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EXHIBIT 1(C)
CMS ENERGY TRUST I
% CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
-- (CONVERTIBLE QUIPS(SM)*)
(liquidation amount $50 per preferred security)
fully and unconditionally guaranteed by,
and convertible into, common stock, $.01 par value, of
CMS ENERGY CORPORATION
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UNDERWRITING AGREEMENT
, 1997
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Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co.
c/x Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CMS Energy Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), and CMS Energy Corporation, a Michigan
corporation, as depositor of the Trust and as guarantor (the "Company"),
propose that the Trust, subject to the terms and conditions stated herein,
issue and sell to the firms named in Schedule I hereto (the "Underwriters") an
aggregate of 3,000,000 (the "Firm Securities") and, at the election of the
Underwriters, up to an additional 450,000 (the "Optional Securities"), of __%
Convertible Quarterly Income Preferred Securities (liquidation amount $50 per
preferred security), representing undivided beneficial interests in the assets
of the Trust, guaranteed on a subordinated basis by the Company as to the
payment of distributions, and as to payments on liquidation or redemption, to
the extent set forth in a guarantee agreement (the "Guarantee") between the
Company and The Bank of New York, as trustee (the "Guarantee Trustee") and
convertible into common stock, $.01 par value per share ("Common Stock") of the
Company. The Firm Securities
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*QUIPS is a servicemark of Xxxxxxx, Xxxxx & Co.
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and the Optional Securities that the Underwriters elect to purchase pursuant to
Section 2 hereof are referred to collectively as the "Securities." The firms
designated as representatives of the Underwriters are referred to collectively
as the "Representatives." The Trust is to purchase, with the proceeds from the
sale of its Common Securities (liquidation amount $50 per common security) (the
"Common Securities") and the sale of the Securities, __% Convertible
Subordinated Debentures due , 2027 (the "Debentures") of the Company, to be
issued pursuant to a Subordinated Debt Indenture (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Debenture Trustee").
The Company will be the holder of 100% of the Common Securities. The
Trust will be subject to the terms of an Amended and Restated Trust Agreement
(the "Trust Agreement"), among the Company and the trustees of the Trust (the
"CMS Trustees"), including The Bank of New York, as property trustee (the
"Property Trustee").
1. Each of the Trust and the Company represents and warrants to, and
agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (Registration
No. 333-27849) (the "Initial Registration Statement") in respect of
the Securities, the Debentures, the Guarantee and the Common Stock
issuable upon the conversion or exchange of the Securities and/or
Debentures has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed, or transmitted for filing, with the
Commission (other than prospectuses filed pursuant to Rule 424(b) of
the rules and regulations of the Commission under the Act each in the
form heretofore delivered to the Representatives); no stop order
suspending the effectiveness of the Initial Registration Statement is
in effect and no proceedings for such purposes are pending before or,
to the knowledge of the Company, threatened by the Commission (any
preliminary prospectus included in such registration statement or
filed with the Commission pursuant to Rule 424(a) under the Act, is
hereinafter called a "Preliminary Prospectus"); the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the registration
statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
each as amended at the time such part of the registration statement
became effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Securities,
the Debentures, the Guarantee and the Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures, in the
form in which it has most recently been filed, or transmitted for
filing, with the Commission on or prior to the date of this Agreement,
is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant
to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or
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supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the Securities in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of the Securities or through the Representatives on behalf
of any Underwriter expressly for use in the Prospectus as amended or
supplemented relating to such Securities or to any statements in or
omissions from that part of the Registration Statement that shall
constitute the Statements of Eligibility and Qualification under the
Trust Indenture Act (as defined herein) of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee;
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed (or,
if an amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and any further
documents so filed and incorporated by reference will, when they are
filed with the Commission, conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder; none of such documents, when filed
(or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and no such
further document, when it is filed, will contain an untrue statement
of a material fact or will omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading;
(d) There has not been any material and adverse change in
the business, properties or financial condition of the Company and its
Subsidiaries (as defined in Rule 405 under the Act, and hereinafter
