<PAGE> 1
As filed with the Securities and Exchange Commission on September 22 , 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CMS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Michigan
(State or other jurisdiction incorporation or organization)
38-2726431
(I.R.S. Employer Identification No.)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(313) 436-9200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
Alan M. Wright
Senior Vice President, Chief Financial Officer and Treasurer
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
313-436-9200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
It is respectfully requested that the Commission send copies of all notices,
orders and communications to:
Michael D. VanHemert
CMS Energy Corporation
Fairlane Plaza South
330 Town Center Drive
Suite 1100
Dearborn, Michigan 48126
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
<PAGE> 2
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / Registration No.
333-17289
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------
Title of each class Amount Proposed Proposed Amount of
securities to be to be maximum offering maximum aggregate registration
registered registered (1) price per security (1)(2) offering price(1)(2) fee(1)
- ----------------------------------------------------------------------------------------------------------------------
Senior Debt Securities
Subordinated Debt Securities
CMS Energy Common Stock,
par value $.01 per share (3)
<S> <C> <C> <C> <C>
Total $30,000,000 100% $30,000,000 $9,090.91
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) There are being registered hereunder such presently indeterminate
principal amount or number of Debt Securities which may be senior or
subordinated.
(2) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(o) under the Securities Act of 1933 which permits
the registration fee to be calculated on the basis of the maximum
offering price of all the securities listed, the table does not specify
by each class information as to the amount to be registered, proposed
maximum offering price per unit or proposed maximum aggregate offering
price.
(3) CMS Energy Common Stock may be issued upon conversion of Subordinated
Debt Securities. Pursuant to Rule 457(i) under the Securities Act of
1933, no registration fee is required with respect to shares of CMS
Energy Common Stock, as no separate consideration will be received for
such CMS Energy Common Stock issuable upon conversion.
This Registration Statement shall become effective upon filing with the
Commission in accordance with Rule 462(b) under the Securities Act of 1933.
================================================================================
<PAGE> 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE PURSUANT TO GENERAL INSTRUCTION
IV OF FORM S-3
In accordance with the provisions of General Instruction IV of Form S-3,
CMS Energy Corporation ("CMS Energy") hereby incorporates by reference the
contents of CMS Energy's Registration Statement on Form S-3 (Registration No.
333-17289) filed with the Securities and Exchange Commission on December 5,
1996, which Registration Statement was declared effective on December 13, 1996.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
All Exhibits filed with the Registration Statement on Form S-3 (File No.
333-17289) are incorporated by reference into, and shall be deemed part of,
this Registration Statement, except the following, which are filed herewith:
EXHIBIT NO. DESCRIPTION
- ----------- -----------
* (1) - Form of Underwriting Agreement with respect to the Offered
Securities. (Designated in CMS Energy's Form 8-K dated May
1, 1997, File No. 1-9513, as Exhibit (4).)
* (4)(a) - Third Supplemental Indenture dated as of May 6, 1997
between CMS Energy Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 10-Q for the quarter ended
March 31, 1997, File No. 1-9513, as Exhibit (4).)
(4)(b) - Form of Fourth Supplemental Indenture with respect to the
Offered Securities.
*(4)(c) - Third Supplemental Indenture dated as of March 17,
1997 between CMS Energy Corporation and The Chase Manhattan
Bank, as Trustee. (Designated in CMS Energy's Form 8-K dated
May 1, 1997, File No. 1-9513, as Exhibit (4).)
(4)(d) - Fourth Supplemental Indenture dated as of September 17, 1997
between CMS Energy Corporation and The Chase Manhattan Bank,
as Trustee.
*(4)(e) - Credit Agreement dated as of July 2, 1997, among CMS Energy,
the Banks, the Administrative Agent, Collateral Agent,
Documentation Agent, Syndication Agent, Co-Agents and Lead
Manager, all as defined therein, and the Exhibits and
Schedules thereto. (Designated in CMS Energy's Form 10-Q for
the quarter ended June 30, 1997, File No. 1-9513, as Exhibit
(4).)
*(4)(f) - First Supplemental Indenture dated as of June 20, 1997 between
CMS Energy and The Bank of New York, as Trustee. (Designated
in CMS Energy's Form 8-K dated July 1, 1997, File No. 1-9513,
as Exhibit (4)(b).)
(5) - Opinion of Michael D. VanHemert, Assistant General Counsel for
CMS Energy.
(12) - Statement re computation of ratios of earnings to fixed
charges.
(15) - Letter regarding unaudited interim financial information.
(23)(a) - Consent of Michael D. VanHemert, Assistant General Counsel
for CMS Energy (included in Exhibit (5) above.)
(23)(b) - Consent of Arthur Andersen LLP.
<PAGE> 4
(24) - Powers of Attorney.
*Previously filed
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect
as if filed with this Registration Statement.
<PAGE> 5
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dearborn, and State of Michigan, on the 22nd
day of September, 1997.
CMS ENERGY CORPORATION
By /s/ A.M. Wright
---------------------------------
Alan M. Wright
Senior Vice President,
Chief Financial Officer and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in their
respective capacities as officers and/or directors of CMS Energy Corporation
and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
(i) Principal executive officer
/s/ William T. McCormick, Jr. Chairman of the Board, September 22, 1997
- ---------------------------------- Chief Executive Officer
(William T. McCormick, Jr.) and Director
(ii) Principal financial officer:
Senior Vice President, September 22, 1997
Chief Financial Officer
/s/ A.M. Wright and Treasurer
- ----------------------------------
(Alan M. Wright)
(iii) Controller or principal accounting officer:
/s/ Preston D. Hopper Senior Vice President, Controller September 22, 1997
- ---------------------------------- and Chief Accounting Officer
(Preston D. Hopper)
</TABLE>
II-3
<PAGE> 6
* September 22, 1997
-----------------------
(John M. Deutch) Director
* September 22, 1997
-----------------------
(James J. Duderstadt) Director
* September 22, 1997
-----------------------
(Kathleen R. Flaherty) Director
* September 22, 1997
-----------------------
(Victor J. Fryling) Director
* September 22, 1997
-----------------------
(Earl D. Holton) Director
* September 22, 1997
-----------------------
(William U. Parfet) Director
September 22, 1997
-----------------------
(Percy A. Pierre) Director
* September 22, 1997
-----------------------
(Kenneth Whipple) Director
* September 22, 1997
-----------------------
(John B. Yasinsky) Director
*By /s/ A.M. Wright
----------------------- September 22, 1997
(Alan M. Wright)
Attorney-in-fact
II-4
<PAGE> 7
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
* (1) - Form of Underwriting Agreement with respect to the Offered
Securities. (Designated in CMS Energy's Form 8-K dated May
1, 1997, File No. 1-9513, as Exhibit (4).)
*(4)(a) - Third Supplemental Indenture dated as of May 6, 1997 between
CMS Energy Corporation and NBD Bank, as Trustee.
(Designated in CMS Energy's Form 10-Q for the quarter ended
March 31, 1997, File No. 1-9513, as Exhibit (4).)
(4)(b) - Form of Fourth Supplemental Indenture with respect to the
Offered Securities.
*(4)(c) - Third Supplemental Indenture dated as of March 17, 1997
between CMS Energy Corporation and The Chase Manhattan Bank,
as Trustee. (Designated in CMS Energy's Form 8-K dated May
1, 1997, File No. 1-9513, as Exhibit (4).)
(4)(d) - Fourth Supplemental Indenture dated as of September 17, 1997
between CMS Energy Corporation and The Chase Manhattan Bank,
as Trustee.
*(4)(e) - Credit Agreement dated as of July 2, 1997, among CMS
Administrative Agent, Collateral Agent, Documentation Agent,
Syndication Agent, Co-Agents and Lead Manager, all as
defined therein, and the Exhibits and Schedules thereto.
(Designated in CMS Energy's Form 10-Q for the quarter ended
June 30, 1997, File No. 1-9513, as Exhibit (4).)
*(4)(f) - First Supplemental Indenture dated as of June 20, 1997
between CMS Energy and The Bank of New York, as Trustee.
(Designated in CMS Energy's Form 8-K dated July 1, 1997,
File No. 1-9513, as Exhibit (4)(b).)
(5) - Opinion of Michael D. VanHemert, Assistant General Counsel
for CMS Energy.
(12) - Statement re computation of ratios of earnings to fixed
charges.
(15) - Letter regarding unaudited interim financial information.
(23)(a) - Consent of Michael D. VanHemert, Assistant General Counsel
for CMS Energy (included in Exhibit (5) above.)
(23)(b) - Consent of Arthur Andersen LLP.
(24) - Powers of Attorney.
*Previously filed
Exhibits listed above which have been filed with the Securities and
Exchange Commission are incorporated herein by reference with the same effect
as if filed with this Registration Statement.
<PAGE> 1
EXHIBIT (4)(B)
FOURTH SUPPLEMENTAL INDENTURE
DATED AS OF SEPTEMBER ___, 1997
____________________
This Fourth Supplemental Indenture, dated as of the ___ day of September,
1997 between CMS Energy Corporation, a corporation duly organized and existing
under the laws of the State of Michigan (hereinafter called the "Issuer") and
having its principal office at Fairlane Plaza South, Suite 1100, 330 Town
Center Drive, Dearborn, Michigan 48126, and NBD Bank, a Michigan banking
corporation (hereinafter called the "Trustee") and having its principal
Corporate Trust Office at 611 Woodward Avenue, Detroit, Michigan 48226.
WITNESSETH:
WHEREAS, the Issuer and the Trustee (formerly known as NBD Bank, National
Association) entered into an Indenture, dated as of September 15, 1992 (the
"Original Indenture"), pursuant to which one or more series of debt securities
of the Issuer (the "Securities") may be issued from time to time; and
WHEREAS, Section 2.3 of the Original Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Original Indenture; and
WHEREAS, Section 8.1(e) of the Original Indenture provides that a
supplemental indenture may be entered into by the Issuer and the Trustee
without the consent of any Holders of the Securities to establish the form and
terms of the Securities of any series; and
WHEREAS, the Issuer has requested the Trustee to join with it in the
execution and delivery of this Fourth Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things,
establishing
<PAGE> 2
the form and terms of a series of Securities to be known as the Issuer's
"_____% Senior Unsecured Notes Due 2004" (the "2004 Notes"), providing for the
issuance of the 2004 Notes and amending and adding certain provisions thereof
for the benefit of the Holders of the 2004 Notes; and
WHEREAS, the Issuer and the Trustee desire to enter into this Fourth
Supplemental Indenture for the purposes set forth in Sections 2.3 and 8.1(e) of
the Original Indenture as referred to above; and
WHEREAS, the Issuer has furnished the Trustee with a copy of the resolutions
of its Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of this Fourth Supplemental Indenture; and
WHEREAS, all things necessary to make this Fourth Supplemental Indenture a
valid agreement of the Issuer and the Trustee and a valid supplement to the
Original Indenture have been done,
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the 2004 Notes
to be issued hereunder by holders thereof, the Issuer and the Trustee mutually
covenant and agree, for the equal and proportionate benefit of the respective
holders from time to time of the 2004 Notes, as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 1.01. Standard Provisions. The Original Indenture together with
this Fourth Supplemental Indenture and all previous indentures supplemental
thereto entered into pursuant to the applicable terms thereof are hereinafter
-2-
<PAGE> 3
sometimes collectively referred to as the "Indenture." All capitalized terms
which are used herein and not otherwise defined herein are defined in the
Indenture and are used herein with the same meanings as in the Indenture.
SECTION 1.02. Definitions. Section 1.1 of the Original Indenture is
amended to insert the new definitions applicable to the 2004 Notes, in the
appropriate alphabetical sequence, as follows:
"Amortization Expense" means, for any period, amounts recognized during such
period as amortization of capital leases, depletion, nuclear fuel, goodwill and
assets classified as intangible assets in accordance with generally accepted
accounting principles.
"Applicable Premium" means, with respect to a 2004 Note (or portion thereof)
at any time, the excess of (A) the present value at such time of the principal
amount of such 2004 Note (or portion thereof) being redeemed plus all interest
payments due on such 2004 Note (or portion thereof), computed using a discount
rate equal to the Treasury Rate plus 50 basis points, over (B) the principal
amount of such 2004 Note (or portion thereof) being redeemed at such time. For
purposes of this definition, the present values of interest and principal
payments will be determined in accordance with generally accepted principles of
financial analysis.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
(x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is required
to be classified and accounted for as a capital lease on the face of a balance
sheet of such Person prepared in accordance with generally accepted accounting
principles; the amount of such obligation shall be the capitalized
-3-
<PAGE> 4
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty;
and such obligation shall be deemed secured by a Lien on any property or assets
to which such lease relates.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock, including any Preferred Stock or Letter
Stock; provided that Hybrid Preferred Securities shall not be considered
Capital Stock for purposes of this definition.
"Change in Control" means an event or series of events by which (i) the
Issuer ceases to own beneficially, directly or indirectly, at least 80% of the
total voting power of all classes of Capital Stock then outstanding of
Consumers (whether arising from issuance of securities of the Issuer or
Consumers, any direct or indirect transfer of securities by the Issuer or
Consumers, any merger, consolidation, liquidation or dissolution of the Issuer
or Consumers or otherwise); (ii) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial
owner" (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person or group shall be deemed to have "beneficial ownership" of
all shares that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 35% of the Voting Stock of the Issuer; or (iii) the
Issuer consolidates with or merges into another corporation or directly or
indirectly conveys, transfers or leases all or substantially all of its assets
to any Person, or any corporation consolidates with or merges into the Issuer,
in either event pursuant to a transaction in which the outstanding Voting Stock
of the Issuer is changed into or exchanged for cash, securities, or other
-4-
<PAGE> 5
property, other than any such transaction in which (A) the outstanding Voting
Stock of the Issuer is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Issuer
immediately prior to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
"CMS Electric and Gas" means CMS Electric and Gas Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"CMS Gas Transmission and Storage" means CMS Gas Transmission and Storage
Company, a Michigan corporation and wholly-owned subsidiary of Enterprises.
"CMS Generation" means CMS Generation Co., a Michigan corporation and
wholly-owned subsidiary of Enterprises.
"CMS MST" means CMS Marketing, Services and Trading Company, a Michigan
corporation and wholly-owned subsidiary of Enterprises.
"Consolidated Assets" means, at any date of determination, the aggregate
assets of the Issuer and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Consolidated Coverage Ratio" with respect to any period means the ratio of
(i) the aggregate amount of Operating Cash Flow for such period to (ii) the
aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Current Liabilities" means, for any period, the aggregate
amount of liabilities of the Issuer and its Consolidated Subsidiaries which may
properly be classified as current liabilities (including taxes accrued
-5-
<PAGE> 6
as estimated), after (i) eliminating all inter-company items between the Issuer
and any Consolidated Subsidiary and (ii) deducting all current maturities of
long-term Indebtedness, all as determined in accordance with generally accepted
accounting principles.
"Consolidated Indebtedness" means, at any date of determination, the
aggregate Indebtedness of the Issuer and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that Consolidated Indebtedness shall not
include any subordinated debt owned by any Hybrid Preferred Securities
Subsidiary.
"Consolidated Interest Expense" means, for any period, the total interest
expense in respect of Consolidated Indebtedness of the Issuer and its
Consolidated Subsidiaries, including, without duplication, (i) interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii)
capitalized interest, (iv) cash and noncash interest payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under Interest Rate Protection
Agreements (including amortization of discount) and (vii) interest expense in
respect of obligations of other Persons deemed to be Indebtedness of the Issuer
or any Consolidated Subsidiaries under clause (v) or (vi) of the definition of
Indebtedness, provided, however, that Consolidated Interest Expense shall
exclude (a) any costs otherwise included in interest expense recognized on
early retirement of debt and (b) any interest expense in respect of any
Indebtedness of any Subsidiary of Consumers, CMS Generation, NOMECO, CMS
Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any other
Designated Enterprises Subsidiary, provided that such Indebtedness is without
recourse to any assets of the Issuer, Consumers, Enterprises, CMS Generation,
NOMECO, CMS Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any
other Designated Enterprises Subsidiary.
-6-
<PAGE> 7
"Consolidated Net Income" means, for any period, the net income of the
Issuer and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a Subsidiary, except
that (A) the Issuer's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period to the
Issuer or a Consolidated Subsidiary as a dividend or other distribution and
(B) the Issuer's equity in a net loss of any such Person for such period shall
be included in determining such Consolidated Net Income;
(ii) any net income of any Person acquired by the Issuer or a Subsidiary in
a pooling of interests transaction for any period prior to the date of such
acquisition;
(iii) any gain or loss realized upon the sale or other disposition of any
property, plant or equipment of the Issuer or its Consolidated Subsidiaries
which is not sold or otherwise disposed of in the ordinary course of business
and any gain or loss realized upon the sale or other disposition of any
Capital Stock of any Person; and
(iv) any net income of any Subsidiary of Consumers, CMS Generation, NOMECO,
CMS Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any other
Designated Enterprises Subsidiary whose interest expense is excluded from
Consolidated Interest Expense, provided, however, that for purposes of this
subsection (iv), any cash, dividends or distributions of any such Subsidiary
to the Issuer shall be included in calculating Consolidated Net Income.
