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FORM 8-K
CURRENT REPORT
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 18, 1997
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification No
1-9513 CMS ENERGY CORPORATION 38-2726431
(A Michigan Corporation)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9261
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ITEM 5. OTHER EVENTS.
On June 20, 1997, CMS Energy Corporation (the "Corporation") entered into
an Indenture dated as of June 1, 1997 and a First Supplemental Indenture
dated as of June 20, 1997 between CMS Energy Corporation and The Bank of
New York , as Trustee, pursuant to which the Corporation sold $177,835,100
aggregate principal amount of convertible subordinated debentures (the
"Debentures"). The Debentures were sold to an affiliated trust,
CMS Energy Trust I, which issued $172,500,000 of 7-3/4% convertible
quarterly income preferred securities pursuant to the terms of a Placement
Agreement dated as of June 18, 1997. Such Indenture, First Supplemental
Indenture and Placement Agreement are attached hereto as exhibits to this
Current Report on Form 8-K and are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(1) Placement Agreement dated June 18, 1997 among CMS Energy Trust I;
CMS Energy Corporation; Franklin Income Fund, Franklin Utilities
Fund, Franklin Valuemark Utility Equity Fund, Franklin Valuemark
Income Securities Fund, Franklin Global Utilities Fund, Franklin
Equity Income Fund, Franklin AGE High Income Fund, Franklin Multi-
Income Trust, Franklin Universal Trust, Franklin Convertible
Securities Fund; Goldman Sachs & Company; Merrill Lynch, Pierce,
Fenner & Smith Incorporated; and Morgan Stanley & Co., as
Representatives of the several Agents named in Schedule II thereto.
(4a) Indenture dated as of June 1, 1997 between CMS Energy Corporation and
The Bank of New York, as Trustee.
(4b) First Supplemental Indenture dated as of June 20, 1997 between
CMS Energy Corporation and The Bank of New York, as Trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by
the undersigned hereunto duly authorized.
CMS ENERGY CORPORATION
Dated: July 01, 1997 By: /s/ A. M. Wright
-------------------------------
Alan M. Wright
Senior Vice President,
Chief Financial Officer
and Treasurer
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EXHIBIT INDEX
Exhibit
Number
(1) Placement Agreement dated June 18, 1997 among CMS Energy Trust I;
CMS Energy Corporation; Franklin Income Fund, Franklin Utilities
Fund, Franklin Valuemark Utility Equity Fund, Franklin Valuemark
Income Securities Fund, Franklin Global Utilities Fund, Franklin
Equity Income Fund, Franklin AGE High Income Fund, Franklin Multi-
Income Trust, Franklin Universal Trust, Franklin Convertible
Securities Fund; Goldman Sachs & Company; Merrill Lynch, Pierce,
Fenner & Smith Incorporated; and Morgan Stanley & Co., as
Representatives of the several Agents named in Schedule II thereto.
(4a) Indenture dated as of June 1, 1997 between CMS Energy Corporation and
The Bank of New York, as Trustee.
(4b) First Supplemental Indenture dated as of June 20, 1997 between
CMS Energy Corporation and The Bank of New York, as Trustee.
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Exhibit (1)
CMS ENERGY TRUST I
7 % Convertible Quarterly Income Preferred Securities
(Convertible QUIPS (SM)*)
(liquidation amount $50 per preferred security)
fully and unconditionally guaranteed by,
and convertible into, common stock, $.01 par value, of
CMS ENERGY CORPORATION
________________________________
Placement Agreement
June 18, 1997
Franklin Income Fund
Franklin Utilities Fund
Franklin Valuemark Utility Equity Fund
Franklin Valuemark Income Securities Fund
Franklin Global Utilities Fund
Franklin Equity Income Fund
Franklin AGE High Income Fund
Franklin Multi-Income Trust
Franklin Universal Trust
Franklin Convertible Securities Fund
777 Mariners Island Boulevard
San Mateo, California 94404
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated,
As Representatives of the several Agents named in Schedule II hereto
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
CMS Energy Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), and CMS Energy Corporation, a
Michigan corporation, as sponsor of the Trust and as guarantor
___________________________
*QUIPS is a servicemark of Goldman, Sachs & Co.<PAGE>
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(the "Company"), propose that the Trust, subject to the terms and
conditions stated herein, issue and sell to the firms named in Schedule I
hereto (the "Purchasers") an aggregate of 3,450,000 of 7 % Convertible
Quarterly Income Preferred Securities (liquidation amount $50 per
preferred security)(the "Securities"), representing undivided beneficial
interests in the assets of the Trust, guaranteed on a subordinated basis
by the Company as to the payment of distributions, and as to payments on
liquidation or redemption, to the extent set forth in a guarantee
agreement (the "Guarantee") between the Company and The Bank of New York,
as trustee (the "Guarantee Trustee") and convertible into common stock,
$.01 par value per share ("Common Stock"), of the Company. The firms
named in Schedule II hereto (the "Agents") are acting, severally and not
jointly, as placement agents in connection with the public offering
contemplated by this Agreement, and each Agent shall be responsible for
placing that number of Securities set forth opposite the name of such
Agent in such Schedule. The firms designated as representatives of the
Agents are referred to collectively as the "Representatives." The Trust is
to purchase, with the proceeds from the sale of its Common Securities
(liquidation amount $50 per common security) (the "Common Securities") and
the sale of the Securities, 7 % Convertible Subordinated Debentures due
July 15, 2027 (the "Debentures") of the Company, to be issued pursuant to
a Subordinated Debt Indenture (the "Indenture") between the Company and
The Bank of New York, as trustee (the "Debenture Trustee").
The Company will be the holder of 100% of the Common Securities. The
Trust will be subject to the terms of an Amended and Restated Trust
Agreement (the "Trust Agreement"), among the Company and the trustees of
the Trust (the "CMS Trustees"), including The Bank of New York, as
property trustee (the "Property Trustee").
1. Each of the Trust and the Company represents and warrants to,
and agrees with, each of the Agents and each of the Purchasers that:
(a) A registration statement on Form S-3 (Registration
No. 333-27849) (the "Initial Registration Statement") in respect
of the Securities, the Debentures, the Guarantee and the Common
Stock issuable upon the conversion or exchange of the Securities
and/or Debentures has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but
including all documents incorporated by reference in the
prospectus included therein, to the Representatives for each of
the other Agents have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been
filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act each in the form
heretofore delivered to the Representatives); no stop order
suspending the effectiveness of the Initial Registration Statement
is in effect and no proceedings for such purposes are pending
before or, to the knowledge of the Company, threatened by the
Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to
Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the registration statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as
amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, the
Debentures, the Guarantee and the Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures, in
the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this
Agreement, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act,
as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to
the Prospectus as amended or supplemented in relation to the
Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
4(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Agent
or through the Representatives on behalf of any Agent expressly
for use in the Prospectus as amended or supplemented relating to
such Securities or to any statements in or omissions from that
part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust
Indenture Act (as defined herein) of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee;
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed
(or, if an amendment with respect to any such document was filed,
when such amendment was filed) with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated
thereunder, and any further documents so filed and incorporated by
reference will, when they are filed with the Commission, conform
in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission promulgated
thereunder; none of such documents, when filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and
no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading;
(d) There has not been any material and adverse change in
the business, properties or financial condition of the Company and
its Subsidiaries (as defined in Rule 405 under the Act, and
hereinafter called the "Subsidiaries"), taken as a whole, from
that set forth in the Registration Statement (other than changes
referred to in or contemplated by the Registration Statement or
the Prospectus);
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Michigan and has all requisite authority to own or lease
its properties and conduct its business as described in the
Prospectus and to consummate the transactions contemplated hereby,
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business as
described in the Prospectus or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
Subsidiaries, taken as a whole; each significant subsidiary (as
defined in Rule 405 under the Act, and hereinafter called a
"Significant Subsidiary") of the Company has been duly organized
and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has all
requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business as described in the Prospectus
or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole; and
the Company has the requisite power and authority to authorize the
offering of the Debentures, the Guarantee and the Common Stock
issuable upon the conversion or exchange of the Securities and/or
the Debentures, to exercise, deliver and perform this Agreement,
and to issue, sell and deliver the Debentures, the Guarantee and
the Common Stock issuable upon the conversion or exchange of the
Securities and/or the Debentures;
(f) The shares of Common Stock of the Company issued and
outstanding prior to the issuance of the Securities have been duly
authorized and are validly issued, fully paid and non-assessable;
the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures have been duly
authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities
and/or the Indenture, will be validly issued, fully paid and
non-assessable; the issuance of the Common Stock upon the
conversion or exchange of the Securities and/or the Debentures
will not be subject to preemptive or other similar rights;
(g) The Securities have been duly and validly authorized
by the Trust, and, when the Securities are issued and delivered,
such Securities will be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the Securities will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of
the Securities is not subject to any preemptive or other similar
rights; the Securities will have the rights set forth in the Trust
Agreement, and the terms of the Securities are valid and binding
on the Trust;
(h) The Common Securities have been duly and validly
authorized by the Trust and upon delivery by the Trust to the
Company against payment therefor as described in the Prospectus,
will be duly and validly issued undivided beneficial interests in
the assets of the Trust and will conform in all material respects
to the description thereof contained in the Prospectus; the
issuance of the Common Securities is not subject to preemptive or
other similar rights; at the Time of Delivery (as defined in
Section 3 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company free
and clear of any security interest, mortgage, pledge, claim, lien
or encumbrance (each, a "Lien"); and the Common Securities and the
Securities are the only interests authorized to be issued by the
Trust;
(i) Except for the outstanding shares of preferred stock
of Consumers Power Company and the 8.36% Trust Originated
Preferred Securities of Consumers Power Company Financing I, all
of the outstanding capital stock of each of Consumers Energy
Company and CMS Enterprises Company is owned directly or
indirectly by the Company, free and clear of any Lien, and there
are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock
or other equity interest in any of Consumers Energy Company and
CMS Enterprises Company or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance
of any such capital stock, any such convertible or exchangeable
securities or any such rights, warrants or options;
(j) The capital stock of the Company, including the
Common Stock, conforms in all material respects to the description
thereof in the Prospectus;
(k) Each of the Company and its Significant Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure
to obtain or file would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
(l) No order, license, consent, authorization or approval
of, or exemption by, or the giving of notice to, or the
registration with any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is
now required to be obtained by the Company to authorize its
execution or delivery of, or the performance of its obligations
under, this Agreement, except such as have been obtained or may be
required under state securities or Blue Sky laws or as referred to
in the Prospectus in connection with the purchase and distribution
of the Securities, the Guarantee and the Debentures;
(m) The execution and delivery of this Agreement by the
Trust, the compliance by the Trust with all of the provisions of
this Agreement, the issuance and sale of the Securities and the
Common Securities by the Trust, the purchase of the Debentures by
the Trust, the distribution of the Debentures by the Trust in the
circumstances contemplated by the Trust Agreement, the performance
of this Agreement and the consummation of the transactions
contemplated by this Agreement and by the Trust Agreement did not
and will not conflict with, result in a breach of any of the terms
or provisions of, or constitute a default or require the consent
of any party under the Trust Agreement, any material terms or
provisions of any material agreement or instrument to which the
Trust is a party, any existing material applicable law, rule or
regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Trust or any of its properties or assets, or did or will
result in the creation or imposition of any Lien on the Company's
properties or assets;
(n) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all of the provisions
of this Agreement, the issuance and sale of the Securities and the
Common Securities by the Trust, the sale of the Debentures by the
Company to the Trust, the issuance by the Company of the
Guarantee, the execution, delivery and performance by the Company
of the Guarantor Agreements (as defined below), the issuance by
the Company of the Common Stock upon the conversion or exchange of
the Securities and/or the Debentures, the distribution of the
Debentures by the Trust in the circumstances contemplated by the
Trust Agreement, the performance of this Agreement and the
consummation of the transactions contemplated by this Agreement
and the Guarantor Agreements did not and will not conflict with,
result in a breach of any of the terms or provisions of, or
constitute a default or require the consent of any party under the
Company's Articles of Incorporation or by-laws, any material terms
or provisions of any material agreement or instrument to which the
Company is a party, any existing material applicable law, rule or
regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or assets, or did or
will result in the creation or imposition of any Lien on the
Company's properties or assets;
(o) Except as disclosed in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in
equity or otherwise) pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary by any
governmental authority that (i) questions the validity,
enforceability or performance of this Agreement or the Securities
or (ii) if determined adversely, is likely to have a material
adverse effect on the business or financial condition of the
Company and its Subsidiaries, taken as a whole, or materially
adversely affect the ability of the Company to perform its
obligations hereunder or the consummation of the transactions
contemplated by this Agreement;
(p) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture,
mortgage, loan agreement, lease or other material agreement or
instrument to which the Company or any of its Significant
Subsidiaries is a party or by which it or any of its Significant
Subsidiaries, or any of their respective properties, may be bound;
(q) Neither the Company, the Trust nor any of the
Subsidiaries is and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust is not required to be
registered under the Investment Company Act;
(r) The shares of Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures
have been approved for listing on the New York Stock Exchange,
subject to notice of issuance;
(s) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Business Trust Act of the State of Delaware (the "Delaware
Business Trust Act") with the trust power and authority to own
property and conduct its business as described in the Prospectus,
and has conducted and will conduct no business other than the
transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement
or instrument other than this Agreement, the Trust Agreement
between the Company and the CMS Trustees named therein and the
agreements and instruments contemplated by the Trust Agreement and
described in the Prospectus; based on expected operations and
current law, the Trust is not and will not be classified as an
association taxable as a corporation for United States federal
income tax purposes; and, to the knowledge of each of the Company
and the Trust, the Trust is not a party to or subject to any
action, suit or proceeding of any nature;
(t) The Guarantee, the Debentures, the Trust Agreement
and the Indenture (collectively, the "Guarantor Agreements") have
each been duly authorized and when validly executed and delivered
by the Company and, in the case of the Guarantee, by the Guarantee
Trustee and, in the case of the Trust Agreement, by the
CMS Trustees and, in the case of the Indenture, by the Debenture
Trustee, and, in the case of the Debentures, when validly
authenticated and delivered by the Debenture Trustee and, in the
case of the Guarantee, upon due execution, authentication and
delivery of the Debentures and upon payment therefor, will
constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity); the Debentures are entitled to the benefits of the
Indenture; the Indenture has been duly qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act"); and
(u) Each of the Preferred Securities, Guarantee,
Debentures and the relationship among each of them will conform in
all material respects to the description thereof contained in the
Prospectus.
2. Subject to the terms and conditions herein set forth, the
Trust and the Company agree that the Trust shall issue and sell to each of
the Purchasers, and each of the Purchasers agrees, jointly and severally,
to purchase from the Trust, at a purchase price per share of $50 per
Security, the number of Securities set forth opposite the name of such
Purchaser in Schedule I hereto.
As compensation to the Agents for their acting, severally
and not jointly, as placement agents hereunder, and in view of the fact
that the proceeds of the sale of the Securities will be used by the Trust
to purchase the Debentures of the Company, the Company at the Time of
Delivery will pay to Goldman, Sachs & Co., for the accounts of the several
Agents, an amount equal to $0.75 per Security for the Securities to be
delivered by the Company hereunder at the Time of Delivery.
3. (a) The Securities to be purchased by each Purchaser shall
be delivered by or on behalf of the Trust to such Purchaser, through the
facilities of The Depository Trust Company ("DTC"), for the account of
such Purchaser, against payment by or on behalf of such Purchaser of the
purchase price therefor by certified or official bank check or checks,
payable to the order of the Trust in federal or other immediately
available funds. The Trust will cause the certificates representing the
Securities to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) at the
office of DTC or its designated custodian (the "Designated Office"). The
Securities to be purchased by each Purchaser hereunder will be represented
by one or more definitive global Securities in book-entry form which will
be deposited by or on behalf of the Trust with the DTC or its designated
custodian. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on June 20, 1997 or such other time and date as
Goldman, Sachs & Co., the Purchasers, the Trust and the Company may agree
upon in writing. Such time and date are herein called the "Time of
Delivery".
At the Time of Delivery, the Company will pay, or cause to
be paid, the commission
payable at the Time of Delivery to the Agents under Section 2 hereof in
immediately available funds.
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 6 hereof,
including the cross-receipt for the Securities, will be delivered at such
time and date at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
919 Third Avenue, New York, New York 10022-3897 (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at the
Time of Delivery. A meeting will be held at the Closing Location prior to
the Time of Delivery, at which meeting the final drafts of the documents
to be delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 3, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
4. The Trust and the Company, jointly and severally, agree with
each of the Agents and each of the Purchasers:
(a) To prepare the Prospectus as amended and supplemented
in relation to the Securities in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable,
such earlier time as may be required by Rule 424(b); prior to the Time of
Delivery, to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented unless the
Company has furnished the Representatives and counsel to the Agents with a
copy for their review and comment a reasonable time prior to filing and
has reasonably considered any comments of the Representatives, and to make
no such amendment or supplement to which such counsel shall reasonably
object on legal grounds in writing, after consultation with the
Representatives; to timely file all reports and any definitive proxy or
information statements required to be filed by the Trust or the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities, the
Debentures or the shares of Common Stock, if any, issuable upon the
conversion or exchange of the Securities and/or the Debentures for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from time
to time during the period of time (not exceeding nine months) after the
date of the Prospectus when a Prospectus is required to be delivered under
the Act to furnish the Agents in New York City with copies of the
Prospectus as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time after the expiration of nine months in
connection with the offering or sale of the Securities, the Debentures or
the shares of Common Stock, if any, issuable upon the conversion or
exchange of the Securities and/or the Debentures and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act or the Exchange Act, to prepare and file such document and to furnish
without charge to each Agent as many copies as the Representatives may
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(c) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act;
(d) To make generally available to the Company's
securityholders, as soon as practicable but in any event not later than
eighteen months after the effective date of the Registration Statement, an
"earning statement" (which need not be audited by independent public
accountants) covering a twelve-month period commencing after the effective
date of the Registration Statement and ending not later than 15 months
thereafter, which shall comply in all material respects with the
provisions of Section 11(a) of the Act and Rule 158 under the Act);
(e) To use its best efforts to qualify the Securities,
the Debentures, the Guarantee and the shares of Common Stock issuable upon
conversion or exchange of the Securities and/or the Debentures for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representatives may designate, to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the
Securities, and to pay (or cause to be paid), or reimburse (or cause to be
reimbursed) the Agents and their counsel for, reasonable filing fees and
expenses in connection therewith (including the reasonable fees and
disbursements of counsel to the Agents and filing fees and expenses paid
and incurred prior to the date hereof), provided, however, that the
Company shall not be required to qualify to do business as a foreign
corporation or as a securities dealer or to file a general consent to
service of process or to file annual reports or to comply with any other
requirements deemed by the Company to be unduly burdensome;
(f) During the period beginning from the date hereof and
continuing for a period of 90 days after the issuance of the Securities,
not to offer, sell, contract to sell or otherwise dispose of (i) any
Securities or any preferred stock or any other securities of the Company
which are substantially similar to the Securities, including any guarantee
of such securities, or any securities convertible into or exchangeable for
or representing the right to receive any of the foregoing securities, or
(ii) any shares of any class of Common Stock of the Company, other than
shares of Common Stock issuable upon conversion of the Securities or
pursuant to the Company's Stock Purchase Plan, Performance Incentive Stock
Plan, Employee Stock Ownership Plan and Employee Savings and Incentive
Plan, without the prior written consent of the Representatives;
(g) To issue the Guarantee concurrently with the issuance
and sale of the Securities as contemplated herein;
(h) To use the net proceeds received by it from the sale
of the Securities in the case of the Trust, and the Debentures, in the
case of the Company, pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or, if the Securities are exchanged for
Debentures, Debentures on the New York Stock Exchange; and
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligation to issue shares of its Common Stock upon
the conversion or exchange of the Securities and/or the Debentures.
5. The Company covenants and agrees with the several Agents and
the several Purchasers that the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Trust's and the
Company's counsel and accountants in connection with the registration of
the Securities and the shares of Common Stock issuable upon conversion of
the Securities and/or the Debentures and all other expenses in connection
with the preparation, printing and filing of the Registration Statement,
any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to
the Agents and dealers and the Purchasers; (ii) the cost of any delivery
to the Agents and the Purchasers of any Blue Sky Memorandum; (iii) all
expenses in connection with the qualification of the Securities, the
Debentures and the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures for offering and sale
under state securities laws as provided in Section 4(e) hereof, including
the fees and disbursements of counsel for the Agents in connection with
such qualification and in connection with the Blue Sky survey(s) up to an
aggregate amount not to exceed $5,000; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
certificates for the Securities and the Debentures; (vi) the fees and
expenses of the CMS Trustees, the Debenture Trustee and the Guarantee
Trustee and any other agent thereof and the fees and disbursements of
their counsel (it being understood that as among the Company and the Trust
and such trustees, such fees and expenses shall not exceed $5,000);
(vii) the cost and charges of any transfer agent or registrar or dividend
disbursing agent; and (viii) all other reasonable costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Section 8 hereof,
the Agents and the Purchasers will pay all of their own costs and
expenses, including, without limitation, the fees of their counsel.
6. The obligations of the Agents, in the discretion of the
Representatives, and the obligations of the Purchasers, shall be subject
to the condition that all representations and warranties and other
statements of the Trust and the Company herein are, at and as of the Time
of Delivery, true and correct, the condition that the Trust and the
Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 4(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission
shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Agents, shall have furnished to the Representatives such
written opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated the Time of Delivery, with
respect to the incorporation of the Company and the formation of
the Trust, insofar as the federal laws of the United States and
the laws of the State of New York or the General Corporation Law
of the State of Delaware or the Delaware Business Trust Act are
concerned, the validity of the Securities, the Debentures, the
Guarantee and the Prospectus, as well as such other related
matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Michael D. Van Hemert, Assistant General Counsel to
the Company, shall have furnished to the Representatives his
written opinion or opinions (a draft of each such opinion is
attached as Annex II(b) hereto), dated the Time of Delivery, in
form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company is a duly organized and validly
existing corporation in good standing under the laws of
Michigan, with power and authority (corporate and other)
to own its properties and conduct its business as
described in the Prospectus, as amended and supplemented;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, as amended or
supplemented, and all of the issued shares of capital
stock of the Company (including the Securities) have been
duly and validly authorized and issued and are fully paid
and non-assessable; the Common Stock initially issuable
upon conversion of the Debentures has been duly authorized
and reserved for issuance by the Company upon such
conversion and, if and when issued upon conversion of the
Debentures in accordance with the terms of the Indenture,
such Common Stock will be validly issued, fully paid and
nonassessable; and no holder thereof will be subject to
personal liability solely by reason of being such a
holder; and the Common Stock will conform to the
description of the Common Stock contained in the
Prospectus in all material respects; and the issuance of
such Common Stock is not subject to any preemptive or
other similar rights;
(iii) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which
any property of the Company or any of its Subsidiaries is
the subject which, if determined adversely to the Company
or any of its Subsidiaries, would in the aggregate have a
material adverse effect on the current or future
consolidated financial position, securityholders' equity
or results of operations of the Company and its
Subsidiaries; and to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) This Agreement has been duly authorized,
executed and delivered by the Company;
(v) To the best knowledge of such counsel, there
are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments or
sale or Liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital
stock of, or other ownership interest in, any Significant
Subsidiary;
(vi) The issuance and sale of the Securities
being delivered at the Time of Delivery, the compliance by
the Company with all the provisions of this Agreement and
the consummation of the transactions contemplated herein,
the issuance and sale of the Securities and the Common
Securities by the Trust, the sale of the Debentures by the
Company to the Trust, the issuance by the Company of the
Guarantee, the execution, delivery and performance by the
Company of the Guarantor Agreements, the issuance by the
Company of the Common Stock upon the conversion or
exchange of the Securities and/or the Debentures, the
distribution of the Debentures by the Trust in the
circumsstances contemplated by the Trust Agreement and the
performance of this Agreement and the consummation of the
transactions contemplated by this Agreement and the
Guarantor Agreements will not conflict with or result in a
breach or violation of any of the material terms or
provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to
which the Company or any of its Subsidiaries is a party or
by which the Company is bound or to which any of the
property or assets of the Company or any of its
Subsidiaries is subject (except for such breaches or
violations or defaults that would not have a material
adverse effect on the business, property or financial
condition of the Trust or of the Company and its
Subsidiaries, taken as a whole), nor will such action
result in any violation of the provisions of the Articles
of Incorporation or by-laws of the Company or any statute
or any currently existing order, rule or regulation known
to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
Subsidiaries or any of its properties (other than the
securities or Blue Sky laws of the various states, as to
which such counsel need express no opinion);
(vii) No consent, approval, authorization,
order, registration or qualification of or with any such
court or governmental agency or body is required for the
issuance and sale of the Securities or the consummation by
the Company of the transactions contemplated herein,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities
or Blue Sky laws (as to which such counsel need express no
opinion) in connection with the purchase and distribution
of the Securities;
(viii) Neither the Company nor any of its
Significant Subsidiaries is in violation of its respective
charters or bylaws or in default in the performance or
observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of
its properties may be bound, except for such violations or
defaults the existence of which would not have a material
adverse effect on the Company and its Subsidiaries, taken
as a whole;
(ix) The statements made in the Prospectus under
the captions "Description of the Preferred Securities",
"Description of the Guarantee", "Description of the
Debentures", and "Relationship Among the Preferred
Securities, the Debenture and the Guarantee", insofar as
such statements constitute summaries of legal matters or
documents referred to therein, are accurate in all
material respects; the Securities, the Debentures, the
Guarantee, the Trust Agreement, the Indenture and the
Common Securities conform as to legal matters to the
description thereof and to the statements in regard
thereto contained in the Registration Statement and the
Prospectus;
(x) The Company is not an "investment company"
within the meaning of the Investment Company Act. The
Trust is not required to be registered under the
Investment Company Act;
(xi) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the
operating statistics, financial statements, notes,
auditors' reports and related schedules therein, and any
other financial or statistical data included or
incorporated by reference therein, as to which such
counsel need express no opinion), when they became
effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe
that any of such documents, when they became effective or
were so filed, as the case may be, contained, in the case
of a registration statement which became effective under
the Act, an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made when such documents were so filed, not
misleading;
(xii) The Registration Statement and the
Prospectus as amended or supplemented, and any further
amendments and supplements thereto made by the Company
prior to the Time of Delivery (other than the operating
statistics, financial statements, notes, auditors' reports
and related schedules and any other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no
opinion), comply as to form in all material respects with
the requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility
for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in
subsection (ix) of this Section 6(c), they have no reason
to believe that, as of its effective date, the
Registration Statement or any further amendment thereto
made by the Company prior to the Time of Delivery (other
than the operating statistics, financial statements,
notes, auditors' reports and related schedules and any
other financial or statistical data included or
incorporated by reference therein, as to which such
counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or
any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the
operating statistics, financial statements, notes,
auditors' reports and related schedules and any other
financial or statistical data included or incorporated by
reference therein, as to which such counsel need express
no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of
the Time of Delivery, either the Registration Statement or
the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior
to the Time of Delivery (other than the operating
statistics, financial statements, notes, auditors' reports
and related schedules and any other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of
any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to
be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed
or incorporated by reference or described as required;
(xiii) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except
to the extent that (a) enforcement thereof may be limited
by (i) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law) and (b) the waiver of
usury contained in Section 5.13 of the Base Indenture may
be unenforceable;
(xiv) The Debentures have been duly
authorized for issuance by the Company and, when
authenticated by the Debenture Trustee in accordance with
the terms of the Indenture, will be validly issued by the
Company and will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with
their terms, except to the extent that (a) enforcement
thereof may be limited by (i) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and (b) the waiver of
usury contained in Section 5.13 of the Base Indenture may
be unenforceable;
(xv) The Trust Agreement has been duly
authorized, executed and delivered by the Company, and
constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may
be limited by (a) bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(xvi) The Guarantee has been duly authorized,
executed and delivered by the Company, and constitutes a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law) ; and
(xvii) To the best of such counsel's
knowledge, the Trust is not a party to or bound by any
agreement or instrument other than this Agreement, the
Trust Agreement and the agreements and instruments
contemplated by the Trust Agreement and described in the
Prospectus; and to the best of such counsel's knowledge,
there are no legal or governmental proceedings pending to
which the Trust is a party or of which any property of the
Trust is the subject and no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
The foregoing opinions may be limited to the laws of
Delaware, Michigan and the federal law of the United States. In giving
such opinion, such counsel may rely, as to matters of Delaware law, upon
the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special Delaware
counsel to the Trust and the Company, in which case the opinion shall
state that such counsel believes that you and he are entitled to so rely.
