convertible.
(g) The 2011 Notes will not be subordinated to the payment of Senior Debt.
(h) The Issuer will not pay any additional amounts on the 2011 Notes
held by a Person who is not a U.S. Person in respect of any tax, assessment or
government charge withheld or deducted.
(i) The events specified in Events of Default with respect to the 2011
Notes shall include the events specified in Article Five of this Eleventh
Supplemental Indenture. In addition to the covenants set forth in Article Three
of the Original Indenture, the Holders of the 2011 Notes shall have the benefit
of the covenants of the Issuer set forth in Article Four hereto.
SECTION 2.02. Forms Generally. The 2011 Notes and Trustee's certificates
of authentication shall be in substantially the form set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by the Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
2011 Notes, as evidenced by their execution thereof.
The definitive 2011 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 2011 Notes, as evidenced by their execution
thereof.
SECTION 2.03. Form of Face of 2011 Note.
CMS ENERGY CORPORATION
% SENIOR NOTES DUE ____
No. ________ $__________
CMS Energy Corporation, a corporation duly organized and existing under the
laws of the State of Michigan (herein called the "Issuer", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________________________, or
registered assigns, the principal sum of ____________________ Dollars on April
15, 2011 ("Maturity") and to pay interest thereon from March 29, 2001 (the
"Original Issue Date") or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on April 15 and
October 15 in each year, commencing on October 15, 2001 and at Maturity at the
rate of 8.50% per annum, until the principal hereof is paid or made available
for payment. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this 2011 Note (or one or more Predecessor 2011 Notes) is registered at the
close of business on the Record Date for such interest, which shall be the 1st
day of the calendar month in which such Interest Payment Date occurs (whether or
not a Business Day) except that the Record Date for interest payable at Maturity
shall be the date of Maturity. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and may either be paid to the Person in whose name this 2011 Note (or one
or more Predecessor 2011 Notes) is registered at the close of business on a
subsequent Record Date (which shall be not less than five Business Days prior to
the date of payment of such defaulted interest) for the payment of such
defaulted interest to be fixed by the Trustee, notice whereof shall be given to
Holders of 2011 Notes not less than 15 days preceding such subsequent Record
Date.
Payment of the principal of (and premium, if any) and interest, if any, on
this 2011 Note will be made at the office or agency of the Issuer maintained for
that purpose in New York, New York (the "Place of Payment"), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuer payment of interest (other than interest payable at
Maturity) may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire
transfer to an account designated by such Person not later than ten days prior
to the date of such payment.
Reference is hereby made to the further provisions of this 2011 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 2011 Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal. Dated:
CMS ENERGY CORPORATION
By____________________________
Its:
By____________________________
Its:
Attest:
SECTION 2.04. Form of Reverse of 2011 Note. This 8.50% Senior Note Due 2011
is one of a duly authorized issue of securities of the Issuer (herein called the
"2011 Notes"), issued and to be issued under an Indenture, dated as of September
15, 1992, as supplemented by certain supplemental indentures, including the
Eleventh Supplemental Indenture, dated as of March 29, 2001 (herein collectively
referred to as the "Indenture"), between the Issuer and Bank One Trust Company,
N.A., a national banking association (formerly known as NBD Bank, N.A), as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Issuer, the Trustee, and the
Holders of the 2011 Notes and of the terms upon which the 2011 Notes are, and
are to be, authenticated and delivered. This 2011 Note is one of the series
designated on the face hereof, limited in aggregate principal amount to
$350,000,000.
The 2001 Notes are subject to redemption at the option of the Issuer, in
whole or in part, upon not more than 60 nor less than 30 days' notice as
provided in the Indenture at any time and from time to time, at a redemption
price equal to 100% of the principal amount of such 2001 Notes being redeemed
plus the Applicable Premium, if any, thereon at the time of redemption, together
with accrued interest, if any, thereon to the redemption date, but interest
installments whose Stated Maturity is on or prior to such redemption date will
be payable to the Holder of record at the close of business on the relevant
Record Date referred to on the face hereof, all as provided in the Indenture. In
no event will the redemption price ever be less than 100% of the principal
amount of the 2001 Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable Premium:
"Applicable Premium" means, with respect to a 2011 Note (or portion
thereof) being redeemed at any time, the excess of (A) the present value at such
time of the principal amount of such 2011 Note (or portion thereof) being
redeemed plus all interest payments due on such 2011 Note (or portion thereof),
which present value shall be computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such 2011
Note (or portion thereof) being redeemed at such time. For purposes of this
definition, the present values of the interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two business days prior to the redemption
date or, in the case of defeasance, prior to the date of deposit (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining average life to
stated maturity of the 2011 Notes; provided, however, that if the average life
to stated maturity of the 2011 Notes is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given.
