EXHIBIT (4)(a)
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SECOND SUPPLEMENTAL INDENTURE
between
CONSUMERS ENERGY COMPANY
and
THE BANK OF NEW YORK
Dated as of September 4, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I.
DEFINITIONS
SECTION 1.1.Definition of Terms . . . . . . . . . . 2
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1.Designation and Principal Amount. . . . 3
SECTION 2.2.Maturity. . . . . . . . . . . . . . . . 3
SECTION 2.3.Form and Payment. . . . . . . . . . . . 3
SECTION 2.4.Global Note . . . . . . . . . . . . . . 3
SECTION 2.5.Interest. . . . . . . . . . . . . . . . 4
ARTICLE III.
REDEMPTION OF THE NOTES
SECTION 3.1.Special Event Redemption. . . . . . . . 5
SECTION 3.2.Optional Redemption by Issuer . . . . . 5
SECTION 3.3.No Sinking Fund . . . . . . . . . . . . 6
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1.Extension of Interest Payment Period. . 6
SECTION 4.2.Notice of Extension . . . . . . . . . . 6
ARTICLE V.
EXPENSES
SECTION 5.1.Payment of Expenses . . . . . . . . . . 7
SECTION 5.2.Payment Upon Resignation or Removal . . 7
ARTICLE VI.
SUBORDINATION
SECTION 6.1.Agreement to Subordinate. . . . . . . . 7
ARTICLE VII.
COVENANT TO LIST ON EXCHANGE
SECTION 7.1.Listing on an Exchange. . . . . . . . . 8
ARTICLE VIII.
FORM OF NOTES
SECTION 8.1.Form of Note. . . . . . . . . . . . . . 8
ARTICLE IX.
ORIGINAL ISSUE OF NOTES
SECTION 9.1.Original Issue of Notes . . . . . . . . 12
ARTICLE X.
MISCELLANEOUS
SECTION 10.1Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Trust Securities . . . . . . . . . . . . 13
SECTION 10.2Ratification of Indenture . . . . . . . 13
SECTION 10.3.Trustee Not Responsible for Recitals . 13
SECTION 10.4.Governing Law. . . . . . . . . . . . . 13
SECTION 10.5.Separability . . . . . . . . . . . . . 13
SECTION 10.6.Counterparts . . . . . . . . . . . . . 13
1
SECOND SUPPLEMENTAL INDENTURE, dated as of September 4, 1997,
(the "Second Supplemental Indenture"), between Consumers Energy Company, a
Michigan Corporation (the "Issuer"), and The Bank of New York, as trustee
(the "Trustee") under the Indenture dated as of January 1, 1996 between
the Issuer and the Trustee (the "Indenture").
WHEREAS, the Issuer executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Issuer's Securities to
be issued from time to time in one or more series as might be determined
by the Issuer under the Indenture, in an unlimited aggregate principal
amount which may be authenticated and delivered as provided in the
Indenture; and
WHEREAS, Section 2.3 of the Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Indenture; and
WHEREAS, Section 8.1(d) of the Indenture provided that a
supplemental indenture may be entered into without the consent of any
Holders of Securities to supplement certain provisions of the Indenture;
and
WHEREAS, Section 8.1(e) of the 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, pursuant to the terms of the Indenture, the Issuer
desires to provide for the establishment of a new series of its Securities
to be known as its 8.20% Subordinated Deferrable Interest Notes due 2027
(the "Notes"), the form and substance of such Notes and the terms,
provisions and conditions thereof to be set forth as provided in the
Indenture and this Second Supplemental Indenture; and
WHEREAS, Consumers Energy Company Financing II, a Delaware
statutory business trust (the "Trust"), has offered to the public $120
million aggregate liquidation amount of its 8.20% Trust Originated
Preferred Securities (the "Preferred Securities"), representing undivided
beneficial interests in the assets of the Trust and proposes to invest
the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Issuer of $3,711,350 aggregate
liquidation amount of its 8.20% Trust Originated Common Securities
(together the "Trust Securities), in $123,711,350 aggregate principal
amount of the Notes; and
WHEREAS, the Issuer wishes to supplement Section 13.2 of the
Indenture with respect to the Notes and the Preferred Securities; and
WHEREAS, the Issuer has requested that the Trustee execute and
deliver this Second Supplemental Indenture and all requirements necessary
to make this Second Supplemental Indenture a valid instrument in
accordance with its terms, and to make the Notes, when executed by the
Issuer and authenticated and delivered by the Trustee, the valid
obligations of the Issuer, have been performed, and the execution and
delivery of this Second Supplemental Indenture has been duly authorized in
all respects.
