SIXTH SUPPLEMENTAL INDENTURE
dated as of January 13, 1998
____________________
This Sixth Supplemental Indenture, dated as of the 13th day
of January, 1998 between CMS Energy Corporation, a corporation duly
organized and existing under the laws of the State of Michigan
(hereinafter called the "Issuer") and having its principal office at
Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn,
Michigan 48126, and NBD Bank, a Michigan banking corporation (hereinafter
called the "Indenture Trustee") and having its principal Corporate Trust
Office at 611 Woodward Avenue, Detroit, Michigan 48226.
WITNESSETH:
WHEREAS, the Issuer and the Indenture Trustee (formerly
known as NBD Bank, National Association) entered into an Indenture, dated
as of September 15, 1992 (the "Original Indenture"), pursuant to which one
or more series of debt securities of the Issuer (the "Securities") may be
issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the
terms of any series of Securities to be established in an indenture
supplemental to the Original Indenture; and
WHEREAS, Section 8.1(e) of the Original Indenture provides
that a supplemental indenture may be entered into by the Issuer and the
Indenture Trustee without the consent of any Holders of the Securities to
establish the form and terms of the Securities of any series; and
WHEREAS, the Issuer has requested the Indenture Trustee to
join with it in the execution and delivery of this Sixth Supplemental
Indenture in order to supplement and amend the Original Indenture by,
among other things, establishing the form and terms of a series of
Securities to be known as the Issuer's "Extendible Tenor Rate-Adjusted
Securities" (the "X-TRAS"), providing for the issuance of the X-TRAS and
amending and adding certain provisions thereof for the benefit of the
Holders of the X-TRAS; and
WHEREAS, the Issuer and the Indenture Trustee desire to
enter into this Sixth Supplemental Indenture for the purposes set forth in
Sections 2.3 and 8.1(e) of the Original Indenture as referred to above;
and
WHEREAS, the Issuer has furnished the Indenture Trustee with
a copy of the resolutions of its Board of Directors certified by its
Secretary or Assistant Secretary authorizing the execution of this Sixth
Supplemental Indenture; and
WHEREAS, all things necessary to make this Sixth
Supplemental Indenture a valid agreement of the Issuer and the Indenture
Trustee and a valid supplement to the Original Indenture have been done,
NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase of
the X-TRAS to be issued hereunder by holders thereof, the Issuer and the
Indenture Trustee mutually covenant and agree, for the equal and
proportionate benefit of the respective holders from time to time of the
X-TRAS, as follows:
ARTICLE I.
STANDARD PROVISIONS; DEFINITIONS
SECTION 1. STANDARD PROVISIONS. The Original Indenture
together with this Sixth Supplemental Indenture and all previous
indentures supplemental thereto entered into pursuant to the applicable
terms thereof are hereinafter sometimes collectively referred to as the
"Indenture." All capitalized terms which are used herein and not
otherwise defined herein are defined in the Indenture and are used herein
with the same meanings as in the Indenture.
SECTION 2. DEFINITIONS. Section 1.1 of the Original
Indenture is amended to insert the new definitions applicable to the X-
TRAS, in the appropriate alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts
recognized during such period as amortization of capital leases,
depletion, nuclear fuel, goodwill and assets classified as intangible
assets in accordance with generally accepted accounting principles.
"Applicable Premium" means, with respect to X-TRAS (or
portion thereof) being redeemed at any time, the excess of (A) the present
value at such time of the principal amount of such X-TRAS (or portion
thereof) being redeemed plus all interest payments due on such X-TRAS (or
portion thereof) from and after the date of redemption, which present
value shall be computed using a discount rate equal to the Treasury Rate
plus 50 basis points, over (B) the principal amount of such X-TRAS (or
portion thereof) being redeemed at such time. For purposes of this
definition, the present values of interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (x) the number of years from the date of determination
to the dates of each successive scheduled principal payment of such
Indebtedness and (y) the amount of such principal payment by (ii) the sum
of all such principal payments.
"Calculation Agent" means Morgan Stanley Capital Services,
Inc., or such other calculation agent as may be provided from time to time
under the ISDA Master Agreement. All determinations made by the
Calculation Agent will be at the sole discretion of the Calculation Agent
and will, in the absence of manifest error, be conclusive for all purposes
and binding on the Issuer.
"Capital Lease Obligation" of a Person means any obligation
that is required to be classified and accounted for as a capital lease on
the face of a balance sheet of such Person prepared in accordance with
generally accepted accounting principles; the amount of such obligation
shall be the capitalized amount thereof, determined in accordance with
generally accepted accounting principles; the stated maturity thereof
shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty; and such obligation
shall be deemed secured by a Lien on any property or assets to which such
lease relates.
"Capital Stock" means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock or Letter Stock; provided that Hybrid Preferred Securities are not
considered Capital Stock for purposes of this definition.
"Certificate" or "Certificates" shall have the meaning set
forth in the Pass Through Trust Agreement.
"Certificateholder" or "Certificateholders" shall have the
meaning set forth in the Pass Through Trust Agreement.
"Change in Control" means an event or series of events by
which (i) the Issuer ceases to own beneficially, directly or indirectly,
at least 80% of the total voting power of all classes of Capital Stock
then outstanding of Consumers (whether arising from issuance of securities
of the Issuer or Consumers, any direct or indirect transfer of securities
by the Issuer or Consumers, any merger, consolidation, liquidation or
dissolution of the Issuer or Consumers or otherwise); (ii) any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner" (as such term is used in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or
group shall be deemed to have "beneficial ownership" of all shares that
such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii)
the Issuer consolidates with or merges into another corporation or
directly or indirectly conveys, transfers or leases all or substantially
all of its assets to any Person, or any corporation consolidates with or
merges into the Issuer, in either event pursuant to a transaction in which
the outstanding Voting Stock of the Issuer is changed into or exchanged
for cash, securities, or other property, other than any such transaction
in which (A) the outstanding Voting Stock of the Issuer is changed into or
exchanged for Voting Stock of the surviving corporation and (B) the
holders of the Voting Stock of the Issuer immediately prior to such
transaction retain, directly or indirectly, substantially proportionate
ownership of the Voting Stock of the surviving corporation immediately
after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a
Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission and Storage" means CMS Gas
Transmission and Storage Company, a Michigan corporation and wholly-owned
subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company,
a Michigan corporation and wholly-owned subsidiary of Enterprises.
"Consolidated Assets" means, at any date of determination,
the aggregate assets of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Consolidated 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, NOMECO,
CMS Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any
other Designated Enterprises Subsidiary, provided that such Indebtedness
is without recourse to any assets of the Issuer, Consumers, Enterprises,
CMS Generation, NOMECO, CMS Electric and Gas, CMS Gas Transmission and
Storage, CMS MST or any other Designated Enterprises Subsidiary.
"Consolidated Net Income" means, for any period, the net
income of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting
principles; provided, however, that there shall not be included in such
Consolidated Net Income:
(1) 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;
(2) 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;
(3) 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
(4) any net income of any Subsidiary of Consumers,
CMS Generation, NOMECO, CMS Electric and Gas, CMS Gas Transmission
and Storage, CMS MST or any other Designated Enterprises Subsidiary
whose interest expense is excluded from Consolidated Interest
Expense, provided, however, that for purposes of this subsection
(iv), any cash, dividends or distributions of any such Subsidiary to
the Issuer shall be included in calculating Consolidated Net Income.
"Consolidated Net Tangible Assets" means, for any period,
the total amount of assets (less accumulated depreciation or amortization,
allowances for doubtful receivables, other applicable reserves and other
properly deductible items) as set forth on the most recently available
quarterly or annual consolidated balance sheet of the Issuer and its
Consolidated Subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, and after giving
effect to purchase accounting and after deducting therefrom, to the extent
otherwise included, the amounts of: (i) Consolidated Current Liabilities;
(ii) minority interests in Consolidated Subsidiaries held by Persons other
than the Issuer or a Restricted Subsidiary; (iii) excess of cost over fair
value of assets of businesses acquired, as determined in good faith by the
Board of Directors as evidenced by Board resolutions; (iv) any revaluation
or other write-up in value of assets subsequent to December 31, 1996, as a
result of a change in the method of valuation in accordance with generally
accepted accounting principles; (v) unamortized debt discount and expenses
and other unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (vi) treasury stock;
and (vii) any cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities.
"Consolidated Net Worth" of any Person means the total of
the amounts shown on the consolidated balance sheet of such Person and its
consolidated subsidiaries, determined on a consolidated basis in
accordance with generally accepted accounting principles, as of any date
selected by such Person not more than 90 days prior to the taking of any
action for the purpose of which the determination is being made (and
adjusted for any material events since such date), as (i) the par or
stated value of all outstanding Capital Stock plus (ii) paid- in capital
or capital surplus relating to such Capital Stock plus (iii) any retained
earnings or earned surplus less (A) any accumulated deficit, (B) any
amounts attributable to Redeemable Stock and (C) any amounts attributable
to Exchangeable Stock.
"Consolidated Subsidiary" means, any Subsidiary whose
accounts are or are required to be consolidated with the accounts of the
Issuer in accordance with generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan
corporation, all of whose common stock is on the date hereof owned by the
Issuer.
"covenant defeasance" shall have the meaning set forth in
Section 6.04.
"Designated Enterprises Subsidiary" means any wholly-owned
subsidiary of Enterprises formed after the date of this Sixth Supplemental
Indenture which is designated a Designated Enterprises Subsidiary by the
Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan
corporation and wholly-owned subsidiary of the Issuer.