In the event of redemption of this 2011 Note in part only, a new 2011 Note
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If a Change in Control occurs, the Issuer shall notify the Holder of this
2011 Note of such occurrence and such Holder shall have the right to require the
Issuer to make a Required Repurchase of all or any part of this 2011 Note at a
Change in Control Purchase Price equal to 101% of the principal amount of this
2011 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 2011 Note, a new 2011 Note or Notes for the
unrepurchased portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
If an Event of Default with respect to this 2011 Note shall occur and be
continuing, the principal of this 2011 Note may be declared due and payable in
the manner and with the effect provided in the Indenture.
In any case where any Interest Payment Date, repurchase date, Stated
Maturity or Maturity of any 2011 Note shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of the Indenture or this
2011 Note), payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, repurchase date or at the Stated
Maturity or Maturity; provided that no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, redemption
date, repurchase date, Stated Maturity or Maturity, as the case may be, to such
Business Day.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this 2011 Note or (ii) certain restrictive covenants and
Events of Default with respect to this 2011 Note, in each case upon compliance
with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of all outstanding 2011 Notes under the
Indenture at any time by the Issuer and the Trustee with the consent of the
Holders of not less than a majority in principal amount of Securities of all
series then outstanding and affected (voting as one class).
The Indenture permits the Holders of not less than a majority in principal
amount of Securities of all series at the time outstanding with respect to which
a default shall have occurred and be continuing (voting as one class) to waive
on behalf of the Holders of all outstanding Securities of such series any past
default by the Issuer, provided that no such waiver may be made with respect to
a default in the payment of the principal of or the interest on any Security of
such series or the default by the Issuer in respect of certain covenants or
provisions of the Indenture, the modification or amendment of which must be
consented to by the Holder of each outstanding Security of each series affected.
As set forth in, and subject to, the provisions of the Indenture, no Holder
of any 2011 Note will have any right to institute any proceeding with respect to
the Indenture or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of Default,
the Holders of not less than 25% in principal amount of the outstanding
Securities of each affected series (voting as one class) shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the outstanding Securities of each affected
series (voting as one class) a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of (and premium, if any)
or any interest on this 2011 Note on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this 2011 Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this 2011 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 2011 Note is registerable in the Security Register,
upon surrender of this 2011 Note for registration of transfer at the office or
agency of the Issuer in any place where the principal of and any premium and
interest on this 2011 Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new 2011 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 2011 Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, 2011 Notes are
exchangeable for a like aggregate principal amount of 2011 Notes and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer shall not be required to (a) issue, exchange or register the
transfer of this 2011 Note for a period of 15 days next preceding the mailing of
the notice of redemption of 2011 Notes or (b) exchange or register the transfer
of any 2011 Note or any portion thereof selected, called or being called for
redemption, except in the case of any 2011 Note to be redeemed in part, the
portion thereof not so to be redeemed.
Prior to due presentment of this 2011 Note for registration of transfer,
the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this 2011 Note is registered as the owner hereof for all
purposes, whether or not this 2011 Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this 2011 Note without definition which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
SECTION 2.05. Form of Trustee's Certificate of Authentication. The
Trustee's certificates of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By__________________________
Authorized Officer
ARTICLE III
CHANGE OF CONTROL
SECTION 3.01. Change of Control. Upon the occurrence of a Change in Control
(the effective date of such Change in Control being the "Change in Control
Date"), each Holder of a 2011 Note shall have the right to require that the
Issuer repurchase (a "Required Repurchase") all or any part of such Holder's
2011 Note at a repurchase price payable in cash equal to 101% of the principal
amount of such 2011 Note plus accrued interest to the Purchase Date (the "Change
in Control Purchase Price").
