Exhibit 4(d)(ii)
SIXTEENTH SUPPLEMENTAL INDENTURE
DATED AS OF DECEMBER 16, 2004
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This Sixteenth Supplemental Indenture, dated as of the 16th day of
December, 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
West Monroe St., 26th Floor, Chicago, IL 60606.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (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
WHEREAS, The Issuer has exchanged the Original 2023 Notes for the 2023
Notes; and
WHEREAS, the Issuer has requested the Trustee to join with it in the
execution and delivery of this Sixteenth 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 "3.375%
Convertible Senior Notes due 2023, Series B" (the "2023 Notes"), providing for
the issuance of the 2023 Notes and amending and adding certain provisions
thereof for the benefit of the Holders of the 2023 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this Sixteenth
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 Sixteenth Supplemental Indenture;
and
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WHEREAS, all things necessary to make this Sixteenth 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 2023 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 2023 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture together with
this Sixteenth 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:
Term Section
- ---- -------------
Additional Amounts 2.04
Additional Shares 6.06(e)
Application Period 7.06
Asset Sale 7.06
Company 2.03
Conversion Date 6.02
Conversion Rate 6.01
Conversion Value 6.13(a)
Depositary Article IX
Determination Date 6.13(b)
Distributed Assets or Securities 6.06(c)
Dividend Adjustment Amount 6.06(d)(ii)
DTC 2.03
Effective Date 2.04(d)
Events of Default 8.01
ex date 1.01(b); 2.04
Excess Proceeds 7.06
Fundamental Change Purchase Date 3.01
Fundamental Change Purchase Notice 3.03
Fundamental Change Purchase Price 3.01
Global Note Article IX
Indenture 1.01; 2.04
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Term Section
- ---- --------------
Interest Payment Date 2.03
Issue 7.04(a)
Issuer Preamble; 2.03
Issuer Notice 5.01
Issuer Notice Date 5.01
Lien 7.02(a)
Maturity 2.03
Maximum Conversion Rate 6.06(j)
Net Share Amount 6.13(b)(ii)
Net Shares 6.13(b)(ii)
Original 2023 Notes 2.03
Original Indenture Recitals
Original Issue Date 2.03
Place of Payment 2.03
Principal Return 6.13(b)(i)
Pre-Dividend Sale Price 6.06(d)(i)
Public Acquirer Change of Control 6.06(f)
Public Acquirer Common Stock 6.06(f)
Purchase Date 2.04; 4.01(a)
Purchase Notice 4.01(a)(i)
Purchase Price 2.04
Record Date 2.03
Redemption Price 2.04
Restricted Payment 7.05(a)
Rule 144A 2.03
Securities Recitals
Securities Act 2.03
Ten Day Average Closing Stock Price 6.13(a)
Trading Exception 2.04
Trustee Preamble; 2.04
2023 Notes Recitals; 2.04
(b) Section 1.1 of the Original Indenture is amended to insert the new
definitions applicable to the 2023 Notes, in the appropriate alphabetical
sequence, as follows:
"Additional Registration Defaults" means failure of the Issuer to, at
Issuer's cost and using its best efforts, amend the shelf registration statement
on Form S-3 filed with the Securities and Exchange Commission on September 24,
2004 to cover resales of 2023 Notes and cause such shelf registration to be
declared effective under the Securities Act of 1933, as amended, no later than
February 15, 2005.
"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.
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"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease prior to the first date upon which
such lease may be terminated by the lessee without payment of a penalty; and
such obligation shall be deemed secured by a Lien on any property or assets to
which such lease relates.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered Capital
Stock for purposes of this definition.
"CMS Electric and Gas" means CMS Electric and Gas Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS ERM" means CMS Energy Resource Management Company, formerly CMS MST, a
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 wholly-owned
subsidiary of Enterprises, whose name was changed to CMS Energy Resource
Management Company effective January 2004.
"Common Equity" of any Person means capital stock of such Person that is
generally entitled to (i) vote in the election of directors of such Person or
(ii) if such Person is not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management or policies of such Person.
"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 ERM 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 ERM 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 ERM 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.
"Continuing Director" means a director who either was a member of the Board
of Directors on November 9, 2004 or who becomes a member of the Board of
Directors subsequent to that date and whose appointment, election or nomination
for election by the Issuer's shareholders is duly approved by a majority of the
Continuing Directors on the Board of Directors at the time of such approval,
either by a specific vote or by approval of the proxy statement issued by the
Issuer on behalf of the Board of Directors in which such individual is named as
nominee for director.
"Conversion Agent" means the office or agency designated by the Issuer
where 2023 Notes may be presented for conversion. Initially, the Conversion
Agent shall be the Trustee.
"Conversion Price" means $1,000 divided by the Conversion Rate.
"Designated Enterprises Subsidiary" means any wholly-owned subsidiary of
Enterprises formed after the date of this Sixteenth 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.
"Equity Interests" means any capital stock, partnership, joint venture,
member or limited liability or unlimited liability company interest, beneficial
interest in a trust or similar entity or other equity interest or investment of
whatever nature.
"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).
"Fair Market Value" means the amount which a willing buyer would pay a
willing seller in an arm's length transaction.
A "Fundamental Change" shall be deemed to have occurred at such time after
the original issuance of the 2023 Notes as any of the following occurs: (i) the
Common Stock or other common stock into which the 2023 Notes are convertible is
neither listed for trading on a United States national securities exchange nor
approved for trading on the Nasdaq National Market or another established
automated over-the-counter trading market in the United States; (ii) a "person"
or "group" within the meaning of Section 13(d) of the Exchange Act, other than
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the Issuer, any Subsidiary of the Issuer or any employee benefit plan of the
Issuer or any such Subsidiary, files a Schedule TO (or any other schedule, form
or report under the Exchange Act) disclosing that such person or group has
become the direct or indirect ultimate "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) of Common Equity of the Issuer representing more
than 50% of the voting power of the Issuer's Common Equity; (iii) consummation
of any share exchange, consolidation or merger of the Issuer pursuant to which
the Common Stock will be converted into cash, securities or other property or
any sale, lease or other transfer (in one transaction or a series of
transactions) of all or substantially all of the consolidated assets of the
Issuer and its Subsidiaries, taken as a whole, to any Person (other than the
Issuer or one or more of the Issuer's Subsidiaries); provided, however, that a
transaction where the holders of the Issuer's Common Equity immediately prior to
such transaction own, directly or indirectly, more than 50% of the aggregate
voting power of all classes of Common Equity of the continuing or surviving
corporation or transferee immediately after such event shall not be a
Fundamental Change; or (iv) Continuing Directors cease to constitute at least a
majority of the Board of Directors; provided, however, that a Fundamental Change
shall not be deemed to have occurred in respect of any of the foregoing if
either (1) the Last Reported Sale Price of Common Stock for any five Trading
Days within the ten consecutive Trading Days ending immediately before the later
of the Fundamental Change or the public announcement thereof equals or exceeds
105% of the applicable Conversion Price of the Notes in effect immediately
before the Fundamental Change or the public announcement thereof (except that
this clause (1) shall not apply to the events described in Section 6.06(e)
hereof) or (2) at least 90% of the consideration (excluding cash payments for
fractional shares) in the transaction or transactions constituting the
Fundamental Change consists of shares of capital stock traded on a national
securities exchange or quoted on the Nasdaq National Market (or which shall be
so traded or quoted when issued or exchanged in connection with such Fundamental
Change) (such securities being referred to as "Publicly Traded Securities") and
as a result of such transaction or transactions the 2023 Notes become
convertible into such Publicly Traded Securities (excluding cash payments for
fractional shares).
"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
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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.
"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.
"Initial Purchasers" has the meaning ascribed to such term in the Purchase
Agreement.
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"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.
"Last Reported Sale Price" of the applicable security on any date means the
closing sale price per share (or, if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average ask prices) on that date as reported
in composite transactions for the principal U.S. securities exchange on which
the applicable security is traded or, if the applicable security is not listed
on a U.S. national or regional securities exchange, as reported by the Nasdaq
National Market. If the applicable security is not listed for trading on a U.S.
national or regional securities exchange and not reported by the Nasdaq National
Market on the relevant date, the Last Reported Sale Price shall be the last
quoted bid price for the applicable security in the over-the-counter market on
the relevant date as reported by the National Quotation Bureau or similar
organization. If the applicable security is not so quoted, the Last Reported
Sale Price will be the average of the mid-point of the last bid and ask prices
for the applicable security on the relevant date from each of at least three
nationally recognized independent investment banking firms selected by the
Issuer for this purpose.
"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.
"Market Price" means the average of the Last Reported Sale Prices of Common
Stock for the 20 Trading Day period ending on the applicable date of
determination (if the applicable date of determination is a Trading Day or, if
not, then on the last Trading Day prior to such applicable date of
determination), appropriately adjusted to take into account the occurrence,
during the period commencing on the first of the Trading Days during such 20
Trading Day period and ending on the applicable date of determination, of any
event that would result in an adjustment of the Conversion Rate under this
Sixteenth Supplemental Indenture.
"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
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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 2023 Notes on
behalf of the Issuer. Initially, the Paying Agent shall be the Trustee.
"Predecessor 2023 Note" of any particular 2023 Note means every previous
2023 Note evidencing all or a portion of the same debt as that evidenced by such
particular 2023 Note; and, for the purposes of the definition, any 2023 Note
authenticated and delivered under Section 2.9 of the Indenture in exchange for
or in lieu of a mutilated, destroyed, lost or stolen 2023 Note shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen 2023 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.
"Publicly Traded Securities" has the meaning provided in the definition of
Fundamental Change.
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"Purchase Agreement" means that certain Purchase Agreement dated July 9,
2003 among the Issuer and the Initial Purchasers which provides for the sale by
the Issuer to the Initial Purchasers of the Original 2023 Notes.
"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 2023 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 2023 Notes.
"Registrable Securities" has the meaning ascribed to such term in the
Registration Rights Agreement.
"Registration Default" has the meaning ascribed to such term in the
Registration Rights Agreement, except that Registration Default shall not
include the registration default contained in Section 2(c)(i)(1) of the
Registration Rights Agreement..
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of July 16, 2003, by and among the Issuer and the Initial
Purchasers.
"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 7.04 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.
"Share Price" means the price per share of Common Stock paid in connection
with a corporate transaction described in Section 6.06(e) hereof, which shall be
equal to (i) if holders of Common Stock receive only cash in such corporate
transaction, the cash amount paid per share of Common Stock and (ii) in all
other cases, the average of the Last Reported Sale Prices of Common Stock on the
five Trading Days up to but not including the Effective Date.
"Spin-off Market Price" per share of Common Stock or the Equity Interests
in a Subsidiary or other business unit of the Issuer on any day means the
average of the daily Last Reported Sale Price for the 10 consecutive Trading
Days commencing on and including the fifth Trading Day after the ex date with
respect to the issuance or distribution requiring such computations. As used
herein, the term "ex date," when used with respect to any issuance or
distribution, shall mean the first date on which the security trades regular way
on the New York
12
Stock Exchange or such other national regional exchange or market in which the
security trades without the right to receive such issuance or distribution.
"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 2023 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 Sixteenth Supplemental Indenture or thereafter
incurred) which is contractually subordinated or junior in right of payment to
the 2023 Notes.
"Support Obligations" means, for any Person, without duplication, any
financial obligation, contingent or otherwise, of such Person guaranteeing or
otherwise supporting any debt or other obligation of any other Person in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such debt, (ii) to purchase property, securities or services for the purpose
of assuring the owner of such debt of the payment of such debt, (iii) to
maintain working capital, equity capital, available cash or other financial
statement condition of the primary obligor so as to enable the 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.
"Trading Day" means (i) if the applicable security is listed, admitted for
trading or quoted on the New York Stock Exchange, the Nasdaq National Market or
another national security exchange, a day on which the New York Stock Exchange,
the Nasdaq National Market or another national security exchange is open for
business or (ii) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law, regulation or executive order to close.
