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EXHIBIT 4.4
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SECOND SUPPLEMENTAL INDENTURE
between
CONSUMERS ENERGY COMPANY
and
THE BANK OF NEW YORK
Dated as of ______________, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms . . . . . . . . . . . . . . . . . . . 1
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1. Designation and Principal Amount . . . . . . . . . . . . . 3
SECTION 2.2. Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.3. Form and Payment . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.4. Global Note . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.5. Interest . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III.
REDEMPTION OF THE NOTES
SECTION 3.1. Special Event Redemption . . . . . . . . . . . . . . . . . 5
SECTION 3.2. Optional Redemption by Issuer . . . . . . . . . . . . . . 5
SECTION 3.3. No Sinking Fund . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period . . . . . . . . . . . 6
SECTION 4.2. Notice of Extension . . . . . . . . . . . . . . . . . . . 6
ARTICLE V.
EXPENSES
SECTION 5.1. Payment of Expenses . . . . . . . . . . . . . . . . . . . 7
SECTION 5.2. Payment Upon Resignation or Removal . . . . . . . . . . . 7
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . 8
ARTICLE VII.
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange . . . . . . . . . . . . . . . . . . 8
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ARTICLE VIII.
FORM OF NOTES
SECTION 8.1. Form of Note . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IX.
ORIGINAL ISSUE OF NOTES
SECTION 9.1. Original Issue of Notes . . . . . . . . . . . . . . . . . 13
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Provisions of Indenture for the Sole Benefit of
Parties and Holders of Notes . . . . . . . . . . . . . . . 13
SECTION 10.2. Ratification of Indenture . . . . . . . . . . . . . . . . 13
SECTION 10.3. Trustee Not Responsible for Recitals . . . . . . . . . . . 13
SECTION 10.4. Governing Law . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 10.5. Separability . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 10.6. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 14
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SECOND SUPPLEMENTAL INDENTURE, dated as of______________, 1997, (the
"Second Supplemental Indenture"), between Consumers Energy Company, a Michigan
Corporation (the "Issuer"), and The Bank of New York, as trustee (the
"Trustee") under the Indenture dated as of January 1, 1996 between the Issuer
and the Trustee (the "Indenture").
WHEREAS, the Issuer executed and delivered the Indenture to the Trustee
to provide for the future issuance of the Issuer's Securities to be issued from
time to time in one or more series as might be determined by the Issuer under
the Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered as provided in the Indenture;
WHEREAS, Section 2.3 of the Indenture permits the terms of any series of
Securities to be established in an indenture supplemental to the Indenture;
WHEREAS, Section 8.1(e) of the Indenture provides that a supplemental
indenture may be entered into by the Issuer and the Trustee without the consent
of any Holders of the Securities to establish the form and terms of the
Securities of any series.
WHEREAS, pursuant to the terms of the Indenture, the Issuer desires to
provide for the establishment of a new series of its Securities to be known as
its ______% Subordinated Deferrable Interest Notes due 20____ (the "Notes"),
the form and substance of such Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this Second
Supplemental Indenture;
WHEREAS, Consumers Energy Company Financing II, a Delaware statutory
business trust (the "Trust"), has offered to the public $_____ million
aggregate liquidation amount of its_____% Trust Originated Preferred Securities
(the "Preferred Securities"), representing undivided beneficial interests in
the assets of the Trust and proposes to invest the proceeds from such offering,
together with the proceeds of the issuance and sale by the Trust to the Issuer
of $_______________ aggregate liquidation amount of its % Trust
Originated Common Securities, in $__________________ aggregate principal amount
of the Notes; and
WHEREAS, the Issuer has requested that the Trustee execute and deliver
this Second Supplemental Indenture and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Notes, when executed by the Issuer and authenticated and
delivered by the Trustee, the valid obligations of the Issuer, have been
performed, and the execution and delivery of this Second Supplemental Indenture
has been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of the
Notes by the Holders thereof, and for the purpose of setting forth, as provided
in the Indenture, the form and substance of the Notes and the terms, provisions
and conditions thereof, the Issuer covenants and agrees with the Trustee as
follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in
this Second Supplemental Indenture;
(b) a term defined anywhere in this Second Supplemental Indenture has
the same meaning throughout;
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(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article of
this Second Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the
Declaration: (i) Clearing Agency; (ii) Delaware Trustee; (iii) Redemption Tax
Opinion; (iv) No Recognition Opinion; (v) Preferred Security Certificate; (vi)
Property Trustee; (vii) Regular Trustees; (viii) Special Event; (ix) Tax Event;
(x) Underwriting Agreement; (xi) Investment Company Event; and (xii)
Distribution;
(g) the following terms have the meanings given to them in this Section
1.1(g):
"Additional Interest" shall have the meaning set forth in Section 2.5.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Declaration" means the Amended and Restated Declaration of Trust of
Consumers Energy Company Financing II, a Delaware statutory business trust,
dated as of _________________, 1997.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Declaration, and the Notes held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Declaration.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Global Note" shall have the meaning set forth in Section 2.4.
