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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 15, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CMS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN
(State or other jurisdiction of incorporation or organization)
38-2726431
(I.R.S. Employer Identification No.)
FAIRLANE PLAZA SOUTH
330 TOWN CENTER DRIVE, SUITE 1100
DEARBORN, MICHIGAN 48126
(313) 436-9200
(Address, including zip code, and telephone number
including, area code, of registrant's principal offices)
ALAN M. WRIGHT
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CMS ENERGY CORPORATION
FAIRLANE PLAZA SOUTH
330 Town Center Drive, Suite 1100
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. VAN HEMERT, ESQ.
ASSISTANT GENERAL COUNSEL
CMS ENERGY CORPORATION
FAIRLANE PLAZA SOUTH
330 TOWN CENTER DRIVE, SUITE 1100
DEARBORN, MICHIGAN 48126
(313) 436-9602
-------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement as determined by
market and other conditions.
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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: [X]
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. [ ]
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
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
<S> <C> <C> <C> <C>
Total $400,000,000 100% $400,000,000 $111,200
- -----------------------------------------------------------------------------------------------------------------------------
</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.
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 15, 1998
CMS ENERGY CORPORATION
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES
---------------
We may offer up to $400,000,000 aggregate principal amount of our unsecured
senior debt securities and our unsecured subordinated debt securities consisting
of debentures, notes and other unsecured evidence of indebtedness, or any
combination of these securities. For each type of securities, the amount,
price and terms will be determined at or prior to the time of sale.
We will provide the specific terms of these securities in an accompanying
prospectus supplement or supplements. You should read this prospectus and the
accompanying prospectus supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
We intend to sell these securities through underwriters, dealers, agents or
directly to a limited number of purchasers. The names of, and any securities to
be purchased by or through these parties, the compensation of these parties and
other special terms in connection with the offering and sale of these securities
will be detailed in the related prospectus supplement.
This prospectus may not be used to consummate sales of these securities
unless accompanied by a prospectus supplement.
---------------
The date of this prospectus is December __, 1998
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NO PERSON IS AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT, AND ANY INFORMATION
OR REPRESENTATION NOT CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY CMS ENERGY OR ANY UNDERWRITER, DEALER OR AGENT.
THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES
TO WHICH THEY RELATE OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
AVAILABLE INFORMATION
CMS Energy Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Information, as of particular dates,
concerning CMS Energy's directors and officers, their remuneration, the
principal holders of CMS Energy's securities and any material interest of such
persons in transactions with CMS Energy is disclosed in proxy statements
distributed to shareholders of CMS Energy and filed with the Commission. Such
reports, proxy statements and other information may be inspected and copied at
the public reference facilities maintained by the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at 5000 West Madison Street, Chicago, Illinois 60661 and at
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies of such
materials can be obtained by mail from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a Web site (http://www.sec.gov) that
contains reports, proxy statements and other information regarding CMS Energy.
The outstanding shares of CMS Energy Common Stock and Class G Common Stock are
listed on the NYSE and reports, proxy statements and other information
concerning CMS Energy may also be inspected and copied at the offices of such
exchange at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by CMS Energy (File No. 1-9513) with the
Commission pursuant to the Exchange Act are hereby incorporated by reference in
this prospectus and shall be deemed to be a part hereof:
(1) CMS Energy's Registration Statement on Form 8-B/A dated November 21,
1996;
(2) CMS Energy's Annual Report on Form 10-K for the year ended December 31,
1997;
(3) CMS Energy's Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30, and September 30, 1998; and
(4) CMS Energy's Current Reports on Form 8-K dated June 23, July 30, October
2, and November 3, 1998.
All documents subsequently filed by CMS Energy pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act and prior to the termination of the
offering made by this prospectus (the "Offering") shall be deemed to be
incorporated by reference herein and shall be deemed to be a part hereof from
the date of filing of such documents (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained herein or in any other subsequently filed Incorporated
Document modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
CMS Energy undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this prospectus has been delivered, upon
the written or oral request of any such person, a copy of any and all of the
documents referred to above which have been or may be incorporated in this
prospectus by reference, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference into such documents).
Requests for such copies should be directed to CMS Energy at its principal
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executive offices located at Fairlane Plaza South, Suite 1100, 330 Town Center
Drive, Dearborn, Michigan 48126, Attention: Office of the Secretary, telephone:
(313) 436-9200.
Certain information contained in this prospectus summarizes, is based upon,
or refers to information and financial statements contained in one or more
Incorporated Documents; accordingly, such information contained herein is
qualified in its entirety by reference to such documents and should be read in
conjunction therewith.
CMS ENERGY CORPORATION
CMS Energy Corporation, a Michigan corporation ("CMS Energy"), incorporated
in 1987, is the parent holding company of Consumers Energy Company ("Consumers")
and CMS Enterprises Company ("Enterprises"). Consumers, a combination electric
and gas utility company serving in all 68 counties of Michigan's Lower
Peninsula, is the largest subsidiary of CMS Energy. Consumers' customer base
includes a mix of residential, commercial and diversified industrial customers,
the largest segment of which is the automotive industry. Enterprises is engaged
in several domestic and international energy-related businesses including: (i)
oil and gas exploration and production; (ii) acquisition, development and
operation of independent power production facilities; (iii) energy marketing,
services and trading; (iv) storage, transmission and processing of natural gas;
and (v) international energy distribution.
CMS Energy conducts its principal operations through the following six
business segments: (i) electric utility operations; (ii) gas utility operations;
(iii) oil and gas exploration and production operations; (iv) independent power
production; (v) energy marketing, services and trading; and (vi) storage,
transmission and processing of natural gas. Consumers or Consumers' subsidiaries
are engaged in two segments: electric operations and gas operations. Consumers'
electric and gas businesses are principally regulated utility operations. CMS
Energy and its subsidiaries routinely evaluate, invest in, acquire and divest
energy-related assets and/or companies both domestically and internationally.
Consideration for such transactions may involve the delivery of cash or
securities.
CMS Energy's 1997 consolidated operating revenue was $4.8 billion. This
consolidated operating revenue was derived from its electric utility operations
(approximately 53%), its gas utility operations (approximately 25%), marketing,
services and trading (approximately 14%), independent power production and other
non-utility activities (approximately 4%), gas transmission, storage and
processing activities (approximately 2%), and oil and gas exploration and
production activities (approximately 2%). Consumers' consolidated operations in
the electric and gas utility businesses account for the majority of CMS Energy's
total assets, revenue and income. The unconsolidated share of non-utility
independent power production, gas transmission and storage, marketing services
and trading, and international energy distribution revenue for 1997 was $913
million.
Consumers is a public utility serving gas or electricity to almost six
million of Michigan's nine and a half million residents in Michigan's Lower
Peninsula. Industries in Consumers' service area include automotive, metal,
chemical, food and wood products industries and a diversified group of other
industries. Consumers' 1997 consolidated operating revenue of $3.8 billion was
derived approximately 67% from its electric utility business, approximately 32%
from its gas utility business and approximately 1% from its non-utility
business. Consumers' rates and certain other aspects of its business are subject
to the jurisdiction of the Michigan Public Service Commission (the "MPSC") and
the Federal Energy Regulatory Commission. Consumers' nuclear operations are
subject to the jurisdiction of the Nuclear Regulatory Commission.
CMS Energy and its subsidiaries routinely evaluate, invest in, acquire and
divest energy-related assets and/or businesses both domestically and
internationally. Consideration for such transactions may involve the delivery of
cash or securities.
The foregoing information concerning CMS Energy and it subsidiaries does not
purport to be comprehensive. For additional information concerning CMS Energy
and its subsidiaries' business and affairs, including their capital requirements
and external financing plans, pending legal and regulatory proceedings and
descriptions of certain laws and regulations to which those companies are
subject, prospective purchasers should refer to the Incorporated Documents. See
"Incorporation of Certain Documents by Reference" and "Available Information"
above.
The address of the principal executive offices of CMS Energy is Fairlane
Plaza South, 330 Town Center Drive, Suite 1100, Dearborn, Michigan 48126. Its
telephone number is (313) 436-9200.
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USE OF PROCEEDS
As will be more specifically set forth in the applicable prospectus
supplement, CMS Energy will use the net proceeds received from the sale of the
unsecured senior or subordinated debt securities offered for its general
corporate purposes, including capital expenditures, investment in subsidiaries,
working capital and repayment of debt.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for each of the years ended December
31, 1993 through 1997, and for the nine months ended September 30, 1998, are as
follows:
<TABLE>
<CAPTION>
Nine Months Year Ended December 31
Ended --------------------------------------
September 30, 1998 1997 1996 1995 1994 1993
------------------ ---- ---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges ........... 1.68 1.78 1.96 1.90 2.07 1.75
</TABLE>
For the purpose of computing such ratios, earnings represent net income
before income taxes, net interest charges and the estimated interest portion of
lease rentals.
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DESCRIPTION OF DEBT SECURITIES
The unsecured senior debt securities ("Senior Debt Securities") will be
issued under an Indenture dated as of September 15, 1992, as amended and
supplemented (the "Senior Debt Indenture"), between CMS Energy and NBD Bank, as
Trustee (the "Senior Debt Trustee"), and the unsecured subordinated debt
securities ("Subordinated Debt Securities") will be issued under an Indenture
dated as of June 1, 1997, as amended and supplemented (the "Subordinated Debt
Indenture"), between CMS Energy and The Bank of New Yorks Trustee (the
"Subordinated Debt Trustee"). The descriptions of the provisions of the Senior
Debt Securities and the Subordinated Debt Securities (together the "Debt
Securities" or "Offered Securities"), the Senior Debt Indenture and the
Subordinated Debt Indenture contained herein are brief summaries of such
provisions and do not purport to be complete. The forms of the Senior Debt
Indenture and the Subordinated Debt Indenture are filed as exhibits to the
Registration Statement of which this prospectus is a part, and reference is made
thereto for the respective definitive provisions of such Indentures. The
descriptions herein are qualified in their entirety by such reference. Certain
capitalized terms used herein shall have the meanings respectively set forth in
the respective Indentures. Section references below are references to sections
of the respective Senior Debt Indenture and Subordinated Debt Indenture.
Specific terms of the particular unsecured senior or subordinated debt
securities in respect of which this prospectus is being delivered, will be set
forth in an accompanying prospectus supplement or supplements, together with the
terms of the offering of the unsecured senior or subordinated debt securities,
the initial price thereof and the net proceeds from the sale thereof. Each
prospectus supplement will set forth with regard to the particular unsecured
senior or subordinated debt securities, without limitation, the designation,
aggregate principal amount, denomination, maturity, any exchange, conversion,
redemption or sinking fund provisions, provisions for redemption at the option
of the holder, interest rate (which may be fixed or variable), the time and
method of calculating interest payments, the right of CMS Energy, if any, to
defer payment of interest on the unsecured senior or subordinated debt
securities and the maximum length of such deferral period, any listing on a
securities exchange and other specific terms of the offering.
GENERAL
CMS Energy will offer under this prospectus unsecured Debt Securities, any
of which may be issued as: (a) Senior Debt Securities or (b) Subordinated Debt
Securities. The terms of any Debt Securities may or may not restrict the
issuance by CMS Energy or its subsidiaries of additional indebtedness which is
secured, unsecured, senior, pari passu or subordinated to such Debt Securities.
CMS Energy is a holding company and its assets consist primarily of
investments in its subsidiaries. The Debt Securities will be obligations
exclusively of CMS Energy. CMS Energy's ability to service its indebtedness,
including the Debt Securities, is dependent primarily upon the earnings of its
subsidiaries and the distribution or other payment of such earnings to CMS
Energy in the form of dividends, loans or advances, and repayment of loans and
advances from CMS Energy. The subsidiaries are separate and distinct legal
entities and have no obligation, contingent or otherwise, to pay any amounts due
pursuant to the Debt Securities or to make any funds available therefor, whether
by dividends, loans or other payments.
A substantial portion of the consolidated liabilities of CMS Energy have
been incurred by its subsidiaries. Therefore, CMS Energy's rights and the rights
of its creditors, including holders of Debt Securities, to participate in the
distribution of assets of any subsidiary upon the latter's liquidation or
reorganization will be subject to prior claims of the subsidiary's creditors,
including trade creditors, except to the extent that CMS Energy may itself be a
creditor with recognized claims against the subsidiary (in which case the claims
of CMS Energy would still be subject to the prior claims of any secured creditor
of such subsidiary and of any holder of indebtedness of such subsidiary that is
senior to that held by CMS Energy).
As of September 30, 1998, CMS Energy had outstanding approximately $2,321
million aggregate principal amount of indebtedness, none of which was secured.
None of such indebtedness would be senior to any Senior Debt Securities which
may be issued. All of such indebtedness would be senior to any Subordinated Debt
Securities which may be issued. The Indenture, as supplemented, pursuant to
which the Senior Debt Securities will be issued, contains certain limitations on
the issuance of additional debt by CMS Energy, but indebtedness issued within
such limitations could be secured and therefore senior to unsecured Senior Debt
Securities. The Indenture pursuant to which the Subordinated Debt Securities
will be issued contains no limitation on the issuance of indebtedness ranking
senior to the Subordinated Debt Securities.
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<PAGE> 8
The applicable prospectus supplement will set forth the following terms
relating to the Offered Securities:
(1) The specific designation of the Offered Securities and whether such Offered
Securities are Senior Debt Securities or Subordinated Debt Securities;
(2) Any limit on the aggregate principal amount of the Offered Securities;
(3) The date or dates, if any (and whether fixed or extendible), on which the
Offered Securities will mature;
(4) The rate or rates per annum (which may be fixed or variable) at which the
Offered Securities will bear interest, if any, the date or dates on which
any such interest will be payable and the regular record dates for any
interest payable on the Offered Securities;
(5) The place or places where the principal of and any interest on the Offered
Securities shall be payable and where such Offered Securities may be
surrendered for registration of transfer or exchange;
(6) Any provisions relating to the issuance of the Offered Securities at an
original issue discount;
(7) The option, if any, of CMS Energy to redeem the Offered Securities and the
periods within which or the dates on which, the prices at which and the
terms and conditions upon which, such Offered Securities may be redeemed,
in whole or in part, upon the exercise of such option;
(8) The obligation, if any, of CMS Energy to redeem such Offered Securities
pursuant to any sinking fund or other mandatory redemption provisions or at
the option of the holder and the periods within which or the dates on
which, the prices at which the terms and the terms and conditions upon
which such Offered Securities will be redeemed, in whole or in part,
pursuant to such obligation;
(9) The denominations in which such Offered Securities will be issued and
whether the Offered Securities will be issuable in registered form or
bearer form or both, and, if issuable in bearer form, the restrictions as
to the offer, sale and delivery of the Offered Securities in bearer form
and as to the exchanges between registered and bearer form;
(10) Whether the Offered Securities will be issuable in the form of one or more
temporary or permanent global securities and, if so, the identity of the
depository for such global securities;
(11) Whether and under what circumstances CMS Energy will pay additional amounts
with respect to the Offered Securities to a non-United States person (as
defined in such prospectus supplement) on account of any tax, assessment or
governmental charge withheld or deducted and, if so, whether CMS Energy
will have the option to redeem such Offered Securities rather than pay such
additional amounts; and
(12) Any other terms of the Offered Securities not inconsistent with the related
Indenture, including covenants and events of default relating solely to the
Offered Securities.