called the "Subsidiaries"), taken as a whole, from that set forth in
the Registration
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Statement (other than changes referred to in or contemplated by the
Registration Statement or the Prospectus);
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Michigan and has all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus and
to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole; each
significant subsidiary (as defined in Rule 405 under the Act, and
hereinafter called a "Significant Subsidiary") of the Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
all requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business as described in the Prospectus or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole; and the Company has the requisite
power and authority to authorize the offering of the Debentures, the
Guarantee and the Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures, to exercise, deliver
and perform this Agreement, and to issue, sell and deliver the
Debentures, the Guarantee and the Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures;
(f) The shares of Common Stock of the Company issued and
outstanding prior to the issuance of the Securities have been duly
authorized and are validly issued, fully paid and non-assessable; the
shares of Common Stock issuable upon the conversion or exchange of the
Securities and/or the Debentures have been duly authorized and
reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and/or the Indenture, will be
validly issued, fully paid and non-assessable; the issuance of the
Common Stock upon the conversion or exchange of the Securities and/or
the Debentures will not be subject to preemptive or other similar
rights;
(g) The Securities have been duly and validly authorized
by the Trust, and, when the Securities are issued and delivered, such
Securities will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the
Securities will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Securities is
not subject to any preemptive or other similar rights; the Securities
will have the rights set forth in the Trust Agreement, and the terms
of the Securities are valid and binding on the Trust;
(h) The Common Securities have been duly and validly
authorized by the Trust and upon delivery by the Trust to the Company
against payment therefor as described in the Prospectus, will be duly
and validly issued undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; at
each Time of Delivery (as defined in Section 3 hereof), all of the
issued and outstanding Common
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Securities of the Trust will be directly owned by the Company free and
clear of any security interest, mortgage, pledge, claim, lien or
encumbrance (each, a "Lien"); and the Common Securities and the
Securities are the only interests authorized to be issued by the
Trust;
(i) Except for the outstanding shares of preferred stock
of Consumers Power Company and the 8.36% Trust Originated Preferred
Securities of Consumers Power Company Financing I, all of the
outstanding capital stock of each of Consumers Energy Company and CMS
Enterprises Company is owned directly or indirectly by the Company,
free and clear of any Lien, and there are no outstanding rights
(including, without limitation, preemptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in any of
Consumers Energy Company and CMS Enterprises Company or any contract,
commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any such capital stock, any such
convertible or exchangeable securities or any such rights, warrants or
options;
(j) The capital stock of the Company, including the
Common Stock, conforms in all material respects to the description
thereof in the Prospectus;
(k) Each of the Company and its Significant Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole;
(l) No order, license, consent, authorization or approval
of, or exemption by, or the giving of notice to, or the registration
with any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any
other place, was or is now required to be obtained by the Company to
authorize its execution or delivery of, or the performance of its
obligations under, this Agreement, except such as have been obtained
or may be required under state securities or Blue Sky laws or as
referred to in the Prospectus in connection with the purchase and
distribution of the Securities, the Guarantee and the Debentures;
(m) The execution and delivery of this Agreement by the
Trust, the compliance by the Trust with all of the provisions of this
Agreement, the issuance and sale of the Securities and the Common
Securities by the Trust, the purchase of the Debentures by the Trust,
the distribution of the Debentures by the Trust in the circumstances
contemplated by the Trust Agreement, the performance of this Agreement
and the consummation of the transactions contemplated by this
Agreement and by the Trust Agreement did not and will not conflict
with, result in a breach of any of the terms or provisions of, or
constitute a default or require the consent of any party under the
Trust Agreement, any material terms or provisions of any material
agreement or instrument to which the Trust is a party, any existing
material applicable law, rule or regulation or any judgment, order or
decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Trust or any of its properties
or assets, or did or will result in the creation or imposition of any
Lien on the Company's properties or assets;
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(n) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all of the provisions of
this Agreement, the issuance and sale of the Securities and the Common
