EXHIBIT 4(d)(i)
FIFTEENTH SUPPLEMENTAL INDENTURE
DATED AS OF SEPTEMBER 29, 2004
--------------------
This Fifteenth Supplemental Indenture, dated as of the 29th day of
September, 2004 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 One Energy Plaza, Jackson, Michigan
49201, and J.P. Morgan Trust Company, N.A., a national banking association
(hereinafter called the "Trustee") and having its Corporate Trust Office at 227
W. Monroe Street, Suite 2700, Chicago, IL 60606.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (ultimate successor to NBD Bank,
National Association) entered into an Indenture, dated as of September 15, 1992
(the "Original Indenture"), pursuant to which one or more series of debt
securities of the Issuer (the "Securities") may be issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Original Indenture; and
WHEREAS, Section 8.1(e) of the Original Indenture provides that a
supplemental indenture may be entered into by the Issuer and the Trustee without
the consent of any Holders (as defined in the Original Indenture) of the
Securities to establish the form and terms of the Securities of any series; and
WHERAS, the Issuer issued its series of "7.75% Senior Notes due 2010
(the "Original 2010 Notes") on July 17, 2003 pursuant to the Fourteenth
Supplemental Indenture dated July 17, 2003 between the Issuer and the Trustee;
and
WHEREAS, the Issuer entered into a registration rights agreement with
the initial purchasers of the Original 2010 Notes whereby the Issuer agreed to
register a series of notes with the Securities and Exchange Commission that
would be exchanged pursuant to an exchange offer to existing holders of the
Original 2010 Notes for their Original 2010 Notes; and
WHEREAS, the Issuer has registered a new series of notes to be
exchanged for the Original 2010 Notes and has requested the Trustee to join with
it in the execution and delivery of this Fifteenth 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 "7.75% Senior Notes due 2010" (the "2010 Notes"), providing for the
issuance of the 2010 Notes and amending and adding certain provisions thereof
for the benefit of the Holders of the 2010 Notes such 2010 Notes to be exchanged
for the Original 2010 Notes; and
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WHEREAS, the Issuer and the Trustee desire to enter into this Fifteenth
Supplemental Indenture for the purposes set forth in Sections 2.3 and 8.1(e) of
the Original Indenture as referred to above; and
WHEREAS, the Issuer has furnished the Trustee with a copy of the
resolutions of its Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of this Fifteenth Supplemental Indenture;
and
WHEREAS, all things necessary to make this Fifteenth Supplemental
Indenture a valid agreement of the Issuer and the Trustee and a valid supplement
to the Original Indenture have been done;
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the 2010 Notes to be issued hereunder by holders thereof, the Issuer
and the Trustee mutually covenant and agree, for the equal and proportionate
benefit of the respective holders from time to time of the 2010 Notes, as
follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture together with
this Fifteenth Supplemental Indenture and all previous indentures supplemental
thereto entered into pursuant to the applicable terms thereof are hereinafter
sometimes collectively referred to as the "Indenture." All capitalized terms
which are used herein and not otherwise defined herein are defined in the
Indenture and are used herein with the same meanings as in the Indenture.
SECTION 1.02. Definitions.
(a) The following terms have the meanings set forth in the Sections
hereof set forth below:
<Table>
<Caption>
Term Section
---- -------
Applicable Premium 2.04
Application Period 4.06
Asset Sale 4.06
Change in Control Date 3.01
Change in Control Purchase Notice 3.01(b)
Change in Control Purchase Price 3.01
Company 2.03
Depositary Article VI
DTC 2.03
Events of Default 5.01
Excess Proceeds 4.06
Global Note Article VI
Indenture 1.01; 2.04
Interest Payment Date 2.03
</Table>
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<Table>
<Caption>
Term Section
---- -------
Issue 4.04(a)
Issuer Preamble; 2.03
Lien 4.02(a)
Maturity 2.03
Original Indenture Recitals
Original Issue Date 2.03
Original 2010 Notes Recitals
Place of Payment 2.03
Purchase Date 3.01(a)(iii)
Record Date 2.03
Required Repurchase 3.01
Required Repurchase Notice 3.01(a)
Restricted Payment 4.05(a)
Securities Recitals
Securities Act 2.03
Treasury Rate 2.04
Trustee Preamble; 2.04
2010 Notes Recitals; 2.04
</Table>
(b) Section 1.1 of the Original Indenture is amended to insert the new
definitions applicable to the 2010 Notes, in the appropriate alphabetical
sequence, as follows:
"Amortization Expense" means, for any period, amounts recognized during
such period as amortization of capital leases, depletion, nuclear fuel, goodwill
and assets classified as intangible assets in accordance with generally accepted
accounting principles.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (i) the sum of the products
of (x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or assets to
which such lease relates.
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"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered Capital
Stock for purposes of this definition.
"Change in Control" means an event or series of events by which: (i)
the Issuer ceases to own beneficially, directly or indirectly, at least 80% of
the total voting power of all classes of Capital Stock then outstanding of
Consumers (whether arising from issuance of securities of the Issuer or
Consumers, any direct or indirect transfer of securities by the Issuer or
Consumers, any merger, consolidation, liquidation or dissolution of the Issuer
or Consumers or otherwise); (ii) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner"
(as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person or group shall be deemed to have "beneficial ownership" of all
shares that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii) the
Issuer consolidates with or merges into another corporation or directly or
indirectly conveys, transfers or leases all or substantially all of its assets
to any Person, or any corporation consolidates with or merges into the Issuer,
in either event pursuant to a transaction in which the outstanding Voting Stock
of the Issuer is changed into or exchanged for cash, securities, or other
property, other than any such transaction in which (A) the outstanding Voting
Stock of the Issuer is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Issuer
immediately prior to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission" means CMS Gas Transmission Company (formerly
known as CMS Gas Transmission and Storage Company), a Michigan corporation and
wholly-owned subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan corporation and
wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"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.
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"Consolidated Coverage Ratio" with respect to any period means the
ratio of (i) the aggregate amount of Operating Cash Flow for such period to (ii)
the aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Current Liabilities" means, for any period, the aggregate
amount of liabilities of the Issuer and its Consolidated Subsidiaries which may
properly be classified as current liabilities (including taxes accrued as
estimated), after (i) eliminating all inter-company items between the Issuer and
any Consolidated Subsidiary and (ii) deducting all current maturities of
long-term Indebtedness, all as determined in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date of determination, the
aggregate Indebtedness of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that Consolidated Indebtedness shall not include
any subordinated debt owned by any Hybrid Preferred Securities Subsidiary.