Debt Securities may be issued at a substantial discount from the stated
principal amount thereof ("Original Issue Discount Securities"). United States
federal income tax consequences and other special considerations applicable
thereto or to other Offered Securities offered and sold at par which are treated
as having been issued at a discount for United States federal income tax
purposes will be described in the prospectus supplement relating thereto.
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CONCERNING THE TRUSTEES
Each of NBD Bank, the Trustee under the Senior Debt Indenture, and The Bank
of New York, the Trustee under the Subordinated Debt Indenture, is one of a
number of banks with which CMS Energy and its subsidiaries maintain ordinary
banking relationships, including credit facilities.
SENIOR DEBT SECURITIES
General. The Senior Debt Securities will be issuable under the Senior Debt
Indenture. The Senior Debt Indenture does not limit the aggregate principal
amount of Senior Debt Securities which may be issued thereunder. Senior Debt
Securities may be issued under the Senior Debt Indenture from time to time in
one or more series. The Senior Debt Securities shall mature on a date not less
than nine month, or more than 40 years after the date of issuance. Capitalized
terms used in this section "Senior Debt Securities" and not otherwise
specifically defined in this prospectus shall have the meanings respectively set
forth in the Senior Debt Indenture.
Exchange and Transfer. Senior Debt Securities may be presented for exchange
and registered Senior Debt Securities may be presented for registration of
transfer at the offices and subject to the restrictions set forth therein and in
the applicable prospectus supplement without service charge, but upon payment of
any taxes or other governmental charges due in connection therewith, subject to
any applicable limitations contained in the Senior Debt Indenture. Senior Debt
Securities in bearer form and the coupons appertaining thereto, if any, will be
transferable by delivery.
Payment. Unless otherwise indicated in the applicable prospectus supplement,
payment of the principal of and the premium and interest, if any, on all Senior
Debt Securities in registered form will be made at the office or agency of the
Senior Debt Trustee in the Borough of Manhattan, the City of New York, except
that, at the option of CMS Energy, payment of any interest may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security Register.
Unless otherwise indicated in the applicable prospectus supplement, payment of
any interest due on Senior Debt Securities in registered form will be made to
the Persons in whose name such Senior Debt Securities are registered at the
close of business on the Record Date for such interest payments.
Events of Default. The occurrence of any of the following events with
respect to the Senior Debt Securities of any series will constitute an "Event of
Default" with respect to the Senior Debt Securities of such series: (a) default
for 30 days in the payment of any interest on any of the Senior Debt Securities
of such series; (b) default in the payment when due of any of the principal of
or the premium, if any, on any of the Senior Debt Securities of such series,
whether at maturity, upon redemption, acceleration or otherwise; (c) default in
the deposit or payment of any sinking fund or analogous payment in respect of
any Senior Debt Securities of such series; (d) default for 60 days by CMS Energy
in the observance or performance of any other covenant or agreement contained in
the Senior Debt Indenture relating to the Senior Debt Securities of such series
after written notice thereof as provided in the Senior Debt Indenture; (e)
certain events of bankruptcy, insolvency or reorganization relating to CMS
Energy or Consumers; (f) entry of final judgments against CMS Energy or
Consumers aggregating in excess of $25,000,000 which remain undischarged or
unbonded for 60 days; or (g) a default resulting in the acceleration of
indebtedness of CMS Energy or Consumers in excess of $25,000,000, which
acceleration has not been rescinded or annulled within 10 days after written
notice of such default as provided in the Senior Debt Indenture. Additional
Events of Default may be prescribed for the benefit of the Holders of a
particular series of Senior Debt Securities and will be described in the
prospectus supplement relating to such Senior Debt Securities.
If an Event of Default on any series of Senior Debt Securities shall have
occurred and be continuing, either the Senior Debt Trustee or the Holders of not
less than 25% in aggregate principal amount of the Senior Debt Securities of
such series then Outstanding may declare the principal of all Senior Debt
Securities of such series and the premium thereon and interest, if any, accrued
thereon to be due and payable immediately.
Upon certain conditions, any such declarations may be rescinded and annulled
if all Events of Default, other than the nonpayment of accelerated principal,
with respect to the Senior Debt Securities of all such affected series then
Outstanding shall have been cured or waived as provided in the Senior Debt
Indenture by the Holders of a majority in aggregate principal amount of the
Senior Debt Securities of the affected series then Outstanding.
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<PAGE> 10
Reference is made to the prospectus supplement relating to any series of
Original Issue Discount Securities for the particular provisions relating to the
acceleration of a portion of the principal amount thereof upon the occurrence
and continuance of an Event of Default with respect thereto.
The Senior Debt Indenture provides that the Senior Debt Trustee will be
under no obligation to exercise any of its rights or powers under the Senior
Debt Indenture at the request, order or direction of the Holders of the Senior
Debt Securities, unless such Holders shall have offered to the Senior Debt
Trustee reasonable indemnity. Subject to such provisions for indemnity and
certain other limitations contained in the Senior Debt Indenture, the Holders of
a majority in aggregate principal amount of the Senior Debt Securities of each
affected series then Outstanding (voting as one class) will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Senior Debt Trustee, or exercising any trust or power conferred
on the Senior Debt Trustee, with respect to the Senior Debt Securities of such
affected series.
The Senior Debt Indenture provides that no Holder of Senior Debt Securities
may institute any action against CMS Energy under the Senior Debt Indenture
(except actions for payment of overdue principal, premium or interest) unless
such Holder previously shall have given to the Senior Debt Trustee written
notice of default and continuance thereof and unless the Holders of not less
than 25% in aggregate principal amount of Senior Debt Securities of the affected
series then Outstanding (voting as one class) shall have requested the Senior
Debt Trustee to institute such action and shall have offered the Senior Debt
Trustee reasonable indemnity, the Senior Debt Trustee shall not have instituted
such action within 60 days of such request and the Senior Debt Trustee shall not
have received direction inconsistent with such request by the Holders of a
majority in aggregate principal amount of the Senior Debt Securities of the
affected series then Outstanding (voting as one class).
The Senior Debt Indenture requires CMS Energy to furnish to the Senior Debt
Trustee annually a statement as to CMS Energy's compliance with all conditions
and covenants under the Senior Debt Indenture. The Senior Debt Indenture
provides that the Senior Debt Trustee may withhold notice to the Holders of the
Senior Debt Securities of any series of any default affecting such series
(except defaults as to payment of principal, premium of interest on the Senior
Debt Securities of such series) if it considers such withholding to be in the
interests of the Holders of the Senior Debt Securities of such series.
Consolidation, Merger or Sale of Assets. The Senior Debt Indenture provides
that CMS Energy may consolidate with or merge into, or sell, lease or convey its
property as an entirety or substantially as an entirety to, any other
corporation if such corporation assumes the obligations of CMS Energy under the
Senior Debt Securities and the Senior Debt Indenture and is organized and
existing under the laws of the United States of America, any state thereof or
the District of Columbia.
Modification of the Senior Debt Indenture. The Senior Debt Indenture permits
CMS Energy and the Senior Debt Trustee to enter into supplemental indentures
thereto without the consent of the Holders of the Senior Debt Securities to:
(A) Secure the Senior Debt Securities of one or more series;
(B) Evidence the assumption by a successor corporation of the obligations
of CMS Energy under the Senior Debt Indenture and the Senior Debt
Securities then Outstanding;
(C) Add covenants for the protection of the Holders of the Senior Debt
Securities;
(D) Cure any ambiguity or correct any defect or inconsistency in the Senior
Debt Indenture or to make such other provisions as CMS Energy deems
necessary or desirable with respect to matters or questions arising
under the Senior Debt Indenture, provided that no such action adversely
affects the interests of any Holders of Senior Debt Securities;
(E) Establish the form and terms of any series of securities under the
Senior Debt Indenture; and
(F) Evidence the acceptance of appointment by a successor Senior Debt
Trustee.
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The Senior Debt Indenture also permits CMS Energy and the Senior Debt
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Senior Debt Securities of all series then
Outstanding and affected (voting as one class), to enter into supplemental
indentures to add any provisions to, or change in any matter or eliminate any of
the provisions of, the Senior Debt Indenture or modify in any manner the rights
of the Holders of the Senior Debt Securities of each such affected series;
provided, however, that CMS Energy and the Senior Debt Trustee may not, without
the consent of the Holder of each Senior Debt Security then outstanding and
affected thereby, enter into any supplemental indenture to:
(A) Change the time of payment of the principal (or any installment of
principal) of any Senior Debt Security, or reduce the principal amount
thereof, or reduce the rate or change the time of payment of interest
thereon, or reduce the amount payable on any Original Issue Discount
Securities upon acceleration or provable in bankruptcy, or impair the
right to institute suit for the enforcement of any payment on any
Senior Debt Security when due; or
(B) Reduce the percentage in principal amount of the Senior Debt Securities
of the affected series, the consent of whose Holders is required for
any such modification or for any waiver provided for in the Senior Debt
Indenture.
Prior to the acceleration of the maturity of any Senior Debt Security, the
Holders (voting as one class) of a majority in aggregate principal amount of the
Senior Debt Securities of all series at the time Outstanding with respect to
which a default or an Event of Default shall have occurred and be continuing may
on behalf of the Holders of all such affected Senior Debt Securities waive any
past default or Event of Default and its consequences, except a default or an
Event of Default in respect of a covenant or provision of the Senior Debt
Indenture or of any Senior Debt Security which cannot be modified or amended
without the consent of the Holder of each Senior Debt Security affected.
Defeasance, Covenant Defeasance and Discharge. The Senior Debt Indenture
provides that, at the option of CMS Energy: (a) CMS Energy will be discharged
from any and all obligations in respect of the Senior Debt Securities of a
particular series then Outstanding (except for certain obligations to register
the transfer of or exchange the Senior Debt Securities of such series, to
replace stolen, lost or mutilated Senior Debt Securities of such series, to
maintain paying agencies and to maintain the trust described below); or (b) CMS
Energy need not comply with certain restrictive covenants of the Senior Debt
Indenture (including those described under "Consolidation, Merger or Sale of
Assets"), in each case if CMS Energy irrevocably deposits in trust with the
Senior Debt Trustee money, and/or securities backed by the full faith and credit
of the United States which, through the payment of the principal thereof and the
interest thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal of and premium, if any, and interest on the
Senior Debt Securities of such series on the stated maturity of such Senior Debt
Securities (which may include one or more redemption dates designated by CMS
Energy) in accordance with the terms thereof. To exercise such option, CMS
Energy is required, among other things, to deliver to the Senior Debt Trustee an
opinion of independent counsel to the effect that the exercise of such option
would not cause the Holders of the Senior Debt Securities of such series to
recognize income, gain or loss for United States federal income tax purposes as
a result of such defeasance, and such Holders will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred, and, in the
case of a discharge as described in clause (a) of the preceding sentence, such
opinion is to be accompanied by a private letter ruling to the same effect
received from the Internal Revenue Service, a revenue ruling to such effect
pertaining to a comparable form of transaction published by the Internal Revenue
Service or appropriate evidence that since the date of the Senior Debt Indenture
there has been a change in the applicable federal income tax law.
In the event CMS Energy exercises its option to effect a covenant defeasance
with respect to the Senior Debt Securities of any series as described in the
preceding paragraph and the Senior Debt Securities of such series are thereafter
declared due and payable because of the occurrence of any Event of Default other
than an Event of Default caused by failing to comply with the covenants which
are defeased, and the amount of money and securities on deposit with the Senior
Debt Trustee would be insufficient to pay amounts due on the Senior Debt
Securities of such series at the time of the acceleration resulting from such
Event of Default, CMS Energy would remain liable for such amounts.
CMS Energy may also obtain a discharge of the Senior Debt Indenture with
respect to all Senior Debt Securities then Outstanding (except for certain
obligations to register the transfer of or exchange such Senior Debt Securities,
to replace stole, lost or mutilated Senior Debt Securities, to maintain paying
agencies and to maintain the trust described below) by irrevocably depositing in
trust with the Senior Debt Trustee money, and/or securities backed by the full
faith and credit of the United States which, through the payment of the
principal
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thereof and the interest thereon in accordance with their terms, will provide
money in an amount sufficient to pay all the principal of and premium, if any,
and interest on the Senior Debt Securities on the stated maturities thereof
(including one or more redemption dates), provided that such Senior Debt
Securities are by their terms due and payable, or are to be called for
redemption, within one year.
For United States federal income tax purposes any deposit contemplated in
the preceding paragraph would be treated as an exchange of the Senior Debt
Securities outstanding for other property. Accordingly, Holders of Senior Debt
Securities outstanding may be required to recognize a gain or loss for United
States federal income tax purposes upon such exchange. In addition, such Holders
thereafter may be required to recognize income from such property which could be
different from the amount that would be includable in the absence of such
deposit. Prospective investors are urged to consult their own tax advisors as to
the specific consequences to them of such deposit.
Governing Law. The Senior Debt Indenture and Senior Debt Securities will be
governed by, and construed in accordance with, the laws of the State of Michigan
unless the laws of another jurisdiction shall mandatorily apply.
SUBORDINATED DEBT SECURITIES
General. The Subordinated Debt Securities will be issuable under the
Subordinated Debt Indenture. The Subordinated Debt Indenture does not limit the
aggregate principal amount of Subordinated Debt Securities which may be issued
thereunder. Subordinated Debt Securities may be issued under the Subordinated
Debt Indenture from time to time in one or more series. The Subordinated Debt
Securities shall mature on a date not less than nine months nor more than 40
years after the date of issuance. Capitalized terms used in this section
"Subordinated Debt Securities" and not otherwise specifically defined in this
prospectus shall have the meanings respectively set forth in the Subordinated
Debt Indenture.
Exchange and Transfer. Subordinated Debt Securities may be presented for
exchange and registered Subordinated Debt Securities may be presented for
registration of transfer at the offices and subject to the restrictions set
forth therein and in the applicable prospectus supplement without service
charge, but upon payment of any taxes or other governmental charges due in
connection therewith, subject to any applicable limitations contained in the
Subordinated Debt Indenture. Subordinated Debt Securities in bearer form and the
coupons appertaining thereto, if any, will be transferable by delivery.
Payment. Unless otherwise indicated in the applicable prospectus supplement,
payment of the principal of and the premium and interest, if any, on all
Subordinated Debt Securities in registered form will be made at the office or
agency of the Subordinated Debt Trustee in the City of New York, except that, at
the option of CMS Energy, payment of any interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in the Security Register.