-7-
<PAGE> 8
"Consolidated Net Tangible Assets" means, for any period, the total amount
of assets (less accumulated depreciation or amortization, allowances for
doubtful receivables, other applicable reserves and other properly deductible
items) as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Issuer and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, and after giving effect to purchase accounting and after
deducting therefrom, to the extent otherwise included, the amounts of: (i)
Consolidated Current Liabilities; (ii) minority interests in Consolidated
Subsidiaries held by Persons other than the Issuer or a Restricted Subsidiary;
(iii) excess of cost over fair value of assets of businesses acquired, as
determined in good faith by the Board of Directors as evidenced by Board
resolutions; (iv) any revaluation or other write-up in value of assets
subsequent to December 31, 1996, as a result of a change in the method of
valuation in accordance with generally accepted accounting principles; (v)
unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses
organization or developmental expenses and other intangible items; (vi)
treasury stock; and (vii) any cash set apart and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement of
Capital Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities.
"Consolidated Net Worth" of any Person means the total of the amounts shown
on the consolidated balance sheet of such Person and its consolidated
subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, as of any date selected by such Person not more
than 90 days prior to the taking of any action for the purpose of which the
determination is being made (and adjusted for any material events since such
date), as (i) the par or stated value of all outstanding Capital Stock plus
(ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit,
(B) any
-8-
<PAGE> 9
amounts attributable to Redeemable Stock and (C) any amounts attributable to
Exchangeable Stock.
"Consolidated Subsidiary" means, any Subsidiary whose accounts are or are
required to be consolidated with the accounts of the Issuer in accordance with
generally accepted accounting principles.
"Consumers" means Consumers Energy Company, a Michigan corporation, all of
whose common stock is on the date hereof owned by the Issuer.
"Designated Enterprises Subsidiary" means any wholly-owned subsidiary of
Enterprises formed after the date of this Fourth Supplemental Indenture which
is designated a Designated Enterprises Subsidiary by the Board of Directors.
"Enterprises" means CMS Enterprises Company, a Michigan corporation and
wholly-owned subsidiary of the Issuer.
"Event of Default" with respect to the 2004 Notes has the meaning specified
in Article V of this Fourth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital Stock of
such corporation that is neither Exchangeable Stock or Redeemable Stock).
"Hybrid Preferred Securities" means any preferred securities issued by a
Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends substantially all of
the proceeds from the issuance of such preferred securities to
-9-
<PAGE> 10
the Company or Consumers in exchange for subordinated debt issued by
the Company or Consumers respectively;
(ii) such preferred securities contain terms providing for the deferral of
distributions corresponding to provisions providing for the
deferral of interest payments on such subordinated debt; and
(iii) the Company or Consumers (as the case may be) makes periodic interest
payments on such subordinated debt, which interest payments are in turn
used by the Hybrid Preferred Securities Subsidiary to make corresponding
payments to the holders of the Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any business trust (or
similar entity) (i) all of the common equity interest of which is owned (either
directly or indirectly through one or more wholly-owned Subsidiaries of the
Company or Consumers) at all times by the Company or Consumers, (ii) that has
been formed for the purpose of issuing Hybrid Preferred Securities and (iii)
substantially all of the assets of which consist at all times solely of
subordinated debt issued by the Company or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii)all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and
-10-
<PAGE> 11
all obligations under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any obligor on
any letter of credit, bankers' acceptance or similar credit transaction (other
than obligations with respect to letters of credit securing obligations (other
than obligations described in clauses (i) through (iii) above) entered into in
the ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by such
Person of a demand for reimbursement following payment on the letter of
credit);
(v) all obligations of the type referred to in clauses (i) through (iv) of
other Persons and all dividends of other Persons for the payment of which, in
either case, such Person is responsible or liable as obligor, guarantor or
otherwise; and
(vi) all obligations of the type referred to in clauses (i) through (v) of
other Persons secured by any Lien on any property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such property or
assets or the amount of the obligation so secured.
"Interest Payment Date" means ___________, 199__ and each _______ and
___________ in each year thereafter.
"Interest Rate Protection Agreement" means any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement
designed to protect the Issuer or any Subsidiary against fluctuations in
interest rates.
-11-
<PAGE> 12
"Letter Stock", as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) which is intended to
reflect the separate performance of certain of the businesses or operations
conducted by such corporation or any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security interest, conditional
sale, title retention agreement or other charge or encumbrance of any kind.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale , the
aggregate proceeds of such Asset Sale including the fair market value (as
determined by the Board of Directors and net of any associated debt and of any
consideration other than Capital Stock received in return) of property other
than cash, received by the Issuer, net of (i) brokerage commissions and other
fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Issuer and
its Restricted Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Issuer or any Restricted Subsidiary of the Issuer as a reserve
against any liabilities associated with such Asset Sale including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with generally accepted accounting principles and (b) with respect to any
issuance or sale or contribution in respect of Capital Stock, the aggregate
proceeds of such issuance, sale or contribution, including the fair market
value (as determined by the Board of Directors and net of any associated debt
and of any consideration
-12-
<PAGE> 13
other than Capital Stock received in return) of property other than cash,
received by the Issuer, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof, provided,
however, that if such fair market value as determined by the Board of Directors
of property other than cash is greater than $25 million, the value thereof
shall be based upon an opinion from an independent nationally recognized firm
experienced in the appraisal or similar review of similar types of
transactions.
"NOMECO" means, CMS NOMECO Oil & Gas Co., a Michigan corporation and
wholly-owned subsidiary of the Issuer.
"Non-Convertible Capital Stock" means, with respect to any corporation, any
non-convertible Capital Stock of such corporation and any Capital Stock of such
corporation convertible solely into non-convertible Capital Stock other than
Preferred Stock of such corporation; provided, however, that Non-Convertible
Capital Stock shall not include any Redeemable Stock or Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to the Issuer and
its Consolidated Subsidiaries, the aggregate amount of Consolidated Net Income
after adding thereto Consolidated Interest Expense (adjusted to include costs
recognized on early retirement of debt), income taxes, depreciation expense,
Amortization Expense and any noncash amortization of debt issuance costs, any
nonrecurring, noncash charges to earnings and any negative accretion
recognition.
"Other Rating Agency" shall mean any one of Duff & Phelps Credit Rating Co.,
Fitch Investors Service, L.P. or Moody's Investors Service, Inc., and
-13-
<PAGE> 14
any successor to any of these organizations which is a nationally recognized
statistical rating organization.
"Paying Agent" means any person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on any of the 2004 Notes on
behalf of the Issuer.
"Predecessor 2004 Note" of any particular 2004 Note means every previous
2004 Note evidencing all or a portion of the same debt as that evidenced by
such particular 2004 Note; and, for the purposes of the definition, any 2004
Note authenticated and delivered under Section 2.9 of the Indenture in exchange
for or in lieu of a mutilated, destroyed, lost or stolen 2004 Note shall be
deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
2004 Note.
"Preferred Stock", as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation; provided that
Hybrid Preferred Securities shall not be considered Preferred Stock for
purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms or otherwise is
required to be redeemed prior to the first anniversary of the Stated Maturity
of the Outstanding 2004 Notes or is redeemable at the option of the holder
thereof at any time prior to the first anniversary of the Stated Maturity of
the Outstanding 2004 Notes.
"Restricted Subsidiary" means any Subsidiary (other than Consumers and its
subsidiaries) of the Issuer which, as of the date of the Issuer's most
-14-
<PAGE> 15
recent quarterly consolidated balance sheet, constituted at least 10% of the
total Consolidated Assets of the Issuer and its Consolidated Subsidiaries and
any other Subsidiary which from time to time is designated a Restricted
Subsidiary by the Board of Directors provided that no Subsidiary may be
designated a Restricted Subsidiary if, immediately after giving effect thereto,
an Event of Default or event that, with the lapse of time or giving of notice
or both, would constitute an Event of Default would exist or the Issuer and its
Restricted Subsidiaries could not incur at least one dollar of additional
Indebtedness under Section 4.04, and (i) any such Subsidiary so designated as a
Restricted Subsidiary must be organized under the laws of the United States or
any State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary
must be owned of record and beneficially by the Issuer or a Restricted
Subsidiary and (iii) such Restricted Subsidiary must be a Consolidated
Subsidiary.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division
of McGraw Hill Inc., and any successor thereto which is a nationally recognized
statistical rating organization, or if such entity shall cease to rate the 2004
Notes or shall cease to exist and there shall be no such successor thereto, any
other nationally recognized statistical rating organization selected by the
Issuer which is acceptable to the Trustee.
"Subordinated Indebtedness" means any Indebtedness of the Issuer (whether
outstanding on the date of this Fourth Supplemental Indenture or thereafter
incurred) which is contractually subordinated or junior in right of payment to
the 2004 Notes.
"Support Obligations" means, for any person, without duplication, any
financial obligation, contingent or otherwise, of such person guaranteeing or
otherwise supporting any debt or other obligation of any other person in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such person, direct or indirect, (i) to purchase or pay (or
advance
-15-
<PAGE> 16
or supply funds for the purchase or payment of) such debt or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of
such debt, (ii) to purchase property, securities or services for the purpose of
assuring the owner of such debt of the payment of such debt, (iii) to maintain
working capital, equity capital, available cash or other financial statement
condition of the primary obligor so as to enable the primary obligor to pay
such debt, (iv) to provide equity capital under or in respect of equity
subscription arrangements (to the extent that such obligation to provide equity
capital does not otherwise constitute debt), or (v) to perform, or arrange for
the performance of, any non-monetary obligations or non-funded debt payment
obligations of the primary obligor.
"Tax-Sharing Agreement" means the Amended and Restated Agreement for the
Allocation of Income Tax Liabilities and Benefits, dated January 1, 1994, as
amended or supplemented from time to time, by and among Issuer, each of the
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519)
which has become publicly available at least two business days prior to the
date fixed for redemption or, in the case of defeasance, prior to the date of
deposit (or, if such Statistical Release is no longer published, any publicly
available source of similar market data) most nearly equal to the then
remaining average life to stated maturity of the 2004 Notes; provided,
however, that if the average life to stated maturity of the 2004 Notes is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given.
-16-
<PAGE> 17
"Voting Stock" means securities of any class or classes the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for corporate
directors (or persons performing similar functions).
Certain terms, used principally in Articles Three, Four and Seven of this
Fourth Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE 2004 NOTES; FORMS
SECTION 2.01. Establishment of Series. (a) There is hereby created a
series of Securities to be known and designated as the "_____% Senior Unsecured
Notes Due 2004" and limited in aggregate principal amount (except as
contemplated in Section 2.3(f)(2) of the Indenture) to $180,000,000. The
Stated Maturity of the 2004 Notes is ___________, 2004.
(b) The 2004 Notes will bear interest from the Original Issue Date, or from
the most recent date to which interest has been paid or duly provided for, at
the rate of _____% per annum stated therein until the principal thereof is paid
or made available for payment. Interest will be payable semiannually on each
Interest Payment Date and at Maturity, as provided in the form of the 2004 Note
in Section 2.03 hereof.
(c) The Record Date referred to in Section 2.3(f)(4) of the Indenture for
the payment of the interest on any 2004 Note payable on any Interest Payment
Date (other than at Maturity) shall be the 1st day (whether or not a Business
Day) of the calendar month in which such Interest Payment Date occurs and, in
the case of interest payable at Maturity, the Record Date shall be the date of
Maturity.
-17-
<PAGE> 18
(d) The payment of the principal of, premium (if any) and interest on the
2004 Notes shall not be secured by a security interest in any property.
(e) The 2004 Notes shall be redeemable at the option of the Issuer, in whole
or in part, at any time and from time to time, at a redemption price
equal to 100% of the principal amount of such 2004 Notes being redeemed plus
the Applicable Premium, if any, thereon at the time of redemption, together
with accrued interest, if any, thereon to the redemption date. In no event
will the redemption price ever be less than 100% of the principal amount of the
2004 Notes plus accrued interest, if any, to the redemption date. The 2004
Notes shall be purchased by the Issuer at the option of the Holders thereof as
provided in Sections 3.01 and 4.06 hereof.
(f) The 2004 Notes shall not be convertible.
(g) The 2004 Notes will not be subordinated to the payment of Senior Debt.
(h) The Issuer will not pay any additional amounts on the 2004 Notes held by
a Person who is not a U.S. Person in respect of any tax, assessment or
government charge withheld or deducted.
(i) The events specified in Events of Default with respect to the 2004 Notes
shall include the events specified in Article Five of this Fourth Supplemental
Indenture. In addition to the covenants set forth in Article Three of the
Original Indenture, the Holders of the 2004 Notes shall have the benefit of the
covenants of the Issuer set forth in Article Four hereto.
SECTION 2.02. Forms Generally. The 2004 Notes and Trustee's certificates
of authentication shall be in substantially the form set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by the Indenture, and may have such letters,
numbers or other marks of identification and such legends or
-18-
<PAGE> 19
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such 2004 Notes, as evidenced by their execution thereof.
The definitive 2004 Notes shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such 2004 Notes, as evidenced by their
execution thereof.
-19-
<PAGE> 20
SECTION 2.03. Form of Face of 2004 Note.
CMS ENERGY CORPORATION
_____% SENIOR UNSECURED NOTES DUE 2004
No. ________ $__________
CMS Energy Corporation, a corporation duly organized and existing under the
laws of the State of Michigan (herein called the "Issuer", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________________________, or
registered assigns, the principal sum of ____________________ Dollars on
______, 2004 ("Maturity") and to pay interest thereon from ____________, 199__
(the "Original Issue Date") or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on ______ and
____________ in each year, commencing ___________, 199__ and at Maturity at the
rate of _____% per annum, until the principal hereof is paid or made available
for payment. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this 2004 Note (or one or more Predecessor 2004
Notes) is registered at the close of business on the Record Date for such
interest, which shall be the 1st day of the calendar month in which such
Interest Payment Date occurs (whether or not a Business Day) except that the
Record Date for interest payable at Maturity shall be the date of Maturity.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Record Date and may either be paid to
the Person in whose name this 2004 Note (or one or more Predecessor 2004 Notes)
is registered at the close of business on a subsequent Record Date (which shall
be not less than five Business Days prior to the date of payment of such
defaulted interest) for the payment of such defaulted interest to be fixed by
the Trustee, notice whereof
-20-
<PAGE> 21
shall be given to Holders of 2004 Notes not less than 15 days preceding such
subsequent Record Date.
Payment of the principal of (and premium, if any) and interest, if any, on
this 2004 Note will be made at the office or agency of the Issuer maintained
for that purpose in New York, New York (the "Place of Payment"), in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuer payment of interest (other than interest payable at
Maturity) may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire
transfer to an account designated by such Person not later than ten days prior
to the date of such payment.
Reference is hereby made to the further provisions of this 2004 Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this 2004 Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal. Dated:
CMS ENERGY CORPORATION
By____________________________
Its:
-21-
<PAGE> 22
By____________________________
Its:
Attest:
SECTION 2.04. Form of Reverse of 2004 Note.
This _____% Senior Unsecured Note Due 2004 is one of a duly authorized issue
of securities of the Issuer (herein called the "2004 Notes"), issued and to be
issued under an Indenture, dated as of September 15, 1992, as supplemented by
certain supplemental indentures, including the Fourth Supplemental Indenture,
dated as of September___, 1997 (herein collectively referred to as the
"Indenture"), between the Issuer and NBD Bank, a Michigan banking corporation
(formerly known as NBD Bank, National Association), as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Issuer, the Trustee, the Holders of the 2004
Notes and of the terms upon which the 2004 Notes are, and are to be,
authenticated and delivered. This 2004 Note is one of the series designated on
the face hereof, limited in aggregate principal amount to $180,000,000.
The 2004 Notes are subject to redemption at the option of the Issuer, in
whole or in part, upon not more than 60 nor less than 30 days' notice
as provided in the Indenture at any time and from time to time, at a redemption
price equal to 100% of the principal amount of such 2004 Notes being redeemed
plus the Applicable Premium, if any, thereon at the time of redemption,
together with accrued interest, if any, thereon to the redemption date, but
interest installments whose Stated Maturity is on or prior to such redemption
date will be payable to the Holder of record at the
-22-
<PAGE> 23
close of business on the relevant Record Date referred to on the face hereof,
all as provided in the Indenture. In no event will the redemption price ever
be less than 100% of the principal amount of the 2004 Notes plus accrued
interest, if any, to the redemption date.
The following definitions are used to determine the Applicable Premium:
"Applicable Premium" means, with respect to a 2004 Note (or portion thereof)
at any time, the excess of (A) the present value at such time of the principal
amount of such 2004 Note (or portion thereof) being redeemed plus all
interest payments due on such 2004 Note (or portion thereof), computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (B) the
principal amount of such 2004 Note (or portion thereof) being redeemed at such
time. For purposes of this definition, the present values of interest and
principal payments will be determined in accordance with generally accepted
principles of financial analysis.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519)
which has become publicly available at least two business days prior to the
date fixed for redemption or, in the case of defeasance, prior to the date of
deposit (or, if such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to the then
remaining average life to stated maturity of the 2004 Notes; provided,
however, that if the average life to stated maturity of the 2004 Notes is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given.