"Consolidated Interest Expense" means, for any period, the total
interest expense in respect of Consolidated Indebtedness of the Issuer and its
Consolidated Subsidiaries, including, without duplication, (i) interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii)
capitalized interest, (iv) cash and noncash interest payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under Interest Rate Protection
Agreements (including amortization of discount) and (vii) interest expense in
respect of obligations of other Persons deemed to be Indebtedness of the Issuer
or any Consolidated Subsidiaries under clause (v) or (vi) of the definition of
Indebtedness, provided, however, that Consolidated Interest Expense shall
exclude (A) any costs otherwise included in interest expense recognized on early
retirement of debt and (B) any interest expense in respect of any Indebtedness
of any Subsidiary of Consumers, CMS Generation, CMS Electric and Gas, CMS Gas
Transmission, CMS MST or any other Designated Enterprises Subsidiary, provided
that such Indebtedness is without recourse to any assets of the Issuer,
Consumers, Enterprises, CMS Generation, CMS Electric and Gas, CMS Gas
Transmission, CMS MST or any other Designated Enterprises Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Issuer and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a Subsidiary,
except that (A) the Issuer's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such period
to the Issuer or a Consolidated Subsidiary as a dividend or other distribution
and (B) the Issuer's equity in a net loss of any such Person for such period
shall be included in determining such Consolidated Net Income;
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(ii) any net income of any Person acquired by the Issuer or a
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition;
(iii) any gain or loss realized upon the sale or other disposition of
any property, plant or equipment of the Issuer or its Consolidated Subsidiaries
which is not sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition of any Capital
Stock of any Person; and
(iv) any net income of any Subsidiary of Consumers, CMS Generation, CMS
Electric and Gas, CMS Gas Transmission, CMS MST or any other Designated
Enterprises Subsidiary whose interest expense is excluded from Consolidated
Interest Expense, provided, however, that for purposes of this subsection (iv),
any cash, dividends or distributions of any such Subsidiary to the Issuer shall
be included in calculating Consolidated Net Income.
"Consolidated Net Tangible Assets" means, for any period, the total
amount of assets (less accumulated depreciation or amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible
items) as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, and after giving effect to purchase accounting and after
deducting therefrom, to the extent otherwise included, the amounts of: (i)
Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary;
(iii) excess of cost over fair value of assets of businesses acquired, as
determined in good faith by the Board of Directors as evidenced by Board of
Directors 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.
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"Consolidated Subsidiary" means any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Issuer in accordance
with generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan corporation, all
of whose common stock is on the date hereof owned by the Issuer.
"Designated Enterprises Subsidiary" means any wholly-owned subsidiary
of Enterprises formed after the date of this Fifteenth 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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital Stock of
such corporation that is neither Exchangeable Stock or Redeemable Stock).
"Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends substantially all
of the proceeds from the issuance of such preferred securities to the 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.
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"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)
above 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)
above of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Issuer or any Subsidiary against
fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
intended to reflect the separate performance of certain of the businesses or
operations conducted by such corporation or any of its subsidiaries.
"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
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counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes (whether or not such taxes will actually be paid or are payable) as a
result of such Asset Sale without regard to the consolidated results of
operations of the Issuer and its Restricted Subsidiaries, taken as a whole,
(iii) payments made to repay Indebtedness or any other obligation outstanding at
the time of such Asset Sale that either (A) is secured by a Lien on the property
or assets sold or (B) is required to be paid as a result of such sale and (iv)
appropriate amounts to be provided by the Issuer or any Restricted Subsidiary of
the Issuer as a reserve against any liabilities associated with such Asset Sale
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
determined in conformity with generally accepted accounting principles and (b)
with respect to any issuance or sale or contribution in respect of Capital
Stock, the aggregate proceeds of such issuance, sale or contribution, including
the fair market value (as determined by the Board of Directors and net of any
associated debt and of any consideration other than Capital Stock received in
return) of property other than cash, received by the Issuer, net of attorneys'
fees, accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred in connection with
such issuance or sale and net of taxes paid or payable as a result thereof,
provided, however, that if such fair market value as determined by the Board of
Directors of property other than cash is greater than $25 million, the value
thereof shall be based upon an opinion from an independent nationally recognized
firm experienced in the appraisal or similar review of similar types of
transactions.
"Non-Convertible Capital Stock" means, with respect to any corporation,
any non-convertible Capital Stock of such corporation and any Capital Stock of
such corporation convertible solely into non-convertible Capital Stock other
than Preferred Stock of such corporation; provided, however, that
Non-Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to the Issuer
and its Consolidated Subsidiaries, the aggregate amount of Consolidated Net
Income after adding thereto Consolidated Interest Expense (adjusted to include
costs recognized on early retirement of debt), income taxes, depreciation
expense, Amortization Expense and any noncash amortization of debt issuance
costs, any nonrecurring, noncash charges to earnings and any negative accretion
recognition.
"Other Rating Agency" means any one of Fitch, Inc. or Moody's Investors
Service, Inc., and any successor to any of these organizations which is a
nationally recognized statistical rating organization.
"Paying Agent" means any Person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on any of the 2010 Notes on
behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.
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"Predecessor 2010 Note" of any particular 2010 Note means every
previous 2010 Note evidencing all or a portion of the same debt as that
evidenced by such particular 2010 Note; and, for the purposes of the definition,
any 2010 Note authenticated and delivered under Section 2.9 of the Indenture in
exchange for or in lieu of a mutilated, destroyed, lost or stolen 2010 Note
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen 2010 Note.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation; provided that Hybrid Preferred Securities shall not be considered
Preferred Stock for purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
Stated Maturity of the outstanding 2010 Notes or is redeemable at the option of
the holder thereof at any time prior to the first anniversary of the Stated
Maturity of the outstanding 2010 Notes.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Subsidiary" means any Subsidiary (other than Consumers and
its Subsidiaries) of the Issuer which, as of the date of the Issuer's most
recent quarterly consolidated balance sheet, constituted at least 10% of the
total Consolidated Assets of the Issuer and its Consolidated Subsidiaries and
any other Subsidiary which from time to time is designated a Restricted
Subsidiary by the Board of Directors; provided that no Subsidiary may be
designated a Restricted Subsidiary if, immediately after giving effect thereto,
an Event of Default or event that, with the lapse of time or giving of notice or
both, would constitute an Event of Default would exist or the Issuer and its
Restricted Subsidiaries could not incur at least one dollar of additional
Indebtedness under Section 4.04 hereof, and (i) any such Subsidiary so
designated as a Restricted Subsidiary must be organized under the laws of the
United States or any State thereof, (ii) more than 80% of the Voting Stock of
such Subsidiary must be owned of record and beneficially by the Issuer or a
Restricted Subsidiary and (iii) such Restricted Subsidiary must be a
Consolidated Subsidiary.