"Early Redemption Option" shall have the meaning set forth
in Section 7.01(b).
"Event of Default" with respect to the X-TRAS has the
meaning specified in Article V of this Sixth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchangeable Stock" means any Capital Stock of a
corporation that is exchangeable for or convertible into another security
(other than Capital Stock of such corporation that is neither Exchangeable
Stock nor Redeemable Stock).
"Exercise Date" means the Premium Termination Date.
"Extended Stated Maturity" shall have the meaning set forth
in Section 2.01.
"Extension Notice" shall have the meaning set forth in the
Pass Through Trust Agreement.
"Extension Option" shall have the meaning set forth in the
Pass Through Trust Agreement.
"Extension Option Buyer" means Morgan Stanley Capital
Services, Inc.
"FD Redemption Option" shall have the meaning set forth in
Section 7.01(c).
"Final Distribution" shall have the meaning set forth in the
Pass Through Trust Agreement.
"Final Distribution Date" shall have the meaning set forth
in the Pass Through Trust Agreement.
"Hybrid Preferred Securities" means any preferred securities
issued by a Hybrid Preferred Securities Subsidiary, where such preferred
securities have the following characteristics: (i) such Hybrid Preferred
Securities Subsidiary lends substantially all of the proceeds from the
issuance of such preferred securities to the Issuer or Consumers in
exchange for subordinated debt issued by the Issuer or Consumers,
respectively; (ii) such preferred securities contain terms providing for
the deferral of distributions corresponding to provisions providing for
the deferral of interest payments on such subordinated debt; and (iii) the
Issuer or Consumers (as the case may be) makes periodic interest payments
on such subordinated debt, which interest payments are in turn used by the
Hybrid Preferred Securities Subsidiary to make corresponding payments to
the holders of the Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any business
trust (or similar entity) (i) all of the common equity interest of which
is owned (either directly or indirectly through one or more wholly-owned
Subsidiaries of the Issuer or Consumers) at all times by the Issuer or
Consumers, (ii) that has been formed for the purpose of issuing Hybrid
Preferred Securities and (iii) substantially all of the assets of which
consist at all times solely of subordinated debt issued by the Issuer or
Consumers (as the case may be) and payments made from time to time on such
subordinated debt.
"ISDA Amount" shall mean such amount as may be due and
payable by the Pass Through Trust under the ISDA Master Agreement under
the circumstances contemplated thereby as notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee by the Calculation Agent.
"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.
"Initial Stated Maturity" means, with respect to the X-TRAS,
January 15, 2005.
"Interest Payment Date" means July, 15 1998 and each January
15 and July 15 in each year thereafter.
"ISDA Master Agreement" means the ISDA Master Agreement,
Schedule and Confirmation dated as of January 13, 1998 entered into by the
Pass Through Trust and the Extension Option Buyer, as amended from time to
time.
"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.
"legal defeasance" shall have the meaning set forth in
Section 6.03.
"Letter Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is intended to reflect the separate performance of
certain of the businesses or operations conducted by such corporation or
any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security interest,
conditional sale, title retention agreement or other charge or encumbrance
of any kind.
"Net Cash Proceeds" means, (a) with respect to any Asset
Sale, the aggregate proceeds of such Asset Sale including the fair market
value (as determined by the Board of Directors and net of any associated
debt and of any consideration other than Capital Stock received in return)
of property other than cash, received by the Issuer, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes (whether or not such taxes will actually be paid
or are payable) as a result of such Asset Sale without regard to the
consolidated results of operations of the Issuer and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness
or any other obligation outstanding at the time of such Asset Sale that
either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts
to be provided by the Issuer or any Restricted Subsidiary of the Issuer as
a reserve against any liabilities associated with such Asset Sale
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities
under any indemnification obligations associated with such Asset Sale, all
as determined in conformity with generally accepted accounting principles
and (b) with respect to any issuance or sale or contribution in respect of
Capital Stock, the aggregate proceeds of such issuance, sale or
contribution, including the fair market value (as determined by the Board
of Directors and net of any associated debt and of any consideration other
than Capital Stock received in return) of property other than cash,
received by the Issuer, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof,
provided, however, that if such fair market value as determined by the
Board of Directors of property other than cash is greater than $25
million, the value thereof shall be based upon an opinion from an
independent nationally recognized firm experienced in the appraisal or
similar review of similar types of transactions.
"NOMECO" means, CMS NOMECO Oil & Gas Co., a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non- convertible Capital Stock of such corporation and
any Capital Stock of such corporation convertible solely into non-
convertible Capital Stock other than Preferred Stock of such corporation;
provided, however, that Non-Convertible Capital Stock shall not include
any Redeemable Stock or Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to
the Issuer and its Consolidated Subsidiaries, the aggregate amount of
Consolidated Net Income after adding thereto Consolidated Interest Expense
(adjusted to include costs recognized on early retirement of debt), income
taxes, depreciation expense, Amortization Expense and any noncash
amortization of debt issuance costs, any nonrecurring, noncash charges to
earnings and any negative accretion recognition.
"Other Rating Agency" shall mean any one of Duff & Phelps
Credit Rating Co., Fitch Investors Service, L.P. or Moody's Investors
Service, Inc., and any successor to any of these organizations which is a
nationally recognized statistical rating organization.
"Pass Through Trust" means the CMS Energy X-TRASsm Pass
Through Trust I created under the Pass Through Trust Agreement, as holder
of the X-TRAS from the Original Issue Date to the Initial Stated Maturity.
"Pass Through Trust Agreement" means the Amended and
Restated Pass Through Trust Agreement dated as of January 13, 1998 between
the Issuer and the Pass Through Trustee.
"Pass Through Trustee" means the Pass Through Trustee
appointed from time to time under the Pass Through Trust Agreement (which
initially shall be Wilmington Trust Company).
"Paying Agent" means any person authorized by the Issuer to
pay the principal of (and premium, if any) or interest on any of the X-
TRAS on behalf of the Issuer. Initially, the Paying Agent is the
Indenture Trustee.
"Predecessor X-TRAS" of any particular X-TRAS means all
previous X-TRAS evidencing all or a portion of the same debt as that
evidenced by such particular X-TRAS; and, for the purposes of the
definition, any X-TRAS authenticated and delivered under Section 2.9 of
the Indenture in exchange for or in lieu of a mutilated, destroyed, lost
or stolen X-TRAS shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen X-TRAS.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation; provided that Hybrid Preferred Securities are
not considered Preferred Stock for purposes of this definition.
"Premium Termination Date" means the 90th day prior to the
Initial Stated Maturity. If the 90th day prior to the Initial Stated
Maturity is not a Business Day, then the Premium Termination Date shall be
the next succeeding Business Day.
"Put Option" shall have the meaning set forth in
Section 7.02.
"Redeemable Stock" means any Capital Stock that by its terms
or otherwise is required to be redeemed prior to the first anniversary of
the Stated Maturity of the Outstanding X-TRAS or is redeemable at the
option of the holder thereof at any time prior to the first anniversary of
the Stated Maturity of the Outstanding X-TRAS.
"Redemption Date" means the date specified for redemption of
the X-TRAS by the Issuer in a notice provided pursuant to Section 7.01(b).
"Reference Treasury Note Yield" means 5.80%.
"Remarketing Agent" means Morgan Stanley & Co. Incorporated
or such other investment banking institution as shall be selected in
accordance with Section 8.02 in connection with a remarketing of the X-
TRAS.
"Remarketing Deadline" means the fifteenth day prior to the
Initial Stated Maturity or such earlier date as may be mutually agreed by
the Issuer, the Indenture Trustee, the Pass Through Trustee and the
Extension Option Buyer.
"Remarketing Procedure" shall have the meaning set forth in
Section 8.02.
"Required Remarketing Proceeds" shall have the meaning set
forth in Section 8.01.
"Restricted Subsidiary" means any Subsidiary (other than
Consumers and its subsidiaries) of the Issuer which, as of the date of the
Issuer's most recent quarterly consolidated balance sheet, constituted at
least 10% of the total Consolidated Assets of the Issuer and its
Consolidated Subsidiaries and any other Subsidiary which from time to time
is designated a Restricted Subsidiary by the Board of Directors; provided
that no Subsidiary may be designated a Restricted Subsidiary if,
immediately after giving effect thereto, an Event of Default or event
that, with the lapse of time or giving of notice or both, would constitute
an Event of Default would exist or the Issuer and its Restricted
Subsidiaries could not incur at least one dollar of additional
Indebtedness under Section 4.03, and (i) any such Subsidiary so designated
as a Restricted Subsidiary must be organized under the laws of the United
States or any State thereof, (ii) more than 80% of the Voting Stock of
such Subsidiary must be owned of record and beneficially by the Issuer or
a Restricted Subsidiary and (iii) such Restricted Subsidiary must be a
Consolidated Subsidiary.
"satisfaction and discharge" shall have the meaning set
forth in Section 6.02.
"Settlement Date" means the settlement date under the ISDA
Master Agreement (which is the Initial Stated Maturity).
"Standard & Poor's" shall mean Standard & Poor's Ratings
Group, a division of McGraw Hill Inc., and any successor thereto which is
a nationally recognized statistical rating organization, or if such entity
shall cease to rate the X-TRAS or shall cease to exist and there shall be
no such successor thereto, any other nationally recognized statistical
rating organization selected by the Issuer which is acceptable to the
Indenture Trustee.