"Non Book-Entry Preferred Securities" shall have the meaning set forth in
Section 2.4.
"Optional Redemption Price" shall have the meaning set forth in Section
3.2.
ARTICLE II.
GENERAL TERMS AND CONDITIONS OF THE NOTES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized and established a series of unsecured
Securities designated the " % Subordinated Deferrable Interest Notes
due 20__", limited in aggregate principal amount to $___________, (except as
contemplated in Section 2(f)(2) of the Indenture).
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SECTION 2.2. Maturity.
The Maturity Date of the notes is ______________________.
SECTION 2.3. Form and Payment.
The Notes shall be issued in fully registered form without interest
coupons. Principal and interest on the Notes issued in certificated form will
be payable, the transfer of such Notes will be registrable and such Notes will
be exchangeable for Notes bearing identical terms and provisions, at the office
or agency of the Trustee in the Borough of Manhattan, the City of New York;
provided, however, that payment of interest may be made at the option of the
Issuer by check mailed to the Holder at such address as shall appear in the
Security Register or by wire transfer to an account maintained by the Holder.
Notwithstanding the foregoing, so long as the Holder of any Notes is the
Property Trustee, the payment of the principal of and interest (including
Compounded Interest and Additional Interest, if any) on such Notes held by the
Property Trustee will be made at such place and to such account as may be
designated by the Property Trustee.
SECTION 2.4. Global Note.
(a) In connection with a Dissolution Event,
(i) the Notes may be presented to the Trustee by the Property
Trustee in exchange for a global Note in an aggregate principal amount
equal to the aggregate principal amount of all outstanding Notes (a
"Global Note"), to be registered in the name of the Clearing Agency, or
its nominee, and delivered by the Trustee to the Clearing Agency for
crediting to the accounts of its participants pursuant to the instructions
of the Regular Trustees and the Clearing Agency will act as Depository for
the Notes. The Issuer upon any such presentation, shall execute a Global
Note in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the Indenture
and this Second Supplemental Indenture. Payments on the Notes issued as a
Global Note will be made to the Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Notes may be presented to the Trustee by the
Property Trustee and any Preferred Security Certificate which represents
Preferred Securities other than Preferred Securities held by the Clearing
Agency or its nominee ("Non Book-Entry Preferred Securities") will be
deemed to represent beneficial interests in Notes presented to the Trustee
by the Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities
until such Preferred Security Certificates are presented to the Security
Registrar for transfer or reissuance at which time such Preferred Security
Certificates will be cancelled and a Note, registered in the name of the
holder of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation amount of
the Preferred Security Certificate cancelled, will be executed by the
Issuer and delivered to the Trustee for authentication and delivery in
accordance with the Indenture and this Second Supplemental Indenture.
(b) Except as provided in (c) below, a Global Note may be transferred,
in whole but not in part, only to another nominee of the Depositary, or to a
successor Depositary selected or approved by the Issuer or to a nominee of such
successor Depositary.