(a) Within 30 days following the Change in Control Date, the Issuer shall
mail a notice (the "Required Repurchase Notice") to each Holder with a copy to
the Trustee stating:
(i) that a Change in Control has occurred and that such Holder has the
right to require the Issuer to repurchase all or any part of such Holder's
2011 Notes at the Change of Control Purchase Price;
(ii) the Change of Control Purchase Price;
(iii) the date on which any Required Repurchase shall be made (which
shall be no earlier than 60 days nor later than 90 days from the date such
notice is mailed) (the "Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause the 2011 Notes to
be repurchased, which shall be consistent with this Section and the
Indenture.
(b) Holders electing to have a 2011 Note repurchased must deliver a written
notice (the "Change in Control Purchase Notice") to the Paying Agent (initially
the Trustee) at its corporate trust office in Detroit, Michigan, or any other
office of the Paying Agent maintained for such purposes, not later than 30 days
prior to the Purchase Date. The Change in Control Purchase Notice shall state:
(i) the portion of the principal amount of any 2011 Notes to be repurchased,
which portion must be $1,000 or an integral multiple thereof; (ii) that such
2011 Notes are to be repurchased by the Issuer pursuant to the change in control
provisions of the Indenture; and (iii) unless the 2011 Notes are represented by
one or more Global Notes, the certificate numbers of the 2011 Notes to be
delivered by the Holder thereof for repurchase by the Issuer. Any Change in
Control Purchase Notice may be withdrawn by the Holder by a written notice of
withdrawal delivered to the Paying Agent not later than three Business Days
prior to the Purchase Date. The notice of withdrawal shall state the principal
amount and, if applicable, the certificate numbers of the 2011 Notes as to which
the withdrawal notice relates and the principal amount of such 2011 Notes, if
any, which remains subject to a Change in Control Purchase Notice.
If a 2011 Note is represented by a Global Note (as described in Article VI
below), the Depositary or its nominee will be the Holder of such 2011 Note and
therefore will be the only entity that can elect a Required Repurchase of such
2011 Note. To obtain repayment pursuant to this Section 3.01 with respect to
such 2011 Note, the beneficial owner of such 2011 Note must provide to the
broker or other entity through which it holds the beneficial interest in such
2011 Note (i) the Change in Control Purchase Notice signed by such beneficial
owner, and such signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, and (ii) instructions to such broker or
other entity to notify the Depositary of such beneficial owner's desire to
obtain repayment pursuant to this Section 3.01. Such broker or other entity will
provide to the Paying Agent (i) the Change of Control Purchase Notice received
from such beneficial owner and (ii) a certificate satisfactory to the Paying
Agent from such broker or other entity stating that it represents such
beneficial owner. Such broker or other entity will be responsible for disbursing
any payments it receives pursuant to this Section 3.01 to such beneficial owner.
(c) Payment of the Change of Control Purchase Price for a 2011 Note for
which a Change in Control Purchase Notice has been delivered and not withdrawn
is conditioned (except in the case of a 2011 Note represented by one or more
Global Notes) upon delivery of such 2011 Note (together with necessary
endorsements) to the Paying Agent at its office in Detroit, Michigan, or any
other office of the Paying Agent maintained for such purpose, at any time
(whether prior to, on or after the Purchase Date) after the delivery of such
Change in Control Purchase Notice. Payment of the Change of Control Purchase
Price for such 2011 Note will be made promptly following the later of the
Purchase Date or the time of delivery of such 2011 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 2011 Note on the Business Day
following the Purchase Date, then, on and after such date, interest will cease
accruing, and all other rights of the Holder shall terminate (other than the
right to receive the Change of Control Purchase Price upon delivery of the 2011
Note).
(d) The Issuer shall comply with the provisions of Regulation 14E and any
other tender offer rules under the Exchange Act, which may then be applicable in
connection with any offer by the Issuer to repurchase 2011 Notes at the option
of Holders upon a Change in Control.