NOW THEREFORE, in consideration of the purchase and acceptance
of the Notes by the Holders thereof, and for the purpose of setting forth,
as provided in the Indenture, the form and substance of the Notes and the
terms, provisions and conditions thereof, the Issuer covenants and agrees
with the Trustee as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1.DEFINITION OF TERMS.
Unless the context otherwise requires:
(a)a term defined in the Indenture has the same meaning when
used in this Second Supplemental Indenture;
(b)a term defined anywhere in this Second Supplemental
Indenture has the same meaning throughout;
(c)the singular includes the plural and vice versa;
(d)a reference to a Section or Article is to a Section or
Article of this Second Supplemental Indenture;
(e)headings are for convenience of reference only and do not
affect interpretation;
(f)the following terms have the meanings given to them in the
Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Redemption
Tax Opinion; (iv) No Recognition Opinion; (v) Preferred Security
Certificate; (vi) Property Trustee; (vii) Regular Trustees; (viii) Special
Event; (ix) Tax Event; (x) Underwriting Agreement; (xi) Investment Company
Event; and (xii) Distribution;
(g)the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in
Section 2.5.
"Compounded Interest" shall have the meaning set forth in
Section 4.1.
"Coupon Rate" shall have the meaning set forth in
Section 2.5.
"Declaration" means the Amended and Restated Declaration of
Trust of Consumers Energy Company Financing II, a Delaware statutory
business trust, dated as of September 4, 1997.
"Deferred Interest" shall have the meaning set forth in
Section 4.1.
"Dissolution Event" means that, as a result of the
occurrence and continuation of a Special Event, the Trust is to be
dissolved in accordance with the Declaration, and the Notes held by the
Property Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust pro rata in accordance with the
Declaration.
"Extended Interest Payment Period" shall have the meaning
set forth in Section 4.1.
"Global Note" shall have the meaning set forth in Section
2.4.
"Non Book-Entry Preferred Securities" shall have the
meaning set forth in Section 2.4.
"Optional Redemption Price" shall have the meaning set
forth in Section 3.2.
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1.DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized and established a series of
unsecured Securities designated the "8.20% Subordinated Deferrable
Interest Notes due 2027", limited in aggregate principal amount to
$123,711,350, (except as contemplated in Section 2(f)(2) of the
Indenture).
SECTION 2.2.MATURITY.
The Maturity Date of the Notes is September 1, 2027.
SECTION 2.3.FORM AND PAYMENT.
The Notes shall be issued in fully registered form without
interest coupons. Principal and interest on the Notes issued in
certificated form will be payable, the transfer of such Notes will be
registrable and such Notes will be exchangeable for Notes bearing
identical terms and provisions, at the office or agency of the Trustee in
the Borough of Manhattan, the City of New York; provided, however, that
payment of interest may be made at the option of the Issuer by check
mailed to the Holder at such address as shall appear in the Security
Register or by wire transfer to an account maintained by the Holder.
Notwithstanding the foregoing, so long as the Holder of any Notes is the
Property Trustee, the payment of the principal of and interest (including
Compounded Interest and Additional Interest, if any) on such Notes held by
the Property Trustee will be made at such place and to such account as may
be designated by the Property Trustee.
SECTION 2.4.GLOBAL NOTE.