"Trading Price" of the 2023 Notes on any date of determination means the
average of the secondary market bid quotations per $1,000 principal amount of
2023 Notes obtained by the Trustee for $5,000,000 principal amount of 2023 Notes
at approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers the Issuer selects,
provided that if three such bids cannot reasonably be obtained by the
13
Trustee, but two such bids are obtained, then the average of the two bids shall
be used, and if only one such bid can reasonably be obtained by the Trustee,
this one bid shall be used. If the Trustee cannot reasonably obtain at least one
bid for $5,000,000 principal amount of the 2023 Notes from a nationally
recognized securities dealer, then the Trading Price will be deemed to be less
than 95% of the product of the sale price of Common Stock and the then
applicable Conversion Rate.
"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).
14
ARTICLE II
DESIGNATION AND TERMS OF THE 2023 NOTES; FORMS
SECTION 2.01. Establishment of Series.
(a) There is hereby created a series of Securities to be known and
designated as the "3.375% Convertible Senior Notes due 2023, Series B" to be
issued in an initial aggregate principal amount of up to $150,000,000.
Additional Securities, without limitation as to amount, having substantially the
same terms as the 2023 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 2023 Notes, and, if no interest has been paid,
from December 16, 2004), may also be issued by the Issuer pursuant to the
Indenture without the consent of the existing Holders of the 2023 Notes. Such
additional Securities shall be part of the same series as the 2023 Notes. The
Stated Maturity of the 2023 Notes is July 15, 2023; the principal amount of the
2023 Notes shall be payable on such date unless the 2023 Notes are earlier
redeemed, purchased or converted in accordance with the terms of the Indenture.
(b) The 2023 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 2023 Notes, at the rate of 3.375% 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 2023 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 2023 Note payable on any Interest Payment
Date (other than at Maturity) shall be the 1st day of the calendar month in
which such Interest Payment Date occurs (whether or not a Business Day) except
that the Record Date for interest payable at Maturity shall be the date of
Maturity.
(d) The payment of the principal of, premium (if any) and interest on the
2023 Notes shall not be secured by a security interest in any property.
(e) The 2023 Notes shall be purchased by the Issuer at the option of the
Holders thereof as provided in Article III, Article IV and Article V hereof.
(f) The 2023 Notes shall be convertible in accordance with the terms of
this Sixteenth Supplemental Indenture.
(g) The 2023 Notes will not be subordinated to the payment of Senior Debt.
(h) The Issuer will not pay any additional amounts on the 2023 Notes held
by a Person who is not a U.S. person (as defined in Regulation S) in respect of
any tax, assessment or government charge withheld or deducted.
15
(i) The events specified in Events of Default with respect to the 2023
Notes shall include the events specified in Article VIII of this Sixteenth
Supplemental Indenture. In addition to the covenants set forth in Article III of
the Original Indenture, the Holders of the 2023 Notes shall have the benefit of
the covenants of the Issuer set forth in this Sixteenth Supplemental Indenture.
SECTION 2.02. Forms Generally. The 2023 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
2023 Notes, as evidenced by their execution thereof.
The definitive 2023 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 2023 Notes, as evidenced by their execution
thereof.
SECTION 2.03. Form of Face of 2023 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 2023 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.
16
CMS ENERGY CORPORATION
3.375% CONVERTIBLE SENIOR NOTES DUE 2023, SERIES B
No. 1 $150,000,000
CUSIP No.: 125896AT7
ISIN No.: US125896AT74
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 One Hundred Fifty Million Dollars on July 15, 2023
("Maturity") and to pay interest thereon from December 16, 2004 (the "Original
Issue Date") or from the date interest has been paid or duly provided for on the
3.375% Convertible Senior Notes Due 2023 issued by the Issuer on July 16, 2003
(the "Original 2023 Notes") pursuant to the terms of the Thirteenth Supplemental
Indenture dated July 16, 2003 between the Issuer and the Trustee for which the
2023 Notes have been exchanged, semi-annually in arrears on January 15 and July
15, in each year, commencing on January 15, 2005 (each an "Interest Payment
Date") to the Persons in whose names the 2023 Notes are registered at the close
of business on January 1 and July 1 (each a "Record Date"), and at Maturity, at
the rate of 3.375% 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 2023 Note (or one or more Predecessor 2023 Notes) is
registered at the close of business on the Record Date for such interest, which
shall be the 1st day of the calendar month in which such Interest Payment Date
occurs (whether or not a Business Day) except that the Record Date for interest
payable at Maturity shall be the date of Maturity. Any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Record Date and may either be paid to the Person in whose name
this 2023 Note (or one or more Predecessor 2023 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 2023 Notes not less than 15 days preceding such
subsequent Record Date.
This 2023 Note is convertible and 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 2023 Note.
Payment of the principal of (and premium, if any) and interest, if any, on
this 2023 Note will be made at the office or agency of the Issuer maintained for
that purpose in New York, New York (the "Place of Payment"), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuer payment of interest (other than interest payable at
Maturity) may be made by check mailed to the address of the Person entitled
thereto as such address shall appear
17
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 2023 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.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND THE COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A")) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (V) TO CMS ENERGY CORPORATION
OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE SECURITY FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.
THE HOLDER OF THIS SECURITY AGREES THAT SUCH HOLDER WILL NOT ENGAGE IN
HEDGING TRANSACTIONS INVOLVING THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON
CONVERSION HEREOF UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED
FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND
OTHER TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR
18
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF,
A REGISTRATION RIGHTS AGREEMENT, DATED AS OF JULY 16, 2003 ENTERED INTO BY THE
COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF SECURITIES FROM TIME TO TIME.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this 2023 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: Executive Vice President and
Chief Financial Officer
By
-------------------------------------
Its: Vice President and Treasurer
SECTION 2.04. Form of Reverse of 2023 Note.
This 3.375% Convertible Senior Note due 2023, Series B is one of a duly
authorized issue of securities of the Issuer (herein called the "2023 Notes"),
issued and to be issued under an Indenture, dated as of September 15, 1992, as
supplemented by certain supplemental indentures, including the Sixteenth
Supplemental Indenture, dated as of December 16, 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 2023 Notes and of the terms upon
which the 2023 Notes are, and are to be, authenticated and delivered. This 2023
Note is one of the series designated on the face hereof, issued in an initial
aggregate principal amount of $150,000,000. Additional Securities, without
limitation as to amount, having substantially the same terms as the 2023 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 2023 Notes, and, if no
19
interest has been paid, from December 16, 2004), may also be issued by the
Issuer pursuant to the Indenture without the consent of the existing Holders of
the 2023 Notes. Such additional Securities shall be part of the same series as
the 2023 Notes.
Holders of 2023 Notes at the close of business on a Record Date will
receive payment of interest, payable on the corresponding Interest Payment Date
notwithstanding the conversion of such 2023 Notes at any time after the close of
business on such Record Date. 2023 Notes surrendered for conversion by a Holder
during the period from the close of business on any Record Date to the opening
of business on the immediately following Interest Payment Date must be
accompanied by payment of an amount equal to the interest that the Holder is to
receive on the 2023 Notes; provided, however, that no such payment need be made
if (1) the Issuer has specified a redemption date that is after a Record Date
and on or prior to the immediately following Interest Payment Date, (2) the
Issuer has specified a Purchase Date following a Fundamental Change that is
during such period or (3) any overdue interest exists at the time of conversion
with respect to such 2023 Notes to the extent of such overdue interest. The
Holders of the 2023 Notes and any Common Stock issuable upon conversion thereof
will continue to be entitled to receive Additional Amounts in accordance with
the Registration Rights Agreement.
If the principal hereof or any portion of such principal is not paid when
due (whether upon acceleration, upon the date set for payment of the Redemption
Price, upon the date set for payment of a Purchase Price or Fundamental Change
Purchase Price or upon the Stated Maturity of this 2023 Note) or if interest due
hereon or any portion of such interest is not paid when due in accordance with
the terms of this 2023 Note, then in each such case the overdue amount shall
bear interest at the rate of 3.375% per annum, compounded semiannually (to the
extent that the payment of such interest shall be legally enforceable), which
interest shall accrue from the date such overdue amount was due to the date
payment of such amount, including interest thereon, has been made or duly
provided for, all such interest shall be payable on demand.
The interest rate borne by the Registrable Securities will be increased by
0.25% per annum upon the occurrence of a Registration Default or upon the
occurrence of an Additional Registration Default, which rate will increase by an
additional 0.25% per annum if such Registration Default or Additional
Registration Default has not been cured within 90 days after the occurrence
thereof and will continue to increase by 0.25% at the beginning of each
subsequent 90-day period until all Registration Defaults and Additional
Registration Defaults have been cured ("Additional Amounts"); provided, that the
aggregate amount of any such increase in the interest rate on the Registrable
Securities shall in no event exceed 0.50% per annum. All accrued Additional
Amounts shall be paid to Holders of Registrable Securities in the same manner
and at the same time as regular payments of interest on the Registrable
Securities. Following the cure of all Registration Defaults and Additional
Registration Defaults, the accrual of Additional Amounts shall cease and the
interest rate on the Registrable Securities will revert to 3.375% per annum.
In the event of redemption of this 2023 Note in part only, a new 2023 Note
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof. No sinking fund is provided for the 2023
Notes. The 2023 Notes are redeemable for cash or check in whole, or in part, at
any time on or after July 15, 2008 at the option of the Issuer at a redemption
price ("Redemption Price") equal to 100% of the principal amount of the 2023
20
Notes to be redeemed plus any accrued and unpaid interest (including Additional
Amounts, if any) to the redemption date. Notice of redemption at the option of
the Issuer shall be mailed at least 30 days but not more than 60 days before a
redemption date to the Trustee, the Paying Agent and each Holder of 2023 Notes
to be redeemed at the Holder's registered address. If money sufficient to pay
the Redemption Price of all 2023 Notes (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent prior to or on the
redemption date, on and after the redemption date interest (including Additional
Amounts, if any), if any, shall cease to accrue on such 2023 Notes or portions
thereof. 2023 Notes in denominations larger than $1,000 principal amount may be
redeemed in part but only in integral multiples of $1,000 principal amount.
Subject to the terms and conditions of the Indenture, a Holder shall have
the option to require the Issuer to purchase the 2023 Notes held by such Holder
on July 15, 2008, July 15, 2013 and July 15, 2018 (each, a "Purchase Date") at a
purchase price (the "Purchase Price") equal to 100% of the principal amount of
the 2023 Notes to be purchased plus any accrued and unpaid interest (including
Additional Amounts, if any) to but excluding such Purchase Date, upon delivery
of a Purchase Notice containing the information set forth in the Indenture, from
the opening of business on the date that is 20 Business Days prior to such
Purchase Date until the close of business on the fifth Business Day prior to
such Purchase Date and upon delivery of the 2023 Notes to the Paying Agent by
the Holder as set forth in the Indenture. The Issuer will pay the Purchase Price
in cash or by check. 2023 Notes in denominations larger than $1,000 principal
amount may be purchased in part, but only in integral multiples of $1,000
principal amount.
If a Fundamental Change shall occur at any time prior to July 15, 2008,
each Holder shall have the right, at such Holder's option and subject to the
terms and conditions of the Indenture, to require the Issuer to purchase any or
all of such Holder's 2023 Notes or any portion of the principal amount thereof
that is equal to $1,000 or an integral multiple of $1,000 on the day that is no
earlier than 60 days nor later than 90 days after the date of the Issuer Notice
of the occurrence of the Fundamental Change (subject to extension to comply with
applicable law) for a Fundamental Change Purchase Price equal to 100% of the
principal amount of 2023 Notes purchased plus accrued and unpaid interest
(including Additional Amounts, if any) to the Fundamental Change Purchase Date,
which Fundamental Change Purchase Price shall be paid by the Issuer in cash or
by check, as set forth in the Indenture.
Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, by delivery to the Paying Agent of a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay a Fundamental Change Purchase Price or Purchase
Price, as the case may be, of all 2023 Notes or portions thereof to be purchased
as of the Purchase Date or the Fundamental Change Purchase Date, as the case may
be, is on deposit with the Paying Agent on the Business Day following the
Purchase Date or the Fundamental Change Purchase Date, as the case may be,
interest (including Additional Amounts, if any) shall cease to accrue on such
2023 Notes (or portions thereof) on and after such date, and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Fundamental Change Purchase Price, as the case may be, upon surrender
of such Note).
21
Subject to the procedures set forth in the Indenture, a Holder may convert
2023 Notes into cash and shares of Common Stock on or before the close of
business on July 15, 2023 during the periods and upon satisfaction of at least
one of the conditions set forth below:
(a) in any calendar quarter (and only during such calendar quarter) if the
Last Reported Sale Price for Common Stock for at least 20 Trading Days
during the period of 30 consecutive Trading Days ending on the last Trading
Day of the previous calendar quarter is greater than or equal to 120% of
the Conversion Price per share of Common Stock on such last Trading Day;
(b) prior to Maturity during the five Business Days immediately following
any ten consecutive Trading Day period in which the Trading Price per
$1,000 principal amount of 2023 Notes (as determined following a request by
a Holder of the 2023 Notes in accordance with the procedures described in
the Indenture) for each day of that period was less than 95% of the product
of the sale price of Common Stock and the then applicable Conversion Rate
(the "Trading Exception"); provided, however, that a Holder may not convert
its 2023 Notes if the average closing sale price of Common Stock for such
ten consecutive Trading Day period is between the then current Conversion
Price and 120% of the then applicable Conversion Price; in connection with
any conversion upon satisfaction of such Trading Price condition, the
Trustee shall have no obligation to determine the Trading Price unless the
Issuer has requested such determination; and the Issuer shall have no
obligation to make such request unless the Holder provides reasonable
evidence that the Trading Price would be less than 95% of the product of
the sale price of Common Stock and the then applicable Conversion Rate; at
which time, the Issuer shall instruct the Trustee to determine the Trading
Price beginning on the next Trading Day and on each successive Trading Day
until the Trading Price is greater than or equal to 95% of the product of
the sale price of Common Stock and the then applicable Conversion Rate;
(c) in the event that the Issuer calls the 2023 Notes for redemption, at
any time prior to the close of business on the second Business Day
immediately preceding the redemption date;
(d) the Issuer becomes a party to a consolidation, merger or binding share
exchange pursuant to which the Common Stock would be converted into cash or
property (other than securities), in which case a Holder may surrender 2023
Notes for conversion at any time from and after the date which is 15 days
prior to the anticipated effective date for the transaction until 15 days
after the actual effective date of such transaction; or
(e) the Issuer elects to (i) distribute to all holders of Common Stock
assets, debt securities or rights to purchase securities of the Issuer,
which distribution has a per share value as determined by the Board of
Directors exceeding 15% of the Last Reported Sale Price of a share of
Common Stock on the Trading Day immediately preceding the declaration date
for such distribution, or (ii) distribute to all holders of Common Stock
rights entitling them to purchase, for a period expiring within 60 days
after the date of such distribution, shares of Common Stock at less than
the Last Reported Sale Price of Common Stock on the Trading Day immediately
preceding the declaration date of the
22
distribution. In the case of the foregoing clauses (i) and (ii), the Issuer
must notify the Holders at least 20 Business Days immediately prior to the
ex date for such distribution. Once the Issuer has given such notice,
Holders may surrender their 2023 Notes for conversion at any time
thereafter until the earlier of the close of business on the Business Day
immediately prior to the ex date or the Issuer's announcement that such
distribution will not take place; provided, however, that a Holder may not
exercise this right to convert if the Holder may participate in the
distribution without conversion. As used herein, the term "ex date," when
used with respect to any issuance or distribution, shall mean the first
date on which the Common Stock trades regular way on such exchange or in
such market without the right to receive such issuance or distribution.
If the Issuer engages in certain reclassifications of its Common Stock or
is a party to a consolidation, merger, binding share exchange or transfer of all
or substantially all of its assets pursuant to which Common Stock is converted
into cash, securities or other property, then, at the effective time of the
transaction, the right to convert a 2023 Note into cash and shares of Common
Stock will be changed into a right to convert a 2023 Note into the kind and
amount of cash, securities or other property which the Holder would have
received if the Holder had converted its 2023 Notes immediately prior to the
transaction. If the Issuer engages in any transaction described in the preceding
sentence, the Conversion Rate will not be adjusted. If the transaction also
constitutes a Fundamental Change, a Holder can require the Issuer to purchase
all or a portion of its 2023 Notes as described in the Indenture.
2023 Notes in respect of which a Holder has delivered a notice of exercise
of the option to require the Issuer to purchase such 2023 Notes pursuant to
Article VII or Article XIII of the Indenture may be converted only if the notice
of exercise is withdrawn in accordance with the terms of the Indenture.
The initial Conversion Rate is 93.7137 shares of Common Stock per $1,000
principal amount, subject to adjustment in certain events described in the
Indenture. The Issuer shall deliver cash or a check in lieu of any fractional
share of Common Stock.
Holders of 2023 Notes at the close of business on a Record Date will
receive payment of interest, payable on the corresponding Interest Payment Date
notwithstanding the conversion of such 2023 Notes at any time after the close of
business on such Record Date. 2023 Notes surrendered for conversion by a Holder
during the period from the close of business on any Record Date to the opening
of business on the immediately following Interest Payment Date must be
accompanied by payment of an amount equal to the interest that the Holder is to
receive on the 2023 Notes; provided, however, that no such payment need be made
if (1) the Issuer has specified a redemption date that is after a Record Date
and on or prior to the immediately following Interest Payment Date, (2) the
Issuer has specified a Purchase Date following a Fundamental Change that is
during such period or (3) any overdue interest exists at the time of conversion
with respect to such 2023 Notes to the extent of such overdue interest. The
Holders of the 2023 Notes and any Common Stock issuable upon conversion thereof
will continue to be entitled to receive Additional Amounts in accordance with
the Registration Rights Agreement.
To convert the 2023 Notes a Holder must (i) complete and manually sign the
irrevocable conversion notice on the back of the 2023 Notes (or complete and
manually sign a facsimile of
23
such notice) and deliver such notice to the Conversion Agent at the office
maintained by the Conversion Agent for such purpose, (ii) surrender the 2023
Notes to the Conversion Agent, (iii) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Issuer or the
Trustee and (iv) pay any transfer or similar tax, if required.
A Holder may convert a portion of the 2023 Notes only if the principal
amount of such portion is $1,000 or a multiple of $1,000. No payment or
adjustment shall be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of the 2023 Notes, that portion of accrued and
unpaid interest attributable to the period from the Original Issue Date to the
Conversion Date shall be deemed canceled, extinguished or forfeited rather than
paid in full to the Holder thereof through the delivery of the cash and shares
of Common Stock (together with any cash payment in lieu of fractional shares) in
exchange for the portion of the 2023 Notes being converted pursuant to the terms
hereof; and the Fair Market Value of any such shares of Common Stock (together
with any such cash payment in lieu of fractional shares) shall be treated as
issued, to the extent thereof, first in exchange for interest accrued and unpaid
through the Conversion Date, and the balance, if any, of such Fair Market Value
of such Common Stock (and any such cash payment) shall be treated as issued in
exchange for the principal amount of the 2023 Notes being converted pursuant to
the provisions hereof. Notwithstanding the conversion of any 2023 Notes, the
Holders of the 2023 Notes and any Common Stock issuable upon conversion thereof
will continue to be entitled to receive Additional Amounts in accordance with
the Registration Rights Agreement.
If an Event of Default with respect to this 2023 Note shall occur and be
continuing, the principal of this 2023 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 2023 Note shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of the
Indenture or this 2023 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 2023 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.
24
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this 2023 Note or (ii) certain restrictive covenants and
Events of Default with respect to this 2023 Note, in each case upon compliance
with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of all outstanding 2023 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 2023 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 2023 Note on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this 2023 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 2023 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 2023 Note is registrable in the Security Register,
upon surrender of this 2023 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 2023 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 2023 Notes of this series
and of like tenor, of authorized
25
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The 2023 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, 2023 Notes are
exchangeable for a like aggregate principal amount of 2023 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.
In the event of any redemption or purchase in part, the Issuer shall not be
required to (i) issue, exchange or register the transfer of this 2023 Note for a
period of 15 days next preceding the mailing of the notice of redemption of 2023
Notes or (ii) exchange or register the transfer of any 2023 Note or any portion
thereof selected, called or being called for redemption, except in the case of
any 2023 Note to be redeemed in part, the portion thereof not so to be redeemed.
Prior to due presentment of this 2023 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 2023 Note is registered as the owner hereof for all
purposes, whether or not this 2023 Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Issuer will be responsible for making all calculations called for under
the 2023 Notes. These calculations include, but are not limited to,
determination of the market prices for the Common Stock, the Conversion Value,
the Principal Return, the Net Share Amount, accrued interest payable on the 2023
Notes and Conversion Price of the 2023 Notes. The Issuer will make these
calculations in good faith and, absent manifest error, these calculations will
be final and binding on the Holders. The Issuer will provide to each of the
Trustee and the Conversion Agent a schedule of its calculations, and each of the
Trustee and the Conversion Agent is entitled to rely upon the accuracy of such
calculations without independent verification. The Trustee will forward the
Issuer's calculations to any Holder upon the request of such Holder.
All terms used in this 2023 Note without definition which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
26
FORM OF CONVERSION NOTICE
To: CMS Energy Corporation
The undersigned registered holder of this 2023 Note hereby exercises the
option to convert this 2023 Note, or portion hereof (which is $1,000 principal
amount or an integral multiple thereof) designated below, for cash and shares of
Common Stock of CMS Energy Corporation in accordance with the terms of the
Indenture referred to in this 2023 Note, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for cash
deliverable upon such conversion, and any 2023 Notes representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or any
portion of this 2023 Note not converted are to be issued in the name of a Person
other than the undersigned, the undersigned shall pay all transfer taxes payable
with respect thereto.
This notice shall be deemed to be an irrevocable exercise of the option to
convert this 2023 Note.
Dated:
----------------------------------------
----------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
cash and shares of Common Stock are to
be issued, or 2023 Notes to be
delivered, other than to or in the name
of the registered holder.
----------------------------------------
Signature Guarantee
Fill in for registration of shares if
to be delivered, and 2023 Notes if to
be issued other than to and in the
name of registered holder:
- ------------------------------------- Principal amount to be purchased (if
(Name) less than all):
- -------------------------------------
(Street Address) $______,000
- ------------------------------------- Social Security or other taxpayer number
(City, state and zip code)
Please print name and address
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.
27
J.P. MORGAN TRUST COMPANY, N.A.,
as Trustee
By
-------------------------------------
Authorized Officer
28
ARTICLE III
PURCHASE UPON A FUNDAMENTAL CHANGE
SECTION 3.01. Purchase at the Option of the Holder Upon a Fundamental
Change. If a Fundamental Change shall occur at any time prior to July 15, 2008,
each Holder shall have the right, at such Holder's option, to require the Issuer
to purchase any or all of such Holder's 2023 Notes for cash or a check on the
date that is no earlier than 60 days nor later than 90 days after the date of
the Issuer Notice of the occurrence of such Fundamental Change (subject to
extension to comply with applicable law, as provided in Section 5.04) (the
"Fundamental Change Purchase Date"). The 2023 Notes shall be repurchased in
integral multiples of $1,000 of the principal amount. The Issuer shall purchase
such 2023 Notes at a price (the "Fundamental Change Purchase Price") equal to
100% of the principal amount of the Notes to be purchased plus accrued and
unpaid interest, including Additional Amounts, if any, to the Fundamental Change
Purchase Date. No 2023 Notes may be purchased at the option of the Holders upon
a Fundamental Change if there has occurred and is continuing an Event of Default
(other than an Event of Default that is cured by the payment of the Fundamental
Change Purchase Price of the 2023 Notes).