In the event of redemption of this 2004 Note in part only, a new 2004 Note
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
-23-
<PAGE> 24
If a Change in Control occurs, the Issuer shall notify the Holder of this
2004 Note of such occurrence and such Holder shall have the right to require
the Issuer to make a Required Repurchase of all or any part of this 2004 Note
at a Change in Control Purchase Price equal to 101% of the principal amount of
this 2004 Note to be so purchased as more fully provided in the Indenture and
subject to the terms and conditions set forth therein. In the event of a
Required Repurchase of only a portion of this 2004 Note, a new 2004 Note or
Notes for the unrepurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default with respect to this 2004 Note shall occur and be
continuing, the principal of this 2004 Note may be declared due and payable in
the manner and with the effect provided in the Indenture.
In any case where any Interest Payment Date, repurchase date, Stated
Maturity or Maturity of any 2004 Note shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of the Indenture or this
2004 Note), payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, repurchase date or at the Stated
Maturity or Maturity; provided that no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, redemption
date, repurchase date, Stated Maturity or Maturity, as the case may be, to such
Business Day.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of this 2004 Note or (ii) certain restrictive covenants and
Events of Default with respect to this 2004 Note, in each case upon compliance
with certain conditions set forth therein.
-24-
<PAGE> 25
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of all Outstanding 2004 Notes under the
Indenture at any time by the Issuer and the Trustee with the consent of the
Holders of not less than a majority in principal amount of Securities of all
series then Outstanding and affected (voting as one class).
The Indenture permits the Holders of not less than a majority in principal
amount of Securities of all series at the time Outstanding with respect to
which a default shall have occurred and be continuing (voting as one class) to
waive on behalf of the Holders of all Outstanding Securities of such series any
past default by the Issuer, provided that no such waiver may be made with
respect to a default in the payment of the principal of or the interest on any
Security of such series or the default by the Issuer in respect of certain
covenants or provisions of the Indenture, the modification or amendment of
which must be consented to by the Holder of each Outstanding Security of each
series affected.
As set forth in, and subject to, the provisions of the Indenture, no Holder
of any 2004 Note will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless such Holder shall have
previously given to the Trustee written notice of a continuing Event of
Default, the Holders of not less than 25% in principal amount of the
Outstanding Securities of each affected series (voting as one class) shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding
Securities of each affected series (voting as one class) a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not
apply to a suit instituted by the Holder hereof for the
-25-
<PAGE> 26
enforcement of payment of the principal of (and premium, if any) or any
interest on this 2004 Note on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this 2004 Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this 2004 Note at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this 2004 Note is registerable in the Security Register,
upon surrender of this 2004 Note for registration of transfer at the office or
agency of the Issuer in any place where the principal of and any premium and
interest on this 2004 Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new 2004 Notes of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The 2004 Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, 2004 Notes are
exchangeable for a like aggregate principal amount of 2004 Notes and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
-26-
<PAGE> 27
The Company shall not be required to (a) issue, exchange or register the
transfer of this 2004 Note for a period of 15 days next preceding the mailing
of the notice of redemption of 2004 Notes or (b) exchange or register the
transfer of any 2004 Note or any portion thereof selected, called or being
called for redemption, except in the case of any 2004 Note to be redeemed in
part, the portion thereof not so to be redeemed.
Prior to due presentment of this 2004 Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this 2004 Note is registered as the owner hereof for all
purposes, whether or not this 2004 Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this 2004 Note without definition which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
SECTION 2.05. Form of Trustee's Certificate of Authentication. The
Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated herein referred to in
the within-mentioned Indenture.
_______________________________________,
as Trustee
By______________________________________
Authorized Officer
-27-
<PAGE> 28
ARTICLE III
CHANGE OF CONTROL
SECTION 3.01. Change of Control. Upon the occurrence of a Change in
Control (the effective date of such Change in Control being the "Change in
Control Date"), each Holder of a 2004 Note shall have the right to require that
the Issuer repurchase (a "Required Repurchase") all or any part of such
Holder's 2004 Note at a repurchase price payable in cash equal to 101% of the
principal amount of such 2004 Note plus accrued interest to the Purchase Date
(the "Change in Control Purchase Price").
(a) Within 30 days following the Change in Control Date, the Issuer shall
mail a notice (the "Required Repurchase Notice") to each Holder with a copy to
the Trustee stating:
(i) that a Change in Control has occurred and that such Holder has the
right to require the Issuer to repurchase all or any part of such Holder's
2004 Notes at the Change of Control Purchase Price;
(ii) the Change of Control Purchase Price;
(iii) the date on which any Required Repurchase shall be made (which
shall be no earlier than 60 days nor later than 90 days from the date such
notice is mailed) (the "Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause the 2004 Notes
to be repurchased, which shall be consistent with this Section and the
Indenture.
-28-
<PAGE> 29
(b) Holders electing to have a 2004 Note repurchased must deliver a written
notice (the "Change in Control Purchase Notice") to the Paying Agent
(initially the Trustee) at its corporate trust office in Detroit, Michigan, or
any other office of the Paying Agent maintained for such purposes, not later
than 30 days prior to the Purchase Date. The Change in Control Purchase
Notice shall state: (i) the portion of the principal amount of any 2004 Notes
to be repurchased, which portion must be $1,000 or an integral multiple
thereof; (ii) that such 2004 Notes are to be repurchased by the Issuer pursuant
to the change in control provisions of the Indenture; and (iii) unless
the 2004 Notes are represented by one or more Global Notes, the certificate
numbers of the 2004 Notes to be delivered by the Holder thereof for repurchase
by the Issuer. Any Change in Control Purchase Notice may be withdrawn by the
Holder by a written notice of withdrawal delivered to the Paying Agent not
later than three Business Days prior to the Purchase Date. The notice of
withdrawal shall state the principal amount and, if applicable, the certificate
numbers of the 2004 Notes as to which the withdrawal notice relates and the
principal amount of such 2004 Notes, if any, which remains subject to a Change
in Control Purchase Notice.
If a 2004 Note is represented by a Global Note (as described in Article VI
below), the Depositary or its nominee will be the Holder of such 2004 Note and
therefore will be the only entity that can elect a Required Repurchase of such
2004 Note. To obtain repayment pursuant to this Section 3.01 with respect to
such 2004 Note, the beneficial owner of such 2004 Note must provide to the
broker or other entity through which it holds the beneficial interest in such
2004 Note (i) the Change in Control Purchase Notice signed by such beneficial
owner, and such signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the
-29-
<PAGE> 30
United States, and (ii) instructions to such broker or other entity to notify
the Depositary of such beneficial owner's desire to obtain repayment pursuant
to this Section 3.01. Such broker or other entity will provide to the Paying
Agent (i) the Change of Control Purchase Notice received from such beneficial
owner and (ii) a certificate satisfactory to the Paying Agent from such broker
or other entity stating that it represents such beneficial owner. Such broker
or other entity will be responsible for disbursing any payments it receives
pursuant to this Section 3.01 to such beneficial owner.
(c) Payment of the Change of Control Purchase Price for a 2004 Note for
which a Change in Control Purchase Notice has been delivered and not withdrawn
is conditioned (except in the case of a 2004 Note represented by one or more
Global Notes) upon delivery of such 2004 Note (together with necessary
endorsements) to the Paying Agent at its office in Detroit, Michigan, or any
other office of the Paying Agent maintained for such purpose, at any time
(whether prior to, on or after the Purchase Date) after the delivery of such
Change in Control Purchase Notice. Payment of the Change of Control Purchase
Price for such 2004 Note will be made promptly following the later of the
Purchase Date or the time of delivery of such 2004 Note. If the Paying Agent
holds, in accordance with the terms of the Indenture, money sufficient to pay
the Change in Control Purchase Price of such 2004 Note on the Business Day
following the Purchase Date, then, on and after such date, interest will cease
accruing, and all other rights of the Holder shall terminate (other than the
right to receive the Change of Control Purchase Price upon delivery of the
2004 Note).
(d) The Issuer shall comply with the provisions of Regulation 14E and any
other tender offer rules under the Exchange Act, which may then be
-30-
<PAGE> 31
applicable in connection with any offer by the Issuer to repurchase 2004 Notes
at the option of Holders upon a Change in Control.
(e) No 2004 Note may be repurchased by the Issuer as a result of a Change in
Control if there has occurred and is continuing an Event of Default (other
than a default in the Payment of the Change in Control Purchase Price with
respect to the 2004 Notes).
ARTICLE IV
ADDITIONAL COVENANTS OF THE ISSUER
WITH RESPECT TO THE 2004 NOTES
SECTION 4.01. Existence. So long as any of the 2004 Notes are Outstanding,
subject to Article 9 of the Original Indenture, the Issuer will do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence.
SECTION 4.02. Limitation on Certain Liens. (a) So long as any of the 2004
Notes are outstanding, the Issuer shall not create, incur, assume or suffer to
exist any lien, mortgage, pledge, security interest, conditional sale, title
retention agreement or other charge or encumbrance of any kind, or any other
type of arrangement intended or having the effect of conferring upon a creditor
of the Issuer or any Subsidiary a preferential interest (hereinafter in this
Section referred to as a "Lien") upon or with respect to any of its property of
any character, including without limitation any shares of Capital Stock of
Consumers or Enterprises, without making effective provision whereby the 2004
Notes shall (so long as any such other creditor shall be so secured) be equally
and ratably secured (along with any other creditor similarly entitled to be
secured) by a direct Lien on all property subject to such Lien, provided,
however, that the foregoing restrictions shall not apply to:
-31-
<PAGE> 32
(i) Liens for taxes, assessments or governmental charges or levies to the
extent not past due;
(ii) pledges or deposits to secure (a) obligations under workmen's
compensation laws or similar legislation, (b) statutory obligations of the
Issuer or (c) Support Obligations;
(iii) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business securing obligations which are not overdue or which have
been fully bonded and are being contested in good faith;
(iv) purchase money Liens upon or in property acquired and held by the Issuer
in the ordinary course of business to secure the purchase price of such
property or to secure Indebtedness incurred solely for the purpose of financing
the acquisition of any such property to be subject to such Liens, or Liens
existing on any such property at the time of acquisition, or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount, provided that no such Lien shall extend to or cover any property other
than the property being acquired and no such extension, renewal or replacement
shall extend to or cover property not theretofore subject to the Lien being
extended, renewed or replaced, and provided, further, that the aggregate
principal amount of the Indebtedness at any one time outstanding secured by
Liens permitted by this clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of this Section
securing Indebtedness of the Issuer; provided that on the date such Liens are
created, and after giving effect to such Indebtedness, the aggregate principal
amount at maturity of all of the secured Indebtedness of the Issuer at such
date shall not exceed 5% of Consolidated Net Tangible Assets at such date.
-32-
<PAGE> 33
SECTION 4.03. Limitation on Consolidation, Merger, Sale or Conveyance. So
long as any of the 2004 Notes are Outstanding and until the 2004 Notes are
rated BBB- or above (or an equivalent rating) by Standard & Poor's and one
Other Rating Agency (or, if Standard & Poor's shall change its rating system,
an equivalent of such rating then employed by such organization), at which time
the Issuer will be permanently released from the provisions of this Section
4.03, and subject also to Article Nine of the Indenture, the Issuer shall not
consolidate with or merge into any other Person or sell, lease or convey the
property of the Issuer in the entirety or substantially as an entirety, unless
(i) immediately after giving effect to such transaction the Consolidated Net
Worth of the surviving entity is at least equal to the Consolidated Net Worth
of the Issuer immediately prior to the transaction, and (ii) after giving
effect to such transaction, the surviving entity would be entitled to incur at
least one dollar of additional Indebtedness (other than revolving Indebtedness
to banks) without violation of the limitations in Section 4.04 hereof.
SECTION 4.04. Limitation on Consolidated Indebtedness. (a) So long as any
of the 2004 Notes are Outstanding and until the 2004 Notes are rated BBB- or
above (or an equivalent rating) by Standard & Poor's and one Other Rating
Agency (or, if Standard & Poor's shall change its rating system, an equivalent
of such rating then employed by such organization), at which time the Issuer
will be permanently released from the provisions of this Section 4.04, the
Issuer shall not, and shall not permit any Consolidated Subsidiary of the
Issuer to, issue, create, assume, guarantee, incur or otherwise become liable
for (collectively, "issue"), directly or indirectly, any Indebtedness unless
the Consolidated Coverage Ratio of the Issuer and its Consolidated Subsidiaries
for the four consecutive fiscal quarters immediately preceding the issuance of
such Indebtedness (as shown by a pro forma consolidated income statement of the
Issuer and its Consolidated Subsidiaries for the four most recent fiscal
quarters ending at least 30 days prior to the issuance of such Indebtedness
after giving effect to (i) the issuance of such Indebtedness and (if
applicable) the application of
-33-
<PAGE> 34
the net proceeds thereof to refinance other Indebtedness as if such
Indebtedness was issued at the beginning of the period, (ii) the issuance and
retirement of any other Indebtedness since the first day of the period as if
such Indebtedness was issued or retired at the beginning of the period and
(iii) the acquisition of any company or business acquired by the Issuer or any
Subsidiary since the first day of the period (including giving effect to the
pro forma historical earnings of such company or business), including any
acquisition which will be consummated contemporaneously with the issuance of
such Indebtedness, as if in each case such acquisition occurred at the
beginning of the period) exceeds a ratio of 1.7 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Issuer or any Restricted
Subsidiary may issue, directly or indirectly, the following Indebtedness:
(1) Indebtedness of the Issuer to banks not to exceed $1,000,000,000 in
aggregate outstanding principal amount at any time;
(2) Indebtedness (other than Indebtedness described in clause (1) of this
Subsection) outstanding on the date of this Fourth Supplemental Indenture, as
set forth on Schedule 4.04(b)(2) attached hereto and made a part hereof, and
Indebtedness issued in exchange for, or the proceeds of which are used to
refund or refinance, any Indebtedness permitted by this clause (2); provided,
however, that (i) the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of the Indebtedness so issued shall not
exceed the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid interest on,
the Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated maturity of
the Indebtedness so exchanged, refunded or refinanced, (B) shall have an
Average Life equal to or greater
-34-
<PAGE> 35
than the remaining Average Life of the Indebtedness so exchanged, refunded or
refinanced and (C) if the Indebtedness to be exchanged, refunded or refinanced
is subordinated to the 2004 Notes, the Indebtedness is subordinated to the 2004
Notes in right of payment;
(3) Indebtedness of the Issuer owed to and held by a Subsidiary and
Indebtedness of a Subsidiary owed to and held by the Issuer; provided, however,
that, in the case of Indebtedness of the Issuer owed to and held
by a Subsidiary, (i) any subsequent issuance or transfer of any Capital Stock
that results in any such Subsidiary ceasing to be a Subsidiary or (ii) any
transfer of such Indebtedness (except to the Issuer or a Subsidiary) shall be
deemed for the purposes of this Subsection to constitute the issuance of such
Indebtedness by the Issuer;
(4) Indebtedness of the Issuer issued in exchange for, or the proceeds of
which are used to refund or refinance, Indebtedness of the Issuer issued in
accordance with Subsection (a) of this Section, provided that (i) the
principal amount (or accreted value in the case of Indebtedness issued at a
discount) of the Indebtedness so issued shall not exceed the principal amount
(or accreted value in the case of Indebtedness issued at a discount) of,
premium, if any, and accrued but unpaid interest on, the Indebtedness so
exchanged, refunded or refinanced and (ii) the Indebtedness so issued (A)
shall not mature prior to the stated maturity of the Indebtedness so
exchanged, refunded or refinanced, (B) shall have an Average Life equal to or
greater than the remaining Average Life of the Indebtedness so exchanged,
refunded or refinanced and (C) if the Indebtedness to be exchanged, refunded
or refinanced is subordinated to the 2004 Notes, the Indebtedness so issued is
subordinated to the 2004 Notes in right of payment;
-35-
<PAGE> 36
(5) Indebtedness of a Restricted Subsidiary issued in exchange for, or the
proceeds of which are used to refund or refinance, Indebtedness of a
Restricted Subsidiary issued in accordance with Subsection (a) of this
Section, provided that (i) the principal amount (or accreted value in the case
of Indebtedness issued at a discount) of the Indebtedness so issued shall not
exceed the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid interest on,
the Indebtedness so exchanged, refunded or refinanced and (ii) the
Indebtedness so issued (A) shall not mature prior to the stated maturity of
the Indebtedness so exchanged, refunded or refinanced and (B) shall have an
Average Life equal to or greater than the remaining Average Life of the
Indebtedness so exchanged, refunded or refinanced.
(6) Indebtedness of a Consolidated Subsidiary issued to acquire, develop,
improve, construct or to provide working capital for a gas, oil or electric
generation, exploration, production, distribution, storage or transmission
facility and related assets, provided that such Indebtedness is without
recourse to any assets of the Issuer, Consumers, Enterprises, CMS Generation,
NOMECO, CMS Electric and Gas, CMS Gas Transmission and Storage, CMS MST or any
other Designated Enterprises Subsidiary;
(7) Indebtedness of a Person existing at the time at which such
person became a Subsidiary and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary. Such Indebtedness shall
be deemed to be incurred on the date the acquired Person becomes a
Consolidated Subsidiary;
(8) Indebtedness issued by the Issuer not to exceed $150,000,000 in aggregate
principal amount at any time; and
-36-
<PAGE> 37
(9) Indebtedness of a Consolidated Subsidiary in respect of rate reduction
bonds issued to recover electric restructuring transition costs of Consumers
provided that such Indebtedness is without recourse to the assets of
Consumers.