(e) No 2011 Note may be repurchased by the Issuer as a result of a Change
in Control if there has occurred and is continuing an Event of Default (other
than a default in the Payment of the Change in Control Purchase Price with
respect to the 2011 Notes).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2011 NOTES
SECTION 4.01. Existence. So long as any of the 2011 Notes are outstanding,
subject to Article 9 of the Original Indenture, the Issuer will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 4.02. Limitation on Certain Liens. (a) So long as any of the 2011
Notes are outstanding, the Issuer shall not create, incur, assume or suffer to
exist any lien, mortgage, pledge, security interest, conditional sale, title
retention agreement or other charge or encumbrance of any kind, or any other
type of arrangement intended or having the effect of conferring upon a creditor
of the Issuer or any Subsidiary a preferential interest (hereinafter in this
Section referred to as a "Lien") upon or with respect to any of its property of
any character, including without limitation any shares of Capital Stock of
Consumers or Enterprises, without making effective provision whereby the 2011
Notes shall (so long as any such other creditor shall be so secured) be equally
and ratably secured (along with any other creditor similarly entitled to be
secured) by a direct Lien on all property subject to such Lien, provided,
however, that the foregoing restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or levies to
the extent not past due;
(ii) pledges or deposits to secure (a) obligations under workmen's
compensation laws or similar legislation, (b) statutory obligations of the
Issuer or (c) Support Obligations;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising
in the ordinary course of business securing obligations which are not
overdue or which have been fully bonded and are being contested in good
faith;
(iv) purchase money Liens upon or in property acquired and held by the
Issuer in the ordinary course of business to secure the purchase price of
such property or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of any such property to be subject to such Liens,
or Liens existing on any such property at the time of acquisition, or
extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that no such Lien shall extend to or cover any
property other than the property being acquired and no such extension,
renewal or replacement shall extend to or cover property not theretofore
subject to the Lien being extended, renewed or replaced, and provided,
further, that the aggregate principal amount of the Indebtedness at any one
time outstanding secured by Liens permitted by this clause (iv) shall not
exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of this
Section securing Indebtedness of the Issuer; provided that on the date such
Liens are created, and after giving effect to such Indebtedness, the
aggregate principal amount at maturity of all of the secured Indebtedness
of the Issuer at such date shall not exceed 5% of Consolidated Net Tangible
Assets at such date.
SECTION 4.03. Limitation on Consolidation, Merger, Sale or Conveyance. So
long as any of the 2011 Notes are outstanding and until the 2011 Notes are rated
BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which time the
Issuer will be permanently released from the provisions of this Section 4.03,
and subject also to Article Nine of the Indenture, the Issuer shall not
consolidate with or merge into any other Person or sell, lease or convey the
property of the Issuer in the entirety or substantially as an entirety, unless
(i) immediately after giving effect to such transaction the Consolidated Net
Worth of the surviving entity is at least equal to the Consolidated Net Worth of
the Issuer immediately prior to the transaction, and (ii) after giving effect to
such transaction, the surviving entity would be entitled to incur at least one
dollar of additional Indebtedness (other than revolving Indebtedness to banks)
without violation of the limitations in Section 4.04 hereof.
SECTION 4.04. Limitation on Consolidated Indebtedness. (a) So long as any
of the 2011 Notes are outstanding and until the 2011 Notes are rated BBB- or
above (or an equivalent rating) by Standard & Poor's and one Other Rating Agency
(or, if Standard & Poor's shall change its rating system, an equivalent of such
rating then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.04, the Issuer shall
not, and shall not permit any Consolidated Subsidiary of the Issuer to, issue,
create, assume, guarantee, incur or otherwise become liable for (collectively,
"issue"), directly or indirectly, any Indebtedness unless the Consolidated
Coverage Ratio of the Issuer and its Consolidated Subsidiaries for the four
consecutive fiscal quarters immediately preceding the issuance of such
Indebtedness (as shown by a pro forma consolidated income statement of the
Issuer and its Consolidated Subsidiaries for the four most recent fiscal
quarters ending at least 30 days prior to the issuance of such Indebtedness
after giving effect to (i) the issuance of such Indebtedness and (if applicable)
the application of the net proceeds thereof to refinance other Indebtedness as