(d) Skadden, Arps, Slate, Meagher & Flom LLP, special tax
counsel to the Trust and the Company, shall have furnished to the
Representatives such opinion or opinions (a draft of each such
opinion is attached as Annex II(c) hereto), dated the Time of
Delivery, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Trust will be classified as a grantor
trust and not as an association taxable as a corporation;
and
(ii) The discussion set forth in the Prospectus
under the captions "Risk Factors -- Option to Extend
Interest Payment Period; Tax Consequences" and "--
Proposed Tax Legislation" and "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the
matters addressed therein, based upon the assumptions
stated or referred to therein.
(e) Skadden, Arps, Slate, Meagher & Flom LLP, special
Delaware counsel to the Trust and the Company, shall have
furnished to the Representatives, the Company and the Trust their
written opinion or opinions (a draft of each such opinion is
attached as Annex II(d) hereto), dated the Time of Delivery, in
form and substance satisfactory to the Representatives, to the
effect that:
(i) This Agreement has been duly authorized,
executed and delivered by the Trust;
(ii) The Trust has been duly created and is
validly existing in good standing as a business trust
under the Delaware Business Trust Act and has the business
trust power and authority to conduct its business as
described in the Registration Statement and the
Prospectus;
(iii) The Trust Agreement has been duly
authorized, executed and delivered by each of the Company
and the Trust, and constitutes a valid and binding
agreement of each of the Company and the Trust,
enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
(a) bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless
of whether enforcement is considered in a proceeding in
equity or at law);
(iv) Under the Delaware Business Trust Act and
the Trust Agreement, the Trust has the power and authority
to (a) execute and deliver, and to perform its obligations
pursuant to, this Agreement, and (b) issue and perform its
obligations under the Securities and Common Securities;
(v) The execution and delivery by the Trust of
this Agreement, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all
necessary action on the part of the Trust;.
(vi) The Securities have been duly
authorized for issuance by the Trust and, when executed
and authenticated by the Property Trustee in accordance
with the terms of the Trust Agreement and delivered and
paid for in accordance with this Agreement, will be fully
paid and non-assessable undivided beneficial interests in
the assets of the Trust and will entitle the holders
thereof to the benefits of this Agreement except to the
extent that enforcement of the Trust Agreement may be
limited by (a) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless
of whether enforcement is considered in a proceeding in
equity or at law); and the holders of the Securities will
be entitled to the same limitation of personal liability
extended to stockholders of private corporations for
profit organized under the General Corporation Law of the
State of Delaware, except that the holders of Securities
may be obligated, pursuant to the Trust Agreement, to make
payments, including (i) to provide indemnity and/or
security in connection with and pay taxes or governmental
charges arising from transfers of the Securities and
(ii) to provide security and indemnity in connection with
requests of or directions to the Property Trustee to
exercise its rights and powers under the Trust Agreement;
the issuance of the Securities is not subject to
preemptive or other similar rights under the Delaware
Business Trust Act or the Trust Agreement;
(vii) The Common Securities have been duly
authorized for issuance by the Trust and, when executed
and authenticated by the Property Trustee in accordance
with the terms of the Trust Agreement and delivered and
paid in accordance with the Common Securities Purchase
Agreement, dated as of June 20, 1997, between the Company
and the Trust, will be validly issued, undivided
beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not subject to
preemptive or other similar rights under the Delaware
Business Trust Act or the Trust Agreement;
(viii) None of the execution and delivery by
the Trust of, or the performance by the Trust of its
obligations under, this Agreement, or the issuance and
sale of the Securities by the Trust in accordance with the
terms of this Agreement or the consummation of the other
transactions contemplated hereby, will contravene any
provision of applicable law or the Trust Agreement or any
agreement or other instrument governed by the laws of the
State of Delaware binding upon the Trust as set forth in
the Trust's certificate, or any judgment, order or decree
applicable to the Trust as set forth in the Trust's
certificate, of any governmental authority; and
(ix) No governmental approval is required for
the issuance and sale of the Securities and the Common
Securities by the Trust pursuant to this Agreement or the
consummation of the other transactions contemplated
hereby, except such as have been obtained and made.
(f) On the date of the Prospectus and also at the Time of
Delivery, the independent accountants of the Company who have
certified the financial statements of the Company and its
consolidated Subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to the
Representatives a letter, dated as of such date, (i) confirming
that they are independent public accountants within the meaning of
the Act and the applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their opinion the
financial statements examined by them and included or incorporated
by reference in the Registration Statement complied as to form in
all material respects with the applicable accounting requirements
of the Commission, including applicable published rules and
regulations of the Commission, and (iii) covering, as of a date
not more than five business days prior to the date of such letter,
such other matters as the Representatives reasonably request;
(g) That, between the date of the execution of this
Agreement and the Time of Delivery, no material and adverse change
shall have occurred in the business, properties or financial
condition of the Company and its Subsidiaries, taken as a whole,
which, in the judgment of the Representatives, impairs the
marketability of the Securities (other than changes referred to in
or contemplated by the Registration Statement or Prospectus);
(h) That, between the date of the execution of this
Agreement and the Time of Delivery, there has been no downgrading
of the investment ratings of the Company's debt securities or
preferred stock by Standard & Poor's Corporation, Moody's
Investors Service, Inc. or Duff & Phelps Credit Rating Co., and
the Company shall not have been placed on "credit watch" or
"credit review" with negative implications by any of such
statistical rating organizattions if any of such occurrences
shall, in the judgment of the Representatives, after reasonable
inquiries on the part of the Representatives, impair the
marketability of the Securities;
(i) The Trust Agreement, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form
reasonably satisfactory to the Representatives;
(j) The shares of Common Stock issuable upon the
conversion or exchange of the Securities and/or Debentures shall
have been duly listed, subject to notice of issuance, on the New
York Stock Exchange;
(k) The Company shall have complied with the provisions
of Section 4(b) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date
of this Agreement; and
(l) The Trust and the Company shall have furnished or
caused to be furnished to the Representatives at the Time of
Delivery certificates of officers of the Trust and the Company to
the effect that to the best of such person's knowledge,
information and belief (i) there has been no material adverse
change in the business, properties or financial condition of the
Company and its Subsidiaries, taken as a whole or the Trust from
that set forth in the Registration Statement or Prospectus (other
than changes referred to in or contemplated by the Registration
Statement or Prospectus), (ii) the representations and warranties
of the Trust and the Company herein at and as of the Time of
Delivery are true and correct, (iii) the Trust and the Company
have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Time of
Delivery, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the Commission.
7. The obligations of the Company and the Trust shall be
subject, in the discretion of the Company and the Trust, to the condition
that the Registration Statement shall be effective under the Act and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings therefor initiated or
threatened by the Commission.
8. (a) The Trust and the Company, jointly and severally, will,
to the extent permitted by law, indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to
which such Agent may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each Agent for any legal or other expenses reasonably incurred
by such Agent in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
neither the Trust nor the Company shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust and the Company
by any Agent through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities or with
any statements in or omissions from that part of the Registration
Statement that shall constitute the Statements of Eligibility and
Qualification under the Trust Indenture Act of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee, and except that this indemnity
shall not inure to the benefit of any Agent (or any person controlling
such Agent) on account of any losses, claims, damages, liabilities or
actions, suits or proceedings arising from the sale of the Securities to
any person if a copy of the Prospectus, as the same may then be
supplemented or amended (excluding, however, any document then
incorporated or deemed incorporated therein by reference), was not sent or
given by or on behalf of such Agent to such person (i) with or prior to
the written confirmation of sale involved or (ii) as soon as available
after such written confirmation, relating to an event occurring prior to
the payment for and delivery to such person of the Securities involved in
such sale, and the omission or alleged omission or untrue statement or
alleged untrue statement was corrected in the Prospectus as supplemented
or amended at such time.
(b) Each Agent, severally and not jointly, will indemnify and
hold harmless the Trust and the Company against any losses, claims,
damages or liabilities to which the Trust and the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust and the Company
by such Agent through the Representatives expressly for use therein; and
will reimburse the Trust and the Company for any legal or other expenses
reasonably incurred by the Trust and the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened against
any person as to which indemnity may be sought under subsection (a) or
(b), such person (the "Indemnified Person") shall notify the person
against whom such indemnity may be sought (the "Indemnifying Person"),
promptly after any assertion of such claim threatening to institute an
action, suit or proceeding or if such an action, suit or proceeding is
commenced against such Indemnified Person, promptly after such Indemnified
Person shall have been served with a summons or other first legal process,
giving information as to the nature and basis of the claim. Failure to so
notify the Indemnifying Person shall not, however, relieve the
Indemnifying Person from any liability which it may have on account of the
indemnity under subsection (a) or (b) if the Indemnifying Person has not
been prejudiced in any material respect by such failure. Subject to the
immediately succeeding sentence, the Indemnifying Person shall assume the
defense of any such litigation or proceeding, including the employment of
counsel and the payment of all expenses, with such counsel being
designated, subject to the immediately succeeding sentence, in writing by
the Representatives in the case of parties indemnified pursuant to
subsection (b) and by the Company in the case of parties indemnified
pursuant to subsection (a). Any Indemnified Person shall have the right
to participate in such litigation or proceeding and to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include (x) the Indemnifying Person and (y) the
Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and expenses of
counsel (including disbursements) for such Indemnified Person shall be
reimbursed by the Indemnifying Person to the Indemnified Person. If there
is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing
separate counsel whose fees and expenses have been reimbursed by the
Indemnifying Person and the Indemnified Persons, or any of them, are found
to be solely liable, such Indemnified Persons shall repay to the
Indemnifying Person such fees and expenses of such separate counsel as the
Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same jurisdiction
as to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses for more than one separate firm (together with not
more than one appropriate local counsel) for all such Indemnified Persons.
Subject to the next paragraph, all such fees and expenses shall be
reimbursed by payment to the Indemnified Persons of such reasonable fees
and expenses of counsel promptly after payment thereof by the Indemnified
Persons. Such firms shall be selected and designated in writing by
Goldman, Sachs & Co.
In furtherance of the requirement above that fees and expenses of
any separate counsel for the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's
obligations to pay such fees and expenses shall be conditioned upon the
following:
(a) in case separate counsel is proposed to be retained by
the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully
consult with the Indemnifying Person in advance as to the
selection of such counsel;
(b) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment
of such counsel, furnishing such information might reasonably be
expected to result in a waiver of any attorney-client privilege);
and
(c) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate
counsel for Indemnified Persons for which the Indemnifying Person
is liable hereunder, and the Indemnified Person shall use every
reasonable effort to cause such separate counsel to minimize the
duplication of activities as between themselves and counsel to the
Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement of
any litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees, subject
to the provisions of this Section 8, to indemnify the Indemnified Person
from and against any loss, damage, liability or expenses by reason of such
settlement or judgment. The Indemnifying Person shall not, without the
prior written consent of the Indemnified Persons, effect any settlement of
any pending or threatened litigation, proceeding or claim in respect of
which indemnity has been properly sought by the Indemnified Persons
hereunder, unless such settlement includes an unconditional release by the
claimant of all Indemnified Persons from all liability with respect to
claims which are the subject matter of such litigation, proceeding or
claim.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Trust and the
Company on the one hand and the Agents on the other from the offering of
the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above and such failure resulted in the indemnifying party being prejudiced
in a material way, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Trust and the Company on the one hand and the Agents
on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Trust and the Company on the one hand
and such Agents on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Trust and the Company bear to the total placement fees
received by such Agents. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Trust and the
Company on the one hand or such Agents on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Trust, the Company and
the Agents agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Agents were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, provided that the
provisions of subsection (c) have been complied with (in all material
respects) in respect of any separate counsel for such indemnified party.
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount greater than the excess of (i) the total
price at which the Securities placed by it and distributed to the public
were offered to the public over (ii) the amount of any damages which such
Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of
the Agents in this subsection (d) to contribute are several in proportion
to their respective placement fees and not joint.
(e) The obligations of the Trust and the Company under this
Section 8 shall be in addition to any liability which the Trust and the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Agent within the
meaning of the Act; and the obligations of the Agents under this Section 8
shall be in addition to any liability which the respective Agents may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company, each Administrative Trustee
under the Trust Agreement and to each person, if any, who controls the
Trust and the Company within the meaning of the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the
several Agents, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Agent or any controlling
person of any Agent, or the Trust, the Company, or any officer, director,
Administrative Trustee or controlling person of the Trust or the Company,
and shall survive delivery of and payment for the Securities.
10. This Agreement may be terminated at any time prior to the
Time of Delivery by the Representatives if, prior to such time, any of the
following events shall have occurred: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Prospectus.
If the Representatives elect to terminate this Agreement, as
provided in this Section 10, the Representatives will promptly notify the
Company and each other Agent by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Agent for any
reason permitted hereunder, or if the sale of the Securities to the Agents
as herein contemplated shall not be carried out because the Company is not
able to comply with the terms hereof, the Company shall not be under any
obligation under this Agreement and shall not be liable to any Agent or to
any member of any selling group for the loss of anticipated profits from
the transactions contemplated by this Agreement and the Agents shall be
under no liability to the Company nor be under any liability under this
Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5 and 8
shall survive any termination of this Agreement.
11. In all dealings hereunder, the Representatives shall act on
behalf of each of the Agents, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of
any Agent made or given by the Representatives jointly or by Goldman,
Sachs & Co. on behalf of the Representatives.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Purchasers shall be delivered or sent by
mail, telex or facsimile transmission to 777 Mariners Island Boulevard,
San Mateo, California 94404, Attention: Ian Link; and if to the Agents
shall be delivered or sent by mail, telex or facsimile transmission to the
Representatives in care of Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004, Attention: Registration Department; and if to the
Trust or the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any
notice to an Agent pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Agent at its address
set forth in its Agents' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Trust and the Company
by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Agents, the Trust, the Company and, to the
extent provided in Sections 8 and 9 hereof, the officers, directors and
administrative trustees of the Trust, the Company and each person who
controls the Trust, the Company or any Agent, and their respective heirs,
executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Purchaser shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Trust, the Company, each of the
Purchasers and each of the Representatives plus one for each counsel
counterparts hereof.
Very truly yours,
CMS Energy Trust I
By: A.M. Wright
_____________________
Alan M. Wright
Administrative Trustee
CMS Energy Corporation
By: A.M. Wright
_____________________
Alan M. Wright
Senior Vice President,
Chief Financial
Officer and Treasurer
Accepted as of the date hereof:
Franklin Income Fund
Franklin Utilities Fund
Franklin Valuemark Utility Equity Fund
Franklin Valuemark Income Securities Fund
Franklin Global Utilities Fund
Franklin Equity Income Fund
Franklin AGE High Income Fund
Franklin Multi-Income Trust
Franklin Universal Trust
Franklin Convertible Securities Fund
By: RH Johnson
_________________________________
Name: Rupert H. Johnson
Title: Executive Vice President
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Morgan Stanley & Co. Incorporated,
As Representatives of the several Agents named in Schedule II hereto
By: Goldman, Sachs & Co.
_________________________________
(Goldman, Sachs & Co.)<PAGE>
<PAGE>
Schedule I
Number of
Securities
to be
Purchasers Purchased
Franklin Income Fund . . . . . . 1,600,000
Franklin Utilities Fund . . . . 705,000
Franklin Valuemark Utility
Equity Fund . . . . . . . . . . 175,000
Franklin Valuemark Income
Securities Fund . . . . . . . . 160,000
Franklin Global Utilities Fund . 35,000
Franklin Equity Income Fund. . . 80,000
Franklin AGE High Income Fund. . 530,000
Franklin Multi-Income Trust. . . 22,000
Franklin Universal Trust . . . . 70,000
Franklin Convertible Securities
Fund . . . . . . . . . . . . . 73,000
---------
Total . . . . . . . . . . 3,450,000
=========
<PAGE>
<PAGE>
Schedule II
Number of
Securities
to be
Agents Placed
Goldman, Sachs & Co. . . . . . . 1,725,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated. . . . . . . 690,000
Morgan Stanley & Co.
Incorporated. . . . . . . . . . 690,000
BancAmerica Securities, Inc. . . 57,500
Donaldson, Lufkin & Jenrette
Securities Corporation. . . . . 57,500
First of Michigan Corporation. . 57,500
Oppenheimer & Co., Inc.. . . . . 57,500
Prudential Securities
Incorporated . . . . . . . . . 57,500
Roney & Co., LLC . . . . . . . . 57,500
---------
Total. . . . . . . . . . . 3,450,000
=========
<PAGE>
<PAGE>
Exhibit (4a)
================================================
CMS Energy Corporation, Issuer
and
The Bank of New York, Trustee
INDENTURE
Dated as of June 1, 1997
================================================
<PAGE>
<PAGE>
CROSS REFERENCE SHEET
_____________
Provisions of Trust Indenture Act of 1939 and Indenture to be
dated as of June 1, 1997 between CMS Energy Corporation and The Bank of New
York:
Section of the Act Section of Indenture
- ------------------ --------------------
310(a)(1) and (2)............. 6.9
310(a)(3) and (4)............. Inapplicable
310(b)........................ 6.8 and 6.10(a), (b) and (d)
310(c)........................ Inapplicable
311(a)........................ 6.13(a) and (c)(1) and (2)
311(b)........................ 6.13(b)
311(c)........................ Inapplicable
312(a)........................ 4.1 and 4.2(a)
312(b)........................ 4.2(a) and (b)(i) and (ii)
312(c)........................ 4.2(c)
313(a)........................ 4.4(a)
313(b)(1)..................... Inapplicable
313(b)(2)..................... 4.4(b)
313(c)........................ 4.4(c)
313(d)........................ 4.4(d)
314(a)........................ 4.3
314(b)........................ Inapplicable
314(c)(1) and (2)............. 14.5
314(c)(3)..................... Inapplicable
314(d)........................ Inapplicable
314(e)........................ 14.5
314(f)........................ Inapplicable
315(a), (c) and (d)........... 6.1
315(b)........................ 5.11
315(e)........................ 5.12
316(a)(1)..................... 5.9
316(a)(2)..................... Not required
316(a) (last sentence)........ 7.4
316(b)........................ 5.7
316(c)........................ Not required
317(a)........................ 5.2
317(b)........................ 3.4(a) and (b)
318(a)........................ 14.7
________________
* This Cross Reference Sheet is not part of the Indenture.
<PAGE>
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1 Certain Terms Defined. . . . . . . . . . . . . . . . . . .1
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . .2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . .2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . .2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . .2
CMS Energy Trust . . . . . . . . . . . . . . . . . . . . . . . . .3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Common Securities. . . . . . . . . . . . . . . . . . . . . . . . .3
Common Securities Guarantee. . . . . . . . . . . . . . . . . . . .3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Conversion Agent . . . . . . . . . . . . . . . . . . . . . . . . .3
Convertible Securities . . . . . . . . . . . . . . . . . . . . . .3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . .3
Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Depository . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . .4
Global Security. . . . . . . . . . . . . . . . . . . . . . . . . .4
Government Obligations . . . . . . . . . . . . . . . . . . . . . .4
Holder", "Holder of Securities", "Security holder. . . . . . . . .5
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Interest Payment Date. . . . . . . . . . . . . . . . . . . . . . .5
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . .5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . .6
Original Issue Discount. . . . . . . . . . . . . . . . . . . . . .6
Original Issue Discount Security . . . . . . . . . . . . . . . . .6
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Periodic Offering. . . . . . . . . . . . . . . . . . . . . . . . .7
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Preferred Securities . . . . . . . . . . . . . . . . . . . . . . .8
Preferred Securities Guarantee . . . . . . . . . . . . . . . . . .8
Principal. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . .8
Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Responsible Officer. . . . . . . . . . . . . . . . . . . . . . . .8
Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Security" or "Securities . . . . . . . . . . . . . . . . . . . . .9
Security Register" and "Security Registrar . . . . . . . . . . . .9
Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . .9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . . . .9
Trust Indenture Act of 1939" or "Trust Indenture Act . . . . . . .9
Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . .9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Yield to Maturity. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.2 OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . 10
ARTICLE TWO SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . 10
Section 2.2 Form of Trustee's Certificate of Authentication. . . . . 11
Section 2.3 Amount Unlimited; Issuable in Series . . . . . . . . . . 12
Section 2.4 Authentication and Delivery of Securities. . . . . . . . 16
Section 2.5 Execution of Securities. . . . . . . . . . . . . . . . . 20
Section 2.6 Certificate of Authentication. . . . . . . . . . . . . . 20
Section 2.7 Denomination of Securities; Payments
of Interest . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.8 Registration, Transfer and Exchange. . . . . . . . . . . 22
Section 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities . . . . . . . . . . . . . . . . . 25
Section 2.10 Cancellation of Securities; Destruction
Thereof . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Temporary Securities. . . . . . . . . . . . . . . . . . 27
Section 2.12 Computation of Interest . . . . . . . . . . . . . . . . 27
Section 2.13 CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE THREE COVENANTS OF THE ISSUER . . . . . . . . . . . . . . . . 28
Section 3.1 Payment of Principal and Interest. . . . . . . . . . . . 28
Section 3.2 Offices for Payments, etc. . . . . . . . . . . . . . . . 28
Section 3.3 Appointment to Fill a Vacancy in Office
of Trustee. . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.4 Paying Agents. . . . . . . . . . . . . . . . . . . . . . 30
Section 3.5 Limitation on Dividends; Transactions with
Affiliates. . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE FOUR SECURITY HOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE. . . . . . . . . . . . . . . . . . . 32
Section 4.1 Issuer to Furnish Trustee Names and Addresses
of Security holders . . . . . . . . . . . . . . . . . . 32
Section 4.2 Preservation and Disclosure of Security holders Lists. . 33
Section 4.3 Reports by the Issuer. . . . . . . . . . . . . . . . . . 35
Section 4.4 Reports by the Trustee . . . . . . . . . . . . . . . . . 36
ARTICLE FIVE REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . 37
Section 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default . . . . . . . . . . . . . . 37
Section 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. . . . . . . . . . . . . . . . . 41
Section 5.3 Application of Proceeds. . . . . . . . . . . . . . . . . 44
Section 5.4 Suits for Enforcement. . . . . . . . . . . . . . . . . . 45
Section 5.5 Restoration of Rights on Abandonment of
Proceedings . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.6 Limitations on Suits by Security holders . . . . . . . . 46
Section 5.7 Unconditional Right of Security holders to
Receive Principal and Interest and
to Institute Certain Suits. . . . . . . . . . . . . . . 47
Section 5.8 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. . . . . . . . . . . . . 47
Section 5.9 Control by Holders of Securities . . . . . . . . . . . . 48
Section 5.10 Waiver of Past Defaults. . . . . . . . . . . . . . . . . 48
Section 5.11 Trustee to Give Notice of Default, But
May Withhold in Certain Circumstances . . . . . . . . . 49
Section 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs. . . . . . . . . . . . . . . . 49
Section 5.13 Waiver of Stay or Extension Laws. . . . . . . . . . . . 50
ARTICLE SIX CONCERNING THE TRUSTEE. . . . . . . . . . . . . . . . . . 50
Section 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. . . . . . . . . . . . 50
Section 6.2 Certain Rights of the Trustee. . . . . . . . . . . . . . 52
Section 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof . . . . . . . . . . . . 54
Section 6.4 Trustee and Agents May Hold Securities;
Collections, etc. . . . . . . . . . . . . . . . . . . . 54
Section 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . . . . 54
Section 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim . . . . . . . . . . . . . . . . . . 54
Section 6.7 Right of Trustee to Rely on Officers'
Certificate, etc. . . . . . . . . . . . . . . . . . . . 55
Section 6.8 Qualification of Trustee; Conflicting
Interests . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.9 Persons Eligible for Appointment as
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.10 Resignation and Removal; Appointment
of Successor Trustee. . . . . . . . . . . . . . . . . . 56
Section 6.11 Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . . . . . 59
Section 6.13 Preferential Collection of Claims Against
the Issuer. . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.14 Appointment of Authenticating Agent . . . . . . . . . . 60
ARTICLE SEVEN CONCERNING THE SECURITY HOLDERS . . . . . . . . . . . . 61
Section 7.1 Evidence of Action Taken by Security holders . . . . . . 61
Section 7.2 Proof of Execution of Instruments and of
Holding of Securities . . . . . . . . . . . . . . . . . 62
Section 7.3 Holders to Be Treated as Owners. . . . . . . . . . . . . 62
Section 7.4 Securities Owned by Issuer Deemed Not
Outstanding . . . . . . . . . . . . . . . . . . . . . . 63
Section 7.5 Right of Revocation of Action Taken. . . . . . . . . . . 64
Section 7.6 Calculation of Original Issue Discount . . . . . . . . . 64
ARTICLE EIGHT SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . 65
Section 8.1 Supplemental Indentures Without
Consent of Security holders . . . . . . . . . . . . . . 65
Section 8.2 Supplemental Indentures With Consent
of Security holders . . . . . . . . . . . . . . . . . . 67
Section 8.3 Effect of Supplemental Indenture . . . . . . . . . . . . 68
Section 8.4 Documents to Be Given to Trustee . . . . . . . . . . . . 69
Section 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . . . . . 69
ARTICLE NINE CONSOLIDATION, MERGER, SALE OR CONVEYANCE. . . . . . . . 69
Section 9.1 Covenant of Issuer Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions. . . . . . . . . . . . . . . . 69
Section 9.2 Successor Corporation Substituted for Issuer . . . . . . 70
Section 9.3 Opinion of Counsel Delivered to Trustee. . . . . . . . . 71
ARTICLE TEN SATISFACTION AND DISCHARGE OF INDENTURE;UNCLAIMED MONEYS. 72
Section 10.1 Satisfaction and Discharge of Indenture . . . . . . . . 72
Section 10.2 Application by Trustee of Funds Deposited
for Payment of Securities . . . . . . . . . . . . . . . 77
Section 10.3 Repayment of Moneys Held by Paying Agent. . . . . . . . 77
Section 10.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Three Years. . . . . . . . . 77
Section 10.5 Indemnity for Government Obligations. . . . . . . . . . 78
ARTICLE ELEVEN REDEMPTION OF SECURITIES AND SINKING FUNDS . . . . . . 78
Section 11.1 Applicability of Article. . . . . . . . . . . . . . . . 78
Section 11.2 Notice of Redemption; Partial Redemptions . . . . . . . 79
Section 11.3 Payment of Securities Called for Redemption . . . . . . 80
Section 11.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. . . . . . . . 81
Section 11.5 Mandatory and Optional Sinking Funds. . . . . . . . . . 82
Section 11.6 Conversion Arrangement on call for
Redemption. . . . . . . . . . . . . . . . . . . . . . . 85
ARTICLE TWELVE SUBORDINATION. . . . . . . . . . . . . . . . . . . . . 86
Section 12.1 Applicability of Article; Securities
Subordinated to Senior Indebtedness . . . . . . . . . . 86
Section 12.2 Issuer Not to Make Payments with
Respect to Subordinated Securities
in Certain Circumstances. . . . . . . . . . . . . . . . 87
Section 12.3 Subordinated Securities Subordinated to
Prior Payment of All Senior Indebtedness
on Dissolution, Liquidation or Reorganization
of Issuer . . . . . . . . . . . . . . . . . . . . . . . 89
Section 12.4 Holders of Subordinated Securities to be
Subrogated to Right of Holders
of Senior Indebtedness. . . . . . . . . . . . . . . . . 90
Section 12.5 Obligation of the Issuer Unconditional. . . . . . . . . 91
Section 12.6 Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice . . . . . . . . . . . . 92
Section 12.7 Application by Trustee of Monies or
Government Obligations Deposited with It. . . . . . . . 93
Section 12.8 Subordination Rights Not Impaired by
Acts or Omissions of Issuer or Holders
of Senior Indebtedness. . . . . . . . . . . . . . . . . 94
Section 12.9 Security holders Authorize Trustee to
Effectuate Subordination of Securities. . . . . . . . . 94
Section 12.10 Right of Trustee to Hold Senior
Indebtedness. . . . . . . . . . . . . . . . . . . . . . 95
Section 12.11 Article Twelve Not to Prevent Events of
Defaults. . . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE THIRTEEN CONVERSIONS. . . . . . . . . . . . . . . . . . . . . 95
Section 13.1 Applicability of Article. . . . . . . . . . . . . . . . 95
Section 13.2 Conversion Privilege. . . . . . . . . . . . . . . . . . 96
Section 13.3 Conversion Procedure. . . . . . . . . . . . . . . . . . 97
Section 13.4 Fractional Shares . . . . . . . . . . . . . . . . . . . 98
Section 13.5 Taxes on Conversion . . . . . . . . . . . . . . . . . . 98
Section 13.6 Issuer to Provide Stock . . . . . . . . . . . . . . . . 98
Section 13.7 Adjustment for Change in Capital Stock. . . . . . . . . 99
Section 13.8 Adjustment for Rights Issue . . . . . . . . . . . . . .100
Section 13.9 Adjustments for Other Distributions . . . . . . . . . .102
Section 13.10 Voluntary Adjustment. . . . . . . . . . . . . . . . . .103
Section 13.11 Certain Definitions. . . . . . . . . . . . . . . . . .103
Section 13.12 When Adjustment May Be Deferred. . . . . . . . . . . .105
Section 13.13 When Adjustment Is Not Required. . . . . . . . . . . .105
Section 13.14 Notice of Adjustment . . . . . . . . . . . . . . . . .106
Section 13.15 Notice of Certain Transactions . . . . . . . . . . . .107
Section 13.16 Consolidation, Merger or Sale of
the Issuer. . . . . . . . . . . . . . . . . . . . . . .107
Section 13.17 Issuer Determination Final . . . . . . . . . . . . . .108
Section 13.18 Trustee's Disclaimer . . . . . . . . . . . . . . . . .108
Section 13.19 Simultaneous Adjustments . . . . . . . . . . . . . . .108
ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . .108
Section 14.1 Incorporators, Stockholders, Officers
and Directors of Issuer Exempt from
Individual Liability. . . . . . . . . . . . . . . . . .108
Section 14.2 Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Securities. . . . . . . . . . . . . . . . . . . . . . .109
Section 14.3 Successors and Assigns of Issuer Bound
by Indenture. . . . . . . . . . . . . . . . . . . . . .109
Section 14.4 Notices and Demands on Issuer, Trustee and
Holders of Securities . . . . . . . . . . . . . . . . .109
Section 14.5 Officers' Certificates and Opinions
of Counsel; Statements to be
Contained Therein . . . . . . . . . . . . . . . . . . .110
Section 14.6 Payments Due on Saturdays, Sundays and
Holidays. . . . . . . . . . . . . . . . . . . . . . . .112
Section 14.7 Conflict of any Provision of Indenture
with Trust Indenture Act of 1939. . . . . . . . . . . .112
Section 14.8 Michigan Law to Govern . . . . . . . . . . . . . . . . .112
Section 14.9 Counterparts. . . . . . . . . . . . . . . . . . . . . .112
Section 14.10 Effect of Headings and Table of Contents . . . . . . .113
Section 14.11 Separability Clause. . . . . . . . . . . . . . . . . .113
<PAGE>
<PAGE>
THIS INDENTURE dated as of June 1, 1997 between CMS Energy
Corporation, a Michigan corporation (the "Issuer"), and The Bank of New York,
a New York banking corporation, as trustee (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time
of its debentures, notes, bonds or other evidences of indebtedness to be
issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the
terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery
of this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the 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 Securities as follows:
ARTICLE ONE
DEFINITIONS
Section 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939, including terms defined therein by reference to
the Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of this Indenture. All accounting terms used herein
and not expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" means such accounting principles
as are generally accepted in the United States of America at the time of any
computation. References to any statute mean such statute as amended at the
time and includes any successor legislation. The words "herein", "hereof"
and "hereunder" and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other subdivision. The
terms defined in this Article include the plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Board of Directors" means either the Board of Directors of the
Issuer or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions,
certified by the secretary or an assistant secretary of the Issuer to have
been duly adopted or consented to by the Board of Directors and to be in full
force and effect, and delivered to the Trustee.