"Standard & Poor's" means Standard & Poor's Ratings Group, a division
of The McGraw-Hill Companies, Inc., and any successor thereto which is a
nationally recognized statistical rating organization, or if such entity shall
cease to rate the 2010 Notes or shall cease to exist and there shall be no such
successor thereto, any other nationally recognized statistical rating
organization selected by the Issuer which is acceptable to the Trustee.
"Subordinated Indebtedness" means any Indebtedness of the Issuer
(whether outstanding on the date of this Fifteenth Supplemental Indenture or
thereafter incurred) which is contractually subordinated or junior in right of
payment to the 2010 Notes.
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"Support Obligations" means, for any Person, without duplication, any
financial obligation, contingent or otherwise, of such Person guaranteeing or
otherwise supporting any debt or other obligation of any other Person in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other financial
statement condition of the primary obligor so as to enable the primary obligor
to pay such debt, (iv) to provide equity capital under or in respect of equity
subscription arrangements (to the extent that such obligation to provide equity
capital does not otherwise constitute debt), or (v) to perform, or arrange for
the performance of, any non-monetary obligations or non-funded debt payment
obligations of the primary obligor.
"Tax Sharing Agreement" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated January 1, 1994, as
amended or supplemented from time to time, by and among Issuer, each of the
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
"Voting Stock" means securities of any class or classes the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for
corporate directors (or persons performing similar functions).
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ARTICLE II
DESIGNATION AND TERMS OF THE 2010 NOTES; FORMS
SECTION 2.01. Establishment of Series.
(a) There is hereby created a series of Securities to be known and
designated as the "7.75% Senior Notes due 2010" to be issued in aggregate
principal amount of $300,000,000. Additional Securities, without limitation as
to amount, having substantially the same terms as the 2010 Notes (except a
different issue date, issue price and bearing interest from the last Interest
Payment Date to which interest has been paid or duly provided for on the 2010
Notes, and, if no interest has been paid, from September 29, 2004), may also be
issued by the Issuer pursuant to the Indenture without the consent of the
existing Holders of the 2010 Notes. Such additional Securities shall be part of
the same series as the 2010 Notes. The Stated Maturity of the 2010 Notes is
August 1, 2010; the principal amount of the 2010 Notes shall be payable on such
date unless the 2010 Notes are earlier redeemed or purchased in accordance with
the terms of the Indenture.
(b) The 2010 Notes will bear interest from the Original Issue Date, or
from the most recent date to which interest has been paid or duly provided for
on the Original 2010 Notes, at the rate of 7.75% per annum stated therein until
the principal thereof is paid or made available for payment. Interest will be
payable semiannually on each Interest Payment Date and at Maturity, as provided
in the form of the 2010 Note in Section 2.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of the Indenture
for the payment of the interest on any 2010 Note payable on any Interest Payment
Date (other than at Maturity) shall be the 15th day preceding the relevant
Interest Payment Date (whether or not a Business Day) except that the Record
Date for interest payable at Maturity shall be the date of Maturity.
(d) The payment of the principal of, premium (if any) and interest on
the 2010 Notes shall not be secured by a security interest in any property.
(e) The 2010 Notes shall be redeemable at the option of the Issuer, in
whole or in part, at any time and from time to time, or not less than 30 days
notice at a redemption price equal to 100% of the principal amount of such 2010
Notes being redeemed plus the Applicable Premium, if any, thereon at the time of
redemption, together with accrued interest, if any, thereon to the redemption
date. In no event will the redemption price ever be less than 100% of the
principal amount of the 2010 Notes plus accrued interest to the redemption date.
The 2010 Notes shall be purchased by the Issuer at the option of the Holders
thereof as provided in Article III hereof.
(f) The 2010 Notes shall not be convertible.
(g) The 2010 Notes will not be subordinated to the payment of Senior
Debt.
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(h) The events specified in Events of Default with respect to the 2010
Notes shall include the events specified in Article V of this Fifteenth
Supplemental Indenture. In addition to the covenants set forth in Article Three
of the Original Indenture, the Holders of the 2010 Notes shall have the benefit
of the covenants of the Issuer set forth in this Fifteenth Supplemental
Indenture.
SECTION 2.02. Forms Generally. The 2010 Notes and Trustee's
certificates of authentication shall be in substantially the form set forth in
this Article II, 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 2010 Notes, as evidenced by their execution thereof.
The definitive 2010 Notes shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such 2010 Notes, as evidenced by their execution
thereof.
SECTION 2.03. Form of Face of 2010 Note.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY.
Unless this Global 2010 Note is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to CMS Energy Corporation or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of a nominee of
DTC or in such other name as is requested by an authorized representative of DTC
(and any payment is made to such nominee of DTC or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof has an interest herein.
13
CMS ENERGY CORPORATION
7.75% SENIOR NOTES DUE 2010
No. ________ $300,000,000
CUSIP No.: 125896 AV 2
ISIN No.:
CMS Energy Corporation, a corporation duly organized and existing under
the laws of the State of Michigan (herein called the "Issuer" or "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to CEDE & Co., or
registered assigns, the principal sum of Three Hundred Million Dollars on August
1, 2010 ("Maturity") and to pay interest thereon from September 29, 2004 (the
"Original Issue Date") or from the date interest has last been paid or duly
provided for on the 7.75% Senior Notes Due 2010 issued by the Issuer on July 17,
2003 (the "Original 2010 Notes") pursuant to the terms of the Fourteenth
Supplemental Indenture dated July 17, 2004 between the Issuer and the Trustee
for which the 2010 Notes have been exchanged, semi-annually in arrears on
February 1 and August 1 in each year, commencing on February 1, 2004 (each an
"Interest Payment Date") to the Persons in whose names the 2010 Notes are
registered at the close of business on the 15th day preceding the relevant
Interest Payment Date (each a "Record Date"), and at Maturity, at the rate of
7.75% per annum, until the principal hereof is paid or made available for
payment. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
2010 Note (or one or more Predecessor 2010 Notes) is registered at the close of
business on the Record Date for such interest, which shall be the 15th day
preceding the relevant Interest Payment Date (whether or not a Business Day)
except that the Record Date for interest payable at Maturity shall be the date
of Maturity. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Record Date and may either
be paid to the Person in whose name this 2010 Note (or one or more Predecessor
2010 Notes) is registered at the close of business on a subsequent Record Date
(which shall be not less than five Business Days prior to the date of payment of
such defaulted interest) for the payment of such defaulted interest to be fixed
by the Trustee, notice whereof shall be given to Holders of 2010 Notes not less
than 15 days preceding such subsequent Record Date.