if such Indebtedness was issued at the beginning of the period, (ii) the
issuance and retirement of any other Indebtedness since the first day of the
period as if such Indebtedness was issued or retired at the beginning of the
period and (iii) the acquisition of any company or business acquired by the
Issuer or any Subsidiary since the first day of the period (including giving
effect to the pro forma historical earnings of such company or business),
including any acquisition which will be consummated contemporaneously with the
issuance of such Indebtedness, as if in each case such acquisition occurred at
the beginning of the period) exceeds a ratio of 1.7 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Issuer or any Restricted
Subsidiary may issue, directly or indirectly, the following Indebtedness:
(1) Indebtedness of the Issuer to banks not to exceed $1,000,000,000
in aggregate outstanding principal amount at any time;
(2) Indebtedness (other than Indebtedness described in clause (1) of
this Subsection) outstanding on the date of this Seventh Supplemental
Indenture, as set forth on Schedule 4.04(b)(2) attached hereto and made a
part hereof, and Indebtedness issued in exchange for, or the proceeds of
which are used to refund or refinance, any Indebtedness permitted by this
clause (2); provided, however, that (i) the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of the Indebtedness
so issued shall not exceed the principal amount (or accreted value in the
case of Indebtedness issued at a discount) of, premium, if any, and accrued
but unpaid interest on, the Indebtedness so exchanged, refunded 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 2011 Notes, the Indebtedness is
subordinated to the 2011 Notes in right of payment;
(3) Indebtedness of the Issuer owed to and held by a Subsidiary and
Indebtedness of a Subsidiary owed to and held by the Issuer; provided,
however, that, in the case of Indebtedness of the Issuer owed to and held
by a Subsidiary, (i) any subsequent issuance or transfer of any Capital
Stock that results in any such Subsidiary ceasing to be a Subsidiary or
(ii) any transfer of such Indebtedness (except to the Issuer or a
Subsidiary) shall be deemed for the purposes of this Subsection to
constitute the issuance of such Indebtedness by the Issuer;
(4) Indebtedness of the Issuer issued in exchange for, or the proceeds
of which are used to refund or refinance, Indebtedness of the Issuer issued
in accordance with Subsection (a) of this Section, provided that (i) the
principal amount (or accreted value in the case of Indebtedness issued at a
discount) of the Indebtedness so issued shall not exceed the principal
amount (or accreted value in the case of Indebtedness issued at a discount)
of, premium, if any, and accrued but unpaid interest on, the Indebtedness
so exchanged, refunded or refinanced and (ii) the Indebtedness so issued
(A) shall not mature prior to the stated maturity of the Indebtedness so
exchanged, refunded or refinanced, (B) shall have an Average Life equal to
or greater than the remaining Average Life of the Indebtedness so
exchanged, refunded or refinanced and (C) if the Indebtedness to be
exchanged, refunded or refinanced is subordinated to the 2011 Notes, the
Indebtedness so issued is subordinated to the 2011 Notes in right of
payment;
(5) Indebtedness of a Restricted Subsidiary issued in exchange for, or
the proceeds of which are used to refund or refinance, Indebtedness of a
Restricted Subsidiary issued in accordance with Subsection (a) of this
Section, provided that (i) the principal amount (or accreted value in the
case of Indebtedness issued at a discount) of the Indebtedness so issued
shall not exceed the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of, premium, if any, and accrued but
unpaid interest on, the Indebtedness so exchanged, refunded or refinanced
and (ii) the Indebtedness so issued (A) shall not mature prior to the
stated maturity of the Indebtedness so exchanged, refunded or refinanced
and (B) shall have an Average Life equal to or greater than the remaining
Average Life of the Indebtedness so exchanged, refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued to acquire,
develop, improve, construct or to provide working capital for a gas, oil or
electric generation, exploration, production, distribution, storage or
transmission facility and related assets, provided that such Indebtedness
is without recourse to any assets of the Issuer, Consumers, Enterprises,
CMS Generation, CMS Oil & Gas, CMS Electric and Gas, CMS Gas Transmission,
CMS MST or any other Designated Enterprises Subsidiary;
(7) Indebtedness of a Person existing at the time at which such person
became a Subsidiary and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary. Such Indebtedness
shall be deemed to be incurred on the date the acquired Person becomes a
Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed $150,000,000 in
aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in respect of rate
reduction bonds issued to recover electric restructuring transition costs
of Consumers provided that such Indebtedness is without recourse to the
assets of Consumers.