(c) If at any time the Depositary notifies the Issuer that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for such series shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Issuer within 90 days after the Issuer receives such notice or becomes aware of
such condition, as the case may be, the Issuer will execute, and, subject to
Section 2.8 of the Indenture, the
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Trustee, upon written notice from the Issuer, will authenticate and deliver the
Notes in definitive registered form, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Note in
exchange for such Global Note. In addition, the Issuer may at any time
determine that the Notes shall no longer be represented by a Global Note. In
such event the Issuer will execute, and subject to Section 2.8 of the
Indenture, the Trustee, upon receipt of an Officers' Certificate evidencing
such determination by the Issuer, will authenticate and deliver the Notes in
definitive registered form, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Note in exchange
for such Global Note. Upon the exchange of the Global Note for such Notes in
definitive registered form, in authorized denominations, the Global Note shall
be cancelled by the Trustee. Such Notes in definitive registered form issued
in exchange for the Global Note shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Notes to the Depositary for delivery to the Persons
in whose names such Notes are so registered.
SECTION 2.5. Interest.
(a) Each Note will bear interest at the rate of % per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest, at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date," commencing on __________________, ), to the Person in
whose name such Note or any predecessor Note is registered, at the close of
business on the regular record date for such interest installment, which, in
respect of any Notes of which the Property Trustee is the Holder or a Global
Note, shall be the close of business on the Business Day next preceding that
Interest Payment Date. Notwithstanding the foregoing sentence, if the
Preferred Securities are no longer in book-entry only form or, except if the
Notes are held by the Property Trustee, the Notes are not represented by a
Global Note, the regular record date for such interest installment shall be the
fifteenth day of the month in which the applicable Interest Payment Date
occurs.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than
a full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 90-day period. In the
event that any date on which interest is payable on the Notes is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(c) If, at any time while the Property Trustee is the Holder of any
Notes, the Trust or the Property Trustee is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in
any case, the Issuer will pay as additional interest ("Additional Interest") on
the Notes held by the Property Trustee, such additional amounts as shall be
required so that the net amounts received and retained by the Trust and the
Property Trustee after paying such taxes, duties, assessments or other
governmental charges will be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties, assessments or other
governmental charges been imposed.
ARTICLE III.
REDEMPTION OF THE NOTES
SECTION 3.1. Special Event Redemption.
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If (a) a Tax Event has occurred and is continuing and (i) the Issuer has
received a Redemption Tax Opinion, or (ii) The Regular Trustees shall have been
informed by tax counsel that a No Recognition Opinion cannot be delivered to
the Trust, or (b) an Investment Company Event has occurred and is continuing,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b) and Article
Eleven of the Indenture, the Issuer shall have the right upon not less than 30
days' nor more than 60 days' notice to the Holders of the Notes to redeem the
Notes, in whole or in part, for cash within 90 days' following the occurrence
of such Special Event (the "90 Day Period") at a redemption price equal to 100%
of the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Redemption Price"), provided that
if at the time there is available to the Issuer or the Trust the opportunity to
eliminate, within the 90 Day Period, the Special Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no
adverse effect on the Issuer, the Trust or the Holders of the Trust Securities
issued by the Trust, the Issuer shall pursue such Ministerial Action in lieu of
redemption, and, provided, further, that the Issuer shall have no right to
redeem the Notes while the Trust is pursuing any Ministerial Action pursuant to
its obligations under the Declaration. The Redemption Price shall be paid
prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Issuer determines, and the Issuer shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New
York time, on the date such Redemption Price is to be paid.
SECTION 3.2. Optional Redemption by Issuer.
(a) Subject to the provisions of Section 3.2(b) and to the provisions of
Article Eleven of the Indenture, the Issuer shall have the right to redeem the
Notes, in whole or in part, from time to time, on or after____________________,
at a redemption price equal to 100% of the principal amount to be redeemed
plus any accrued and unpaid interest thereon to the date of such redemption
(the "Optional Redemption Price"). Any redemption pursuant to this paragraph
will be made upon not less than 30 days' nor more than 60 days' notice to the
Holder of the Notes, at the Optional Redemption Price. If the Notes are only
partially redeemed pursuant to this Section 3.2, the Notes will be redeemed on
a pro rata basis provided that if at the time of redemption the Notes are
registered as a Global Note, the Depository shall determine, in accordance with
its procedures, the principal amount of such Notes held by each Holder of Notes
to be redeemed. The Optional Redemption Price shall be paid prior to 12:00
noon, New York time, on the date of such redemption or at such earlier time as
the Issuer determines and the Issuer shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price by 10:00 a.m., New York time,
on the date such Optional Redemption Price is to be paid.