"Subordinated Indebtedness" means any Indebtedness of the
Issuer (whether outstanding on the date of this Sixth Supplemental
Indenture or thereafter incurred) which is contractually subordinated or
junior in right of payment to the X-TRAS.
"Support Obligations" means, for any Person, without
duplication, any financial obligation, contingent or otherwise, of such
Person guaranteeing or otherwise supporting any debt or other obligation
of any other Person in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such debt,
(ii) to purchase property, securities or services for the purpose of
assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable the
primary obligor to pay such debt, (iv) to provide equity capital under or
in respect of equity subscription arrangements (to the extent that such
obligation to provide equity capital does not otherwise constitute debt),
or (v) to perform, or arrange for the performance of, any non-monetary
obligations or non- funded debt payment obligations of the primary
obligor.
"Tax-Sharing Agreement" means the Amended and Restated
Agreement for the Allocation of Income Tax Liabilities and Benefits, dated
January 1, 1994, as amended or supplemented from time to time, by and
among Issuer, each of the members of the Consolidated Group (as defined
therein), and each of the corporations that become members of the
Consolidated Group.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) (the "Statistical Release") which has become publicly
available at least two Business Days prior to the redemption date or, in
the case of defeasance, prior to the date of deposit (or, if such
Statistical Release is no longer published, any publicly available source
of similar market data)) most nearly equal to the then remaining average
life to stated maturity of the X-TRAS; provided, however, that if the
average life to stated maturity of the X-TRAS is not equal to the constant
maturity of a United States Treasury security for which a weekly average
yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such
yields are given.
"Voting Stock" means securities of any class or classes the
holders of which are ordinarily, in the absence of contingencies, entitled
to vote for corporate directors (or persons performing similar functions).
"Yield" means the yield-to-maturity on the then current
7-year U.S. Treasury Note as determined by linear interpolation, which
shall equal the sum of (i) 0.6 times the 5-year then current offered-side
yield and (ii) 0.4 times the 10-year then current offered-side yield, in
each case, in respect of the on-the-run most recently issued U.S. Treasury
Notes, as published on Telerate page 500 as of approximately 12:30 p.m.,
New York City time, on the Exercise Date. If Telerate 500 is unavailable,
"Yield" means the arithmetic mean of offered-side yields for the then
current 7-year U.S. Treasury Note as determined by linear interpolation,
which shall equal the sum of (i) 0.6 times the 5-year then current
offered-side yield and (ii) 0.4 times the 10-year then current offered-
side yield, in each case, in respect of the on-the-run most recently
issued U.S. Treasury Notes, without regard to highest and lowest yields,
quoted as of approximately 12:30 p.m., New York City time, on the Exercise
Date by five primary dealers in U.S. Treasury Notes selected by the
Calculation Agent.
Certain terms, used principally in Articles Three and Four
of this Sixth Supplemental Indenture, are defined in those Articles.
ARTICLE II.
DESIGNATION AND TERMS OF THE X-TRAS; FORMS
SECTION 1. ESTABLISHMENT OF SERIES. a. There is hereby
created a series of Securities to be known and designated as the
"Extendible Tenor Rate-Adjusted Securities" and limited in aggregate
principal amount (except as contemplated in Section 2.3(f)(2) of the
Indenture) to $180,000,000. If the Yield on the Exercise Date is equal to
or greater than the Reference Treasury Note Yield, the X-TRAS will mature
on January 15, 2005 (the "Initial Stated Maturity"). If the Yield on the
Exercise Date is less than the Reference Treasury Note Yield, the maturity
of the X-TRAS will be extended until January 15, 2012 (the "Extended
Stated Maturity").
b. During the period commencing on the Original Issue
Date and ending on the Initial Stated Maturity, the X-TRAS will bear
interest from the Original Issue Date, or from the most recent date to
which interest has been paid or duly provided for, at the rate of 7% per
annum stated therein until the principal thereof is paid or made available
for payment on the Initial Stated Maturity; provided, that if the maturity
of the X-TRAS is extended until the Extended Stated Maturity, the X-TRAS
will bear interest from the date of closing of the remarketed X-TRAS, at
such rate per annum as may be established pursuant to Article VIII, until
the principal thereof is paid or made available for payment on the
Extended Stated Maturity. Interest will be payable semiannually on each
Interest Payment Date and at Maturity, as provided in the form of X-TRAS
in Section 2.03 hereof.
c. The Record Date referred to in Section 2.3(f)(4) of
the Indenture for the payment of the interest on any X-TRAS payable on any
Interest Payment Date (other than at Maturity) shall be the first day
(whether or not a Business Day) of the calendar month in which such
Interest Payment Date occurs and, in the case of interest payable at
Maturity, the Record Date shall be the date of Maturity.
(d) The payment of the principal of, premium (if any)
and interest on the X- TRAS shall not be secured by a security interest in
any property.
(e) The X-TRAS shall be redeemable at the option of the
Issuer as provided in Section 7.01(b) and (c) hereof. The holders of X-
TRAS shall not be entitled to any sinking fund payments. The X-TRAS shall
be purchased by the Issuer at the option of the Holders thereof as
provided in Sections 3.01, 4.05 and 7.02 hereof.
(f) The X-TRAS shall not be convertible.
(g) The X-TRAS will not be subordinated to the payment
of Senior Debt.
(h) The Issuer will not pay any additional amounts on
the X-TRAS held by a Person who is not a U.S. Person in respect of any
tax, assessment or government charge withheld or deducted.
(i) The events specified in Events of Default with
respect to the X-TRAS shall include the events specified in Article Five
of this Sixth Supplemental Indenture. In addition to the covenants set
forth in Article Three of the Original Indenture, the Holders of the X-
TRAS shall have the benefit of the covenants of the Issuer set forth in
Article Four hereto.
(j) In the event the maturity of the X-TRAs is extended
until the Extended Maturity Date, then, unless the Issuer exercises the FD
Redemption Option (which option the Issuer shall be entitled to exercise
at any time subsequent to the delivery of the Extension Notice and prior
to the earlier of the pricing of the remarketing and the Remarketing
Deadline), the interest rate borne by the X-TRAS will be reset in order
that the X-TRAS may be remarketed so as to yield proceeds at least
sufficient to make available to the Pass Through Trustee on the Final
Distribution Date an amount in cash equal to 100% of the principal amount
thereof plus the ISDA Amount. The remarketing of the X-TRAS will be
conducted in accordance with the provisions of Article VIII hereof.
SECTION 2. FORMS GENERALLY. The X-TRAS and Indenture
Trustee's certificates of authentication shall be in substantially the
form set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted
by the Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such X-
TRAS, as evidenced by their execution thereof.
The definitive X-TRAS shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such X-TRAS, as evidenced by
their execution thereof.
SECTION 3. FORM OF FACE OF X-TRAS.
CMS ENERGY CORPORATION
7% EXTENDIBLE TENOR RATE-ADJUSTED SECURITIES ("X-TRAS_")
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 January 15, 2005 ("Initial Stated
Maturity") or, in the event the maturity of the X-TRAS is extended until
the Extended Stated Maturity, January 13, 2012 and to pay interest
thereon, semi-annually on January 15 and July 15 in each year, from
January 13, 1998 (the "Original Issue Date") or from the most recent
Interest Payment Date to which interest has been paid or duly provided
for, commencing July 15, 1998 at the rate of 7% per annum, until the
principal hereof is paid or made available for payment on the Initial
Stated Maturity; provided, that if the maturity of the X-TRAS is extended
until the Extended Stated Maturity, the X-TRAS will bear interest from the
date of closing of the remarketed X-TRAS at such rate per annum as may be
established pursuant to the Remarketing Procedure, until the principal
hereof is paid or made available for payment on the Extended Stated
Maturity. The amount of interest payable on any Interest Payment Date
shall be computed on the basis of a 360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Extendible Tenor Rate-Adjusted Security
("Security") (or one or more Predecessor X-TRAS) is registered at the
close of business on the Record Date for such interest, which shall be the
first day of the calendar month in which such Interest Payment Date occurs
(whether or not a Business Day) except that the Record Date for interest
payable at the Initial Stated Maturity or Extended Stated Maturity shall
be the date of such Initial Stated Maturity or Extended Stated Maturity.
Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor X-TRAS) is registered at the close of business on a subsequent
Record Date (which shall be not less than five Business Days prior to the
date of payment of such defaulted interest) for the payment of such
defaulted interest to be fixed by the Indenture Trustee, notice whereof
shall be given to Holders of X-TRAS not less than 15 days preceding such
subsequent Record Date.
Payment of the principal of (and premium, if any) and
interest, if any, on this Security will be made at the office or agency of
the Issuer maintained for that purpose in New York, New York (the "Place
of Payment"), in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Issuer payment of the
principal of (and premium, if any) and interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or by wire transfer to an account
designated by such Person not later than ten days prior to the date of
such payment. If the date on which payment of principal or interest on
this Security becomes due is not a Business Day, then such principal or
interest shall be due and payable on the next succeeding Business Day.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By: _______________________
Its:_______________________
By: _______________________
Its:_______________________
Attest:
SECTION 4. FORM OF REVERSE OF SECURITY.