SECTION 4.05. Limitation on Restricted Payments. (a) So long as the 2011
Notes are outstanding and until the 2011 Notes are rated BBB - or above (or an
equivalent rating) by Standard & Poor's and one Other Rating Agency (or, if
Standard & Poor's shall change its rating system, an equivalent of such rating
then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.05, the Issuer shall
not, and shall not permit any Restricted Subsidiary of the Issuer, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on the
Capital Stock of the Issuer to the direct or indirect holders of its Capital
Stock (except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such
Non-Convertible Capital Stock and except dividends or distributions payable to
the Issuer or a Subsidiary), (ii) purchase, redeem or otherwise acquire or
retire for value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity or scheduled repayment thereof, any Subordinated Indebtedness (any such
dividend, distribution, purchase, redemption, repurchase, defeasing, other
acquisition or retirement being hereinafter referred to as a "Restricted
Payment") if at the time the Issuer or such Subsidiary makes such Restricted
Payment:
(1) an Event of Default, or an event that with the lapse of time or
the giving of notice or both would constitute an Event of Default, shall
have occurred and be continuing (or would result therefrom); or
(2) the aggregate amount of such Restricted Payment and all other
Restricted Payments made since May 6, 1997 would exceed the sum of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued during the period
(treated as one accounting period) from May 6, 1997 to the end of the
most recent fiscal quarter ending at least 45 days prior to the date
of such Restricted Payment (or, in case such sum shall be a deficit,
minus 100% of the deficit); and
(C) the aggregate Net Cash Proceeds received by the Issuer from
the issue or sale of or contribution with respect to its Capital Stock
subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not in
the form of cash, the amount shall be the fair value of such Restricted Payment
as determined in good faith by the Board of Directors, provided that if the
value of the non-cash portion of such Restricted Payment as determined by the
Board of Directors is in excess of $25 million, such value shall be based on the
opinion from a nationally recognized firm experienced in the appraisal of
similar types of transactions.
(b) The provisions of Section 4.05(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Issuer made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Issuer (other than Redeemable Stock or
Exchangeable Stock); provided, however, that such purchase or redemption
shall be excluded from the calculation of the amount of Restricted
Payments;
(ii) dividends or other distributions paid in respect of any class of
the Issuer's Capital Stock issued in respect of the acquisition of any
business or assets by the Issuer or a Restricted Subsidiary if the
dividends or other distributions with respect to such Capital Stock are
payable solely from the net earnings of such business or assets;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section; provided, however, that at the time of payment of such
dividend, no Event of Default shall have occurred and be continuing (or
result therefrom), and provided further, however, that such dividends shall
be included (without duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.06. Limitation on Asset Sales. So long as any of the 2011 Notes
are outstanding, the Issuer may not sell, transfer or otherwise dispose of any
property or assets of the Issuer, including Capital Stock of any Consolidated
Subsidiary, in one transaction or a series of transactions in an amount which
exceeds $50,000,000 (an "Asset Sale") unless the Issuer shall (i) apply an
amount equal to such excess Net Cash Proceeds to permanently repay Indebtedness
of a Consolidated Subsidiary or Indebtedness of the Issuer which is pari passu
with the 2011 Notes or (ii) invest an equal amount not so used in clause (i) in
property or assets of related business within 24 months after the date of the
Asset Sale (the "Application Period") or (iii) apply such excess Net Cash
Proceeds not so used in (i) or (ii) (the "Excess Proceeds") to make an offer,
within 30 days after the end of the Application Period, to purchase from the
Holders on a pro rata basis an aggregate principal amount of 2011 Notes on the
relevant purchase date equal to the Excess Proceeds on such date, at a purchase
price equal to 100% of the principal amount of the 2011 Notes on the relevant
purchase date and unpaid interest, if any, to the purchase date. The Issuer
shall only be required to make an offer to purchase 2011 Notes from Holders
pursuant to subsection (iii) if the Excess Proceeds equal or exceed $25,000,000
at any given time.
The procedures to be followed by the Issuer in making an offer to purchase
2011 Notes from the Holders with Excess Proceeds, and for the acceptance of such
offer by the Holders, shall be the same as those set forth in Section 3.01
herein with respect to a Change in Control.
ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2011 NOTES
SECTION 5.01. Definition. All of the events specified in clauses (a)
through (h) of Section 5.1 of the Original Indenture shall be "Events of
Default" with respect to the 2011 Notes.