Securities by the Trust, the sale of the Debentures by the Company to
the Trust, the issuance by the Company of the Guarantee, the
execution, delivery and performance by the Company of the Guarantor
Agreements (as defined below), the issuance by the Company of the
Common Stock upon the conversion or exchange of the Securities and/or
the Debentures, the distribution of the Debentures by the Trust in the
circumstances contemplated by the Trust Agreement, the performance of
this Agreement and the consummation of the transactions contemplated
by this Agreement and the Guarantor Agreements did not and will not
conflict with, result in a breach of any of the terms or provisions
of, or constitute a default or require the consent of any party under
the Company's Articles of Incorporation or by-laws, any material terms
or provisions of any material agreement or instrument to which the
Company is a party, any existing material applicable law, rule or
regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or assets, or did or will
result in the creation or imposition of any Lien on the Company's
properties or assets;
(o) Except as disclosed in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in
equity or otherwise) pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary by any governmental
authority that (i) questions the validity, enforceability or
performance of this Agreement or the Securities or (ii) if determined
adversely, is likely to have a material adverse effect on the business
or financial condition of the Company and its Subsidiaries, taken as a
whole, or materially adversely affect the ability of the Company to
perform its obligations hereunder or the consummation of the
transactions contemplated by this Agreement;
(p) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture, mortgage,
loan agreement, lease or other material agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries, or any of their
respective properties, may be bound;
(q) Neither the Company, the Trust nor any of the
Subsidiaries is and, after giving effect to the offering and sale of
the Securities, will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment
Company Act"). The Trust is not required to be registered under the
Investment Company Act;
(r) The Securities and the shares of Common Stock
issuable upon the conversion or exchange of the Securities and/or the
Debentures have been approved for listing on the New York Stock
Exchange, subject to notice of issuance;
(s) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Business Trust Act of the State of Delaware (the "Delaware Business
Trust Act") with the trust power and authority to own property and
conduct its business as described in the Prospectus, and has conducted
and will conduct no business other than the transactions contemplated
by this Agreement and described in the Prospectus; the Trust is not a
party to or bound by any agreement or instrument other than this
Agreement, the Trust
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Agreement between the Company and the CMS Trustees named therein and
the agreements and instruments contemplated by the Trust Agreement and
described in the Prospectus; based on expected operations and current
law, the Trust is not and will not be classified as an association
taxable as a corporation for United States federal income tax
purposes; and, to the knowledge of each of the Company and the Trust,
the Trust is not a party to or subject to any action, suit or
proceeding of any nature;
(t) The Guarantee, the Debentures, the Trust Agreement
and the Indenture (collectively, the "Guarantor Agreements") have each
been duly authorized and when validly executed and delivered by the
Company and, in the case of the Guarantee, by the Guarantee Trustee
and, in the case of the Trust Agreement, by the CMS Trustees and, in
the case of the Indenture, by the Debenture Trustee, and, in the case
of the Debentures, when validly authenticated and delivered by the
Debenture Trustee and, in the case of the Guarantee, upon due
execution, authentication and delivery of the Debentures and upon
payment therefor, will constitute valid and binding obligations of the
Company, enforceable in accordance with their respective terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity); the Debentures are
entitled to the benefits of the Indenture; the Indenture has been duly
qualified under the Trust Indenture Act of 1939 (the "Trust Indenture
Act"); and
(u) Each of the Preferred Securities, Guarantee,
Debentures and the relationship among each of them will conform in all
material respects to the description thereof contained in the
Prospectus.
2. Subject to the terms and conditions herein set forth, (a) the
Trust and the Company agree that the Trust shall issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Trust, at a purchase price per share of $50 per Security,
the number of Securities set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Securities as provided below,
the Trust agrees, and the Company agrees to cause the Trust to, issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase, at the purchase price per Security set forth in
Clause (a) of this Section 2, that portion of the number of Optional Securities
as to which such election shall have been exercised (to be adjusted by the
Representatives so as to eliminate fractional Securities) determined by
multiplying such number of Optional Securities by a fraction, the numerator of
which is the maximum number of Securities which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I
hereto and the denominator of which is the maximum number of Securities that
all of the Underwriters are entitled to purchase pursuant to clause (a) of this
Section 2.