SECTION 4.05. Limitation on Restricted Payments. (a) So long as the 2004
Notes are Outstanding and until the 2004 Notes are rated BBB- or above (or an
equivalent rating) by Standard & Poor's and one Other Rating Agency (or, if
Standard & Poor's shall change its rating system, an equivalent of such rating
then employed by such organization), at which time the Issuer will be
permanently released from the provisions of this Section 4.05, the Issuer shall
not, and shall not permit any Restricted Subsidiary of the Issuer, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on the
Capital Stock of the Issuer to the direct or indirect holders of its Capital
Stock (except dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase such Non-
Convertible Capital Stock and except dividends or distributions payable to the
Issuer or a Subsidiary), (ii) purchase, redeem or otherwise acquire or retire
for value any Capital Stock of the Issuer, or (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity or scheduled repayment thereof, any Subordinated Indebtedness (any
such dividend, distribution, purchase, redemption, repurchase, defeasing, other
acquisition or retirement being hereinafter referred to as a "Restricted
Payment") if at the time the Issuer or such Subsidiary makes such Restricted
Payment:
(1) an Event of Default, or an event that with the lapse of time or the
giving of notice or both would constitute an Event of Default, shall have
occurred and be continuing (or would result therefrom); or
-37-
<PAGE> 38
(2) the aggregate amount of such Restricted Payment and all other
Restricted Payments made since the date of this Fourth Supplemental Indenture
would exceed the sum of:
(A) $100,000,000;
(B) 100% of Consolidated Net Income, accrued during the period (treated as
one accounting period) from May 6, 1997 to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such Restricted
Payment (or, in case such sum shall be a deficit, minus 100% of the
deficit); and
(C) the aggregate Net Cash Proceeds received by the Issuer from the issue
or sale of or contribution with respect to its Capital Stock subsequent to
the date of this Fourth Supplemental Indenture.
For the purpose of determining the amount of any Restricted Payment not in the
form of cash, the amount shall be the fair value of such Restricted Payment as
determined in good faith by the Board of Directors, provided that if the value
of the non-cash portion of such Restricted Payment as determined by the Board
of Directors is in excess of $25 million, such value shall be based on the
opinion from a nationally recognized firm experienced in the appraisal of
similar types of transactions.
(b) The provisions of Section 4.05(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Issuer made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Capital Stock of the Issuer (other than
-38-
<PAGE> 39
Redeemable Stock or Exchangeable Stock); provided, however, that such
purchase or redemption shall be excluded from the calculation of the amount
of Restricted Payments;
(ii) dividends or other distributions paid in respect of any class of
the Issuer's Capital Stock issued in respect of the acquisition of any
business or assets by the Issuer or a Restricted Subsidiary if the
dividends or other distributions with respect to such Capital Stock are
payable solely from the net earnings of such business or assets;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section; provided, however, that at the time of payment of such
dividend, no Event of Default shall have occurred and be continuing (or
result therefrom), and provided further, however, that such dividends shall
be included (without duplication) in the calculation of the amount of
Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 4.06. Limitation on Asset Sales. So long as any of the 2004 Notes
are outstanding, the Issuer may not sell, transfer or otherwise dispose of any
property or assets of the Issuer, including Capital Stock of any Consolidated
Subsidiary, in one transaction or a series of transactions in an amount which
exceeds $50,000,000 (an "Asset Sale") unless the Issuer shall (i) apply an
amount equal to such excess Net Cash Proceeds to permanently repay Indebtedness
of a Consolidated Subsidiary or Indebtedness of the Issuer which is pari passu
with the 2004 Notes or (ii) invest an equal amount not so used in clause (i) in
property or assets of related business within 24 months after the
-39-
<PAGE> 40
date of the Asset Sale (the "Application Period") or (iii) apply such excess
Net Cash Proceeds not so used in (i) or (ii) (the "Excess Proceeds") to make an
offer, within 30 days after the end of the Application Period, to purchase from
the Holders on a pro rata basis an aggregate principal amount of 2004 Notes on
the relevant purchase date equal to the Excess Proceeds on such date, at a
purchase price equal to 100% of the principal amount of the 2004 Notes on the
relevant purchase date and unpaid interest, if any, to the purchase date. The
Issuer shall only be required to make an offer to purchase 2004 Notes from
Holders pursuant to subsection (iii) if the Excess Proceeds equal or exceed
$25,000,000 at any given time.
The procedures to be followed by the Issuer in making an offer to purchase
2004 Notes from the Holders with Excess Proceeds, and for the acceptance of
such offer by the Holders, shall be the same as those set forth in Section 3.01
herein with respect to a Change in Control.
ARTICLE V
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE 2004 NOTES
SECTION 5.01. Definition. All of the events specified in clauses (a)
through (h) of Section 5.1 of the Original Indenture shall be "Events of
Default" with respect to the 2004 Notes.
SECTION 5.02. Amendments to Section 5.1 of the Original Indenture. Solely
for the purpose of determining Events of Default with respect to the 2004
Notes, paragraphs (e), (f) and (h) of Section 5.1 of the Original Indenture
shall be amended such that each and every reference therein to the Issuer shall
be deemed to mean either the Issuer or Consumers.
-40-
<PAGE> 41
ARTICLE VI
GLOBAL NOTES
The 2004 Notes will be issued initially in the form of Global Notes.
"Global Note" means a registered 2004 Note evidencing one or more 2004 Notes
issued to a depositary (the "Depositary") or its nominee, in accordance with
this Article and bearing the legend prescribed in this Article. One or more
Global Notes will represent all 2004 Notes. The Issuer shall execute and the
Trustee shall, in accordance with this Article and the Issuer Order with
respect to the 2004 Notes, authenticate and deliver one or more Global Notes in
temporary or permanent form that (i) shall represent and shall be denominated
in an aggregate amount equal to the aggregate principal amount of the 2004
Notes to be represented by such Global Note or Notes, (ii) shall be registered
in the name of the Depositary for such Global Note or Notes or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless the Global 2004 Note is
presented by an authorized representative of the Depository to the Issuer or
its agent for registration of transfer, exchange or payment, and any 2004 Note
issued is registered in the name of a nominee of the Depository, or in such
other name as is requested by an authorized representative of the Depository
(and any payment is made to the nominee of the Depository, or to such other
entity as is requested by an authorized representative of the Depository), any
transfer, pledge or other use hereof for value or otherwise by or to any Person
is wrongful inasmuch as the registered owner hereof has an interest herein."
Notwithstanding Section 2.8 of the Indenture, unless and until it is
exchanged in whole or in part for 2004 Notes in definitive form, a Global Note
representing one or more 2004 Notes may not be transferred except as a whole by
the Depositary, to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
-41-
<PAGE> 42
Depositary or any such nominee to a successor Depositary for 2004 Notes or a
nominee of such successor Depositary.
If at any time the Depositary for the 2004 Notes is unwilling or unable to
continue as Depositary for the 2004 Notes, the Issuer shall appoint a successor
Depositary with respect to the 2004 Notes. If a successor Depositary for the
2004 Notes is not appointed by the Issuer by the earlier of (i) 90 days from
the date the Issuer receives notice to the effect that the Depositary is
unwilling or unable to act, or the Issuer determines that the Depositary is
unable to act or (ii) the effectiveness of the Depositary's resignation or
failure to fulfill its duties as Depositary, the Issuer will execute, and the
Trustee, upon receipt of a Issuer Order for the authentication and delivery of
definitive 2004 Notes, will authenticate and deliver 2004 Notes in definitive
form in an aggregate principal amount equal to the principal amount of the
Global Note or Notes representing such 2004 Notes in exchange for such Global
Note or Notes.
The Issuer may at any time and in its sole discretion determine that the
2004 Notes issued in the form of one or more Global Notes shall no longer be
represented by such Global Note or Notes. In such event the Issuer will
execute, and the Trustee, upon receipt of a Issuer Order for the authentication
and delivery of definitive 2004 Notes, will authenticate and deliver 2004 Notes
in definitive form in an aggregate principal amount equal to the principal
amount of the Global Note or Notes representing such 2004 Notes in exchange for
such Global Note or Notes.
The Depositary for such 2004 Notes may surrender a Global Note or Notes for
such 2004 Notes in exchange in whole or in part for 2004 Notes in definitive
form on such terms as are acceptable to the Issuer and such Depositary.
Thereupon, the Issuer shall execute, and the Trustee shall authenticate and
deliver, without service charge:
-42-
<PAGE> 43
(i) to each Person specified by such Depositary a new 2004 Note or
Notes, of any authorized denomination as requested by such Person in
aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a denomination equal to the
difference, if any, between the principal amount of the surrendered Global
Note and the aggregate principal amount of 2004 Notes in definitive form
delivered to Holders thereof.
In any exchange provided for in this Article, the Issuer will execute and
the Trustee will authenticate and deliver 2004 Notes in definitive registered
form in authorized denominations.
Upon the exchange of a Global Note for 2004 Notes in definitive form, such
Global Note shall be cancelled by the Trustee. 2004 Notes in definitive form
issued in exchange for a Global Note pursuant to this Article shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Note, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee or Security Registrar.
The Trustee shall deliver such 2004 Notes to the persons in whose names such
2004 Notes are so registered.
ARTICLE VII
DEFEASANCE
All of the provisions of Article Ten of the Original Indenture shall be
applicable to the 2004 Notes. Upon satisfaction by the Issuer of the
requirements of Section 10.1(c) of the Indenture, in connection with any
covenant defeasance (as provided in Section 10.1(c) of the Indenture), the
Issuer shall be released from its obligations under Article Nine of the
Original Indenture and
-43-
<PAGE> 44
under Articles III and IV of this Fourth Supplemental Indenture with respect to
the 2004 Notes.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
This Fourth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Fourth Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Fourth Supplemental Indenture shall together constitute one
and the same instrument.
TESTIMONIUM
This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
-44-
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental
Indenture to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first written above.
CMS ENERGY CORPORATION
By: ______________________
Attest:
(Corporate Seal)
NBD BANK
as Trustee
By: ______________________
Attest:
(Corporate Seal)
-45-
<PAGE> 46
Schedule 4.04(b)(2)
Indebtedness of CMS Energy Corporation outstanding on September__, 1997
-46-
<PAGE> 1
EXHIBIT (4)(D)
FOURTH SUPPLEMENTAL INDENTURE
DATED AS OF SEPTEMBER 17, 1997
____________________
This Fourth Supplemental Indenture, dated as of the 17th day of
September, 1997 between CMS Energy Corporation, a corporation duly organized
and existing under the laws of the State of Michigan (hereinafter called the
"Company") and having its principal office at Fairlane Plaza South, Suite 1100,
330 Town Center Drive, Dearborn, Michigan 48126, and The Chase Manhattan Bank,
a New York banking corporation (hereinafter called the "Trustee") and having
its principal Corporate Trust Office at 450 West 33rd Street, 15th Floor, New
York, New York 10001.
WITNESSETH:
WHEREAS, the Company and the Trustee entered into an Indenture, dated
as of January 15, 1994 (the "Original Indenture"), pursuant to which one or
more series of debt securities of the Company (the "Securities") may be issued
from time to time; and
WHEREAS, Section 301 of the Original Indenture permits the terms of any
series of Securities to be established in an indenture supplemental to the
Original Indenture; and
WHEREAS, Section 901(7) of the Original Indenture provides that a
supplemental indenture may be entered into by the Company and the Trustee
without the consent of any Holders of the Securities to establish the form and
terms of the Securities of any series; and
<PAGE> 2
WHEREAS, the Company has requested the Trustee to join with it in the
execution and delivery of this Fourth Supplemental Indenture in order to
supplement and amend the Original Indenture by, among other things,
establishing the form and terms of a series of Securities to be known as the
Company's "General Term Notes(R), Series D (the "General Term Notes"),
providing for the issuance of the General Term Notes and amending and adding
certain provisions thereof for the benefit of the Holders of the General Term
Notes; and
WHEREAS, the Company and the Trustee desire to enter into this Fourth
Supplemental Indenture for the purposes set forth in Sections 301 and 901(7) of
the Original Indenture as referred to above; and
WHEREAS, all things necessary to make this Fourth Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid
supplement to the Original Indenture have been done,
- ---------------------------
* Registered servicemark of J. W. Korth & Company
2
<PAGE> 3
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE
WITNESSETH:
For and in consideration of the premises and the purchase of the
General Term Notes to be issued hereunder by holders thereof, the Company and
the Trustee mutually covenant and agree, for the equal and proportionate
benefit of the respective holders from time to time of the General Term Notes,
as follows:
ARTICLE I
STANDARD PROVISIONS; DEFINITIONS
SECTION 101. Standard Provisions. The Original Indenture together
with this Fourth Supplemental Indenture and all indentures supplemental thereto
entered into pursuant to the applicable terms thereof are hereinafter sometimes
collectively referred to as the "Indenture." All of the terms, conditions,
covenants and provisions contained in the Original Indenture as heretofore
supplemented are incorporated herein by reference in their entirety and, except
as specifically noted herein or unless the context otherwise requires, shall be
deemed to be a part hereof to the same extent as if such provisions had been
set forth in full herein. All capitalized terms which are used herein and not
otherwise defined herein are defined in the Indenture and are used herein with
the same meanings as in the Indenture.
SECTION 102. Definitions. Section 101 of the Indenture is amended to
insert the new definitions applicable to the General Term Notes, in the
appropriate alphabetical sequence, as follows:
3
<PAGE> 4
"Amortization Expense" means, for any period, amounts recognized during
such period as amortization of capital leases, depletion, nuclear fuel,
goodwill and assets classified as intangible assets in accordance with
generally accepted accounting principles.
"Average Life" means, as of the date of determination, with respect to
any Indebtedness, the quotient obtained by dividing (i) the sum of the products
of (x) the number of years from the date of determination to the dates of each
successive scheduled principal payment of such Indebtedness and (y) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligation" of a Person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty;
and such obligation shall be deemed secured by a Lien on any property or assets
to which such lease relates.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock or Letter Stock; provided that Hybrid Preferred Securities shall not be
considered Capital Stock for purposes of this definition.
4
<PAGE> 5
"Change in Control" means an event or series of events by which (i) the
Company ceases to own beneficially, directly or indirectly, at least 80% of the
total voting power of all classes of Capital Stock then outstanding of
Consumers (whether arising from issuance of securities of the Company or
Consumers, any direct or indirect transfer of securities by the Company or
Consumers, any merger, consolidation, liquidation or dissolution of the Company
or Consumers or otherwise); (ii) any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act) becomes the "beneficial
owner" (as such term is used in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person or group shall be deemed to have "beneficial ownership" of
all shares that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), directly
or indirectly, of more than 30% of the Voting Stock of the Company; or (iii)
the Company consolidates with or merges into another corporation or directly or
indirectly conveys, transfers or leases all or substantially all of its assets
to any Person, or any corporation consolidates with or merges into the Company,
in either event pursuant to a transaction in which the outstanding Voting Stock
of the Company is changed into or exchanged for cash, securities, or other
property, other than any such transaction in which (A) the outstanding Voting
Stock of the Company is changed into or exchanged for Voting Stock of the
surviving corporation and (B) the holders of the Voting Stock of the Company
immediately prior to such transaction retain, directly or indirectly,
substantially proportionate ownership of the Voting Stock of the surviving
corporation immediately after such transaction.
"Consolidated Assets" means, at any date of determination, the
aggregate assets of the Company and its Consolidated Subsidiaries determined on
5
<PAGE> 6
a consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Capital" means, at any date of determination, the sum of
(a) Consolidated Indebtedness, (b) consolidated equity of the common
stockholders of the Company and the Consolidated Subsidiaries, (c) consolidated
equity of the preference stockholders of the Company and the Consolidated
Subsidiaries (d) consolidated equity of the preferred stockholders of the
Company and the Consolidated Subsidiaries and (e) the aggregate amount of all
Hybrid Preferred Securities, in each case determined at such date in accordance
with generally accepted accounting principles.
"Consolidated Coverage Ratio" with respect to any period means the
ratio of (i) the aggregate amount of Operating Cash Flow for such period to
(ii) the aggregate amount of Consolidated Interest Expense for such period.
"Consolidated Indebtedness" means, at any date of determination, the
aggregate Indebtedness of the Company and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles provided, however that Consolidated Indebtedness shall
not include any subordinated debt owned by any Hybrid Preferred Securities
Subsidiary.
"Consolidated Interest Expense" means, for any period, the total
interest expense in respect of Consolidated Indebtedness of the Company and its
Consolidated Subsidiaries, including, without duplication, (i) interest expense
attributable to capital leases, (ii) amortization of debt discount, (iii)
6
<PAGE> 7
capitalized interest, (iv) cash and noncash interest payments, (v) commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) net costs under Interest Rate Protection
Agreements (including amortization of discount) and (vii) interest expense in
respect of obligations of other Persons deemed to be Indebtedness of the
Company or any Consolidated Subsidiaries under clause (v) or (vi) of the
definition of Indebtedness, provided, however, that Consolidated Interest
Expense shall exclude any costs otherwise included in interest expense
recognized on early retirement of debt.