Unless otherwise indicated in the applicable prospectus supplement, payment of
any interest due on Subordinated Debt Securities in registered form will be made
to the Persons in whose name such Subordinated Debt Securities are registered at
the close of business on the Record Date for such interest payments.
Events of Default. The occurrence of any of the following events with
respect to the Subordinated Debt Securities of any series will constitute an
"Event of Default" with respect to the Subordinated Debt Securities of such
series:
(A) Default for 30 days in the payment of any interest on any of the
Subordinated Debt Securities of such series (whether or not payment is
prohibited by the subordination provisions of the Subordinated Debt
Indenture); provided, however, that if CMS Energy is permitted by the
terms of the Subordinated Debt Securities of the applicable series to
defer the payment in question, the date on which such payment is due
and payable shall be the date on which CMS Energy is required to make
payment following such deferral, if such deferral has been elected
pursuant to the terms of the Subordinated Debt Securities;
(B) Default in the payment when due of any of the principal of or the
premium, if any, on any of the Subordinated Debt Securities of such
series, whether at maturity, upon redemption, acceleration or otherwise
(whether or not payment is prohibited by the subordination provision of
the Subordinated Debt Indenture); provided, however, that if CMS Energy
is permitted by the terms of the Subordinated Debt Securities of the
applicable series to defer the payment in question,
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the date on which such payment is due and payable shall be the date on
which CMS Energy is required to make payment following such deferral,
if such deferral has been elected pursuant to the terms of the
Subordinated Debt Securities;
(C) Default in the deposit or payment of any sinking fund or analogous
payment in respect if any Subordinated Debt Securities of such series
(whether or not payment is prohibited by the subordination provisions
of the Subordinated Debt Indenture);
(D) Default for 60 days by CMS Energy in the observance or performance of
any other covenant or agreement contained in the Subordinated Debt
Indenture relating to the Subordinated Debt Securities of such series
after written notice thereof as provided in the Subordinated Debt
Indenture;
(E) Certain events of bankruptcy, insolvency or reorganization relating to
CMS Energy;
(F) Entry of final judgments against CMS Energy or Consumers Energy
aggregating in excess of $25,000,000 which remain undischarged or
unbonded for 60 days; or
(G) A default resulting in the acceleration of indebtedness of CMS Energy
in excess of $25,000,000 which acceleration has not been rescinded or
annulled within 10 days after written notice of such default as
provided in the Subordinated Debt Indenture.
Additional Events of Default may be prescribed for the benefit of the
Holders of a particular series of Subordinated Debt Securities and will be
described in the prospectus supplement relating to such Subordinated Debt
Securities.
If any Event of Default on any series of Subordinated Debt Securities shall
have occurred and be continuing, either the Subordinated Debt Trustee or the
Holders of not less than 25% in aggregate principal amount of the Subordinated
Debt Securities of such series then Outstanding may declare the principal of all
Subordinated Debt Securities of such series and the interest, if any, accrued
thereon to be due and payable immediately.
Upon certain conditions, any such declarations may be rescinded and annulled
if all Events of Default, other than the nonpayment of accelerated principal,
with respect to the Subordinated Debt Securities of all such affected series
then Outstanding shall have been cured or waived as provided in the Subordinated
Debt Indenture by the Holders of a majority in aggregate principal amount of the
Subordinated Debt Securities of the affected series then Outstanding.
Reference is made to the prospectus supplement relating to any series of
Original Issue Discount Securities for the particular provisions relating to the
acceleration of a portion of the principal amount thereof upon the occurrence
and continuance of an Event of Default with respect thereto.
The Subordinated Debt Indenture provides that the Subordinated Debt Trustee
will be under no obligation to exercise any of its rights or powers under the
Subordinated Debt Indenture at the request, order or direction of the Holders of
the Subordinated Debt Securities, unless such Holders shall have offered to the
Subordinated Debt Trustee reasonable indemnity. Subject to such provisions for
indemnity and certain other limitations contained in the Subordinated Debt
Indenture, the Holders of a majority in aggregate principal amount of the
Subordinated Debt Securities of each affected series then Outstanding (voting as
one class) will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Subordinated Debt
Trustee, or exercising any trust or power conferred on the Subordinated Debt
Trustee, with respect to the Subordinated Debt Securities of such affected
series.
The Subordinated Debt Indenture provides that no Holder of Subordinated Debt
Securities may institute any action against CMS Energy under the Subordinated
Debt Indenture (except actions for payment of overdue principal, premium or
interest) unless such Holder previously shall have given to the Subordinated
Debt Trustee written notice of default and continuance thereof and unless the
Holders of not less than 25% in aggregate principal amount of the Subordinated
Debt Securities of the affected series then Outstanding (voting as one class)
shall have requested the Subordinated Debt Trustee to institute such action and
shall have offered the Subordinated Debt Trustee
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reasonable indemnity, the Subordinated Debt Trustee shall not have received
direction inconsistent with such request by the Holders of a majority in
aggregate principal amount of the Subordinated Debt Securities of the affected
series then Outstanding (voting as one class).
The Subordinated Debt Indenture requires CMS Energy to furnish to the
Subordinated Debt Trustee annually a statement as to CMS Energy?s compliance
with all conditions and covenants under the Subordinated Debt Indenture. The
Subordinated Debt Indenture provides that the Subordinated Debt Trustee may
withhold notice to the Holders of the Subordinated Debt Securities of any series
of any default affecting such series (except defaults as to payment of
principal, premium or interest on the Subordinated Debt Securities of such
series) if it considers such withholding to be in the interests of the Holders
of the Subordinated Debt Securities of such series.
Subordination. The Subordinated Debt Indenture provides (and each Holder of
Subordinated Debt Securities by acceptance thereof agrees) that the Subordinated
Debt Securities will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness (as defined herein) of CMS Energy. No payment on
account of principal of, premium, if any, or interest on the Subordinated Debt
Securities and no acquisition of, or payment on account of any sinking fund for,
the Subordinated Debt Securities may be made unless full payment of amounts then
due for principal, premium, if any, and interest then due on all Senior
Indebtedness by reason of the maturity thereof (by lapse of time, acceleration
or otherwise) has been made or duly provided for in cash or in a manner
satisfactory to the Holders of such Senior Indebtedness. In addition, the
Subordinated Debt Indenture provides that upon the happening and during the
continuation of any default in payment of the principal of, premium, if any, or
interest on any Senior Indebtedness when the same becomes due and payable or in
the event any judicial proceeding shall be pending with respect to any such
default, then, unless and until such default shall have been cured or waived or
shall have ceased to exist, no payment shall be made by CMS Energy with respect
to the principal of, premium, if any, or interest on Subordinated Debt
Securities or to acquire any Subordinated Debt Securities or on account of any
sinking fund provisions applicable to Subordinated Debt Securities. CMS Energy
shall give prompt written notice to the Subordinated Debt Trustee of any default
in payment of principal of or interest on any Senior Indebtedness. The
Subordinated Debt Indenture provisions described in this paragraph, however, do
not prevent CMS Energy from making sinking fund payments in Subordinated Debt
Securities acquired prior to the maturity of Senior Indebtedness or, in the case
of default, prior to such default and notice thereof. Upon any distribution of
its assets in connection with any dissolution, winding up, liquidation or
reorganization of CMS Energy, whether voluntary or involuntary, in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise: (i) all Senior Indebtedness must be paid in full before
the Holders of the Subordinated Debt Securities are entitled to any payments
whatsoever; and (ii) any payment or distribution of CMS Energy?s assets of any
kind or character, whether in cash, securities or other property, which would
otherwise (but for the subordination provisions) be payable or deliverable in
respect of the Subordinated Debt Securities shall be paid or delivered directly
to the Holders of such Senior Indebtedness (or their representative or trustee)
in accordance with the priorities then existing among such Holders until all
Senior Indebtedness shall have been paid in full before any payment or
distribution is made to the Holders of Subordinated Debt Securities. In the
event that notwithstanding such subordination provisions, any payment or
distribution of assets of any kind or character is made on the Subordinated Debt
Securities before all Senior Indebtedness is paid in full, the Subordinated Debt
Trustee or the Holders of Subordinated Debt Securities receiving such payment
will be required to pay over such payment or distribution to the Holders of such
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness,
the rights of the Holders of the Subordinated Debt Securities will be subrogated
to the rights of the Holders of Senior Indebtedness to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Subordinated Debt Securities are paid in full. As a result of the subordination
provisions, in the event of CMS Energy?s insolvency, Holders of the Subordinated
Debt Securities may recover ratably less than senior creditors of CMS Energy.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
Subordinated Debt Indenture or thereafter incurred, created or assumed:
(I) Indebtedness of CMS Energy for money borrowed by CMS Energy (including
purchase money obligations) or evidenced by debentures (other than the
Subordinated Debt Securities), notes, bankers? acceptances or other
corporate debt securities or similar instruments issued by CMS Energy;
(II) Obligations with respect to letters of credit;
(III) All Indebtedness of others of the type referred to in the preceding
clauses (I) and (II) assumed by or guaranteed in any manner by CMS
Energy or in effect guaranteed by CMS Energy; or
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(IV) Renewals, extensions or refundings of any of the indebtedness referred
to in the preceding clauses (I), (II) and (III) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under
the express provisions of the instrument creating or evidencing the
same or the assumption or guarantee of the same, or pursuant to which
the same is outstanding, such indebtedness or such renewal, extension
or refunding thereof is not superior in right of payment to the
Subordinated Debt Securities.
The Subordinated Debt Indenture does not limit the aggregate amount of
Senior Indebtedness that may be issued. As of September 30, 1998, Senior
Indebtedness of CMS Energy aggregated approximately $2,321 million.
Consolidation, Merger or Sale of Assets. The Subordinated Debt Indenture
provides that CMS Energy may consolidate with or merge into, or sell, lease or
convey its property as an entirety or substantially as an entirety to, any other
corporation if such corporation assumes the obligations of CMS Energy under the
Subordinated Debt Securities and the Subordinated Debt Indenture and is
organized and existing under the laws of the United States of America, any state
thereof or the District of Columbia.
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Modification of the Subordinated Debt Indenture. The Subordinated Debt
Indenture permits CMS Energy and the Subordinated Debt Trustee to enter into
supplemental indentures thereto without the consent of the Holders of the
Subordinated Debt Securities to:
(A) Secure the Subordinated Debt Securities of one or more series;
(B) Evidence the assumption by a successor corporation of the obligations
of CMS Energy under the Subordinated Debt Indenture and the
Subordinated Debt Securities then Outstanding;
(C) Add covenants for the protection of the Holders of the Subordinated
Debt Securities;
(D) Cure any ambiguity or correct any defect or inconsistency in the
Subordinated Debt Indenture or to make such other provisions as CMS
Energy deems necessary or desirable with respect to matters or
questions arising under the Subordinated Debt Indenture, provided that
no such action adversely affects the interests of any Holders of
Subordinated Debt Securities;
(E) Establish the form and terms of any series of securities under the
Subordinated Debt Indenture; and
(F) Evidence the acceptance of appointment by a successor Subordinated Debt
Trustee.
The Subordinated Debt Indenture also permits CMS Energy and the Subordinated
Debt Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Subordinated Debt Securities of all series
then Outstanding and affected (voting as one class), to enter into supplemental
indentures to add any provisions to, or change in any manner or eliminate any of
the provisions of, the Subordinated Debt Indenture or modify in any manner the
rights of the Holders of Subordinated Debt Securities of each such affected
series; provided, however, that CMS Energy and the Subordinated Debt Trustee may
not, without the consent of the Holder of each Subordinated Debt Security then
outstanding and affected thereby, enter into a supplemental indenture to:
(A) Change the time of payment of the principal (or any installment of
principal) of any Subordinated Debt Security, or reduce the principal
amount thereof, or reduce the rate or change the time of payment of
interest thereon, or reduce the amount payable on any Original Issue
Discount Securities upon acceleration or provable in bankruptcy, or
impair the right to institute suit for the enforcement of any payment
on any Subordinated Debt Security when due; or
(B) Reduce the percentage in principal amount of the Subordinated Debt
Securities of the affected series, the consent of whose Holders is
required for any such modification or for any waiver provided for in
the Subordinated Debt Indenture.
Prior to the acceleration of the maturity of any Subordinated Debt Security,
the Holders of a majority in aggregate principal amount of the Subordinated Debt
Securities of all series at the time Outstanding with respect to which a default
or an Event of Default shall have occurred and be continuing (voting as one
class) may on behalf of the Holders of all such affected Subordinated Debt
Securities waive any past default or Event of Default and its consequences,
except a default or an Event of Default in respect of a covenant or provision of
the Subordinated Debt Indenture or of any Subordinated Debt Security which
cannot be modified or amended without the consent of the Holder of each
Subordinated Debt Security affected.
Defeasance, Covenant Defeasance and Discharge. The Subordinated Debt
Indenture provides that, at the option of CMS Energy:
(A) CMS Energy will be discharged from any and all obligations in respect
of the Subordinated Debt Securities of a particular series then
Outstanding (except for certain obligations to register the transfer of
or exchange the Subordinated Debt Securities of such series, to replace
stolen, lost or mutilated Subordinated Debt Securities of such series,
to maintain paying agencies and to maintain the trust described below),
or
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(B) CMS Energy need not comply with certain restrictive covenants of the
Subordinated Debt Indenture (including those described under
"Consolidation, Merger or Sale of Assets"), in each case if CMS Energy
irrevocably deposits in trust with the Subordinated Debt Trustee money,
and/or securities backed by the full faith and credit of the United
States which, through payment of the principal thereof and the interest
thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal of and premium, if any, and
interest on the Subordinated Debt Securities of such series on the
stated maturity of such Subordinated Debt Securities (which may include
one or more redemption dates designated by CMS Energy) in accordance
with the terms thereof.
To exercise such option, CMS Energy is required, among other things, to
deliver to the Subordinated Debt Trustee an opinion of independent counsel to
the effect that the exercise of such option would not cause the Holders of the
Subordinated Debt Securities of such series to recognize income, gain or loss
for United States federal income tax purposes as amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred, and, in the case of a discharge as described in clause (A) of the
preceding paragraph, such opinion is to be accompanied by a private letter
ruling to the same effect received from the Internal Revenue Service, a revenue
ruling to such effect pertaining to a comparable form of transaction published
by the Internal Revenue Service or appropriate evidence that since the date of
the Subordinated Debt Indenture there has been a change in the applicable
federal income tax law.
In the event CMS Energy exercises its option to effect a covenant defeasance
with respect to the Subordinated Debt Securities of any series as described in
the preceding paragraph and the Subordinated Debt Securities of such series are
thereafter declared due and payable because of the occurrence of any Event of
Default other than an Event of Default caused by failing to comply with the
covenants which are defeased, and the amount of money and securities on deposit
with the Subordinated Debt Trustee would be insufficient to pay amounts due on
the Subordinated Debt Securities of such series at the time of the acceleration
resulting from such Event of Default, CMS Energy would remain liable for such
amounts.