This 2010 Note is subject to redemption at the option of the Issuer and
to purchase by the Issuer at the option of the Holder as specified on the
reverse of this 2010 Note.
Payment of the principal of (and premium, if any) and interest, if any,
on this 2010 Note will be made at the office or agency of the Issuer maintained
for that purpose in New York, New York (the "Place of Payment"), in such coin or
currency of the United
14
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Issuer
payment of interest (other than interest payable at Maturity) may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or by wire transfer to an account designated by
such Person not later than ten days prior to the date of such payment.
Reference is hereby made to the further provisions of this 2010 Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
THE HOLDER OF THIS SECURITY AGREES THAT SUCH HOLDER WILL NOT ENGAGE IN
HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this 2010
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal. Dated:
CMS ENERGY CORPORATION
By
-----------------------------
Its:
By
------------------------------
Its:
SECTION 2.04. Form of Reverse of 2010 Note.
This 7.75% Senior Note due 2010 is one of a duly authorized issue of
securities of the Issuer (herein called the "2010 Notes"), issued and to be
issued under an Indenture, dated as of September 15, 1992, as supplemented by
certain supplemental indentures, including the Fifteenth Supplemental Indenture,
dated as of September 29, 2004 (herein collectively referred to as the
"Indenture"), between the Issuer and J.P. Morgan Trust Company, N.A., a national
banking association (ultimate successor to NBD Bank, National Association), as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Issuer, the Trustee, and the
Holders of the 2010 Notes and of the terms upon which the 2010 Notes are, and
are to be,
15
authenticated and delivered. This 2010 Note is one of the series designated on
the face hereof, issued in an initial aggregate principal amount of
$300,000,000. Additional Securities, without limitation as to amount, having
substantially the same terms as the 2010 Notes (except a different issue date,
issue price and bearing interest from the last Interest Payment Date to which
interest has been paid or duly provided for on the 2010 Notes, and, if no
interest has been paid, from September 29, 2004), may also be issued by the
Issuer pursuant to the Indenture without the consent of the existing Holders of
the 2010 Notes. Such additional Securities shall be part of the same series as
the 2010 Notes.
The 2010 Notes are subject to redemption at the option of the Issuer,
in whole or in part, upon not more than 60 nor less than 30 days' notice as
provided in the Indenture at any time and from time to time, at a redemption
price equal to 100% of the principal amount of such 2010 Notes being redeemed
plus the Applicable Premium, if any, thereon at the time of redemption, together
with accrued interest, if any, thereon to the redemption date, but interest
installments whose Stated Maturity is on or prior to such redemption date will
be payable to the Holder of record at the close of business on the relevant
Record Date referred to on the face hereof, all as provided in the Indenture. In
no event will the redemption price ever be less than 100% of the principal
amount of the 2010 Notes plus accrued interest to the redemption date.
The following definitions are used to determine the Applicable Premium:
"Applicable Premium" means, with respect to a 2010 Note (or portion
thereof) being redeemed at any time, the excess of (A) the present value at such
time of the principal amount of such 2010 Note (or portion thereof) being
redeemed plus all interest payments due on such 2010 Note (or portion thereof),
which present value shall be computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such 2010
Note (or portion thereof) being redeemed at such time. For purposes of this
definition, the present values of the interest and principal payments will be
determined in accordance with generally accepted principles of financial
analysis.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two business days prior to the redemption
date or, in the case of defeasance, prior to the date of deposit (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining average life to
stated maturity of the 2010 Notes; provided, however, that if the average life
to stated maturity of the 2010 Notes is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given.
16
In the event of redemption of this 2010 Note in part only, a new 2010
Note for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
If a Change in Control occurs, the Issuer shall notify the Holder of
this 2010 Note of such occurrence and such Holder shall have the right to
require the Issuer to make a Required Repurchase of all or any part of this 2010
Note at a Change in Control Purchase Price equal to 101% of the principal amount
of this 2010 Note to be so purchased as more fully provided in the Indenture and
subject to the terms and conditions set forth therein. In the event of a
Required Repurchase of only a portion of this 2010 Note, a new 2010 Note or 2010
Notes for the unrepurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default with respect to this 2010 Note shall occur and
be continuing, the principal of this 2010 Note may be declared due and payable
in the manner and with the effect provided in the Indenture.
In any case where any Interest Payment Date, redemption date,
repurchase date, Stated Maturity or Maturity of any 2010 Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of the Indenture or this 2010 Note) payment of interest or principal (and
premium, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date, repurchase date
or at the Stated Maturity or Maturity; provided that no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date,
redemption date, repurchase date, Stated Maturity or Maturity, as the case may
be, to such Business Day.
The Trustee and the Paying Agent shall return to the Issuer upon
written request any money or property held by them for the payment of any amount
with respect to the 2010 Notes that remains unclaimed for two years, provided,
however, that the Trustee or such Paying Agent, before being required to make
any such return, shall at the expense of the Issuer cause to be published once
in a newspaper of general circulation in The City of New York or mail to each
such Holder notice that such money or property remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed money or property then remaining
shall be returned to the Issuer. After return to the Issuer, Holders entitled to
the money or property must look to the Issuer for payment as general creditors
unless an applicable abandoned property law designates another Person.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this 2010 Note or (ii) certain restrictive covenants and
Events of Default with respect to this 2010 Note, in each case upon compliance
with certain conditions set forth therein.
17
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 2010 Notes under the
Indenture at any time by the Issuer and the Trustee with the consent of the
Holders of not less than a majority in principal amount of Securities of all
series then outstanding and affected (voting as one class).