This 7% Extendible Tenor Rate-Adjusted Security is one of a
duly authorized issue of securities of the Issuer (herein called the "X-
TRAS"), issued and to be issued under an Indenture, dated as of September
15, 1992, as supplemented by certain supplemental indentures, including
the Sixth Supplemental Indenture, dated as of January 13, 1998 (herein
collectively referred to as the "Indenture"), between the Issuer and NBD
Bank, a Michigan banking corporation (formerly known as NBD Bank, National
Association), as Indenture Trustee (herein called the "Indenture Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Issuer, the Indenture Trustee, the
Holders of the X-TRAS and of the terms upon which the X- TRAS are, and are
to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate principal amount to
$180,000,000.
The X-TRAS will be redeemable at any time, at the option of
the Issuer, in whole or in part, on any date on or prior to the Premium
Termination Date on not less than 30 nor more than 60 days' notice to the
Indenture Trustee, the Pass Through Trustee and the Extension Option
Buyer, at a redemption price ("Early Redemption Price") equal to the sum
of (i) 100% of the principal amount of the X-TRAS being redeemed, together
with accrued interest, thereon to the Redemption Date plus the Applicable
Premium (but interest installments whose Stated Maturity is on or prior to
the Redemption Date will be payable to the Holder thereof of record at the
close of business on the relevant Record Date referred to on the face
hereof all as provided in the Indenture) plus (ii) the ISDA Amount, if
any, as of the second Business Day preceding the Redemption Date as
determined by the Extension Option Buyer and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee by 12 noon, New York City
time, on such second preceding Business Day. In no event will the Early
Redemption Price calculated pursuant to the foregoing clause (i) ever be
less than 100% of the principal amount of the X- TRAS plus accrued
interest to the Redemption Date. The Notional Amount used to determine
the ISDA Amount shall be equal to the aggregate principal amount of X-TRAS
redeemed. The following definitions are used to determine the Applicable
Premium:
"Applicable Premium" means, with respect to X-TRAS (or
portion thereof) being redeemed at any time, the excess of (A) the present
value at such time of the principal amount of such X-TRAS (or portion
thereof) being redeemed plus all interest payments due on such X- TRAS (or
portion thereof) from and after the date of redemption, which present
value shall be computed using a discount rate equal to the Treasury Rate
plus 50 basis points, over (B) the principal amount of such X-TRAS (or
portion thereof) being redeemed at such time. For purposes of this
definition, the present values of interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity
(as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) (the "Statistical Release") which has become publicly
available at least two Business Days prior to the redemption date or, in
the case of defeasance, prior to the date of deposit (or, if such
Statistical Release is no longer published, any publicly available source
of similar market data)) most nearly equal to the then remaining average
life to stated maturity of the X-TRAS; provided, however, that if the
average life to stated maturity of the X-TRAS is not equal to the constant
maturity of a United States Treasury security for which a weekly average
yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such
yields are given.
In the event of redemption of the X-TRAS in part, new X-TRAS
for the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation hereof.
If the X-TRAS are extended until the Extended Stated
Maturity, the Issuer shall have the option (the "FD Redemption Option"),
in lieu of permitting the X-TRAS to be remarketed in accordance with
Section 8.01 of the Indenture, to redeem the X-TRAS in whole on the
Initial Stated Maturity, by irrevocable notice given to the Indenture
Trustee, the Pass Through Trustee, the Extension Option Buyer and the
Calculation Agent not later than the Remarketing Deadline, at a redemption
price, payable in cash, equal to the sum of (i) 100% of the principal
amount of the X-TRAS being redeemed together with accrued interest, if
any, thereon to the Initial Stated Maturity plus (ii) the ISDA Amount, if
any, as of the Exercise Date (as calculated by the Calculation Agent on
the Exercise Date and notified to the Issuer, the Indenture Trustee and
the Pass Through Trustee on or promptly following such date (but in any
event within five Business Days thereafter)), which redemption price shall
be payable at the Initial Stated Maturity. The Notional Amount used to
determine the ISDA Amount shall be the aggregate principal amount of the
X-TRAS outstanding as of the Exercise Date.
If a Change in Control occurs, the Issuer shall notify the
Holder of this Security, the Indenture Trustee, the Pass Through Trustee
and the Extension Option Buyer of such occurrence and each Holder shall
have the right to require the Issuer to make a Required Repurchase of all
or any part of this Security at a Change in Control Purchase Price equal
to 101% of the principal amount of the X-TRAS to be so purchased together
with accrued interest thereon to the date of repurchase plus (in the
aggregate with all other X-TRAS repurchased pursuant to such Required
Repurchase) the ISDA Amount, if any, as of the second Business Day
preceding the Change in Control Purchase Date as determined by the
Extension Option Buyer and notified to the Issuer, the Indenture Trustee
and the Pass Through Trustee by 12 noon, New York City time, on such
second preceding Business Day, as more fully provided in the Indenture and
subject to the terms and conditions set forth therein. In the event of a
Required Repurchase of only a portion of this Security, a new Security or
Notes for the unrepurchased portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
In the event that the Issuer has Excess Proceeds from an
Asset Sale, it shall be required to make an offer to purchase from Holders
on a pro rata basis an aggregate principal amount of X-TRAS equal to the
Excess Proceeds, at a purchase price equal to the sum of (i) 100% of the
principal amount of and unpaid interest, if any, to the purchase date on
such X- TRAS, plus (ii) (in the aggregate with all other X-TRAS
repurchased pursuant to such Excess Proceeds Offer) the ISDA Amount as of
the second Business Day preceding the Excess Proceeds Purchase Date as
determined by the Extension Option Buyer and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee by 12 noon, New York City
time, on such second preceding Business Day.
If the maturity of the X-TRAS is extended and for any reason
the Pass Through Trustee does not receive an amount in cash equal to the
principal amount of and interest on the X-TRAS plus the ISDA Amount by the
Remarketing Deadline, the Holders of the X-TRAS will be deemed to have
exercised the Put Option and required the Issuer to purchase all of the
outstanding X-TRAS on the Initial Stated Maturity at a purchase price
equal to 100% of the principal amount of and interest on the X-TRAS.
If an Event of Default with respect to this Security shall
occur and be continuing, the principal of this Security may be declared
due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration occurs, the Issuer will also be
obligated to pay the ISDA Amount, if any, as of the date of such
acceleration, as determined by the Extension Option Buyer and notified to
the Issuer, the Indenture Trustee and the Pass Through Trustee within five
Business Days after the date of such acceleration.
In any case where any Interest Payment Date, repurchase
date, Stated Maturity or Maturity of any Security shall not be a Business
Day at any Place of Payment, then (notwithstanding any other provision of
the Indenture or this Security), payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment
Date, repurchase date or at the Stated Maturity or Maturity; provided that
no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, redemption date, repurchase date, Stated
Maturity or Maturity, as the case may be, to such Business Day.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security or (ii) certain
restrictive covenants and Events of Default with respect to this Security,
in each case upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of all Outstanding
X-TRAS under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Holders of not less than a majority in
principal amount of Securities of all series then Outstanding and affected
(voting as one class). No such amendment or modification may be made to
the Indenture which has a material adverse effect on the Extension Option
Buyer without the consent of the Extension Option Buyer.
The Indenture permits the Holders of not less than a
majority in principal amount of Securities of all series at the time
Outstanding with respect to which a default shall have occurred and be
continuing (voting as one class) to waive on behalf of the Holders of all
Outstanding Securities of such series any past default by the Issuer,
provided that no such waiver may be made with respect to a default in the
payment of the principal of or the interest on any Security of such series
or the default by the Issuer in respect of certain covenants or provisions
of the Indenture, the modification or amendment of which must be consented
to by the Holder of each Outstanding Security of each series affected or
by the Extension Option Buyer, as the case may be.
As set forth in, and subject to, the provisions of the
Indenture, no Holder of any Securities of any series will have any right
to institute any proceeding with respect to the Indenture or for any
remedy thereunder, unless such Holder shall have previously given to the
Indenture Trustee written notice of a continuing Event of Default, the
Holders of not less than 25% in principal amount of the Outstanding
Securities of each affected series (voting as one class) shall have made
written request, and offered reasonable indemnity, to the Indenture
Trustee to institute such proceeding as trustee, and the Indenture Trustee
shall not have received from the Holders of a majority in principal amount
of the Outstanding Securities of each affected series (voting as one
class) a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if any) or any
interest on this Security on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of
the Issuer, which is absolute and unconditional, to pay the principal of
and any premium and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Issuer in any
place where the principal of and any premium and interest on this Security
are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Security Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of
like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The X-TRAS are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, X-TRAS are exchangeable for a like aggregate principal amount of X-
TRAS and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Issuer shall not be required to (a) issue, exchange or
register the transfer of this Security for a period of 15 days next
preceding the mailing of the notice of redemption of X-TRAS or (b)
exchange or register the transfer of any Security or any portion thereof
selected, called or being called for redemption, except in the case of any
Security to be redeemed in part, the portion thereof not so to be
redeemed.
Prior to due presentment of this Security for registration
of transfer, the Issuer, the Indenture Trustee and any agent of the Issuer
or the Indenture Trustee may treat the Person in whose name this Security
is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Issuer, the Indenture Trustee nor any
such agent shall be affected by notice to the contrary.
All terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
SECTION 2.05. FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF
AUTHENTICATION. The Indenture Trustee's certificates of authentication
shall be in substantially the following form:
This is one of the Securities of the series designated
herein referred to in the within-mentioned Indenture.
__________________________________
as Indenture Trustee
By: ______________________________
Authorized Officer
ARTICLE III.