CMS Energy may also obtain a discharge of the Subordinated Debt Indenture
with respect to all Subordinated Debt Securities then Outstanding (except for
certain obligations to register the transfer of or exchange such Subordinated
Debt Securities to replace stolen, lost or mutilated Subordinated Debt
Securities, to maintain paying agencies and to maintain the trust described
below) by irrevocably depositing in trust with the Subordinated Debt Trustee
money, and/or securities backed by the full faith and credit of the United
States which, through the payment of the principal thereof and the interest
thereon in accordance with their terms, will provide money in an amount
sufficient to pay all the principal of and premium, if any, and interest on the
Subordinated Debt Securities on the stated maturities thereof (including one or
more redemption dates), provided that such Subordinated Debt Securities are by
their terms due and payable, or are to be called for redemption, within one
year.
For United States federal income tax purposes any deposit contemplated in
the preceding paragraph would be treated as an exchange of the Subordinated Debt
Securities outstanding for other property. Accordingly, holders of Subordinated
Debt Securities outstanding may be required to recognize a gain or loss for
United States federal income tax purposes upon such exchange. In addition, such
Holders thereafter may be required to recognize income from such property which
could be different from the amount that would be includable in the absence of
such deposit. Prospective investors are urged to consult their own tax advisors
as to the specific consequences to them of such deposit.
Governing Law. The Subordinated Debt Indenture and the Subordinated Debt
Securities will be governed by, and construed in accordance with, the laws of
the State of Michigan except to the extent the laws of another jurisdiction
shall be mandatorily applicable.
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LEGAL OPINIONS
Opinions as to the legality of certain of the Offered Securities will be
rendered for CMS Energy by Michael D. Van Hemert, Esq., Assistant General
Counsel for CMS Energy. Certain legal matters with respect to Offered Securities
will be passed upon by counsel for any underwriters, dealers or agents, each of
whom will be named in the related prospectus supplement.
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EXPERTS
The consolidated financial statements and schedule of CMS Energy as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997 incorporated by reference in this prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
With respect to the unaudited interim consolidated financial information for
the periods ended March 31, 1998 and 1997, June 30, 1998 and 1997, and September
30, 1998 and 1997, Arthur Andersen LLP has applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate reports thereon state that they did not audit and they
did not express an opinion on that interim consolidated financial information.
Accordingly, the degree of reliance on their report on that information should
be restricted in light of the limited nature of the review procedures applied.
In addition, the accountants are not subject to the liability provisions of
Section 11 of the Securities Act, for their reports on the unaudited interim
consolidated financial information because those reports are not a "report" or
"part" of the registration statement prepared or certified by the accountants
within the meaning of Sections 7 and 11 of the Securities Act.
Future consolidated financial statements of CMS Energy and the reports
thereon of Arthur Andersen LLP also will be incorporated by reference in this
prospectus in reliance upon the authority of that firm as experts in giving
those reports to the extent that said firm has audited said consolidated
financial statements and consented to the use of their reports thereon.
PLAN OF DISTRIBUTION
CMS Energy may sell the Offered Securities: (i) through the solicitation of
proposals of underwriters or dealers to purchase the Offered Securities; (ii)
through underwriters or dealers on a negotiated basis; (iii) directly to a
limited number of purchasers or to a single purchaser; or (iv) through agents.
The prospectus supplement with respect to any Offered Securities will set forth
the terms of such offering, including the name or names of any underwriters,
dealers or agents; the purchase price of the Offered Securities and the proceeds
to CMS Energy from such sale; any underwriting discounts and commissions and
other items constituting underwriters' compensation; any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
and any securities exchange on which such Offered Securities may be listed. Any
initial public offering price, discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the prospectus supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such prospectus supplement. Unless otherwise set forth
in the prospectus supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
If dealers are utilized in the sale of Offered Securities, CMS Energy will sell
such Offered Securities to the dealers as principals. The dealers may then
resell such Offered Securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the prospectus supplement relating thereto.
The Offered Securities may be sold directly by CMS Energy or through agents
designated by CMS Energy from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect to which this prospectus is delivered
will be named, and any commissions payable by CMS Energy to such agent will be
set forth, in the prospectus supplement relating thereto. Unless otherwise
indicated in the prospectus supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
16
<PAGE> 20
The Offered Securities may be sold directly by CMS Energy to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the prospectus supplement relating thereto.
Agents, dealers and underwriters may be entitled under agreements with CMS
Energy to indemnification by CMS Energy against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, dealers or underwriters may be required to make
in respect thereof. Agents, dealers and underwriters may be customers of, engage
in transactions with, or perform services for CMS Energy in the ordinary course
of business.
The Offered Securities may or may not be listed on a national securities
exchange. Reference is made to the prospectus supplement with regard to such
matter. No assurance can be given that there will be a market for any of the
Offered Securities.
17
<PAGE> 21
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Filing Fee -- Securities and Exchange Commission...................... $111,200
*Listing on New York Stock Exchange................................... 75,000
*Trustees expenses.................................................... 18,000
*Printing and Engraving............................................... 200,000
*Services of counsel.................................................. 50,000
*Services of independent public accountants, Arthur Andersen LLP...... 25,000
*Rating Agency Fees, Collateral Agent's and Purchase.................. 100,000
Contract Agent's Fees.................................................
*Blue Sky fees and expenses........................................... 20,000
*Miscellaneous........................................................ 10,800
--------
TOTAL $610,000
</TABLE>
- ----------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The following resolution was adopted by the Board of Directors of CMS Energy
on May 6, 1987:
Resolved: That effective March 1, 1987 the corporation shall indemnify to
the full extent permitted by law every person (including the estate, heirs and
legal representatives of such person in the event of the decease, incompetency,
insolvency or bankruptcy of such person) who is or was a director, officer,
partner, trustee, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against all liability, costs, expenses, including attorneys'
fees, judgments, penalties, fines and amounts paid in settlement, incurred by or
imposed upon the person in connection with or resulting from any claim or any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative, investigative or of whatever nature, arising from the
person's service or capacity as, or by reason of the fact that the person is or
was, a director, officer, partner, trustee, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. Such right of indemnification shall not be
deemed exclusive of any other rights to which the person may be entitled under
statute, bylaw, agreement, vote of shareholders or otherwise.
CMS Energy's Bylaws provide:
The Corporation may purchase and maintain liability insurance, to the full
extent permitted by law, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against such person and incurred by such person in any such
capacity.
Article VIII of CMS Energy's Articles of Incorporation provides:
A director shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director except (I)
for a breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) for a violation of
section 551 (I) of the Michigan Business Corporation Act, and (iv) any action
from which the director derived an improper personal benefit. No amendment to or
repeal of this Article VIII, and no modification to its provisions by law, shall
apply to, or have any effect upon,
II-1
<PAGE> 22
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment, repeal or modification.
Article IX of CMS Energy's Articles of Incorporation provides:
Each director and each officer of the Corporation shall be indemnified by
the Corporation to the fullest extent permitted by law against expenses
(including attorneys' fees), judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with the
defense of any proceeding in which he or she was or is a party or is threatened
to be made a party by reason of being or having been a director or an officer of
the Corporation. Such right of indemnification is not exclusive of any other
rights to which such director or officer may be entitled under any now or
thereafter existing statute, any other provision of these Articles, bylaw,
agreement, vote of shareholders or otherwise. If the Business Corporation Act of
the State of Michigan is amended after approval by the shareholders of this
article IX to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Business Corporation Act of the State of Michigan, as so amended. Any repeal
or modification of this article IX by the shareholders of the Corporation shall
not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
Sections 561 through 571 of the Michigan Business Corporation Act provides
CMS Energy with the power to indemnify directors, officers, employees and agents
against certain expenses and payments, and to purchase and maintain insurance on
behalf of directors, officers, employees and agents.
Officers and directors are covered within specified monetary limits by
insurance against certain losses arising from claims made by reason of their
being directors or officers of CMS Energy or of CMS Energy's subsidiaries and
CMS Energy's officers and directors are indemnified against such losses by
reason of their being or having been directors of officers or another
corporation, partnership, joint venture, trust or other enterprise at CMS
Energy's request. In addition, CMS Energy has indemnified each of its present
directors by contracts that contain affirmative provisions essentially similar
to those in sections 561 through 571 of the Michigan Business Corporation Act
cited above.
II-2
<PAGE> 23
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C> <C>
(1)(a) - Form of Underwriting Agreement with respect to the Offered
Securities.
*(3)(a) - Restated Articles of Incorporation of CMS Energy. (Designated in CMS
Energy's Form S-4 Registration Statement filed June 6, 1995, File No.
33-60007, as Exhibit 3(i).)
*(3)(b) - By-Laws of CMS Energy. (Designated in CMS Energy's Form 10-K for the
year ended December 31, 1994, File No. 1-9513, as Exhibit 3(c).)
*(4)(a) - Indenture dated September 15, 1992 between CMS Energy Corporation and
NBD Bank, as Trustee. (Designated in CMS Energy's Form S-3
Registration Statement filed May 1, 1992, File No. 33-47629, as
Exhibit 4(a).)
First Supplemental Indenture dated October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form
8-K dated October 1, 1992, File No. 1-9513, as Exhibit 4.)
Second Supplemental Indenture dated October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form
8-K dated October 1, 1992, File No. 1-9513, as Exhibit 4(a).)
Third Supplemental Indenture dated 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.)
Fourth Supplemental Indenture dated September 26, 1997 between CMS
Energy Corporation and NBD Bank, as Trustee. (Designated in CMS
Energy's Form S-3 Registration Statement filed October 6, 1997, File
No. 333-37241, as Exhibit 4(a).)
Fifth Supplemental Indenture dated November 4, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form
10-Q for the quarter ended September 30, 1997, File No. 1-9513, as
Exhibit 4(b).)
Sixth Supplemental Indenture dated January 13, 1998 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form
10-K for the year ended December 31, 1997, File No. 1-9513, as Exhibit
4(a).)
*(4)(b) - Indenture dated as of January 15, 1994 between CMS Energy Corporation
and The Chase Manhattan Bank, as Trustee. (Designated in CMS
Energy's Form 8-K dated March 29, 1994, File No. 1-9513, as Exhibit
4(b).)
First Supplemental Indenture dated January 20, 1994 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in
CMS Energy's Form 8-K dated March 29, 1994, File No. 1-9513, as
Exhibit 4(b).)
</TABLE>
II-3
<PAGE> 24
<TABLE>
<S> <C> <C>
Second Supplemental Indenture dated March 19, 1996 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in
CMS Energy's Form 10-Q for the quarter ended March 31, 1996, File No.
1-9513, as Exhibit 4.)
Third Supplemental Indenture dated 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.)
Fourth Supplemental Indenture dated September 17, 1997 between CMS
Energy Corporation and The Chase Manhattan Bank, as Trustee.
(Designated in CMS Energy's Form S-3 Registration Statement filed
September 22, 1997, File No. 333-36115, as Exhibit 4(d).)
Fifth Supplemental Indenture dated August 26, 1998 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in
CMS Energy's Form S-4 Registration Statement filed September 10, 1998,
File No. 333-63229, as Exhibit 4(c).)
*(4)(c) - Indenture dated June 1, 1997 between CMS Energy Corporation and The
Bank of New York, as Trustee. (Designated in CMS Energy's Form 8-K
dated June 1, 1997, File No. 1-9513, as Exhibit 4(a).)
First Supplemental Indenture dated June 20, 1997 between CMS Energy
Corporation 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).)
*(4)(d) - Credit Agreement dated as of July 21, 1997, among CMS Energy, the
Banks, the Administrative Agent, the Collateral Agent, the
Documentation Agent, the Syndication Agent, the Co-Agents and the
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.)
Amendment No. 1 dated January 30, 1998 to Credit Agreement dated July
21, 1997, among CMS Energy, the Banks, the Administrative Agent, the
Collateral Agent, the Documentation Agent, the Syndication Agent, the
Co-Agents and the Lead Manager, all as defined therein, and the
Exhibits thereto. (Designated in CMS Energy's Form S-4 Registration
Statement file September 10, 1998, File No. 333-63229, as Exhibit
4(f).)
*(4)(e) - Registration Rights Agreement dated as of November 7, 1997 by and
among CMS Energy and Donaldson, Lufkin & Jenrette Securities
Corporation, Chase Securities, Inc., CIBC Oppenheimer Corp., Morgan
Stanley & Co. Incorporated, and Salomon Brothers, Inc. (Designated
in CMS Energy's Form S-4 Registration Statement filed December 23,
1997, File No. 333-43077, as Exhibit 4(d).)
(5) - Opinion of Michael D. VanHemert, Assistant General Counsel for CMS
Energy.
(12) - Statement regarding computation of ratios of earnings to fixed
charges.
(15)(a) - Arthur Andersen LLP Letter re: CMS Energy unaudited interim financial
information for the period ended March 31, 1998.
</TABLE>
II-4
<PAGE> 25
<TABLE>
<S> <C> <C>
(15)(b) - Arthur Andersen LLP Letter re: CMS Energy unaudited interim
financial information for the periods ended June 30, and September
30, 1998.
(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
(25)(a) - Statement of Eligibility and Qualification (Form T-1) of NBD Bank
(Trustee under the Senior Debt Indenture).
(25)(b) - Statement of Eligibility and Qualification (Form T-1) of The Bank of
New York (Trustee under the Subordinated Debt Indenture).
</TABLE>
- ----------
* 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.
II-5
<PAGE> 26
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) To file a post-effective amendment to this registration statement
during any period in which offers or sales are being made:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) Include any material information with respect to the plan
of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement; provided,
however, that (i) and (ii) do not apply if the registration
statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that as
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
be governed by the final adjudication of such issue.
(6) That (1) for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and (2) for the purpose of
determining any liability under the Securities Act of 1933, each post-
II-6
<PAGE> 27
effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-7
<PAGE> 28
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 December 15,
1998.
CMS ENERGY CORPORATION
By:
/s/ A.M. Wright
-----------------------------------
Alan M. Wright
Senior Vice President and Chief
Financial Officer
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.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on December 15, 1998.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C> <C>
(i) Principal executive officer:
/s/ William T. McCormick, Jr. Chairman of the Board, Chief Executive Officer and Director
----------------------------------------
William T. McCormick, Jr.