"Consolidated Leverage Ratio" means, at any date of determination, the
ratio of Consolidated Indebtedness to Consolidated Capital.
"Consolidated Net Income" means, for any period, the net income of the
Company and its Consolidated Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that there shall not be included in such Consolidated Net Income:
(i) any net income of any Person if such Person is not a Subsidiary,
except that (A) the Company's equity in the net income of any such Person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person during such period
to the Company or a Consolidated Subsidiary as a dividend or other distribution
and (B) the Company's equity in a net loss of any such Person for such period
shall be included in determining such Consolidated Net Income;
7
<PAGE> 8
(ii) any net income of any Person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; and
(iii) any gain or loss realized upon the sale or other disposition of
any property, plant or equipment of the Company or its Consolidated
Subsidiaries which is not sold or otherwise disposed of in the ordinary course
of business and any gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person.
"Consolidated Net Worth" of any Person means the total of the amounts
shown on the consolidated balance sheet of such Person and its consolidated
subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, as of any date selected by such Person not more
than 90 days prior to the taking of any action for the purpose of which the
determination is being made (and adjusted for any material events since such
date), as (i) the par or stated value of all outstanding Capital Stock plus
(ii) paid-in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated deficit,
(B) any amounts attributable to Redeemable Stock and (C) any amounts
attributable to Exchangeable Stock.
"Consolidated Subsidiary" means, any Subsidiary whose accounts are or
are required to be consolidated with the accounts of the Company in accordance
with generally accepted accounting principles.
8
<PAGE> 9
"Consumers" means Consumers Energy Company, a Michigan corporation, all
of whose common stock is on the date hereof owned by the Company.
"Enterprises" means CMS Enterprises Company, a Michigan corporation.
"Event of Default" with respect to the General Term Notes has the
meaning specified in Article VI of this Fourth Supplemental Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock of a corporation that is
exchangeable or convertible into another security (other than Capital Stock of
such corporation that is neither Exchangeable Stock, or Redeemable Stock).
"Hybrid Preferred Securities" means any preferred securities issued by
a Hybrid Preferred Securities Subsidiary, where such preferred securities have
the following characteristics:
(i) such Hybrid Preferred Securities Subsidiary lends
substantially all of the proceeds from the issuance of
such preferred securities to the Company or Consumers in
exchange for subordinated debt issued by the Company or
Consumers, respectively;
(ii) such preferred securities contain terms providing for the
deferral of distributions corresponding to provisions
providing for the deferral of interest payments on such
subordinated debt; and
9
<PAGE> 10
(iii) the Company or Consumers (as the case may be) makes periodic
interest payments on such subordinated debt, which interest
payments are in turn used by the Hybrid Preferred Securities
Subsidiary to make corresponding payments to the holders of the
Hybrid Preferred Securities.
"Hybrid Preferred Securities Subsidiary" means any business trust
(or similar entity)(i) all of the common equity interest of which is owned
(either directly or indirectly through one or more wholly-owned Subsidiaries of
the Company or Consumers)at all times by the Company or Consumers, (ii) that
has been formed for the purpose of issuing Hybrid Preferred Securities and
(iii) substantially all of the assets of which consist at all times solely of
subordinated debt issued by the Company or Consumers (as the case may be) and
payments made from time to time on such subordinated debt.
"Indebtedness" of any Person means, without duplication,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness evidenced
by notes, debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable;
(ii) all Capital Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and
10
<PAGE> 11
all obligations under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (i) through (iii)
above) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit);
(v) all obligations of the type referred to in clauses (i) through
(iv) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable as obligor,
guarantor or otherwise; and
(vi) all obligations of the type referred to in clauses (i) through
(v) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the amount
of such obligation being deemed to be the lesser of the value of such property
or assets or the amount of the obligation so secured.
11
<PAGE> 12
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Subsidiary against
fluctuations in interest rates.
"Letter Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
intended to reflect the separate performance of certain of the businesses or
operations conducted by such corporation or any of its subsidiaries.
"Lien" means any lien, mortgage, pledge, security interest, conditional
sale, title retention agreement or other charge or encumbrance of any kind.
"Net Proceeds" means, with respect to any issuance or sale or
contribution in respect of Capital Stock, the aggregate proceeds of such
issuance, sale or contribution, including the fair market value (as determined
by the Board of Directors and net of any associated debt and of any
consideration other than Capital Stock received in return) of property other
than cash, received by the Company, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts, or commissions and
brokerage, consultant and other fees actually incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof,
provided, however, that if such fair market value as determined by the Board of
Directors of property other than cash is greater than $25 million, the value
thereof shall be based upon an opinion from an independent nationally
recognized firm experienced in the appraisal or similar review of similar types
of transactions.
12
<PAGE> 13
"NOMECO" means, CMS NOMECO Oil & Gas Co., a Michigan corporation and
wholly-owned subsidiary of the Company.
"Non-Convertible Capital Stock" means, with respect to any corporation,
any non-convertible Capital Stock of such corporation and any Capital Stock of
such corporation convertible solely into non-convertible Capital Stock other
than Preferred Stock of such corporation; provided, however, that
Non-Convertible Capital Stock shall not include any Redeemable Stock or
Exchangeable Stock.
"Operating Cash Flow" means, for any period, with respect to the
Company and its Consolidated Subsidiaries, the aggregate amount of Consolidated
Net Income after adding thereto Consolidated Interest Expense (adjusted to
include costs recognized on early retirement of debt), income taxes,
depreciation expense, Amortization Expense and any noncash amortization of debt
issuance costs, any nonrecurring, noncash charges to earnings and any negative
accretion recognition.
"Other Rating Agency" means any of Duff & Phelps Credit Rating Co.,
Fitch Investors Service, L.P. or Moody's Investors Service, Inc., and any
successor to any of these organizations which is a nationally recognized
statistical rating organization.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation,
13
<PAGE> 14
over shares of Capital Stock of any other class of such corporation; provided
that Hybrid Preferred Securities shall not be considered "Preferred Stock" for
purposes of this definition.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
Maturity of any Outstanding General Term Notes or is redeemable at the option
of the holder thereof at any time prior to the first anniversary of the
Maturity of any Outstanding General Term Notes.
"Restricted Subsidiary" means any Subsidiary (other than Consumers and
its subsidiaries) of the Company which, as of the date of the Company's most
recent quarterly consolidated balance sheet, constituted at least 10% of the
total Consolidated Assets of the Company and its Consolidated Subsidiaries and
any other Subsidiary which from time to time is designated a Restricted
Subsidiary by the Board of Directors provided that no Subsidiary may be
designated a Restricted Subsidiary if, immediately after giving effect thereto,
an Event of Default or event that, with the lapse of time or giving of notice
or both, would constitute an Event of Default would exist or the Company and
its Restricted Subsidiaries could not incur at least $1 of additional
Indebtedness under Section 510, and (i) any such Subsidiary so designated as a
Restricted Subsidiary must be organized under the laws of the United States or
any State thereof, (ii) more than 80% of the Voting Stock of such Subsidiary
must be owned of record and beneficially by the Company or a Restricted
Subsidiary, (iii) such Restricted Subsidiary must be a Consolidated Subsidiary,
and (iv) such Subsidiary must not theretofore have been designated as a
Restricted Subsidiary.
14
<PAGE> 15
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a
division of McGraw Hill Inc., and any successor thereto which is a nationally
recognized statistical rating organization, or if such entity shall cease to
rate the General Term Notes or shall cease to exist and there shall be no such
successor thereto, any other nationally recognized statistical rating
organization selected by the Company which is acceptable to the Trustee.
"Support Obligations" means, for any person, without duplication, any
financial obligation, contingent or otherwise, of such person guaranteeing or
otherwise supporting any debt or other obligation of any other person in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such debt or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such debt, (ii) to purchase property, securities or services for
the purpose of assuring the owner of such debt of the payment of such debt,
(iii) to maintain working capital, equity capital, available cash or other
financial statement condition of the primary obligor so as to enable the
primary obligor to pay such debt, (iv) to provide equity capital under or in
respect of equity subscription arrangements (to the extent that such obligation
to provide equity capital does not otherwise constitute debt), or (v) to
perform, or arrange for the performance of, any non-monetary obligations or
non-funded debt payment obligations of the primary obligor.
"Tax-Sharing Agreement" means the Amended and Restated Agreement for
the Allocation of Income Tax Liabilities and Benefits, dated January 1, 1994,
as amended or supplemented from time to time, by and among Company, each of the
15
<PAGE> 16
members of the Consolidated Group (as defined therein), and each of the
corporations that become members of the Consolidated Group.
Certain terms, used principally in Articles Three, Four and Seven of
this Fourth Supplemental Indenture, are defined in those Articles.
ARTICLE II
DESIGNATION AND TERMS OF THE GENERAL TERM NOTES; FORMS
SECTION 201. Establishment of Series. There is hereby created a
series of Securities to be known and designated as the "General Term Notes(R),
Series D" and limited in aggregate principal amount (except as contemplated in
Section 301(2) of the Indenture) to $200,000,000.
Each General Term Note will be dated and issued as of the date of its
authentication by the Trustee. Each General Term Note shall also bear an
Original Issue Date (as hereinafter defined) which, with respect to any General
Term Note (or any portion thereof), shall mean the date of its original issue,
as specified in such General Term Note (the "Original Issue Date"), and such
Original Issue Date shall remain the same if such General Term Note is
subsequently issued upon transfer, exchange, or substitution of such General
Term Note regardless of its date of authentication. Principal on any General
Term Note shall become due and payable from nine months to twenty-five years
from the Original Issue Date of such General Term Note, as specified on such
General Term Note.
16
<PAGE> 17
Each General Term Note will bear interest from the Original Issue Date,
or from the most recent date to which interest has been paid or duly provided
for, at the rate per annum stated therein until the principal thereof is paid
or made available for payment. Interest will be payable either monthly,
quarterly or semi-annually on each Interest Payment Date and at Maturity, as
specified below and in each General Term Note. Interest will be payable to the
person in whose name a General Term Note is registered at the close of business
on the Regular Record Date next preceding each Interest Payment Date; provided,
however, interest payable at Maturity will be payable to the person to whom
principal shall be payable. Interest on the General Term Notes will be
computed on the basis of a 360-day year of twelve 30-day months.
The Interest Payment Dates for a General Term Note that provides
for monthly interest payments shall be the fifteenth day of each calendar
month; provided, however, that in the case of a General Term Note issued
between the first and fifteenth day of a calendar month, interest otherwise
payable on the fifteenth day of such calendar month will be payable on the
fifteenth day of the next succeeding calendar month. In the case of a General
Term Note that provides for quarterly interest payments, the Interest Payment
Dates shall be the fifteenth day of each of the months specified in such
General Term Note, commencing on the day that is three months from (i) the day
on which such General Term Note is issued, if such General Term Note is issued
on the fifteenth day of a calendar month, or (ii) the fifteenth day of the
calendar month immediately preceding the calendar month in which such General
Term Note is issued, if such General Term Note is issued prior to the fifteenth
day of a calendar month, or (iii) the fifteenth day of the calendar month in
which such General Term Note is issued, if such General Term Note is issued
after the fifteenth day of a calendar
17
<PAGE> 18
month. In the case of a General Term Note that provides for semi-annual
interest payments, the Interest Payment Dates shall be the fifteenth day of
each of the months specified in such General Term Note, commencing on the day
that is six months from (i) the day on which such General Term Note is issued,
if such General Term Note is issued on the fifteenth day of a calendar month,
or (ii) the fifteenth day of the calendar month immediately preceding the
calendar month in which such General Term Note is issued, if such General Term
Note is issued prior to the fifteenth day of a calendar month, or (iii) the
fifteenth day of the calendar month in which such General Term Note is issued,
if such General Term Note is issued after the fifteenth day of a calendar
month.
Payment of principal of the General Term Notes (and premium, if any)
and, unless otherwise paid as hereinafter provided, any interest thereon will
be made at the office or agency of the Company in New York, New York; provided,
however, that payment of interest (other than interest at Maturity) may be made
at the option of the Company by check or draft mailed to the Person entitled
thereto at such Person's address appearing in the Security Register or by wire
transfer to an account designated by such Person not later than ten days prior
to the date of such payment.
The Regular Record Date referred to in Section 301 of the Indenture for
the payment of the interest on any General Term Note payable on any Interest
Payment Date (other than at Maturity) shall be the first day (whether or not a
Business Day) of the calendar month in which such Interest Payment Date occurs
as is specified in such General Term Note, and, in the case of interest payable
at Maturity, the Regular Record Date shall be the date of Maturity. Unless
otherwise specified in such General Term Notes, the cities of New York, New
York
18
<PAGE> 19
and Chicago, Illinois shall be the reference cities for determining a Business
Day.
The General Term Notes may be issued only as registered notes, without
coupons, in denominations of $1,000 and any larger denomination which is in an
integral multiple of $1,000.
Upon the execution of this Fourth Supplemental Indenture, or from time
to time thereafter, General Term Notes may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said General Term Notes in accordance with the
procedures set forth in or upon a Company Order complying with Sections 301 and
303 of the Indenture.
SECTION 202. Forms Generally. The General Term Notes shall be in
substantially the form set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by the Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such General
Term Notes, as evidenced by their execution thereof.
The definitive General Term Notes shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such General Term Notes, as evidenced
by their execution thereof.
19
<PAGE> 20
SECTION 203. Form of Face of General Term Note.
[Insert any legend required by the Internal Revenue
Code and the regulations thereunder.]
CMS ENERGY CORPORATION
GENERAL TERM NOTE(R), SERIES D
No. ________ $__________
[Initial Redemption Date]
CMS Energy Corporation, a corporation duly organized and existing under
the laws of the State of Michigan (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to _________________________________, or
registered assigns, the principal sum of ____________________ Dollars on
__________________________ and to pay interest thereon from _____________ (the
"Original Issue Date") or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, [choose one of the following --
monthly/quarterly/semi-annually [insert as applicable -- on ___________
[________, ____________] and _________ in each [year/month], commencing
______________, and at Maturity at the rate of ____% per annum, until the
principal hereof is paid or made available for payment [if applicable, insert
- --, and at the rate of ___% per annum on any overdue principal and premium and
on any overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this General
Term Note (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the first
day of the calendar month in which such Interest
20
<PAGE> 21
Payment Date occurs (whether or not a Business Day) next preceding such
Interest Payment Date except that the Regular Record Date for interest payable
at Maturity shall be the date of Maturity. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name
this General Term Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of General Term Notes not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the General Term
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
[If the General Term Note is not to bear interest prior to Maturity,
insert -- The principal of this General Term Note shall not bear interest
except in the case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity and in such case the overdue principal of this
General Term Note shall bear interest at the rate of ___% per annum, which
shall accrue from the date of such default in payment to the date payment of
such principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any overdue
principal that is not so paid on demand shall bear interest at the rate of
____% per annum, which shall accrue from the date of such demand for payment to
the date payment of such interest has been made or duly provided for, and such
interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and interest, if any,
on this General Term Note will be made at the office or agency of the Company
21
<PAGE> 22
maintained for that purpose in New York, New York (the "Place of Payment"), in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that at the option of the Company payment of interest (other than interest
payable at Maturity) may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or by
wire transfer to an account designated by such Person not later than ten days
prior to the date of such payment.
Reference is hereby made to the further provisions of this General Term
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this General
Term Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
22
<PAGE> 23
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
CMS ENERGY CORPORATION
By____________________________
Attest:
_________________________
SECTION 204. Form of Reverse of General Term Note.
This General Term Note(R), Series D is one of a duly authorized
issue of securities of the Company (herein called the "General Term Notes"),
issued and to be issued in one or more series under an Indenture, dated as of
January 15, 1994, as supplemented by certain supplemental indentures, including
the Fourth Supplemental Indenture, dated as of ________, 1997 (herein
collectively referred to as the "Indenture"), between the Company and The Chase
Manhattan Bank, a New York banking corporation, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee, the Holders of the
General Term Notes and of the terms upon which the General Term Notes are, and
are to be, authenticated and delivered. This General Term Note is one of the
series designated on the face hereof, limited in aggregate principal amount to
$200,000,000.
23
<PAGE> 24
[If applicable, insert -- The General Term Notes of this series are
subject to redemption upon not more than 60 nor less than 30 days' notice as
provided in the Indenture, at any time [on or after __________, _____,] as a
whole or in part from time to time, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed [on or before _____________, ___%, and if redeemed] during the
12-month period beginning ____________ of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such General Term
Notes, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
__________, redeem this General Term Note as a part of, or in anticipation of,
any refunding operation by the application, directly or indirectly, of moneys
borrowed having an effective interest cost to the Company (calculated in
accordance with generally accepted financial practice) of less than the
effective interest cost to the Company (similarly calculated) of this General
Term Note.]