(b) If a partial redemption of the Notes would result in the delisting
of the Preferred Securities from any national securities exchange or other
organization on which the Preferred Securities are then listed, the Issuer
shall not be permitted to effect such partial redemption and may only redeem
the Notes in whole.
SECTION 3.3. No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Issuer shall have the right, at any time and from time to time during
the term of the Notes, to defer payments of interest by extending the interest
payment period of such Notes for a period not exceeding 20 consecutive quarters
(the "Extended Interest Payment Period"), during which Extended Interest
Payment Period no interest shall be due and payable; provided that no Extended
Interest Payment Period may extend beyond the Maturity Date. To
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the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this Section 4.1, will bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Issuer
shall pay all interest accrued and unpaid on the Notes, including any
Additional Interest and Compounded Interest (together, "Deferred Interest")
that shall be payable to the Holders of the Notes in whose names the Notes are
registered in the Security Register on the First record date after the end of
the Extended Interest Payment Period. Prior to the termination of any Extended
Interest Payment Period, the Issuer may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the
Issuer may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an
Extended Interest Payment Period, except at the end thereof, but the Issuer may
prepay at any time all or any portion of the interest accrued during an
Extended Interest Payment Period.
The limitations set forth in Section 3.5 of the Indenture shall apply
during any Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder of the Notes
at the time the Issuer elects an Extended Interest Payment Period, the Issuer
shall give written notice to the Regular Trustees, the Property Trustee and the
Trustee of its election of such Extended Interest Payment Period one Business
Day before the earlier of (i) the next succeeding date on which Distributions
on the Trust Securities issued by the Trust are payable, or (ii) the date the
Trust is required to give notice of the record date, or the date such
Distributions are payable, to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities, but in
any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only Holder of the Notes at the
time the Issuer elects an Extended Interest Payment Period, the Issuer shall
give the Holders of the Notes and the Trustee written notice of its election of
such Extended Interest Payment Period ten Business Days before the earlier of
(i) the next succeeding Interest Payment Date, or (ii) the date the Issuer is
required to give notice of the record or payment date of such interest payment
to the New York Stock Exchange or other applicable self-regulatory organization
or to Holders of the Notes, but in any event at least 2 Business Days before
such record date.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 4.2 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under Section 4.1.
ARTICLE V.
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Notes to the
Property Trustee and in connection with the sale of the Trust Securities by the
Trust, the Issuer, in its capacity as borrower with respect to the Notes,
shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Notes, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and the Pricing Agreements, and
compensation of the Trustee under the Indenture in accordance with the
provisions of Section 6.6 of the Indenture;
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(b) pay all costs and expenses of the Trust (including, but not limited
to, costs and expenses relating to the organization of the Trust, the offering,
sale and issuance of the Trust Securities (including commissions to the
underwriters in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating to the
operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets);
(c) be primarily liable for any indemnification obligations arising with
respect to the Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal.
Upon termination of this Second Supplemental Indenture or the Indenture
or the removal or resignation of the Trustee pursuant to Section 6.10 of the
Indenture, the Issuer shall pay to the Trustee all amounts accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Property Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the Issuer shall pay to the Delaware Trustee or the Property
Trustee, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE VI.
SUBORDINATION
SECTION 6.1. Agreement to Subordinate.
The Issuer covenants and agrees, and each Holder of Notes issued
hereunder, by such Holder's acceptance thereof likewise covenants and agrees,
that pursuant to Section 2.3(f)(9) of the Indenture all Notes shall be issued
as Subordinated Securities subject to the provisions of Article Twelve of the
Indenture and this Article VI; and each Holder of a Note by its acceptance
thereof accepts and agrees to be bound by such provisions.
ARTICLE VII.
COVENANT TO LIST ON EXCHANGE
SECTION 7.1. Listing on an Exchange.
In connection with the distribution of the Notes to the holders of the
Preferred Securities upon a Dissolution Event, the Issuer will use its best
efforts to list such Notes on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed.
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ARTICLE VIII.
FORM OF NOTES
SECTION 8.1. Form of Note.
The Notes and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following forms and the Notes shall have
such additional terms as may be set forth in such form:
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTES, INSERT - This Note is a Global Note
within the meaning of the Indenture hereinafter referred to and is registered
in the name of a Depositary or a nominee of a Depositary. This Note is
exchangeable for Notes registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Note (other than a transfer of this Note as
a whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Note is presented by an authorized representative of The
Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
No.