CHANGE IN CONTROL
SECTION 1. CHANGE IN CONTROL. Upon the occurrence of a
Change in Control (the effective date of such Change in Control being the
"Change in Control Date"), each Holder of X-TRAS shall have the right to
require that the Issuer repurchase (a "Required Repurchase") all or any
part of such Holder's X-TRAS at a repurchase price (the "Change in Control
Purchase Price") payable in cash equal to the sum of (i) 101% of the
principal amount of such X-TRAS plus accrued interest to the Change in
Control Purchase Date (as defined below) (the "Change in Control Purchase
Price") plus (in the aggregate with all other X-TRAS repurchased pursuant
to this Section 3.01) the ISDA Amount, if any, as of the second Business
Day preceding the Change in Control Purchase Date as determined by the
Extension Option Buyer and notified to the Issuer, the Indenture Trustee
and the Pass Through Trustee by 12 noon, New York City time, on such
second preceding Business Day. The Notional Amount used to determine the
ISDA Amount shall be equal to the aggregate principal amount of X-TRAS
tendered for repurchase and not withdrawn.
a. Within 30 days following the Change in Control Date,
the Issuer shall mail a notice (the "Required Repurchase Notice") to
each Holder with copies to the Indenture Trustee, Pass Through
Trustee and Extension Option Buyer stating:
(1) that a Change in Control has occurred and
that such Holder has the right to require the Issuer to
repurchase all or any part of such Holder's X-TRAS at the
Change in Control Purchase Price;
(2) the Change in Control Purchase Price;
(3) the date on which any Required Repurchase
shall be made (which shall be no earlier than 60 days nor
later than 90 days from the date such notice is mailed) (the
"Change in Control Purchase Date");
(4) the name and address of the Paying Agent;
and
(5) the procedures that Holders must follow to
cause the X-TRAS to be repurchased, which shall be
consistent with this Section and the Indenture.
b. Holders electing to have X-TRAS repurchased must
deliver a written notice (the "Change in Control Purchase Notice") to
the Paying Agent (initially the Indenture Trustee) at its corporate
trust office in Detroit, Michigan, or any other office of the Paying
Agent maintained for such purposes, not later than 30 days prior to
the Change in Control Purchase Date. The Change in Control Purchase
Notice shall state: (i) the portion of the principal amount of any X-
TRAS to be repurchased, which portion must be $1,000 or an integral
multiple thereof; (ii) that such X-TRAS are to be repurchased by the
Issuer pursuant to the change in control provisions of the Indenture;
and (iii) unless the X-TRAS are represented by one or more Global
Notes, the certificate numbers of the X-TRAS to be delivered by the
Holder thereof for repurchase by the Issuer. Any Change in Control
Purchase Notice may be withdrawn by the Holder by a written notice of
withdrawal delivered to the Paying Agent not later than three
Business Days prior to the Change in Control Purchase Date. The
notice of withdrawal shall state the principal amount and, if
applicable, the certificate numbers of the X-TRAS as to which the
withdrawal notice relates and the principal amount of such X-TRAS, if
any, which remains subject to a Change in Control Purchase Notice.
c. Payment of the Change in Control Purchase Price for
X-TRAS for which a Change in Control Purchase Notice has been
delivered and not withdrawn is conditioned upon delivery of such X-
TRAS (together with necessary endorsements) to the Paying Agent at
its office in Detroit, Michigan, or any other office of the Paying
Agent maintained for such purpose, at any time (whether prior to, on
or after the Change in Control Purchase Date) after the delivery of
such Change in Control Purchase Notice. Payment of the Change in
Control Purchase Price for such X-TRAS will be made promptly
following the later of the Change in Control Purchase Date or the
time of delivery of such X-TRAS. If the Paying Agent holds, in
accordance with the terms of the Indenture, money sufficient to pay
the Change in Control Purchase Price of such X- TRAS on the Business
Day following the Change in Control Purchase Date, then, on and after
such date, interest will cease accruing, and all other rights of the
Holder shall terminate (other than the right to receive the Change in
Control Purchase Price upon delivery of the X-TRAS).
d. The Issuer shall comply with the provisions of
Regulation 14E and any other tender offer rules under the Exchange
Act which may then be applicable in connection with any offer by the
Issuer to repurchase X-TRAS at the option of Holders upon a Change in
Control.
e. No X-TRAS may be repurchased by the Issuer as a
result of a Change in Control if there has occurred and is continuing
an Event of Default (other than a default in the Payment of the
Change in Control Purchase Price with respect to the X-TRAS).
ARTICLE IV.
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE X-TRAS
SECTION 1. LIMITATION ON CERTAIN LIENS. So long as any of
the X-TRAS are outstanding, the Issuer shall not create, incur, assume or
suffer to exist any Lien 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 upon or with respect to any of its
property of any character, including without limitation any shares of
Capital Stock of Consumers or Enterprises, without making effective
provision whereby the X-TRAS shall (so long as any such other creditor
shall be so secured) be equally and ratably secured (along with any other
creditor similarly entitled to be secured) by a direct Lien on all
property subject to such Lien, provided, however, that the foregoing
restrictions shall not apply to:
(1) Liens for taxes, assessments or governmental charges
or levies to the extent not past due;
(2) pledges or deposits to secure (a) obligations under
workmen's compensation laws or similar legislation, (b) statutory
obligations of the Issuer or (c) Support Obligations at any one time
outstanding;
(3) 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;
(4) 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
(5) 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 2. LIMITATION ON CONSOLIDATION, MERGER, SALE OR
CONVEYANCE OF ASSETS. So long as any of the X-TRAS are Outstanding and
until senior unsecured debt of the Issuer is rated BBB- or above (or an
equivalent rating) by Standard & Poor's and one Other Rating Agency (or,
if Standard & Poor's shall change its rating system, an equivalent of such
rating then employed by such organization), at which time the Issuer will
be permanently released from the provisions of this Section 4.02, and
subject also to Article Nine of the Indenture, the Issuer shall not
consolidate with or merge into any other Person or sell, lease or convey
the property of the Issuer in the entirety or substantially as an
entirety, unless (i) immediately after giving effect to such transaction
the Consolidated Net Worth of the surviving entity is at least equal to
the Consolidated Net Worth of the Issuer immediately prior to the
transaction, and (ii) after giving effect to such transaction, the
surviving entity would be entitled to incur at least one dollar of
additional Indebtedness (other than revolving Indebtedness to banks)
without violation of the limitations in Section 4.03 hereof.
SECTION 3. LIMITATION ON CONSOLIDATED INDEBTEDNESS. a. So
long as any of the X-TRAS are Outstanding and until the senior unsecured
debt of the Issuer is rated BBB- or above (or an equivalent rating) by
Standard & Poor's and one Other Rating Agency (or, if Standard & Poor's
shall change its rating system, an equivalent of such rating then employed
by such organization), at which time the Issuer will be permanently
released from the provisions of this Section 4.03, the Issuer shall not,
and shall not permit any Consolidated Subsidiary of the Issuer to, issue,
create, assume, guarantee, incur or otherwise become liable for
(collectively, "issue"), directly or indirectly, any Indebtedness unless
the Consolidated Coverage Ratio of the Issuer and its Consolidated
Subsidiaries for the four consecutive fiscal quarters immediately
preceding the issuance of such Indebtedness (as shown by a pro forma
consolidated income statement of the Issuer and its Consolidated
Subsidiaries for the four most recent fiscal quarters ending at least 30
days prior to the issuance of such Indebtedness after giving effect to (i)
the issuance of such Indebtedness and (if applicable) the application of
the net proceeds thereof to refinance other Indebtedness as if such
Indebtedness was issued at the beginning of the period, (ii) the issuance
and retirement of any other Indebtedness since the first day of the period
as if such Indebtedness was issued or retired at the beginning of the
period and (iii) the acquisition of any company or business acquired by
the Issuer or any Subsidiary since the first day of the period (including
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:
(a) Indebtedness of the Issuer to banks not to exceed
$1,000,000,000 in aggregate outstanding principal amount at any time;
(b) Indebtedness (other than Indebtedness described in
clause (1) of this Subsection) outstanding on the date of this Sixth
Supplemental Indenture, as set forth on Schedule 4.03(b)(2) attached
hereto and made a part hereof, and Indebtedness issued in exchange
for, or the proceeds of which are used to refund or refinance, any
Indebtedness permitted by this clause (2); provided, however, that
(i) the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of the Indebtedness so issued
shall not exceed the principal amount (or accreted value in the case
of Indebtedness issued at a discount) of, premium, if any, and
accrued but unpaid interest on, the Indebtedness so exchanged,
refunded or refinanced and (ii) the Indebtedness so issued (A) shall
not mature prior to the stated maturity of the Indebtedness so
exchanged, refunded or refinanced, (B) shall have an Average Life
equal to or greater than the remaining Average Life of the
Indebtedness so exchanged, refunded or refinanced and (C) if the
Indebtedness to be exchanged, refunded or refinanced is subordinated
to the X-TRAS, the Indebtedness is subordinated to the X-TRAS in
right of payment;
(c) 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;
(d) Indebtedness of the Issuer issued in exchange for,
or the proceeds of which are used to refund or refinance,
Indebtedness of the Issuer issued in accordance with Subsection (a)
of this Section, provided that (i) the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of the
Indebtedness so issued shall not exceed the principal amount (or
accreted value in the case of Indebtedness issued at a discount) of,
premium, if any, and accrued but unpaid interest on, the Indebtedness
so exchanged, refunded or refinanced and (ii) the Indebtedness so
issued (A) shall not mature prior to the stated maturity of the
Indebtedness so exchanged, refunded or refinanced, (B) shall have an
Average Life equal to or greater than the remaining Average Life of
the Indebtedness so exchanged, refunded or refinanced and (C) if the
Indebtedness to be exchanged, refunded or refinanced is subordinated
to the X-TRAS, the Indebtedness so issued is subordinated to the X-
TRAS in right of payment;
(e) 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.