"Business Day" means a day on which banking institutions in New
York, New York or Delaware are not authorized or required by law or
regulation to close.
"CMS Energy Trust" means a Delaware business trust formed by the
Issuer for the purpose of purchasing the Securities of the Issuer.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act of 1939, then the body performing such duties at such
time.
"Common Securities" means undivided beneficial interests in the
assets of a CMS Energy Trust which rank pari passu with Preferred Securities
issued by such trust; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect
of distributions and payments upon liquidation, redemption and maturity are
subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" means any guarantee that the Issuer
may enter into that operates directly or indirectly for the benefit of
holders of Common Securities of Consumers Trust.
"Common Stock" means the Common Stock, $.01 par value, of the
Issuer as it exists on the date of this Indenture and stock of any other
class into which such Common Stock may thereafter have been changed.
"Conversion Agent" shall mean the office or agency where the
Securities of each series that is convertible may be presented for conversion
as set forth in Section 3.2.
"Convertible Securities" means any or all options, warrants,
securities and rights, except the Securities, which are convertible into or
exercisable or exchangeable for Common Stock or which otherwise entitle the
holder thereof to subscribe for, purchase or otherwise acquire Common Stock.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay St.,Floor 21W., New York, New York
10286; Attn. Corporate Trust, Trustee Administration.
"Declaration" means, in respect of a Consumers Trust, the amended
and restated declaration of trust of such Consumers Trust or any other
governing instrument of such Trust.
"Depository" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depository by the Issuer pursuant to Section 2.3, which must
be a clearing agency registered under the Securities Exchange Act of 1934,
as amended, and any other applicable statute or regulation, until a successor
Depository shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Depository" shall mean each Person who is
then a Depository hereunder; and if at any time there is more than one such
Person, "Depository" as used with respect to the Securities of any such
series shall mean each Depository with respect to the Global Securities of
such series.
"Event of Default" means any event or condition specified as such
in Section 5.1.
"Global Security" means a Security evidencing all or a part of a
series of Securities issued to the Depository, or its nominee, for such
series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.
"Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency
or instrumentality of the United States and the payment of which is
unconditionally guaranteed by the United States, and shall also include a
depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest
on or principal of any such Government Obligation held by such custodian for
the account of a holder of a depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder", "Holder of Securities", "Security holder" or other
similar terms mean the Person in whose name such Security is registered in
the Security Register kept by the Issuer for that purpose in accordance with
the terms hereof.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended
or supplemented or both, and shall include the forms and terms of particular
series of Securities established as provided hereunder.
"Interest" means, when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity or
upon default in any other payment due on such Security, interest payable
after Maturity or upon such default, as the case may be.
"Interest Payment Date" means (a) the date or dates, if any, on
which interest is to be paid on any Security as established pursuant to
Section 2.3(f), (b) the date of maturity or redemption of such Security, and
(c) only with respect to defaulted interest on such Security, the date
established for the payment of such defaulted interest pursuant to Section
2.7 hereof.
"Issuer" means (except as otherwise provided in Article Six)
CMS Energy Corporation, a Michigan corporation, and, subject to Article Nine,
its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by the Chairman, the President or any Vice Presi-
dent (whether or not designated by a number or numbers or a word or words
added before or after the title "Vice President") or by the Treasurer of the
Issuer.
"Maturity" means, when used with respect to any Security, the date
on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman,
the President or any Vice President (whether or not designated by a number
or numbers or a word or words added before or after the title "Vice
President"), and by the Chief Financial Officer, Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary, of the Issuer and
delivered to the Trustee. Except as otherwise provided herein, each such
certificate shall include the statements provided for in Section 14.5.
"Opinion of Counsel" means an opinion in writing signed by the
counsel of the Issuer as designated by the Board of Directors or by such
other legal counsel who may be an employee of or regular counsel to the
Issuer and who shall be satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.5, if and to the extent
required thereby.
"Original Issue Discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt
security (as set forth, in the case of an Original Issue Discount Security,
on the face of such Security).
"Original Issue Discount Security" means any Security that provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when
used with reference to Securities, shall, subject to the provisions of
Section 7.4, mean, as of any particular time, all Securities theretofore
authenticated and delivered by the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys or Government Obligations (as provided
for in Section 10.1) in the necessary amount shall have been
theretofore deposited in trust with the Trustee or with any paying
agent (other than the Issuer) or shall have been set aside,
segregated and held in trust by the Issuer for the Holders of such
Securities (if the Issuer shall act as its own paying agent),
provided that if such Securities, or portions thereof, are to be
redeemed prior to the Maturity thereof, notice of such redemption
shall have been given as herein provided, or provision satisfactory
to the Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in substitution
for which other Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.9 (except with respect
to any such Security as to which proof satisfactory to the Trustee
is presented that such Security is held by a Person in whose hands
such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
(a) the principal amount of an Original Issue Discount Security that shall
be deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.1, and (b) Securities owned by the Issuer or any other
obligor upon the Securities of any Affiliate of the Issuer or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that
in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned as described in clause (b) above which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Issuer or any
other obligor upon the Securities or an Affiliate of the Issuer or of such
other obligor.
"Periodic Offering" means an offering of Securities of any series
from time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Securities" means undivided beneficial interests in the
assets of a Consumers Trust which rank pari passu with Common Securities
issued by such trust; provided however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect
of distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the
Issuer may enter into that operates directly or indirectly for the benefit
of holders of Preferred Securities of a Consumers Trust.
"Principal", of a debt security, including any Security, means the
amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect
to such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Issuer, upon any purchase or exchange at the option of the
Issuer or the Holder of such debt security and upon any acceleration of the
Maturity of such debt security) and shall be deemed to include the words "and
premium, if any".
"Property Trustee" means the entity performing the functions of
the Property Trustee of a Consumers Trust under the applicable Declaration
of such Consumers Trust.
"Record Date" shall have the meaning set forth in Section 2.7.
"Responsible Officer", when used with respect to the Trustee, means
any vice president (whether or not designated by numbers or words added
before or after the title "vice president"), any trust officer, any
assistant vice president, any assistant secretary, any assistant treasurer
or any other officer of the Trustee customarily performing functions similar
to those performed by the persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of
his knowledge of and familiarity with the particular subject.
"Security" means any Security registered on the Security Register
of the Issuer.
"Security" or "Securities" (except as otherwise provided in
Section 2.3) shall have the meaning stated in the first recital of this
Indenture and, more particularly, any Securities that have been authenticated
and delivered under this Indenture.
"Security Register" and "Security Registrar" shall have the
respective meanings set forth in Section 2.8.
"Senior Indebtedness" shall have the meaning set forth in
Section 12.1(b).
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Issuer or by
one or more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
"Stated Maturity" means, when used with respect to any Security or
any installment of principal thereof or interest thereon, the date specified
in such Security as the fixed date on which the principal of such Security
or such installment of principal or interest is due and payable.
"Trust Indenture Act of 1939" or "Trust Indenture Act" (except as
otherwise provided in Sections 8.1 and 8.2) means the Trust Indenture Act of
1939 as in force at the date as of which this Indenture was originally
executed.
"Trust Securities" means Common Securities and Preferred
Securities.
"Trustee" means the Person identified as the "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder; and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"Yield to Maturity" means the yield to Maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
in accordance with accepted financial practice.
Section 1.2 OTHER DEFINITIONS.
TERM
DEFINED IN SECTION
Average Market Price. . . . . . . . . . . 13.11
Current market price. . . . . . . . . . . 13.11
Determination Date. . . . . . . . . . . . 13.11
Ex-Dividend Date. . . . . . . . . . . . . 13.11
Senior Indebtedness . . . . . . . . . . . 12.1(b)
ARTICLE TWO
SECURITIES
Section 2.1 Forms Generally. The Securities of each series shall
be substantially in such form (not inconsistent with this Indenture) as shall
be established by or pursuant to one or more Board Resolutions (as set forth
in a Board Resolution or, to the extent established pursuant to rather than
set forth in a Board Resolution, an Officers' Certificate detailing such
establishment) or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have
imprinted or otherwise reproduced thereon such letters, numbers or other
marks of identification and such legend or legends or endorsements, not
inconsistent with the provisions of this Indenture, as may be required to
comply with any law or with any rules or regulations pursuant thereto, or
with any rules of any securities exchange or to conform to general usage, all
as may be determined by the officers executing such Securities as evidenced
by their execution of such Securities.
The definitive Securities 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 Securities as evidenced by
their execution of such Securities.
Section 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities 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.
The Bank of New York ,
as Trustee
Dated:________ By_______________________
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed
with respect to any series of Securities, then the Trustee's certificate of
authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
_________________________,
as Authenticating Agent
Dated:_________ By_______________________
Authorized Officer"
Section 2.3 Amount Unlimited; Issuable in Series.
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
(b) The Securities may be issued in one or more series and shall
be direct obligations of the Issuer.
(c) Each Security shall be dated and issued as of the date of its
authentication by the Trustee.
(d) Each Security shall bear interest from the later of its
original date of authentication or the most recent Interest Payment Date to
which interest has been paid or duly provided for with respect to such
Security until the principal of such Security is paid or made available for
payment, and interest on each Security shall be payable on each Interest
Payment Date after the date of such Security.
(e) Each Security shall mature on a date specified in the Security
not less than nine months nor more than 40 years after the date of its
issuance, and the principal amount of each outstanding Security shall be
payable on the Maturity specified therein.
(f) There shall be established in or pursuant to one or more Board
Resolutions (and, to the extent established pursuant to rather than set forth
in a Board Resolution, in an Officers' Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series:
(1) the designation of the Securities of such series, which
shall distinguish the Securities of such series from the Securities
of all other series;
(2) any limit upon the aggregate principal amount of the
Securities of such series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of such series pursuant to
Section 2.8, 2.9, 2.11, 8.5 or 11.3);
(3) subject to Section 2.3(e), the date or dates (and whether
fixed or extendible) on which the principal of the Securities of
such series is payable;
(4) the rate or rates at which the Securities of such series
shall bear interest, if any, the Interest Payment Date or Dates for
the Securities of such series and the Record Date for interest
payable on any Interest Payment Date and/or the method by which
such rate or rates shall be determined;
(5) the place or places where the principal of and any
interest on Securities of such series shall be payable and where
such Securities may be registered or transferred (if in addition
to, or other than, as provided in Section 3.2);
(6) any provisions relating to the issuance of Securities of
such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which
such original issue discount shall accrue, if any, and the dates
from or to which or periods during which such original issue
discount shall accrue at such rate or rates);
(7) the right, if any, of the Issuer to redeem or purchase
Securities of such series, in whole or in part, at its option and
the period or periods within which, the price or prices at which
and any terms and conditions upon which Securities of such series
may be so redeemed;
(8) the obligation, if any, of the Issuer to redeem, purchase
or repay Securities of such series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option
of a Holder thereof and the price or prices at which and the period
or periods within which and any terms and conditions upon which
Securities of such series shall be redeemed, purchased or repaid,
in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of such
series shall be issuable;
(10) the obligation, if any, of the Issuer to permit the
conversion of Securities of such series into Common Stock and the
terms and conditions upon which such conversion shall be effected
(including, without limitation, the initial conversion price or
rate, the conversion period and any other provision in addition to
or in lieu of those set forth in Article Thirteen of this Indenture
relative to such obligation);
(11) if other than the entire principal amount thereof, the
portion of the principal amount of Securities of such series which
shall be payable upon acceleration of the Maturity thereof pursuant
to Section 5.1 or, if applicable, which is convertible in
accordance with Article Thirteen;
(12) whether the Securities of such series will be
subordinated to the payment of Senior Indebtedness on the terms and
conditions set forth in Article Twelve and whether such
subordination shall be subject to any provisions in addition to or
in lieu of those set forth in Article Twelve;
(13) whether the Securities of such series will be issuable
as Global Securities;
(14) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of such series held by a
person who is not a U.S. Person in respect of any tax, assessment
or governmental charge withheld or deducted and, if so, whether the
Issuer will have the option to redeem such Securities rather than
pay such additional amounts;
(15) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of
a temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other
conditions, and the form and terms of any such certificates,
documents or conditions;
(16) any trustees, depositaries, authenticating or paying
agents, transfer agents, conversion agents or registrars or any
other agents with respect to the Securities of such series;
(17) any events of default or covenants with respect to the
Securities of such series other than those specified herein;
(18) the Person to whom any interest on a Security of such
series shall be payable, if other than the Person in whose name the
Security (or one or more predecessor Securities) is registered at
the close of business on the Record Date for such interest;
(19) if the Securities of such series shall be issued in
whole or in part in the form of one or more Global Securities,
whether beneficial owners of interests in any such Global Security
may exchange such interests for Securities of such series of like
tenor and of authorized form and denomination and the circumstances
under which any such changes may occur, if other than in the manner
provided in Section 2.8;
(20) the right of the Issuer, if any, to defer any payment of
principal of or interest on the Securities of such series, and the
maximum length of any such deferral period;
(21) whether any property will be pledged to secure the
Securities; and
(22) any other terms of such series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any indenture supplemental hereto referred to above. All
Securities of any one series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to such Board Resolution, such Officers' Certificate
or in any such indenture supplemental hereto.
Section 2.4 Authentication and Delivery of Securities. The Issuer
may from time to time deliver Securities of any series, executed by the
Issuer to the Trustee for authentication, together with the applicable
documents referred to below in this Section, and the Trustee shall thereupon
authenticate and make available for delivery such Securities to or upon the
order of the Issuer (contained in the Issuer Order referred to below in this
Section) or pursuant to such procedures acceptable to the Trustee and to such
recipients as may be specified from time to time by an Issuer Order. If so
provided in the Board Resolution, Officers' Certificate or supplemental
indenture establishing the Securities of any series, the maturity date,
interest accrual date, interest rate, Interest Payment Date or Dates and any
other terms of any or all of the Securities of such series may be determined
by or pursuant to such Issuer Order and procedures. If provided for in such
procedures, such Issuer Order may authorize authentication and delivery
pursuant to instructions (from the Issuer or its duly authorized agent) in
writing, by facsimile or any other method mutually agreed upon by the Issuer
and Trustee. In authenticating the Securities of a series and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive (but, in the case of
subparagraphs 2, 3 and 4 below, only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such
series, however, any request after the first shall be deemed to include the
representation of the Issuer that the document previously delivered pursuant
to subparagraphs 2, 3 and 4 below are still true and in effect) and (subject
to Section 6.1) shall be fully protected in relying upon, unless and until
such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting
forth delivery instructions if the Securities are not to be
delivered to the Issuer, provided that, with respect to Securities
of a series subject to a Periodic Offering, (a) such Issuer Order
may be delivered by the Issuer to the Trustee at any time prior to
the delivery to the Trustee of the Securities of such series for
authentication and delivery, (b) the Trustee shall authenticate and
deliver the Securities of such series for original issue from time
to time, in an aggregate principal amount not exceeding the
aggregate principal amount established for such series, pursuant
to an Issuer Order or pursuant to such procedures acceptable to the
Trustee as may be specified from time to time by an Issuer Order,
(c) if so provided in the Board Resolution or supplemental
indenture establishing the Securities of such series, the maturity
date, original issue date, interest rate, the Interest Payment Date
or Dates and any other terms of any or all of the Securities of
such series may be determined by an Issuer Order or pursuant to
such procedures and (d) if provided for in such procedures, such
Issuer Order may authorize authentication and delivery pursuant to
instructions in writing, by facsimile or any other method mutually
agreed upon by the Issuer and Trustee;
(2) any Board Resolution, Officers' Certificate and/or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of
such series were established;
(3) an Officers' Certificate setting forth the form or forms
and terms of the Securities of such series stating (a) that such
form or forms and terms have been established pursuant to
Sections 2.1 and 2.3 and comply with this Indenture, (b) the
aggregate principal amount of all of the Securities outstanding
under this Indenture and (c) covering such other matters as the
Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter addressed to the Trustee permitting it to rely
on an Opinion of Counsel, substantially to the effect that:
(a) the forms of the Securities of such series
have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) the terms of the Securities of such series
have been duly authorized and established in conformity
with the provisions of this Indenture;
(c) when the Securities of such series have been
executed by the Issuer and authenticated by the Trustee
in accordance with the provisions of this Indenture and
delivered to and duly paid for by the purchasers
thereof, they will have been duly issued under this
Indenture and will be valid and legally binding
obligations of the Issuer, enforceable in accordance
with their respective terms, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting the enforcement
of creditors' rights and to general principles of
equity, and will be entitled to the benefits of this
Indenture;
(d) the Indenture has been duly authorized,
executed and delivered by the Issuer and constitutes a
legal, valid and binding agreement of the Issuer,
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting the
enforcement of creditors' rights and to general
principles of equity;
(e) the issuance of the Securities will not result
in any default under this Indenture, or any other
contract, indenture, loan agreement or other instrument
to which the Issuer is a party or by which it or any of
its property is bound; and
(f) no consent, approval, authorization, order,
registration or qualification of or with any
governmental agency or body having jurisdiction over the
Issuer is required for the execution and delivery of the
Securities of such series by the Issuer, except such as
have been obtained (except that no opinion need be
expressed as to state securities or Blue Sky laws).
The Trustee shall have the right to decline to authenticate and
deliver any Securities of any series under this Section (other than
Securities the forms and terms of which shall have been established by
supplemental indenture) if the Trustee, being advised by counsel, determines
that such action may not lawfully be taken by the Issuer or if the Trustee
in good faith by its board of directors or board of trustees, executive
committee or a trust committee of directors, trustees or Responsible Officers
shall determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee's rights, duties
or immunities under the Securities of any such series, this Indenture or
otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such
series, authenticate and make available for delivery one or more Global
Securities that (i) shall be in an aggregate amount equal to the aggregate
principal amount specified in such Issuer Order, (ii) shall be registered in
the name of the Depository therefor or its nominee, (iii) shall be delivered
by the Trustee to such Depository or pursuant to such Depository's
instructions and (iv) shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Securities
in definitive registered form, this Security may not be transferred except
as a whole by the Depository to the nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the Depository or
by the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository."
Section 2.5 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by both (a) its Chairman, its President or any
Vice President (whether or not designated by a number or numbers or a word
or words added before or after the title "Vice President"), reproduced
thereon, which need not be attested and (b) by its Chief Financial Officer,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary. Such signatures may be the manual or facsimile signatures of such
officers. Typographical and other minor errors or defects in any such
signature shall not affect the validity or enforceability of any Security
that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have so signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to
be such officer of the Issuer; and any Security may be so signed on behalf
of the Issuer by such persons as, at the actual date of the execution of such
Security, shall be the proper officers of the Issuer, although at the date
of the execution and delivery of this Indenture any such person was not such
an officer.
Section 2.6 Certificate of Authentication. Only such Securities
as shall bear thereon a certificate of authentication substantially in the
form hereinbefore recited, executed by the Trustee by the manual signature
of one of its authorized signatories, shall be entitled to the benefits of
this Indenture or be valid or obligatory for any purpose. The execution of
such certificate by the Trustee upon any Security executed by the Issuer
shall be conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and
sold by the Issuer, and the Issuer shall deliver such Security to the Trustee
for cancellation as provided in Section 2.10, together with a written
statement (which need not comply with Section 14.5 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never
been issued and sold by the Issuer, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
Section 2.7 Denomination of Securities; Payments of Interest. The
Securities of each series shall be issuable in registered form in
denominations established as contemplated by Section 2.3. The Securities of
each series shall be numbered, lettered or otherwise distinguished in such
manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as
evidenced by the execution and authentication thereof.
The Securities of each series shall bear interest, if any, from the
date, and such interest shall be payable on the Interest Payment Dates,
established as contemplated by Section 2.3.
The Person in whose name any Security of any series is registered
at the close of business on any Record Date applicable to such series with
respect to any Interest Payment Date for such series shall be entitled to
receive the interest, if any, payable on such Interest Payment Date
notwithstanding any transfer, exchange or conversion of such Security
subsequent to the Record Date and prior to such Interest Payment Date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such Interest Payment Date, in which case such defaulted interest
shall be paid to the Persons in whose names Outstanding Securities of such
series are 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) established by notice given by mail by or on
behalf of the Issuer to the Holders of Securities of such series not less
than 15 days preceding such subsequent Record Date. The term "Record Date",
as used with respect to any Interest Payment Date (except a date for payment
of defaulted interest) for the Securities of any series, shall mean the date
specified as such in the terms of the Securities of such series established
as contemplated by Section 2.3.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 2.8 Registration, Transfer and Exchange. The Issuer will
keep, or cause to be kept, at the Corporate Trust Office and at each other
office or agency to be maintained for the purpose as provided in Section 3.2
for each series of Securities a register or registers (collectively, the
"Security Register") in which, subject to such reasonable regulations as it
may prescribe, it will provide for the registration of Securities of such
series and the registration of transfer of Securities of such series. The
Security Register shall be in written form in the English language or in any
other form capable of being converted into such form within a reasonable
time. At all reasonable times such register or registers not maintained by
the Trustee shall be open for inspection by the Trustee. Unless and until
otherwise determined by the Issuer pursuant to Section 2.3, the Security
Register with respect to each series of Securities shall be kept solely at
the Corporate Trust Office and, for this purpose, the Trustee shall be
designated the "Security Registrar."
Upon due presentation for registration of transfer of any Security
of any series at any such office or agency, the Issuer shall execute and the
Trustee shall authenticate and make available for delivery in the name of the
transferee or transferees a new Security or Securities of the same series,
maturity date and interest rate in authorized denominations for a like
aggregate principal amount.
At the option of the Holder thereof, Securities of any series
(other than a Global Security, except as set forth below) may be exchanged
for one or more Securities of such series in authorized denominations for a
like aggregate principal amount, upon surrender of such Securities to be
exchanged at the office or agency to be maintained for such purpose in
accordance with Section 3.2 and upon payment, if the Issuer shall so require,
of the charges hereinafter provided. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive. All Securities surrendered upon
any exchange or transfer provided for in this Indenture shall be promptly
cancelled by the Trustee and the Trustee will deliver a certificate of
cancellation thereof to the Issuer.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments
of transfer in form satisfactory to the Issuer and the Trustee duly executed
by, the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities, other than exchanges
pursuant to Sections 2.11, 8.5 , 11.2 and 13.3 not involving any transfer.
No service charge shall be made for any such transaction.
The Issuer shall not be required to (a) issue, exchange or register
a transfer of any Securities of any series for a period of 15 days next
preceding the first mailing or publication of notice of redemption of
Securities of such series to be redeemed or (b) exchange or register the
transfer of any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in
part, the portion thereof not so to be redeemed.
Notwithstanding any other provision of this Section, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor
Depository for such Global Security or a nominee of such successor
Depository.
If at any time a Depository for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depository for such Securities or if at
any time any such Depository shall no longer be eligible as a Depository, the
Issuer shall appoint a successor Depository with respect to the Securities
held by such Depository. If a successor Depository is not appointed by the
Issuer within 90 days after the Issuer receives such notice or becomes aware
of such ineligibility, the Securities of such series shall no longer be
represented by one or more Global Securities held by such Depository, and the
Issuer shall execute, and the Trustee, upon receipt of an Issuer Order for
the authentication and delivery of definitive Securities of such series,
shall authenticate and make available for delivery Securities of such series
in definitive registered form without coupons, in any authorized
denominations and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities held by such Depository in
exchange for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine
that the Securities of a particular series shall no longer be represented by
a Global Security or Securities. In such event, the Issuer shall execute,
and the Trustee, upon receipt of an Issuer Order for the authentication and
delivery of definitive Securities of such series, shall authenticate and
deliver, Securities of such series in definitive registered form in any
authorized denominations and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing Securities
of such series in exchange for such Global Security or Securities.
If so specified by the Issuer pursuant to Section 2.3 with respect
to Securities of a particular series represented by a Global Security, the
Depository for such Global Security may surrender such Global Security in
exchange in whole or in part for Securities of such series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depository. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery:
(i) to each Person specified by such Depository a new
Security or Securities of such series, in any authorized
denominations requested by such Person, in an aggregate principal
amount equal to, and in exchange for, such Person's beneficial
interest in the Global Security; and
(ii) to such Depository a new Global Security in a
denomination equal to the difference between the principal amount
of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of any Global Security for Securities in
definitive registered form in authorized denominations, such Global Security
shall be cancelled by the Trustee or an agent of the Issuer or the Trustee.