The Indenture permits the Holders of not less than a majority in
principal amount of Securities of all series at the time outstanding with
respect to which a default shall have occurred and be continuing (voting as one
class) to waive on behalf of the Holders of all outstanding Securities of such
series any past default by the Issuer, provided that no such waiver may be made
with respect to a default in the payment of the principal of or the interest on
any Security of such series or the default by the Issuer in respect of certain
covenants or provisions of the Indenture, the modification or amendment of which
must be consented to by the Holder of each outstanding Security of each series
affected.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any 2010 Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default, the Holders of not less than 25% in principal amount of the outstanding
Securities of each affected series (voting as one class) shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the Holders
of a majority in principal amount of the outstanding Securities of each affected
series (voting as one class) a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of (and premium, if any)
or any interest on this 2010 Note on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this 2010 Note
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this 2010 Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this 2010 Note is registrable in the Security
Register, upon surrender of this 2010 Note for registration of transfer at the
office or agency of the Issuer in any place where the principal of and any
premium and interest on this 2010 Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new 2010 Notes of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
18
The 2010 Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, 2010 Notes are
exchangeable for a like aggregate principal amount of 2010 Notes and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Issuer shall not be required to (i) issue, exchange or register the
transfer of this 2010 Note for a period of 15 days next preceding the mailing of
the notice of redemption of 2010 Notes or (ii) exchange or register the transfer
of any 2010 Note or any portion thereof selected, called or being called for
redemption, except in the case of any 2010 Note to be redeemed in part, the
portion thereof not so to be redeemed.
Prior to due presentment of this 2010 Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this 2010 Note is registered as the owner hereof
for all purposes, whether or not this 2010 Note be overdue, and neither the
Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this 2010 Note without definition which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
SECTION 2.05. Form of Trustee's Certificate of Authentication. The
Trustee's certificates of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
J.P. MORGAN TRUST COMPANY, N.A.,
as Trustee
By
--------------------------------
Authorized Officer
19
ARTICLE III
CHANGE IN CONTROL
SECTION 3.01. 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 a 2010 Note shall have the right to require that
the Issuer repurchase (a "Required Repurchase") all or any part of such Holder's
2010 Note at a repurchase price payable in cash equal to 101% of the principal
amount of such 2010 Note plus accrued interest to the Purchase Date (the "Change
in Control Purchase Price").
(a) Within 30 days following the Change in Control Date, the Issuer
shall mail a notice (the "Required Repurchase Notice") to each Holder with a
copy to the Trustee stating:
(i) that a Change in Control has occurred and that such Holder
has the right to require the Issuer to repurchase all or any
part of such Holder's 2010 Notes at the Change in Control
Purchase Price;
(ii) the Change in Control Purchase Price;
(iii) the date on which any Required Repurchase shall be made
(which shall be no earlier than 60 days nor later than 90 days
from the date such notice is mailed) (the "Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause the 2010
Notes to be repurchased, which shall be consistent with this
Section 3.01 and the Indenture.
(b) Holders electing to have a 2010 Note repurchased must deliver a
written notice (the "Change in Control Purchase Notice") to the Paying Agent
(initially the Trustee) at its corporate trust office in Chicago, Illinois, or
any other office of the Paying Agent maintained for such purposes, not later
than 30 days prior to the Purchase Date. The Change in Control Purchase Notice
shall state: (i) the portion of the principal amount of any 2010 Notes to be
repurchased, which portion must be $1,000 or an integral multiple thereof; (ii)
that such 2010 Notes are to be repurchased by the Issuer pursuant to the change
in control provisions of the Indenture; and (iii) unless the 2010 Notes are
represented by one or more Global Notes, the certificate numbers of the 2010
Notes to be delivered by the Holder thereof for repurchase by the Issuer. Any
Change in Control Purchase Notice may be withdrawn by the Holder by a written
notice of withdrawal delivered to the Paying Agent not later than three Business
Days prior to the Purchase Date. The notice of withdrawal shall state the
principal amount and, if applicable, the certificate numbers of the 2010 Notes
as to which the withdrawal notice relates and the
20
principal amount of such 2010 Notes, if any, which remains subject to a Change
in Control Purchase Notice.
If a 2010 Note is represented by a Global Note (as described in Article
VI hereof), the Depositary or its nominee will be the Holder of such 2010 Note
and therefore will be the only entity that can elect a Required Repurchase of
such 2010 Note. To obtain repayment pursuant to this Section 3.01 with respect
to such 2010 Note, the beneficial owner of such 2010 Note must provide to the
broker or other entity through which it holds the beneficial interest in such
2010 Note (i) the Change in Control Purchase Notice signed by such beneficial
owner, and such signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, and (ii) instructions to such broker or
other entity to notify the Depositary of such beneficial owner's desire to
obtain repayment pursuant to this Section 3.01. Such broker or other entity will
provide to the Paying Agent (i) the Change in Control Purchase Notice received
from such beneficial owner and (ii) a certificate satisfactory to the Paying
Agent from such broker or other entity stating that it represents such
beneficial owner. Such broker or other entity will be responsible for disbursing
any payments it receives pursuant to this Section 3.01 to such beneficial owner.
(c) Payment of the Change in Control Purchase Price for a 2010 Note for
which a Change in Control Purchase Notice has been delivered and not withdrawn
is conditioned (except in the case of a 2010 Note represented by one or more
Global Notes) upon delivery of such 2010 Note (together with necessary
endorsements) to the Paying Agent at its office in Chicago, Illinois, or any
other office of the Paying Agent maintained for such purpose, at any time
(whether prior to, on or after the Purchase Date) after the delivery of such
Change in Control Purchase Notice. Payment of the Change in Control Purchase
Price for such 2010 Note will be made promptly following the later of the
Purchase Date or the time of delivery of such 2010 Note. If the Paying Agent
holds, in accordance with the terms of the Indenture, money sufficient to pay
the Change in Control Purchase Price of such 2010 Note on the Business Day
following the Purchase Date, then, on and after such date, interest will cease
accruing, and all other rights of the Holder shall terminate (other than the
right to receive the Change in Control Purchase Price upon delivery of the 2010
Note).
(d) The Issuer shall comply with the provisions of Regulation 14E and
any other tender offer rules under the Exchange Act, which may then be
applicable in connection with any offer by the Issuer to repurchase 2010 Notes
at the option of Holders upon a Change in Control.