(a) In connection with a Dissolution Event,
(i) the Notes may be presented to the Trustee by
the Property Trustee in exchange for a global Note in an
aggregate principal amount equal to the aggregate principal
amount of all outstanding Notes (a "Global Note"), to be
registered in the name of the Clearing Agency, or its nominee,
and delivered by the Trustee to the Clearing Agency for
crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees and the Clearing Agency
will act as Depository for the Notes. The Issuer upon any such
presentation, shall execute a Global Note in such aggregate
principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture and
this Second Supplemental Indenture. Payments on the Notes
issued as a Global Note will be made to the Depositary; and
(ii)if any Preferred Securities are held in non
book-entry certificated form, the Notes may be presented to the
Trustee by the Property Trustee and any Preferred Security
Certificate which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency or its nominee
("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Notes presented to the Trustee
by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security Certificates
are presented to the Security Registrar for transfer or
reissuance at which time such Preferred Security Certificates
will be cancelled and a Note, registered in the name of the
holder of the Preferred Security Certificate or the transferee
of the holder of such Preferred Security Certificate, as the
case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Security
Certificate cancelled, will be executed by the Issuer and
delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this Second Supplemental
Indenture.
(b) Except as provided in (c) below, a Global Note may be
transferred, in whole but not in part, only to another nominee of the
Depositary, or to a successor Depositary selected or approved by the
Issuer or to a nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Issuer
that it is unwilling or unable to continue as Depositary or if at any time
the Depositary for such series shall no longer be registered or in good
standing under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, and a successor Depositary for such
series is not appointed by the Issuer within 90 days after the Issuer
receives such notice or becomes aware of such condition, as the case may
be, the Issuer will execute, and, subject to Section 2.8 of the Indenture,
the Trustee, upon written notice from the Issuer, will authenticate and
deliver the Notes in definitive registered form, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Note in exchange for such Global Note. In addition,
the Issuer may at any time determine that the Notes shall no longer be
represented by a Global Note. In such event the Issuer will execute, and
subject to Section 2.8 of the Indenture, the Trustee, upon receipt of an
Officers' Certificate evidencing such determination by the Issuer, will
authenticate and deliver the Notes in definitive registered form, in
authorized denominations, and in an aggregate principal amount equal to
the principal amount of the Global Note in exchange for such Global Note.
Upon the exchange of the Global Note for such Notes in definitive
registered form, in authorized denominations, the Global Note shall be
cancelled by the Trustee. Such Notes in definitive registered form issued
in exchange for the Global Note shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Notes to the Depositary for
delivery to the Persons in whose names such Notes are so registered.
SECTION 2.5.INTEREST.
(a) Each Note will bear interest at the rate of 8.20% per
annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, at the Coupon
Rate, compounded quarterly, payable (subject to the provisions of
Article IV) quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year (each, an "Interest Payment Date," commencing on
September 30, 1997), to the Person in whose name such Note or any
predecessor Note is registered, at the close of business on the regular
record date for such interest installment, which, in respect of any Notes
of which the Property Trustee is the Holder or a Global Note, shall be the
close of business on the Business Day next preceding that Interest Payment
Date. Notwithstanding the foregoing sentence, if the Preferred Securities
are no longer in book-entry only form or, except if the Notes are held by
the Property Trustee, the Notes are not represented by a Global Note, the
regular record date for such interest installment shall be the fifteenth
day of the month in which the applicable Interest Payment Date occurs.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except
as provided in the following sentence, the amount of interest payable for
any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days
elapsed in such a 90-day period. In the event that any date on which
interest is payable on the Notes is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) If, at any time while the Property Trustee is the
Holder of any Notes, the Trust or the Property Trustee is required to pay
any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other
taxing authority, then, in any case, the Issuer will pay as additional
interest ("Additional Interest") on the Notes held by the Property
Trustee, such additional amounts as shall be required so that the net
amounts received and retained by the Trust and the Property Trustee after
paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Property Trustee would have
received had no such taxes, duties, assessments or other governmental
charges been imposed.
ARTICLE III.
REDEMPTION OF THE NOTES
SECTION 3.1.SPECIAL EVENT REDEMPTION.