24
<PAGE> 25
[If the General Term Note is subject to redemption, insert -- In the
event of redemption of this General Term Note in part only, a new General Term
Note or Notes of this series and of like tenor for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.]
If a Change in Control occurs, the Company shall notify the Holder of
this General Term Note of such occurrence and such Holder shall have the right
to require the Company to make a Required Repurchase of all or any part of this
General Term Note at a Change in Control Purchase Price equal to 101% of the
principal amount of this General Term Note to be so purchased as more fully
provided in the Indenture and subject to the terms and conditions set forth
therein. In the event of a Required Repurchase of only a portion of this
General Term Note, a new General Term Note or Notes for the unrepurchased
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
[If this General Term Note is subject to redemption upon exercising a
Survivor's Option, insert -- As more fully provided in the Indenture and
subject to the terms and conditions set forth therein, the Company will repay
this General Term Note (or portion thereof) properly tendered for repayment by
or on behalf of the person (the "Representative") that has authority to act on
behalf of a deceased owner of the beneficial interest in this General Term Note
under the laws of the appropriate jurisdiction (including, without limitation,
the personal representative or executor of such deceased beneficial owner) at a
price equal to 100% of the principal amount hereof plus accrued interest to the
date of such repayment. The Company may, in its sole discretion, limit the
aggregate principal amount of all outstanding General Term Notes as to which
exercises of this option (the "Survivor's Option") will be accepted in any
calendar year to one percent (1%)
25
<PAGE> 26
of the outstanding principal amount of all General Term Notes as of the end of
the most recent fiscal year, but not less than $500,000 in any such calendar
year, or such greater amount as the Company in its sole discretion may
determine for any calendar year, and may limit to $100,000, or such greater
amount as the Company in its sole discretion may determine for any calendar
year, the aggregate principal amount of General Term Notes (or portions
thereof) as to which exercise of the Survivor's Option will be accepted in such
calendar year with respect to any individual deceased owner of beneficial
interests in such General Term Notes. Notwithstanding the foregoing, the
Survivor's Option will not be available to persons who are surviving joint
tenants or surviving tenants by the entirety.
[If the General Term Note is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to this General Term Note shall
occur and be continuing, the principal of this General Term Note may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, Stated Maturity or Maturity of any General Term Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of the Indenture or this General Term Note), payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date,
Redemption Date or Repayment Date or at the Stated Maturity or Maturity;
provided that no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repayment Date,
Stated Maturity or Maturity, as the case may be, to such Business Day.
26
<PAGE> 27
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of all Outstanding Securities under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of not less than a majority in principal amount of all Outstanding
Securities affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of all Outstanding
Securities, on behalf of the Holders of all Outstanding Securities, to waive
compliance by the Company with certain provisions of the Indenture. Any such
consent or waiver by the Holder of this General Term Note shall be conclusive
and binding upon such Holder and upon all future Holders of this General Term
Note and of any General Term Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this General Term Note.
The Indenture permits the Holders of not less than a majority in
principal amount of all Outstanding Securities of any series thereunder to
waive on behalf of the Holders of all Outstanding Securities of such series any
past default by the Company, provided that no such waiver may be made with
respect to a default in the payment of the principal of or premium, if any, or
the interest on any Security of such series or the default by the Company in
respect of certain covenants or provisions of the Indenture, the modification
or amendment of which must be consented to by the older of each Outstanding
Security of each series affected.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any General Term Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
27
<PAGE> 28
shall have previously given to the Trustee written notice of a continuing Event
of Default, the Holders of not less than 25% in principal amount of the
Outstanding General Term Notes shall have made written request, and offered
satisfactory indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
principal amount of the Outstanding General Term Notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days; provided, however, that such limitations do not apply to a suit
instituted by the Holder hereof for the enforcement of payment of the principal
of (and premium, if any) or any interest on this General Term Note on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this General
Term Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this General Term Note at the times, place and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this General Term Note is registerable in the
Security Register, upon surrender of this General Term Note for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this General Term Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new General Term Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
28
<PAGE> 29
The General Term Notes of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, General Term Notes of this series are exchangeable for a like
aggregate principal amount of General Term Notes of this series and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
[If this General Term Note is redeemable at the option of the Company,
insert -- The Company shall not be required (i) to issue, register the transfer
of or exchange this General Term Note if this General Term Note may be among
those selected for redemption during a period beginning at the opening of
business 15 days before selection of the General Term Notes to be redeemed under
Section 1103 of the Indenture and ending at the close of business on the day of
the mailing of the relevant notice of redemption, (ii) to register the transfer
of or exchange any General Term Note so selected for redemption in whole or in
part, except, in the case of any General Term Note to be redeemed in part, the
portion thereof not to be redeemed, or (iii) to issue, register the transfer of
or exchange any General Term Note which has been surrendered for repayment at
the option of the Holder, except the portion, if any, of such General Term Note
not to be so repaid.]
Prior to due presentment of this General Term Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this General Term Note is registered as the
owner
29
<PAGE> 30
hereof for all purposes, whether or not this General Term Note be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this General Term Note without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
(R) Registered servicemark of J. W. Korth & Company
________________________
SECTION 205. Form of Legend for Global Notes. Any Global Note (as
defined in Article VII below) authenticated and delivered hereunder shall bear
a legend in substantially the following form:
"This Security is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This General Term Note is not exchangeable for General
Term Notes registered in the name of a Person other than the Depositary or its
nominee except in the limited circumstances described in the Indenture, and no
transfer of this General Term Note (other than a transfer of this General Term
Note as a whole by the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the Depositary) may be
registered except in the limited circumstances described in the Indenture."
SECTION 206. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
30
<PAGE> 31
This is one of the General Term Notes of the series designated therein
referred to in the within-mentioned Indenture.
________________________________________,
as Trustee
By______________________________________
Authorized Officer
ARTICLE III
REDEMPTION OF GENERAL TERM NOTES; CHANGE OF CONTROL
SECTION 301. Redemption of General Term Notes. (a) Each General Term
Note may be redeemed by the Company in whole or in part if so provided in, and
in accordance with, the terms of such General Term Note issued by the Company.
The Company may redeem any General Term Note which by its terms is redeemable
prior to Stated Maturity without also redeeming any other General Term Note
which is redeemable prior to Stated Maturity.
(b) Change of Control. Upon the occurrence of a Change in Control (the
effective date of such Change in Control being the "Change in Control Date"),
each Holder of a General Term Note shall have the right to require that the
Company repurchase (a "Required Repurchase") all or any part of such Holder's
General Term Note at a repurchase price payable in cash equal to 101% of the
principal amount of such General Term Note plus accrued interest to the Purchase
Date (the "Change in Control Purchase Price").
31
<PAGE> 32
(1) Within 30 days following the Change in Control Date, the Company
shall mail a notice (the "Required Repurchase Notice") to each Holder with a
copy to the Trustee stating:
(i) that a Change in Control has occurred and that such Holder has
the right to require the Company to repurchase all or any part of such
Holder's General Term Notes at the Change of Control Purchase Price;
(ii) the Change of Control Purchase Price;
(iii) the date on which any Required Repurchase shall be made (which
shall be no earlier than 60 days nor later than 90 days from the date
such notice is mailed) (the "Purchase Date");
(iv) the name and address of the Paying Agent; and
(v) the procedures that Holders must follow to cause the General
Term Notes to be repurchased, which shall be consistent with this
Section and the Indenture.
(2) Holders electing to have a General Term Note repurchased must
deliver a written notice (the "Change in Control Purchase Notice") to the Paying
Agent (initially the Trustee) at its office in The City of New York, or any
other office of the Paying Agent maintained for such purposes, not later than 30
days prior to the Purchase Date. The Change in Control Purchase Notice shall
state: (i) the portion of the principal amount of any General Term Notes to be
repurchased, which portion must be $1,000 or an integral
32
<PAGE> 33
multiple thereof; (ii) that such General Term Notes are to be repurchased by
the Company pursuant to the change in control provisions of the Indenture; and
(iii) unless the General Term Notes are represented by one or more Global
Notes, the certificate numbers of the General Term Notes to be delivered by the
Holder thereof for repurchase by the Company. Any Change in Control Purchase
Notice may be withdrawn by the Holder by a written notice of withdrawal
delivered to the Paying Agent not later than three Business Days prior to the
Purchase Date. The notice of withdrawal shall state the principal amount and,
if applicable, the certificate numbers of the General Term Notes as to which
the withdrawal notice relates and the principal amount of such General Term
Notes, if any, which remains subject to a Change in Control Purchase Notice.
If a General Term Note is represented by a Global Note (as described in
Article VII below), the Depositary or its nominee will be the Holder of such
General Term Note and therefore will be the only entity that can elect a
Required Repurchase of such General Term Note. To obtain repayment pursuant to
this Section 301(b) with respect to such General Term Note, the beneficial owner
of such General Term Note must provide to the broker or other entity through
which it holds the beneficial interest in such General Term Note (i) the Change
in Control Purchase Notice signed by such beneficial owner, and such signature
must be guaranteed by a member firm of a registered national securities exchange
or of the National Association of Securities Dealers, Inc. or a commercial bank
or trust company having an office or correspondent in the United States, and
(ii) instructions to such broker or other entity to notify the Depositary of
such beneficial owner's desire to obtain repayment pursuant to this Section
301(b). Such broker or other entity will provide to the
33
<PAGE> 34
Paying Agent (i) the Change of Control Purchase Notice received from such
beneficial owner and (ii) a certificate satisfactory to the Paying Agent from
such broker or other entity stating that it represents such beneficial owner.
Such broker or other entity will be responsible for disbursing any payments it
receives pursuant to this Section 301(b) to such beneficial owner.
(3) Payment of the Change of Control Purchase Price for a General
Term Note for which a Change in Control Purchase Notice has been delivered and
not withdrawn is conditioned (except in the case of a General Term Note
represented by one or more Global Notes) upon delivery of such General Term Note
(together with necessary endorsements) to the Paying Agent at its office in The
City of New York, or any other office of the Paying Agent maintained for such
purpose, at any time (whether prior to, on or after the Purchase Date) after the
delivery of such Change in Control Purchase Notice. Payment of the Change of
Control Purchase Price for such General Term Note will be made promptly
following the later of the Purchase Date or the time of delivery of such General
Term Note. If the Paying Agent holds, in accordance with the terms of the
Indenture, money sufficient to pay the Change in Control Purchase Price of such
General Term Note on the Business Day following the Purchase Date, then, on and
after such date, interest will cease accruing, and, if applicable, amounts will
no longer accrue on any such General Term Note that is an Original Issue
Discount Security, whether or not such General Term Note is delivered to the
Paying Agent, and all other rights of the Holder shall terminate (other than the
right to receive the Change of Control Purchase Price upon delivery of the
General Term Note).
34
<PAGE> 35
(4) The Company shall comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act, which may then be
applicable and shall file Schedule 13E-4 or any other schedule required
thereunder in connection with any offer by the Company to repurchase General
Term Notes at the option of Holders upon a Change in Control.
(5) No General Term Note may be repurchased by the Company as a
result of a Change in Control if there has occurred and is continuing an Event
of Default (other than a default in the Payment of the Change in Control
Purchase Price with respect to the General Term Notes).
ARTICLE IV
REPAYMENT UPON DEATH
If so specified in any General Term Note, the Holder of such General
Term Note will have the option (the "Survivor's Option") to elect repayment of
such General Term Note prior to its Stated Maturity in the event of the death
of the beneficial owner of such General Term Note. Pursuant to exercise of the
Survivor's Option, if applicable, the Company will repay any General Term Note
(or portion thereof) properly tendered for repayment by or on behalf of the
person (the "Representative") that has authority to act on behalf of the
deceased beneficial owner of such General Term Note under the laws of the
appropriate jurisdiction (including, without limitation, the personal
representative or executor of such deceased beneficial owner) at a price equal
to one-hundred percent (100%) of the principal amount of the beneficial
interest of the deceased owner of such General Term Note plus accrued interest
to
35
<PAGE> 36
the date of such payment, subject to the following limitations.
Notwithstanding the foregoing, the Survivor's Option will not be available to
persons who are surviving joint tenants or surviving tenants by the entirety.
The Company may, in its sole discretion, limit the aggregate principal amount
of General Term Notes as to which exercises of the Survivor's Option will be
accepted in any calendar year (the "Annual Put Limitation") to one percent (1%)
of the outstanding principal amount of the General Term Notes as of the end of
the most recent fiscal year, but not less than $500,000 in any such calendar
year, or such greater amount as the Company in its sole discretion may
determine for any calendar year, and may limit to $100,000, or such greater
amount as the Company in its sole discretion may determine for any calendar
year, the aggregate principal amount of General Term Notes (or portions
thereof) as to which exercise of the Survivor's Option will be accepted in such
calendar year with respect to any individual deceased owner of beneficial
interests in such General Term Notes (the "Individual Put Limitation").
Moreover, the Company will not make principal repayments pursuant to exercise
of the Survivor's Option in amounts that are less that $1,000, and, in the
event that the limitations described in the preceding sentence would result in
the partial repayment of any General Term Note, the principal amount of such
General Term Note remaining outstanding after repayment must be at least $1,000
(the minimum authorized denomination of the General Term Notes). Any General
Term Note (or portion thereof) tendered pursuant to exercise of the Survivor's
Option may be withdrawn by a written request of its Holder received by the
Trustee prior to its repayment.
Each General Term Note (or portion thereof) that is tendered pursuant to
a valid exercise of the Survivor's Option will be accepted promptly in the order
all such General Term Notes are tendered, except for any General Term Note (or
36
<PAGE> 37
portion thereof) the acceptance of which would contravene (i) the Annual Put
Limitation, if applied, or (ii) the Individual Put Limitation, if applied, with
respect to the relevant individual deceased owner of beneficial interests
therein. If, as of the end of any calendar year, the aggregate principal
amount of General Term Notes (or portions thereof) that have been accepted
pursuant to exercise of the Survivor's Option for such year has not exceeded
the Annual Put Limitation, if applied, for such year, any exercise(s) of the
Survivor's Option with respect to General Term Notes (or portions thereof) not
accepted during such calendar year because such acceptance would have
contravened the Individual Put Limitation, if applied, with respect to an
individual deceased owner of beneficial interests therein will be accepted in
the order all such General Term Notes (or portions thereof) were tendered, to
the extent that any such exercise would not exceed the Annual Put Limitation,
if applied, for such calendar year. Any General Term Note (or portion thereof)
accepted for repayment pursuant to exercise of the Survivor's Option will be
repaid no later than the first Interest Payment Date that occurs 20 or more
calendar days after the date of such acceptance. Each General Term Note (or
any portion thereof) tendered for repayment that is not accepted in any
calendar year because of the application of the Annual Put Limitation will be
deemed to be tendered in the following calendar year in the order in which all
such General Term Notes (or portions thereof) were originally tendered, unless
any such General Term Note (or portion thereof) is withdrawn by the
Representative for the deceased owner prior to its repayment. In the event
that a General Term Note (or any portion thereof) tendered for repayment
pursuant to valid exercise of the Survivor's Option is not accepted, the
Trustee will deliver a notice by first-class mail to the registered Holder
thereof at its last known address as indicated in the Security Register that
states the reasons such General Term Note (or portion thereof) has not been
accepted for repayment.
37
<PAGE> 38
Subject to the foregoing, in order for a Survivor's Option to be validly
exercised with respect to any General Term Note (or portion thereof), the
Trustee must receive from the Representative of the individual deceased owner of
beneficial interests therein (i) a written request for payment signed by the
Representative, and such signature must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an office
or correspondent in the United States, (ii) if any such General Term Note is not
represented by a Global Note (as described in Article VII below), tender of the
General Term Note (or portion thereof) to be repaid, (iii) appropriate evidence
satisfactory to the Company and the Trustee that (A) the Representative has
authority to act on behalf of the individual deceased beneficial owner, (B) the
death of such beneficial owner has occurred and (C) the deceased individual was
the owner of a beneficial interest in such General Term Note at the time of
death, (iv) if applicable, a properly executed assignment or endorsement, and
(v) if the beneficial interest in such General Term Note is held by a nominee of
the deceased beneficial owner, a certificate satisfactory to the Trustee from
such nominee attesting to the deceased's ownership of a beneficial interest in
such General Term Note. All questions as to the eligibility or validity of any
exercise of the Survivor's Option will be determined by the Company, in its sole
discretion, which determinations will be final and binding on all parties.
If a General Term Note is represented by a Global Note (as described in
Article VII below), the Depositary or its nominee will be the Holder of such
General Term Note and therefore will be the only entity that can exercise the
Survivor's Option for such General Term Note. To obtain repayment pursuant to
exercise of the Survivor's Option with respect to such General Term Note, the
38
<PAGE> 39
Representative must provide to the broker or other entity through which the
beneficial interest in such General Term Note is held by the deceased owner (i)
the documents described in clauses (i) and (iii) of the preceding paragraph and
(ii) instructions to such broker or other entity to notify the Depositary of
such Representative's desire to obtain repayment pursuant to exercise of the
Survivor's Option. Such broker or other entity shall provide to the Trustee
(i) the documents received from the Representative referred to in clause (i) of
the preceding sentence and (ii) a certificate satisfactory to the Trustee from
such broker or other entity stating that it represents the deceased beneficial
owner. Such broker or other entity will be responsible for disbursing any
payments it receives pursuant to exercise of the Survivor's Option to the
appropriate Representative.