(ii) Principal financial officer:
/s/ A.M. Wright Senior Vice President and Chief Financial Officer
----------------------------------------
Alan M. Wright
(iii) /s/ P.D. Hopper Senior Vice President, Controller and Chief Accounting Officer
----------------------------------------
Preston D. Hopper
* Director
----------------------------------------
(John M. Deutch)
* Director
----------------------------------------
(James J. Duderstadt)
* Director
----------------------------------------
(Kathleen R. Flaherty
* Director
----------------------------------------
(Victor J. Fryling)
</TABLE>
II-8
<PAGE> 29
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
* Director
----------------------------------------
(Earl D. Holton)
* Director
----------------------------------------
(William U. Parfet)
* Director
----------------------------------------
(Percy A. Pierre)
Director
----------------------------------------
(Kenneth L. Way)
* Director
----------------------------------------
(Kenneth Whipple)
* Director
----------------------------------------
(John B. Yasinsky)
By: /s/ A.M. Wright
----------------------------------------
Alan M. Wright
Attorney-in-Fact
</TABLE>
II-9
<PAGE> 30
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
(1)(a) - Form of Underwriting Agreement with respect to the Offered Securities.
*(3)(a) - Restated Articles of Incorporation of CMS Energy. (Designated in CMS
Energy's Form S-4 Registration Statement filed June 6, 1995, File No.
33-60007, as Exhibit 3(i).)
*(3)(b) - By-Laws of CMS Energy. (Designated in CMS Energy's Form 10-K for the year
ended December 31, 1994, File No. 1-9513, as Exhibit 3(c).)
*(4)(a) - Indenture dated September 15, 1992 between CMS Energy Corporation and NBD
Bank, as Trustee. (Designated in CMS Energy's Form S-3 Registration
Statement filed May 1, 1992, File No. 33-47629, as Exhibit 4(a).)
First Supplemental Indenture dated October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form 8-K
dated October 1, 1992, File No. 1-9513, as Exhibit 4.)
Second Supplemental Indenture dated October 1, 1992 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form 8-K
dated October 1, 1992, File No. 1-9513, as Exhibit 4(a).)
Third Supplemental Indenture dated 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.)
Fourth Supplemental Indenture dated September 26, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form S-3
Registration Statement filed October 6, 1997, File No. 333-37241, as Exhibit
4(a).)
Fifth Supplemental Indenture dated November 4, 1997 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form 10-Q
for the quarter ended September 30, 1997, File No. 1-9513, as Exhibit 4(b).)
Sixth Supplemental Indenture dated January 13, 1998 between CMS Energy
Corporation and NBD Bank, as Trustee. (Designated in CMS Energy's Form 10-K
for the year ended December 31, 1997, File No. 1-9513, as Exhibit 4(a).)
*(4)(b) - Indenture dated as of January 15, 1994 between CMS Energy Corporation and
The Chase Manhattan Bank, as Trustee. (Designated in CMS Energy's Form
8-K dated March 29, 1994, File No. 1-9513, as Exhibit 4(b).)
First Supplemental Indenture dated January 20, 1994 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in CMS
Energy's Form 8-K dated March 29, 1994, File No. 1-9513, as Exhibit 4(b).)
</TABLE>
II-10
<PAGE> 31
<TABLE>
<S> <C>
Second Supplemental Indenture dated March 19, 1996 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in CMS
Energy's Form 10-Q for the quarter ended March 31, 1996, File No. 1-9513, as
Exhibit 4.)
Third Supplemental Indenture dated 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.)
Fourth Supplemental Indenture dated September 17, 1997 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in CMS
Energy's Form S-3 Registration Statement filed September 22, 1997, File No.
333-36115, as Exhibit 4(d).)
Fifth Supplemental Indenture dated August 26, 1998 between CMS Energy
Corporation and The Chase Manhattan Bank, as Trustee. (Designated in CMS
Energy's Form S-4 Registration Statement filed September 10, 1998, File No.
333-63229, as Exhibit 4(c).)
*(4)(c) - Indenture dated June 1, 1997 between CMS Energy Corporation and The Bank
of New York, as Trustee. (Designated in CMS Energy's Form 8-K dated June
1, 1997, File No. 1-9513, as Exhibit 4(a).)
First Supplemental Indenture dated June 20, 1997 between CMS Energy
Corporation 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).)
*(4)(d) - Credit Agreement dated as of July 21, 1997, among CMS Energy, the Banks,
the Administrative Agent, the Collateral Agent, the Documentation Agent,
the Syndication Agent, the Co-Agents and the 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.)
Amendment No. 1 dated January 30, 1998 to Credit Agreement dated July 21,
1997, among CMS Energy, the Banks, the Administrative Agent, the Collateral
Agent, the Documentation Agent, the Syndication Agent, the Co-Agents and the
Lead Manager, all as defined therein, and the Exhibits thereto. (Designated in
CMS Energy's Form S-4 Registration Statement file September 10, 1998, File No.
333-63229, as Exhibit 4(f).)
*(4)(e) - Registration Rights Agreement dated as of November 7, 1997 by and among CMS
Energy and Donaldson, Lufkin & Jenrette Securities Corporation, Chase
Securities, Inc., CIBC Oppenheimer Corp., Morgan Stanley & Co. Incorporated,
and Salomon Brothers, Inc. (Designated in CMS Energy's Form S-4 Registration
Statement filed December 23, 1997, File No. 333-43077, as Exhibit 4(d).)
(5) - Opinion of Michael D. VanHemert, Assistant General Counsel for CMS Energy.
(12) - Statement regarding computation of ratios of earnings to fixed charges.
(15)(a) - Arthur Andersen LLP Letter re: CMS Energy unaudited interim financial
information for the period ended March 31, 1998.
(15)(b) - Arthur Andersen LLP Letter re: CMS Energy unaudited interim financial
information for the periods ended June 30, and September 30, 1998.
</TABLE>
II-11
<PAGE> 32
<TABLE>
<S> <C>
(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
(25)(a) - Statement of Eligibility and Qualification (Form T-1) of NBD Bank (Trustee
under the Senior Debt Indenture).
(25)(b) - Statement of Eligibility and Qualification (Form T-1) of The Bank of New
York (Trustee under the Subordinated Debt Indenture).
</TABLE>
- ----------
* Previously filed
II-12
<PAGE> 1
EXHIBIT 1(a)
_____________________Shares
CMS ENERGY CORPORATION
Common Stock ($.01 par value)
______________________
Underwriting Agreement
_____________ __, 199_
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
CMS Energy Corporation, a Michigan corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined in Section 14
hereof) ________ shares of its Common Stock ($.01 par value) (the "Securities")
as indicated in Schedule II. The Underwriters have designated the
Representatives to execute this Agreement on their behalf and to act for them in
the manner provided in this Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), a registration statement on Form
S-3 (Registration No. ___________) including a prospectus relating to the
Securities, and such registration statement, has become effective under the Act.
The registration statement, at the time such registration statement, became
effective and as it may have been thereafter amended to the date of this
Agreement (including the documents then incorporated by reference therein) is
hereinafter referred to as the "Registration Statement." If the Company has
filed, or will file, an breviated registration statement to register additional
Securities pursuant to Rule 462(b) under the Act (the "Rule 462(b) Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462(b) Registration Statement. The
prospectus forming a part of the Registration Statement at the time the
Registration Statement became effective (including the documents then
incorporated by reference therein) is hereinafter referred to as the "Basic
Prospectus," provided that in the event that the Basic Prospectus shall have
been
<PAGE> 2
amended, revised or supplemented prior to the date of this Agreement, or if
the Company shall have supplemented the Basic Prospectus by filing any documents
pursuant to Section 13 or 14 or 15 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the time the Registration Statement became
effective and prior to the date of this Agreement, which documents are deemed to
be incorporated in the Basic Prospectus, the term "Basic Prospectus" shall also
mean such prospectus as so amended, revised or supplemented. The Basic
Prospectus, as it shall be revised or supplemented to reflect the final terms of
the offering and sale of the Securities by a prospectus supplement relating to
the Securities, and in the form to be filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 under the Act, is hereinafter referred to as
the "Prospectus." Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to include only amendments or supplements to the Registration
Statement or Prospectus, as the case may be, and documents incorporated by
reference therein after the date of this Agreement and prior to the termination
of the offering of the Securities by the Underwriters.
1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth, the
Company agrees to sell to the respective Underwriters, severally and not
jointly, and the respective Underwriters, severally and not jointly, agree to
purchase from the Company, at the purchase price of $ ________ a share (the
"Purchase Price"), the respective number of shares of Firm Securities set
opposite their names in Schedule II hereto.
The Company hereby agrees that, without the prior written consent of
_________________, the Company will not offer, sell, contract to sell or
otherwise dispose of any shares of common stock of the Company or any securities
convertible into or exercisable or exchangeable for common stock of the Company
other than the Securities for a period of ____ days after the date of this
Agreement, provided, that the Company may, in a manner generally consistent with
past practices regarding the numbers of shares issued by the Company from time
to time thereunder during such _____ day period, issue shares of CMS Energy
Common Stock and CMS Energy Class G Common Stock under its Stock Purchase Plan,
Performance Incentive Stock Plan, Employee Stock Ownership Plan and Employee
Savings and Incentive Plan.
The Company is advised by the Representatives that the Securities may
be offered by the Underwriters from time to time in one or more transactions
_____________________________________ on the New York Stock Exchange or on other
national securities exchanges on which the Company's Common Stock is traded, in
the over-the-counter market, through negotiated transactions or otherwise at
market prices prevailing at the time of the sale or at prices otherwise
negotiated.
2. Payment and Delivery: Payment for the Securities shall be made to the
Company or its order in Federal or other immediately available funds in New York
City (or such other place or places of payment as shall be agreed upon by the
Company and the Representatives in writing), upon the delivery of the Securities
at the offices of Skadden, Arps, Slate, Meagher and
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<PAGE> 3
Flom LLP ("Skadden Arps"), 919 Third Avenue, New York, New York 10022 (or such
other place or places of delivery as shall be agreed upon by the Company and the
Representatives) to the Representatives for the respective accounts of the
Underwriters against receipt therefor signed by the Representatives on behalf of
themselves and as agent for the Underwriters. Such payment and delivery shall be
made at 10:00 A.M., New York time on _____________ (or on such later business
day as shall be agreed upon by the Company and the Representatives in writing),
unless postponed in accordance with the provisions of Section 10 hereof. The day
and time at which payment and delivery for the Securities are to be made is
herein called the "Time of Purchase."
Delivery of the Securities shall be made in definitive, fully
registered form in authorized denominations registered in such names as the
Representatives may request in writing to the Company not later than two full
business days prior to the Time of Purchase, or if no such request is received,
in the names of the respective Underwriters for the respective number of shares
of Securities, set forth opposite the name of each Underwriter in Schedule II,
in denominations selected by the Company.
The Company agrees to make the Securities available for inspection by
the Underwriters at the offices of Skadden, Arps at least 24 hours prior to the
Time of Purchase, in definitive, fully registered form, and as requested
pursuant to the preceding paragraph.
3. Conditions of Underwriters' Obligations: The several obligations of
the Underwriters hereunder are subject to the accuracy of the warranties and
representations on the part of the Company and to the following other
conditions:
(a) That all legal proceedings to be taken in connection with the
issue and sale of the Securities shall be reasonably satisfactory in form
and substance to ________________, counsel to the Underwriters.
(b) That, at the Time of Purchase, the Representatives shall be
furnished with the following opinions, dated the day of the Time of
Purchase:
(1) Opinion of Michael D. VanHemert, Esq., counsel to the
Company, substantially to the effect set forth in Exhibit A to this
Agreement; and
(2) Opinion of ______________, counsel to the Underwriters,
substantially to the effect set forth in Exhibit B to this Agreement.
(c) That on the date of the Time of Purchase the Representatives
shall have received a letter from Arthur Anderson LLP in form and substance
satisfactory to the Representatives, dated as of such date, (i) confirming
that they are independent public accountants within the meaning of the Act
and the related rules and regulations adopted by the Commission, (ii)
stating that in their opinion the financial statements examined by
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<PAGE> 4
them and included or incorporated by reference in the Registration
Statement complied as to form in all material respects with the applicable
accounting requirements of the Commission, including the related rules and
regulations adopted by the Commission, and (iii) covering, as of a date not
more than four business days prior to the date of such letter, such other
matters as the Representatives reasonably request.
(d) That, between the date of the execution of this Agreement and
the Time of Purchase, no material and adverse change shall have occurred in
the business, properties or financial condition of the Company and its
subsidiaries (as defined in Rule 405 under the Act, and hereafter called
the "Subsidiaries"), taken as a whole, which, in the judgment of the
Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities (other than
changes referred to in or contemplated by the Registration Statement or
Prospectus).
(e) That, prior to the Time of Purchase, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the Act by the Commission or proceedings therefor initiated or
threatened.
(f) That, at the Time of Purchase, the Company shall have
delivered to the Representatives a certificate of an executive officer of
the Company to the effect that, to the best of his knowledge, information
and belief there shall have been no material adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement or Prospectus (other than changes referred to in or contemplated
by the Registration Statement or Prospectus).
(g) That the Company shall have performed such of its obligations
under this Agreement as are to be performed at or before the Time of
Purchase by the terms hereof.
(h) That any additional documents or agreements reasonably
requested by the Representatives or their counsel to permit the
Underwriters to perform their obligations or permit their counsel to
deliver opinions hereunder shall have been provided to them.
(i) That between the date of the execution of this Agreement and
the day of the Time of Purchase there has been no downgrading of the
investment ratings of any of the Company's securities or of Consumers
Energy Company's first mortgage bonds by Standard & Poor's Ratings Group,
Moody's Investors Service, Inc. or Duff & Phelps Credit Rating Co., and
neither the Company nor Consumers Energy Company shall have been placed on
"credit watch" or "credit review" with negative implications by any of such
statistical rating organizations if any of such occurrences shall, in the
reasonable judgment of the Representatives, after reasonable inquiries on
the part of the Representatives, impair the marketability of the
Securities.
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<PAGE> 5
(j) That any filing of the Prospectus and any supplements thereto
required pursuant to Rule 424 under the Act have been made in compliance
with Rule 424 in the time periods provided by Rule 424.
(k) That the Securities, at the Time of Purchase, shall have been
duly listed, subject to notice of issuance, on the New York Stock Exchange.
(l) That, prior to the Time of Purchase, the Company shall file a
Rule 462(b) Registration Statement and that such Rule 462(b) Registration
Statement shall have become effective under the Act.
4. Conditions of the Company's Obligations: The obligations of the
Company hereunder are subject to the satisfaction of the condition set forth in
Section 3(e).
5. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To use its best efforts to cause any post-effective amendments
to the Registration Statement to become effective as promptly as possible.
During the time when a Prospectus is required to be delivered under the
Act, the Company will comply so far as it is able with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
to the extent necessary to permit the continuance of sales of or dealings
in the Securities in accordance with the provisions hereof and of the
Prospectus.
(b) To deliver to each of the Representatives a conformed copy of
the Registration Statement and any amendments thereto (including all
exhibits thereto) and full and complete sets of all comments of the
Commission or its staff and all responses thereto with respect to the
Registration Statement and any amendments thereto and to furnish to the
Representatives, for each of the Underwriters, conformed copies of the
Registration Statement and any amendments thereto without exhibits.