The Trust and the Company hereby grant to the Underwriters the
right to purchase at their election up to 450,000 Optional Securities, at the
purchase price per Security set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Securities. Any
such election to purchase Optional Securities may be exercised only by written
notice from the Representatives to the Company, given within a period of 30
calendar days after the date of this Agreement, setting forth the aggregate
number of Optional Securities to be determined by the Representatives but in no
event earlier than the first Time of Delivery (as defined in Section 3 hereof)
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or, unless the Representatives and the Trust and the Company otherwise agree in
writing, earlier than two or later than ten business days after the date of
such notice.
As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be used by the Trust to purchase the Debentures of the Company,
the Company at each Time of Delivery will pay to Xxxxxxx, Xxxxx & Co., for the
accounts of the several Underwriters, an amount equal to $___ per Security for
the Securities to be delivered by the Company hereunder at the Time of
Delivery.
3. (a) The Securities to be purchased by each Underwriter
shall be delivered by or on behalf of the Trust to Xxxxxxx, Xxxxx & Co.,
through the facilities of The Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Trust in federal or other immediately available funds. The
Trust will cause the certificates representing the Securities to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The Securities to be purchased by each
Underwriter hereunder will be represented by one or more definitive global
Securities in book-entry form which will be deposited by or on behalf of the
Trust with the DTC or its designated custodian. The time and date of such
delivery and payment shall be 9:30 a.m., New York City time, on _________, 1997
or such other time and date as Xxxxxxx, Xxxxx & Co. and the Trust and the
Company may agree upon in writing. Such time and date are herein called the
"Time of Delivery".
At each Time of Delivery, the Company will pay, or cause to be
paid, the commission payable at such Time of Delivery to the Underwriters under
Section 2 hereof in immediately available funds.
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 6 hereof, including
the cross-receipt for the Securities and any additional documents requested by
the Underwriters pursuant to Section 6(m) hereof, will be delivered at such
time and date at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (the "Closing Location"), and the
Securities will be delivered at the Designated Office, all at the Time of
Delivery. A meeting will be held at the Closing Location prior to the Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 3, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or obligated by
law or executive order to close.
4. The Trust and the Company, jointly and severally, agree with
each of the Underwriters:
(a) To prepare the Prospectus as amended and supplemented
in relation to the Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 424(b); prior to the Time of Delivery, to make no further
amendment or any supplement to the Registration Statement or
Prospectus as amended or supplemented unless the Company has furnished
the Representatives and counsel to the Underwriters with a copy for
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their review and comment a reasonable time prior to filing and has
reasonably considered any comments of the Representatives, and to make
no such amendment or supplement to which such counsel shall reasonably
object on legal grounds in writing, after consultation with the
Representatives; to timely file all reports and any definitive proxy
or information statements required to be filed by the Trust or the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Securities,
and during such same period to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of the Securities, the Debentures or the shares of
Common Stock, if any, issuable upon the conversion or exchange of the
Securities and/or the Debentures for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Regis- tration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of
any prospectus relating to the Securities or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time during the period of time (not exceeding nine months)
after the date of the Prospectus when a Prospectus is required to be
delivered under the Act to furnish the Underwriters in New York City
with copies of the Prospectus as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time after the expiration
of nine months in connection with the offering or sale of the
Securities, the Debentures or the shares of Common Stock, if any,
issuable upon the conversion or exchange of the Securities and/or the
Debentures and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, to prepare and file such document and to
furnish without charge to each Underwriter as many copies as the
Representatives may reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance;
(c) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
(d) To make generally available to the Company's
securityholders, as soon as practicable but in any event not later
than eighteen months after the effective date of the
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Registration Statement, an "earning statement" (which need not be
audited by independent public accountants) covering a twelve-month
period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, which shall
comply in all material respects with the provisions of Section 11(a)
of the Act and Rule 158 under the Act);
(e) To use its best efforts to qualify the Securities,
the Debentures, the Guarantee and the shares of Common Stock issuable
upon conversion or exchange of the Securities and/or the Debentures
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate, to comply with
such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities, and to pay (or cause to
be paid), or reimburse (or cause to be reimbursed) the 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;
(f) During the period beginning from the date hereof and
continuing for a period of 90 days after the issuance of the
Securities, not to offer, sell, contract to sell or otherwise dispose
of (i) any Securities or any preferred stock or any other securities