$
CUSIP NO.
CONSUMERS ENERGY COMPANY
___% SUBORDINATED DEFERRABLE INTEREST NOTES
DUE____________
Consumers Energy Company, a Michigan corporation (the "Issuer", which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ______________, or
registered assigns, the principal sum of _____________ Dollars ($___________)
on _________, ____, and to pay interest on said principal sum from _____, 19__,
or from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on March 31, June 30,
September 30 and December 31 of each year commencing ___________ at the rate of
___% per annum until the principal hereof shall have become due and payable,
and on any overdue principal and premium, if any, and (without duplication and
to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the same rate per annum
compounded quarterly. The amount of interest payable on any Interest Payment
Date shall be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on this Note is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. The interest installment so payable, and
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punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the person in whose name this Note (or
one or more Predecessor Securities, as defined in said Indenture) is registered
at the close of business on the regular record date for such interest
installment, which shall be the close of business on the business day next
preceding such Interest Payment Date. [IF PURSUANT TO THE PROVISIONS OF THE
INDENTURE THE NOTES ARE NO LONGER REPRESENTED BY A GLOBAL NOTE -- which shall
be the close of business on the 15th day of the month in which such Interest
Payment Date occurs.] If and to the extent the Company shall default in the
payment of the interest due on such Interest Payment Date, interest shall be
paid to the person in whose name this Note is registered at the close of
business on a subsequent record date (which shall not be less than five
Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Company to the
Holders of this Note not less than 15 days preceding such subsequent Record
Date. The principal of (and premium, if any) and the interest on this Note
shall be payable at the office or agency of the Trustee in the Borough of
Manhattan, the City of New York maintained for that purpose in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided, however, that payment
of interest may be made at the option of the Issuer by check mailed to the
registered Holder at such address as shall appear in the Security Register or
by wire transfer to an account maintained by the Holder. Notwithstanding the
foregoing, so long as the Holder of this Note is the Property Trustee, the
payment of the principal of (and premium, if any) and interest on this Note
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Note is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Note is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each Holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been signed by or on behalf
of the Trustee.
The provisions of this Note are continued on the reverse side hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be executed.
Dated
Consumers Energy Company
By:
Name:
Title
Attest:
By:
Name:
Title:
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(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series of Securities described in
the within-mentioned Indenture.
[ ]
________________________________
as Trustee
By
Authorized Officer
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Securities of the Issuer
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series under and pursuant to an Indenture
dated as of January 1, 1996, duly executed and delivered between the Issuer and
The Bank of New York, as Trustee (the "Trustee"), as supplemented by certain
supplemental indentures, including the Second Supplemented Indenture dated as
of _______, 1997, between the Issuer and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Issuer and the Holders of the Notes. By the terms of the
Indenture, the Notes are issuable in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Indenture.
This series of Notes is limited in aggregate principal amount as specified in
said Second Supplemental Indenture.
The Issuer shall have the right to redeem this Note at the option of the
Issuer, without premium or penalty, in whole or in part at any time on or after
_________ __, or at any time in certain circumstances upon the occurrence of
a Special Event, at a redemption price equal to 100% of the principal amount
plus any accrued but unpaid interest, to the date of such redemption. Any
redemption pursuant to this paragraph will be made upon not less than 30 days
nor more than 60 days' notice. If the Notes are only partially redeemed by the
Issuer pursuant to an Optional Redemption, the Notes will be redeemed pro rata.