Securities in definitive registered form without coupons issued in exchange
for a Global Security pursuant to this Section shall be registered in such
names and in such authorized denominations as the Depository for such Global
Security, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee or an agent of the Issuer or the
Trustee. The Trustee or such agent shall deliver such Securities to or as
directed by the Persons in whose names such Securities are so registered.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Section 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon receipt of an Issuer Order, the Trustee
shall authenticate and make available for delivery a new Security of the same
series, maturity date and interest rate, bearing a number or other distin-
guishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In every case
the applicant for a substitute Security shall furnish to the Issuer and to
the Trustee or any agent of the Issuer or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each
of them and any agent of either of them harmless and, in every case of
destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and,
in the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case
any Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost
or stolen, the Issuer may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), if the applicant for such payment
shall furnish to the Issuer and to the Trustee or any agent of the Issuer or
the Trustee such security or indemnity as may be required by them to save
each of them harmless, and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such
Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights
set forth in) this Indenture equally and proportionately with any and all
other Securities of such series duly authenticated and delivered hereunder.
All Securities shall be held and owned upon the express condition that, to
the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost
or stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
Section 2.10 Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a sinking or
analogous fund, if surrendered to the Issuer or any agent of the Issuer or
any agent of the Trustee, shall be delivered to the Trustee or its agent for
cancellation or, if surrendered to the Trustee, shall be cancelled by it; and
no Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee or its agent shall
cancel Securities held by it and deliver a certificate of cancellation to the
Issuer. If the Issuer or its agent shall acquire any of the Securities, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
delivered to the Trustee or its agent for cancellation.
Section 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and make available for delivery temporary Securities for
such series (printed, lithographed, typewritten or otherwise reproduced, in
each case in form satisfactory to the Trustee). Temporary Securities of any
series shall be issuable as registered Securities of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee as evidenced by the execution and
authentication thereof. Temporary Securities may contain such references to
any provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities of such series and
thereupon temporary Securities of such series may be surrendered in exchange
for such definitive Securities in registered form without charge at each
office or agency to be maintained for such purpose in accordance with
Section 3.2 and the Trustee shall authenticate and make available for
delivery in exchange for such temporary Securities of such series an equal
aggregate principal amount of definitive Securities of the same series in
authorized denominations. Until so exchanged, the temporary Securities of
any series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series, unless otherwise established pursuant
to Section 2.3. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of temporary Securities
of any series that may be established pursuant to Section 2.3.
Section 2.12 Computation of Interest. Except as otherwise
specified as contemplated by Section 2.3 for Securities of any series,
interest, if any, on the Securities of each series shall be computed on the
basis of a 360-day year of twelve 30-day months.
Section 2.13 CUSIP Numbers. The Issuer in issuing the Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or
as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Issuer will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
Section 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees for the benefit of each series of Securities that it
will duly and punctually pay or cause to be paid the principal of, and
interest, if any, on, each of the Securities of such series (together with
any additional amounts payable pursuant to the terms of such Securities) at
the place or places, at the respective times and in the manner provided in
such Securities and in this Indenture. The interest on Securities (together
with any additional amounts payable pursuant to the terms of such Securities)
shall be payable only to or upon the written order of the Holders thereof
and, at the option of the Issuer, may be paid by wire transfer or by mailing
checks for such interest payable to or upon the written order of such Holders
at their last addresses as they appear on the registry books of the Issuer.
If interest is to be paid by wire transfer, such Holders must notify the
Trustee within 5 Business Days prior to the Record Date of the wire
instructions.
Section 3.2 Offices for Payments, etc. So long as any Securities
are outstanding hereunder, the Issuer will maintain in The City of New York,
State of New York an office or agency where the Securities of each series may
be presented for payment, where the Securities of each series may be
presented for exchange as in this Indenture provided, and where the
Securities of each series may be presented for registration of transfer as
in this Indenture provided and where the Securities of each series that is
convertible may be presented for conversion as in this Indenture provided.
The Issuer will maintain in The City of New York an office or
agency where notices and demands to or upon the Issuer in respect of the
Securities of any series, or this Indenture may be served.
The Issuer will give to the Trustee prompt written notice of the
location of each such office or agency and of any change of location thereof.
In case the Issuer shall fail to maintain any office or agency required by
this Section to be located in The City of New York, State of New York or
shall fail to give such notice of the location or of any change in the
location of any of the above offices or agencies, presentations and demands
may be made and notices may be served at the Corporate Trust Office of the
Trustee, and, in such event, the Trustee shall act as the Issuer's agent to
receive all such presentations, surrenders, notices and demands.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of any series may be presented for
payment, where the Securities of such series may be presented for exchange
as in this Indenture provided, where the Securities of such series may be
presented for registration of transfer as in this Indenture provided and
where the Securities of each series that is convertible may be presented for
conversion as in this Indenture provided, and the Issuer may from time to
time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain any office or agency provided for in this Section.
The Issuer will give to the Trustee prompt written notice of any such
designation or rescission thereof and of change in the location of any such
other office or agency.
Section 3.3 Appointment to Fill a Vacancy in Office of Trustee.
The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee with respect to each series of
Securities hereunder.
Section 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section:
(a) that such paying agent will hold all sums received by it
as such agent for the payment of the principal of or interest, if
any, on the Securities of such series (whether such sums have been
paid to it by the Issuer or by any other obligor on the Securities
of such series) in trust for the benefit of the Holders of the
Securities of such series entitled thereto or of the Trustee until
such sums shall be paid to such Holders or otherwise disposed of
as herein provided;
(b) that such paying agent will give the Trustee prompt
notice of any failure by the Issuer (or by any other obligor on the
Securities of such series) to make any payment of the principal of
or interest on the Securities of such series when the same shall
be due and payable; and
(c) at any time during the continuance of any such failure,
upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent.
The Issuer will, on or prior to each due date of the principal of
or interest, if any, on the Securities of any series, deposit with the paying
agent a sum sufficient to pay such principal or interest so becoming due,
such sum to be held in trust for the benefit of the Holders of the Securities
of such series entitled to such principal or interest, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of
any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the
principal of or interest, if any, on the Securities of such series, set
aside, segregate and hold in trust for the benefit of the Holders of the
Securities of such series a sum sufficient to pay such principal or interest,
if any, so becoming due until such sums shall be paid to such Holders or
otherwise disposed of as herein provided. The Issuer will promptly notify
the Trustee of any failure to take such action.
Anything in this section to the contrary notwithstanding, but
subject to Section 10.1, the Issuer may at any time, for the purpose of
obtaining a satisfaction and discharge with respect to one or more or all
series of Securities hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such series by the Issuer
or any paying agent hereunder, as required by this Section, such sums to be
held by the Trustee upon the trusts herein contained, and, upon such payment
by any paying agent to the Trustee, such paying agent shall be released from
all further liability with respect to such money.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.3 and 10.4.
Section 3.5 Limitation on Dividends; Transactions with Affiliates.
(a) If Securities are issued to a CMS Energy's Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such CMS Energy
Trust and (i) there shall have occurred any event of which the Issuer has
actual knowledge that (A) with the giving of notice or the lapse of time or
both, would constitute an Event of Default hereunder and (B) in respect of
which the Issuer shall not have taken reasonable steps to cure, (ii) the
Issuer shall be in default with respect to its payment of any obligations
under the Preferred Securities Guarantee or (iii) the Issuer shall have given
notice of its election to defer payments of interest on such Securities by
extending the interest payment period as provided in any indentures
supplemental hereto and shall not have rescinded such notice, or such period,
or any extension thereof, shall be continuing, then the Issuer shall not, and
shall cause any Subsidiary not to, (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the Issuer's capital stock or (y) make any
payment of principal, interest or premium, if any, on or repay, repurchase
or redeem any debt securities (including guarantees of indebtedness for money
borrowed) of the Issuer that rank pari passu with or junior to the Securities
(other than (1) any dividend, redemption, liquidation, interest, principal
or guarantee payment by the Issuer where the payment is made by way of
securities (including capital stock) that rank pari passu with or junior to
the securities on which such dividend, redemption, interest, principal or
guarantee payment is being made,(2) payments under the Preferred Securities
Guarantee, (3) purchases of Common Stock related to the issuance of Common
Stock under any of the Issuer's benefit plans for its directors, officers or
employees, (4) as a result of a reclassification of the Issuer's capital
stock or the exchange or conversion of one series or class of the Issuer's
capital stock for another series or class of the Issuer's capital stock and
(5) the purchase of fractional interests in shares of the Issuer's capital
stock pursuant to the conversion or exchange provisions of such capital stock
or the security being converted or exchanged).
The Issuer also covenants with each Holder of the Securities (i) that
for so long as Trust Securities are outstanding not to convert the Securities
except pursuant to a notice of conversion delivered to the Conversion Agent
by a holder of Trust Securities and (ii) to maintain directly or indirectly
100% ownership of the Common Securities of the Trust; provided, however, that
any permitted successor of the Issuer hereunder may succeed to the Issuer's
ownership of such Common Securities, (iii) not to voluntarily terminate,
wind-up or liquidate the Trust, except (a) in connection with a distribution
of the Securities to the holders of Trust Securities in liquidation of the
Trust or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration and (iv) to use its reasonable
efforts, consistent with the terms and provisions of the Declaration to cause
the Trust to remain a business trust and not to be classified as an
association taxable as a corporation for United States Federal income tax
purposes.
ARTICLE FOUR
SECURITY HOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
Section 4.1 Issuer to Furnish Trustee Names and Addresses of
Security holders. The Issuer and any other obligor on the Securities
covenant and agree that they will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Securities of each series:
(a) semi-annually and not more than 15 days after each Record
Date for the payment of interest on such Securities, as of such
Record Date and on dates to be determined pursuant to Section 2.3
for non-interest bearing Securities, in each year; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such
request, as of a date not more than 15 days prior to the time such
information is furnished;
provided that if and so long as the Trustee shall be the Security Registrar
for such series such list shall not be required to be furnished.
Section 4.2 Preservation and Disclosure of Security holders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to
it as provided in Section 4.1, (ii) received by it in the capacity of
Security Registrar for such series, if so acting, and (iii) filed with it
within the two preceding years pursuant to Section 4.4(c)(ii). The Trustee
may destroy any list furnished to it as provided in Section 4.1 upon receipt
of a new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to
the Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application,
and such application states that the applicants desire to communicate with
other Holders of Securities of a particular series (in which case the
applicants must all hold Securities of such series) or with Holders of all
Securities with respect to their rights under this Indenture or under such
Securities and such application is accompanied by a copy of the form of proxy
or other communication which such applicants propose to transmit, then the
Trustee shall, within five Business Days after the receipt of such
application, at its election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section; or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of such subsection (a) and as to the approximate cost
of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of such series or all Holders of Securities,
whose name and address appears in the information preserved at the time by
the Trustee in accordance with the provisions of such subsection (a) a copy
of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the
best interests of the Holders of Securities of such series or of all
Securities, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in
the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more
of such objections, the Commission shall find, after notice and opportunity
for hearing, that all the objections so sustained have been met, and shall
enter an order so declaring, the Trustee shall mail copies of such material
to all such Holders with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Securities by receiving and holding
the same, agrees with the Issuer and the Trustee that neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Securities in accordance with the
provisions of subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made
under such subsection (b).
Section 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations
prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or if the Issuer is not required
to file information, documents or reports pursuant to either of
such Sections, then to file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic
information, documents, and reports which may be required pursuant
to Section 13 of the Securities Exchange Act of 1934 in respect of
a debt security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by the Issuer with the
conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within
30 days after the filing thereof with the Trustee, in the manner
and to the extent provided in Section 4.4(c), such summaries of any
information, documents and reports required to be filed by the
Issuer pursuant to subsections (a) and (b) of this Section as may
be required to be transmitted to such Holders by rules and
regulations prescribed from time to time by the Commission; and
(d) to furnish to the Trustee, not less often than annually, a
brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her
knowledge of the Issuer's compliance with all conditions and covenants
under this Indenture (such compliance to be determined without regard
to any period of grace or requirement of notice provided under this
Indenture).
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 4.4 Reports by the Trustee. (a) Annually, not later than
60 days after May 15 of each year, the Trustee shall transmit to the Holders
and the Commission a report with respect to events described in Section 313(a)
of the Trust Indenture Act, in such manner and to the extent revised thereunder.
(b) The Trustee shall transmit to the Holders of each series, as
provided in subsection (c) of this Section, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the Trustee,
as such, since the date of the last report transmitted pursuant to the
provisions of subsection (a) of this Section (or if no such report has yet
been so transmitted, since the date of this Indenture) for the reimbursement
of which it claims or may claim a lien or charge, prior to that of the
Securities of such series, on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this subsection
(b), except that the Trustee shall not be required (but may elect) to report
such advances if such advances remaining unpaid at any time aggregate 10% or
less of the principal amount of the Securities of such series outstanding at
such time, such report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail
to all Holders of Securities, as the names and addresses of such Holders
appear upon the Security Register;
(d) A copy of each such report shall, at the time of such
transmission to the Holders, be furnished to the Issuer and be filed by the
Trustee with each stock exchange, if any, upon which the Securities of any
series are listed and also with the Commission. The Issuer agrees to notify
the Trustee when and as the Securities of such series become admitted to
trading on any national securities exchange.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITY HOLDERS
ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. "Event of Default" with respect to Securities of any
series, wherever used herein, means each of the following events which shall
have occurred and be continuing (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest
upon any of the Securities of such series as and when the same
shall become due and payable, (whether or not payment is prohibited
by the provisions of Article 12 hereof), and continuance of such
default for a period of 30 days; provided, however, that if the
Issuer is permitted by the terms of the Securities of such series
to defer the payment in question, the date on which such payment
is due and payable shall be the date on which the Issuer is
required to make payment following such deferral, if such deferral
has been elected pursuant to the terms of the Securities; or
(b) default in the payment of all or any part of the
principal of the Securities of such series as and when the same
shall become due and payable (whether or not payment is prohibited
by the provisions of Article 12 hereof), whether at Maturity, upon
purchase by the Issuer at the option of the Holder, upon any
redemption, by declaration or otherwise; provided, however, that
if the Issuer is permitted by the terms of the Securities of such
series to defer the payment in question, the date on which such
payment is due and payable shall be the date on which the Issuer
is required to make payment following such deferral, if such
deferral has been elected pursuant to the terms of the Securities;
or
(c) default in the deposit or payment of any sinking fund or
analogous payment (whether or not payment is prohibited by the
provisions of Article 12 hereof) for the benefit of the Securities
of such series as and when the same shall become due and payable;
or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the
Issuer in the Securities of such series or in this Indenture
contained (other than a covenant or agreement expressly included
herein solely for the benefit of Securities of other series) for
a period of 60 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice of
Default" hereunder and demanding that the Issuer remedy the same,
shall have been given by registered or certified mail, return
receipt requested, to the Issuer by the Trustee, or to the Issuer
and the Trustee by the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities of all series
affected thereby; or
(e) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Issuer in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, adjudging the Issuer
a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of
or in respect of the Issuer under any applicable law, or appointing
a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any
substantial part of the property of the Issuer, or ordering the
winding up or liquidation of the affairs of the Issuer, and such
decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case or proceeding
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect or any other case or proceeding to be
adjudicated a bankrupt or insolvent, or consent to the entry of a
decree or order for relief in an involuntary case under any such
law, or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable law, or consent to the filing of such petition or to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official)
of the Issuer or for any substantial part of the property of the
Issuer, or make any general assignment for the benefit of
creditors, or the notice by it in writing of its inability to pay
its debts generally as they become due, or the taking of any
corporate action by the Issuer in furtherance of any such action;
(g) entry of final judgments against the Issuer or Consumers
Power Company aggregating in excess of $25,000,000 which remain
undischarged or unbonded for a period (during which execution shall
not be effectively stayed) of 60 days;
(h) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Issuer
(including a default with respect to Securities of any series other
than that series) or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Issuer
(including this Indenture), whether such indebtedness now exists
or shall hereafter be created, which default shall have resulted
in such indebtedness in an aggregate principal amount exceeding
$25,000,000 becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable,
without such acceleration having been rescinded or annulled within
a period of 10 days after there shall have been given, by
registered or certified mail, to the Issuer by the Trustee or to
the Issuer and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a
written notice specifying such default and requiring the Company
to cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; or
(i) any other Event of Default provided in the supplemental
indenture or Board Resolution establishing the terms of such series
of Securities as provided in Section 2.3 or in the form of Security
for such series.
If an Event of Default shall have occurred and be continuing then, unless the
principal of all the Securities shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of all the Securities of such series then Outstanding, by notice in
writing to the Issuer (and to the Trustee if given by such Holders), may
declare the entire principal of all the Securities of such series then
Outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable.
The foregoing paragraph, however, is subject to the condition that
if, at any time after the principal of the Securities of one or more series
shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered
as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of such series and the principal of all Securities of such
series which shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that payment of such interest
is enforceable under applicable law, on overdue installments of interest at
the same rate as the rate of interest (or Yield to Maturity, in the case of
Original Issue Discount Securities) specified in the Securities of such
series, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and
all advances made, by the Trustee except as a result of negligence or bad
faith, and if any and all Events of Default under this Indenture with respect
to such series, other than the non-payment of the principal of Securities of
such series which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein - then, and in every
such case, the Holders of a majority in aggregate principal amount of all the
Securities of such affected series then Outstanding by written notice to the
Issuer and to the Trustee, may direct the Trustee to waive all defaults with
respect to such series and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to
or shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been
accelerated and declared due and payable pursuant to the provisions hereof,
then, from and after such declaration, unless such declaration has been
rescinded and annulled, the principal amount of such Original Issue Discount
Securities shall be deemed, for all purposes hereunder, to be such portion
of the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall
be due and payable as a result of such acceleration, together with interest,
if any, thereon and all other amounts owing thereunder, shall constitute
payment in full of such Original Issue Discount Securities.
Section 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt. The Issuer covenants that (a) in case default shall be made in
the payment of any installment of interest on any of the Securities of any
series when such interest shall have become due and payable, and such default
shall have continued for a period of 30 days, or (b) in case default shall
be made in the payment of all or any part of the principal of any of the
Securities of any series when the same shall have become due and payable,
whether at Maturity, upon redemption, by declaration or otherwise -- then,
upon demand of the Trustee, the Issuer will pay to the Trustee for the
benefit of the Holders of the Securities of such series the whole amount that
then shall have become due and payable on all Securities of such series for
principal or interest, as the case may be (with interest to the date of such
payment upon the overdue principal and, to the extent that payment of such
interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest (or Yield to Maturity, in
the case of Original Issue Discount Securities) specified in the Securities
of such series); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and any expenses and liabilities incurred by such parties, and all advances
made by the Trustee except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of such series to the Holders,
whether or not the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or other obligor
upon the Securities of such series and collect in the manner provided by law
out of the property of the Issuer or other obligor upon the Securities of
such series, wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer
or any other obligor upon the Securities of any series under Title 11 of the
United States Code or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its
property or such other obligor, or in case of any other comparable judicial
proceedings relative to the Issuer or such other obligor, or to the creditors
or property of the Issuer or such other obligor, the Trustee, irrespective
of whether the principal of the Securities of any series shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand pursuant to
the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of the principal and interest (or, if the Securities of any series
are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series)
owing and unpaid in respect of the Securities of each series, and
to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation to the Trustee and its agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Trustee, except
as a result of negligence or bad faith) and of the Security holders
allowed in any judicial proceedings relative to the Issuer or such
other obligor, or to the creditors or property of the Issuer or
such other obligor;
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of the Securities of each series in
any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable
proceedings; and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Security holders
and of the Trustee on their behalf; and any trustee, receiver,
liquidator, custodian or other similar official is hereby
authorized by each of the Security holders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to the Security holders, to pay to the
Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, and its agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances
made, by the Trustee except, in each case, as a result of
negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities of any series or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder in
any such proceeding except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities of any series may be prosecuted and enforced
by the Trustee without the possession of any of the Securities of such series
or the production thereof at any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the
Trustee and its agents, attorneys and counsel, shall be for the ratable
benefit of the Holders of the Securities in respect of which such action was
taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities in respect to which action was taken, and it shall
not be necessary to make any Holders of such Securities parties to any such
proceedings.
Section 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of the Securities of any series
shall be applied in the following order at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of
principal or interest, upon presentation of the several Securities in respect
of which moneys have been collected and stamping (or otherwise noting)
thereon the payment, and upon surrender thereof if fully paid, or issuing
Securities of the same series in reduced principal amounts in exchange for
the presented Securities if only partially paid, or upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses of collection
applicable to such series, including reasonable compensation to the
Trustee and its agents, attorneys and counsel and of all expenses
and liabilities incurred, and all advances made, by the Trustee
except as a result of negligence or bad faith;
SECOND: In case the principal of the Securities of such
series in respect of which moneys have been collected shall not
have become and be then due and payable, to the payment of
interest, if any, on the Securities of such series in default in
the order of the maturity of the installments of such interest,
with interest (to the extent that such interest has been collected
by the Trustee and to the extent permitted by law) upon the overdue
installments of interest at the same rate as the rate of interest
(or Yield to Maturity, in the case of Original Issue Discount
Securities) specified in such Securities, such payments to be made
ratably to the Persons entitled thereto, without discrimination or
preference;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall have become
and be then due and payable, to the payment of the whole amount
then owing and unpaid upon all the Securities of such series for
principal and interest, if any, with interest upon the overdue
principal, and (to the extent that such interest has been collected
by the Trustee and to the extent permitted by law) upon overdue
installments of interest at the same rate as the rate of interest
(or Yield to Maturity, in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount
so due and unpaid upon the Securities of such series, then to the
payment of such principal and interest, without preference or
priority of principal over interest, or of interest over principal,
or of any installment of interest over any other installment of
interest, or of any Security of such series over any other Security
of such series, ratably to the aggregate of such principal and
accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the
Issuer or any other Person lawfully entitled thereto.
Section 5.4 Suits for Enforcement. In case an Event of Default
has occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
Section 5.5 Restoration of Rights on Abandonment of Proceedings.
In case the Trustee or any Holder shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee or to such Holder, then, and in every such case, the Issuer, the
Trustee and the Holders shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Holders shall continue as though no such
proceedings had been taken.
Section 5.6 Limitations on Suits by Security holders. No Holder
of any Security of any series shall have any right by virtue or by availing
of any provision of this Indenture to institute any action or proceeding at
law or in equity or in bankruptcy or otherwise upon or under or with respect
to this Indenture, or for the appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of not less than 25% in aggregate principal amount of the
Securities of each affected series then Outstanding (determined as provided
herein and voting as one class) shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as
it may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any
such action or proceeding and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 5.9; it
being understood and intended, and being expressly covenanted by the taker
and Holder of every Security with every other taker and Holder and the
Trustee, that no one or more Holders of Securities of any series shall have
any right in any manner whatever by virtue or by availing of any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holder of Securities or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable
and common benefit of all Holders of Securities of the affected series. For
the protection and enforcement of the provisions of this Section, each and
every Security holder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 5.7 Unconditional Right of Security holders to Receive
Principal and Interest and to Institute Certain Suits. Notwithstanding any
other provision in this Indenture and any provision of any Security, the
right of any Holder of any Security to receive payment of the principal of
and interest, if any, on such Security on or after the respective due dates
expressed in such Security or any date fixed for redemption, or to institute
suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 5.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of
Securities is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
No delay or omission of the Trustee or of any Holder of Securities
to exercise any right or power accruing upon any Event of Default occurring
and continuing as aforesaid shall impair any such right or power or shall be
construed to be a waiver of any such Event of Default or an acquiescence
therein; and, subject to Section 5.6, every right and power given by this
Indenture or by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Holders of Securities, as the case may be.
Section 5.9 Control by Holders of Securities. The Holders of a
majority in aggregate principal amount of the Securities of each series
affected at the time Outstanding (determined as provided herein and voting
as one class) shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee with respect to the
Securities of such affected series by this Indenture; provided that such
direction shall not be otherwise than in accordance with law and the
provisions of this Indenture; and provided further that (subject to the
provisions of Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel of its
choice, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors,
its executive committee or a trust committee of directors or Responsible
Officers of the Trustee shall determine that the action or proceedings so
directed would involve the Trustee in personal liability or that the actions
or forbearances specified in or pursuant to such direction would be unduly
prejudicial to the interests of Holders of the Securities of all affected
series not joining in the giving of said direction, it being understood that
(subject to Section 6.1) the Trustee shall have no duty to ascertain whether
or not such actions or forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is
not inconsistent with such direction or directions by Securityholders.
Section 5.10 Waiver of Past Defaults. Prior to the declaration
of acceleration of the Maturity of any Securities as provided in Section 5.1,
the Holders of a majority in aggregate principal amount of the Securities of
all series at the time Outstanding with respect to which a default or an
Event of Default shall have occurred and be continuing (determined as
provided herein and voting as one class) may on behalf of the Holders of all
such affected Securities waive any past default or Event of Default described
in Section 5.1 and its consequences, except a default or an Event of Default
(i) in the payment of the principal of or interest, if any, on any Security
of such series, or (ii) in respect of a covenant or provision hereof or of
any Security which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the
Issuer, the Trustee and the Holders of all such affected Securities shall be
restored to their former positions and rights hereunder, respectively; but
no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
Section 5.11 Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances. The Trustee shall, within 90 days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to such series actually known to the
Trustee to all Holders of Securities of such series in the manner and to the
extent provided in Section 4.4(c), unless in each case such defaults shall
have been cured before the mailing or publication of such notice (the term
"default" for the purpose of this Article being hereby defined to mean any
event or condition which is, or with notice or lapse of time or both would
become, an Event of Default); provided that, except in the case of default
in the payment of the principal of or the interest, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment
or analogous payment on such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or trustees and/or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
series.
Section 5.12 Right of Court to Require Filing of Undertaking to
Pay Costs. All parties to this Indenture agree, and each Holder of any
Security by his or her acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section
shall not apply to any suit instituted by the Trustee, to any suit instituted
by any Securityholder or group of Securityholders of any series holding in
the aggregate more than 10% in aggregate principal amount of the Securities
of such series, or, in the case of any suit relating to or arising under
clause (d) or (g) of section 5.1 (if the suit relates to the Securities of
more than one but less than all series), 10% in aggregate principal amount
of the Securities then Outstanding and affected thereby, or, in the case of
any suit relating to or arising under clause (d) or (g) (if the suit relates
to all the Securities then Outstanding), 10% in aggregate principal amount
of all Securities then Outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or the
interest on any Security on or after the due date expressed in such Security
or any date fixed for redemption.
Section 5.13 Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SIX
CONCERNING THE TRUSTEE
Section 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. The Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after
the curing or waiving of all Events of Default which may have occurred with
respect to such series, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default with respect to the Securities of a particular series has occurred
(which has not been cured or waived), the Trustee shall exercise with respect
to such series such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or
waiving of all such Events of Default which may have occurred with
respect to such series:
(i) the duties and obligations of the Trustee with
respect to the Securities of such series shall be deter-
mined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except
for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
statements, certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with an appropriate direction of the Holders pursuant
to Section 5.9 relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there shall be reasonable grounds
for believing that the repayment of such funds or adequate indemnity against
such liability is not reasonably assured to it.
Section 6.2 Certain Rights of the Trustee. Subject to
Section 6.1:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate or other certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, note,
security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof
certified by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel of its choice and
any advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted to be taken by it hereunder in good faith and
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture at the
request, order or direction of any of the Holders pursuant to the
provisions of this Indenture, unless such Holders shall have
offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or
waiving of all such Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, security or other paper or document unless
requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities of all
affected series then Outstanding; provided that, if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation
shall be paid by the Issuer or, if paid by the Trustee, shall be
repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ, and the
Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent or attorney appointed with due care
by it hereunder.
Section 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities, other than as to the due execution and delivery of the Indenture
by the Trustee. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds
thereof.
Section 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and, subject to Sections 6.8 and 6.13, may otherwise deal with the
Issuer and receive, collect, hold and retain collections from the Issuer with
the same rights it would have if it were not the Trustee or such agent.