(c) As soon as the Company is advised thereof, the Company will
advise the Representatives and confirm the advice in writing of: (i) the
effectiveness of any amendment to the Registration Statement, (ii) any
request made by the Commission for amendments to the Registration Statement
or Prospectus or for additional information with respect thereto, (iii) the
suspension of qualification of the Securities for sale under Blue Sky or
state securities laws, and (iv) the entry of a stop order suspending the
effectiveness of the Registration Statement or of the initiation or threat
or any proceedings for that purpose and, if such a stop order should be
entered by the Commission, to make every reasonable effort to obtain the
lifting or removal thereof.
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<PAGE> 6
(d) To deliver to the Underwriters, without charge, as soon as
practicable, and from time to time during such period of time (not
exceeding nine months) after the date of the Prospectus as they are
required by law to deliver a prospectus, as many copies of the Prospectus
(as supplemented or amended if the Company shall have made any supplements
or amendments thereto) as the Representatives may reasonably request; and
in case any Underwriter is required to deliver a prospectus after the
expiration of nine months after the date of the Prospectus, to furnish to
the Representatives, upon request, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or of supplements to the
Prospectus complying with Section 10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months) after the
date of the Prospectus as the Underwriters are required by law to deliver a
prospectus in respect of the Securities, if any event shall have occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it
becomes necessary to amend or supplement the Prospectus to comply with law,
to forthwith prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus and deliver to the Underwriters, without
charge, such number of copies thereof as may be reasonably requested.
(f) To make generally available to the Company's security holders,
as soon as practicable, an "earning statement" (which need not be audited
by independent public accountants) covering a twelve-month period
commencing after the effective date of the Registration Statement and
ending not later than 15 months thereafter, which shall comply in all
material respects with and satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
(g) To use its best efforts to qualify the Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to pay (or cause to be paid), or
reimburse (or cause to be reimbursed) the Underwriters and their counsel
for, reasonable filing fees and expenses in connection therewith (including
the reasonable fees and disbursements of counsel to the Underwriters and
filing fees and expenses paid and incurred prior to the date hereof),
provided, however, that the Company shall not be required to qualify to do
business as a foreign corporation or as a securities dealer or to file a
general consent to service of process or to file annual reports or to
comply with any other requirements deemed by the Company to be unduly
burdensome.
(h) To pay all expenses, fees and taxes (other than transfer taxes
on sales by the respective Underwriters) in connection with the issuance
and delivery of the Securities, except that the Company shall be required
to pay the fees and disbursements (other than disbursements referred to in
paragraph (g) of this Section 5) of Skadden Arps, counsel to the
Underwriters, only in the events provided in paragraph (i) of this Section
5,
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<PAGE> 7
the Underwriters hereby agreeing to pay such fees and disbursements in any
other event, and that except as provided in Section (i), the Company shall
not be responsible for any out-of-pocket expenses of the Underwriters in
connection with their services hereunder.
(i) If the Underwriters shall not take up and pay for the
Securities due to the failure of the Company to comply with any of the
conditions specified in Section 3 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 11 hereof prior to
the Time of Purchase, to pay the reasonable fees and disbursements of
Skadden Arps, counsel to the Underwriters, and, if the Underwriters shall
not take up and pay for the Securities due to the failure of the Company to
comply with any of the conditions specified in Section 3 hereof, to
reimburse the Underwriters for their reasonable out-of-pocket expenses, in
an aggregate amount not exceeding a total of $3,000, incurred in connection
with the financing contemplated by this Agreement.
(j) Prior to the termination of the offering of the Securities, to
not file any amendment to the Registration Statement or supplement to the
Prospectus (including the Basic Prospectus) unless the Company has
furnished the Representatives and counsel to the Underwriters with a copy
for their review and comment a reasonable time prior to filing and has
reasonably considered any comments of the Representatives, or any such
amendment or supplement to which such counsel shall reasonably object on
legal grounds in writing, after consultation with the Representatives.
(k) To furnish the Representatives with copies of all documents
required to be filed with the Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act subsequent to the time the Registration Statement
becomes effective and prior to the termination of the offering of the
Securities.
(l) So long as may be required by law for distribution of the
Securities by the Underwriters or by any dealers that participate in the
distribution thereof, the Company will comply with all requirements under
the Exchange Act relating to the timely filing with the Commission of its
reports with the Commission of its reports pursuant to Section 13 of the
Exchange Act and of its proxy statements pursuant to Section 14 of the
Exchange Act.
6. Representations and Warranties of the Company: The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statement has become effective under the Act;
a true and correct copy of the Registration Statement in the form in which
it became effective has been delivered to each of the Representatives and
to the Representatives for each of the Underwriters (except that copies
delivered for the Underwriters excluded exhibits to such Registration
Statement); any filing of the Prospectus and any supplements thereto
required pursuant to Rule 424(b) has been or will be made in the manner
required by Rule
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<PAGE> 8
424(b) and within the time period required by Section 3(j) hereof; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purposes are pending before or, to the
knowledge of the Company, threatened by the Commission. On the initial
effective date of the Registration Statement, the Registration Statement
and the Basic Prospectus complied, or were deemed to have complied, on the
effective date of the Rule 462(b) Registration Statement, the Rule 462(b)
Registration Statement will comply, and on its respective issue date, each
preliminary prospectus filed pursuant to Rule 424(b) complied, and the
Basic Prospectus complied, and on its issue date, the Prospectus will
comply, or will be deemed to comply, in all material respects with the
applicable provisions of the Act and the related rules and regulations of
the Commission, none of the Registration Statement on its effective date,
the Basic Prospectus or its issue date, or any other preliminary
prospectus, on its issue date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, as of its issue date and, as amended or supplemented, if
applicable, as of the Time of Purchase, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that the Company makes no warranty or
representation to any Underwriter with respect to any statements or
omissions made therein in reliance upon and in conformity with information
furnished in writing to the Company by, or through the Representatives on
behalf of, any Underwriter expressly for use therein.
(b) The documents incorporated by reference in the Registration
Statement, any preliminary prospectus, the Basic Prospectus, when they were
filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed) with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and any further
documents so filed and incorporated by reference will, when they are filed
with the Commission, conform in all material respects to the requirements
of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder; none of such documents, when it was filed (or, if
an amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are
made, not misleading.
(c) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Michigan and
has all requisite authority to own or lease its properties and conduct its
business as described in the
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<PAGE> 9
Prospectus and to consummate the transactions contemplated hereby, and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its Subsidiaries taken as a whole. Each significant subsidiary (as
defined in Rule 405 under the Act, and hereinafter called a "Significant
Subsidiary") of the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has all requisite authority to own or lease its properties
and conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Subsidiaries, taken
as a whole.
(d) The shares of Common Stock of the Company outstanding prior to
the issuance of the Securities have been duly authorized and are validly
issued, full paid and non-assessable.
(e) The Securities have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Securities
will not be subject to any preemptive or similar rights.
(f) The capital stock of the Company conforms in all material respects
to the description thereof in the Prospectus.
(g) Except for the outstanding shares of preferred stock of Consumers
Energy Company, the 8.36% Trust Originated Preferred Securities of
Consumers Power Company Financing I, the 8.20% Trust Originated Preferred
Securities of Consumers Energy Financing II, all of the outstanding capital
stock of each of Consumers Energy Company and CMS Enterprises Company is
owned directly or indirectly by the Company, free and clear of any security
interest, claim, lien, or other encumbrance or preemptive rights, and (ii)
there are no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
any of Consumers Energy Company and CMS Enterprises Company or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options.
(h) Each of the Company and its Significant Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has
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<PAGE> 10
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file would
not have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
(i) No order, license, consent, authorization or approval of, or
exemption by, or the giving of notice to, or the registration with any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, and no filing, recording,
publication or registration in any public office or any other place, was or
is now required to be obtained by the Company to authorize its execution or
delivery of, or the performance of its obligations under, this Agreement or
the Securities, except such as have been obtained or may be required under
state securities or Blue Sky laws or as referred to in the Basic
Prospectus.
(j) Neither the execution or delivery by the Company of, nor the
performance by the Company of its obligations under, this Agreement did or
will conflict with, result in a breach of any terms or provisions of, or
constitute a default or require the consent of any party under the
Company's Articles of Incorporation or by-laws, any material agreement or
instrument to which it is a party, any existing applicable law, rule or
regulation or any judgment, order or decree of any government, governmental
instrumentality or court, domestic of foreign, having jurisdiction over the
Company or any of its properties or assets, or did or will result in the
creation or imposition of any lien on the Company's properties or assets.
(k) Except as disclosed in the Basic Prospectus, there is no action,
suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened against
the Company or any Subsidiary by any governmental authority that (i)
questions the validity, enforceability or performance of this Agreement or
the Securities or (ii) if determined adversely, is likely to have a
material adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or material adversely
affect the ability of the Company to perform its obligations hereunder or
the consummation of the transactions contemplated by this Agreement.
(l) There has not been any material and adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement (other than changes referred to in or contemplated by the
Registration Statement or the Basic Prospectus).
(m) Except as set forth in the Basic Prospectus, no event or condition
exists that constitutes, or with the giving of notice or lapse of time or
both would constitute, a default or any breach or failure to perform by the
Company or any of its Significant
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<PAGE> 11
Subsidiaries in any material respect under any indenture, mortgage, loan
agreement, lease or other material agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which it or
any of its Significant Subsidiaries, or any of their respective properties,
may be bound.
7. Representation and Warranties of Underwriters: Each Underwriter
warrants and represents that the information, if any, furnished in writing to
the Company through the Representatives expressly for use in the Registration
Statement and Prospectus is correct in all material respects to such
Underwriter. Each Underwriter, in addition to other information furnished to the
Company for use in the Registration Statement and Prospectus, herewith furnishes
to the Company for use in the Registration Statement and Prospectus, the
information stated herein with regard to the public offering, if any, by such
Underwriter and represents and warrants that such information is correct in all
material respects as to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each of the Underwriters and each person, if
any, who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject under the Act or otherwise, and to reimburse the
Underwriters and such controlling person or persons, if any, for any legal
or other expenses incurred by them in connection with defending any action,
suit or proceeding (including governmental investigations) as provided in
Section 8(c) hereof, insofar as such losses, claims, damages, liabilities
or actions, suits or proceedings (including governmental investigations)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus as of its issue date (if used prior to the date of
the Basic Prospectus), the Basic Prospectus (if used prior to the date of
the Prospectus), the Prospectus, or, if the Prospectus shall be amended or
supplemented, in the Prospectus as so amended or supplemented (if such
Prospectus or such Prospectus as amended or supplemented is used after the
period of time referred to in Section 5(e) hereof, it shall contain or be
used with such amendments or supplements as the Company deems necessary to
comply with Section 10(a) of the Act), or arise out of or are based upon
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in such
preliminary Prospectus, Basic Prospectus, Registration Statement or
Prospectus, or in the Prospectus as so amended or supplemented, in reliance
upon and in conformity with information furnished in writing to the Company
by, or through the Representatives on behalf of, any Underwriter expressly
for use therein, and except that this indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of
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<PAGE> 12
any losses, claims, damages, liabilities or actions, suits or proceedings
arising from the sale of the Securities to any person if a copy of the
Prospectus, as the same may then be supplemented or amended (excluding,
however, any document then incorporated or deemed incorporated therein by
reference), was not sent or given by or on behalf of such Underwriter to
such person (i) with or prior to the written confirmation of sale involved
or (ii) as soon as available after such written confirmation, relating to
an event occurring prior to the payment for and delivery to such person of
the Securities involved in such sale, and the omission or alleged omission
or untrue statement or alleged untrue statement was corrected in the
Prospectus as supplemented or amended at such time.
The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in
this Agreement, shall remain in full force and effect regardless of any
investigation made by or on behalf of any person, and shall survive the
delivery of and payment for the Securities hereunder, and the indemnity
agreement contained in this Section 8 shall survive any termination of this
Agreement. The liabilities of the Company in this Section 8(a) are in
addition to any other liabilities of the Company under this Agreement or
otherwise.
(b) Each underwriter agrees, severally and not jointly, to the
extent permitted by law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as shall have signed the
Registration Statement, each other Underwriter and each person, if any, who
controls the Company or any such other Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
and upon the same terms as the indemnity agreement of the Company set forth
in Section 8(a) hereof, but only with respect to alleged untrue statements
or omissions made in the Registration Statement, the Basic Prospectus or in
the Prospectus, as amended or supplemented, (if applicable) in reliance
upon and in conformity with information furnished in writing to the Company
by such Underwriter expressly for use therein.
The indemnity agreement on the part of each Underwriter contained in
this Section 8(b) and the representations and warranties of such Underwriter
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any other person, and
shall survive the delivery of and payment for the Securities hereunder, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement. The liabilities of each Underwriter in Section 8(b) are in
addition to any other liabilities of such Underwriter under this Agreement or
otherwise.
(c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person
as to which indemnity may be sought under Section 8(a) or 8(b), such person
(the "Indemnified Person") shall notify the person against whom such
indemnity may be sought (the "Indemnifying Person") promptly after any
assertion of such claim threatening to institute an action, suit or
proceeding or if such an action, suit or proceeding is commenced against
such
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Indemnified Person, promptly after such Indemnified Person shall have been
served with a summons or other first legal process, giving information as
to the nature and basis of the claim. Failure to so notify the Indemnifying
Person shall not, however, relieve the Indemnifying Person from any
liability which it may have on account of the indemnity under Section 8(a)
or 8(b) if the Indemnifying Person has not been prejudiced in any material
respect by such failure. Subject to the immediately succeeding sentence,
the Indemnifying Person shall assume the defense of any such litigation or
proceeding, including the employment of counsel and the payment of all
expenses, with such counsel being designated, subject to the immediately
succeeding sentence, in writing by the Representatives in the case of
parties indemnified pursuant to Section 8(b) and by the Company in the case
of parties indemnified pursuant to Section 8(a). Any Indemnified Person
shall have the right to participate in such litigation or proceeding and to
retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person and
(y) the Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and expenses of
counsel (including disbursements) for such Indemnified Person shall be
reimbursed by the Indemnifying Person to the Indemnified Person. If there
is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing
separate counsel whose fees and expenses have been reimbursed by the
Indemnifying Person and the Indemnified Persons, or any of them, are found
to be solely liable, such Indemnified Persons shall repay to the
Indemnifying Person such fees and expenses of such separate counsel as the
Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same jurisdiction as
to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses of more than one separate firm (together with not
more than one appropriate local counsel) for all such Indemnified Persons.