of the Company which are substantially similar to the Securities,
including any guarantee of such securities, or any securities
convertible into or exchangeable for or representing the right to
receive any of the foregoing securities, or (ii) any shares of any
class of Common Stock of the Company, other than shares of Common
Stock issuable upon conversion of the Securities or pursuant to the
Company's Stock Purchase Plan, the Performance Incentive Stock Plan,
the Employee Stock Ownership Plan and the Employee Savings and
Incentive Plan, without the prior written consent of the
Representatives;
(g) To issue the Guarantee concurrently with the issuance
and sale of the Securities as contemplated herein;
(h) To use the net proceeds received by it from the sale
of the Securities in the case of the Trust, and the Debentures, in the
case of the Company, pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the Securities and the shares of Common Stock issuable upon
the conversion or exchange of the Securities and/or, if the Securities
are exchanged for Debentures, Debentures on the New York Stock
Exchange; and
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling
the Company to satisfy any obligation to issue shares of its Common
Stock upon the conversion or exchange of the Securities and/or the
Debentures.
5. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's and the Company's counsel and
accountants in connection with the registration of the Securities and the
shares
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of Common Stock issuable upon conversion of the Securities and/or the
Debentures and all other expenses in connection with the preparation, printing
and filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
any delivery to the Underwriters of any Blue Sky Memorandum; (iii) all expenses
in connection with the qualification of the Securities, the Debentures and the
shares of Common Stock issuable upon the conversion or exchange of the
Securities and/or the Debentures for offering and sale under state securities
laws as provided in Section 4(e) hereof, including the fees and disbursements
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey(s) up to an aggregate amount not to exceed
$5,000; (iv) any fees charged by securities rating services for rating the
Securities; (v) the cost of preparing the certificates for the Securities and
the Debentures; (vi) the fees and expenses of the CMS Trustees, the Debenture
Trustee and the Guarantee Trustee and any other agent thereof and the fees and
disbursements of their counsel (it being understood that as among the Company
and the Trust and such trustees, such fees and expenses shall not exceed
$5,000); (vii) the cost and charges of any transfer agent or registrar or
dividend disbursing agent; and (viii) all other reasonable costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Section 7 hereof, the
Underwriters will pay all of their own costs and expenses, including, without
limitation, the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
6. The obligations of the Underwriters shall be subject, in the
discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Trust and the Company herein are, at
and as of each Time of Delivery, true and correct, the condition that the Trust
and the Company shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Underwriters, shall have furnished to the Representatives such
written opinion or opinions (a draft of each such opinion is attached
as Xxxxx XX(a) hereto), dated the Time of Delivery, with respect to
the incorporation of the Company and the formation of the Trust,
insofar as the federal laws of the United States and the laws of the
State of New York or the General Corporation Law of the State of
Delaware or the Delaware Business Trust Act are concerned, the
validity of the Securities, the Debentures, the Guarantee and the
Prospectus, as well as such other related matters as the
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
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(c) Xxxxxxx X. Xxx Xxxxxx, Assistant General Counsel to
the Company, shall have furnished to the Representatives his written
opinion or opinions (a draft of each such opinion is attached as Xxxxx
XX(b) hereto), dated the Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company is a duly organized and validly
existing corporation in good standing under the laws of
Michigan, with power and authority (corporate and other) to
own its properties and conduct its business as described in
the Prospectus, as amended and supplemented;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, as amended or supplemented,
and all of the issued shares of capital stock of the Company
(including the Securities) have been duly and validly
authorized and issued and are fully paid and non-assessable;
the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or Debentures have been duly
authorized and reserved for issuance and, if and when issued
and delivered in accordance with the provisions of the Trust
Agreement and the Indenture, will be validly issued, fully
paid and non- assessable, and will conform to the description
of the Common Stock contained in the Prospectus in all
material respects; and the issuance of such Common Stock is
not subject to any preemptive or other similar rights;
(iii) To the best of such counsel's knowledge and
other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or
any of its Subsidiaries is a party or of which any property of
the Company or any of its Subsidiaries is the subject which,
if determined adversely to the Company or any of its
Subsidiaries, would in the aggregate have a material adverse
effect on the current or future consolidated financial
position, securityholders' equity or results of operations of
the Company and its Subsidiaries; and to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(iv) Each of this Agreement, the Indenture and the
Guarantee have been duly authorized, executed and delivered by
the Company; and the Debentures have been duly authenticated
in accordance with the Indenture and delivered and paid for in
accordance herewith;
(v) To the best knowledge of such counsel, there
are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments or sale or Liens
related to or entitling any person to purchase or otherwise to
acquire any shares of the capital stock of, or other ownership
interest in, any Significant Subsidiary;
(vi) The issuance and sale of the Securities being