Section 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4, all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent
of the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
Section 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, such compensation as the
parties shall agree in writing(which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust), and
the Issuer covenants and agrees to pay or reimburse the Trustee upon its
written request for all reasonable expenses and fees, disbursements and
advances incurred or made by or on behalf of it in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except any such expense, disbursement or advance
as may arise from its negligence or bad faith. The Issuer also covenants to
indemnify the Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on the part of
the Trustee arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and the Trustee's
duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and to pay or reimburse the Trustee for expenses and fees,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall not be deemed to be Subordinated Securities,
as that term is defined in Section 12.1, and shall be a senior claim to that
of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities, and the Securities are hereby subordinated to such
senior claim. When the Trustee incurs expenses after the occurrence of a
default, the expenses are intended to constitute expenses of administration
under any bankruptcy law.
Section 6.7 Right of Trustee to Rely on Officers' Certificate,
etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence
or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture in reliance
thereon.
Section 6.8 Qualification of Trustee; Conflicting Interests. If
the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
Section 6.9 Persons Eligible for Appointment as Trustee. There
shall at all times be a Trustee hereunder which shall be a corporation
organized and doing business under the laws of the United States of America
or of any State thereof or the District of Columbia having a combined capital
and surplus of at least $50,000,000, and which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or
examination by Federal, State or District of Columbia authority. Such
corporation shall have its principal place of business in The City of
New York, if there be such a corporation in such location willing to act upon
reasonable and customary terms and conditions. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance with the provisions
of this Section, the Trustee shall resign immediately in the manner and with
the effect specified in Section 6.10.
Section 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign and be discharged of the trusts created by this
Indenture by giving written notice of resignation to the Issuer and by
mailing notice of such resignation to the Holders of the then Outstanding
Securities at their addresses as they shall appear on the Security registry
books. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees with respect to the applicable series
by written instrument, in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 after written request therefor by the Issuer or by any
Holder who has been a bona fide Holder of a Security or Securities
of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any Holder; or
(iii) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent, or a receiver or liquidator
of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation
or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
Securities of any or all series, as appropriate, and appoint a successor
trustee for such series by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee or
trustees, or, subject to the provisions of Section 5.12, any Holder who has
been a bona fide Holder of a Security or Securities of such series for at
least six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding may at any time remove the Trustee and
appoint a successor trustee by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Issuer the evidence provided for
in Section 7.1 of the action in that regard taken by the Holders.
(d) Any resignation or removal of the Trustee and any appointment
of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11. If no successor trustee shall
have been so appointed with respect to any series and shall have accepted
appointment within 30 days after the mailing of a notice of resignation or
removal, the retiring trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Holder who
has been a bona fide Holder of a Security or Securities of such series for
at least six months may, subject to the provisions of Section 5.12, on behalf
of such Holder and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(e) Except in the case of a default in the payment of the
principal of or interest on any Security, or in the payment of any sinking
or purchase fund installment, the Trustee shall not be required to resign as
provided by Section 6.8 if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that:
(i) the default under this Indenture may be cured or waived during
a reasonable period and under the procedures described in such
application; and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of the Securityholders.
Section 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute,
acknowledge and deliver to the Issuer and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all rights, powers, trusts and duties of its predecessor
hereunder, with like effect as if originally named as trustee hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
Trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over and transfer to the successor
Trustee all moneys and property at the time held by it hereunder and shall
execute, acknowledge and deliver an instrument transferring to such successor
Trustee all such rights, powers, trusts and duties. Upon request of any such
successor Trustee, the Issuer shall execute and acknowledge any and all
instruments in writing for more fully and certainly vesting in and confirming
to such successor Trustee all such money, property, rights, powers and
trusts. Any Trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such Trustee for the benefit
of such applicable series to secure any amounts then due it pursuant to the
provisions of Section 6.6.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9.
Upon acceptance of appointment by any successor Trustee as provided
in this Section, the Issuer shall give notice thereof to the Holders of
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security registry books. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within
10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be given at the expense of the
Issuer.
Section 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided that such corporation shall be qualified under
the provisions of Section 6.8 and eligible under the provisions of
Section 6.9, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
In case at the time of such succession to the Trustee any of the
Securities of any series shall have been authenticated but not delivered, any
such successor Trustee may adopt the certificate of authentication of any
predecessor Trustee and deliver the Securities so authenticated; and, in case
at that time any of the Securities of any series shall not have been
authenticated, any successor Trustee may authenticate such Securities either
in the name of any predecessor hereunder or in the name of such successor
Trustee; and in all such cases such certificate of authentication shall have
the full force which is anywhere in the Securities of such series or in this
Indenture provided that the certificate of authentication of the Trustee
shall have; provided that the right to adopt the certification of any
predecessor Trustee or to authenticate Securities of any series in the name
of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
Section 6.13 Preferential Collection of Claims Against the Issuer.
The Trustee shall comply with its obligations under the applicable provisions
of Section 311 of the Trust Indenture Act.
Section 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer an authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of,
but subject to the direction of, the Trustee to authenticate and deliver
Securities of such series, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of such series so authenticated and delivered shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee. Whenever reference is made in
this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's certificate of authentication, such
reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent for such series and a certificate
of authentication executed on behalf of the Trustee by such Authenticating
Agent. Such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States of America
or of any State thereof or of the District of Columbia authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 (determined as provided in Section 6.9 with
respect to the Trustee) and subject to supervision or examination by Federal
or State authority.
Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any Authen-
ticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of any Authenticating Agent,
shall be the successor to such Authenticating Agent with respect to all
series of Securities for which it served as Authenticating Agent without the
execution or filing of any paper or any further act on the part of the
Trustee or such Authenticating Agent.
Any Authenticating Agent may at any time, and if it shall cease to
be eligible hereunder shall, resign by giving written notice of resignation
to the Trustee and to the Issuer. The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall upon receipt of an Issuer Order
appoint a successor Authenticating Agent and shall provide notice of such
appointment to all Holders of Securities affected thereby in the manner and
to the extent provided in Section 6.11 with respect to the appointment of a
successor trustee. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. The Authenticating Agent for the Securities of any
series shall have no responsibility or liability for any action taken by it
as such at the direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
Section 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in aggregate principal amount of the Holders of one or more series
of Securities may be evidenced (i) by one or more instruments of
substantially similar tenor signed by such specified percentage of Holders
in person or by an agent or proxy duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee; (ii) by the
record of such specified percentage of Holders voting in favor thereof at any
meeting of such Holders duly called and held by the Trustee; and (iii) by a
combination of such instrument or instruments and any such record of a
meeting.
Section 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument
by a Holder or his agent or proxy and proof of the holding by any Person of
any of the Securities of any series shall be sufficient if made in the
following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved by the certificate of any notary
public or other officer of any jurisdiction authorized to take
acknowledgments of deeds or administer oaths that the Person
executing such instrument acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn
to before any such notary or other such officer. Where such
execution is by or on behalf of any legal entity other than an
individual, such certificate or affidavit shall also constitute
sufficient proof of the authority of the Person executing the same.
(b) The ownership of Securities shall be proved by the
Security Register or by a certificate of the Security Registrar.
Section 7.3 Holders to Be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the
Person in whose name any Security of any series shall be registered upon the
Security Register for such series as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions
of Section 2.7 of this Indenture, interest, if any, on such Security and for
all other purposes; and none of the Issuer, the Trustee and any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary. All
such payments so made to any such Person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Security.
No holder of any beneficial interest in any Global Security held
on its behalf by a Depository shall have any rights under this Indenture with
respect to such Global Security, and such Depository may be treated by the
Issuer, the Trustee, and any agent of the Issuer or the Trustee as the owner
of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall impair, as between a Depository and such
holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depository as holder of any
Security.
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of one or more series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned
by the Issuer or any other obligor on the Securities with respect to which
such determination is being made or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer or any other obligor on the Securities with respect to which such
determination is being made shall be disregarded and deemed not to be
Outstanding for the purposes of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Securities which the Trustee
actually knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Issuer or any other obligor upon such Securities or any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer or any other obligor on such Securities. In case of
a dispute as to such right, the advice of counsel shall be full protection
in respect of any decision made by the Trustee in accordance with such
advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Securities, if
any, known by the Issuer to be owned or held by or for the account of any of
the above described Persons; and, subject to Sections 6.1 and 6.2, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Securities
not listed therein are Outstanding for the purposes of any such
determination.
Section 7.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the requisite
percentage in aggregate principal amount of the Securities of one or more
series, as the case may be, specified in this Indenture in connection with
such action, any Holder of a Security the serial number of which is shown by
the evidence to be included among the serial numbers of the Securities the
Holders of which have consented to such action may, by filing written notice
at the Corporate Trust Office and upon proof of ownership as provided in
Section 7.2, revoke such action so far as concerns such Security. Except as
aforesaid, any such action taken by the Holder of any Security of any series
shall be conclusive and binding upon such Holder and upon all future Holders
and owners of such Security and of any Securities of such series issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon
any such Security. Any action taken by the Holders of the requisite
percentage in aggregate principal amount of the Securities of one or more
series, as the case may be, specified in this Indenture in connection with
such action shall be conclusively binding upon the Issuer, the Trustee and
the Holders of all the Securities of such series.
Section 7.6 Calculation of Original Issue Discount. The Company
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including
daily accruals and accrual periods) accrued on Outstanding Securities as of
the end of such year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal
Revenue Code of 1986, as amended from time to time.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of the Board
of Directors (which resolution may provide general terms or parameters for
such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order), and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the execution thereof)
for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations
of the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer for the benefit of
the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being
included solely for the benefit of such series) such further
covenants, restrictions, conditions or provisions as the Issuer and
the Trustee shall consider to be for the protection of the Holders
of Securities of any series, and to make the occurrence, or the
occurrence and continuance, of a default in complying with any such
additional covenant, restriction, condition or provision an Event
of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; in respect
of any such additional covenant, restriction, condition or
provision, such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such an Event of Default
or may limit the remedies available to the Trustee upon such an
Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such
series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision contained
herein or in any supplemental indenture, or to make such other
provisions as the Issuer may deem necessary or desirable, with
respect to matters or questions arising under this Indenture,
provided that no such action shall adversely affect the interests
of the Holders of the Securities of any series appertaining
thereto;
(e) to establish the form and terms of the Securities of any
series as permitted by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities and
to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee, all as provided
in Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property or
assets thereunder, but the Trustee shall not be obligated to enter into any
such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
Section 8.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article Seven)
of the Holders of not less than a majority in aggregate principal amount of
the Securities of all series at the time Outstanding affected by such
supplemental indenture (voting as one class), the Issuer, when authorized by
a resolution of the Board of Directors (which resolution may provide general
terms or parameters for such action and may provide that the specific terms
of such action may be determined in accordance with or pursuant to an Issuer
Order), and the Trustee may, from time to time and at any time, enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
any supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of each such series; provided that no such
supplemental indenture shall (a) change the time of payment of the principal,
or any installment of the principal, of any Security or reduce the principal
amount thereof, or reduce the rate or change the time of payment of interest,
if any, thereon, or reduce any amount payable on the redemption thereof, or
make the principal thereof or the interest thereon payable in any coin or
currency other than that provided in such Security in accordance with the
terms thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
Maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy, pursuant to Section 5.2, or impair or affect the right to
institute suit for the payment thereof when due, or, if such Security shall
so provide, any right of repayment at the option of the Holder, in each case
without the consent of the Holder of each Security so affected, (b) reduce
the percentage in principal amount of the Outstanding Securities of the
affected series, the consent of whose Holders is required for any such sup-
plemental indenture or for any waiver provided for in this Indenture, without
the consent of the Holders of each Security so affected or (c) without the
consent of the Holders of each Security so affected, modify any of the
provisions of this Section or Section 5.10, except to increase any such
percentage or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; provided, however, that this clause
shall not be deemed to require the consent of any Holder with respect to
changes in the references to "the Trustee" and concomitant changes in this
Section, or the deletion of this proviso, in accordance with the requirements
of Sections 6.11 and 8.1(f).
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more series of Securities, or which modifies the
rights of the Holders of Securities of such series appertaining to such
Securities with respect to such covenant or provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a Board Resolution
complying with the first paragraph of this Section and evidence of the
consent of the Holders of the Securities as aforesaid and such other
documents, if any, as may be required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall give notice thereof to the Holders of then Outstanding
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on
the Security Register, and in each case such notice shall set forth in
general terms the substance of such supplemental indenture. Any failure of
the Issuer to give such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article complies with the
applicable provisions of this Indenture.
Section 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee as to any matter
provided for by such supplemental indenture. If the Issuer or the Trustee
shall so determine, new Securities of any series so modified as to conform,
in the opinion of the Trustee and the Board of Directors, to any modification
of this Indenture contained in any such supplemental indenture may be
prepared and executed by the Issuer, authenticated by the Trustee and
delivered in exchange for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Covenant of Issuer Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain Conditions. Nothing contained in this
Indenture or in any of the Securities shall prevent any consolidation of the
Issuer with, or merger of the Issuer into, any other corporation or
corporations (whether or not affiliated with the Issuer), or successive
consolidations or mergers to which the Issuer or its successor or successors
shall be a party or parties, shall prevent any sale, lease or conveyance of
the property of the Issuer as an entirety or substantially as an entirety,
shall prevent any consolidation of any Person with, or the merger of any
Person into, the Issuer or shall prevent any sale, lease or conveyance of the
property of any Person as an entirety or substantially as an entirety to the
Issuer; provided, that, and the Issuer hereby covenants and agrees, upon any
such consolidation, merger, sale, lease or conveyance, the due and punctual
payment of the principal of and interest, if any, on all the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Issuer, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee
by the corporation formed by such consolidation, or into which the Issuer
shall have been merged, or which shall have acquired such property; provided,
further, that the corporation formed by such consolidation or into which the
Issuer merged or the Person which acquired by conveyance or sale, or which
leases, the properties and assets of the Issuer as an entirety or
substantially as an entirety shall be a corporation organized and existing
under the laws of the United States of America, any State thereof or the
District of Columbia; provided, further, that immediately after giving effect
to such transaction, and treating any indebtedness which becomes an
obligation of the Issuer or a Subsidiary as a result of such transaction as
having been incurred by the Issuer or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and
be continuing; provided, further, if, as a result of any such consolidation
or merger or such conveyance, transfer or lease, properties or assets of the
Issuer would become subject to a mortgage, pledge, lien, security interest
or other encumbrance which would not be permitted by this Indenture, the
Issuer or such successor corporation or Person, as the case may be, shall
take such steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured thereby.
Section 9.2 Successor Corporation Substituted for Issuer. In case
of any consolidation, merger, sale, lease or conveyance referred to in, and
in accordance with, Section 9.1, and following such an assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named
herein as Issuer.
Such successor corporation may cause to be signed, and may issue
either in its own name or in the name of the Issuer prior to such succession,
any or all of the Securities issuable hereunder which theretofore shall not
have been signed by the Issuer and delivered to the Trustee; and, upon the
order of such successor corporation, instead of the Issuer, and subject to
all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the Issuer to the
Trustee for authentication, and any Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee
for that purpose. All of the Securities so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this
indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may
be made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease), the Issuer or any successor corporation which
shall theretofore have become such in the manner described in this Article
shall be discharged from all obligations and covenants under this Indenture
and the Securities and may be liquidated and dissolved.
Section 9.3 Opinion of Counsel Delivered to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
lease or conveyance, and any such assumption, and any such liquidation or
dissolution, complies with the applicable provisions of this Indenture and
that all conditions precedent herein provided for relating to such
transactions have been complied with.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 10.1 Satisfaction and Discharge of Indenture. (A) If at
any time (a) the Issuer shall have paid or caused to be paid the principal
of, and interest, if any, on all the Securities of each series theretofore
authenticated, (other than Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9), in
accordance with the terms of this Indenture and such Securities or (b) as to
Securities not so paid, the Issuer shall have delivered to the Trustee for
cancellation all Securities of each series theretofore authenticated (other
than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.9) or (c) as to
Securities not so paid or delivered for cancellation, in the case of any
series of Securities as to which the exact amount of principal of and
interest, if any, due can be determined at the time of making the deposit
referred to in clause (ii) below,(i) all the Securities of such series shall
have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused
to be deposited with the Trustee as trust funds money in an amount (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 10.4) or Government Obligations, maturing as to
principal and interest at such times and in such amounts as will insure the
availability of money, or a combination thereof, sufficient in the opinion
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay (A) the
principal and interest, if any, on all Securities of such series on each date
that such principal or interest, if any, is due and payable and (B) any
mandatory sinking fund or analogous payments on the dates on which such
payments are due and payable in accordance with the terms of this Indenture
and the Securities of such series; and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer
then this Indenture shall cease to be of further effect (except as to
(i) rights of registration of transfer and exchange of Securities and the
Issuer's right of optional redemption, if any, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities, (iii) the rights
of Holders of Securities to receive payments of principal thereof, and
interest, if any, thereon, upon the original stated due dates therefor or any
date of redemption (but not upon acceleration), and remaining rights of such
Holders to receive mandatory sinking fund or analogous payments, if any,
(iv) the rights, obligations, duties and immunities of the Trustee hereunder,
(v) the rights of Holders of Securities as beneficiaries hereof with respect
to the property so deposited with the Trustee and payable to all or any of
them and (vi) the obligations of the Issuer under Section 3.2) and the
Trustee, on demand of the Issuer accompanied by an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with, and at the cost and expense of the Issuer, shall
execute proper instruments acknowledging such satisfaction and discharge of
this Indenture, provided that the rights of Holders of the Securities to
receive amounts in respect of principal of and interest on the Securities
held by them shall not be delayed longer than required by then applicable
mandatory rules or policies of any national securities exchange upon which
the Securities are listed. The Issuer agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred and to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in the Board Resolution,
Officers' Certificate or supplemental indenture relating thereto provided
pursuant to Section 2.3. In addition to discharge of this Indenture pursuant
to the next preceding paragraph (A) the Issuer shall be deemed to have paid
and discharged the entire indebtedness on all the Securities of such series
on the 123rd day after the date of making the deposit referred to in
clause (a), and the provisions of this Indenture with respect to the
Securities of such series shall no longer be in effect (except as to
(i) rights of registration of transfer and exchange of Securities of such
series and the Issuer's right of optional redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen
Securities, (iii) the rights of Holders of Securities of such series
appertaining thereto to receive payments of principal thereof and interest,
if any, thereon, upon the original stated due dates therefor or any date of
redemption (but not upon acceleration), and remaining rights of such Holders
to receive mandatory sinking fund or analogous payments, if any, solely from
the trust fund referred to in subparagraph (a) below, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights
of Holders of Securities of such series as beneficiaries hereof with respect
to the property so deposited with the Trustee and payable to all or any of
them and (vi) the obligations of the Issuer under Section 3.2), and the
Trustee, at the cost and expense of the Issuer, shall, at the Issuer's
written request, execute proper instruments acknowledging the same, if:
(a) the Issuer shall have irrevocably deposited or caused to
be irrevocably deposited with the Trustee as a trust fund
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series (i) money
in an amount, or (ii) Government Obligations, maturing as to
principal and interest at such times and in such amounts as will
insure the availability of money, or (iii) a combination thereof,
sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and
interest, if any, on all Securities of such series on each date
that such principal or interest, if any, is due and payable and
(B) any mandatory sinking fund or analogous payments on the dates
on which such payments are due and payable in accordance with the
terms of this Indenture and the Securities of such series;
(b) no Event of Default or event which, with notice or lapse
of time or both, would become an Event of Default with respect to
the Securities of such series shall have occurred and be continuing
on the date of such deposit or at any time during the period ending
on the 123rd day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until
the expiration of such period);
(c) such deposit shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Issuer is a party or
by which it is bound;
(d) such deposit shall not cause any Securities of such
series then listed on any national securities exchange registered
under the Securities Exchange Act of 1934, as amended, to be
delisted;
(e) the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that (i) if such deposits shall include
Government Obligations in respect of any government other than the
United States of America, such deposit shall not result in the
Issuer, the Trustee or such trust constituting an "investment
company" under the Investment Company Act of 1940, as amended, and
(ii) if any such deposit occurs more than one year prior to the
stated maturity or redemption date of the Securities of such
series, the Holders of the Securities of such series then
Outstanding will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not
occurred; and
(f) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
defeasance contemplated by this paragraph have been complied with.
(C) The Issuer shall be released from its obligations under
Article Three and Article Nine with respect to the Securities of a particular
series Outstanding on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"). Covenant defeasance means
that, with respect to the Outstanding Securities of such series, the Issuer
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in Article Three or Article Nine, whether
directly or indirectly by reason of any reference elsewhere herein to such
Article by reason of any reference in such Article to any other provision
herein or by reason of any reference to such Article in any other document,
and such omission to comply shall not constitute an Event of Default under
Section 5.1 with respect to the Outstanding Securities of such series, but
the remainder of this Indenture and other Outstanding Securities shall be
unaffected thereby. The following shall be the conditions to application of
this paragraph (C):
(a) the Issuer shall have irrevocably deposited or caused to
be irrevocably deposited with the Trustee as a trust fund
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of such series, (i) money
in an amount, or (ii) Government Obligations, maturing as to
principal and interest at such times and in such amounts as will
insure the availability of money, or (iii) a combination thereof,
sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal and
interest, if any, on all Securities of such series on each date
that such principal or interest, if any, is due and payable and
(B) any mandatory sinking fund or analogous payments on the dates
on which such payments are due and payable in accordance with the
terms of this Indenture and the Securities of such series;
(b) no Event of Default or event which, with notice or lapse
of time or both, would become an Event of Default with respect to
the Securities of such series shall have occurred and be continuing
on the date of such deposit or at any time during the period ending
on the 123rd day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until
the expiration of such period);
(c) such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Issuer is a
party or by which it is bound;
(d) such covenant defeasance shall not cause any Securities
of such series then listed on any national securities exchange
registered under the Securities Exchange Act of 1934, as amended,
to be delisted;
(e) the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that (i) if such deposits shall include
Government Obligations in respect of any government other than the
United States of America, such deposit shall not result in the
Issuer, the Trustee or such trust constituting an "investment
company" under the Investment Company Act of 1940, as amended, and
(ii) the Holders of the Securities of such series then Outstanding
will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(f) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to such
covenant defeasance have been complied with.
Section 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and Government
Obligations deposited with the Trustee (or other trustee), and all money
received by the Trustee in respect of Government Obligations deposited with
the Trustee, pursuant to Section 10.1 in respect of the Outstanding
Securities of a particular series shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of such Securities of
all sums due and to become due thereon for principal and interest, if any;
but such money need not be segregated from other funds except to the extent
required by law.
Section 10.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect
to the Securities of any series, all moneys then held by any paying agent
under the provisions of this Indenture with respect to such series of
Securities shall, upon demand of the Issuer, be repaid to it or paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
Section 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years. Any moneys deposited with or paid to the Trustee
or any paying agent for the payment of the principal of or interest, if any,
on any Security of any series and not applied but remaining unclaimed for
three years after the date upon which such principal or interest shall have
become due and payable, shall, upon the written request of the Issuer and
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee
or such paying agent, and any Holder of the Securities of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all liability
of the Trustee or any paying agent with respect to such moneys shall
thereupon cease; provided, however, that the Trustee or such paying agent,
before being required to make any such repayment with respect to moneys
deposited with it for any payment shall at the expense of the Issuer, mail
by first-class mail to Holders of such Securities at their addresses as they
shall appear on the Security Register for the Securities of such series,
notice that such moneys remain and that, after a date specified therein,
which shall not be less than 30 days from the date of such mailing any
unclaimed balance of such moneys then remaining will be repaid to the Issuer.
Section 10.5 Indemnity for Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the Government Obligations deposited pursuant
to Section 10.1 or the principal or interest received in respect of such
Government Obligations, other than any such tax, fee or other charge which
by law is for the account of the Holders of the Securities for whose benefit
such Government Obligations are held.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 11.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any Securities of a series which have
the benefit of a sinking fund, except as otherwise specified as contemplated
by Section 2.3 for Securities of any series.
Section 11.2 Notice of Redemption; Partial Redemptions. Notice
of redemption to the Holders of Securities of any series to be redeemed as
a whole or in part shall be given by mailing notice of such redemption by
first class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption, to such Holders at their last
addresses as they shall appear upon the registry books for such Securities.
Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of any series designated for redemption
as a whole or in part, shall not affect the validity of the proceedings for
the redemption of any other Security of such series.
The notice of redemption to each such Holder shall specify (a) the
principal amount to be redeemed, (b) the date fixed for redemption, (c) the
redemption price, (d) if applicable, the current conversion price or rate,
(e) if applicable, the name and address of the Conversion Agent, (f) if
applicable, that the right of the Holder to convert Securities called for
redemption shall terminate at the close of business on the fifteenth day
prior to the redemption date (or such other day as may be specified as
contemplated by Section 2.3 for Securities of any series), (g) if applicable,
that Holders who elect to convert Securities called for redemption must
satisfy the requirements for conversion contained in such Securities, (h) the
place or places of payment, that payment will be made upon presentation and
surrender of such Securities, (i) that such redemption is pursuant to the
mandatory or optional sinking or other analogous fund, or both, if such be
the case, (j) that interest accrued to the date fixed for redemption will be
paid as specified in such notice and (k) that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue, (l)
place for presentment and (m) the CUSIP number. In case any Security is to
be redeemed in part only, the notice of redemption shall state the portion
of the principal amount thereof to be redeemed and shall state that on and
after the date fixed for redemption, upon surrender of such Security, a new
Security or Securities of such series in authorized denominations for an
aggregate principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with
the Trustee or with one or more paying agents (or, if the Issuer is acting
as its own paying agent, set aside, segregate and hold in trust as provided
in Section 3.4) an amount of money sufficient to redeem on the redemption
date all the Securities of any series so called for redemption at the
applicable redemption price, together with accrued interest to the date fixed
for redemption. The Issuer will deliver to the Trustee at least 60 days
prior (except that the Trustee may in its sole discretion waive such notice
period at any time) to the date fixed for redemption an Officers' Certificate
stating such date, the aggregate principal amount of Securities of each
series to be redeemed and that no Events of Default with respect to the
Securities of such series have occurred (which have not been waived or
cured). In case of a redemption at the option of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver
to the Trustee, prior to the giving of any notice of redemption to Holders
pursuant to this Section, an Officers' Certificate stating that such
restriction has been complied with. If less than all the Securities of any
series are to be redeemed, the Trustee shall select by lot or, in such manner
as it shall deem appropriate and fair, Securities of such series to be
redeemed in whole or in part. Securities may be redeemed in part in
multiples equal to the minimum authorized denomination for Securities of such
series or any multiple thereof. The Trustee shall promptly notify the Issuer
in writing of the Securities of such series selected for redemption and, in
the case of any Securities of such series selected for partial redemption,
the principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities of any series shall relate, in the case of any
Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
Section 11.3 Payment of Securities Called for Redemption. If
notice of redemption has been given as provided in Section 11.2, the
Securities or portions of Securities specified in such notice shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the Issuer shall default
in the payment of such Securities at the applicable redemption price,
together with interest accrued to said date) interest on the Securities or
portions of Securities so called for redemption shall cease to accrue and,
except as provided in Sections 6.5 and 10.4, such Securities shall cease from
and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right
in respect of such Securities except the right to receive the applicable
redemption price thereof and unpaid interest to the date fixed for redemption
and the right to convert such Securities, if such Securities are convertible.
On presentation and surrender of such Securities at a place of payment
specified in said notice, redemption, such Securities or the specified
portions thereof shall be paid and redeemed by the Issuer at the applicable
redemption price, together with interest accrued thereon to the date fixed
for redemption.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate
of interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and make available for
delivery to or on the order of the Holder thereof, at the expense of the
Issuer, a new Security or Securities of such series, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Security so presented.
Section 11.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and
certificate number in an Officers' Certificate delivered to the Trustee at
least 60 days prior to the last date on which notice of redemption may be
given as being owned of record and beneficially by, and not pledged or
hypothecated by either (a) the Issuer or (b) an entity specifically
identified in such Officers' Certificate as an Affiliate of the Issuer.