(f) Indebtedness of a Consolidated Subsidiary issued to
acquire, develop, improve, construct or to provide working capital
for a gas, oil or electric generation, exploration, production,
distribution, storage or transmission facility and related assets,
provided that such Indebtedness is without recourse to any assets of
the Issuer, Consumers, Enterprises, CMS Generation, NOMECO,
CMS Electric and Gas, CMS Gas Transmission and Storage, CMS MST or
any other Designated Enterprises Subsidiary;
(g) 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;
(h) Indebtedness issued by the Issuer not to exceed
$150,000,000 in aggregate principal amount at any time; and
(i) 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. LIMITATION ON RESTRICTED PAYMENTS. a. So long
as the X-TRAS are Outstanding and until senior unsecured debt of the
Issuer is rated BBB- or above (or an equivalent rating) by Standard &
Poor's and one Other Rating Agency (or, if Standard & Poor's shall change
its rating system, an equivalent of such rating then employed by such
organization), at which time the Issuer will be permanently released from
the provisions of this Section 4.04, the Issuer shall not, and shall not
permit any Restricted Subsidiary of the Issuer, directly or indirectly, to
(i) declare or pay any dividend or make any distribution on the Capital
Stock of the Issuer to the direct or indirect holders of its Capital Stock
(except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such
Non-Convertible Capital Stock and except dividends or distributions
payable to the Issuer or a Subsidiary), (ii) purchase, redeem or otherwise
acquire or retire for value any Capital Stock of the Issuer, or (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity or scheduled repayment thereof, any
Subordinated Indebtedness (any such dividend, distribution, purchase,
redemption, repurchase, defeasing, other acquisition or retirement being
hereinafter referred to as a "Restricted Payment") if at the time the
Issuer or such Subsidiary makes such Restricted Payment:
(a) 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
(b) the aggregate amount of such Restricted Payment and
all other Restricted Payments made since May 6, 1997 would exceed the
sum of:
i) $100,000,000;
ii) 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
iii) the aggregate Net Cash Proceeds received by
the Issuer from the issue or sale of or contribution with
respect to its Capital Stock subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not in
the form of cash, the amount shall be the fair value of such Restricted
Payment as determined in good faith by the Board of Directors, provided
that if the value of the non-cash portion of such Restricted Payment as
determined by the Board of Directors is in excess of $25 million, such
value shall be based on the opinion from a nationally recognized firm
experienced in the appraisal of similar types of transactions.
b. The provisions of Section 4.04(a) shall not
prohibit:
(1) 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;
(2) 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;
(3) 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
(4) payments pursuant to the Tax-Sharing
Agreement.
SECTION 5. LIMITATION ON ASSET SALES. So long as any of
the X-TRAS are outstanding, the Issuer may not sell, transfer or otherwise
dispose of any property or assets of the Issuer, including Capital Stock
of any Consolidated Subsidiary, in one transaction or a series of
transactions in an amount which exceeds $50,000,000 (an "Asset Sale")
unless the Issuer shall (i) apply an amount equal to such excess Net Cash
Proceeds to permanently repay Indebtedness of a Consolidated Subsidiary or
Indebtedness of the Issuer which is pari passu with the X-TRAS or (ii)
invest an equal amount not so used in clause (i) in property or assets of
related business within 24 months after the date of the Asset Sale (the
"Application Period") or (iii) apply such excess Net Cash Proceeds not so
used in (i) or (ii) (the "Excess Proceeds") to make an offer (the "Excess
Proceeds Offer"), within 30 days after the end of the Application Period,
to purchase (the "Excess Proceeds Repurchase") from the Holders on a pro
rata basis an aggregate principal amount of X-TRAS on the Excess Proceeds
Purchase Date (as defined herein) equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of the principal amount of the X-
TRAS on the Excess Proceeds Purchase Date and unpaid interest, if any, to
such date (the "Excess Proceeds Repurchase Price") plus (in the aggregate
with all other X-TRAS repurchased pursuant to such Excess Proceeds Offer)
the ISDA Amount, if any, as of the Excess Proceeds Purchase Date as
determined by the Extension Option Buyer as of such date and notified to
the Issuer, the Indenture Trustee and the Pass Through Trustee by 10 a.m.,
New York City time, on such date. The Notional Amount used to determine
the ISDA Amount shall be equal to the aggregate principal amount of X-TRAS
tendered for repurchase and not withdrawn. The Issuer shall only be
required to make an offer to purchase X-TRAS from Holders pursuant to
subsection (iii) if the Excess Proceeds equal or exceed $25,000,000 at any
given time.
a. Within 30 days after the end of the Application
Period, the Issuer shall mail a notice (the "Excess Proceeds
Repurchase Notice") to each Holder with copies to the Indenture
Trustee, Pass Through Trustee and Extension Option Buyer stating:
(1) that the Issuer is making an Excess Proceeds
Offer pursuant to Section 4.05 of the Sixth Supplemental
Indenture;
(2) the Excess Proceeds Purchase Price;
(3) the date on which any Excess Proceeds
Repurchase shall be made (which shall be no earlier than 60
days nor later than 90 days from the date such notice is
mailed) (the "Excess Proceeds Purchase Date");
(4) the name and address of the Paying Agent;
and
(5) the procedures that Holders must follow to
cause the X-TRAS to be repurchased, which shall be
consistent with this Section and the Indenture.
b. Holders electing to have X-TRAS repurchased must
deliver a written notice (the "Excess Proceeds Purchase Notice") to
the Paying Agent (initially the Indenture Trustee) at its corporate
trust office in Detroit, Michigan, or any other office of the Paying
Agent maintained for such purposes, not later than 30 days prior to
the Excess Proceeds Purchase Date. The Excess Proceeds Purchase
Notice shall state: (i) the portion of the principal amount of any X-
TRAS to be repurchased, which portion must be $1,000 or an integral
multiple thereof; (ii) that such X-TRAS are to be repurchased by the
Issuer pursuant to the Excess Proceeds Offer provisions of the
Indenture; and (iii) unless the X-TRAS are represented by one or more
Global Notes, the certificate numbers of the X-TRAS to be delivered
by the Holder thereof for repurchase by the Issuer. Any Excess
Proceeds Purchase Notice may be withdrawn by the Holder by a written
notice of withdrawal delivered to the Paying Agent not later than
three Business Days prior to the Excess Proceeds Purchase Date. The
notice of withdrawal shall state the principal amount and, if
applicable, the certificate numbers of the X-TRAS as to which the
withdrawal notice relates and the principal amount of such X-TRAS, if
any, which remains subject to an Excess Proceeds Purchase Notice.
c. Payment of the Excess Proceeds Purchase Price for X-
TRAS for which an Excess Proceeds Purchase Notice has been delivered
and not withdrawn is conditioned upon delivery of such X-TRAS
(together with necessary endorsements) to the Paying Agent at its
office in Detroit, Michigan, or any other office of the Paying Agent
maintained for such purpose, at any time (whether prior to, on or
after the Excess Proceeds Purchase Date) after the delivery of such
Excess Proceeds Purchase Notice. Payment of the Excess Proceeds
Purchase Price for such X-TRAS will be made promptly following the
later of the Excess Proceeds Purchase Date or the time of delivery of
such X-TRAS. If the Paying Agent holds, in accordance with the terms
of the Indenture, money sufficient to pay the Excess Proceeds
Purchase Price of such X-TRAS on the Business Day following the
Excess Proceeds Purchase Date, then, on and after such date, interest
will cease accruing, and all other rights of the Holder shall
terminate (other than the right to receive the Excess Proceeds
Purchase Price upon delivery of the X-TRAS).
d. The Issuer shall comply with the provisions of
Regulation 14E and any other tender offer rules under the Exchange
Act which may then be applicable in connection with any Excess
Proceeds Offer.
ARTICLE V.
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE X-TRAS
SECTION 1. DEFINITION. All of the events specified in
clauses (a) through (h) of Section 5.1 of the Original Indenture shall be
"Events of Default" with respect to the X- TRAS. In addition, each of the
following events that shall have occurred and be continuing shall be an
Event of Default: (i) default in the payment when due of any Applicable
Premium on any of the X-TRAS, whether at maturity, upon redemption,
acceleration, purchase by the Issuer at the option of the Holders or
otherwise; and (ii) default in the payment when due of the ISDA Amount, if
any, whether on the Initial Stated Maturity, upon redemption,
acceleration, purchase by the Issuer at the option of the Holders or
otherwise.
SECTION 2. AMENDMENTS TO SECTION 5.1 OF THE ORIGINAL
INDENTURE. (a) Solely for the purpose of determining Events of Default
with respect to the X-TRAS, paragraphs (e), (f) and (h) of Section 5.1 of
the Original Indenture shall be amended such that each and every reference
therein to the Issuer shall be deemed to mean either the Issuer or
Consumers.