(e) No 2010 Note may be repurchased by the Issuer as a result of a
Change in Control if there has occurred and is continuing an Event of Default
(other than a default in the payment of the Change in Control Purchase Price
with respect to the 2010 Notes).
21
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2010 NOTES
SECTION 4.01. Existence. So long as any of the 2010 Notes are
outstanding, subject to Article Nine of the Original Indenture, the Issuer will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
SECTION 4.02. Limitation on Certain Liens.
(a) So long as any of the 2010 Notes are outstanding, the Issuer shall
not create, incur, assume or suffer to exist any lien, mortgage, pledge,
security interest, conditional sale, title retention agreement or other charge
or encumbrance of any kind, or any other type of arrangement intended or having
the effect of conferring upon a creditor of the Issuer or any Subsidiary a
preferential interest (hereinafter in this Section 4.02 referred to as a "Lien")
upon or with respect to any of its property of any character, including without
limitation any shares of Capital Stock of Consumers or Enterprises, without
making effective provision whereby the 2010 Notes shall (so long as any such
other creditor shall be so secured) be equally and ratably secured (along with
any other creditor similarly entitled to be secured) by a direct Lien on all
property subject to such Lien, provided, however, that the foregoing
restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or levies to
the extent not past due;
(ii) pledges or deposits to secure (A) obligations under workmen's
compensation laws or similar legislation, (B) statutory obligations of
the Issuer or (C) Support Obligations;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations which
are not overdue or which have been fully bonded and are being contested
in good faith;
(iv) purchase money Liens upon or in property acquired and held by the
Issuer in the ordinary course of business to secure the purchase price
of such property or to secure Indebtedness incurred solely for the
purpose of financing the acquisition of any such property to be subject
to such Liens, or Liens existing on any such property at the time of
acquisition, or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount, provided that no such Lien
shall extend to or cover any property other than the property being
acquired and no such extension, renewal or replacement shall extend to
or cover property not theretofore subject to the Lien being extended,
renewed or replaced, and provided, further, that the aggregate
principal amount of the Indebtedness at any one time outstanding
secured by Liens permitted by this clause (iv) shall not exceed
$10,000,000; and
22
(v) Liens not otherwise permitted by clauses (i) through (iv) of this
Section 4.02 securing Indebtedness of the Issuer; provided that on the
date such Liens are created, and after giving effect to such
Indebtedness, the aggregate principal amount at maturity of all of the
secured Indebtedness of the Issuer at such date shall not exceed 5% of
Consolidated Net Tangible Assets at such date.
SECTION 4.03. Limitation on Consolidation, Merger, Sale or Conveyance.
So long as any of the 2010 Notes are outstanding and until the 2010 Notes are
rated BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which time the
Issuer will be permanently released from the provisions of this Section 4.03,
and subject also to Article Nine of the Original 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
(a) 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 (b) after giving effect to
such transaction, the surviving entity would be entitled to incur at least one
dollar of additional Indebtedness (other than revolving Indebtedness to banks)
without violation of the limitations in Section 4.04 hereof.
SECTION 4.04. Limitation on Consolidated Indebtedness.
(a) So long as any of the 2010 Notes are outstanding and until the 2010
Notes are rated BBB- or above (or an equivalent rating) by Standard & Poor's and
one Other Rating Agency (or, if Standard & Poor's shall change its rating
system, an equivalent of such rating then employed by such organization), at
which time the Issuer will be permanently released from the provisions of this
Section 4.04, the Issuer shall not, and shall not permit any Consolidated
Subsidiary of the Issuer to, issue, create, assume, guarantee, incur or
otherwise become liable for (collectively, "issue"), directly or indirectly, any
Indebtedness unless the Consolidated Coverage Ratio of the Issuer and its
Consolidated Subsidiaries for the four consecutive fiscal quarters immediately
preceding the issuance of such Indebtedness (as shown by a pro forma
consolidated income statement of the Issuer and its Consolidated Subsidiaries
for the four most recent fiscal quarters ending at least 30 days prior to the
issuance of such Indebtedness after giving effect to (i) the issuance of such
Indebtedness and (if applicable) the application of the net proceeds thereof to
refinance other Indebtedness as if such Indebtedness was issued at the beginning
of the period, (ii) the issuance and retirement of any other Indebtedness since
the first day of the period as if such Indebtedness was issued or retired at the
beginning of the period and (iii) the acquisition of any company or business
acquired by the Issuer or any Subsidiary since the first day of the period
(including giving effect to the pro forma historical earnings of such company or
business), including any acquisition which will be consummated contemporaneously
with the issuance of such Indebtedness, as if in each case such acquisition
occurred at the beginning of the period) exceeds a ratio of 1.6 to 1.0.