If (a) a Tax Event has occurred and is continuing and (i)
the Issuer has received a Redemption Tax Opinion, or (ii) The Regular
Trustees shall have been informed by tax counsel that a No Recognition
Opinion cannot be delivered to the Trust, or (b) an Investment Company
Event has occurred and is continuing, then, notwithstanding Section 3.2(a)
but subject to Section 3.2(b) and Article Eleven of the Indenture, the
Issuer shall have the right upon not less than 30 days' nor more than 60
days' notice to the Holders of the Notes to redeem the Notes, in whole or
in part, for cash within 90 days' following the occurrence of such Special
Event (the "90 Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Redemption Price"), provided
that if at the time there is available to the Issuer or the Trust the
opportunity to eliminate, within the 90 Day Period, the Special Event by
taking some ministerial action ("Ministerial Action"), such as filing a
form or making an election, or pursuing some other similar reasonable
measure which has no adverse effect on the Issuer, the Trust or the
Holders of the Trust Securities issued by the Trust, the Issuer shall
pursue such Ministerial Action in lieu of redemption, and, provided,
further, that the Issuer shall have no right to redeem the Notes while the
Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or such earlier time as the
Issuer determines, and the Issuer shall deposit with the Trustee an amount
sufficient to pay the Redemption Price by 10:00 a.m., New York time, on
the date such Redemption Price is to be paid.
SECTION 3.2.OPTIONAL REDEMPTION BY ISSUER.
(a) Subject to the provisions of Section 3.2(b) and to
the provisions of Article Eleven of the Indenture, the Issuer shall have
the right to redeem the Notes, in whole or in part, from time to time, on
or after September 30, 2002, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Optional Redemption Price").
Any redemption pursuant to this paragraph will be made upon not less than
30 days' nor more than 60 days' notice to the Holder of the Notes, at the
Optional Redemption Price. If the Notes are only partially redeemed
pursuant to this Section 3.2, the Notes will be redeemed on a pro rata
basis provided that if at the time of redemption the Notes are registered
as a Global Note, the Depository shall determine, in accordance with its
procedures, the principal amount of such Notes held by each Holder of
Notes to be redeemed. The Optional Redemption Price shall be paid prior
to 12:00 noon, New York time, on the date of such redemption or at such
earlier time as the Issuer determines and the Issuer shall deposit with
the Trustee an amount sufficient to pay the Optional Redemption Price by
10:00 a.m., New York time, on the date such Optional Redemption Price is
to be paid.
(b) If a partial redemption of the Notes would result in
the delisting of the Preferred Securities from any national securities
exchange or other organization on which the Preferred Securities are then
listed, the Issuer shall not be permitted to effect such partial
redemption and may only redeem the Notes in whole.
SECTION 3.3.NO SINKING FUND.
The Notes are not entitled to the benefit of any sinking
fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1.EXTENSION OF INTEREST PAYMENT PERIOD.
The Issuer shall have the right, at any time and from time
to time during the term of the Notes, to defer payments of interest by
extending the interest payment period of such Notes for a period not
exceeding 20 consecutive quarters (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest shall
be due and payable; provided that no Extended Interest Payment Period may
extend beyond the Maturity Date. To the extent permitted by applicable
law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1,
will bear interest thereon at the Coupon Rate compounded quarterly for
each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the
Issuer shall pay all interest accrued and unpaid on the Notes, including
any Additional Interest and Compounded Interest (together, "Deferred
Interest") that shall be payable to the Holders of the Notes in whose
names the Notes are registered in the Security Register on the First
record date after the end of the Extended Interest Payment Period. Prior
to the termination of any Extended Interest Payment Period, the Issuer may
further extend such period, provided that such period together with all
such further extensions thereof shall not exceed 20 consecutive quarters.
Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Issuer may commence a new
Extended Interest Payment Period, subject to the foregoing requirements.
No interest shall be due and payable during an Extended Interest Payment
Period, except at the end thereof, but the Issuer may prepay at any time
all or any portion of the interest accrued during an Extended Interest
Payment Period.
The limitations set forth in Section 3.5 of the Indenture
shall apply during any Extended Interest Payment Period.