SECTION 3.02. Notice of Fundamental Change. The Issuer, or at its request
(which must be received by the Paying Agent at least three Business Days (or
such lesser period as agreed to by the Paying Agent) prior to the date the
Paying Agent is requested to give such notice as described below), the Paying
Agent, in the name of and at the expense of the Issuer, shall mail to all
Holders and the Trustee and the Paying Agent an Issuer Notice of the occurrence
of a Fundamental Change and of the purchase right arising as a result thereof,
including the information required by Section 5.01 hereof, on or before the 30th
day after the occurrence of such Fundamental Change.
SECTION 3.03. Exercise of Option. For a 2023 Note to be so purchased at the
option of the Holder, the Paying Agent must receive such 2023 Note duly endorsed
for transfer, together with a written notice of purchase in the form attached
hereto as Exhibit A (a "Fundamental Change Purchase Notice") and the form
entitled "Form of Fundamental Change Purchase Notice" on the reverse thereof
duly completed, on or before the 30th day prior to the occurrence of such
Fundamental Change, subject to extension to comply with applicable law. The
Fundamental Change Purchase Notice shall state:
(a) if certificated, the certificate numbers of the 2023 Notes which the
Holder shall deliver to be purchased, or, if not certificated, the
Fundamental Change Purchase Notice must comply with appropriate Depositary
procedures;
(b) the portion of the principal amount of the 2023 Notes which the Holder
shall deliver to be purchased, which portion must be $1,000 in principal
amount or an integral multiple thereof; and
(c) that such 2023 Notes shall be purchased as of the Fundamental Change
Purchase Date pursuant to the terms and conditions specified in the 2023
Notes and in this Sixteenth Supplemental Indenture.
29
SECTION 3.04. Procedures. The Issuer shall purchase from a Holder, pursuant
to this Article III, 2023 Notes if the principal amount of such 2023 Notes is
$1,000 or a multiple of $1,000 if so requested by such Holder.
Any purchase by the Issuer contemplated pursuant to the provisions of this
Article III shall be consummated by the delivery of the Fundamental Change
Purchase Price to be received by the Holder promptly following the later of the
Fundamental Change Purchase Date or the time of book-entry transfer or delivery
of the 2023 Notes.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Fundamental Change Purchase Notice contemplated by Section
3.03 hereof shall have the right at any time prior to the close of business on
the Business Day prior to the Fundamental Change Purchase Date to withdraw such
Fundamental Change Purchase Notice (in whole or in part) by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section 5.02
hereof.
The Paying Agent shall promptly notify the Issuer of the receipt by it of
any Fundamental Change Purchase Notice or written notice of withdrawal thereof.
On or before 10:00 a.m. (New York City time) on the Fundamental Change
Purchase Date, the Issuer shall deposit with the Paying Agent (or if the Issuer
or an Affiliate of the Issuer is acting as the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the aggregate Fundamental Change Purchase
Price of the 2023 Notes to be purchased pursuant to this Article III. Payment by
the Paying Agent of the Fundamental Change Purchase Price for such 2023 Notes
shall be made promptly following the later of the Fundamental Change Purchase
Date or the time of book-entry transfer or delivery of such 2023 Notes. If the
Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Fundamental Change Purchase Price of such 2023 Notes on
the Business Day following the Fundamental Change Purchase Date, then, on and
after such date, such 2023 Notes shall cease to be outstanding and interest
(including Additional Amounts, if any) on such 2023 Notes shall cease to accrue,
whether or not book-entry transfer of such 2023 Notes is made or such 2023 Notes
are delivered to the Paying Agent, and all other rights of the Holder shall
terminate (other than the right to receive the Fundamental Change Purchase Price
upon delivery or transfer of the 2023 Notes). Nothing herein shall preclude any
withholding tax required by law.
The Issuer shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of the
Fundamental Change Purchase Price and shall notify the Trustee of any default by
the Issuer in making any such payment. If the Issuer or an Affiliate of the
Issuer acts as Paying Agent, it shall segregate the money held by it as Paying
Agent and hold it as a separate trust fund. The Issuer at any time may require a
Paying Agent to deliver all money held by it to the Trustee and to account for
any funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall
have no further liability for the cash delivered to the Trustee.
30
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any 2023 Notes for redemption shall be determined by the
Issuer, whose determination shall be final and binding.
ARTICLE IV
OPTIONAL PURCHASE
SECTION 4.01 Purchase of 2023 Notes by the Issuer at the Option of the
Holder.
(a) On each of July 15, 2008, July 15, 2013 and July 15, 2018 (each, a
"Purchase Date"), Holders shall have the option to require the Issuer to
purchase any 2023 Notes at the Purchase Price specified in the 2023 Notes, upon:
(i) delivery to the Paying Agent by the Holder of a written notice of
purchase in the form attached hereto as Exhibit B (a "Purchase
Notice") at any time from the opening of business on the date that is
20 Business Days prior to a Purchase Date until the close of business
on the fifth Business Day prior to such Purchase Date, stating:
(A) if certificated, the certificate numbers of the 2023 Notes
which the Holder will deliver to be purchased, or, if not
certificated, the Purchase Notice must comply with appropriate
Depositary procedures;
(B) the portion of the principal amount of the 2023 Notes which
the Holder will deliver to be purchased, which portion must be
$1,000 in principal amount or an integral multiple thereof; and
(C) that such 2023 Notes shall be purchased as of the Purchase
Date pursuant to the terms and conditions specified in the 2023
Notes and in this Sixteenth Supplemental Indenture; and
(ii) delivery or book-entry transfer of such 2023 Notes to the Paying
Agent prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such
delivery or transfer being a condition to receipt by the Holder of the
Purchase Price therefor; provided, however, that such Purchase Price
shall be so paid pursuant to this Section 4.01 only if the 2023 Notes
so delivered or transferred to the Paying Agent shall conform in all
respects to the description thereof in the related Purchase Notice.
(b) The Issuer shall purchase from a Holder, pursuant to the terms of this
Section 4.01, 2023 Notes if the principal amount of such 2023 Notes is $1,000 or
a multiple of $1,000 if so requested by such Holder.
(c) Any purchase by the Issuer contemplated pursuant to the provisions of
this Section 4.01 shall be consummated by the delivery of the Purchase Price to
be received by the Holder promptly following the later of the Purchase Date or
the time of book-entry transfer or delivery of the 2023 Notes.
31
(d) Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 4.01 shall
have the right at any time prior to the close of business on the Business Day
prior to the Purchase Date to withdraw such Purchase Notice (in whole or in
part) by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 5.02 hereof.
(e) The Paying Agent shall promptly notify the Issuer of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(f) On or before 10:00 a.m. (New York City time) on the Purchase Date, the
Issuer shall deposit with the Paying Agent (or if the Issuer or an Affiliate of
the Issuer is acting as the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the aggregate Purchase Price of the 2023 Notes to be
purchased pursuant to this Section 4.01. Payment by the Paying Agent of the
Purchase Price for such Notes shall be made promptly following the later of the
Purchase Date or the time of book-entry transfer or delivery of such 2023 Notes.
If the Paying Agent holds, in accordance with the terms of the Indenture, money
sufficient to pay the Purchase Price of such 2023 Notes on the Business Day
following the Purchase Date, then, on and after such date, such 2023 Notes shall
cease to be outstanding and interest (including Additional Amounts, if any) on
such 2023 Notes shall cease to accrue, whether or not book-entry transfer of
such 2023 Notes is made or such 2023 Notes are delivered to the Paying Agent,
and all other rights of the Holder shall terminate (other than the right to
receive the Purchase Price upon delivery or transfer of the 2023 Notes).
(g) The Issuer shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of the
Purchase Price and shall notify the Trustee of any default by the Issuer in
making any such payment. If the Issuer or an Affiliate of the Issuer acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Issuer at any time may require a Paying Agent
to deliver all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no
further liability for the cash delivered to the Trustee.
ARTICLE V
CONDITIONS AND PROCEDURES FOR PURCHASES AT OPTION OF HOLDERS
SECTION 5.01. Notice of Purchase Date or Fundamental Change. The Issuer
shall send notices (each, an "Issuer Notice") to the Holders (and to beneficial
owners as required by applicable law) at their addresses shown in the Security
Register maintained by the Security Registrar, and delivered to the Trustee and
Paying Agent, not less than 20 Business Days prior to each Purchase Date, or on
or before the 30th day after the occurrence of the Fundamental Change, as the
case may be (each such date of delivery, an "Issuer Notice Date"). Each Issuer
Notice shall include a form of Purchase Notice or Fundamental Change Purchase
Notice to be completed by a Holder and shall state:
32
(a) the applicable Purchase Price or Fundamental Change Purchase Price,
excluding accrued and unpaid interest, Conversion Rate at the time of such
notice (and any adjustments to the Conversion Rate) and, to the extent
known at the time of such notice, the amount of interest (including
Additional Amounts, if any), if any, that will be payable with respect to
the 2023 Notes on the applicable Purchase Date or Fundamental Change
Purchase Date;
(b) if the notice relates to a Fundamental Change, the events causing the
Fundamental Change and the date of the Fundamental Change;
(c) the Purchase Date or Fundamental Change Purchase Date;
(d) the last date on which a Holder may exercise its purchase right;
(e) the name and address of the Paying Agent and the Conversion Agent;
(f) that 2023 Notes must be surrendered to the Paying Agent to collect
payment of the Purchase Price or Fundamental Change Purchase Price;
(g) that 2023 Notes as to which a Purchase Notice or Fundamental Change
Purchase Notice has been given may be converted only if the applicable
Purchase Notice or Fundamental Change Purchase Notice has been withdrawn in
accordance with the terms of this Sixteenth Supplemental Indenture;
(h) that the Purchase Price or Fundamental Change Purchase Price for any
2023 Notes as to which a Purchase Notice or a Fundamental Change Purchase
Notice, as applicable, has been given and not withdrawn shall be paid by
the Paying Agent promptly following the later of the Purchase Date or
Fundamental Change Purchase Date, as applicable, or the time of book-entry
transfer or delivery of such 2023 Notes;
(i) the procedures the Holder must follow under Article III or Article IV
hereof, as applicable, and Article V hereof;
(j) briefly, the conversion rights of the 2023 Notes;
(k) that, unless the Issuer defaults in making payment of such Purchase
Price or Fundamental Change Purchase Price on 2023 Notes covered by any
Purchase Notice or Fundamental Change Purchase Notice, as applicable,
interest (including Additional Amounts, if any) will cease to accrue on and
after the Purchase Date or Fundamental Change Purchase Date, as applicable;
(l) the CUSIP or ISIN number of the 2023 Notes; and
(m) the procedures for withdrawing a Purchase Notice or Fundamental Change
Purchase Notice.
In connection with providing such Issuer Notice, the Issuer will issue a
press release and publish a notice containing the information in such Issuer
Notice in a newspaper of general
33
circulation in The City of New York or publish such information on the Issuer's
then existing Web site or through such other public medium as the Issuer may use
at the time.
At the Issuer's request, made at least five Business Days prior to the date
upon which such notice is to be mailed, and at the Issuer's expense, the Paying
Agent shall give the Issuer Notice in the Issuer's name; provided, however,
that, in all cases, the text of the Issuer Notice shall be prepared by the
Issuer.
SECTION 5.02. Effect of Purchase Notice or Fundamental Change Purchase
Notice; Effect of Event of Default. Upon receipt by the Issuer of the Purchase
Notice or Fundamental Change Purchase Notice specified in Section 4.01 or
Section 3.03 hereof, as applicable, the Holder of the 2023 Notes in respect of
which such Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, was given shall (unless such Purchase Notice or Fundamental Change
Purchase Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price or Fundamental
Change Purchase Price with respect to such 2023 Notes. Such Purchase Price or
Fundamental Change Purchase Price shall be paid by the Paying Agent to such
Holder promptly following the later of (x) the Purchase Date or the Fundamental
Change Purchase Date, as the case may be, with respect to such 2023 Notes
(provided the conditions in Section 4.01 or Section 3.03 hereof, as applicable,
have been satisfied) and (y) the time of delivery or book-entry transfer of such
2023 Notes to the Paying Agent by the Holder thereof in the manner required by
Section 4.01 or Section 3.03 hereof, as applicable. 2023 Notes in respect of
which a Purchase Notice or Fundamental Change Purchase Notice, as the case may
be, has been given by the Holder thereof may not be converted for shares of
Common Stock on or after the date of the delivery of such Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, unless such Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has first been
validly withdrawn as specified in the following two paragraphs.