SECTION 5.02. Amendments to Section 5.1 of the Original Indenture. Solely
for the purpose of determining Events of Default with respect to the 2011 Notes,
paragraphs (e), (f) and (h) of Section 5.1 of the Original Indenture shall be
amended such that each and every reference therein to the Issuer shall be deemed
to mean either the Issuer or Consumers.
ARTICLE VI
GLOBAL NOTES
The 2011 Notes will be issued initially in the form of Global Notes.
"Global Note" means a registered 2011 Note evidencing one or more 2011 Notes
issued to a depositary (the "Depositary") or its nominee, in accordance with
this Article and bearing the legend prescribed in this Article. One or more
Global Notes will represent all 2011 Notes. The Issuer shall execute and the
Trustee shall, in accordance with this Article and the Issuer Order with respect
to the 2011 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 2011 Notes to
be represented by such Global Note or Notes, (ii) shall be registered in the
name of the Depositary for such Global Note or Notes or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2011 Note is presented
by an authorized representative of the Depository to the Issuer or its agent for
registration of transfer, exchange or payment, and any 2011 Note issued is
registered in the name of a nominee of the Depository, or in such other name as
is requested by an authorized representative of the Depository (and any payment
is made to the nominee of the Depository, or to such other entity as is
requested by an authorized representative of the Depository), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is
wrongful inasmuch as the registered owner hereof has an interest herein."
Notwithstanding Section 2.8 of the Indenture, unless and until it is
exchanged in whole or in part for 2011 Notes in definitive form, a Global Note
representing one or more 2011 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 2011 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2011 Notes is unwilling or unable to
continue as Depositary for the 2011 Notes, the Issuer shall appoint a successor
Depositary with respect to the 2011 Notes. If a successor Depositary for the
2011 Notes is not appointed by the Issuer by the earlier of (i) 90 days from the
date the Issuer receives notice to the effect that the Depositary is unwilling
or unable to act, or the Issuer determines that the Depositary is unable to act
or (ii) the effectiveness of the Depositary's resignation or failure to fulfill
its duties as Depositary, the Issuer will execute, and the Trustee, upon receipt
of a Issuer Order for the authentication and delivery of definitive 2011 Notes,
will authenticate and deliver 2011 Notes in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such 2011 Notes in exchange for such Global Note or Notes.
The Issuer may at any time and in its sole discretion determine that the
2011 Notes issued in the form of one or more Global Notes shall no longer be
represented by such Global Note or Notes. In such event the Issuer will execute,
and the Trustee, upon receipt of a Issuer Order for the authentication and
delivery of definitive 2011 Notes, will authenticate and deliver 2011 Notes in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Note or Notes representing such 2011 Notes in exchange for such
Global Note or Notes.
The Depositary for such 2011 Notes may surrender a Global Note or Notes for
such 2011 Notes in exchange in whole or in part for 2011 Notes in definitive
form on such terms as are acceptable to the Issuer and such Depositary.
Thereupon, the Issuer shall execute, and the Trustee shall authenticate and
deliver, without service charge:
(i) to each Person specified by such Depositary a new 2011 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 2011 Notes in definitive
form delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer will execute and
the Trustee will authenticate and deliver 2011 Notes in definitive registered
form in authorized denominations.
Upon the exchange of a Global Note for 2011 Notes in definitive form, such
Global Note shall be cancelled by the Trustee. 2011 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 2011 Notes to the persons in whose names such 2011
Notes are so registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture shall be
applicable to the 2011 Notes. Upon satisfaction by the Issuer of the
requirements of Section 10.1(c) of the Indenture, in connection with any
covenant defeasance (as provided in Section 10.1(c) of the Indenture), the
Issuer shall be released from its obligations under Article Nine of the Original
Indenture and under Articles III and IV of this Eleventh Supplemental Indenture
with respect to the 2011 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Eleventh Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Eleventh Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Eleventh Supplemental Indenture shall together constitute one
and the same instrument.
TESTIMONIUM
This Eleventh 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 Eleventh
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
/s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Executive Vice President,
Chief Financial Officer and Chief
Administrative Officer
Attest: /s/Xxxxxx X. Xxxxxxxxx
BANK ONE TRUST COMPANY, N.A.,
as Trustee
/s/X. Xxxxxxx
Attest: /s/Xxxx Xxxxxxxxx