ARTICLE V
ADDITIONAL COVENANTS OF THE COMPANY
WITH RESPECT TO THE GENERAL TERM NOTES
SECTION 501. Statement by Officers as to Default. (a) The Company
will deliver to the Trustee, within 120 days after the end of each fiscal year
a brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Fourth
Supplemental Indenture. For such purposes, such compliance shall be determined
without regard to any period of grace or requirement of notice provided
hereunder and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
39
<PAGE> 40
(b) The Company shall deliver to the Trustee, as soon as possible and
in any event within 10 days after the Company becomes aware of the occurrence of
an Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which the Company
proposes to take with respect thereto.
SECTION 502. Existence. So long as any of the General Term Notes are
Outstanding, subject to Article 8 of the Indenture, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and all rights (charter and statutory) and franchises
other than rights or franchises the loss of which would not be disadvantageous
in any material respect to the Holders of the General Term Notes.
SECTION 503. Maintenance of Properties. So long as any of the General
Term Notes are Outstanding, the Company will cause all properties used or useful
in the conduct of its business to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Holders.
40
<PAGE> 41
SECTION 504. Payment of Taxes and Other Claims. So long as any of the
General Term Notes are Outstanding, the Company will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (1) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a Lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim the amount of which, applicability or validity is being contested in good
faith by appropriate proceedings.
SECTION 505. Insurance. So long as any of the General Term Notes are
Outstanding, the Company shall, and each of its Restricted Subsidiaries and
Consumers shall, keep insured by financially sound and reputable insurers all
property of a character usually insured by entities engaged in the same or
similar businesses similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such entities and carry such amounts
of other insurance as is usually carried by such entities.
SECTION 506. Compliance with Laws. So long as any of the General Term
Notes are Outstanding, the Company shall, and each of its Restricted
Subsidiaries and Consumers shall, comply in all material respects with all laws
applicable to the Company or such Restricted Subsidiary or Consumers, as the
case may be, its respective business and properties.
41
<PAGE> 42
SECTION 508. Limitation on Certain Liens. (a) So long as any of the
General Term Notes are outstanding, the Company shall not create, incur, assume
or suffer to exist any Lien or any other type of arrangement intended or having
the effect of conferring upon a creditor of the Company or any Subsidiary a
preferential interest (hereinafter in this Section referred to as a "Lien") upon
or with respect to the Capital Stock of Consumers, Enterprises or NOMECO without
making effective provision whereby the General Term Notes shall (so long as any
such other creditor shall be so secured) be equally and ratably secured (along
with any other creditor similarly entitled to be secured) by a direct Lien on
all property subject to such Lien, provided, however, that the foregoing
restrictions shall not apply to:
(i) Liens for taxes, assessments or governmental charges or levies to
the extent not past due;
(ii) pledges or deposits to secure (a) obligations under workmen's
compensation laws or similar legislation, (b) statutory obligations of the
Company or (c) Support Obligations not to exceed $30 million at any one time
outstanding;
(iii) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations which are not overdue or
which have been fully bonded and are being contested in good faith;
(iv) purchase money Liens upon or in property acquired and held by the
Company in the ordinary course of business to secure the purchase price of such
property or to secure Indebtedness incurred solely for the purpose of financing
the
42
<PAGE> 43
acquisition of any such property to be subject to such Liens, or Liens existing
on any such property at the time of acquisition, or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount, provided
that no such Lien shall extend to or cover any property other than the property
being acquired and no such extension, renewal or replacement shall extend to or
cover property not theretofore subject to the Lien being extended, renewed or
replaced, and provided, further, that the aggregate principal amount of the
Indebtedness at any one time outstanding secured by Liens permitted by this
clause (iv) shall not exceed $10,000,000; and
(v) Liens not otherwise permitted by clauses (i) through (iv) of this
Section securing Indebtedness of the Company; provided that on the date such
Liens are created, and after giving effect to such Indebtedness, the aggregate
principal amount at maturity of all of the secured Indebtedness of the Company
at such date shall not exceed 10% of Consolidated Assets at such date.
SECTION 509. Limitation on Consolidation, Merger, Sale or Conveyance.
In addition to the limitations set forth in Article 8 of the Indenture, so long
as the General Term Notes are Outstanding and until the General Term Notes are
rated BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization) at which time the
Company shall be permanently released from the following provisions, the Company
shall not consolidate with or merge into any other Person or sell, lease or
convey the property of the Company in the entirety or substantially as an
entirety unless (i) immediately after giving effect to such transaction the
Consolidated Net Worth of the surviving entity is at least equal to the
Consolidated Net Worth of the Company
43
<PAGE> 44
immediately prior to the transaction, and (ii) after giving effect to such
transaction, the surviving entity would be entitled to incur at least one
dollar of additional Indebtedness (other than revolving Indebtedness to banks)
without violation of the limitations in Section 510 hereof.
SECTION 510. Limitation on Consolidated Indebtedness. (a) So long as
any of the General Term Notes are Outstanding and until the General Term Notes
are rated BBB- or above (or an equivalent rating) by Standard & Poor's and one
Other Rating Agency (or if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization) at which time the
Company shall be permanently released from the provision of this Section 510,
the Company shall not, and shall not permit any Restricted Subsidiary of the
Company to, issue, create, assume, guarantee, incur or otherwise become liable
for (collectively, "issue"), directly or indirectly, any Indebtedness unless (i)
the Consolidated Coverage Ratio of the Company and its Consolidated Subsidiaries
for the four consecutive fiscal quarters immediately preceding the issuance of
such Indebtedness (as shown by a pro forma consolidated income statement of the
Company and its Consolidated Subsidiaries for the four most recent fiscal
quarters ending at least 30 days prior to the issuance of such Indebtedness
after giving effect to (i) the issuance of such Indebtedness and (if applicable)
the application of the net proceeds thereof to refinance other Indebtedness as
if such Indebtedness was issued at the beginning of the period, (ii) the
issuance and retirement of any other Indebtedness since the first day of the
period as if such Indebtedness was issued or retired at the beginning of the
period and (iii) the acquisition of any company or business acquired by the
Company or any Subsidiary since the first day of the period (including giving
effect to the pro forma historical earnings of such company or business),
including any acquisition which will be consummated
44
<PAGE> 45
contemporaneously with the issuance of such Indebtedness, as if in each case
such acquisition occurred at the beginning of the period) exceeds a ratio of
1.6 to 1.0 and (ii), immediately after giving effect to the issuance of such
Indebtedness and (if applicable) the application of the net proceeds thereof to
refinance other Indebtedness, the Consolidated Leverage Ratio is equal to or
less than a ratio of 0.75 to 1.0.
(b) Notwithstanding the foregoing paragraph, the Company or any
Restricted Subsidiary may issue, directly or indirectly, the following
Indebtedness:
(1) Revolving Indebtedness to banks not to exceed $1,000,000,000 in the
aggregate outstanding principal amount at any time;
(2) Indebtedness (other than Indebtedness described in clause (1) of
this Subsection) outstanding on the date of the original Indenture, as set forth
on Schedule 510(b)(2) attached hereto and made a part hereof, and Indebtedness
issued in exchange for, or the proceeds of which are used to refund or
refinance, any Indebtedness permitted by this clause (2); provided, however,
that (i) the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of the Indebtedness so issued shall not exceed the
principal amount (or accreted value in the case of Indebtedness issued at a
discount) of, premium, if any, and accrued but unpaid interest on, the
Indebtedness so exchanged, refunded or refinanced and (ii) the Indebtedness so
issued (A) shall not mature prior to the stated maturity of the Indebtedness so
exchanged, refunded or refinanced, (B) shall have an Average Life equal to or
greater than the remaining Average Life of the
45
<PAGE> 46
Indebtedness so exchanged, refunded or refinanced and (C) if the Indebtedness
to be exchanged, refunded or refinanced is subordinated to the General Term
Notes, the Indebtedness is subordinated to the General Term Notes in right of
payment;
(3) Indebtedness of the Company owed to and held by a Subsidiary and
Indebtedness of a Subsidiary owed to and held by the Company; provided, however,
that, in the case of Indebtedness of the Company owed to and held by a
Subsidiary, (i) any subsequent issuance or transfer of any Capital Stock that
results in any such Subsidiary ceasing to be a Subsidiary or (ii) any transfer
of such Indebtedness (except to the Company or a Subsidiary) shall be deemed for
the purposes of this Subsection to constitute the issuance of such Indebtedness
by the Company;
(4) Indebtedness of the Company issued in exchange for, or the proceeds
of which are used to refund or refinance, Indebtedness of the Company issued in
accordance with Subsection (a) of this Section, provided that (i) the principal
amount (or accreted value in the case of Indebtedness issued at a discount) of
the Indebtedness so issued shall not exceed the principal amount (or accreted
value in the case of Indebtedness issued at a discount) of, premium, if any, and
accrued but unpaid interest on, the Indebtedness so exchanged, refunded or
refinanced and (ii) the Indebtedness so issued (A) shall not mature prior to the
stated maturity of the Indebtedness so exchanged, refunded or refinanced, (B)
shall have an Average Life equal to or greater than the remaining Average Life
of the Indebtedness so exchanged, refunded or refinanced and (C) if the
Indebtedness to be exchanged, refunded
46
<PAGE> 47
or refinanced is subordinated to the General Term Notes, the Indebtedness so
issued is subordinated to the General Term Notes in right of payment; and
(5) Indebtedness of a Restricted Subsidiary issued in exchange for, or
the proceeds of which are used to refund or refinance, Indebtedness of a
Restricted Subsidiary issued in accordance with Subsection (a) of this Section,
provided that (i) the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of the Indebtedness so issued shall not
exceed the principal amount (or accreted value in the case of Indebtedness
issued at a discount) of, premium, if any, and accrued but unpaid interest on,
the Indebtedness so exchanged, refunded or refinanced and (ii) the Indebtedness
so issued (A) shall not mature prior to the stated maturity of the Indebtedness
so exchanged, refunded or refinanced and (B) shall have an Average Life equal to
or greater than the remaining Average Life of the Indebtedness so exchanged,
refunded or refinanced.
SECTION 511. Limitation on Restricted Payments. (a) So long as the
General Term Notes are Outstanding and until the General Term Notes are rated
BBB- or above (or an equivalent rating) by Standard & Poor's and one Other
Rating Agency (or if Standard & Poor's shall change its rating system, an
equivalent of such rating then employed by such organization) at which time the
Company shall be permanently released from the provision of this Section 511,
the Company shall not, and shall not permit any Restricted Subsidiary of the
Company, directly or indirectly, to (i) declare or pay any dividend or make any
distribution on the Capital Stock of the Company to the direct or indirect
holders of the Capital Stock of the Company (except dividends or distributions
payable solely in Non-Convertible Capital Stock of the Company or in options,
warrants or other rights to purchase
47
<PAGE> 48
such Non-Convertible Capital Stock and except dividends or distributions
payable to the Company or a Subsidiary), (ii) purchase, redeem or otherwise
acquire or retire for value any Capital Stock of the Company (any such
dividend, distribution, purchase, redemption, other acquisition or retirement
being hereinafter referred to as a "Restricted Payment") if at the time the
Company or such Subsidiary makes such Restricted Payment:
(1) an Event of Default, or an event that with the lapse of time or the
giving of notice or both would constitute an Event of Default, shall
have occurred and be continuing (or would result therefrom); or
(2) the aggregate amount of such Restricted Payment and all other
Restricted Payments made since September 30, 1993, would exceed the sum
of:
(A) $120,000,000;
(B) 100% of Consolidated Net Income, accrued during the period (treated
as one accounting period) from September 30, 1993 to the end of the most
recent fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such sum shall be a deficit, minus 100%
of the deficit); and
(C) the aggregate Net Proceeds received by the Company from the issue
or sale of or contribution with respect to its Capital Stock subsequent to
September 30, 1993.
48
<PAGE> 49
For the purpose of determining the amount of any Restricted Payment not in the
form of cash, the amount shall be the fair value of such Restricted Payment as
determined in good faith by the Board of Directors, provided that if the value
of the non-cash portion of such Restricted Payment as determined by the Board
of Directors is in excess of $25 million, such value shall be based on the
opinion from a nationally recognized firm experienced in the appraisal of
similar types of transactions.
(b) The provisions of Section 511(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Redeemable
Stock or Exchangeable Stock); provided, however, that such purchase or
redemption shall be excluded from the calculation of the amount of
Restricted Payments;
(ii) dividends or other distributions paid in respect of any
class of the Company's Capital Stock issued in respect of the
acquisition of any business or assets by the Company or a Restricted
Subsidiary if the dividends or other distributions with respect to such
Capital Stock are payable solely from the net earnings of such business
or assets;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section; provided, however, that at the time of payment of
such dividend, no Event of Default shall have occurred and be continuing
(or
49
<PAGE> 50
result therefrom), and provided further, however, that such dividends
shall be included (without duplication) in the calculation of the amount
of Restricted Payments; or
(iv) payments pursuant to the Tax-Sharing Agreement.
SECTION 512. Limitation on Transactions with Affiliates. So long as
any of the General Term Notes are Outstanding, the Company shall not directly or
indirectly, conduct any business or enter into any transaction or series of
related transactions (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with an Affiliate unless the terms of
such business, transaction or series of transactions are as favorable to the
Company as terms that could be obtainable at the time for a comparable
transaction or series of related transactions in arm's-length dealings with an
unrelated third Person. This Section shall not apply to (x) compensation paid
to officers and directors of the Company which has been approved by the Board of
Directors of the Company or (y) loans to the Company or an Affiliate pursuant to
a global cash management program, which loans mature within one year from the
date thereof.
ARTICLE VI
ADDITIONAL EVENTS OF DEFAULT
WITH RESPECT TO THE GENERAL TERM NOTES
SECTION 601. Definition. All of the events specified in Section
501 of the Indenture and the events specified in Section 602 of this
Article shall be "Events of Default" with respect to the General Term
Notes.
50
<PAGE> 51
SECTION 602. Additional Events of Default. As contemplated by Sections
301(15) and 501(7) of the Indenture, any one of the following events (whatever
the reason for such Event of Default and whether or not 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) shall be an Event of Default with respect
to the General Term Notes for all purposes of the Indenture:
(a) a default or event of default in respect of any Indebtedness of the
Company having an aggregate outstanding principal amount at the time of such
default in excess of $25,000,000 shall occur which results in the acceleration
of such Indebtedness or Indebtedness of the Company having an outstanding
principal amount at maturity in excess of $25,000,000 shall not be paid at
maturity thereof, which default shall not have been waived by the holder or
holders of such Indebtedness within 30 days of such default; or
(b) the entry of a final judgment or judgments against the 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.
ARTICLE VII
GLOBAL NOTES
The General Term Notes will be issued initially in the form of Global
Notes. "Global Note" means a registered General Term Note evidencing one or
more General Term Notes issued to a depositary (the "Depositary") or its
nominee, in accordance with this Article and bearing the legend prescribed in
this Article.
51
<PAGE> 52
A single Global Note will represent all General Term Notes issued on the same
date and having the same terms, including, but not limited to, the same
Interest Payment Dates, rate of interest, Stated Maturity, and redemption
provisions (if any). The Company shall execute and the Trustee shall, in
accordance with this Article and the Company Order with respect to the General
Term Notes, authenticate and deliver one or more Global Notes in temporary or
permanent form that (i) shall represent and shall be denominated in an
aggregate amount equal to the aggregate principal amount of the General Term
Notes to be represented by such Global Note or Notes, (ii) shall be registered
in the name of the Depositary for such Global Note or Notes or the nominee of
such Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless this Global Note is presented by
an authorized representative of the Depositary to the Company or its agent for
registration of transfer, exchange or payment, and any Note issued is
registered in the name of the Depositary or in such other name as is requested
by the Depositary, any transfer, pledge or other use hereof for value or
otherwise by or to any person shall be wrongful inasmuch as the registered
owner hereof, the Depositary, has an interest herein."
Notwithstanding Section 305 of the Indenture, unless and until it is
exchanged in whole or in part for General Term Notes in definitive form, a
Global Note representing one or more General Term Notes may not be transferred
except as a whole by the Depositary, to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for General Term Notes or a nominee of such successor Depositary.
52
<PAGE> 53
If at any time the Depositary for the General Term Notes is unwilling or
unable to continue as Depositary for the General Term Notes, the Company shall
appoint a successor Depositary with respect to the General Term Notes. If a
successor Depositary for the General Term Notes is not appointed by the Company
by the earlier of (i) 90 days from the date the Company receives notice to the
effect that the Depositary is unwilling or unable to act, or the Company
determines that the Depositary is unable to act or (ii) the effectiveness of the
Depositary's resignation or failure to fulfill its duties as Depositary, the
Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive General Term Notes, will authenticate
and deliver General Term Notes in definitive form in an aggregate principal
amount equal to the principal amount of the Global Note or Notes representing
such General Term Notes in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that
the General Term Notes issued in the form of one or more Global Notes shall no
longer be represented by such Global Note or Notes. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive General Term Notes, will authenticate
and deliver General Term Notes in definitive form in an aggregate principal
amount equal to the principal amount of the Global Note or Notes representing
such General Term Notes in exchange for such Global Note or Notes.