A Purchase Notice or Fundamental Change Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent at any time prior to 5:00 p.m. New York City time on
the Business Day prior to the Purchase Date or the Fundamental Change Purchase
Date, as the case may be, to which it relates specifying:
(a) if certificated, the certificate number of the 2023 Notes in respect of
which such notice of withdrawal is being submitted, or, if not
certificated, the written notice of withdrawal must comply with appropriate
Depositary procedures;
(b) the principal amount of the 2023 Notes with respect to which such
notice of withdrawal is being submitted; and
(c) the principal amount, if any, of such 2023 Notes which remains subject
to the original Purchase Notice or Fundamental Change Purchase Notice, as
the case may be, and which has been or shall be delivered for purchase by
the Issuer.
There shall be no purchase of any 2023 Notes pursuant to Article III or
Article IV hereof if an Event of Default has occurred and is continuing (other
than a default that is cured by the
34
payment of the Purchase Price or Fundamental Change Purchase Price, as the case
may be). The Paying Agent shall promptly return to the respective Holders
thereof any 2023 Notes (x) with respect to which a Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, has been withdrawn in
compliance with this Sixteenth Supplemental Indenture, or (y) held by it during
the continuance of an Event of Default (other than a default that is cured by
the payment of the Purchase Price or Fundamental Change Purchase Price, as the
case may be) in which case, upon such return, the Purchase Notice or Fundamental
Change Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
SECTION 5.03. 2023 Notes Purchased in Part. Any 2023 Notes that are to be
purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Issuer or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Issuer shall execute and the Trustee or the
Authenticating Agent shall authenticate and deliver to the Holder of such 2023
Notes, without service charge, a new 2023 Note or 2023 Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the portion of the principal amount of the 2023 Notes so
surrendered which is not purchased or redeemed.
SECTION 5.04. Covenant to Comply with Securities Laws Upon Purchase of 2023
Notes. In connection with any offer to purchase 2023 Notes under Article III or
Article IV hereof, the Issuer shall, to the extent applicable: (a) comply with
Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange
Act, if applicable; (b) file the related Schedule TO (or any successor schedule,
form or report) under the Exchange Act, if applicable; and (c) otherwise comply
with all applicable federal and state securities laws so as to permit the rights
and obligations under Article III or Article IV hereof to be exercised in the
time and in the manner specified in Article III or Article IV hereof.
SECTION 5.05. Repayment to the Issuer. The Trustee and the Paying Agent
shall return to the Issuer any cash or property that remains unclaimed as
provided in the 2023 Notes, together with interest that the Trustee or Paying
Agent, as the case may be, has agreed to pay, if any, held by them for the
payment of a Purchase Price or Fundamental Change Purchase Price, as the case
may be; provided, however, that to the extent that the aggregate amount of cash
or property deposited by the Issuer pursuant to Section 4.01(f) or Section 3.04
hereof, as applicable, exceeds the aggregate Purchase Price or Fundamental
Change Purchase Price, as the case may be, of the 2023 Notes or portions thereof
which the Issuer is obligated to purchase as of the Purchase Date or Fundamental
Change Purchase Date, as the case may be, then promptly on and after the
Business Day following the Purchase Date or Fundamental Change Purchase Date, as
the case may be, the Trustee and the Paying Agent shall return any such excess
to the Issuer together with interest that the Trustee or Paying Agent, as the
case may be, has agreed to pay, if any.
SECTION 5.06. Officers' Certificate. At least five Business Days before the
Issuer Notice Date, the Issuer shall deliver an Officers' Certificate to the
Trustee (provided, that, at the Issuer's option, the matters to be addressed in
such Officers' Certificate may be divided among two such certificates)
specifying:
(a) the manner of payment selected by the Issuer; and
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(b) whether the Issuer desires the Trustee to give the Issuer Notice
required by Section 5.01 hereof.
ARTICLE VI
CONVERSION OF 2023 NOTES
SECTION 6.01. Right to Convert. A Holder may convert its 2023 Notes for
cash and shares of Common Stock at any time during which the conditions stated
in the 2023 Notes are met. The cash and number of shares of Common Stock
issuable upon conversion of a 2023 Note per $1,000 principal amount (the
"Conversion Rate") shall be that set forth in Section 6.13 hereof, subject to
adjustment as herein set forth. The initial Conversion Rate is 93.7137 shares of
Common Stock issuable upon conversion of a 2023 Note per $1,000 principal
amount.
A Holder may convert a portion of the principal amount of 2023 Notes if the
portion is $1,000 or a multiple of $1,000.
SECTION 6.02. Conversion Procedures. To convert 2023 Notes, a Holder must
satisfy the requirements in this Section 6.02 and in the 2023 Notes. The date on
which the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). Subject to the procedures set forth in Section 6.13 hereof,
as soon as practicable, but in no event later than the fifth Business Day
following the Conversion Date, the Issuer shall deliver the Conversion Value in
cash and deliver the Common Stock by either of the following methods: (i) update
the global security representing the shares of Common Stock to record the
Holder's interest in the Common Stock, or (ii) deliver to the Holder, through
the Conversion Agent, a certificate for the number of full shares of Common
Stock representing Net Shares, if any, together with, in either case, cash or a
check in lieu of any fractional share determined pursuant to Section 6.03
hereof. The Person in whose name the certificate is registered shall be treated
as a stockholder of record on and after the Conversion Date; provided, however,
that no surrender of 2023 Notes on any date when the stock transfer books of the
Issuer shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; such conversion shall be at the Conversion Rate
in effect on the date that such 2023 Notes shall have been surrendered for
conversion, as if the stock transfer books of the Issuer had not been closed.
Upon conversion of 2023 Notes, such Person shall no longer be a Holder of such
2023 Notes.
No payment or adjustment shall be made for dividends on or other
distributions with respect to any Common Stock except as provided in Section
6.06 hereof or as otherwise provided in this Indenture.
On conversion of 2023 Notes, delivery of the Principal Return and the Net
Shares (together with the cash or check payment, if any, in lieu of fractional
shares) will be deemed to satisfy the Issuer's obligation to pay the principal
amount of the converted 2023 Notes as well as accrued interest with respect to
the converted 2023 Notes. Accrued interest on the 2023 Notes
36
shall be deemed canceled, extinguished or forfeited, rather than paid in full.
Notwithstanding conversion of any 2023 Notes, the Holders of the 2023 Notes and
any Common Stock issuable upon conversion thereof will continue to be entitled
to receive Additional Amounts in accordance with the Registration Rights
Agreement.
If a Holder converts more than one 2023 Note at the same time, the amount
of cash and number of shares of Common Stock issuable upon the conversion shall
be based on the total principal amount of the 2023 Notes converted.
Upon surrender of a 2023 Note that is converted in part, the Issuer shall
execute, and the Trustee or the Authenticating Agent shall authenticate and
deliver to the Holder, a new 2023 Note in an authorized denomination equal in
principal amount to the unconverted portion of the 2023 Note surrendered.
If the last day on which 2023 Notes may be converted is a legal holiday in
a place where a Conversion Agent is located, the 2023 Notes may be surrendered
to that Conversion Agent on the next succeeding day that it is not a legal
holiday.
SECTION 6.03. Cash or Check Payments in Lieu of Fractional Shares. The
Issuer shall not issue a fractional share of Common Stock upon conversion of
2023 Notes. Instead the Issuer shall deliver cash (or Issuer's check) for the
current market value of the fractional share. The current market value of a
fractional share shall be determined to the nearest 1/10,000th of a share by
multiplying the Last Reported Sale Price of a full share of Common Stock on the
Trading Day immediately preceding the Conversion Date by the fractional amount
and rounding the product to the nearest whole cent.
SECTION 6.04. Taxes on Conversion. If a Holder converts 2023 Notes, the
Issuer shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any
withholding tax required by law.
SECTION 6.05. Covenants of the Issuer. The Issuer shall, prior to issuance
of any 2023 Notes hereunder, and from time to time as may be necessary, reserve
out of its authorized but unissued Common Stock a sufficient number of shares of
Common Stock to permit the conversion of the 2023 Notes.
All shares of Common Stock delivered upon conversion of the 2023 Notes
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Issuer shall endeavor promptly to comply with all federal and state
securities laws regulating the order and delivery of shares of Common Stock upon
the conversion of 2023 Notes, if any, and shall cause to have listed or quoted
all such shares of Common Stock on each
37
United States national securities exchange or over-the-counter or other domestic
market on which the Common Stock is then listed or quoted.
SECTION 6.06. Adjustments to Conversion Rate. The Conversion Rate shall be
adjusted from time to time, without duplication, as follows:
(a) In case the Issuer shall: (i) pay a dividend, or make a distribution,
exclusively in shares of its capital stock, on the Common Stock; (ii)
subdivide its outstanding Common Stock into a greater number of shares;
(iii) combine its outstanding Common Stock into a smaller number of shares;
or (iv) reclassify its Common Stock, the Conversion Rate in effect
immediately prior to the record date or effective date, as the case may be,
for the adjustment pursuant to this Section 6.06(a) as described below,
shall be adjusted so that the Holder of any 2023 Notes thereafter
surrendered for conversion shall be entitled to receive the cash and number
of shares of Common Stock of the Issuer which such Holder would have owned
or have been entitled to receive after the happening of any of the events
described above had such 2023 Notes been converted immediately prior to
such record date or effective date, as the case may be. An adjustment made
pursuant to this Section 6.06(a) shall become effective immediately after
the applicable record date in the case of a dividend or distribution and
shall become effective immediately after the applicable effective date in
the case of subdivision, combination or reclassification of the Issuer's
Common Stock. If any dividend or distribution of the type described in
clause (i) above is not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared.
(b) In case the Issuer shall issue rights or warrants to all holders of the
Common Stock entitling them (for a period expiring within 60 days after the
date of issuance of such rights or warrants) to subscribe for or purchase
Common Stock at a price per share less than the Market Price per share of
Common Stock on the record date fixed for determination of shareholders
entitled to receive such rights or warrants, the Conversion Rate in effect
immediately after such record date shall be adjusted so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately after such record date by a fraction of which (i) the
numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock offered
for subscription or purchase, and (ii) the denominator shall be the number
of shares of Common Stock outstanding on such record date plus the number
of shares which the aggregate offering price of the total number of shares
so offered would purchase at the Market Price per share of Common Stock on
the earlier of such record date or the Trading Day immediately preceding
the ex date for such issuance of rights or warrants. Such adjustment shall
be made successively whenever any such rights or warrants are issued, and
shall become effective immediately after the opening of business on the day
following the record date for the determination of shareholders entitled to
receive such rights or warrants. To the extent that shares of Common Stock
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. If
38
such rights or warrants are not so issued, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
record date for the determination of shareholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
Stock at less than such Market Price, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken into
account any consideration received by the Issuer for such rights or
warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) In case the Issuer shall, by dividend or otherwise, distribute to all
holders of Common Stock any assets, debt securities or rights or warrants
to purchase any of its securities (excluding (i) any dividend, distribution
or issuance covered by those referred to in Section 6.06(a) or Section
6.06(b) hereof and (ii) any dividend or distribution paid exclusively in
cash) (any of the foregoing hereinafter in this Section 6.06(c) called the
"Distributed Assets or Securities") in an aggregate amount per share of
Common Stock that, combined together with the aggregate amount of any other
such distributions to all holders of its Common Stock made within the 12
months preceding the date of payment of such distribution, and in respect
of which no adjustment pursuant to this Section 6.06(c) has been made,
exceeds 15% of the Market Price on the Trading Day immediately preceding
the declaration of such distribution, then the Conversion Rate shall be
adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on the record date mentioned below by a fraction of which (A) the
numerator shall be the Market Price per share of the Common Stock on the
earlier of such record date or the Trading Day immediately preceding the ex
date for such dividend or distribution, and (B) the denominator shall be
(1) the Market Price per share of the Common Stock on the earlier of such
record date or the Trading Day immediately preceding the ex date for such
dividend or distribution less (2) the Fair Market Value on the earlier of
such record date or the Trading Day immediately preceding the ex date for
such dividend or distribution (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a certificate
filed with the Trustee and the Paying Agent) of the Distributed Assets or
Securities so distributed applicable to one share of Common Stock. Such
adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution;
provided, however, that, if (i) the Fair Market Value of the portion of the
Distributed Assets or Securities so distributed applicable to one share of
Common Stock is equal to or greater than the Market Price of the Common
Stock on the record date for the determination of shareholders entitled to
receive such distribution or (ii) the Market Price of the Common Stock on
the record date for the determination of shareholders entitled to receive
such distribution is greater than the Fair Market Value per share of such
Distributed Assets or Securities by less than $1.00, then, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder
shall have the right to receive upon conversion, in addition to the cash
and shares of Common Stock, the kind and amount of assets, debt securities,
or rights or warrants comprising the Distributed Assets or Securities the
Holder would have received had such Holder converted such 2023 Notes
immediately prior to the record date for the determination of shareholders
entitled to receive such distribution. In the event that such distribution
is not so paid or made, the applicable Conversion Rate shall again be
adjusted
39
to the Conversion Rate which would then be in effect if such distribution
had not been declared.