delivered at the Time of Delivery, the compliance by the
Company with all the provisions of this Agreement and the
consummation of the transactions contemplated herein, the
issuance and sale of the Securities and the Common Securities
by the Trust, the sale of the Debentures by the Company to the
Trust, the issuance by the Company of the Guarantee, the
execution, delivery and performance by the Company of the
Guarantor Agreements, the issuance by the Company of the
Common Stock upon the conversion or exchange of the Securities
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and/or the Debentures, the distribution of the Debentures by the Trust
in the circumstances contemplated by the Trust Agreement and the
performance of this Agreement and the consummation of the transactions
contemplated by this Agreement and the Guarantor Agreements will not
conflict with or result in a breach or violation of any of the
material terms or provisions of, or constitute a default under, any
material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its Subsidiaries is a party or by which the Company is bound or
to which any of the property or assets of the Company or any of its
Subsidiaries is subject (except for such breaches or violations or
defaults that would not have a material adverse effect on the
business, property or financial condition of the Trust or of the
Company and its Subsidiaries, taken as a whole), nor will such action
result in any violation of the provisions of the Articles of
Incorporation or by-laws of the Company or any statute or any
currently existing order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over the
Company or any of its Subsidiaries or any of its properties (other
than the securities or Blue Sky laws of the various states, as to
which such counsel need express no opinion);
(vii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of
the Securities or the consummation by the Company of the transactions
contemplated herein, except such as have been obtained under the Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws (as to which such counsel need express no opinion) in connection
with the purchase and distribution of the Securities;
(viii) Neither the Company nor any of its
Significant Subsidiaries is in violation of its respective charters
or bylaws or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it
or any of its properties may be bound, except for such violations or
defaults the existence of which would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole;
(ix) The statements made in the Prospectus under
the captions "Description of the Preferred Securities", "Description
of the Guarantee", "Description of the Debentures", and "Relationship
Among the Preferred Securities, the Debenture and the Guarantee",
insofar as such statements constitute summaries of legal matters or
documents referred to therein, are accurate in all material respects;
the Securities, the Debentures, the Guarantee, the Trust Agreement,
the Indenture and the Common Securities conform as to legal matters
to the description thereof and to the statements in regard thereto
contained in the Registration Statement and the Prospectus;
(x) The Company is not an "investment company"
within the meaning of the Investment Company Act. The Trust is not
required to be registered under the Investment Company Act;
(xi) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the [operating
statistics,] financial statements, notes,
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auditors' reports and related schedules therein, and any other
financial [or statistical] data included or incorporated by reference
therein, as to which such counsel need express no opinion), when they
became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; [and they have no reason to
believe that any of such documents, when they became effective or were
so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading];
(xii) The Registration Statement and the Prospectus
as amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to the Time of Delivery
(other than the [operating statistics,] financial statements, notes,
auditors' reports and related schedules and any other financial [or
statistical] data included or incorporated by reference therein, as
to which such counsel need express no opinion), comply as to form in
all material respects with the requirements of the Act and the rules
and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
except for those referred to in the opinion in subsection (ix) of
this Section 6(c), they have no reason to believe that, as of its
effective date, the Registration Statement or any further amendment
thereto made by the Company prior to the Time of Delivery (other than
the [operating statistics,] financial statements, notes, auditors'
reports and related schedules and any other financial [or statistical]
data included or incorporated by reference therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the [operating
statistics,] financial statements, notes, auditors' reports and related
schedules and any other financial [or statistical] data included or
incorporated by reference therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented
or any further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the [operating statistics,]
financial statements, notes, auditors' reports and related schedules
and any other financial [or statistical] data included or
incorporated by reference therein, as to which such counsel need
express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be
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filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement
or the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(xiii) Upon due execution, authentication and
delivery of the Securities and upon payment therefor, the Guarantor
Agreements will be legally valid and binding obligations of the
Company enforceable in accordance with their terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity); the Debentures are
entitled to the benefits of the Indenture; the Indenture has been duly
qualified under the Trust Indenture Act; and
(xiv) To the best of such counsel's knowledge, the
Trust is not a party to or bound by any agreement or instrument other
than this Agreement, the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; and to the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject and no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others.