The Depositary for such General Term Notes may surrender a Global Note
or Notes for such General Term Notes in exchange in whole or in part for General
Term Notes in definitive form on such terms as are acceptable to the Company and
53
<PAGE> 54
such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge:
(i) to each Person specified by such Depositary a new General Term
Note or Notes, of any authorized denomination as requested by such Person
in aggregate principal amount equal to and in exchange for such Person's
beneficial interest in the Global Note; and
(ii) to such Depositary a new Global Note in a denomination equal to
the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of General Term Notes in
definitive form delivered to Holders thereof.
In any exchange provided for in this Article, the Company will execute
and the Trustee will authenticate and deliver General Term Notes in definitive
registered form in authorized denominations.
Upon the exchange of a Global Note for General Term Notes in definitive
form, such Global Note shall be canceled by the Trustee. General Term Notes in
definitive form issued in exchange for a Global Note pursuant to this Article
shall be registered in such names and in such authorized denominations as the
Depositary for such Global Note, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or Security
Registrar. The Trustee shall deliver such General Term Notes to the persons in
whose names such General Term Notes are so registered.
54
<PAGE> 55
ARTICLE VIII
DEFEASANCE
All of the provisions of Article Fourteen of the Original Indenture
shall be applicable to the General Term Notes. Upon satisfaction by the Company
of the requirements of Section 1404 of the Indenture, in connection with any
covenant defeasance (as provided in Section 1403 of the Indenture), the Company
shall be released from its obligations under Article Eight of the Original
Indenture and under Articles III and V of this Fourth Supplemental Indenture
with respect to the General Term Notes.
ARTICLE IX
SUPPLEMENTAL INDENTURES
This Fourth Supplemental Indenture is a supplement to the Original
Indenture. As supplemented by this Fourth Supplemental Indenture, the Original
Indenture is in all respects ratified, approved and confirmed, and the Original
Indenture and this Fourth Supplemental Indenture shall together constitute one
and the same instrument.
The Company may, by supplemental indenture, amend this Fourth
Supplemental Indenture to provide for additional definitions, terms and
provisions relating to General Term Notes. Any such supplemental indenture
shall not adversely affect the rights and privileges of Holders of General Term
Notes issued prior to such supplemental indenture. Any such supplemental
indenture may include,
55
<PAGE> 56
but is not limited to including, additional provisions
permitting payment of General Term Notes prior to Stated Maturity at the option
of the Holders, issuance of General Term Notes in currencies other than Dollars,
and special provisions relating to interest rate provisions.
TESTIMONIUM
This Fourth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
56
<PAGE> 57
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first written
above.
CMS ENERGY CORPORATION
By: ___________________
Attest:
________________ (Corporate Seal)
THE CHASE MANHATTAN BANK
as Trustee
By: ______________________
Attest:
_________________ (Corporate Seal)
57
<PAGE> 58
Schedule 510(b)(2)
------------------
Indebtedness of CMS Energy Corporation outstanding on January 20, 1994:
1. $146,000,000 of Series A Senior Deferred Coupon Notes due 1997; and
2. $248,000,000 of Series B Senior Deferred Coupon Notes due 1999.
58
<PAGE> 1
EXHIBIT (5)
September 22, 1997
CMS Energy Corporation
Fairlane Plaza South
330 Town Center Drive
Suite 1100
Dearborn, MI 48126
Gentlemen:
I am the Assistant General Counsel of CMS Energy Corporation,
a Michigan corporation (the "Company"), and have acted as such in connection
with the Registration Statement on Form S-3 (the "Registration Statement")
being filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the registration of $30,000,000 aggregate principal amount
of debt securities (the "Debt Securities"). Capitalized terms not otherwise
defined herein have the respective meanings specified in the Registration
Statement.
In rendering this opinion, I have examined and relied upon a
copy of the Registration Statement. I have also examined, or have arranged for
the examination by an attorney or attorneys under my general supervision,
originals, or copies of originals certified to my satisfaction, of such
agreements, documents, certificates and other statements of governmental
officials and other instruments, and have examined such questions of law and
have satisfied myself as to such matters of fact, as I have considered relevant
and necessary as a basis for this opinion. I have assumed the authenticity of
all documents submitted to me as originals, the genuineness of all signatures,
the legal capacity of all natural persons and the conformity with the original
documents of any copies thereof submitted to me for examination.
Based on the foregoing, it is my opinion that:
1. The Company is duly incorporated and validly existing
under the laws of the State of Michigan.
2. The Company has corporate power and authority to
execute and deliver the Subordinated Debt Indenture
(the "Subordinated Debt Indenture") between the
Company and The Bank of New York and to authorize and
sell the Subordinated Debt Securities pursuant
thereto, and to sell the Senior Debt Securities
pursuant to the Senior Debt Indenture dated as of
September 15, 1992, as supplemented (the "Senior Debt
Indenture") between the Company
<PAGE> 2
Page 2
and NBD Bank, as Trustee (the Subordinated Debt
Indenture and Senior Debt Indenture, collectively,
the "Indentures").
3. The Debt Securities will be legally issued and
binding obligations of the Company (except to the
extent enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting
the enforcement of creditors' rights generally and by
the effect of general principles of equity,
regardless of whether enforceability is considered in
a proceeding in equity or at law) when: (i) the
Registration Statement, as finally amended (including
any necessary post-effective amendments), shall have
become effective under the Securities Act and the
Indentures (including any necessary supplemental
indentures) shall have been qualified under the Trust
Indenture Act of 1939, as amended, and duly executed
and delivered by the Company and the Trustees; (ii)
an appropriate Pricing Supplement with respect to the
particular Debt Securities then being sold by the
Company shall have been filed with the Commission
pursuant to Rule 424 under the Securities Act; (iii)
the Company's Board of Directors or a duly authorized
committee thereof shall have duly adopted final
resolutions authorizing the issuance and sale of the
particular Debt Securities then being sold by the
Company as contemplated by the Registration Statement
and the particular Indenture; and (iv) the
supplemental indenture under which the particular
Debt Securities are to be issued has been duly
authorized, executed and delivered, and the
particular Debt Securities then being sold by the
Company shall have been duly executed and
authenticated as provided in the particular Indenture
and such resolutions, and shall have been duly
delivered to the purchasers thereof against payment
of the agreed consideration therefor.
4. The CMS Energy Common Stock ($.01 par value) will be
legally issued, fully paid and non-assessable when:
(i) the Registration Statement, as finally amended,
shall have become effective under the Securities Act;
(ii) CMS Energy's Board of Directors or a duly
authorized committee thereof shall have duly adopted
final resolutions authorizing Subordinated Debt
Securities to be converted into CMS Energy Common
Stock, as contemplated by the Registration Statement
and prospectus supplement relating thereto; and (iii)
upon conversion, certificates representing the CMS
Energy Common Stock, shall have been duly executed,
countersigned and registered and duly delivered to
the purchasers thereof against payment of the agreed
consideration therefor.
<PAGE> 3
Page 3
For purposes of this opinion, I have assumed that there will
be no changes in the laws currently applicable to the Company and that such
laws will be the only laws applicable to the Company.
I do not find it necessary for the purposes of this opinion to
cover, and accordingly I express no opinion as to, the application of the
securities or blue sky laws of the various states to the sale of the Debt
Securities.
I am a member of the bar of the State of Michigan and I
express no opinion as to the laws of any jurisdiction other than the State of
Michigan and the federal law of the United States of America.
I hereby consent to the filing of this opinion as an exhibit
to the Company's Registration Statement on Form S-3 relating to the Debt
Securities and to all references to me included in or made a part of the
Registration Statement.
Very truly yours,
/s/ Michael D. Van Hemert
------------------------------
Michael D. Van Hemert
<PAGE> 4
EXHIBIT (12)
CMS ENERGY CORPORATION
Ratio of Earnings to Fixed Charges
(Millions of Dollars)
<TABLE>
<CAPTION>
Six Months
Ended Years Ended December 31
June 30, 1997 1996 1995 1994 1993 1992
------------------------------------------------------------------
(b)
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined (a)
- -----------------------
Consolidated net income (loss) $ 138 $ 240 $ 204 $ 179 $ 155 $(297)
Income taxes 79 139 118 92 75 (146)
Exclude equity basis subsidiaries (36) (85) (57) (18) (6) 10
Fixed charges as defined, adjusted to
exclude capitalized interest of $7, $8,
$8, $6, $5, and $3 million for the six
months ended June 30, 1997 and for the
years ended December 31, 1996, 1995,
1994, 1993 and 1992, respectively 146 275 268 226 241 225
--------------------------------------------------------------
Earnings as defined $ 327 $ 569 $ 533 $ 479 $ 465 $(208)
==============================================================
Fixed charges as defined (a)
- ----------------------------
Interest on long-term debt $ 126 $ 230 $ 224 $ 193 $ 204 $ 169
Estimated interest portion of lease rental 5 10 9 9 11 16
Other interest charges 22 43 42 30 32 43
--------------------------------------------------------------
Fixed charges as defined $ 153 $ 283 $ 275 $ 232 $ 247 $ 228
==============================================================
Ratio of earnings to fixed charges 2.13 2.01 1.94 2.07 1.88 -
=============================================================
</TABLE>
NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K.
(b) For the year ended December 31, 1992, fixed charges exceeded earnings by
$441 million. Earnings as defined include a $520 million pretax loss on the
settlement of MCV Power Purchases, $(15) million for potential customer refunds
and other reserves related to 1992 but recorded in 1991, and $6 million
relating to CMS Generation Company's reduction in its investment in The Oxford
Energy Company. The ratio of earnings to fixed charges would have been 1.33
excluding these amounts.
<PAGE> 1
EXHIBIT (12)
CMS ENERGY CORPORATION
Ratio of Earnings to Fixed Charges
(Millions of Dollars)
<TABLE>
<CAPTION>
Six Months
Ended Years Ended December 31
June 30, 1997 1996 1995 1994 1993 1992
------------------------------------------------------------------
(b)
<S> <C> <C> <C> <C> <C> <C>
Earnings as defined (a)
- -----------------------
Consolidated net income (loss) $ 138 $ 240 $ 204 $ 179 $ 155 $(297)
Income taxes 79 139 118 92 75 (146)
Exclude equity basis subsidiaries (36) (85) (57) (18) (6) 10
Fixed charges as defined, adjusted to
exclude capitalized interest of $7, $8,
$8, $6, $5, and $3 million for the six
months ended June 30, 1997 and for the
years ended December 31, 1996, 1995,
1994, 1993 and 1992, respectively 146 275 268 226 241 225
--------------------------------------------------------------
Earnings as defined $ 327 $ 569 $ 533 $ 479 $ 465 $(208)
==============================================================
Fixed charges as defined (a)
- ----------------------------
Interest on long-term debt $ 126 $ 230 $ 224 $ 193 $ 204 $ 169
Estimated interest portion of lease rental 5 10 9 9 11 16
Other interest charges 22 43 42 30 32 43
--------------------------------------------------------------
Fixed charges as defined $ 153 $ 283 $ 275 $ 232 $ 247 $ 228
==============================================================
Ratio of earnings to fixed charges 2.13 2.01 1.94 2.07 1.88 -
=============================================================
</TABLE>
NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K.
(b) For the year ended December 31, 1992, fixed charges exceeded earnings by
$441 million. Earnings as defined include a $520 million pretax loss on the
settlement of MCV Power Purchases, $(15) million for potential customer refunds
and other reserves related to 1992 but recorded in 1991, and $6 million
relating to CMS Generation Company's reduction in its investment in The Oxford
Energy Company. The ratio of earnings to fixed charges would have been 1.33
excluding these amounts.
<PAGE> 1
Exhibit (15)
To CMS Energy Corporation:
We are aware that CMS Energy Corporation has incorporated by reference
in this registration statement its Form 10-Q for the quarters ended March 31,
1997 and its Form 10-Q for the quarter ended June 30, 1997, which include our
reports dated May 9, 1997 and August 11, 1997, respectively, covering the
unaudited interim financial information contained therein. Pursuant to
Regulation C of the Securities Act of 1933, this report is not considered a
part of the registration statement prepared or certified by our Firm or a
report prepared or certified by our Firm within the meaning of Sections 7 and
11 of the Act.
/s/ Arthur Andersen LLP
-----------------------
Detroit, Michigan,
September 19, 1997
<PAGE> 1
EXHIBIT (23)(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
January 24, 1997 included or incorporated by reference in CMS Energy
Corporation's Form 10-K for year ended December 31, 1996, and to all reference
to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
-----------------------
Detroit, Michigan,
September 19, 1997
<PAGE> 1
EXHIBIT (23)(b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
January 24, 1997 included or incorporated by reference in CMS Energy
Corporation's Form 10-K for year ended December 31, 1996, and to all reference
to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
-----------------------
Detroit, Michigan,
September 19, 1997
<PAGE> 2
EXHIBIT (24)
August 23, 1997
Mr. Alan M. Wright and
Mr. Thomas A. McNish
CMS Energy Corporation
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, MI 48126
We hereby appoint each of you lawful attorney for each of us and in each of our
names to sign and cause to be filed with the Securities and Exchange Commission
registration statement(s) and/or any amendment(s) thereto, including
post-effective amendment or amendments, to be accompanied in each case by a
prospectus or supplemental prospectus and any necessary exhibits with respect
to the issue and sale of up to $200 million of debt securities of the
Corporation.
Yours very truly,
/s/ William T. McCormick, Jr. /s/ Earl D. Holton
- ----------------------------------- -----------------------------------
William T. McCormick, Jr. Earl D. Holton
/s/ John M. Deutch /s/ W. U. Parfet
- ----------------------------------- -----------------------------------
John M. Deutch William U. Parfet
/s/ James D. Duderstadt
- ----------------------------------- -----------------------------------
James J. Duderstadt Percy A. Pierre
/s/ K. R. Flaherty /s/ Whipple
- ----------------------------------- -----------------------------------
Kathleen R. Flaherty Kenneth Whipple
/s/ Victor J. Fryling /s/ John B. Yasinsky
- ----------------------------------- -----------------------------------
Victor J. Fryling John B. Yasinsky
<PAGE> 3
Extract from minutes of a meeting of the Board of Directors of CMS Energy
Corporation (the "Corporation") held on August 23, 1997.
- - - - - - - - - -
Proposed Issue and Sale of Debt Securities
At a meeting of the Board of Directors of the Corporation held on October 25,
1996, resolutions were adopted authorizing the Corporation to issue and sell,
from time to time, at private placement or public sale, up to $500 million net
aggregate principal amount of debt securities, including but not limited to (i)
unsecured senior debt securities consisting of debentures, notes or other
unsecured evidence of indebtedness, each of which may be convertible into
shares of any class of authorized common stock, and (ii) unsecured
subordinated debt securities consisting of debentures, notes or other
unsecured evidence of indebtedness, each which may be convertible into
shares of any class of authorized common stock, or any combination
of the foregoing (collectively, the Debt Securities), to have funds available
for general corporate purposes (the Original Authorization). On May 1, 1997,
the Corporation issued $350 million of senior unsecured notes pursuant
to the Original Authorization. In addition to the $150 million remaining
under the Original Authorization, it was recommended that the Corporation
be authorized to issue up to an additional $50 million net aggregate
principal amount of Debt Securities (the Additional Securities ), or an
aggregate $200 million of Debt Securities, to refund or refinance a portion of
existing indebtedness. The resolutions adopted by the Board on October 25,
1996 should be amended to reflect the authority for the Additional
Securities. The matter was fully discussed.
Upon motion duly made and seconded, the following resolutions
were thereupon unanimously adopted:
RESOLVED: That the resolutions adopted by the Board of
Directors at its meeting held on October 25, 1996 with respect to the
proposed issue and sale of Debt Securities of the Corporation are
hereby amended to reflect the authority for the Additional Securities,
as discussed at the meeting, thus authorizing the Corporation to issueand
sell, from time to time, at private placement or public sale, up to $2
million net aggregate principal amount of Debt Securities. All other
resolutions adopted by the Board at the October 25, 1996 meeting with
respect to the remaining $150 million net aggregate principal amount of
Debt Securities remain in full force and effect and apply equally in all
respects to the Additional Securities; and
<PAGE> 4
2
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized to execute, in addition to underwriting
agreements, purchase agreements or any other type of agreements between
the Corporation and the underwriters or representatives of the underwriters
(or any agents) or any other purchaser appointed or named in such
agreement or agreements, as they may deem appropriate for the proposed sale
of the Debt Securities and Additional Securities.
- - - - - - - - - -
I, Joyce H. Norkey, Assistant Secretary of CMS Energy Corporation,
CERTIFY that the foregoing is a true and correct copy of resolutions duly
and regularly adopted at a meeting of the Board of Directors of CMS Energy
Corporation duly held on August 23, 1997 at which a quorum was in
attendance and voting throughout, and that said resolutions have not
since been rescinded but are still in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Corporation this 19th day of September 1997.
/s/ Joyce H. Norkey
-----------------------------------
Joyce H. Norkey
Assistant Secretary
( S E A L )