(d) In case the Issuer shall declare a cash dividend or cash distribution
to all or substantially all of the holders of Common Stock, the Conversion
Rate shall be increased so that the applicable Conversion Rate shall equal
the price determined by multiplying the Conversion Rate in effect
immediately prior to the record date for such dividend or distribution by a
fraction,
(i) the numerator of which shall be the average of the Last Reported
Sale Price of Common Stock for the five consecutive Trading Days
ending on the Trading Day immediately preceding the record date for
such dividend or distribution (the "Pre-Dividend Sale Price"), and
(ii) the denominator of which shall be the Pre-Dividend Sale Price,
minus the full amount of such cash dividend or cash distribution
applicable to one share of Common Stock (the "Dividend Adjustment
Amount"), with
such adjustment to become effective immediately after the record date for
such dividend or distribution; provided that if the denominator of the
foregoing fraction is less than $1.00 (including a negative amount), then
in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder shall have the right to receive upon conversion, in
addition to the cash and Common Stock issuable upon such conversion, the
amount of cash such Holder would have received had such Holder converted
its 2023 Note solely into Common Stock at the then applicable Conversion
Rate immediately prior to the record date for such cash dividend or cash
distribution. If such cash dividend or cash distribution is not so paid or
made, the applicable Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
(e) If a Holder elects to convert 2023 Notes in connection with a corporate
transaction that occurs on or prior to July 15, 2008, that constitutes a
Fundamental Change (other than as described in clause (iv) of the
definition of Fundamental Change) and 10% or more of the Fair Market Value
of the consideration for the Common Stock (as determined by the Board of
Directors, whose determination shall be conclusive evidence of such Fair
Market Value) in the corporate transaction consists of (i) cash, (ii) other
property or (iii) securities that are not traded or scheduled to be traded
immediately following such transaction on a U.S. national securities
exchange or the Nasdaq National Market, then the Conversion Rate for the
2023 Notes surrendered for conversion by such Holder shall be adjusted so
that such Holder will be entitled to receive cash and shares of Common
Stock equal to the sum of (A) the Conversion Value and (B) the number of
additional shares of Common Stock (the "Additional Shares") determined in
the manner set forth below, subject in each case to the Issuer's payment
elections as described in Section 6.13 hereof. For the avoidance of doubt,
the adjustment provided for in this Section 6.06(e) shall only be made with
respect to the 2023 Notes being converted in connection with such
Fundamental Change and shall not be effective as to any 2023 Notes not so
converted.
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The number of Additional Shares will be determined by reference to the
table below, based on the date on which such corporate transaction becomes
effective (the "Effective Date") and the Share Price; provided that if the
Share Price is between two Share Price amounts in the table below or the
Effective Date is between two Effective Dates in the table, the number of
Additional Shares will be determined by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower
Share Price amounts and the two dates, as applicable, based on a 365-day
year.
The Share Prices set forth in the first row of the table below (i.e.,
column headers) will be adjusted as of any date on which the applicable
Conversion Rate of the 2023 Notes is adjusted pursuant to this Section
6.06. The adjusted Share Prices will equal the Share Prices applicable
immediately prior to such adjustment, multiplied by a fraction, the
numerator of which is the Conversion Rate immediately prior to the
adjustment giving rise to the share price adjustment and the denominator of
which is the Conversion Rate as so adjusted.
The following table sets forth the hypothetical Share Price and number
of Additional Shares to be received per $1,000 principal amount of 2023
Notes:
SHARE PRICE
-----------------------------------------------------------------------------------------------------
EFFECTIVE DATE $7.21 $8.00 $9.00 $10.00 $11.00 $12.00 $13.00 $14.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $50.00
- -------------- ----- ----- ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
November 9, 2004 45.0 36.3 28.3 22.6 18.5 15.3 13.0 11.1 9.7 5.6 3.7 2.6 1.9 1.4 0.0
July 15, 2005 45.0 36.4 28.0 22.1 17.9 14.7 12.3 10.5 9.1 5.2 3.5 2.5 1.9 1.4 0.0
July 15, 2006 45.0 35.5 26.7 20.5 16.1 12.9 10.6 8.9 7.6 4.2 2.8 2.0 1.5 1.1 0.0
July 15, 2007 45.0 34.4 24.8 18.2 13.7 10.5 8.3 6.8 5.7 3.1 2.1 1.5 1.2 0.9 0.0
July 15, 2008 44.9 33.1 22.4 15.2 10.6 7.5 5.5 4.3 3.4 1.8 1.3 1.0 0.7 0.6 0.0
The Share Prices and Additional Share amounts set forth above are
based upon an initial Conversion Rate per share of 93.7137 per $1,000
principal amount of 2023 Notes.
If the Share Price is equal to or in excess of $50.00 per share
(subject to adjustment), no Additional Shares will be issued upon
conversion.
If the Share Price is less than $7.21 per share (subject to
adjustment), no Additional Shares will be issued upon conversion.
Notwithstanding the foregoing, any adjustment to the applicable
Conversion Rate relating to the issuance of Additional Shares as described
in this section will not exceed the Maximum Conversion Rate.
(f) Notwithstanding the foregoing, in the case of a Public Acquirer Change
of Control, the Issuer may, in lieu of increasing the applicable Conversion
Rate by Additional Shares as described in Section 6.06(e) hereof, elect to
adjust the applicable Conversion Rate and the related conversion obligation
such that upon conversion the Issuer will deliver cash and a number of
shares of Public Acquirer Common Stock such that by multiplying the
Conversion Rate in effect immediately before the Public Acquirer Change of
Control shall be adjusted by a fraction:
41
(i) the numerator of which will be the average of the Last Reported
Sale Price of the Common Stock for the five consecutive Trading Days
prior to but excluding the effective date of such Public Acquirer
Change of Control; and
(ii) the denominator of which will be the average of the Last Reported
Sale Price of the Public Acquirer Common Stock for the five
consecutive Trading Days commencing on the Trading Day next succeeding
the effective date of such Public Acquirer Change of Control.
A "Public Acquirer Change of Control" means any event described in
Section 6.06(e) hereof that would otherwise obligate the Issuer to increase
the Conversion Rate as described in Section 6.06(e) hereof and the acquirer
(or any entity of which the acquirer is a directly or indirectly
wholly-owned Subsidiary and such entity provides a guarantee to the new
2023 Notes) has a class of common stock traded on a U.S. national
securities exchange or quoted on the Nasdaq National Market or which will
be so traded or quoted when issued or exchanged in connection with such
event (the "Public Acquirer Common Stock").
After the adjustment of the applicable Conversion Rate in connection
with a Public Acquirer Change of Control, the applicable Conversion Rate
will be subject to further similar adjustments in the event that any of the
events described in this Section 6.06 occur thereafter.
The Issuer is required to notify Holders of its election in writing of
such transaction which notice shall be made five Business Days prior to the
effective date of such Public Acquirer Change of Control. In addition, the
Holder can also, subject to certain conditions, require the Company to
repurchase all or a portion of its 2023 Notes as described under Article
III.
(g) With respect to Section 6.06(c) hereof, in the event that the Issuer
makes any distribution to all holders of Common Stock consisting of Equity
Interests in a Subsidiary or other business unit of the Issuer, the
Conversion Rate shall be adjusted so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive such
distribution by a fraction of which (i) the numerator shall be (x) the
Spin-off Market Price per share of the Common Stock on such record date
plus (y) the Spin-off Market Price per Equity Interest of the Subsidiary or
other business unit of the Issuer on such record date and (ii) the
denominator shall be the Spin-off Market Price per share of the Common
Stock on such record date, such adjustment to become effective 10 Trading
Days after the effective date of such distribution of Equity Interests in a
Subsidiary or other business unit of the Issuer.
(h) Upon conversion of the 2023 Notes, the Holders shall receive, in
addition to the cash and Common Stock issuable upon such conversion, the
rights issued under any future shareholder rights plan the Issuer
implements (notwithstanding the occurrence of an event causing such rights
to separate from the Common Stock at or prior to the time of conversion)
unless, prior to conversion, the rights have expired, terminated or been
42
redeemed or exchanged in accordance with such rights plan. If, and only if,
the Holders of 2023 Notes receive rights under such shareholder rights
plans as described in the preceding sentence upon conversion of their 2023
Notes, then no other adjustment pursuant to this Section 6.06 shall be made
in connection with such shareholder rights plans.
(i) For purposes of this Section 6.06, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of
the Issuer but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Issuer shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Issuer.
(j) Notwithstanding the foregoing, in no event shall the Conversion Rate
exceed the maximum conversion rate specified under this Section 6.06(j)
(the "Maximum Conversion Rate") as a result of an adjustment pursuant to
Sections 6.06(c), 6.06(d) and 6.06(e). The Maximum Conversion Rate shall
initially be 138.6963 and shall be appropriately adjusted from time to time
for any stock dividends on or subdivisions or combinations of the Common
Stock. The Maximum Conversion Rate shall not apply to any adjustments made
pursuant to any of the events in Section 6.06(a) or Section 6.06(b) hereof.
SECTION 6.07. Calculation Methodology. No adjustment in the Conversion
Price need be made unless the adjustment would require an increase or decrease
of at least 1% in the Conversion Price then in effect, provided that any
adjustment that would otherwise be required to be made shall be carried forward
and taken into account in any subsequent adjustment. Except as stated in this
Article VI, the Conversion Rate will not be adjusted for the issuance of Common
Stock or any securities convertible into or exchangeable for Common Stock or
carrying the right to purchase any of the foregoing. Any adjustments that are
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under Article V and Section 6.06 hereof and this
Section 6.07 shall be made to the nearest cent or to the nearest 1/10,000th of a
share, as the case may be.
SECTION 6.08. When No Adjustment Required. No adjustment to the Conversion
Rate need be made:
(a) upon the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the reinvestment of dividends or interest
payable on securities of the Issuer and the investment of additional
optional amounts in shares of Common Stock under any plan;
(b) upon the issuance of any shares of Common Stock or options or rights to
purchase those shares pursuant to any present or future employee, director
or consultant benefit plan or program of or assumed by the Issuer or any of
its Subsidiaries;
(c) upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right, or exercisable, exchangeable or convertible security not
described in clause (b) above and outstanding as of the date of this
Sixteenth Supplemental Indenture;
43
(d) for a change in the par value or no par value of the Common Stock;
(e) for accrued and unpaid interest (including Additional Amounts, if any);
or
(f) if Holders are to participate in a merger or consolidation on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common
Stock participate in the transaction; provided that the basis on which the
Holders are to participate in the transaction shall not be deemed to be
fair if it would require the conversion of Securities at any time prior to
the expiration of the conversion period specified for such Securities.