Section 11.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of the Securities of any series is herein referred to as an
"optional sinking fund payment". The date on which a sinking fund payment
is to be made is herein referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section or (c) receive credit for Securities of such series (not previously
so credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee an Officers'
Certificate (which need not contain the statements required by Section 14.5)
(a) specifying the portion of the mandatory sinking fund payment due on such
date to be satisfied by payment of cash and the portion to be satisfied by
credit of Securities of such series and the basis for such credit, (b)
stating that none of the Securities of such series to be so credited has
theretofore been so credited, (c) stating that no defaults in the payment of
interest or Events of Default with respect to such series have occurred and
are continuing (which have not been waived or cured) and (d) stating whether
or not the Issuer intends to exercise its right to make an optional sinking
fund payment on such date with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to
pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be so credited and required to be delivered to
the Trustee in order for the Issuer to be entitled to credit therefor as
aforesaid which have not theretofore been delivered to the Trustee shall be
delivered for cancellation pursuant to Section 2.10 to the Trustee with such
Officers' Certificate (or reasonably promptly thereafter if acceptable to the
Trustee). Such Officers' Certificate shall be irrevocable, and upon its
receipt by the Trustee the Issuer shall become unconditionally obligated to
make all the cash payments or other deliveries therein referred to, if any,
on or before the next succeeding sinking fund payment date. Failure of the
Issuer, on or before any such 60th day, to deliver such Officers' Certificate
and securities specified in this paragraph, if any, shall not constitute a
default but shall constitute, on and as of such 60th day, the irrevocable
election of the Issuer that (i) the mandatory sinking fund payment for such
series due on the next succeeding sinking fund payment date shall be paid
entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) the Issuer will make no optional sinking
fund payment with respect to such series on such date as provided in this
Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 and if the Issuer shall so request with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the applicable sinking fund redemption price, together with accrued
interest to the date fixed for redemption. If such amount shall be $50,000
or less and the Issuer makes no such request, then such amount shall be
carried over until a sum in excess of $50,000 is available. The Trustee
shall select, in the manner provided in Section 11.2, for redemption on such
sinking fund payment date a sufficient principal amount of Securities of such
series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the
Securities of such series (or portions thereof) so selected. Securities
shall be excluded from eligibility for redemption under this Section if they
are identified by registration and certificate number in an Officers'
Certificate delivered to the Trustee at least 40 days prior to the sinking
fund payment date as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such Officers' Certificate as an Affiliate of the
Issuer. The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it shall so request the Trustee in writing), shall cause notice
of redemption of the Securities of such series to be given in substantially
the manner provided in Section 11.2 (and with the effect provided in Section
11.3) for the redemption of Securities of such series in part at the option
of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section.
Any and all sinking fund moneys held on the stated maturity date of the
Securities of a particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series, shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of and
interest on the Securities of such series at maturity.
Unless otherwise provided for, on or before each sinking fund
payment date, the Issuer shall pay to the Trustee in cash or shall otherwise
provide for the payment of all interest accrued to the date fixed for
redemption on Securities to be redeemed on such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed Securities of
any series with sinking fund moneys or give any notice of redemption of
Securities of such series by operation of the sinking fund for such series
during the continuance of any Event of Default with respect to such series
except that, if notice of redemption of any Securities of such series shall
theretofore have been given, the Trustee shall redeem or cause to be redeemed
such Securities, provided that the Trustee or one or more paying agents shall
have received from the Issuer a sum sufficient for such redemption. Except
as aforesaid, any moneys in the sinking fund for such series at the time when
any such Event of Default shall occur, and any moneys thereafter paid into
the sinking fund, shall, during the continuance of such Event of Default, be
deemed to have been collected under Article Five and held for the payment of
all Securities of such series. In case such Event of Default shall have been
waived as provided in Section 5.10 or such Event of Default cured on or
before the 60th day preceding any sinking fund payment date, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date
in accordance with this Section to the redemption of Securities of such
series.
Section 11.6 Conversion Arrangement on call for Redemption. In
connection with any redemption of Convertible Securities of any series which
are convertible into Common Stock, the Issuer may arrange for the purchase
and conversion of any such Securities called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Securities by paying to the Trustee in trust for the Holders of such
Securities, on or before the close of business on the redemption date, an
amount in cash not less than the redemption price, together with interest,
if any, accrued to the redemption date, of such Securities. Notwithstanding
anything to the contrary contained in this Article Eleven, the obligation of
the Issuer to pay the redemption price of such Securities, including all
accrued interest, if any, shall be deemed to be satisfied and discharged to
the extent such amount is so paid by such purchasers. If such an agreement
is entered into, any such Securities not duly surrendered for conversion by
the Holders thereof may, at the option of the Issuer, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such
Holders and (notwithstanding anything to the contrary contained in Article
Thirteen) surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the last day on which
Securities of such series called for redemption may be converted in
accordance with this Indenture and the terms of such Securities, subject to
payment of the above amount as aforesaid. The Trustee shall hold and pay to
the Holders whose Securities are selected for redemption any such amount paid
to it in the same manner as it would moneys deposited with it by the Issuer
for the redemption of Securities. Without the Trustee's prior written
consent, no arrangement between the Issuer and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect
any of the powers, duties, responsibilities or obligations of the Trustee as
set forth in this Indenture, and the Issuer agrees to indemnify the Trustee
from, and hold it harmless against, any loss, liability or expense arising
out of or in connection with any such arrangement for the purchase and
conversion of any Securities between the Issuer and such purchasers,
including the costs and expenses incurred by the Trustee in the defense of
any claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations
under this Indenture.
ARTICLE TWELVE
SUBORDINATION
Section 12.1 Applicability of Article; Securities Subordinated to
Senior Indebtedness. (a) This Article Twelve shall apply only to the
Securities of any series which, pursuant to Section 2.3, are expressly made
subject to this Article. Such Securities are referred to in this Article
Twelve as "Subordinated Securities."
(b) The Issuer covenants and agrees, and each Holder of
Subordinated Securities by his acceptance thereof likewise covenants and
agrees, that the indebtedness represented by the Subordinated Securities and
the payment of the principal and interest, if any, on the Subordinated
Securities is subordinated and subject in right, to the extent and in the
manner provided in this Article, to the prior payment in full of all Senior
Indebtedness.
"Senior Indebtedness" means the principal of and premium, if any,
and interest on the following, whether outstanding on the date hereof or
thereafter incurred, created or assumed: (i) indebtedness of the Issuer for
money borrowed by the Issuer (including purchase money obligations) or
evidenced by debentures (other than the Subordinated Securities), notes,
bankers' acceptances or other corporate debt securities, or similar
instruments issued by the Issuer; (ii) all capital lease obligations of
CMS Energy; (iii) all obligations of CMS Energy issued or assumed as the
deferred purchase price of property, all conditional sale obligations of
CMS Energy and all obligations of CMS Energy under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business); (iv) obligations with respect to letters of credit;
(v) all indebtedness of others of the type referred to in the preceding
clauses (i) through (iv) assumed by or guaranteed in any manner by the Issuer
or in effect guaranteed by the Issuer; (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 CMS Energy (whether or not such obligation
is assumed by CMS Energy), except for (1) any such indebtedness that is by
its terms subordinated to or pari passu with the Subordinated Notes, as the
case may be, including all other debt securities and guaranties in respect
of those debt securities, issued to any other trusts, partnerships or other
entities affiliated with CMS Energy which act as a financing vehicle of
CMS Energy in connection with the issuance of preferred securities by such
entity or other securities which rank pari passu with, or junior to, the
Preferred Securities, and (2) any indebtedness between or among CMS Energy
and its affiliates and/or (vii) renewals, extensions or refundings of any of
the indebtedness referred to in the preceding clauses unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the
express provisions of the instrument creating or evidencing the same or the
assumption or guarantee of the same, or pursuant to which the same is
outstanding, such indebtedness or such renewal, extension or refunding
thereof is not superior in right of payment to the Subordinated Securities.
This Article shall constitute a continuing obligation to all
Persons who, in reliance upon such provisions become holders of, or continue
to hold, Senior Indebtedness, and such provisions are made for the benefit
of the holders of Senior Indebtedness, and such holders are made obligees
hereunder and they and/or each of them may enforce such provisions.
Section 12.2 Issuer Not to Make Payments with Respect to
Subordinated Securities in Certain Circumstances. (a) Upon the maturity of
any Senior Indebtedness by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon shall first be paid in full, or such
payment duly provided for in cash in a manner satisfactory to the holders of
such Senior Indebtedness, before any payment is made on account of the
principal of, or interest on, Subordinated Securities or to acquire any
Subordinated Securities or on account of any sinking fund provisions of any
Subordinated Securities (except payments made in capital stock of the Issuer
or in warrants, rights or options to purchase or acquire capital stock of the
Issuer, sinking fund payments made in Subordinated Securities acquired by the
Issuer before the maturity of such Senior Indebtedness, and payments made
through the exchange of other debt obligations of the Issuer for such
Subordinated Securities in accordance with the terms of such Subordinated
Securities, provided that such debt obligations are subordinated to Senior
Indebtedness at least to the extent that the Subordinated Securities for
which they are exchanged are so subordinated pursuant to this Article
Twelve).
(b) Upon the happening and during the continuation of any default
in payment of the principal of, or interest on, any Senior Indebtedness when
the same becomes due and payable or in the event any judicial proceeding
shall be pending with respect to any such default, then, unless and until
such default shall have been cured or waived or shall have ceased to exist,
no payment shall be made by the Issuer with respect to the principal of, or
interest on, Subordinated Securities or to acquire any Subordinated
Securities or on account of any sinking fund provisions of Subordinated
Securities (except payments made in capital stock of the Issuer or in
warrants, rights, or options to purchase or acquire capital stock of the
Issuer, sinking fund payments made in Subordinated Securities acquired by the
Issuer before such default and notice thereof, and payments made through the
exchange of other debt obligations of the Issuer for such Subordinated
Securities in accordance with the terms of such Subordinated Securities,
provided that such debt obligations are subordinated to Senior Indebtedness
at least to the extent that the Subordinated Securities for which they are
exchanged are so subordinated pursuant to this Article Twelve).
(c) In the event that, notwithstanding the provisions of this
Section 12.2, the Issuer shall make any payment to the Trustee on account of
the principal of or interest on Subordinated Securities, or on account of any
sinking fund provisions of such Securities, after the maturity of any Senior
Indebtedness as described in Section 12.2(a) above or after the happening of
a default in payment of the principal of or interest on any Senior
Indebtedness as described in Section 12.2(b) above, then, unless and until
all Senior Indebtedness which shall have matured, and all interest thereon,
shall have been paid in full (or the declaration of acceleration thereof
shall have been rescinded or annulled), or such default shall have been cured
or waived or shall have ceased to exist, such payment (subject to the
provisions of Sections 12.6 and 12.7) shall be held by the Trustee, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of such Senior Indebtedness (pro rata as to each of such holders on
the basis of the respective amounts of Senior Indebtedness held by them) or
their representative or the trustee under the indenture or other agreement
(if any) pursuant to which such Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of all
such Senior Indebtedness remaining unpaid to the extent necessary to pay the
same in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness. The Issuer shall give prompt written notice to the Trustee of
any default in the payment of principal of or interest on any Senior
Indebtedness.
Section 12.3 Subordinated Securities Subordinated to Prior Payment
of All Senior Indebtedness on Dissolution, Liquidation or Reorganization of
Issuer. Upon any distribution of assets of the Issuer in any dissolution,
winding up, liquidation or reorganization of the Issuer (whether voluntary
or involuntary, in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payments in full of the principal thereof and
interest due thereon, or provision shall be made for such payment,
before the Holders of Subordinated Securities are entitled to
receive any payment on account of the principal of or interest on
such Securities;
(b) any payment or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities
(other than securities of the Issuer as reorganized or readjusted
or securities of the Issuer or any other corporation provided for
by a plan or reorganization or readjustment the payment of which
is subordinate, at least to the extent provided in this Article
Twelve with respect to Subordinated Securities, to the payment in
full without diminution or modification by such plan of all Senior
Indebtedness), to which the Holders of Subordinated Securities or
the Trustee on behalf of the Holders of Subordinated Securities
would be entitled except for the provisions of this Article Twelve
shall be paid or delivered by the liquidating trustee or agent or
other person making such payment or distribution directly to the
holders of Senior Indebtedness or their representative, or to the
trustee under any indenture under which Senior Indebtedness may
have been issued (pro rata as to each such holder, representative
or trustee on the basis of the respective amounts of unpaid Senior
Indebtedness held or represented by each), to the extent necessary
to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or
distribution or provision thereof to the holders of such Senior
Indebtedness; and
(c) in the event that notwithstanding the foregoing provisions
of this Section 12.3, any payment or distribution of assets of the
Issuer of any kind or character, whether in cash, property or
securities (other than securities of the Issuer as reorganized or
readjusted or securities of the Issuer or any other corporation
provided for by a plan of reorganization or readjustment the
payment of which is subordinate, at least to the extent provided
in this Article Twelve with respect to Subordinated Securities, to
the payment in full without diminution or modification by such plan
of all Senior Indebtedness), shall be received by the Trustee or
the Holders of the Subordinated Securities on account of principal
of or interest on the Subordinated Securities before all Senior
Indebtedness is paid in full, or effective provision made for its
payment, such payment or distribution (subject to the provisions
of Section 12.6 and 12.7) shall be received and held in trust for
and shall be paid over to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative, or to
the trustee under any indenture under which such Senior
Indebtedness may have been issued (pro rata as provided in
subsection (b) above), for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have
been paid in full, after giving effect to any concurrent payment
or distribution or provision therefor to the holders of such Senior
Indebtedness.
The Issuer shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Issuer.
The consolidation of the Issuer with, or the merger of the Issuer
into, another corporation or the liquidation or dissolution of the Issuer
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Nine hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of
this Section 12.3 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated such in Article Nine.
Section 12.4 Holders of Subordinated Securities to be Subrogated
to Right of Holders of Senior Indebtedness. Subject to the payment in full
of all Senior Indebtedness, the Holders of Subordinated Securities shall be
subrogated equally and ratably to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Issuer
applicable to the Senior Indebtedness until all amounts owing on Subordinated
Securities shall be paid in full, and for the purposes of such subrogation
no payments or distributions to the holders of the Senior Indebtedness by or
on behalf of the Issuer or by or on behalf of the Holders of Subordinated
Securities by virtue of this Article Twelve which otherwise would have been
made to the Holders of Subordinated Securities shall, as between the Issuer,
its creditors other than holders of Senior Indebtedness and the Holders of
Subordinated Securities, be deemed to be payment by the Issuer to or on
account of the Senior Indebtedness, it being understood that the provisions
of this Article Twelve are and are intended solely for the purpose of
defining the relative rights of the Holders of the Subordinated Securities,
on the one hand, and the holders of the Senior Indebtedness, on the other
hand.
Section 12.5 Obligation of the Issuer Unconditional. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in any
Subordinated Security is intended to or shall impair, as among the Issuer,
its creditors other than holders of Senior Indebtedness and the Holders of
Subordinated Securities, the obligation of the Issuer, which is absolute and
unconditional, to pay to the Holders of Subordinated Securities the principal
of, and interest on, Subordinated Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of Subordinated Securities
and creditors of the Issuer other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
Holder of any Subordinated Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article Twelve of the holders of Senior
Indebtedness in respect of cash, property or securities of the Issuer
received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Issuer referred to in this Article Twelve, the
Trustee and Holders of Subordinated Securities shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are
pending, or, subject to the provisions of Section 6.1 and 6.2, a certificate
of the receiver, trustee in bankruptcy, liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or the Holders of
Subordinated Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed therein and all
other facts pertinent thereto or to this Article Twelve.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in any Subordinated Security is intended to or shall affect the
obligation of the Issuer to make, or prevent the Issuer from making, at any
time except during the pendency of any dissolution, winding up, liquidation
or reorganization proceeding, and, except as provided in subsections (a) and
(b) of Section 12.2, payments at any time of the principal of, or interest
on Subordinated Securities.
Section 12.6 Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice. The Issuer shall give prompt written notice to the
Trustee of any fact known to the Issuer which would prohibit the making of
any payment or distribution to or by the Trustee in respect of the
Subordinated Securities. Notwithstanding the provisions of this Article
Twelve or any provision of this Indenture, the Trustee shall not at any time
be charged with knowledge of the existence of any facts which would prohibit
the making of any payment or distribution to or by the Trustee, unless at
least two Business Days prior to the making of any such payment, the Trustee
shall have received written notice thereof from the Issuer or from one or
more holders of Senior Indebtedness or from any representative thereof or
from any trustee therefor, together with proof satisfactory to the Trustee
of such holding of Senior Indebtedness or of the authority of such
representative or trustee; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of Sections 6.1 and 6.2, shall
be entitled to assume conclusively that no such facts exist. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a
representative or trustee on behalf of the holder) to establish that such
notice has been given by a holder of Senior Indebtedness (or a representative
of or trustee on behalf of any such holder). In the event that the Trustee
determines, in good faith, that further evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness to participate in
any payments or distribution pursuant of this Article Twelve, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, as to
the extent to which such Person is entitled to participate in such payment
or distribution, and as to other facts pertinent to the rights of such Person
under this Article Twelve, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The Trustee, however, shall
not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness
and nothing in this Article Twelve shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6.
Section 12.7 Application by Trustee of Monies or Government
Obligations Deposited with It. Money or Government obligations deposited in
trust with the Trustee pursuant to and in accordance with Section 10.1 shall
be for the sole benefit of Securityholders and, to the extent allocated for
the payment of Subordinated Securities, shall not be subject to the
subordination provisions of this Article Twelve, if the same are deposited
in trust prior to the happening of any event specified in Section 12.2.
Otherwise, any deposit of monies or Government Obligations by the Issuer with
the Trustee or any paying agent (whether or not in trust) for the payment of
the principal of, or interest on any Subordinated Securities shall be subject
to the provisions of Section 12.1, 12.2 and 12.3 except that, if prior to the
date on which by the terms of this Indenture any such monies may become
payable for any purposes (including, without limitation, the payment of the
principal of, or the interest, if any, on any Subordinated Security) the
Trustee shall not have received with respect to such monies the notice
provided for in Section 12.6, then the Trustee or the paying agent shall have
full power and authority to receive such monies and Government Obligations
and to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on
or after such date. This Section 12.7 shall be construed solely for the
benefit of the Trustee and paying agent and, as to the first sentence hereof,
the Securityholders, and shall not otherwise effect the rights of holders of
Senior Indebtedness.
Section 12.8 Subordination Rights Not Impaired by Acts or
Omissions of Issuer or Holders of Senior Indebtedness. No rights of any
present or future holders of any Senior Indebtedness to enforce subordination
as provided herein shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Issuer or by any act or failure
to act, in good faith, by any such holders or by any noncompliance by the
Issuer with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Issuer may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Holders of the Subordinated Securities, without incurring responsibility to
the Holders of the Subordinated Securities and without impairing or releasing
the subordination provided in this Article Twelve or the obligations
hereunder of the Holders of the Subordinated Securities to the holders of
such Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, such Senior Indebtedness, or otherwise amend or supplement
in any manner such Senior Indebtedness or any instrument evidencing the same
or any agreement under which such Senior Indebtedness is outstanding; (ii)
sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing such Senior Indebtedness; (iii) release any
Person liable in any manner for the collection for such Senior Indebtedness;
and (iv) exercise or refrain from exercising any rights against the Issuer,
as the case may be, and any other Person.
Section 12.9 Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of Subordinated Securities by his
acceptance thereof authorizes and expressly directs the Trustee on his behalf
to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the Trustee his
attorney-in-fact for such purpose, including in the event of any dissolution,
winding up, liquidation or reorganization of the Issuer (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) the immediate filing of a claim for
the unpaid balance of his Subordinated Securities in the form required in
said proceedings and causing said claim to be approved. If the Trustee does
not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such
claim or claims, then the holders of Senior Indebtedness have the right to
file and are hereby authorized to file an appropriate claim for and on behalf
of the Holders of said Securities.
Section 12.10 Right of Trustee to Hold Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all of the rights set
forth in this Article Twelve in respect of any Senior Indebtedness at any
time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Issuer,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article Twelve, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of Sections 12.2 and 12.3,
the Trustee shall not be liable to any holder of such Senior Indebtedness if
it shall pay over or deliver to Holders of Subordinated Securities, the
Issuer or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article Twelve or otherwise.
Section 12.11 Article Twelve Not to Prevent Events of Defaults.
The failure to make a payment on account of principal or interest by reason
of any provision in this Article Twelve shall not be construed as preventing
the occurrence of an Event of Default under Section 5.1.
ARTICLE THIRTEEN
CONVERSIONS
Section 13.1 Applicability of Article. Securities of any series
which are convertible into Common Stock at the option of the Holder shall be
convertible in accordance with their terms and (except as otherwise specified
as contemplated by Section 2.3 for Securities of the series) in accordance
with this Article. Each reference in this Article to "a Security" or "the
Securities" refers to the Securities of the particular series that is
convertible into Common Stock. If more than one series of Securities with
conversion privileges are outstanding at any time, the provisions of this
Article shall be applied separately to each such series.
Section 13.2 Conversion Privilege. A Holder of a Security of any
authorized denomination of any series may convert such Security at the
principal amount thereof, or of such portion thereof, into fully paid and
non-assessable shares of Common Stock, at any time during the period
specified on the Securities of that series, at the conversion price or
conversion rate in effect on the conversion date, except that, with respect
to any Security (or portion thereof) called for redemption, such conversion
right shall (except as otherwise provided in Section 11.6) terminate at the
close of business on the fifteenth day prior to the date fixed for redemption
of such Security (or portion thereof) (or such other day as may be specified
as contemplated by Section 2.3 for Securities of such series), unless the
Issuer shall default in payment of the amount due upon redemption thereof.
The initial conversion price or conversion rate in respect of a
series of Securities shall be as specified on the Securities of that series.
The conversion price or conversion rate will be subject to adjustment on the
terms set forth in Section 13.7 through 13.13 or such other or different
terms, if any, as may be specified as contemplated by Section 2.3 for
Securities of such series.
A Holder may convert any Security in full and may convert a portion
of a Security if the portion to be converted and the remaining portion of
such Security are in denominations issuable for that series of Securities.
Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of it.
Section 13.3 Conversion Procedure. To convert a Security of any
series, a Holder must surrender such Security, duly endorsed or assigned to
the Issuer or in blank, at any office or agency of the Issuer maintained for
that purpose, accompanied by written notice to the Issuer at such office or
agency that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to
be converted. The date on which the Holder satisfies all those requirements
is the conversion date. As soon as practicable after the conversion date,
the Issuer shall deliver to the Holder through the Conversion Agent a
certificate for the number of shares of Common Stock issuable upon the
conversion and cash or its check in lieu of any fractional share. The Person
in whose name the certificate is registered becomes a stockholder of record
on the conversion date and the rights of the Holder of the Securities so
converted as a Holder thereof cease as of such date.
If the Holder converts more than one Security of any series at the
same time, the number of full shares issuable upon the conversion shall be
based on the total principal amount of the Securities of such series so
converted.
Upon surrender of a Security of any series that is converted in
part, the Trustee shall authenticate for the Holder a new Security of that
series equal in principal amount to the unconverted portion of the Security
surrendered.
If the last day on which a Security may be converted is not a
Business Day in a place where a Conversion Agent is located, the Security may
be surrendered to that Conversion Agent on the next succeeding day that is
a Business Day.
The Issuer will not be required to deliver certificates for shares
of Common Stock upon conversion while its stock transfer books are closed for
a meeting of stockholders or for the payment of dividends or for any other
purpose, but certificates for shares of Common Stock shall be delivered as
soon as the stock transfer books shall again be opened.
Securities of any series surrendered for conversion during the
period from the close of business on any Record Date next preceding any
Interest Payment Date for such series to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a redemption date within
such period) be accompanied by payment in funds acceptable to the Issuer of
an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion; provided,
that no such payment need be made if there shall exist, at the time of
conversion, a default in the payment of interest on the Securities of such
series. The funds so delivered to the Conversion Agent shall be paid to the
Issuer on or after such Interest Payment Date unless the Issuer shall default
on the payment of the interest due on such Interest Payment Date, in which
event such funds shall be paid to the Holder who delivered the same. Except
as provided in the preceding sentence and subject to the last paragraph of
Section 2.7, no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Securities surrendered for conversion
or on account of any dividends on the Common Stock issued upon conversion.
Section 13.4 Fractional Shares. The Issuer will not issue a
fractional share of Common Stock upon conversion of a Security. Instead, the
Issuer will deliver cash or its check for the current market value of a
fractional share. The current market value of a fractional share is
determined as follows: Multiply the current market price of a full share of
Common Stock on the last full trading day prior to the conversion date by the
fraction (rounded to the nearest 1/100 of a share) and round the result to
the nearest whole cent.
Section 13.5 Taxes on Conversion. The Issuer shall pay any and
all documentary, stamp or similar issue or transfer taxes due on the issue
or delivery of shares of Common Stock upon the conversion of Securities
pursuant hereto. The Holder, however, shall pay any such tax which is due
because the shares of Common Stock are issued in a name other than his.
Section 13.6 Issuer to Provide Stock. The Issuer shall from time
to time as may be necessary reserve and keep available out of its authorized
but unissued Common Stock or its Common Stock held in treasury enough shares
of Common Stock to permit the conversion of all outstanding Securities.
All shares of Common Stock which may be issued or delivered upon
conversion of the Securities shall be validly issued, fully paid and non-
assessable and shall be free from any preemptive rights.
In order that the Issuer may issue shares of Common Stock upon
conversion of the Securities, the Issuer will endeavor to comply with all
applicable Federal and State securities laws and will endeavor to list such
shares on each national or regional securities exchange on which the Common
Stock is listed.
If the taking of any action would cause an adjustment to the then
prevailing conversion price or conversion rate which would result in shares
of Common Stock being issued upon conversion of the Securities at an
effective conversion price below the then par value, if any, of the Common
Stock, or would raise the par value above the effective conversion price then
in effect, the Issuer will take such corporate action as may, in the opinion
of its counsel, be necessary in order that the Issuer may validly and legally
issue fully paid and non-assessable shares of its Common Stock at such
adjusted conversion price or conversion rate or the conversion price or
conversion rate then in effect, as the case may be.
Section 13.7 Adjustment for Change in Capital Stock. If the
Issuer:
(1) pays a dividend or makes a distribution in shares of its
Common Stock;
(2) subdivides its outstanding shares of Common Stock into
a greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Common
Stock other than in shares of its Common Stock; or
(5) issues by reclassification of its shares of Common Stock
any shares of its capital stock,
then the conversion privilege and the conversion price or conversion rate in
effect immediately prior to the opening of business on the record date for
such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Holder of any
Security thereafter converted may receive the number of shares of capital
stock of the Issuer which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to
such time. Such adjustment shall be made successively whenever any event
listed below shall occur.
For a dividend or distribution, the adjustment shall become
effective immediately after the record date for the dividend or distribution.
For a subdivision, combination or reclassification, the adjustment shall
become effective immediately after the effective date of the subdivision,
combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of
it may receive shares of two or more classes of capital stock of the Issuer,
the conversion prices of the classes of capital stock (after giving effect
to such allocation of the adjusted conversion price between or among the
classes of capital stock as the Board of Directors shall determine to be
appropriate) or the conversion rate, as the case may be, shall thereafter be
subject to adjustment on terms comparable to those applicable to Common Stock
in this Indenture.
Any shares of Common Stock issuable in payment of a dividend shall
be deemed to have been issued immediately prior to the time of the record
date for such dividend for purposes of calculating the number of outstanding
shares of Common Stock under Sections 13.8 and 13.9.
Section 13.8 Adjustment for Rights Issue. If the Issuer issues
any rights or warrants to all holders of shares of its Common Stock entitling
them for a period expiring within 45 days after the record date mentioned
below to purchase shares of Common Stock (or Convertible Securities) at a
price per share (or having a conversion price per share, after adding thereto
an allocable portion of the exercise price of the right or warrant to
purchase such Convertible Securities, computed on the basis of the maximum
number of shares of Common Stock issuable upon conversion of such Convertible
Securities) less than the Average Market Price on the Determination Date, the
conversion price or rate shall be adjusted so that it shall equal the price
or rate determined by multiplying the conversion price or dividing the
conversion rate, as the case may be, in effect immediately prior to the
opening of business on that record date by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering price
of the total number of shares of Common Stock so offered (or the aggregate
conversion price of the Convertible Securities to be so offered, after adding
thereto the aggregate exercise price of the rights or warrants to purchase
such Convertible Securities) would purchase at such Average Market Price and
of which the denominator 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 (or into which the
Convertible Securities so offered are convertible). Shares of Common stock
owned by or held for the account of the Issuer shall not be deemed
outstanding for the purpose of any such adjustment.