In the event of redemption of this Note in part only, a new Note or Notes
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with
the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the consent of the Holders of not less than a majority in aggregate
principal amount of the Notes and other Indenture securities of each series
affected at the time Outstanding and affected (voting as one class), as defined
in the Indenture, to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions
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of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Notes; provided, however, that the Company and
the Trustee may not, without the consent of the Holder of each Note then
Outstanding and affected thereby: (a) change the time of payment of the
principal (or any installment) of any Note, or reduce the principal amount
thereof, or reduce the rate or change the time of payment of interest thereon,
or impair the right to institute suit for the enforcement of any payment on any
Note when due or (b) reduce the percentage in principal amount of the Notes,
the consent of whose Holders is required for any such modification or for any
waiver provided for in the Indenture. The Indenture also contains provisions
providing that prior to the acceleration of the maturity of any Note or other
securities outstanding under the Indenture, the Holders of a majority in
aggregate principal amount of Notes of and other Securities Outstanding under
the Indenture 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 Securities (including the Notes) waive any past default
and its consequences, except a default or an Event of Default in respect of a
covenant or provision of the Indenture or of any Note or other Security which
cannot be modified or amended without the consent of the Holder of each Note or
other Security affected. Any such consent or waiver by the registered Holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this
Note and of any Note issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Note at the time and place and at the rate and in the money
herein prescribed.
The Issuer shall have the right at any time during the term of the Notes
and from time to time to extend the interest payment period of such Notes for
up to 20 consecutive quarters (an "Extended Interest Payment Period"), at the
end of which period the Issuer shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Notes to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the Issuer
may further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters. At the termination of any
such Extended Interest Payment Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Issuer may commence a
new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is transferable by the registered Holder hereof on the
Security Register of the Issuer, upon surrender of this Note for registration
of transfer at the office or agency of the Trustee in the City and State of New
York accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer or the Trustee duly executed by the registered
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of authorized denominations and for the same aggregate principal
amount and series will be issued to the designated transferee or transferees.
No service charge will be made for any such transfer, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Issuer, the Trustee, any paying agent and the Security Registrar may deem and
treat the registered holder hereof as the absolute owner hereof (whether or not
this Note shall be overdue and notwithstanding any notice of ownership or
writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and
neither the Issuer nor the Trustee nor any paying agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as such, of the
Issuer or of any predecessor or successor
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corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issuance hereof, expressly waived and released.
Notes of this series so issued are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations herein and therein
set forth, Notes of this series so issued are exchangeable for a like aggregate
principal amount of Notes of this series in authorized denominations, as
requested by the Holder surrendering the same.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
[END OF FORM OF NOTE]
ARTICLE IX.
ORIGINAL ISSUE OF NOTES
SECTION 9.1. Original Issue of Notes.
Notes in the aggregate principal amount of $ ________________ may, upon
execution of this Second Supplemental Indenture, be executed by the Issuer and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the Issuer,
in accordance with Section 2.4 of the Indenture.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Notes.
Notwithstanding Section 13.2 of the Indenture, for so long as any Notes
remain outstanding, the Issuer's obligations under the Indenture and this
Second Supplemental Indenture will also be for the benefit of the holders of
the Notes, and the Issuer acknowledges and agrees that such holders will be
entitled to enforce certain payment obligations under the Notes directly
against the Issuer to the extent provided in the Declaration.
SECTION 10.2 Ratification of Indenture.
The Indenture, as supplemented by this Second Supplemental Indenture, is
in all respects ratified and confirmed, and this Second Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein
and therein provided.
SECTION 10.3. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Issuer and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Second Supplemental Indenture.
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SECTION 10.4. Governing Law.
This Second Supplemental Indenture and each Note shall be deemed to be a
contract made under the internal laws of the State of Michigan, and for all
purposes shall be construed in accordance with the laws of said State,
provided, however, that the rights, duties and obligations of the Trustee are
governed and construed in accordance with the laws of the State of New York.
SECTION 10.5. Separability.
In case any one or more of the provisions contained in this Second
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Second
Supplemental Indenture or of the Notes, but this Second Supplemental Indenture
and the Notes shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 10.6. Counterparts.
This Second Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgements and as of the day and year first above written.
Consumers Energy Company
By:
------------------------------
Name:
Title:
[Seal]
Attest:
By:
--------------------------
The Bank of New York as Trustee
By:
------------------------------
Name:
Title:
Attest:
By:
--------------------------
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STATE OF MICHIGAN )
)ss.
COUNTY OF ▇▇▇▇▇ )
On the _____ day of __________, 199__, before me personally
came_________________, to me known, who, being by me duly sworn, did depose and
say that he resides at ______________________; that he is __________________ of
Consumers Energy Company, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate; that it was so
affixed by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
[Notarial Seal]
______________________________________
Notary Public, ______________ County, ____________
My Commission Expires:
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