(b) Solely for purposes of determining waivers of
defaults and their consequences in respect of the X-TRAS, the penultimate
paragraph of Section 5.1 of the Original Indenture shall be amended such
that no such waiver may be made of any such default in respect of a
covenant or provision of the Sixth Supplemental Indenture which cannot be
modified or amended without the consent of each Holder of the X-TRAS or
the Extension Option Buyer without the consent of such Holder or buyer,
respectively.
(c) Solely for purposes of determining the application
of proceeds in respect of defaults under the X-TRAS, paragraphs SECOND and
THIRD of Section 5.3 of the Original Indenture shall be amended to provide
that proceeds paid thereunder shall be applied on a pro rata basis to (i)
the payment in full of the aggregate unpaid principal amount of the X-TRAS
and all accrued but unpaid interest on the X-TRAS to the Interest Payment
Date and (ii) the payment of the amount due under Section 5.03 of this
Sixth Supplemental Indenture.
SECTION 3. PAYMENT OF ISDA AMOUNT UPON ACCELERATION OF X-
TRAS. If an Event of Default resulting in acceleration of the X-TRAS
occurs, the Issuer shall pay to the Indenture Trustee, in addition to such
amounts as may be due in respect of the principal of, Applicable Premium,
if any, and accrued interest on the X-TRAS pursuant to Article V of the
Original Indenture and this Sixth Supplemental Indenture, an amount equal
to the ISDA Amount as of the date of acceleration of the X-TRAS (as
calculated by the Calculation Agent as of such date and notified to the
Issuer, the Indenture Trustee and the Pass Through Trustee within five
Business Days thereafter).
ARTICLE VI.
DEFEASANCE
SECTION 1. GENERAL. All of the provisions of Article Ten
of the Original Indenture shall be applicable to the X-TRAS.
SECTION 2. SATISFACTION AND DISCHARGE. The provisions of
Section 10.1(A) of the Original Indenture are amended to provide that, in
addition to the requirements set forth therein for obtaining the
satisfaction and discharge of the Issuer's obligations under the Indenture
in respect of the X-TRAS, the Issuer shall, on the date of deposit
referred to in Section 10.1(A)(c)(ii) of the Original Indenture, be
required to deliver to the Indenture Trustee for the benefit of the Pass
Through Trustee the ISDA Amount, if any, as of the second Business Day
preceding such date of deposit as determined by the Extension Option Buyer
and notified to the Issuer, the Indenture Trustee and the Pass Through
Trustee by 12 noon, New York City time, on such second preceding Business
Day.
SECTION 3. LEGAL DEFEASANCE. (a) Solely for purposes of
a legal defeasance of the X-TRAS, the requirements for a legal defeasance
set forth in Section 10.1(B) of the Original Indenture are amended to
provide that in addition to the requirements set forth in clauses (a)
through (f), the Issuer shall be required to deliver to the Indenture
Trustee on the date of deposit referred to in Section 10.1(B)(a) of the
Original Indenture cash in an amount equal to the ISDA Amount, if any, as
of the second Business Day preceding such date of deposit as determined by
the Extension Option Buyer as of such date and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee by 12 noon, New York City
time, on such second preceding Business Day.
(b) Upon satisfaction by the Issuer of the requirements
of Section 10.1(B) of the Original Indenture and the foregoing clause (a),
in connection with any legal defeasance of the X-TRAS, the Issuer shall be
released from its obligations under the Original Indenture and under this
Sixth Supplemental Indenture with respect to the X-TRAS, except to the
extent otherwise provided in Section 10.1(b) of the Original Indenture.
SECTION 4. COVENANT DEFEASANCE. (a) Solely for purposes
of a covenant defeasance of the X-TRAS, the requirements for a covenant
defeasance set forth in Section 10.1(C) of the Original Indenture are
amended to provide that in addition to the requirements set forth in
clauses (a) through (f), the Issuer shall be required to deliver to the
Indenture Trustee for the benefit of the Pass Through Trustee on the date
of deposit referred to in Section 10.1(C)(a) of the Original Indenture
cash in an amount equal to the ISDA Amount, if any, as of the second
Business Day preceding such date of deposit as determined by the Extension
Option Buyer and notified to the Issuer, the Indenture Trustee and the
Pass Through Trustee by 12 noon, New York City time, on such second
preceding Business Day.
(b) Upon satisfaction by the Issuer of the requirements
of Section 10.1(C) of the Original Indenture, in connection with any
covenant defeasance of the X-TRAS, the Issuer shall be released from its
obligations under Article Nine of the Original Indenture and under
Articles III and IV of this Sixth Supplemental Indenture with respect to
the X-TRAS.
ARTICLE VII.
REDEMPTION
SECTION 1. REDEMPTION AT THE OPTION OF THE ISSUER. (a)
The provisions of Article XI of the Original Indenture (other than
Sections 11.5 and 11.6) shall be applicable to the X-TRAS.
(b) The X-TRAS will be redeemable at any time, at the
option of the Issuer, in whole or in part, on any date on or prior to the
Premium Termination Date on not less than 30 nor more than 60 days' notice
to the Indenture Trustee, the Pass Through Trustee and the Extension
Option Buyer, at a redemption price ("Early Redemption Price") equal to
the sum of (i) 100% of the principal amount of the X-TRAS being redeemed,
together with accrued interest, thereon to the Redemption Date plus the
Applicable Premium (but interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holder thereof of
record at the close of business on the relevant Record Date) plus (ii) the
ISDA Amount, if any, as of the second Business Day preceding the
Redemption Date as determined by the Extension Option Buyer and notified
to the Issuer, the Indenture Trustee and the Pass Through Trustee by 12
noon, New York City time, on such second preceding Business Day. In no
event will the Redemption Price calculated pursuant to the foregoing
clause (i) ever be less than 100% of the principal amount of the X-TRAS
plus accrued interest to the Redemption Date. The Notional Amount used
to determine the ISDA Amount shall be equal to the aggregate principal
amount of X-TRAS redeemed.
(c) If the X-TRAS are extended until the Extended Stated
Maturity, the Issuer shall have the option (the "FD Redemption Option"),
in lieu of permitting the X- TRAS to be remarketed in accordance with
Article VIII of this Sixth Supplemental Indenture, to redeem the X-TRAS in
whole on the Initial Stated Maturity, by irrevocable notice given to the
Indenture Trustee, the Pass Through Trustee, the Extension Option Buyer
and the Calculation Agent not later than the Remarketing Deadline, at a
redemption price, payable in cash, equal to the sum of (i) 100% of the
principal amount of the X-TRAS being redeemed together with accrued
interest, if any, thereon to the Initial Stated Maturity plus (ii) the
ISDA Amount, if any, as of the Exercise Date (as calculated by the
Calculation Agent on the Exercise Date and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee on or promptly following
such date (but in any event within five Business Days thereafter)), which
redemption price shall be payable at the Initial Stated Maturity. The
Notional Amount used to determine the ISDA Amount shall be the aggregate
principal amount of the X-TRAS outstanding as of the Exercise Date.
SECTION 2. PUT OPTION OF HOLDERS. If the maturity of the
X-TRAS is extended and for any reason the Pass Through Trustee does not
receive an amount in cash equal to the principal amount of and interest on
the X-TRAS plus the ISDA Amount by the Remarketing Deadline, the Holders
of the X-TRAS will be deemed to have exercised the Put Option and required
the Issuer to purchase all of the outstanding X-TRAS on the Initial Stated
Maturity at a purchase price equal to 100% of the principal amount of and
interest on the X-TRAS.
ARTICLE VIII.
REMARKETING OF X-TRAS
SECTION 1. REMARKETING OF X-TRAS. In the event that the
maturity of the X-TRAS is extended until the Extended Stated Maturity,
then, unless the Issuer exercises the FD Redemption Option (which option
the Issuer shall be entitled to exercise at any time subsequent to the
delivery of the Extension Notice and prior to the earlier of the pricing
of the remarketing and the Remarketing Deadline upon delivery of an
irrevocable notice of redemption), the interest rate borne by the X-TRAS
will be reset effective on and as of the date of closing of the
remarketing in order that the X-TRAS may be remarketed so as to yield net
proceeds in cash at least equal to the sum of (i) 100% of the principal
amount of the X-TRAS plus (ii) the ISDA Amount as of the Exercise Date as
calculated by the Calculation Agent and notified to the Issuer, the
Indenture Trustee and the Pass Through Trustee on or promptly following
such date (but in any event within five Business Days thereafter)
(collectively, the "Required Remarketing Proceeds"). As more
particularly set forth in the next sentence, it is intended that the
portions of the Required Remarketing Proceeds representing the principal
amount of the X-TRAS, together with the amount payable by the Issuer
pursuant to such sentence, will be sufficient to enable the Pass Through
Trustee to make the Final Distribution on the Certificates. Accordingly,
the Issuer shall be obligated to pay to the Pass Through Trust,
simultaneously with the closing of the remarketing, an amount equal to the
interest that would have accrued on the X-TRAS had they been held by the
Pass Through Trust to the Initial Stated Maturity. In the event that the
Final Distribution Date shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of the Indenture),
payment of the portion of the Required Remarketing Proceeds representing
the principal amount of the X-TRAS, together with the amount equal to the
interest that would have accrued on the X-TRAS had they been held by the
Pass Through Trust to the Initial Stated Maturity 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 Initial Stated Maturity; provided that no interest shall
accrue on the amount so payable for the period from and after such Initial
Stated Maturity to such Business Day. Upon payment of the Final
Distribution to Certificateholders and the ISDA Amount to the Extension
Option Buyer on the Final Distribution Date, the Issuer shall be entitled
to receive any amounts earned in respect of the investment by the Pass
Through Trustee of the Required Remarketing Proceeds and the ISDA Amount
in Government Obligations pursuant to clause (d) of Section 8.02 below.