Subject to the next paragraph, all such fees and expenses shall be
reimbursed by payment to the Indemnified Persons of such reasonable fees
and expenses of counsel promptly after payment thereof by the Indemnified
Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel of the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's obligations
to pay such fees and expenses shall be conditioned upon the following:
(1) in case separate counsel is proposed to be retained by the
Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified
13
<PAGE> 14
Persons shall in good faith fully consult with the Indemnifying Person
in advance as to the selection of such counsel; and
(2) reimbursable fees and expenses of such separate counsel
shall be detailed and supported in a manner reasonably acceptable to
the Indemnifying Person (but nothing herein shall be deemed to require
the furnishing to the Indemnifying Person of any information,
including without limitation, computer print-outs of lawyers' daily
time entries, to the extent that, in the judgment of such counsel,
furnishing such information might reasonably be expected to result in
a waiver of any attorney-client privilege); and
(3) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate counsel
for Indemnified Persons for which the Indemnifying Person is liable
hereunder, and the Indemnified Person shall use every reasonable
effort to cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the Indemnifying
Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in Section 8 above
is unavailable to or insufficient to hold harmless an Indemnified Person under
such Section in respect of any losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in respect
thereof) referred to therein, then each Indemnifying Person under Section 8
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Person on the one hand and the Indemnified Person
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
14
<PAGE> 15
losses, claims, damages or liabilities (or action, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and commission received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 9. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental proceedings) in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action, suits or proceedings
(including governmental proceedings) or claim, provided that the provisions of
Section 8 have been complied with (in all material respects) in respect of any
separate counsel for such Indemnified Person. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any amount
greater than the excess of (i) the total price at which the Securities
underwritten by it and distributed to the public were offered to the public over
(ii) the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 9 to contribute are several in
proportion to their respective underwriting obligations and not joint.
The agreement with respect to contribution contained in Section 9
hereof shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any Underwriter, and shall survive
delivery of and payment for the Securities hereunder and any termination of this
Agreement.
10. Substitution of Underwriters: If any Underwriter under this agreement
shall fail or refuse (otherwise than for some reason sufficient to justify in
accordance with the terms hereof, the termination of its obligations hereunder)
to purchase the Securities which it had agreed to purchase on the Time of
Purchase, the Representatives shall immediately notify the Company and the
Representatives and the other Underwriters may, within 36 hours of the giving of
such notice, determine to purchase, or to procure one or more other members of
the National Association of Securities Dealers, Inc. ("NASD") (or, if not
members of the NASD, who are
15
<PAGE> 16
foreign banks, dealers or institutions not registered under the Securities
Exchange Act and who agree in making sales to comply with the NASD's Rules of
Fair Practice), satisfactory to the Company, to purchase, upon the terms herein
set forth, the number of shares of Securities which the defaulting Underwriter
had agreed to purchase. If any non-defaulting Underwriter or Underwriters shall
determine to exercise such right, the Representatives shall give written notice
to the Company of such determination within 36 hours after the Company shall
have received notice of any such default, and thereupon the Time of Purchase
shall be postponed for such period, not exceeding three business days, as the
Company shall determine. If in the event of such a default, the Representatives
shall fail to give such notice, or shall within such 36-hour period give written
notice to the Company that no other Underwriter or Underwriters, or others, will
exercise such right, then this Agreement may be terminated by the Company, upon
like notice given to the Representatives within a further period of 36 hours. If
in such case the Company shall not elect to terminate this Agreement, it shall
have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase and
pay for the respective number of shares which they had severally agreed to
purchase hereunder, as hereinabove provided, and, in addition, the number
of shares of Securities which the defaulting Underwriter shall have so
failed to purchase up to a number of shares thereof equal to one-ninth
(1/9) of the respective number of shares of Securities which such
non-defaulting Underwriters have otherwise agreed to purchase hereunder;
and/or
(b) to procure one or more other members of the NASD (or, if not
members of the NASD, who are foreign banks, dealers or institutions not
registered under the Exchange Act and who agree in making sales to comply
with the NASD's Rules of Fair Practice), to purchase, upon the terms herein
set forth, the number of shares of Securities which such defaulting
Underwriter had agreed to purchase, or that portion thereof which the
remaining Underwriters shall not be obligated to purchase pursuant to the
foregoing clause (a).
In the event the Company shall exercise its rights under clause (a)
and/or (b) above, the Company shall give written notice thereof to the
Representatives within such further period of 36 hours, and thereupon the Time
of Purchase shall be postponed for such period, not exceeding five business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Agreement.
Any action taken by the Company under this Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement. Termination by the Company under this
Section 10 shall be without any liability on the part of the Company or any
non-defaulting Underwriting.
16
<PAGE> 17
In the computation of any period of 36 hours referred to in this
Section 10, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday which would otherwise be included in such
period of time.
11. Termination of Agreement: This Agreement may be terminated at any time
prior to the Time of Purchase by the Representatives, if, prior to such time (i)
trading generally in securities on the New York Stock Exchange shall have been
suspended by the Commission or the New York Stock Exchange, (ii) trading of any
securities of the Company shall have been suspended on any exchange or
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by federal or New York State
authorities or (iv) there shall have occurred any outbreak or material
escalation of hostilities or any material adverse disruption in financial
markets or any other calamity or crisis, the effect of which on the financial
markets of the United States is such as to impair, in the Representatives'
reasonable judgment, after having made due inquiry, the marketability of the
Securities.
If the Representatives elect to terminate this Agreement, as provided
in this Section 11, the Representatives will promptly notify the Company and
each other Underwriter by telephone or telecopy, confirmed by letter. If this
Agreement shall not be carried out by any Underwriter for any reason permitted
hereunder, or if the sale of the Securities to the Underwriters as herein
contemplated shall not be carried out because the Company is not able to comply
with the terms hereof, the Company shall not be under any obligation under this
Agreement and shall not be liable to any Underwriter or to any member of any
selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement and the Underwriters shall be under no liability
to the Company nor be under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5(g), 5(i),
8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following addresses
or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and if the to the Company, to CMS
Energy Corporation, Attention: Senior Vice President and Chief Financial
Officer, Fairlane Plaza South, Suite 1100, 330 Town Center Drive, Dearborn,
Michigan 48126 (Telecopy: 313-436-9548).
13. Parties in Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company (including the
directors thereof and such of the officers thereof as shall have signed the
Registration Statement), and the controlling persons, if any, referred to in
Section 8 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 10
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
17
<PAGE> 18
14. Definition of Certain Terms: The term "Underwriters," as used
herein, shall be deemed to mean the several persons, firms or corporations named
in Schedule II hereto (including the Representatives herein mentioned, if so
named), and the term "Representatives," as used herein, shall be deemed to mean
the representative or representatives designated by, or in the manner authorized
by, the Underwriters in Schedule I hereto. All obligations of the corporation
named in Schedule I and Schedule II hereto, the term "Underwriters" and the term
"Representatives," as used herein, shall mean such person, firm or corporation.
If the firm or firms listed in Schedule I hereto are the same as the firm or
firms listed in Schedule II hereto, then the terms "Underwriters" and
"Representatives," as used herein, shall each be deemed to refer to such firm or
firms. The term "successors" as used in this Agreement shall not include any
purchaser, as such purchaser, of any of the Securities from any of the
respective Underwriters.
15. Governing Law: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
18
<PAGE> 19
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Underwriters and the Company.
Very truly yours,
CMS ENERGY CORPORATION
By:__________________________________________
Accepted as of: _____________ ___, 199_
By:_____________________________
Name:
Title:
19
<PAGE> 20
Schedule I
__________________________
Attn:
20
<PAGE> 21
Schedule II
Number of Firm Shares
Underwriter to be Purchased
- ----------- ---------------------
___________________................................... ______________
Total............................. ______________
21
<PAGE> 1
Exhibit 5
[CMS ENERGY LETTERHEAD]
MICHAEL D. VAN HEMERT, ESQ.
ASSISTANT GENERAL COUNSEL
December 14, 1998
CMS Energy Corporation
Fairlane Plaza South
330 Town Center Drive, Suite 1100
Dearborn, MI 48126
Ladies and 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 $400,000,000 aggregate principal amount of
unsecured senior or subordinated 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 the 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 the corporate power and authority to sell the
Senior Debt Securities pursuant to the Indenture dated
September 15, 1992, as supplemented,
<PAGE> 2
2
between the Company and NBD Bank, as trustee (the "Senior Debt
Indenture) and the Subordinated Debt Securities pursuant to the
Indenture dated June 1, 1997, as supplemented, between the Company
and The Bank of New York, as trustee (the "Subordinated Debt
Indenture")(the Senior Debt Indenture and Subordinated 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 Prospectus 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 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.
<PAGE> 3
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> 1
EXHIBIT 12
CMS ENERGY CORPORATION
Ratio of Earnings to Fixed Charges
(Millions of Dollars)
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31
September 30, 1998 1997 1996 1995 1994 1993
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
(b)
Earnings as defined (a)
Consolidated net income $ 191 $ 244 $ 224 $ 195 $ 177 $ 130
Income taxes 86 108 137 113 91 62
Exclude equity basis subsidiaries (75) (80) (85) (57) (18) (6)
Fixed charges as defined, adjusted to
exclude capitalized interest of $17, $13,
$5, $4, $2, and $5 million for the three
months ended March 31, 1998 and for the
years ended December 31, 1997, 1996,
1995, 1994 and 1993, respectively 255 316 278 271 230 236
-------------------------------------------------------------
Earnings as defined $ 457 $ 588 $ 554 $ 522 $ 480 $ 422
=============================================================
Fixed charges as defined (a)
Interest on long-term debt $ 234 $ 273 $ 230 $ 224 $ 193 $ 204
Estimated interest portion of lease rental 5 8 10 9 9 12
Other interest charges 33 49 43 42 30 25
-------------------------------------------------------------
Fixed charges as defined $ 272 $ 330 $ 283 $ 275 $ 232 $ 241
=============================================================
Ratio of earnings to fixed charges 1.68 1.78 1.96 1.90 2.07 1.75
=============================================================
</TABLE>
NOTES:
(a) Earnings and fixed charges as defined in instructions for Item 503 of
Regulation S-K.
(b) Excludes a cumulative effect of change in accounting after-tax gain of $43
million.
<PAGE> 1
Exhibit (15a)
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 quarter ended March 31,
1998, which includes our report dated May 11, 1998, covering the unaudited
interim financial information contained therein. In June 1998, CMS Energy
Corporation changed its method of accounting for its investments in oil and gas
properties from the full cost method of accounting to the successful efforts
method of accounting. The interim financial information contained therein has
not been restated to reflect the change in accounting. However, CMS Energy
Corporation's Form 8-K dated July 30, 1998 contains certain restated financial
information for the quarter ended March 31, 1998 such information has not been
subject to audit or review procedures. Pursuant to this change in accounting,
our report contained therein has not been modified to reflect this change in
accounting. 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 report prepared or certified by our Firm within the meaning of
Sections 7 and 11 of the Act.
/s/ Arthur Andersen LLP
Detroit, Michigan,
December 9, 1998.
<PAGE> 1
Exhibit (15b)
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 quarter ended June 30, 1998
and its Form 10-Q for the quarter ended September 30, 1998, which includes our
reports dated August 11, 1998 and November 10, 1998, 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 report
prepared or certified by our Firm within the meaning of Sections 7 and 11 of the
Act.
/s/ Arthur Andersen LLP
Detroit, Michigan,
December 9, 1998.
<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 report dated
July 27, 1998 included or incorporated by reference in CMS Energy Corporation's
Form 8-K dated July 30, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Detroit, Michigan,
December 9, 1998.
<PAGE> 1
Exhibit 24
January 24, 1998
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 $400 million net aggregate principal amount of debt
securities of the Corporation (plus an additional 20% for the purpose of
covering underwriters' over-allotments, price adjustments, or sale of additional
securities) including but not limited to (i) unsecured senior or subordinated
debt securities, (ii) trust securities of one or more trusts, (iii) debt
securities issued solely in connection with the sale of the trust securities,
and (iv) the Corporation's guarantee of trust securities of one or more trusts.
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 J. Duderstadt /s/ Percy A. Pierre
- ------------------------------ --------------------------------
James J. Duderstadt Percy A. Pierre
/s/ K.R. Flaherty /s/ K. Whipple
- ------------------------------ --------------------------------
Kathleen R. Flaherty Kenneth Whipple
/s/ Victor J. Fryling /s/ John B. Yasinsky
- ------------------------------ --------------------------------
Victor J. Fryling John B. Yasinsky
<PAGE> 2
Proposed Issuance and Sale of Debt Securities
To have funds available for general corporate purposes, it was
recommended that the Corporation offer, from time to time, at private placement
or public sale, up to $400 million net aggregate principal amount of debt
securities of the Corporation (plus an additional 20% for the purpose of
covering underwriters' over-allotments, price adjustments, or sale of additional
securities), including but not limited to (i) unsecured senior or subordinated
debt securities, (ii) trust securities ("Trust Securities") of one or more
trusts (the Trust"), (iii) debt securities issued solely in connection with the
sale of the Trust Securities, and (iv) the Corporation's guarantee of Trust
Securities of the Trust. One or more Trusts would be formed by the Company. The
trust may offer Trust Securities representing interests in the Trust or Trust
assets. Any of the foregoing securities issued in a private placement may be
offered with registration rights. Management further recommended the appointment
of a Special Committee of the Board of Directors to take any and all action to
facilitate the proposed offering(s) and to assure that the securities are sold
for the best price and on the best terms obtainable in the judgment of a Special
Committee of the Board of Directors appointed for such purposes. The matter was
fully discussed.
Upon motion duly made and seconded, the following resolutions were
thereupon unanimously adopted:
RESOLVED: That the Board of Directors authorizes the issue
and sale, from time to time, at private placement or public sale, of
up to $400 million net aggregate principal amount of debt securities
of the Corporation (plus an additional 20% for the purpose of
covering under-writers' over-allotments, price adjustments, or sale
of additional securities), including but not limited to (i) unsecured
senior or subordinated debt securities, (ii) Trust Securities of the
Trust, (iii) debt securities issued solely in connection with the
sale of the Trust Securities and (iv) the Corporation's guarantee of
Trust Securities of the Trust (collec-tively, the "Securities") as
discussed at the meeting, each to be sold for the best price and on
the best terms obtainable in the judgment of a Special Committee of
the Board of Directors appointed for such purposes; and
RESOLVED FURTHER: That Victor J. Fryling with William T.
McCormick, Jr., as alternate, is appointed to a Special Committee of
this Board of Directors, which shall have the full authority to act
on behalf of the Board for the purposes stated in the foregoing
resolution with respect to (a) determining the offering price, any
underwriting discounts and the proceeds to the Corporation of the
proposed issue and sale of the Securities and (b) authorizing the
officers to take such further actions as they may deem advisable to
carry out the issue and sale of such Securities; and
RESOLVED FURTHER: That Messrs. Alan M. Wright and Thomas A.