23
(b) Notwithstanding the foregoing paragraph, the Issuer or any
Restricted Subsidiary may issue, directly or indirectly, the following
Indebtedness:
(1) Indebtedness of the Issuer to banks not to exceed $1,000,000,000 in
aggregate outstanding principal amount at any time;
(2) Indebtedness (other than Indebtedness described in Section
4.04(b)(1) hereof) outstanding on the date of this Fifteenth
Supplemental Indenture, as set forth on Schedule 4.04(b)(2) attached
hereto and made a part hereof, and Indebtedness issued in exchange for,
or the proceeds of which are used to refund or refinance, any
Indebtedness permitted by this clause (2); provided, however, that (i)
the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of the Indebtedness so issued shall not exceed
the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid
interest on, the Indebtedness so exchanged, refunded or refinanced and
(ii) the Indebtedness so issued (A) shall not mature prior to the
stated maturity of the Indebtedness so exchanged, refunded or
refinanced, (B) shall have an Average Life equal to or greater than the
remaining Average Life of the Indebtedness so exchanged, refunded or
refinanced and (C) if the Indebtedness to be exchanged, refunded or
refinanced is subordinated to the 2010 Notes, the Indebtedness is
subordinated to the 2010 Notes in right of payment;
(3) Indebtedness of the Issuer owed to and held by a Subsidiary and
Indebtedness of a Subsidiary owed to and held by the Issuer; provided,
however, that, in the case of Indebtedness of the Issuer owed to and
held by a Subsidiary, (i) any subsequent issuance or transfer of any
Capital Stock that results in any such Subsidiary ceasing to be a
Subsidiary or (ii) any transfer of such Indebtedness (except to the
Issuer or a Subsidiary) shall be deemed for the purposes of this
Section 4.04(b) to constitute the issuance of such Indebtedness by the
Issuer;
(4) Indebtedness of the Issuer issued in exchange for, or the proceeds
of which are used to refund or refinance, Indebtedness of the Issuer
issued in accordance with Section 4.04(a) hereof, 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 2010 Notes, the Indebtedness so issued is
subordinated to the 2010 Notes in right of payment;
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(5) Indebtedness of a Restricted Subsidiary issued in exchange for, or
the proceeds of which are used to refund or refinance, Indebtedness of
a Restricted Subsidiary issued in accordance with Section 4.04(a)
hereof, provided that (i) the principal amount (or accreted value in
the case of Indebtedness issued at a discount) of the Indebtedness so
issued shall not exceed the principal amount (or accreted value in the
case of Indebtedness issued at a discount) of, premium, if any, and
accrued but unpaid interest on, the Indebtedness so exchanged, refunded
or refinanced and (ii) the Indebtedness so issued (A) shall not mature
prior to the stated maturity of the Indebtedness so exchanged, refunded
or refinanced and (B) shall have an Average Life equal to or greater
than the remaining Average Life of the Indebtedness so exchanged,
refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued to acquire,
develop, improve, construct or to provide working capital for a gas,
oil or electric generation, exploration, production, distribution,
storage or transmission facility and related assets, provided that such
Indebtedness is without recourse to any assets of the Issuer,
Consumers, Enterprises, CMS Generation, CMS Electric and Gas, CMS Gas
Transmission, CMS MST or any other Designated Enterprises Subsidiary;
(7) Indebtedness of a Person existing at the time at which such Person
became a Subsidiary and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary. Such Indebtedness
shall be deemed to be incurred on the date the acquired Person becomes
a Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed $150,000,000 in
aggregate principal amount at any time; and
(9) Indebtedness of a Consolidated Subsidiary in respect of rate
reduction bonds issued to recover electric restructuring transition
costs of Consumers, provided that such Indebtedness is without recourse
to the assets of Consumers.
SECTION 4.05. Limitation on Restricted Payments.
(a) So long as the 2010 Notes are outstanding and until the 2010 Notes
are rated BBB- or above (or an equivalent rating) by Standard & Poor's and one
Other Rating Agency (or, if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization), at which time the
Issuer will be permanently released from the provisions of this Section 4.05,
the Issuer shall not, and shall not permit any Restricted Subsidiary of the
Issuer, directly or indirectly, to (i) declare or pay any dividend or make any
distribution on the Capital Stock of the Issuer to the direct or indirect
holders of its Capital Stock (except dividends or distributions payable solely
in its Non-Convertible Capital Stock or in options, warrants or other rights to
purchase such Non-Convertible Capital Stock and except dividends or
distributions payable to the Issuer or a Subsidiary), (ii) purchase, redeem or
otherwise acquire or
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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 herein referred to as a "Restricted Payment") if
at the time the Issuer or such Subsidiary makes such Restricted Payment:
(1) an Event of Default, or an event that with the lapse of time or the
giving of notice or both would constitute an Event of Default, shall
have occurred and be continuing (or would result therefrom); or
(2) the aggregate amount of such Restricted Payment and all other
Restricted Payments made since May 6, 1997 would exceed the sum of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued during the period
(treated as one accounting period) from May 6, 1997 to the end
of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or, in case such
sum shall be a deficit, minus 100% of the deficit); and
(C) the aggregate Net Cash Proceeds received by the Issuer
from the issue or sale of or contribution with respect to its
Capital Stock subsequent to May 6, 1997.
For the purpose of determining the amount of any Restricted Payment not
in the form of cash, the amount shall be the fair value of such Restricted
Payment as determined in good faith by the Board of Directors, provided that if
the value of the non-cash portion of such Restricted Payment as determined by
the Board of Directors is in excess of $25 million, such value shall be based on
the opinion from a nationally recognized firm experienced in the appraisal of
similar types of transactions.
(b) The provisions of Section 4.05(a) hereof shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Issuer
made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Issuer
(other than Redeemable Stock or Exchangeable Stock); provided,
however, that such purchase or redemption shall be excluded
from the calculation of the amount of Restricted Payments;
(ii) dividends or other distributions paid in respect of any
class of the Issuer's Capital Stock issued in respect of the
acquisition of any business or assets by the Issuer or a
Restricted Subsidiary if the dividends or other distributions
with respect to such Capital Stock are payable solely from the
net earnings of such business or assets;
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(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
dividend would have complied with this Section 4.05; provided,
however, that at the time of payment of such dividend, no
Event of Default shall have occurred and be continuing (or
result therefrom), and provided further, however, that such
dividends shall be included (without duplication) in the
calculation of the amount of Restricted Payments; or
(iv) payments pursuant to the Tax Sharing Agreement.
SECTION 4.06. Limitation on Asset Sales. So long as any of the 2010
Notes are outstanding, the Issuer may not sell, transfer or otherwise dispose of
any property or assets of the Issuer, including Capital Stock of any
Consolidated Subsidiary, in one transaction or a series of transactions in an
amount which exceeds $50,000,000 (an "Asset Sale") unless the Issuer shall (i)
apply an amount equal to such excess Net Cash Proceeds to permanently repay
Indebtedness of a Consolidated Subsidiary or Indebtedness of the Issuer which is
pari passu with the 2010 Notes, (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 clause (i) or (ii) (the "Excess Proceeds") to make
an offer, within 30 days after the end of the Application Period, to purchase
from the Holders on a pro rata basis an aggregate principal amount of 2010 Notes
on the relevant purchase date equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the principal amount of the 2010 Notes on the
relevant purchase date and unpaid interest, if any, to the purchase date. The
Issuer shall only be required to make an offer to purchase 2010 Notes from
Holders pursuant to clause (iii) if the Excess Proceeds equal or exceed
$25,000,000 at any given time.
The procedures to be followed by the Issuer in making an offer to
purchase 2010 Notes from the Holders with Excess Proceeds, and for the
acceptance of such offer by the Holders, shall be the same as those set forth in
Section 3.01 herein with respect to a Change in Control.
ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2010 NOTES
SECTION 5.01. Definition. All of the events specified in clauses (a)
through (h) of Section 5.1 of the Original Indenture shall be Events of Default
with respect to the 2010 Notes.
SECTION 5.02. Amendments to Section 5.1 of the Original Indenture.