To the extent the 2023 Notes become convertible into cash, assets, or
property (other than capital stock of the Issuer or securities to which Section
6.12 hereof applies), no adjustment shall be made thereafter as to the cash,
assets or property. Interest shall not accrue on such cash.
SECTION 6.09. Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Issuer shall promptly mail to Holders a notice of the adjustment.
The Issuer shall file with the Trustee and the Conversion Agent such notice. The
certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.
SECTION 6.10. Voluntary Increase. The Issuer may make such increases in the
Conversion Rate, in addition to those required by Section 6.06 hereof, as the
Board of Directors considers to be advisable to avoid or diminish any income tax
to holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. To the extent permitted by applicable
law, the Issuer may from time to time increase the Conversion Rate by any
amount, temporarily or otherwise, for any period of at least 20 days if the
increase is irrevocable during the period and the Board of Directors shall have
made a determination that such increase would be in the best interests of the
Issuer, which determination shall be conclusive. Whenever the Conversion Rate is
so increased, the Issuer shall mail to Holders and file with the Trustee and the
Conversion Agent a notice of such increase. Neither the Trustee nor any
Conversion Agent shall be under any duty or responsibility with respect to any
such notice except to exhibit the same to any holder desiring inspection
thereof. The Issuer shall mail the notice at least 15 days before the date the
increased Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it shall be in effect.
SECTION 6.11. Notice to Holders Prior to Certain Actions. In case:
(a) the Issuer shall declare a dividend (or any other distribution) on its
Common Stock that would require an adjustment in the Conversion Rate
pursuant to Section 6.06 hereof;
(b) the Issuer shall authorize the granting to all or substantially all the
holders of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants;
44
(c) of any reclassification or reorganization of the Common Stock of the
Issuer (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from
no par value to par value), or of any consolidation or merger to which the
Issuer is a party and for which approval of any shareholders of the Issuer
is required, or of the sale or transfer of all or substantially all of the
assets of the Issuer; or
(d) of the voluntary or involuntary dissolution, liquidation or winding-up
of the Issuer,
the Issuer shall cause to be filed with the Trustee and to be mailed to
each Holder at its address appearing on the Security Register, as promptly
as possible but in any event at least 15 days prior to the applicable date
hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of such dividend, distribution or rights or
warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend,
distribution, or rights or warrants are to be determined or (y) the date on
which such reclassification, reorganization, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, reorganization, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up.
SECTION 6.12. Effect of Reclassification, Consolidation, Merger, Binding
Share Exchange or Sale. If any of the following events occur, namely: (a) any
reclassification or change of outstanding shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination); (b) any
consolidation, merger, combination or binding share exchange of the Issuer with
another Person as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock; or (c) any sale or conveyance
of the properties and assets of the Issuer as, or substantially as, an entirety
to any other Person as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Issuer or
the successor or purchasing Person, as the case may be, shall execute with the
Trustee a supplemental indenture to the Indenture, providing that each 2023 Note
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, binding share
exchange, sale or conveyance by a holder of a number of shares of Common Stock
issuable upon conversion of such 2023 Note immediately prior to such
reclassification, change, consolidation, merger, combination, binding share
exchange, sale or conveyance. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6.12.
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The Issuer shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at its address appearing on the Security
Register, within 20 days after execution thereof. Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.
The above provisions of this Section 6.12 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
binding share exchanges, sales and conveyances.
If this Section 6.12 applies to any event or occurrence, Section 6.06
hereof shall not apply.
SECTION 6.13 Conversion Value of 2023 Notes Tendered.
(a) Subject to certain exceptions described in Sections 2.04(b) and
2.04(e), Holders tendering the 2023 Notes for conversion shall be entitled to
receive, upon conversion of such 2023 Notes, cash and shares of Common Stock,
the value of which (the "Conversion Value") shall be equal to the product of:
(i) (A) the aggregate principal amount of 2023 Notes to be converted
divided by 1,000 multiplied by (B) the then applicable Conversion
Rate; and
(ii) the average of the Common Stock prices for the ten consecutive
Trading Days (appropriately adjusted to take into account the
occurrence during such period of stock splits, stock dividends and
similar events) beginning on the second Trading Day immediately
following the day the 2023 Notes are tendered for conversion (the "Ten
Day Average Closing Stock Price").
(b) Subject to certain exceptions described below and under Sections
2.04(b) and 2.04(e), the Issuer shall deliver the Conversion Value to converting
Holders as follows:
(i) an amount in cash (the "Principal Return") equal to the lesser of
(a) the Conversion Value of the 2023 Notes to be converted and (b) the
aggregate principal amount of the 2023 Notes to be converted;
(ii) if the Conversion Value of the 2023 Notes to be converted is
greater than the Principal Return, an amount in whole shares (the "Net
Shares"), determined as set forth below, equal to such aggregate
Conversion Value less the Principal Return (the "Net Share Amount");
and
(iii) an amount paid in cash, determined as set forth below, in lieu
of any fractional shares of Common Stock.
The number of Net Shares to be paid shall be determined by dividing the Net
Share Amount by the Ten Day Average Closing Stock Price. Holders of 2023 Notes
will not receive fractional shares upon conversion of 2023 Notes. In lieu of
fractional shares, Holders will receive cash for the value of the fractional
shares, which cash payment shall be based on the Ten Day Average Closing Stock
Price.
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The Conversion Value, Principal Return, number of Net Shares and Net Share
Amount shall be determined by the Issuer at the end of the ten consecutive
Trading Day period beginning on the second Trading Day immediately following the
day the 2023 Notes are tendered for conversion (the "Determination Date").
The Issuer shall pay the Principal Return and cash for fractional shares
and deliver the Net Shares, if any, as promptly as practicable after the
Determination Date, but in no event later than five Business Days thereafter.
Except as provided in Section 2.04, delivery of the Principal Return, Net Shares
and cash in lieu of fractional shares shall be deemed to satisfy the Issuer's
obligation to pay the principal amount of a converted 2023 Note including
accrued but unpaid interest (including Additional Amounts, if any) thereon. Any
accrued and unpaid interest (including Additional Amounts, if any) payable on a
converted 2023 Note shall be deemed canceled, extinguished or forfeited rather
than paid in full.
(c) Neither the Trustee nor the Conversion Agent has any duty to determine
or calculate the Conversion Value, Principal Return, number of Net Shares, the
Net Share Amount or any other computation required under this Section 6.13, all
of which shall be determined by the Issuer (or the Trustee, as the case may be)
in accordance with the provisions of this Indenture, and the Trustee and
Conversion Agent shall not be under any responsibility to determine the
correctness of any such determinations and/or calculations and may conclusively
rely on the correctness thereof.
SECTION 6.14. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder to either calculate the Conversion Rate or determine whether any
facts exist which may require any adjustment of the Conversion Rate, or with
respect to the nature or extent or calculation of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same and shall be protected in
relying upon an Officers' Certificate with respect to the same. The Trustee and
any other Conversion Agent shall not be accountable with respect to the validity
or value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon the
conversion of any 2023 Notes and the Trustee and any other Conversion Agent make
no representations with respect thereto. Subject to the provisions of Article
Six of the Original Indenture, neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Issuer to issue, transfer or deliver
any shares of Common Stock or stock certificates or other securities or property
or cash upon the surrender of any 2023 Notes for the purpose of conversion or to
comply with any of the duties, responsibilities or covenants of the Issuer
contained in this Section 6.14. Without limiting the generality of the
foregoing, neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Article VI hereof relating
either to the kind or amount of shares of stock or securities or property
(including cash) receivable by Holders upon the conversion of their 2023 Notes
after any event referred to in such Section 6.12 or to any adjustment to be made
with respect thereto, but, subject to the provisions of Article Six of the
Original Indenture, may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Issuer shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
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SECTION 6.15. Simultaneous Adjustments. In the event that Section 6.06
hereof requires adjustments to the Conversion Rate under more than one of
Section 6.06(a), Section 6.06(b), Section 6.06(c) or Section 6.06(d) hereof, and
the Record Dates for the distributions giving rise to such adjustments shall
occur on the same date, then such adjustments shall be made by applying, first,
the provisions of Section 6.06(c) hereof, second, the provisions of Section
6.06(a) hereof and third, the provisions of Section 6.06(b) hereof; provided,
however, that nothing in this Section 6.15 shall be done to evade the principle
set forth in Section 6.06(j) hereof that the Maximum Conversion Rate shall not
apply to any adjustments made with respect to any of the events in Section
6.06(a) or Section 6.06(b) hereof.
SECTION 6.16. Successive Adjustments. After an adjustment to the Conversion
Rate under Section 6.06 hereof, any subsequent event requiring an adjustment
under Section 6.06 shall cause an adjustment to the Conversion Rate as so
adjusted.
SECTION 6.17. General Considerations. Whenever successive adjustments to
the Conversion Rate are called for pursuant to this Article VI, such adjustments
shall be made to the Market Price as may be necessary or appropriate to
effectuate the intent of this Article VI and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
SECTION 6.18. Issuer Determination Final. Any determination which the Board
of Directors must make pursuant to this Article VI shall be conclusive and
binding on the Holders.
SECTION 6.19. Conversion Provisions. Pursuant to Section 2.3(f)(10) of the
Original Indenture, the obligation of the Issuer to permit the conversion of the
2023 Notes into Common Stock and the terms and conditions upon which such
conversion shall be effected set forth in this Sixteenth Supplemental Indenture
are in addition to and in lieu of those provisions set forth in Article Thirteen
of the Original Indenture relative to such obligation.
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ARTICLE VII
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2023 NOTES
SECTION 7.01. Existence. So long as any of the 2023 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 7.02. Limitation on Certain Liens. (a) So long as any of the 2023
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 7.02 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 2023 Notes shall (so long as any such other creditor shall be so secured) be
equally and ratably secured (along with any other creditor similarly entitled to
be secured) by a direct Lien on all property subject to such Lien, provided,
however, that the foregoing restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or levies to the
extent not past due;
(ii) pledges or deposits to secure (A) obligations under workmen's
compensation laws or similar legislation, (B) statutory obligations of the
Issuer or (C) Support Obligations;
(iii) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the
ordinary course of business securing obligations which are not overdue or
which have been fully bonded and are being contested in good faith;
(iv) purchase money Liens upon or in property acquired and held by the
Issuer in the ordinary course of business to secure the purchase price of
such property or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of any such property to be subject to such Liens,
or Liens existing on any such property at the time of acquisition, or
extensions, renewals or replacements of any of the foregoing for the same
or a lesser amount, provided that no such Lien shall extend to or cover any
property other than the property being acquired and no such extension,
renewal or replacement shall extend to or cover property not theretofore
subject to the Lien being extended, renewed or replaced, and provided,
further, that the aggregate principal amount of the Indebtedness at any one
time outstanding secured by Liens permitted by this clause (iv) shall not
exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of this
Section 7.02 securing Indebtedness of the Issuer; provided that on the date
such Liens are created, and
49
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 7.03. Limitation on Consolidation, Merger, Sale or Conveyance. So
long as any of the 2023 Notes are outstanding and until the 2023 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 7.03,
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 7.04 hereof.
SECTION 7.04. Limitation on Consolidated Indebtedness.
(a) So long as any of the 2023 Notes are outstanding and until the 2023
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 7.04, 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.
(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;
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(2) Indebtedness (other than Indebtedness described in Section
7.04(b)(1) hereof) outstanding on the date of this Sixteenth
Supplemental Indenture, as set forth on Schedule 7.04(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 2023 Notes, the Indebtedness is
subordinated to the 2023 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 7.04(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 7.04(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 2023 Notes, the Indebtedness so
issued is subordinated to the 2023 Notes in right of payment;
(5) Indebtedness of a Restricted Subsidiary issued in exchange for, or
the proceeds of which are used to refund or refinance, Indebtedness of
a Restricted Subsidiary issued in accordance with Section 7.04(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
51
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 ERM 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 7.05. Limitation on Restricted Payments.