SECTION 4.2.NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered Holder
of the Notes at the time the Issuer elects an Extended Interest Payment
Period, the Issuer shall give written notice to the Regular Trustees, the
Property Trustee and the Trustee of its election of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by
the Trust are payable, or (ii) the date the Trust is required to give
notice of the record date, or the date such Distributions are payable, to
the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities, but in any event
at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the
Notes at the time the Issuer elects an Extended Interest Payment Period,
the Issuer shall give the Holders of the Notes and the Trustee written
notice of its election of such Extended Interest Payment Period ten
Business Days before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Issuer is required to give notice of
the record or payment date of such interest payment to the New York Stock
Exchange or other applicable self-regulatory organization or to Holders of
the Notes, but in any event at least 2 Business Days before such record
date.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the
20 quarters permitted in the maximum Extended Interest Payment Period
permitted under Section 4.1.
ARTICLE V.
EXPENSES
SECTION 5.1.PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the
Notes to the Property Trustee and in connection with the sale of the Trust
Securities by the Trust, the Issuer, in its capacity as borrower with
respect to the Notes, shall:
(a) pay all costs and expenses relating to the offering,
sale and issuance of the Notes, including commissions to the underwriters
payable pursuant to the Underwriting Agreement and the Pricing Agreements,
and compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.6 of the Indenture;
(b) pay all costs and expenses of the Trust (including,
but not limited to, costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the fees and
expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses
and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification
obligations arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
SECTION 5.2.PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this Second Supplemental Indenture or
the Indenture or the removal or resignation of the Trustee pursuant to
Section 6.10 of the Indenture, the Issuer shall pay to the Trustee all
amounts accrued to the date of such termination, removal or resignation.
Upon termination of the Declaration or the removal or resignation of the
Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 5.6 of the Declaration, the Issuer shall pay to the Delaware
Trustee or the Property Trustee, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE VI.
SUBORDINATION
SECTION 6.1.AGREEMENT TO SUBORDINATE.
The Issuer covenants and agrees, and each Holder of Notes
issued hereunder, by such Holder's acceptance thereof likewise covenants
and agrees, that pursuant to Section 2.3(f)(9) of the Indenture all Notes
shall be issued as Subordinated Securities subject to the provisions of
Article Twelve of the Indenture and this Article VI; and each Holder of a
Note by its acceptance thereof accepts and agrees to be bound by such
provisions.
ARTICLE VII.
COVENANT TO LIST ON EXCHANGE
SECTION 7.1.LISTING ON AN EXCHANGE.
In connection with the distribution of the Notes to the
holders of the Preferred Securities upon a Dissolution Event, the Issuer
will use its best efforts to list such Notes on the New York Stock
Exchange or on such other exchange as the Preferred Securities are then
listed.
ARTICLE VIII.
FORM OF NOTES
SECTION 8.1.FORM OF NOTE.
The Notes and the Trustee's Certificate of Authentication
to be endorsed thereon are to be substantially in the following forms and
the Notes shall have such additional terms as may be set forth in such
form:
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTES, INSERT - This Note 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 Note is exchangeable for Notes registered in the name of
a person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Note
(other than a transfer of this 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 limited circumstances.
Unless this Note is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York, New York) to the issuer or its agent for registration of transfer,
exchange or payment, and any Note issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
No. $
CUSIP NO.
CONSUMERS ENERGY COMPANY
____% SUBORDINATED DEFERRABLE INTEREST NOTES
DUE 2027
Consumers Energy Company, a Michigan corporation (the
"Issuer", which term includes any successor corporation 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 on said principal sum from ____________, 19 , or from the most
recent interest payment date (each such date, an "Interest Payment Date")
to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on March 31, June 30,
September 30 and December 31 of each year commencing ___________ at the
rate of ____% per annum until the principal hereof shall have become due
and payable, and on any overdue principal and premium, if any, and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest
at the same rate per annum compounded quarterly. 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. In the event that any date on which
interest is payable on this Note is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of
any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if
made on such date. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided
in the Indenture, be paid to the person in whose name this Note (or one or
more Predecessor Securities, as defined in said Indenture) is registered
at the close of business on the regular record date for such interest
installment, which shall be the close of business on the Business Day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF
THE INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE --
which shall be the close of business on the 15th day of the month in which
such Interest Payment Date occurs.] If and to the extent the Issuer shall
default in the payment of the interest due on such Interest Payment Date,
interest shall be paid to the person in whose name this Note is registered
at the close of business on a subsequent record date (which shall not be
less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on behalf of
the Issuer to the Holder of this Note not less than 15 days preceding such
subsequent Record Date. The principal of (and premium, if any) and the
interest on this Note shall be payable at the office or agency of the
Trustee in the Borough of Manhattan, the City of New York maintained for
that purpose in any coin or currency of the United States of America that
at the time is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of
the Issuer by check mailed to the registered Holder at such address as
shall appear in the Security Register or by wire transfer to an account
maintained by the Holder. Notwithstanding the foregoing, so long as the
Holder of this Note is the Property Trustee, the payment of the principal
of (and premium, if any) and interest on this Note will be made at such
place and to such account as may be designated by the Property Trustee.