For purposes of this Section 13.8, the number of shares of Common
Stock outstanding on any record date shall be deemed to include the maximum
number of shares of Common Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible
Securities outstanding on such record date which are then exercisable,
exchangeable or convertible at a price equal to or less than the Average
Market Price per share of Common Stock, if all of such Convertible Securities
were deemed to have been exercised, exchanged or converted immediately prior
to the opening of business on such record date.
The adjustment shall be made successively whenever any such rights
or warrants are issued, and shall become effective immediately after the
record date or the determination of stockholders entitled to receive the
rights or warrants. If all of the shares of Common Stock (or all of the
Convertible Securities) subject to such rights or warrants have not been
issued when such rights or warrants expire (or, in the case of rights or
warrants to purchase Convertible Securities which have been exercised, all
of the shares of Common Stock issuable upon conversion of such Convertible
Securities have not been issued prior to the expiration of the conversion
right thereof), then the conversion price or conversion rate shall promptly
be readjusted to the conversion price or conversion rate which would then be
in effect had the adjustment upon the issuance of such rights or warrants
been made on the basis of the actual number of shares of Common Stock (or
Convertible Securities) issued upon the exercise of such rights or warrants
(or the conversion of such Convertible Securities).
No adjustment shall be made under this Section 13.8 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be,
in effect prior to such adjustment.
Section 13.9 Adjustments for Other Distributions. If the Issuer
distributes to all holders of shares of its Common Stock any assets or debt
securities or any rights or warrants to purchase securities, the conversion
price or conversion rate shall be adjusted by multiplying the conversion
price or dividing the conversion rate, as the case may be, in effect
immediately prior to the opening of business on the record date mentioned
below by a fraction, of which the numerator shall be the total number of
shares of Common Stock outstanding on such record date multiplied by the
Average Market Price on the Determination Date, less the fair market value
(as determined by the Board of Directors) on such record date of said assets
or debt securities or rights or warrants so distributed, and of which the
denominator shall be the total number of shares of Common Stock outstanding
on such record date multiplied by such Average Market Price.
For purposes of this Section 13.9, the number of shares of Common
Stock outstanding on any record date shall be deemed to include the maximum
number of shares of Common Stock the issuance of which would be necessary to
effect the full exercise, exchange or conversion of all Convertible
Securities outstanding on such record date which are then exercisable,
exchangeable or convertible at a price equal to or less than the Average
Market Price, if all of such Convertible Securities were deemed to have been
exercised, exchanged or converted immediately prior to the opening of
business on such record date.
The adjustment shall be made successively whenever any such
distribution is made, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the
distribution. Shares of Common Stock owned by or held for the account of the
Issuer shall not be deemed outstanding for the purpose of any such
adjustment.
No adjustment shall be made under this Section 13.9 if the adjusted
conversion price would be higher than, or the adjusted conversion rate would
be less than, the conversion price or conversion rate, as the case may be,
in effect prior to such adjustment.
This Section does not apply to cash dividends or distributions.
Also, this Section does not apply to dividends or distributions referred to
in Section 13.7 or to rights or warrants referred to in Section 13.8.
Section 13.10 Voluntary Adjustment. The Issuer at any time may
reduce the conversion price or increase the conversion rate, temporarily or
otherwise, by any amount but in no event shall such adjusted conversion price
or conversion rate result in shares of Common Stock being issuable upon
conversion of the Securities if converted at the time of such adjustment at
an effective conversion price per share less than the par value of the Common
Stock at the time such adjustment is made.
A voluntary adjustment of the conversion price or conversion rate
pursuant to this Section 13.10 does not change or adjust the conversion price
or conversion rate otherwise in effect for purposes of Section 13.7, 13.8 or
13.9. If an event requiring an adjustment to the conversion price or
conversion rate pursuant to Section 13.7, 13.8 or 13.9 occurs at any time
that a voluntary adjustment to the conversion price or conversion rate is in
effect pursuant to this Section 13.10, then the adjustment required by the
applicable of Section 13.7, 13.8 or 13.9 shall be made to the conversion
price or conversion rate that would otherwise have been in effect as of the
relevant date specified in such Section had no voluntary adjustment pursuant
to this Section 13.10 been made, and for purposes of applying such Section,
any such voluntary adjustment shall be disregarded. If such adjustment would
result in a lower conversion price or a higher conversion rate, as the case
may be, than the conversion price or conversion rate as voluntarily adjusted
by the Issuer then such lower conversion price or higher conversion rate
shall be the conversion price or conversion rate, as the case may be.
Section 13.11 Certain Definitions. For the purposes of this
Article, the following terms have the following meanings:
"Average Market Price" of a share of Common Stock on the
Determination Date for any issuance of rights or warrants or any distribution
in respect of which the Average Market Price is being calculated means the
average of the daily current market prices of the Common Stock for the
shortest of:
(i) the period of 30 consecutive trading days commencing 45
trading days before such Determination Date,
(ii) the period commencing on the date next succeeding the first
public announcement of the issuance of rights or warrants or the distribution
in respect of which the Average Market Price is being calculated and ending
on the last full trading day before such Determination Date, and
(iii) the period, if any, commencing on the date next succeeding
the Ex-Dividend Date with respect to the next preceding issuance of rights
or warrants or distribution for which an adjustment is required by the
provisions of Sections 13.7(4), 13.8 or 13.9, and ending on the last full
trading day before such Determination Date.
If the record date for an issuance of rights or warrants or a
distribution for which an adjustment is required by the provisions of
Sections 13.7(4), 13.8 or 13.9 (the "preceding adjustment event"), precedes
the record date for the issuance or distribution in respect of which the
Average Market Price is being calculated and the Ex-Dividend Date for such
preceding adjustment event is on or after the Determination Date for the
issuance or distribution in respect of which the Average Market Price is
being calculated, then the Average Market Price shall be adjusted by
deducting therefrom the fair market value (on the record date for the
issuance or distribution in respect of which the Average Market Price is
being calculated), as determined by the Board of Directors, of the capital
stock, rights, warrants, assets or debt securities issued or distributed in
respect of each share of Common Stock in such preceding adjustment event.
Further, in the event that the Ex-Dividend Date (or in the case of
a subdivision, combination or reclassification, the effective date with
respect thereto) with respect to a dividend, subdivision, combination
or reclassification to which Section 13.7(1), (2), (3) or (5) applied
occurs during the period applicable for calculating the Average Market
Price, then the Average Market Price shall be calculated for such period
in a manner determined by the Board of Directors to reflect the impact
of such dividend, subdivision, combination or reclassification on the
current market price of the Common Stock during such period.
"current market price" of a share of Common Stock on any day means
the last reported sale price (or, if no sale price is reported, the average
of the high and low bid prices) on such day on the National Association of
Securities Dealers, Inc. Automated Quotation System or as quoted by the
National Quotation Bureau Incorporated, or if the Common Stock is listed on
an exchange, on the principal exchange on which the Common Stock is listed.
In the event that no such quotation is available for any day, the Board of
Directors shall be entitled to determine the current market price on the
basis of such quotations as it considers appropriate.
"Determination Date" for any issuance of rights or warrants or any
distribution to which Section 13.8 or 13.9 applies means the earlier of (i)
the record date for the determination of stockholders entitled to receive the
rights or warrants or the distribution to which such Section applies and (ii)
the Ex-Dividend Date of such rights, warrants or distribution.
"Ex-Dividend Date" means the date on which "ex-dividend" trading
commences for a dividend, an issuance of rights or warrants or a distribution
to which any of Sections 13.7, 13.8 and 13.9 applies in the over-the-counter
market or on the principal exchange on which the Common Stock is then quoted
or listed.
Section 13.12 When Adjustment May Be Deferred. In any case in
which this Article shall require that an adjustment shall become effective
immediately after a record date for an event, the Issuer may defer until the
occurrence of such event (i) issuing to the Holder of any Security converted
after such record date and before the occurrence of such event the additional
shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such Holder cash or its check in lieu of any fractional
interest to which he is entitled pursuant to Section 13.4; provided, however,
that the Issuer shall deliver to such Holder a due bill or other appropriate
instrument evidencing such Holder's rights to receive such additional shares
of Common Stock, and such cash, upon the occurrence of the event requiring
such adjustment.
Section 13.13 When Adjustment Is Not Required. No adjustments in
the conversion price or conversion rate need be made unless the adjustment
would require an increase or decrease of at least one percent (1%) in the
initial conversion price or conversion rate. Any adjustment which is not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
No adjustment in the conversion price or conversion rate shall be
made because the Issuer issues, in exchange for cash, property or services,
shares of Common Stock, or any securities convertible into or exchangeable
for shares of Common Stock, or securities carrying the right to purchase
shares of Common Stock or such convertible or exchangeable securities.
No adjustment in the conversion price or conversion rate need be
made under this Article for sales of shares of Common Stock pursuant to an
Issuer plan providing for reinvestment of dividends or interest or in the
event the par value of the Common Stock is changed.
No adjustment in the conversion price or conversion rate need be
made for a transaction referred to in Section 13.7, 13.8 or 13.9 if
Securityholders are to participate in the transaction 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 Securityholders 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 Securities become convertible into cash, no
adjustment need be made thereafter as to such cash. Interest will not accrue
on such cash.
Section 13.14 Notice of Adjustment. Whenever the conversion price
or conversion rate is adjusted, the Issuer shall promptly mail to
Securityholders a notice of the adjustment and file with the Trustee an
Officers' Certificate briefly stating the new conversion price or conversion
rate, the date it becomes effective, the facts requiring the adjustment and
the manner of computing it. The certificate shall be conclusive evidence
that the adjustment is correct.
Section 13.15 Notice of Certain Transactions. If:
(1) the Issuer takes any action which would require an
adjustment in the conversion price or conversion rate;
(2) the Issuer consolidates or merges with, or transfers all
or substantially all of its assets to, another corporation, and stockholders
of the Issuer must approve the transaction; or
(3) there is a voluntary or involuntary dissolution or
liquidation of the Issuer,
a Holder of a Security may elect to convert it into shares of
Common Stock prior to the record date for, or the effective date of, the
transaction so that he may receive the rights, warrants, securities or assets
which a holder of shares of Common Stock on that date may receive.
Therefore, the Issuer shall mail to the Securityholders and the Trustee, at
least 20 days prior to the applicable record or effective date hereinafter
mentioned, a notice stating the proposed record or effective date, as the
case may be. Failure to mail the notice or any defect in it shall not affect
the validity of any transaction referred to in clause (1), (2) or (3) of this
Section.
Section 13.16 Consolidation, Merger or Sale of the Issuer. If the
Issuer is a party to a transaction described in Section 9.1 or a merger which
reclassifies or changes its Outstanding Common Stock, the successor
corporation (or corporation controlling the successor corporation or the
issuer, as the case may be) shall enter into a supplemental indenture which
shall provide that the Holder of a Security may convert it into the kind and
amount of securities or cash or other assets which he would have owned
immediately after the consolidation, merger or transfer if he had converted
the Security immediately before the effective date of such transaction,
assuming (to the extent applicable) that such Holder failed to exercise any
rights of election with respect thereto and received per share of Common
Stock the kind and amount of securities, cash or assets received per share
by a plurality of the non-electing shares. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The successor
corporation shall mail to each Securityholder a notice describing the
supplemental indenture.
If this Section applies, Sections 13.7, 13.8 and 13.9 shall not
apply.
Section 13.17 Issuer Determination Final. Any determination which
the Board of Directors must make pursuant to Sections 13.7, 13.9, 13.11,
13.13 or 13.16 is conclusive and binding on the Holders of Securities.
Section 13.18 Trustee's Disclaimer. Neither the Trustee nor any
Conversion Agent has any duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. Neither
the Trustee nor any Conversion Agent has any duty to determine whether any
provisions of a supplemental indenture under Section 13.16 are correct.
Neither the Trustee nor any Conversion Agent makes any representation as to
the validity or value of any securities or assets issued upon conversion of
Securities. Neither the Trustee nor any Conversion Agent shall be
responsible for the Issuer's failure to comply with this Article.
Section 13.19 Simultaneous Adjustments. In the event that this
Article Thirteen requires adjustments to the conversion price or conversion
rate under more than one of Sections 13.7(4), 13.8 or 13.9, 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 13.7, second, the provisions of Section 13.9 and,
third, the provisions of Section 13.8.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
Section 14.1 Incorporators, Stockholders, Officers and Directors
of Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such, or against any past, present or future
stockholder, officer or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of
law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the
issue of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
Section 14.2 Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities. Nothing in this Indenture, in the
Securities, expressed or implied, shall give or be construed to give to any
Person other than the parties hereto and their successors and the Holders of
the Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities. Notwithstanding the
foregoing, for so long as any Trust Securities remain outstanding, the
Issuer's obligations under this Indenture will also be for the benefit of the
Holders of such Trust Securities, and the Issuer acknowledges and agrees that
such holders will be entitled to enforce certain payment obligations under
the Securities directly against the Issuer to the extent provided in
the Declaration.
Section 14.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
made by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
Section 14.4 Notices and Demands on Issuer, Trustee and Holders
of Securities. Any notice, direction, request or demand which by any
provision of this Indenture is required or permitted to be given or served
by the Trustee or by any Holder of Securities of any series to or upon the
Issuer shall be deemed to have been sufficiently given or served by being
deposited postage prepaid in the United States mail, first-class mail (except
as otherwise specifically provided herein), addressed (until another address
of the Issuer is filed by the Issuer with the Trustee) to CMS Energy
Corporation, Fairlane Plaza South, Suite 1100, 330 Town Center Drive,
Dearborn, Michigan 48126, Attention: Secretary. Any notice, direction,
request or demand by the Issuer or any Holder of Securities of any series to
or upon the Trustee shall be deemed to have been sufficiently given or served
by being deposited postage prepaid in the United States mail, first-class
mail (except as otherwise specifically provided herein), addressed (until
another address of the Trustee is filed by the Trustee with the Issuer) to
The Bank of New York, 101 Barclay Street,Floor 21W., New York, New York, 10286,
Attn: Corporate Trust, Trustee Administration. Any notice required or
permitted to be given or served by the Issuer or by the Trustee to or upon
(i) any Holders of Registered Securities of any series or any Holders of
Unregistered Securities who have filed their names and addresses with the
Trustee pursuant to Section 4.4(c)(ii), shall be deemed to have been
sufficiently given or served by being deposited in the United States mail,
first-class mail (except as otherwise specifically provided herein),
addressed at their addresses as they shall appear on the Security Register
or at the addresses so filed, respectively, and (ii) any Holders of other
Unregistered Securities, shall be deemed to have been sufficiently given or
served by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York.
In any case where notice to the Holders of Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service or by reason of any other cause, it shall be
impracticable to mail notice when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to
be a sufficient giving of such notice.
Section 14.5 Officers' Certificates and Opinions of Counsel;
Statements to be Contained Therein. Except as otherwise expressly provided
by this Indenture, upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular application
or demand, no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture (other than certificates provided
pursuant to Section 4.3(d) or Section 11.5) shall include (a) a statement
that the individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto, (b) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based, (c) a statement that, in the opinion of
such individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with and (d) a statement as to
whether or not, in the opinion of such individual, such condition or covenant
has been complied with.
Any certificate, statement or opinion of an officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion of or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any such certificate, statement or Opinion of Counsel may be
based, insofar as it relates to factual matters, on information with respect
to which is in the possession of the Issuer, upon the certificate, statement
or opinion of or representations by an officer or officers of the Issuer,
unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer
or of counsel may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
Section 14.6 Payments Due on Saturdays, Sundays and Holidays. If
the date of maturity of interest on or principal of the Securities of any
series or the date fixed for redemption or repayment of any such Security
shall not be a Business Day, then (notwithstanding any other provision of
this Indenture or of the Securities) payment of such interest or principal
need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption or repayment, and no interest shall
accrue for the period from and after such date.
Section 14.7 Conflict of any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with any provision set forth in
Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, that
impose duties on any person, such provision of the Trust Indenture Act of
1939 shall control.
Section 14.8 Michigan Law to Govern. This Indenture and each
Security shall be governed by and deemed to be a contract under, and
construed in accordance with, the laws of the State of Michigan, and for all
purposes shall be construed in accordance with the laws of such State, except
as may otherwise be required by mandatory provisions of law, provided,
however, that the rights, duties and obligations of the Trustee are governed
and construed in accordance with the laws of the State of New York.
Section 14.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 14.10 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 14.11 Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of June 20, 1997.
CMS ENERGY CORPORATION
By /s/ A. M. Wright
-------------------------------
Alan M. Wright
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
[CORPORATE SEAL]
Attest:
By /s/ Michael D. VanHemert
---------------------------
Title:
THE BANK OF NEW YORK, TRUSTEE
By /s/ Denise Leonard
--------------------------
Title: Assistant Treasurer
<PAGE>
<PAGE>
STATE OF MICHIGAN )
)ss.
COUNTY OF WAYNE )
On the 20th day of June, 1997, before me personally came Alan M. Wright,
to me known, who, being by me duly sworn, did depose and say that he resides
at Ann Arbor, Michigan; that he is Senior Vice President, Chief Financial
Officer and Treasurer of CMS Energy Corporation, one of the corporations
described in and which executed the foregoing instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate; that it was so affixed by authority of the Board of Directors of
said corporation; and that he signed his name thereto by like authority.
[Notarial Seal]
/s/ Linda J. Wulff
- -------------------------------------------
Linda J. Wulff
Notary Public, Wayne County, Michigan
My Commission Expires: Aug. 31, 2000
<PAGE>
<PAGE>
Exhibit (4b)
====================================
FIRST SUPPLEMENTAL INDENTURE
between
CMS ENERGY CORPORATION
and
THE BANK OF NEW YORK
Dated as of June 20, 1997
====================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
ARTICLE I.DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1. Definition of Terms. . . . . . . . . . . . . . . . 2
ARTICLE II.GENERAL TERMS AND CONDITIONS OF THE DEBENTURES. . . . . . . . . . . 5
SECTION 2.1. Designation and Principal Amount . . . . . . . . . 5
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3. Form and Payment . . . . . . . . . . . . . . . . . 5
SECTION 2.4. Global Debenture . . . . . . . . . . . . . . . . . 5
SECTION 2.5. Interest . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III.REDEMPTION OR EXCHANGE OF DEBENTURES . . . . . . . . . . . . . . . 8
SECTION 3.1 Election to Redeem; Notice to Trustee. . . . . . . 8
SECTION 3.2 Selection of Debentures to Be Redeemed . . . . . . 8
SECTION 3.3 Notice of Redemption . . . . . . . . . . . . . . . 8
SECTION 3.4 Deposit of Redemption Price. . . . . . . . . . . . 9
SECTION 3.5 Debentures Payable on Redemption Date. . . . . . . 9
SECTION 3.6 Debentures Redeemed in Part. . . . . . . . . . . . 9
SECTION 3.7 Mandatory Redemption . . . . . . . . . . . . . . .10
SECTION 3.8 Optional Redemption. . . . . . . . . . . . . . . .10
SECTION 3.9 Exchange of Trust Securities for Debentures. . . .10
SECTION 4.1 Deferrals of Interest Payment Dates. . . . . . . .11
ARTICLE V.EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 5.1. Payment of Expenses. . . . . . . . . . . . . . . .12
ARTICLE VICONVERSION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . .12
SECTION 6.1 Conversion Rights. . . . . . . . . . . . . . . . .12
SECTION 6.2 Expiration of Conversion Rights. . . . . . . . . .13
SECTION 6.3 Conversion Price Adjustments.. . . . . . . . . . .13
SECTION 6.4 Fundamental Change . . . . . . . . . . . . . . . .16
SECTION 6.5 Prior Notice of Certain Events.. . . . . . . . . .17
ARTICLE VII.SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 7.1. Agreement to Subordinate . . . . . . . . . . . . .18
ARTICLE VIII.COVENANT TO LIST ON EXCHANGE. . . . . . . . . . . . . . . . . . .19
SECTION 8.1. Listing on an Exchange . . . . . . . . . . . . . .19
ARTICLE IX.FORM OF DEBENTURES. . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 9.1. Form of Debenture. . . . . . . . . . . . . . . . .19
SECTION 9.2. Form of Assignment . . . . . . . . . . . . . . . .26
ARTICLE X.ORIGINAL ISSUE OF DEBENTURES . . . . . . . . . . . . . . . . . . . .26
SECTION 10.1. Original Issue of Debentures . . . . . . . . . . .26
ARTICLE XI.MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 11.1. Ratification of Indenture. . . . . . . . . . . . .27
SECTION 11.2. Trustee Not Responsible for Recitals . . . . . . .27
SECTION 11.3. Governing Law. . . . . . . . . . . . . . . . . . .27
SECTION 11.4. Separability . . . . . . . . . . . . . . . . . . .27
SECTION 11.5. Counterparts . . . . . . . . . . . . . . . . . . .27
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FIRST SUPPLEMENTAL INDENTURE, dated as of June 20, 1997, (the
"First Supplemental Indenture"), between CMS Energy Corporation, a
Michigan Corporation (the "Issuer"), and The Bank of New York, as trustee
(the "Trustee") under the Indenture dated as of June 1, 1997 between the
Issuer and the Trustee (the "Indenture").
WHEREAS, the Issuer executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Issuer's Securities to
be issued from time to time in one or more series as might be determined
by the Issuer under the Indenture, in an unlimited aggregate principal
amount which may be authenticated and delivered as provided in the
Indenture;
WHEREAS, Section 2.3 of the Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Indenture;
WHEREAS, Section 8.1(e) of the Indenture provides that a
supplemental indenture may be entered into by the Issuer and the Trustee
without the consent of any Holders of the Securities to establish the form
and terms of the Securities of any series.
WHEREAS, pursuant to the terms of the Indenture, the Issuer
desires to provide for the establishment of a new series of its Securities
to be known as its 7-3/4% Convertible Subordinated Debentures due 2027
(the "Debentures"), the form and substance of such Debentures and the
terms, provisions and conditions thereof to be set forth as provided in
the Indenture and this First Supplemental Indenture;
WHEREAS, CMS Energy Trust I, a Delaware statutory business trust
(the "Trust"), has offered to the public $172,500,000 million aggregate
liquidation amount of its 7-3/4%% Convertible Quarterly Income Preferred
Securities (the "Preferred Securities"), representing undivided beneficial
interests in the assets of the Trust and proposes to invest the proceeds
from such offering, together with the proceeds of the issuance and sale by
the Trust to the Issuer of $5,335,100 aggregate liquidation amount of its
7-3/4% Convertible Quarterly Income Common Securities, in $177,835,100
aggregate principal amount of the Debentures; and
WHEREAS, the Issuer has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary
to make this First Supplemental Indenture a valid instrument in accordance
with its terms, and to make the Debentures, when executed by the Issuer
and authenticated and delivered by the Trustee, the valid obligations of
the Issuer, have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance
of the Debentures by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the
Debentures and the terms, provisions and conditions thereof, the Issuer
covenants and agrees with the Trustee as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when
used in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental
Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not
affect interpretation;
(f) the following terms have the meanings given to them in the
Trust Agreement: (i) Clearing Agency; (ii) Delaware Trustee;
(iii) Preferred Security Certificate; (iv) Property Trustee; (v) Regular
Trustees; (vi) Special Event; (vii) Tax Event; (viii) Underwriting
Agreement; (ix) Investment Company Event; (x) Depositary; and (xi)
Distribution;
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" means the interest, if any, that shall
accrue on any interest on the Debentures that is in arrears for more than
one interest payment period or not paid during any Extension Period, which
in either case shall accrue at the stated rate per annum specified or
determined as specified in such Debenture and compounded quarterly.
"Additional Sums" has the meaning specified in Section 2.5(c).
"Additional Taxes" means the sum of any additional taxes, duties
and other governmental charges to which the Trust has become subject from
time to time as a result of a Tax Event.
"Applicable Price" means (i) in the case of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive only
cash, the amount of cash received by the holder of one share of Common
Stock and (ii) in the event of any other Non-Stock Fundamental Change or
any Common Stock Fundamental Change, the average of the Closing Prices for
the Common Stock during the ten trading days prior to and including the
record date for the determination of the holders of Common Stock entitled
to receive such securities, cash, or other property in connection with
such Non-Stock Fundamental Change or Common Stock Fundamental Change or,
if there is no such record date, the date upon which the holders of the
Common Stock shall have the right to receive such securities, cash, or
other property, in each case as adjusted in good faith by the Issuer to
appropriately reflect any of the events referred to in Section 6.3.
"Closing Price" means on any day the reported last sale price on
such day or, in case no sale takes place on such day, the average of the
reported closing bid and asked prices in each case on the NYSE
Consolidated Transactions Tape or, if the stock is not listed or admitted
to trading on such Exchange, on the principal national securities exchange
on which such stock is listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, the average of
the closing bid and asked prices as furnished by any NYSE member firm,
selected by the Trustee for that purpose
"Common Stock Fundamental Change" means any Fundamental Change
in which more than 50% of the value (as determined in good faith by the
Board of Directors) of the consideration received by holders of Common
Stock consists of common stock that for each of the ten consecutive
trading days prior to the record date for the determination of the holders
of Common Stock entitled to receive such common stock or, if there is no
such record date, the date on which the holders of the Common Stock shall
have the right to receive such Common Stock, has been admitted for listing
or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on the Nasdaq National Market; provided,
however, that a Fundamental Change shall not be a Common Stock Fundamental
Change unless either (i) the Company continues to exist after the
occurrence of such Fundamental Change and the outstanding Preferred
Securities continue to exist as outstanding Preferred Securities or (ii)
not later than the occurrence of such Fundamental Change, the outstanding
Preferred Securities are converted into or exchanged for shares of
convertible preferred stock of an entity succeeding to the business of the
Company or a subsidiary thereof, which convertible preferred stock has
powers, preferences, and relative, participating, optional, or other
rights, and qualifications, limitations, and restrictions, substantially
similar to those of the Preferred Securities.
"Conversion Expiration Date" means, subject to Section 6.2(c),
the date selected by the Issuer not less than 30 days nor more than 60
days after the date on which the Issuer issues a press release announcing
its intention to terminate the conversion rights for the Holders.
"Conversion Price" shall have the meaning set forth in Section
6.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Current Market Price" means, for any day the last reported sale
price, regular way, on such day of Common Stock, or, if no sale takes
place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Composite Transactions Tape, or, if the Common Stock is not listed or
admitted to trading on the NYSE on such day, on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading, if the Common Stock is listed on a national securities exchange,
or the Nasdaq National Market, or, if the Common Stock is not quoted or
admitted to trading on such quotation system, on the principal quotation
system on which the Common Stock may be listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid
and asked prices of the Common Stock in the over-the-counter market on the
day in question as reported by the National Quotation Bureau Incorporated,
or a similar generally accepted reporting service, or, if not so available
in such manner, as furnished by any NYSE member firm selected from time to
time by the Board of Directors for that purpose or, if not so available in
such manner, as otherwise determined in good faith by the Board of
Directors.
"Dissolution Event" means that, as a result of the occurrence
and continuation of a Special Event, the Trust is to be dissolved in
accordance with the Declaration, and the Debentures held by the Property
Trustee are to be distributed to the holders of the Trust Securities
issued by the Trust pro rata in accordance with the Declaration.
"Expiration Time" shall have the meaning set forth in Section
6.3(e).
"Extension Period" shall have the meaning set forth in Section
4.1.
"Fundamental Change" means the occurrence of any Transaction or
event in connection with a plan pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for,
or constitute solely the right to receive securities, cash, or other
property (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification, recapital-
ization, or otherwise), provided, that, in the case of a plan involving
more than one such Transaction or event, for purposes of adjustment of the
conversion price, such Fundamental Change shall be deemed to have occurred
when substantially all of the Common Stock shall be exchanged for, con-
verted into, or acquired for or constitute solely the right to receive
securities, cash, or other property, but the adjustment shall be based
upon consideration that a holder of Common Stock received in such Trans-
action or event as a result of which more than 50% of the Common Stock
shall have been exchanged for, converted into, or acquired for or consti-
tute solely the right to receive securities, cash, or other property.
"Global Debenture" shall have the meaning set forth in Section
2.4(a).
"Interest Payment Date" shall have the meaning set forth in
Section 2.5(a).
"Non Book-Entry Preferred Securities" shall have the meaning set
forth in Section 2.4(a).