(a) So long as the 2023 Notes are outstanding and until the 2023 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 7.05,
the Issuer shall not, and shall not permit any Restricted Subsidiary of the
Issuer, directly or indirectly, to (i) declare or pay any dividend or make any
distribution on the Capital Stock of the Issuer to the direct or indirect
holders of its Capital Stock (except dividends or distributions payable solely
in its Non-Convertible Capital Stock or in options, warrants or other rights to
purchase such Non-Convertible Capital Stock and except dividends or
distributions payable to the Issuer or a Subsidiary), (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Issuer or (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity or scheduled repayment thereof, any Subordinated
Indebtedness (any such dividend, distribution, purchase, redemption, repurchase,
defeasing, other acquisition or retirement being 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
52
(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 7.05(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;
(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 7.05; 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 7.06. Limitation on Asset Sales. So long as any of the 2023 Notes
are outstanding, the Issuer may not sell, transfer or otherwise dispose of any
property or assets of the
53
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 2023
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 2023 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 2023 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 2023 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
2023 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 5.01
herein with respect to a Fundamental Change.
ARTICLE VIII
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2023 NOTES
SECTION 8.01. 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 2023 Notes.
SECTION 8.02. Amendments to Section 5.1 of the Original Indenture. Solely
for the purpose of determining Events of Default with respect to the 2023 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.
SECTION 8.03. Additional Events of Default. Solely for the purpose of
determining Events of Default with respect to the 2023 Notes, an Event of
Default shall also include the following:
(i) default in the payment of any interest upon any 2023 Note, including
Additional Amounts, if any, when it becomes due and payable, and continuance of
such default for 30 days;
(ii) default in the Issuer's obligation to redeem the 2023 Notes after
exercising its redemption option pursuant to Article XIII hereof;
(iii) default in the Issuer's obligation to convert the 2023 Notes upon exercise
of a Holder's conversion right in accordance with the terms of the 2023 Notes
and Article VI hereof; and
(iv) default in the Issuer's obligation to purchase 2023 Notes upon the
occurrence of a Fundamental Change or the exercise by a Holder of its option to
require the Issuer to repurchase
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such Holder's 2023 Notes in accordance with the terms of Article III or Article
IV hereof, as applicable.
ARTICLE IX
GLOBAL NOTES
The 2023 Notes will be issued initially in the form of Global Notes.
"Global Note" means a registered 2023 Note evidencing one or more 2023 Notes
issued to a depositary (the "Depositary") or its nominee, in accordance with
this Article IX and bearing the legend prescribed in this Article IX. One or
more Global Notes will represent all 2023 Notes. The Issuer shall execute and
the Trustee shall, in accordance with this Article IX and the Issuer Order with
respect to the 2023 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 2023 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 2023 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 2023 Notes in definitive form, a Global
Note representing one or more 2023 Notes may not be transferred except as a
whole by the Depositary, to a nominee of such Depository 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 2023 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2023 Notes is unwilling or unable to
continue as Depositary for the 2023 Notes, the Issuer shall appoint a successor
Depositary with respect to the 2023 Notes. If a successor Depositary for the
2023 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 2023 Notes,
will authenticate and deliver 2023 Notes in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Global
Notes representing such 2023 Notes in exchange for such Global Note or Global
Notes.
The Issuer may at any time and in its sole discretion determine that the
2023 Notes issued in the form of one or more Global Notes shall no longer be
represented by such Global Note or
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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
2023 Notes, will authenticate and deliver 2023 Notes in definitive form in an
aggregate principal amount equal to the principal amount of the Global Note or
Global Notes representing such 2023 Notes in exchange for such Global Note or
Global Notes.
The Depositary for such 2023 Notes may surrender a Global Note or Global
Notes for such 2023 Notes in exchange in whole or in part for 2023 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 2023 Note or 2023
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 2023 Notes in definitive form
delivered to Holders thereof.
In any exchange provided for in this Article IX, the Issuer will execute
and the Trustee will authenticate and deliver 2023 Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for 2023 Notes in definitive form, such
Global Note shall be cancelled by the Trustee. 2023 Notes in definitive form
issued in exchange for a Global Note pursuant to this Article IX shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Note, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or Security Registrar. The
Trustee shall deliver such 2023 Notes to the Persons in whose names such 2023
Notes are so registered.
ARTICLE X
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture shall be
applicable to the 2023 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 VII and Article XIII of this Sixteenth Supplemental
Indenture with respect to the 2023 Notes.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
This Sixteenth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Sixteenth Supplemental Indenture, the
Original Indenture is in all respects ratified, approved and confirmed, and the
Original Indenture and this Sixteenth Supplemental Indenture shall together
constitute one and the same instrument.
ARTICLE XII
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 2023 Notes set forth
herein), with respect to the 2023 Notes, no amendment or supplemental indenture
to the Indenture shall, without the consent of the Holder of each 2023 Note
affected thereby:
(a) reduce the Redemption Price, Purchase Price or Fundamental Change Purchase
Price of the 2023 Notes;
(b) change the terms applicable to redemption or purchase of the 2023 Notes in a
manner adverse to the Holder; or
(c) alter the manner of calculation or rate of Additional Amounts payable on any
2023 Note or extend the time for payment of any such amount.
In addition, with respect to the 2023 Notes, notwithstanding Section 5.10 of the
Original Indenture, approval of the Holders of each outstanding 2023 Note shall
be required to:
(a) waive any default by the Issuer in any payment of the Redemption Price,
Purchase Price or Fundamental Change Purchase Price with respect to any 2023
Notes; or
(b) waive any default which constitutes a failure to convert any 2023 Note in
accordance with its terms and the terms of Article VI hereof.
The reference to "interest" in Section 5.10(i) of the Original Indenture shall
include Additional Amounts, if any.
ARTICLE XIII
OPTIONAL REDEMPTION OF THE 2023 NOTES
SECTION 13.01. Right to Redeem; Notice to Trustee, Paying Agent and
Holders. On or after July 15, 2008, the Issuer may, at its option, redeem the
2023 Notes in whole, or in part, at any time in accordance with the provisions
of the 2023 Notes. If the Issuer elects to redeem 2023 Notes pursuant to the
provisions of the 2023 Notes, it shall notify in writing the Trustee,
57
the Paying Agent and each Holder of 2023 Notes to be redeemed, as provided in
Section 11.2 of the Indenture and Section 13.04 hereof.
SECTION 13.02. Fewer Than All Outstanding 2023 Notes to Be Redeemed. If
fewer than all of the outstanding 2023 Notes are to be redeemed, the Trustee
shall select the 2023 Notes to be redeemed in principal amounts of $1,000 or
integral multiples thereof. In the case that the Trustee shall select the 2023
Notes to be redeemed, the Trustee may effectuate such selection by lot, pro
rata, or by any other method that the Trustee considers fair and appropriate.
The Trustee will make such selection promptly following receipt of the notice of
redemption from the Issuer provided pursuant to Section 13.04 hereof.
SECTION 13.03. Selection of 2023 Notes to Be Redeemed. If any 2023 Notes
selected for partial redemption are thereafter surrendered for conversion in
part before termination of the conversion right with respect to the portion of
the 2023 Notes so selected, the converted portion of such 2023 Notes shall be
deemed (so far as may be), solely for purposes of determining the aggregate
principal amount of 2023 Notes to be redeemed by the Issuer, to be the portion
selected for redemption. 2023 Notes which have been converted during a selection
of 2023 Notes to be redeemed may be treated by the Trustee as outstanding for
the purpose of such selection. Nothing in this Section 13.03 shall affect the
right of any Holder to convert any 2023 Notes pursuant to Article VI hereof
before the termination of the conversion right with respect thereto.
SECTION 13.04. Notice of Redemption. In addition to those matters set forth
in Section 11.2 of the Indenture, a notice of redemption sent to Holders of 2023
Notes shall state:
(a) the then current Conversion Rate;
(b) the name and address of the Paying Agent and the Conversion Agent;
(c) that the 2023 Notes called for redemption may be converted at any time
before the close of business on the Business Day immediately preceding the
redemption date; and
(d) that Holders who wish to convert 2023 Notes must comply with the
procedures provided in the 2023 Notes.
SECTION 13.05. Effect of Notice of Redemption. Once notice of redemption is
mailed, 2023 Notes called for redemption become due and payable on the
redemption date and at the Redemption Price, except for 2023 Notes that are
converted in accordance with the provisions of Article VI hereof and the
provisions of the 2023 Notes. Upon presentation and surrender to the Paying
Agent, 2023 Notes called for redemption shall be paid at the Redemption Price.
SECTION 13.06. Deposit of Redemption Price. On or before 10:00 a.m. (New
York City time) on the redemption date, the Issuer shall deposit with the Paying
Agent (or if the Issuer or an Affiliate of the Issuer is acting as the Paying
Agent, shall segregate and hold in trust) an amount of money sufficient to pay
the aggregate Redemption Price of all the 2023 Notes to be redeemed on that date
other than the 2023 Notes or portions thereof called for redemption which on or
prior thereto have been delivered by the Issuer to the Security Registrar for
cancellation or
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have been converted. The Trustee and Paying Agent shall, as promptly as
practicable, return to the Issuer any money not required for that purpose
because of conversion of the 2023 Notes in accordance with the provisions of
Article VI hereof. If such money is then held by the Issuer or a Subsidiary in
trust and is not required for such purpose, it shall be discharged from such
trust.
TESTIMONIUM
This Sixteenth 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 Sixteenth
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
- -------------------------------------
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
Schedule 7.04(b)(2)
- See Attached -
EXHIBIT A
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: CMS Energy Corporation
The undersigned registered holder of this 2023 Note hereby acknowledges
receipt of a notice from CMS Energy Corporation (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repurchase this 2023 Note, or the portion hereof (which
is $1,000 principal amount or a integral multiple thereof) designated below, in
accordance with the terms of the Sixteenth Supplemental Indenture referred to in
this 2023 Note and directs that the check of the Company, in payment for this
2023 Note or the portion thereof and any 2023 Notes representing any
un-repurchased principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
any portion of this 2023 Note not repurchased is to be issued in the name of a
Person other than the undersigned, the undersigned shall pay all transfer taxes
payable with respect thereto.
Dated:
----------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
cash or 2023 Notes are to be delivered,
other than to or in the name of the
registered holder.
----------------------------------------
Signature Guarantee
Fill in for registration of 2023 Notes if to be issued other than to and in the
name of registered holder:
- -------------------------------------
(Name)
- -------------------------------------
(Street Address)
- -------------------------------------
(City, state and zip code)
Please print name and address
Principal amount to be purchased (if
less than all): $______,000
Social Security or other taxpayer
number
EXHIBIT B
FORM OF PURCHASE NOTICE
To: CMS Energy Corporation
The undersigned registered holder of this 2023 Note hereby acknowledges
receipt of a notice from CMS Energy Corporation (the "Company") as to the
holder's option to require the Company to repurchase this 2023 Note and requests
and instructs the Company to repurchase this 2023 Note, or the portion hereof
(which is $1,000 principal amount or an integral multiple thereof) designated
below, in accordance with the terms of the Sixteenth Supplemental Indenture
referred to in this 2023 Note and directs that the check of the Company in
payment for this 2023 Note or the portion thereof and any 2023 Notes
representing any un-repurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this 2023 Note not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.
Dated:
----------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a
member firm of a major stock exchange if
cash or 2023 Notes are to be delivered,
other than to or in the name of the
registered holder.
----------------------------------------
Signature Guarantee
Fill in for registration of 2023 Notes if to be issued other than to and in the
name of registered holder:
- -------------------------------------
(Name)
- -------------------------------------
(Street Address)
- -------------------------------------
(City, state and zip code)
Please print name and address
Principal amount to be purchased (if
less than all): $______,000
Social Security or other taxpayer
number