The indebtedness evidenced by this Note is, to the extent
provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Note is
issued subject to the provisions of the Indenture with respect thereto.
Each Holder of this Note, by accepting the same, (a) agrees to and shall
be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints
the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein
and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder
upon said provisions.
This Note shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been
signed by or on behalf of the Trustee.
The provisions of this Note are continued on the reverse
side hereof and such continued provisions shall for all purposes have the
same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be executed.
Dated
Consumers Energy
Company
[Seal] By:
Name:
Title
Attest:
By:
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities
described in the within-mentioned Indenture.
[ ]
________________________________
as Trustee
By
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Securities of
the Issuer (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and
pursuant to an Indenture dated as of January 1, 1996, duly executed and
delivered between the Issuer and The Bank of New York, a New York banking
corporation, as Trustee (the "Trustee"), as supplemented by certain
supplemental indentures, including the Second Supplemental Indenture dated
as of _______, 1997, between the Issuer and the Trustee (the Indenture as
so supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Issuer and the Holders of the Notes. By
the terms of the Indenture, the Notes are issuable in series that may vary
as to amount, date of maturity, rate of interest and in other respects as
provided in the Indenture. This series of Notes is limited in aggregate
principal amount as specified in said Second Supplemental Indenture.
The Issuer shall have the right to redeem this Note at the
option of the Issuer, without premium or penalty, in whole or in part at
any time on or after __________, 2002, or at any time in certain
circumstances upon the occurrence of a Special Event, at a redemption
price equal to 100% of the principal amount plus any accrued but unpaid
interest, to the date of such redemption. Any redemption pursuant to this
paragraph will be made upon not less than 30 days nor more than 60 days'
notice. If the Notes are only partially redeemed by the Issuer pursuant
to an Optional Redemption, the Notes will be redeemed pro rata.
In the event of redemption of this Note in part only, a new
Note or Notes of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Notes may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes and other Indenture securities of
each series affected at the time Outstanding and affected (voting as one
class), as defined in the Indenture, to execute supplemental indentures
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Notes; provided, however, that the Company and the Trustee may not,
without the consent of the Holder of each Note then Outstanding and
affected thereby: (a) change the time of payment of the principal (or any
installment) of any Note, or reduce the principal amount thereof, or
reduce the rate or change the time of payment of interest thereon, or
impair the right to institute suit for the enforcement of any payment on
any Note when due or (b) reduce the percentage in principal amount of the
Notes, the consent of whose Holders is required for any such modification
or for any waiver provided for in the Indenture. The Indenture also
contains provisions providing that prior to the acceleration of the
maturity of any Note or other securities outstanding under the Indenture,
the Holders of a majority in aggregate principal amount of Notes of and
other Securities Outstanding under the Indenture with respect to which a
default or/an Event of Default shall have occurred and be continuing
(voting as one class) may on behalf of the Holders of all such affected
Securities (including the Notes) waive any past default and its
consequences, except a default or an Event of Default in respect of a
covenant or provision of the Indenture or of any Note or other Security
which cannot be modified or amended without the consent of the Holder of
each Note or other Security affected. Any such consent or waiver by the
registered Holder of this Note (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Note and of any Note issued in exchange
herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Note.
No reference herein to the Indenture and no provision of this
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
premium, if any, and interest on this Note at the time and place and at
the rate and in the money herein prescribed.