The foregoing opinions may be limited to the laws of Delaware,
Michigan and the federal law of the United States. In giving such opinion,
such counsel may rely, as to matters of Delaware law, upon the opinion of
Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special Delaware counsel to the Trust
and the Company, in which case the opinion shall state that such counsel
believes that you and he are entitled to so rely.
(d) Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special tax
counsel to the Trust and the Company, shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion
is attached as Xxxxx XX(c) hereto), dated the Time of Delivery, in
form and substance satisfactory to the Representatives, to the effect
that:
(i) The Trust will be classified as a grantor
trust and not as an association taxable as a corporation; and
(ii) The discussion set forth in the Prospectus
under the captions "Risk Factors -- Option to Extend Interest
Payment Period; Tax Consequences" and "-- Proposed Tax Legislation"
and "Certain Federal Income Tax Consequences" is a fair and accurate
summary of the matters addressed therein, based upon the assumptions
stated or referred to therein.
(e) Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special
Delaware counsel to the Trust and the Company, shall have furnished to
the Representatives, the Company and the Trust their written opinion
or opinions (a draft of each such opinion is attached as Annex II(d)
hereto), dated the Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
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(i) This Agreement has been duly authorized,
executed and delivered by the Trust;
(ii) The Trust has been duly created and is
validly existing in good standing as a business trust under
the Delaware Business Trust Act and has the business trust
power and authority to conduct its business as described in
the Registration Statement and the Prospectus;
(iii) The Trust Agreement has been duly authorized,
executed and delivered by each of the Company and the Trust,
and constitutes a valid and binding agreement of each of
the Company and the Trust, enforceable against the Company
in accordance with its terms, except as enforcement
thereof may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of
equity (regardless of whether enforcement is considered in
a proceeding in equity or at law);
(iv) Under the Delaware Business Trust Act and the
Trust Agreement, the Trust has the power and authority to
(a) execute and deliver, and to perform its obligations
pursuant to, this Agreement, and (b) issue and perform its
obligations under the Securities and Common Securities;
(v) The execution and delivery by the Trust of
this Agreement, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all
necessary action on the part of the Trust;.