"Non-Stock Fundamental Change" means any Fundamental Change
other than a Common Stock Fundamental Change.
"Predecessor Debenture" shall mean, of any particular Debenture,
every previous Debenture evidencing all or a portion of the same debt as
that evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.9 of
the Indenture in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.
"Purchased Shares" shall have the meaning set forth in Section
6.3(e).
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the 10 consecutive
trading days prior to and including the record date for the determination
of the holders of Common Stock entitled to receive such common stock, or
if there is no such record date, the date on which the holders of Common
Stock shall have the right to receive such common stock, as adjusted in
good faith by the Issuer to appropriately reflect any of the events re-
ferred to in Section .6.3.
"Reference Date" has the meaning specified in Section 6.3(c).
"Reference Market Price" initially means $23.33 (which is an
amount equal to 66 2/3% of the reported last sale price for the Common
Stock on the NYSE Consolidated Transactions Tape on June 18, 1997), and in
the event of any adjustment of the Conversion Price other than as a result
of a Non-Stock Fundamental Change, the Reference Market Price shall also
be adjusted so that the ratio of the Reference Market Price to the
Conversion Price after giving effect to any such adjustment shall always
be the same as the ratio of the initial Reference Market Price to the
initial Conversion Price of the Debentures.
"Redemption Date" shall mean, when used with respect to any
Debenture to be redeemed, the date fixed for such redemption by or
pursuant to this Supplemental Indenture.
"Redemption Price" shall have the meaning set forth in Section
3.3.
"Transaction" shall have the meaning set forth in Section 6.4.
"Trust Agreement" means the Amended and Restated Declaration of
Trust of CMS Energy Trust I , a Delaware statutory business trust, dated
as of June 20 1997.
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized and established a series of unsecured
Securities designated the "7-3/4% Convertible Subordinated Debentures due
2027", limited in aggregate principal amount to $177,835,000 (except as
contemplated in Section 2.3(f)(2) of the Indenture).
SECTION 2.2. Maturity.
The Maturity Date of the Debentures is July 15, 2027.
SECTION 2.3. Form and Payment.
The Debentures shall be issued in fully registered form without
interest coupons and shall be issuable in denominations of $50 and any
integral multiple thereof. Principal and interest on the Debentures
issued in certificated form will be payable, the transfer of such
Debentures will be registrable and such Debentures will be exchangeable
for Debentures bearing identical terms and provisions, at the office or
agency of the Trustee in the Borough of Manhattan, the City of New York;
provided, however, that payment of interest may be made at the option of
the Issuer by check mailed to the Holder at such address as shall appear
in the Security Register or by wire transfer to an account maintained by
the Holder. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and
interest (including Additional Interest and Additional Sums, if any) on
such Debentures held by the Property Trustee will be made at such place
and to such account as may be designated by the Property Trustee.
SECTION 2.4. Global Debenture.
(a) In connection with a distribution of Debentures to Holders
in connection with the involuntary or voluntary dissolution, winding up or
liquidation of the Trust,
(i) the Debentures may be presented to the Trustee by the
Property Trustee in exchange for a global Debenture in an aggregate
principal amount equal to the aggregate principal amount of all
outstanding Debentures (a "Global Debenture"), to be registered in
the name of the Clearing Agency, or its nominee, and delivered by the
Trustee to the Clearing Agency for crediting to the accounts of its
participants pursuant to the procedures of the Depositary. The
Issuer upon any such presentation, shall execute a Global Debenture
in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the
Indenture and this First Supplemental Indenture. Payments on the
Debentures issued as a Global Debenture will be made to the
Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Debentures may be presented to the Trustee by
the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held
by the Clearing Agency or its nominee ("Non Book-Entry Preferred
Securities") will be deemed to represent beneficial interests in
Debentures presented to the Trustee by the Property Trustee having an
aggregate principal amount equal to the aggregate liquidation amount
of the Non Book-Entry Preferred Securities until such Preferred
Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security
Certificates will be canceled and a Debenture, registered in the name
of the holder of the Preferred Security Certificate or the transferee
of the holder of such Preferred Security Certificate, as the case may
be, with an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Security Certificate canceled,
will be executed by the Issuer and delivered to the Trustee for
authentication and delivery in accordance with the Indenture and this
First Supplemental Indenture. On issue of such Debentures, Debentures
with an equivalent aggregate principal amount that were presented by
the Property Trustee to the Trustee will be deemed to have been
canceled.
(b) Except as provided in (c) below, a Global Debenture may be
transferred, in whole but not in part, only to another nominee of the
Depositary, or to a successor Depositary selected or approved by the
Issuer or to a nominee of such successor Depositary.
(c) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global Debenture
and no successor depositary shall have been appointed within 90 days by
the Company, (ii) the Depositary, at any time, ceases to be a clearing
agency registered under the Exchange Act at which time the Depositary is
required to be so registered to act as such depositary and no successor
depositary shall have been appointed within 90 days by the Company, (iii)
the Company, in its sole discretion, determines that such Global Debenture
shall be so exchangeable or (iv) there shall have occurred an Event of
Default with respect to such Debentures, as the case may be, the Company
will execute, and, subject to Article 2 of the Indenture, the Trustee,
upon written notice from the Company and receipt of a Company Order, will
authenticate and deliver the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate princi-
pal amount equal to the principal amount of the Global Debenture in ex-
change for such Global Debenture. In addition, upon an Event of Default
or if the Company may at any time determine that the Debenture shall no
longer be represented by a Global Debenture, in such event the Company
will execute, and subject to Section 2.8 of the Indenture, the Trustee,
upon receipt of an Officers' Certificate evidencing such determination by
the Company and a Company Order, will authenticate and make available for
delivery the Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to
the principal amount of the Global Debenture in exchange for such Global
Debenture. Upon the exchange of the Global Debenture for such Debentures
in definitive registered form without coupons, in authorized denomina-
tions, the Global Debenture shall be canceled by the Trustee. Such Deben-
tures in definitive registered form issued in exchange for the Global
Debenture shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Debentures to the Depositary for delivery to
the Persons in whose names such Debentures are so registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest at the rate of 7-3/4% per
annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal
and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, at the Coupon
Rate, compounded quarterly, payable (subject to the provisions of
Article IV) quarterly in arrears on January 15, April 15, July 15 and
October 15 of each year (each, an "Interest Payment Date," commencing on
October 15, 1997), to the Person in whose name such Debenture or any
predecessor Debenture is registered, at the close of business on the
regular record date for such interest installment, which, in respect of
any Debentures of which the Property Trustee is the Holder or a Global
Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing
sentence, if the Preferred Securities are no longer in book-entry only
form or, except if the Debentures are held by the Property Trustee, the
Debentures are not represented by a Global Debenture, the regular record
date for such interest installment shall be the fifteenth day of the month
in which the applicable Interest Payment Date occurs.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except
as provided in the following sentence, the amount of interest payable for
any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days
elapsed in such a 90-day period. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then payment
of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Accrued interest that is not paid on the
applicable interest payment date will bear additional interest on the
amount thereof (to the extent permitted by law) at the stated rate per
annum, compounded quarterly.
(c) In the event that (i) the Property Trustee is the Holder
of all of the Outstanding Debentures, (ii) a Tax Event in respect of the
Trust shall have occurred and be continuing and (iii) the Company shall
not have (A) redeemed the Debentures pursuant to Section 3.7 or 3.8 or (B)
terminated the Trust pursuant to Section 9.2(b) of the Trust Agreement,
the Company shall pay to the Trust (and its permitted successors or
assigns under the Trust Agreement) for so long as the Trust (or its
permitted successor or assignee) is the registered holder of the
Debentures, such additional amounts as may be necessary in order that the
amount of distributions (including any Additional Amounts as defined in
the Trust Agreement) then due and payable by the Trust on the Preferred
Securities and Common Securities that at any time remain outstanding in
accord with the terms thereof shall not be reduced as a result of any
Additional Taxes (the "Additional Sums"). Whenever in this Indenture or
the Debentures there is a reference in any context to the payment of
principal of or interest on the Debentures, such mention shall be deemed
to include mention of the payments of the Additional Sums provided for in
this paragraph to the extent that, in such context, Additional Sums are,
were or would be payable in respect thereof pursuant to the provisions of
this paragraph and express mention of the payment of Additional Sums (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Sums in those provisions hereof where such express mention is
not made, provided, however, that the extension of an interest payment
period pursuant to Section 4.1 or the Debentures shall not extend the
payment of any Additional Sums that may be due and payable during such
interest payment period.
ARTICLE III.
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 3.1 Election to Redeem; Notice to Trustee. The election of the
Issuer to redeem any Debentures shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the
Issuer, the Issuer shall, not less than 45 days prior to the date fixed
for redemption (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such date and of the principal
amount of Debentures to be redeemed.
SECTION 3.2 Selection of Debentures to Be Redeemed. If less than all
the Debentures are to be redeemed, the particular Debentures to be
redeemed shall be selected not more than 45 days prior to the Redemption
Date by the Trustee from the Outstanding Debentures not previously called
for redemption, by lot or by such other method as the Trustee shall deem
fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of the Debentures Out-
standing, provided that the unredeemed portion of the principal amount of
the Debentures be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for the Debentures.
The Trustee shall promptly notify the Issuer in writing of the
Debentures selected for partial redemption and the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Debentures shall relate, in the case of any Debenture redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Debenture which has been or is to be redeemed. If the Issuer shall so
direct, Debentures registered in the name of the Issuer, any Affiliate or
any Subsidiary thereof shall not be included in the Debentures selected
for redemption.
SECTION 3.3 Notice of Redemption. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not later than the thirtieth
day, and not earlier than the sixtieth day, prior to the date fixed for
redemption, to each Holder of Debentures to be redeemed, at the address of
such Holder as it appears in the Securities Register.
With respect to Debentures to be redeemed, each notice of redemption
shall state:
(a) the Redemption Date;
(b) the redemption price at which the Debentures are to be
redeemed (the "Redemption Price");
(c) if less than all Outstanding Debentures are to be re-
deemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Debentures to be
redeemed (including, if relevant, the CUSIP or ISIN number);
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture or portion thereof,
and that upon deposit with the Paying Agent interest thereon, if any,
shall cease to accrue on and after the Redemption Date;
(e) the place or places where the Debentures are to be sur-
rendered for payment of the redemption price at which the Debentures
are to be redeemed; and
(f) that a Holder of Debentures who desires to convert
Debentures called for redemption must satisfy the requirements for
conversion contained in the Debentures, the then existing conversion
price or rate, and the date and time when the option to convert shall
expire.
Notice of redemption of Debentures to be redeemed at the election of
the Issuer shall be given by the Issuer or, at the Issuer's request, by
the Trustee in the name and at the expense of the Issuer and shall be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail
or any defect in the notice to the Holder of any Debenture designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
SECTION 3.4 Deposit of Redemption Price. Prior to 12:00 noon, New York
City time, on the Redemption Date specified in the notice of redemption
given as provided in Section 3.3, the Issuer will deposit with the Trustee
or with one or more Paying Agents (or, if the Issuer is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.2 of
the Indenture) an amount of money sufficient to redeem on the Redemption
Date all the Debentures so called for redemption at the applicable
Redemption Price.
If any Debenture called for redemption has been converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and
held in trust for the redemption of such Debenture shall (subject to any
right of the Holder of such Debenture or any Predecessor Debenture to re-
ceive interest as provided in the last paragraph of Section 2.7 of the
Indenture) be paid to the Issuer or, if then held by the Issuer, shall be
discharged from such trust.
SECTION 3.5 Debentures Payable on Redemption Date. If notice of
redemption has been given as provided in Section 3.3, the Debentures so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, including any accrued interest (and
any Additional Interest) thereon, and from and after such date (unless the
Issuer shall default in the payment of the Redemption Price or any accrued
interest on (including any Additional Interest)) such Debentures shall
cease to bear interest. Upon surrender of any such Debenture for
redemption in accordance with said notice, such Debenture shall be paid by
the Issuer at the Redemption Price, including any accrued interest (and
any Additional Interest) to the Redemption Date.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debenture.
SECTION 3.6 Debentures Redeemed in Part. In the event of any
redemption in part, the Issuer shall not be required to (i) issue, regis-
ter the transfer of or exchange any Debenture during a period beginning at
9:00 a.m. (New York City time) 15 Business Days before any selection for
redemption of Debentures and ending at 5:00 p.m. (New York City time) on
the earliest date in which the relevant notice of redemption is deemed to
have been given to all holders of Debentures to be so redeemed and (ii)
register the transfer of or exchange any Debentures so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Debentures being redeemed in part.
Any Debenture which is to be redeemed only in part shall be
surrendered at the place of payment therefor (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 his attorney duly authorized in writing), and
the Issuer shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Debenture without service
charge, a new Debenture or Debentures, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Debenture so
surrendered. Each Debenture shall be subject to partial redemption only
in the amount of $50 or integral multiples thereof.
The Debentures are not entitled to the benefit of any sinking or like
fund.
SECTION 3.7 Mandatory Redemption. Upon (i) repayment at maturity or
(ii) as a result of acceleration upon the occurrence of an Event of
Default, the Issuer shall redeem all the Outstanding Debentures at a
redemption price equal to 100% of the principal amount of such Debentures
plus any accrued and unpaid interest, including any Additional Interest,
to the date fixed for redemption.
SECTION 3.8 Optional Redemption. Except as set forth below, on and
after July 16, 2001 and subject to the next succeeding sentence, the
Issuer shall have the right, at any time and from time to time, to redeem
the Debentures, in whole or in part, upon notice given as set forth in
Section 3.3 during the twelve-month periods beginning on July 16 in each
of the following years at the indicated Redemption Price (expressed as a
percentage of the principal amount of the Debentures being redeemed),
together with any accrued but unpaid interest on the portion being re-
deemed:
Redemption Price Redemption Price
Year (%) of principal amount) Year (% of principal amount)
- ---- ------------------------ ---- -----------------------
2001 . . . . . . . 104.650 2005 . . . . . 101.550
2002 . . . . . . . 103.875 2006 . . . . . 100.775
2003 . . . . . . . 103.100 2007
and thereafter. . 100.00
2004 . . . . . . . 102.325
The principal amount of the Debentures so redeemed may not, however,
exceed the amount of the proceeds derived, directly or indirectly, by the
Issuer or its Subsidiaries from the issuance and sale of Common Stock
within three years preceding the date fixed for redemption. The Issuer
may not redeem the Debentures in part unless all accrued and unpaid
interest has been paid in full on all outstanding Debentures for all
quarterly interest periods terminating on or prior to the giving of notice
of the Redemption Date.
If at any time following the Conversion Expiration Date, less than 5%
of the original aggregate principal amount of the Debentures remains
Outstanding, such Debentures shall be redeemable at the option of the
Issuer, in whole but not in part, at a Redemption Price equal to the
principal amount thereof, plus any accrued and unpaid interest.
Upon the occurrence of a Tax Event, the Issuer shall have the right,
upon not less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole or in part, for cash upon the later of (i) 90 days
following the occurrence of such Tax Event or (ii) July 16, 2001 , at a
Redemption Price equal to the principal amount of such Debentures plus any
accrued and unpaid interest, including Additional Interest, to the date
fixed for such redemption.
SECTION 3.9 Exchange of Trust Securities for Debentures.
(a) At any time, the Issuer shall have the right to terminate
the Trust and cause the Debentures to be distributed to the holders of the
Preferred Securities in liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as provided by applicable law.
(b) If a Special Event in respect of the Trust shall occur, the
Issuer shall give the Property Trustee notice of the same. If a Special
Event in respect of the Trust shall occur and be continuing, the Trust
Agreement requires the Property Trustee to direct the Conversion Agent (as
defined in the Trust Agreement) to exchange all outstanding Trust Securi-
ties for the Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Securities to be exchanged with accrued
interest in an amount equal to any unpaid distributions (including any
Additional Amounts) on the Trust Securities provided that, in the case of
a Tax Event, the Issuer shall have the right to direct the Property
Trustee that less than all, or none of the Trust Securities be so
exchanged (i) if and for so long as the Issuer shall have elected to pay
any Additional Sums such that the net amounts received by holders of the
Trust Securities not so exchanged in respect of distributions are not
reduced as a result of such Tax Event, and shall not have revoked any such
election or failed to make such payments or (ii) if the Issuer shall
instead elect to redeem the Debentures, in whole or in part, in the manner
set forth in Section 3.8.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Deferrals of Interest Payment Dates. The Company shall
have the right, at any time during the term of the Debentures, so long as
no Event of Default has occurred and is continuing, from time to time to
extend the interest payment period for the Debentures for up to 20 con-
secutive quarters with respect to each deferral period (each, an
"Extension Period"), during which period the Company shall have the right
to not make payments on interest on any interest payment date, and at the
end of such Extension Period the Company shall pay all interest then
accrued and unpaid thereon (together with Additional Interest thereon, if
any, at the rate specified for the Debentures to the extent permitted by
applicable law); provided that no such Extension Period shall exceed 20
consecutive quarters or extend beyond the Stated Maturity of the
Debentures. Upon termination of any Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due,
the Company may select a new Extension Period, subject to the above
requirements. No interest including Additional Interest, if any, shall be
due and payable during an Extension Period, except at the end thereof.
The Company shall give the Trustee, the Property Trustee and the Adminis-
trative Trustees notice of its selection of such Extension Period at least
one Business Day prior to the earlier of (i) the record date for the date
the distributions on the Preferred Securities of the Trust (or if no,
Preferred Securities are outstanding, for the date interest on the
Debentures) would have been payable except for the election to begin such
Extension Period and (ii) the date the Property Trustee (or, if no Pre-
ferred Securities are outstanding, the Trustee) is required to give notice
to New York Stock Exchange or other applicable self-regulatory orga-
nization or to holders of such Preferred Securities (or, if no Preferred
Securities are outstanding, to the holders of such Debentures) of such
record date, but in any event not less than one Business Day prior to such
record date. Such notice shall specify the period selected.
The Trustee shall promptly give notice of the Company's selection of
such Extension Period to the Holders of the outstanding Debentures.
The limitations set forth in Section 3.5 of the Indenture shall apply
during any Extension Period.
ARTICLE V.
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the
Debentures to the Property Trustee and in connection with the sale of the
Trust Securities by the Trust, the Issuer, in its capacity as borrower
with respect to the Debentures, shall:
(a) pay all costs and expenses relating to the
offering, sale and issuance of the Debentures, including commissions to
the underwriters payable pursuant to the Underwriting Agreement and the
Pricing Agreements, and compensation of the Trustee under the Indenture in
accordance with the provisions of Section 6.6 of the Indenture;
(b) pay all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization of the Trust, the offering, sale and issuance of the Trust
Securities (including commissions to the underwriters in connection
therewith), the fees and expenses of the Property Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and
other telecommunications expenses and costs and expenses incurred in
connection with the acquisition, financing, and disposition of Trust
assets);
(c) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.
ARTICLE VI
CONVERSION OF DEBENTURES
SECTION 6.1 Conversion Rights. Subject to and upon compliance with
the provisions of this Article, the Debentures are convertible, at the
option of the Holder, at any time prior to the Conversion Expiration Date,
into fully paid and nonassessable shares of Common Stock of the Issuer at
an initial conversion rate of 1.2255 shares of Common Stock for each $50
in aggregate principal amount of Debentures (equal to a conversion price
of $ 40.80 per share of Common Stock), subject to adjustment as described
in this Article 13 of the Indenture (as adjusted the "Conversion Price").
A Holder of Debentures may convert any portion of the principal amount of
the Debentures into that number of fully paid and nonassessable shares of
Common Stock (calculated as to each conversion to the nearest 1/10,000th
of a share) obtained by dividing the principal amount of the Debentures to
be converted by the Conversion Price. In case a Debenture or portion
thereof is called for redemption, such conversion right in respect of the
Debenture or portion so called shall expire at the close of business on
the Business Day immediately preceding the corresponding Redemption Date,
unless the Issuer defaults in making the payment due upon redemption.
SECTION 6.2 Expiration of Conversion Rights.
(a) On and after July 16, 2001, the Issuer may, at its
option, cause the conversion rights of Holders of Debentures to expire;
provided, however, that the Issuer may exercise this option only if for 20
trading days within any period of 30 consecutive trading days, including
the last trading day of such period, the Current Market Price of Common
Stock exceeds 115% of the Conversion Price of the Debentures, subject to
adjustment as described in this Section.
(b) In order to exercise its option to terminate the
conversion rights of the Debentures, the Issuer must issue a press release
for publication on the Dow Jones News Service announcing the Conversion
Expiration Date prior to the opening of business on the second trading day
after any period in which the condition in Section 6.2(a) has been met,
but in no event prior to July 16, 2001. The press release shall announce
the Conversion Expiration Date (which may not occur sooner than 30 nor
more than 60 days after the Issuer issues the press release announcing its
intention to terminate the conversion rights of the Debentures) and pro-
vide the current Conversion Price and Current Market Price of Common
Stock, in each case as of the close of business on the trading day next
preceding the date of the press release. Conversion rights will terminate
at the close of business on the Conversion Expiration Date.
(c) In addition to issuing the press release referred
to in the preceding paragraph the Issuer or at the Issuer's request, the
Property Trustee, shall send notice of the expiration of conversion rights
by first-class mail to the Holders of the Debentures not more than four
Business Days after the Issuer issues the press release. Such mailed
notice of the expiration of the conversion rights of the Holders shall
state: (i) the Conversion Expiration Date; (ii) the Conversion Price of
the Debentures and the Current Market Price of the Common Stock, in each
case as of the close of business on the Business Day next preceding the
date of the notice of expiration of the conversion rights of the Holders;
(iii) the place or places at which Debentures may be surrendered prior to
the Conversion Expiration Date for certificates representing shares of
Common Stock; and (iv) such other information or instructions as the
Issuer deems necessary or advisable to enable a Holder to exercise its
conversion right hereunder. No defect in the notice of expiration of the
conversion rights of the Holders or in the mailing thereof with respect to
any Debentures shall affect the validity of such notice with respect to
any other Debenture. As of the close of business on the Conversion
Expiration Date, the Debenture shall no longer be convertible into Common
Stock. If the Issuer does not exercise its option to terminate the con-
version rights of the Holders of the Debentures, the Conversion Expiration
Date with respect to the Debentures will be the close of business two
Business Days preceding the date set for redemption of the Debentures upon
the mandatory redemption or Maturity Date of the Debentures.
SECTION 6.3 Conversion Price Adjustments. The conversion price
shall be subject to adjustment (without duplication) from time to time as
follows:
(a) In case the Issuer shall, while any of the
Debentures are outstanding, (i) pay a dividend or make a distribution with
respect to its Common Stock in shares of Common Stock, (ii) subdivide its
outstanding shares of Common Stock, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares or (iv) issue by
reclassification of its shares of Common Stock any shares of capital stock
of the Issuer, the conversion privilege and the Conversion Price in effect
immediately prior to such action shall be adjusted so that the Holder of
any Debentures thereafter surrendered for conversion shall be entitled to
receive the number of shares of capital stock of the Issuer which he would
have owned immediately following such action had such Debentures been
converted immediately prior thereto. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in
the case of a dividend or other distribution and shall become effective
immediately after the effective date in case of a subdivision, combination
or reclassification (or immediately after the record date if a record date
shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any
Debenture thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes or series of capital stock of the
Issuer, the Board of Directors (whose determination shall be conclusive
and shall be described in a Board Resolution filed with the Trustee) shall
determine the allocation of the adjusted Conversion Price between or among
shares of such classes or series of capital stock. In the event that such
dividend, distribution, subdivision, combination or issuance is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such record date had not
been fixed.
(b) In case the Issuer shall, while any of the
Debentures are Outstanding, issue rights or warrants to all holders of its
Common Stock entitling them (for a period expiring within 45 days after
the record date mentioned below) to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price per
share of Common Stock on the record date mentioned below, the Conversion
Price for the Debentures shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immedi-
ately prior to the date of issuance of such rights or warrants by a frac-
tion of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of shares which the aggregate offering price of the total number of
shares so offered for subscription or purchase would purchase at such
Current Market Price, and of which the denominator shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase. Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants. For the purposes of this
subsection, the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Issuer. The Issuer
shall not issue any rights or warrants in respect of shares of Common
Stock held in the treasury of the Issuer. In case any rights or warrants
referred to in this subsection in respect of which an adjustment shall
have been made shall expire unexercised within 45 days after the same
shall have been distributed or issued by the Issuer, the Conversion Price
shall be readjusted at the time of such expiration to the Conversion Price
that would have been in effect if no adjustment had been made on account
of the distribution or issuance of such expired rights or warrants.
(c) Subject to the last sentence of this subpara-
graph, in case the Issuer shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of
any class or series of capital stock, cash or assets (including secu-
rities, but excluding any rights or warrants referred to in subparagraph
(b), any dividend or distribution paid exclusively in cash and any divi-
dend or distribution referred to in subparagraph (a) of this Section 6.3),
the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction contemplated
by this subparagraph (c) by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on the date fixed for
the payment of such distribution (the "Reference Date") less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors), on the Reference Date, of the portion of the evidenc-
es of indebtedness, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock and the denominator
shall be such current market price per share of the Common Stock, such
reduction to become effective immediately prior to the opening of business
on the day following the Reference Date. In the event that such dividend
or distribution is not so paid or made, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not occurred. For purposes of this sub-
paragraph (c), any dividend or distribution that includes shares of Common
Stock or rights or warrants to subscribe for or purchase shares of Common
Stock shall be deemed instead to be (i) a dividend or distribution of the
evidences of indebtedness, shares of capital stock, cash or assets other
than such shares of Common Stock or such rights or warrants (making any
Conversion Price reduction required by this subparagraph (c)) immediately
followed by (ii) a dividend or distribution of such shares of Common Stock
or such rights or warrants (making any further conversion price reduction
required by subparagraph (a) or (b)), except (A) the Reference Date of
such dividend or distribution as defined in this subparagraph shall be
substituted as (x) "the record date in the case of a dividend or other
distribution," and (y) "the record date for the determination of stock-
holders entitled to receive such rights or warrants" and (z) "the date
fixed for such determination" within the meaning of subparagraphs (a) and
(b) and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed outstanding for purposes of computing any
adjustment of the conversion price in subparagraph (a).
(d) In case the Issuer shall pay or make a dividend
or other distribution on its Common Stock exclusively in cash (excluding
all regular cash dividends, if the annualized amount thereof per share of
Common Stock does not exceed 12.5% of the current market price per share
of the Common Stock on the trading day immediately preceding the date of
declaration of such dividend), the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subparagraph (d) by a
fraction of which the numerator shall be the Current Market Price per
share of the Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed (excluding that
portion of such distribution that does not exceed 12.5% of the Current
Market Price per share, determined as provided above) applicable to one
share of Common Stock and the denominator shall be such Current Market
Price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the date
fixed for the payment of such distribution; provided, however, that in the
event the portion of the cash so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price per
share of the Common Stock on the record date mentioned above (excluding
that portion of such distribution that does not exceed 12.5% of the
Current Market Price per share, determined as provided above), in lieu of
the foregegal or unenforceable provision had never been
contained herein or therein.
SECTION 11.5. Counterparts.
This First Supplemental Indenture may be executed in any number
of counterparts each of which shall be an original, but such counterparts
shall together constitute but one and the same instrument.<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated
in the acknowledgements and as of the day and year first above written.
CMS Energy Corporation
By: /s/ A. M. Wright
---------------------------------------
Name: Alan M. Wright
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
[Seal]
Attest:
By: /s/ Michael D. VanHemert
----------------------------
The Bank of New York as Trustee
By: /s/ Denise Leonard
-----------------------------------
Name: Denise Leonard
Title: Assistant Treasurer
<PAGE>
<PAGE>
STATE OF MICHIGAN )
)ss.
COUNTY OF WAYNE )
On the 20th day of June, 1997, before me personally came Alan M.
Wright, to me known, who, being by me duly sworn, did depose and say that
he resides at Ann Arbor, Michigan; that he is Senior Vice President,
Treasurer and Chief Financial Officer of CMS Energy Corporation, one of
the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate; that it was so affixed by authority of the
Board of Directors of said corporation; and that he signed his name
thereto by like authority.
[Notarial Seal]
/s/ Linda J. Wulff
- -------------------------------
Linda J. Wulff
Notary Public, Wayne County, Michigan
My Commission Expires: Aug. 31, 2000
<PAGE>