The Issuer shall have the right at any time during the term of
the Notes and from time to time to extend the interest payment period of
such Notes for up to 20 consecutive quarters (an "Extended Interest
Payment Period"), at the end of which period the Issuer shall pay all
interest then accrued and unpaid (together with interest thereon at the
rate specified for the Notes to the extent that payment of such interest
is enforceable under applicable law). Before the termination of any such
Extended Interest Payment Period, the Issuer may further extend such
Extended Interest Payment Period, provided that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid
interest and any additional amounts then due, the Issuer may commence a
new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Note is transferable by the registered Holder
hereof on the Security Register of the Issuer, upon surrender of this Note
for registration of transfer at the office or agency of the Trustee in the
City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer or the Trustee
duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of authorized
denominations and for the same aggregate principal amount and series will
be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment for registration of transfer of this
Note, the Issuer, the Trustee, any paying agent and the Security Registrar
may deem and treat the registered holder hereof as the absolute owner
hereof (whether or not this Note shall be overdue and notwithstanding any
notice of ownership or writing hereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on account
of the principal hereof and premium, if any, and interest due hereon and
for all other purposes, and neither the Issuer nor the Trustee nor any
paying agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future,
as such, of the Issuer or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
Notes of this series so issued are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
herein and therein set forth, Notes of this series so issued are
exchangeable for a like aggregate principal amount of Notes of this series
in authorized denominations, as requested by the Holder surrendering the
same.
All terms used in this Note that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
[END OF FORM OF NOTE]
ARTICLE IX.
ORIGINAL ISSUE OF NOTES
SECTION 9.1. Original Issue of Notes.
Notes in the aggregate principal amount of $123,711,350 may,
upon execution of this Second Supplemental Indenture, be executed by the
Issuer and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and deliver said Notes to or upon the written
order of the Issuer, in accordance with Section 2.4 of the Indenture.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Trust Securities.
Notwithstanding Section 13.2 of the Indenture, for so long as
any Trust Securities remain outstanding, the Issuer's obligations under
the Indenture and this Second Supplemental Indenture will also be for the
benefit of the holders of the Trust Securities, and the Issuer
acknowledges and agrees that such holders will be entitled to enforce
certain payment obligations under the Notes directly against the Issuer to
the extent provided in the Declaration.
SECTION 10.2 Ratification of Indenture.
The Indenture, as supplemented by this Second Supplemental
Indenture, is in all respects ratified and confirmed, and this Second
Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided.
SECTION 10.3.Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Issuer and not by
the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this Second Supplemental Indenture.
SECTION 10.4.Governing Law.
This Second Supplemental Indenture and each Note shall be
deemed to be a contract made under the internal laws of the State of
Michigan, and for all purposes shall be construed in accordance with the
laws of said State, provided, however, that the rights, duties and
obligations of the Trustee are governed and construed in accordance with
the laws of the State of New York.
SECTION 10.5.Separability.
In case any one or more of the provisions contained in this
Second Supplemental Indenture or in the Notes shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Second Supplemental Indenture or of the Notes, but this Second
Supplemental Indenture and the Notes shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.
SECTION 10.6.Counterparts.
This Second Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.IN
WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
Consumers Energy Company
By: /s/ A.M. Wright
______________________
Name:Alan M. Wright
Title: Senior Vice President and Chief
Financial Officer
[Seal]
Attest:
By: /s/ Joyce H. Norkey
_______________________
Joyce H. Norkey
Assistant Secretary
The Bank of New York, as Trustee
By: /s/ Denise Leonard
_____________________
Name: Denise Leonard
Title: Assistant Treasurer
STATE OF MICHIGAN )
)ss.
COUNTY OF WAYNE )
On the 4th day of September, 1997, before me personally came Alan M.
Wright, to me known, who, being by me duly sworn, did depose and say that
he resides at Ann Arbor, Michigan; that he is Senior Vice President and
Chief Financial Officer of Consumers Energy Company, one of the
corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name
thereto by like authority.
[Notarial Seal]
/s/ Sherry Ann White
________________________________
Notary Public, Wayne County, Michigan
My Commission Expires: March 7, 2002