In no event shall the Issuer have any obligation to pay the principal
amount of the X-TRAS to the Pass Through Trust on the Initial Stated
Maturity.
SECTION 2. REMARKETING PROCEDURE. The X-TRAS will be
remarketed in accordance with the following procedure (the "Remarketing
Procedure"):
(a) On the Exercise Date and thereafter on the 75th,
60th, 45th, 30th and 15th day prior to the Initial Stated Maturity, Morgan
Stanley & Co. Incorporated (or, subsequent to the Exercise Date, such
other investment banking institution as may be selected as the Remarketing
Agent) will provide the Issuer with non-binding indications of the
interest rate and discount or premium at which it believes it could
remarket the X-TRAS in order to yield the Required Remarketing Proceeds.
(b) Morgan Stanley & Co. Incorporated shall act as the
Remarketing Agent for the X-TRAS unless, no later than 60 days prior to
the Initial Stated Maturity, the Issuer shall select another investment
banking institution to remarket the X-TRAS or exercise the FD Redemption
Option in accordance with the provisions of Section 7.01(c) hereof.
(c) No later than 15 days prior to the Remarketing
Deadline, the Remarketing Agent will commence marketing of the X-TRAS to
investors.
(d) Pricing and closing of the remarketed X-TRAS shall
occur at any time within 10 days prior to the Remarketing Deadline,
subject to then prevailing market conditions and settlement cycles. Upon
completion of the remarketing, the net proceeds thereof, together with the
amount payable by the Issuer equal to the interest that would have accrued
on the X-TRAS had they been held by the Pass Through Trust to the Initial
Stated Maturity, will be deposited with the Pass Through Trustee and
invested in Government Obligations having a maturity as close as possible
equal to the number of days between the date of such investment and the
Initial Stated Maturity.
(e) The Remarketing Agent will be entitled to
underwriting commissions, payable at settlement of the Remarketing
Procedure, which will be determined at the time the Remarketing Procedure
is commenced and shall be consistent with then prevailing market
practices. In the event that Morgan Stanley & Co. Incorporated purchases
the X-TRAS pursuant to clause (i) below, it shall be entitled to
underwriting commissions, payable at settlement of such purchase, which
will be determined at the time it gives notice of its offer pursuant to
clause (i) below and shall be consistent with then prevailing market
practices.
(f) The Issuer will cooperate with and provide
information reasonably requested by the Remarketing Agent and (in the
event of an offer to purchase by Morgan Stanley & Co. Incorporated made
pursuant to clause (i) below) by Morgan Stanley & Co. Incorporated in
connection with the remarketing or purchase of the X-TRAS, as applicable,
including, without limitation, (1) promptly preparing an offering
memorandum or prospectus containing such disclosures as may be required by
applicable law and as may be required by the Remarketing Agent or Morgan
Stanley & Co. Incorporated, as applicable, in its reasonable judgment,
(ii) executing and delivering or causing to be executed and delivered
legal documentation (including a purchase agreement or underwriting
agreement and registration rights agreement with customary indemnities,
covenants, representations and warranties, comfort letters and legal
opinions) in form and substance reasonably satisfactory to the Remarketing
Agent or Morgan Stanley & Co. Incorporated, as applicable, (iii) providing
promptly upon request updated consolidated financial statements to the
date of its latest report filed with the Commission and (iv) to the extent
the Issuer and the Remarketing Agent or Morgan Stanley & Co. Incorporated,
as applicable, deem reasonably necessary for successful completion of the
Remarketing Procedure or the purchase by Morgan Stanley & Co.
Incorporated, as applicable, making available senior management of the
Issuer for road show and one-on-one presentations.
(g) The Issuer may, in its sole discretion, elect to
cause the X-TRAS to be remarketed by conducting an underwritten offering
or private placement thereof on a firm- commitment basis. In such event,
the Issuer shall notify the Remarketing Agent of such request no later
than 70 days prior to the Final Distribution Date. The Issuer
acknowledges that in no event shall the Remarketing Agent be deemed by
this provision to have made a commitment to underwrite or place the X-
TRAS.
(h) Regardless of whether it has been selected to act as
Remarketing Agent, Morgan Stanley & Co. Incorporated shall at all times be
permitted to make an offer, on not less than five Business Days' notice,
to purchase the X-TRAS bearing a reset interest rate specified by Morgan
Stanley & Co. Incorporated on a date not later than the Remarketing
Deadline for net proceeds in cash equal to the Required Remarketing
Proceeds, which offer the Company and the Trustee shall be required to
accept, unless, on or prior to the date for such purchase specified in the
notice provided by Morgan Stanley & Co. Incorporated, (i) the Company
shall have delivered an irrevocable notice of redemption pursuant to
Section 7.01(c) of this Sixth Supplemental Indenture or (B) any other
party shall have remarketed the X-TRAS bearing a reset interest rate lower
than or equal to that specified by Morgan Stanley & Co. Incorporated for
net proceeds in cash at least equal to the Required Remarketing Proceeds.
(i) The remarketed X-TRAS will bear interest at the
reset interest rate commencing upon the date of closing of the
remarketing. For the avoidance of doubt, holders of the remarketed X-TRAS
shall not be entitled to receive any interest thereon for any period prior
to the date of closing of the remarketing.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 1. EFFECT ON ORIGINAL INDENTURE. This Sixth
Supplemental Indenture is a supplement to the Original Indenture. As
supplemented by this Sixth Supplemental Indenture, the Original Indenture
is in all respects ratified, approved and confirmed, and the Original
Indenture and this Sixth Supplemental Indenture shall together constitute
one and the same instrument.
SECTION 2. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
SECURITYHOLDERS. The Issuer and the Indenture Trustee may enter into
supplemental indentures to this Sixth Supplemental Indenture without the
consent of the Holders of the X-TRAS for any of the purposes for which
execution of a supplemental indenture without the consent of the Holders
of the X-TRAS is authorized as provided in Section 8.1 of the Original
Indenture. In addition, any such supplemental indentures may be entered
into without the consent of the Holders of the X-TRAS for the purpose of
(i) curing any ambiguity or correcting or supplementing any provision
which may be defective or inconsistent with any other provision in the
Original Indenture, the ISDA Master Agreement or the Pass Through Trust
Agreement or (ii) modifying or amending any of the provisions hereof or of
the X-TRAS (A) relating to the ISDA Master Agreement or (B) that is
effective only from and after the closing of the remarketing of the X-
TRAS; provided that no such action adversely affects the interests of the
Holders of Securities of any Series; and provided further that no such
supplemental indenture referred to in the first clause of this sentence
and in clauses (a) through (f) of Section 8.1 of the Original Indenture
which has a material adverse effect on the Extension Option Buyer may be
entered into without the consent of the Extension Option Buyer.
SECTION 3. SUPPLEMENTAL INDENTURES WITH CONSENT OF
SECURITYHOLDERS. The provisions of Section 8.2 of the Original Indenture
are hereby amended to provide that notwithstanding any consent obtained
from the Holders of X-TRAS in respect of any modification, amendment or
supplement to this Sixth Supplemental Indenture requiring the consent of
the Holders of the X-TRAS pursuant to Section 8.2 of the Original
Indenture, no modification, amendment or supplement may be made to this
Sixth Supplemental Indenture that has a material adverse effect on the
Extension Option Buyer without the consent of the Extension Option Buyer.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 1. PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF
PARTIES AND HOLDERS OF SECURITIES AND COUPONS. The provisions of Section
14.2 of the Original Indenture are hereby amended to provide that, solely
for purposes of the X-TRAS issued under the Sixth Supplemental Indenture,
(i) each of the Extension Option Buyer and Morgan Stanley & Co.
Incorporated (as Remarketing Agent) shall be a third party beneficiary of
this Agreement and may enforce the obligations of the Issuer hereunder
running in favor of the Extension Option Buyer and Morgan Stanley & Co.
Incorporated, as applicable, and (ii) all amounts payable by the Issuer
under this Sixth Supplemental Indenture shall be for the benefit of and
enforceable by the Pass Through Trustee, as registered holder of the X-
TRAS, and shall be paid over by the Indenture Trustee to the Pass Through
Trustee promptly upon confirmation of the receipt of funds from the
Company by the Indenture Trustee.
SECTION 2. MICHIGAN LAW TO GOVERN. This Sixth
Supplemental Indenture and the X-TRAS shall be governed by and deemed to
be a contract under, and construed in accordance with, the laws of the
State of Michigan, and for all purposes shall be construed in accordance
with the laws of such State, except as may otherwise be required by
mandatory provisions of law.
TESTIMONIUM
This Sixth Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Sixth Supplemental Indenture to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of the day and
year first written above.
CMS ENERGY CORPORATION
By: /s/ A.M. Wright
___________________________
Attest: /s/ Michael D. Van Hemert
(Corporate Seal)
NBD BANK
as Indenture Trustee
By: /s/ J. Michael Banas
____________________________
Attest:
/s/ Steven D. VanderClay
(Corporate Seal)
SCHEDULE 4.03(b)(2)
Indebtedness of CMS Energy Corporation outstanding on January 13, 1998