McNish (or successors, appointed in writing, by the Chairman of the
Board, Vice Chairman of the Board or the President of the Corporation,
and filed in the Corporate Secretary's office) are appointed to serve,
at the Corporation's request, and are authorized and empowered, for and
on behalf of the Corporation, to act as the Corporation's trustees in
accordance with the trust agreement, and any amendments thereto, of the
Trust; and
RESOLVED FURTHER: That the officers of the Corporation, and
<PAGE> 3
each of them, are authorized and empowered, for and on behalf of the
Corporation, to establish one or more trusts, for the purpose of
issuing and selling Trust Securities; and
RESOLVED FURTHER: That the above-designated Corporation
trustees, and each of them, are authorized and empowered, to execute
and deliver all documents, papers, applications, agreements and
instruments, including but not limited to, a declaration of trust, and
any amendments thereto, and to do all acts and things they deem
necessary or appropriate and as counsel may advise to carry out the
intent and purpose of the foregoing resolutions; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and empowered to prepare, execute, and
file, or cause to be prepared and filed, one or more Registration
Statement with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, ("Registration Statement") together
with all documents required as exhibits to such Registration Statement,
with respect to the issue and sale of the Securities, such registration
to be in such form as may be approved by the officers executing the
same, and to do all other things necessary to make such registration
effective, including the execution and filing of any necessary or
appropriate amendments, including post-effective amendments; and
RESOLVED FURTHER: That any Securities issued in a private
placement may be offered with registration rights permitting the
Corporation to (i) file a Registration Statement, for the resale of
such Securities, or (ii) exchange, in a registered exchange offer
pursuant to a Registration Statement, such Securities for substantially
similar securities; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, to appoint an institutional trustee, and any agent or
trustees necessary or appropriate in connection with the issuance and
sale of the Securities; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and directed to determine the
jurisdictions in which appropriate action shall be taken to qualify or
register for sale all or such part of the Securities of the Corporation
as they may deem advisable; to perform on behalf of the Corporation any
and all such acts as they may deem advisable; to perform on behalf of
the Corporation any and all such acts as they may deem necessary or
advisable in order to comply with the applicable laws of any such
jurisdictions, and in connection therewith, to execute and file all
requisite papers and documents, including but not limited to,
applications, reports, surety bonds, irrevocable consents and
appointments of attorneys for service of process; and the execution by
such officers or any of them of any such paper or document or the doing
by them of any act in connection with the foregoing matters shall
conclusively establish their authority therefor from the Corporation;
and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and empowered to cause the Corporation to
make application to the New York Stock Exchange, or on such other
exchange as the officers may decide, for the listing on such Exchange,
upon notice of issuance of the
<PAGE> 4
Securities, and to represent the Corporation in connection with
any application or applications for listing and to appear on behalf of
the Corporation before such official or body of said Exchange as may be
appropriate, with authority to make such changes, upon the advice of
counsel, in said application(s) or in any agreements or other papers
relating thereto as may be necessary or appropriate to conform with the
requirements for listing; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and empowered to execute and deliver on
behalf of the Corporation (i) an indenture or indentures, including
one or more supplements to any indenture, in the form approved or
authorized by the Special Committee under the corporate seal to be
thereto affixed and attested, with the trustee or trustees appointed,
such indenture or indentures, supplement or supplements and (ii)
Corporation guarantee or guarantees relating to the Trust Securities,
each to be in such form and content and bear such date as may be
approved by the officer of the Corporation executing the same, such
approval to be conclusively evidenced by the execution of said
indenture or indentures, or supplement or supplements, guarantee or
guarantees; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and empowered to execute one or more
underwriting agreements, purchase agreements, or any other type of
agreements between the Corporation and the underwriter or
representatives of the underwriters (or any agents) or an other
purchaser appointed or named in such agreement or agreements, as they
may deem appropriate for the proposed sale of the Securities; and
RESOLVED FURTHER: That the officers of the Corporation, and
each of them, are authorized and empowered to do and to perform, or
cause to be done and performed, all such acts, deeds, and things and to
make, execute, and deliver, or cause to be made, executed, and
delivered, all such agreements, undertakings, documents, instruments,
or certificates in the name and on the behalf of the Corporation or
otherwise as each such officer may deem necessary or appropriate to
effectuate or carry out fully the purpose and intent of the foregoing
resolutions, including the performance of the obligations of the
Corporation under purchase agreements, underwriting agreements and
sales agreements, indentures, registration rights agreements, or other
similar agreements, certificates or declarations, the Securities, any
Registration Statement or any other agreements related to the issuance
and sale of the Securities.
<PAGE> 1
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
-----------------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED,
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A
TRUSTEE PURSUANT TO SECTION 305(b)(2)
--------------------------------------------
NBD BANK
(Exact name of Trustee as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226 38-0864715
(Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.)
</TABLE>
NBD BANK
611 WOODWARD AVENUE
DETROIT, MICHIGAN 48226
CORPORATE TRUST ADMINISTRATION
ATTN: ERNEST J. PECK, VICE PRESIDENT
TELEPHONE: (313) 225-2025
(Name, Address and Telephone number of agent for service)
CMS ENERGY CORORATION
(Exact name of obligor as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
MICHIGAN 38-2726431
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
FAIRLANE PLAZA SOUTH, SUITE 1100
330 TOWN CENTER DRIVE
DEARBORN, MICHIGAN 48126
(Address of principal executive offices) (Zip Code)
</TABLE>
SENIOR DEBT SECURITIES
(Title of Indenture Securities)
1
<PAGE> 2
ITEM 1 GENERAL INFORMATION. Furnish the following information as to the
Trustee:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT:
State of Michigan Financial Institutions Bureau,
Lansing, MI Federal Reserve Bank of Chicago,
Chicago, Illinois Federal Deposit Insurance
Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE
TRUST POWERS. The Trustee is authorized to
exercise corporate trust powers.
ITEM 2 AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE,
DESCRIBE EACH SUCH AFFILIATION. The obligor is not an
affiliate of the Trustee.
ITEM 3 VOTING SECURITIES OF THE TRUSTEE.
The following information is furnished as to each class of
voting securities of the Trustee:
<TABLE>
<CAPTION>
As of December 9, 1998
-------------------------------------------------------------------------------------
<S> <C>
Column A Column B
-------------------------------------------------------------------------------------
Title of Class Amount Outstanding
-------------------------------------------------------------------------------------
Common Stock, par value $12.50 per share 8,948,648 shares
</TABLE>
ITEM 4 TRUSTEESHIPS UNDER OTHER INDENTURES
None.
ITEM 5 THROUGH ITEM 15 Not applicable
ITEM 16 LIST OF EXHIBITS:
EXHIBIT (1) A COPY OF THE ARTICLES OF INCORPORATION OF THE
TRUSTEE NOW IN EFFECT
Incorporated by reference to Exhibit (1) to Item 16 of
Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration No.
33-51775.*
EXHIBIT (2) CERTIFICATE OF AUTHORITY OF THE TRUSTEE
TO COMMENCE BUSINESS
Incorporated by reference to Exhibit (2) to Item 16 of
Form T-1 filed with Amendment No. 1, Securities and Exchange
Commission, Registration No. 22-4501.*
EXHIBIT (3) AUTHORIZATION OF THE TRUSTEE TO EXERCISE
CORPORATE TRUST POWERS
Incorporated by reference to Exhibit (3) to Item 16
of Form T-1 filed with Amendment No. 1, Securities and
Exchange Commission,
2
<PAGE> 3
Registration No. 22-4501.*
EXHIBIT (4) BY-LAWS OF THE TRUSTEE, AS PRESENTLY IN EFFECT
Incorporated by reference to Exhibit (4) to Item 16 of
Form T-1 filed as Exhibit 25 to Registration Statement,
Securities and Exchange Commission, Registration No.
33-51775.*
EXHIBIT (5) Not Applicable.
EXHIBIT (6) CONSENT BY THE TRUSTEE REQUIRED BY SECTION 321
(B) OF THE ACT.
Incorporated by reference to Exhibit (6) to Item 16 of
Form T-1, filed with Amendment No. 1, Securities and
Exchange Commission, Registration No. 22-4501.*
EXHIBIT (7) A COPY OF THE LATEST REPORT OF CONDITION
OF THE TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS
OF ITS SUPERVISING OR EXAMINING AUTHORITY.
EXHIBIT (8) Not applicable.
EXHIBIT (9) Not applicable.
* Exhibits thus designated are incorporated herein by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 filed by the Trustee with
the Securities and Exchange Commission with the specific references noted.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, NBD Bank, a Michigan banking corporation organized and existing under
the laws of the State of Michigan, has duly caused this Statement of Eligibility
and Qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Detroit, State of Michigan on the 9th day of
December, 1998.
NBD BANK, Trustee
By: /s/ Ernest J. Peck
---------------------------
Ernest J. Peck
Vice President
3
<PAGE> 4
Charter No. 13671 Comptroller of the Currency District
REPORT OF CONDITION CONSOLIDATING
DOMESTIC AND FOREIGN SUBSIDIARIES OF THE
NBD BANK
in the State of Michigan, at the close of business on September 30, 1998
published in response to call made by Comptroller of the Currency, under title
12, United States Code, Section 161.
ASSETS
<TABLE>
<CAPTION>
Thousands
of dollars
Cash and balances due from depository institutions
Noninterest-bearing balances and currency
<S> <C>
and coin......................................................... 1,466,575
Interest-bearing balances........................................ 2,095
Securities:
Held-to-maturity securities...................................... 0
Available-for-sale securities.................................... 1,721,741
Federal funds sold and securities purchased
under agreements to resell....................................... 73,400
Loans and lease financing receivables:
Loans and leases, net of unearned income ........................ 16,759,920
LESS: Allowance for loan and lease losses ....................... 282,626
Less: Allocated Transfer Risk Reserve ........................... 0
Loans and leases of unearned income, allowance,
and reserve ..................................................... 16,477,294
Trading Assets ...................................................... 145,349
Premises and fixed assets (including
capitalized leases).............................................. 341,644
Other real estate owned.............................................. 5,089
Investments in unconsolidated subsidiaries and
associated companies............................................. 0
Customers' liability to this bank on acceptances
outstanding...................................................... 8,885
Intangible assets.................................................... 115,504
Other assets......................................................... 720,315
----------
Total assets......................................................... 21,077,891
==========
</TABLE>
<PAGE> 5
LIABILITIES
<TABLE>
<CAPTION>
<S> <C>
Deposits:
In domestic offices............................................. 16,631,970
Noninterest-bearing............................. 4,438,275
Interest-bearing................................ 12,193,695
In foreign offices, Edge and Agreement
subsidiaries, and IBFs.......................................... 125,364
Noninterest-bearing............................. 0
Interest-bearing................................ 125,364
Federal funds purchased and securities sold
under agreements to repurchase.................................. 750,204
Demand notes issued to the U.S. Treasury............................ 366,236
Trading liabilities................................................. 88,574
Other borrowed money:
With remaining maturity of one year or less................. 168,624
With remaining maturity of more than one year
through three years ....................................... 3,194
With remaining maturity of more than three years............ 3,214
Bank's liability on acceptances executed and
outstanding..................................................... 8,885
Notes and debentures subordinated to
deposits........................................................ 500,000
Other liabilities................................................... 525,946
----------
Total liabilities................................................... 19,172,211
----------
</TABLE>
EQUITY CAPITAL
<TABLE>
<CAPTION>
<S> <C>
Common stock........................................................ 111,858
Surplus............................................................. 686,244
Undivided profits and capital reserves.............................. 1,083,053
Net unrealized holding gains (losses) on available
for-sale Securities ........................................... 24,525
Cumulative foreign currency translation
adjustments..................................................... 0
Total equity capital................................................ 1,905,680
---------
Total liabilities and equity capital................................ 21,077,891
==========
</TABLE>
I, Jason N. Hansen, Vice President of the named bank do hereby
declare that the Reports of Condition and income (including the
supporting schedules) for this report date have been prepared in
conformance with the instructions issued by the appropriate
Federal regulatory authority and are true to the best of my
knowledge and belief.
JASON N. HANSEN
October 29, 1998
We, the undersigned directors (trustees), attest to the
correctness of the Report of Condition (including the supporting
schedules) for this report date and declare that it has been
examined by us and to the best of our knowledge and belief has
been prepared in conformance with the instructions issued by the
appropriate Federal regulatory authority and is true and correct.
DANIEL T. LIS
WALTER C. WATKINS
VERNE G ISTOCK
Directors/(Trustees)
<PAGE> 1
Exhibit 25(b)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [__]
------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
------------
CMS ENERGY CORPORATION
(Exact name of obligor as specified in its charter)
Michigan 38-2726431
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Fairlane Plaza South, Suite 1100
330 Town Center Drive
Dearborn, Michigan 48126
(Address of principal executive offices) (Zip code)
----------------------
Subordinated Debentures
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 9th day of December, 1998.
THE BANK OF NEW YORK
By: /s/THOMAS C. KNIGHT
-----------------------------------
Name: THOMAS C. KNIGHT
Title: ASSISTANT VICE PRESIDENT
<PAGE> 4
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $7,301,241
Interest-bearing balances........................... 1,385,944
Securities:
Held-to-maturity securities......................... 1,000,737
Available-for-sale securities....................... 4,240,655
Federal funds sold and Securities purchased under
agreements to resell................................ 971,453
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................................38,788.269
LESS: Allowance for loan and
lease losses............................ 632,875
LESS: Allocated transfer risk
reserve................................. 0
Loans and leases, net of unearned income,
allowance, and reserve............................ 38,155,394
Assets held in trading accounts........................ 1,307,562
Premises and fixed assets (including capitalized
leases)............................................. 670,445
Other real estate owned................................ 13,598
Investments in unconsolidated subsidiaries and
associated companies................................ 215,024
Customers' liability to this bank on acceptances
outstanding......................................... 974,237
Intangible assets...................................... 1,102,625
Other assets........................................... 1,944,777
-----------
Total assets........................................... $59,283,692
===========
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
LIABILITIES
Deposits:
In domestic offices................................. $26,930,258
Noninterest-bearing.......................11,579.390
Interest-bearing..........................15,350,868
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 16,117,854
Noninterest-bearing....................... 187,464
Interest-bearing..........................15,930,390
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,170,238
Demand notes issued to the U.S. Treasury............... 300,000
Trading liabilities.................................... 1,310,867
Other borrowed money:
With remaining maturity of one year or less......... 2,549,479
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 46,654
Bank's liability on acceptances executed and
outstanding......................................... 983,398
Subordinated notes and debentures...................... 1,314,000
Other liabilities...................................... 2,295,520
----------
Total liabilities...................................... 54,018,268
==========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 731,319
Undivided profits and capital reserves................. 3,385,227
Net unrealized holding gains (losses) on
available-for-sale securities....................... 51,233
Cumulative foreign currency translation adjustments.... ( 37,639)
------------
Total equity capital................................... 5,265,424
-----------
Total liabilities and equity capital................... $59,283,692
===========
</TABLE>
<PAGE> 6
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot
Thomas A. Renyi
Alan R. Griffith Directors
- --------------------------------------------------------------------------------
-3-