Solely for the purpose of determining Events of Default with respect to the 2010
Notes, paragraphs Section 5.1(e), Section 5.1(f) and Section 5.1(h) 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.
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SECTION 5.03. Additional Events of Default. Solely for the purpose of
determining Events of Default with respect to the 2010 Notes, an Event of
Default shall also include the following:
(i) default in the payment of any interest upon any 2010 Note when it
becomes due and payable, and continuance of such default for 30 days;
(ii) default in the Issuer's obligation to redeem the 2010 Notes after
exercising its redemption option pursuant to this Fifteenth
Supplemental Indenture; and
(iii) default in the Issuer's obligation to purchase 2010 Notes upon
the occurrence of a Change in Control in accordance with the terms of
Article III hereof.
ARTICLE VI
GLOBAL NOTES
The 2010 Notes will be issued initially in the form of Global Notes.
"Global Note" means a registered 2010 Note evidencing one or more 2010 Notes
issued to a depositary (the "Depositary") or its nominee, in accordance with
this Article VI and bearing the legend prescribed in this Article VI. One or
more Global Notes will represent all 2010 Notes. The Issuer shall execute and
the Trustee shall, in accordance with this Article VI and the Issuer Order with
respect to the 2010 Notes, authenticate and deliver one or more Global Notes in
temporary or permanent form that (i) shall represent and shall be denominated in
an aggregate amount equal to the aggregate principal amount of the 2010 Notes to
be represented by such Global Note or Global Notes, (ii) shall be registered in
the name of the Depositary for such Global Note or Global Notes or the nominee
of such Depositary, (iii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2010 Note is presented
by an authorized representative of the Depositary to the Issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of a nominee of the Depositary or in such other name as
is requested by an authorized representative of the Depositary (and any payment
is made to such nominee of the Depositary or to such other entity as is
requested by an authorized representative of the Depositary), any transfer,
pledge or other use hereof for value or otherwise by or to any Person is
wrongful inasmuch as the registered owner hereof has an interest herein."
Notwithstanding Section 2.8 of the Original Indenture, unless and until
it is exchanged in whole or in part for 2010 Notes in definitive form, a Global
Note representing one or more 2010 Notes may not be transferred except as a
whole by the Depositary, to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor Depositary for 2010 Notes or a
nominee of such successor Depositary.
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If at any time the Depositary for the 2010 Notes is unwilling or unable
to continue as Depositary for the 2010 Notes, the Issuer shall appoint a
successor Depositary with respect to the 2010 Notes. If a successor Depositary
for the 2010 Notes is not appointed by the Issuer by the earlier of (i) 90 days
from the date the Issuer receives notice to the effect that the Depositary is
unwilling or unable to act, or the Issuer determines that the Depositary is
unable to act or (ii) the effectiveness of the Depositary's resignation or
failure to fulfill its duties as Depositary, the Issuer will execute, and the
Trustee, upon receipt of a Issuer Order for the authentication and delivery of
definitive 2010 Notes, will authenticate and deliver 2010 Notes in definitive
form in an aggregate principal amount equal to the principal amount of the
Global Note or Global Notes representing such 2010 Notes in exchange for such
Global Note or Global Notes.
The Issuer may at any time and in its sole discretion determine that
the 2010 Notes issued in the form of one or more Global Notes shall no longer be
represented by such Global Note or Global Notes. In such event the Issuer will
execute, and the Trustee, upon receipt of an Issuer Order for the authentication
and delivery of definitive 2010 Notes, will authenticate and deliver 2010 Notes
in definitive form in an aggregate principal amount equal to the principal
amount of the Global Note or Global Notes representing such 2010 Notes in
exchange for such Global Note or Global Notes.
The Depositary for such 2010 Notes may surrender a Global Note or
Global Notes for such 2010 Notes in exchange in whole or in part for 2010 Notes
in definitive form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new 2010 Note or 2010
Notes, of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of 2010 Notes in
definitive form delivered to Holders thereof.
In any exchange provided for in this Article VI, the Issuer will
execute and the Trustee will authenticate and deliver 2010 Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for 2010 Notes in definitive form,
such Global Note shall be cancelled by the Trustee. 2010 Notes in definitive
form issued in exchange for a Global Note pursuant to this Article VI shall be
registered in such names
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and in such authorized denominations as the Depositary for such Global Note,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee or Security Registrar. The Trustee shall deliver such
2010 Notes to the Persons in whose names such 2010 Notes are so registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture shall be
applicable to the 2010 Notes. Upon satisfaction by the Issuer of the
requirements of Section 10.1(C) of the Indenture, in connection with any
covenant defeasance (as provided in Section 10.1(C) of the Indenture), the
Issuer shall be released from its obligations under Article Nine of the Original
Indenture and under Article IV of this Fifteenth Supplemental Indenture with
respect to the 2010 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Fifteenth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Fifteenth Supplemental Indenture, the
Original Indenture is in all respects ratified, approved and confirmed, and the
Original Indenture and this Fifteenth Supplemental Indenture shall together
constitute one and the same instrument.
ARTICLE IX
MODIFICATION AND WAIVER
In addition to those matters set forth in Section 8.2 of the Original
Indenture (including the terms and conditions of the 2010 Notes set forth
herein), with respect to the 2010 Notes, no amendment or supplemental indenture
to the Indenture shall, without the consent of the Holder of each 2010 Note
affected thereby:
(a) reduce the redemption price or Change in Control Purchase Price of
the 2010 Notes; or
(b) change the terms applicable to redemption or purchase of the 2010
Notes in a manner adverse to the Holder.
In addition, with respect to the 2010 Notes, notwithstanding Section
5.10 of the Original Indenture, approval of the Holders of each outstanding 2010
Note shall be required to waive any default by the Issuer in any payment of the
redemption price or Change in Control Purchase Price with respect to any 2010
Notes.
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TESTIMONIUM
This Fifteenth 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Fifteenth
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
/s/ Thomas J. Webb
--------------------------------------
Thomas J. Webb
Executive Vice President and
Chief Financial Officer
Attest: /s/ Laura L. Mountcastle
------------------------
J.P. MORGAN TRUST COMPANY, N.A.,
as Trustee
/s/ Renee Johnson
--------------------------------------
Renee Johnson
Attest: /s/ Mietka T. Collins
------------------------
Mietka T. Collins
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Schedule 4.04(b)(2)
- See Attached -
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