(vi) The Securities have been duly authorized for
issuance by the Trust and, when executed and authenticated
by the property trustee in accordance with the terms of the
Trust Agreement and delivered and paid for in accordance
with this Agreement, will be fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and
will entitle the holders thereof to the benefits of this
Agreement except to the extent that enforcement of the Trust
Agreement may be limited by (a) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of
equity (regardless of whether enforcement is considered
in a proceeding in equity or at law); and the holders of the
Securities will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General
Corporation Law of the State of Delaware, except that the
holders of Securities may be obligated, pursuant to the
Trust Agreement, to make payments, including (i) to provide
indemnity and/or security in connection with and pay taxes
or governmental charges arising from transfers of the
Securities and (ii) to provide security and indemnity in
connection with requests of or directions to the property
trustee to exercise its rights and powers under the
Trust Agreement; the issuance of the Securities is not
subject to preemptive or other similar rights under the
Delaware Business Trust Act or the Trust Agreement;
(vii) The Common Securities have been duly
authorized for issuance by the Trust and, when executed and
authenticated by the property trustee in accordance with
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the terms of the Trust Agreement and delivered and paid in accordance
with the Common Securities Purchase Agreement, dated as of June __,
1997, between the Company and the Trust, will be validly issued,
undivided beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not subject to preemptive or
other similar rights under the Delaware Business Trust Act or the
Trust Agreement;
(viii) None of the execution and delivery by the
Trust of, or the performance by the Trust of its obligations
under, this Agreement, or the issuance and sale of the Securities by
the Trust in accordance with the terms of this Agreement or the
consummation of the other transactions contemplated hereby, will
contravene any provision of applicable law or the Trust Agreement or
any agreement or other instrument governed by the laws of the State
of Delaware binding upon the Trust as set forth in the Trust's
certificate, or any judgment, order or decree applicable to
the Trust as set forth in the Trust's certificate, of any
governmental authority; and
(ix) No governmental approval is required for the
issuance and sale of the Securities and the Common Securities by the
Trust pursuant to this Agreement or the consummation of the other
transactions contemplated hereby, except such as have been obtained
and made.
(f) [On the date of the Prospectus and also] at the Time of
Delivery, the independent accountants of the Company who have certified the
financial statements of the Company and its consolidated Subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Representatives a letter, dated as of such date, (i) confirming that
they are independent public accountants within the meaning of the Act and the
applicable published rules and regulations of the Commission thereunder, (ii)
stating that in their opinion the financial statements examined by them and
included or incorporated by reference in the Registration Statement complied as
to form in all material respects with the applicable accounting requirements of
the Commission, including applicable published rules and regulations of the
Commission, and (iii) covering, as of a date not more than five business days
prior to the date of such letter, such other matters as the Representatives
reasonably request;
(g) That, between the date of the execution of this Agreement and
the Time of Delivery, no material and adverse change shall have occurred in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, which, in the judgment of the Representatives,
impairs the marketability of the Securities (other than changes referred to in
or contemplated by the Registration Statement or Prospectus);
(h) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred
stock by any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under the Act,
[and (ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock or the Company's financial
strength or claims paying ability];
(i) The Trust Agreement, the Guarantee and the Indenture shall
have been executed and delivered, in each case in a form reasonably
satisfactory to the Representatives;
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(j) The Securities and the shares of Common Stock issuable upon
the conversion or exchange of the Securities and/or Debentures shall have
been duly listed, subject to notice of issuance, on the New York Stock
Exchange;
(k) The Company shall have complied with the provisions of Section
4(b) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(l) The Trust and the Company shall have furnished or caused to be
furnished to the Representatives at the Time of Delivery certificates of
officers of the Trust and the Company to the effect that to the best of
such person's knowledge, information and belief (i) there has been no
material adverse change in the business, properties or financial condition
of the Company and its Subsidiaries, taken as a whole or the Trust from
that set forth in the Registration Statement or Prospectus (other than
changes referred to in or contemplated by the Registration Statement or
Prospectus), (ii) the representations and warranties of the Trust and the
Company herein at and as of such Time of Delivery are true and correct,
(iii) the Trust and the Company have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or
prior to the Time of Delivery, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
7. The obligations of the Company and the Trust shall be subject,
in the discretion of the Company and the Trust, to the condition that the
Registration Statement shall be effective under the Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the Act or proceedings therefor initiated or threatened by the
Commission.
8. (a) The Trust and the Company, jointly and severally, will, to the
extent permitted by law, indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with [investigating or] defending any such
action or claim as such expenses are incurred; provided, however, that (i)
neither the Trust nor the Company shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Trust and the Company by any Underwriter through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities or with any statements in or omissions
from that part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust Indenture Act of
the Debenture Trustee, the Guarantee Trustee and the Property Trustee, and
except that this indemnity shall not inure to the benefit of any Underwriter
(or any person controlling such
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Underwriter) on account of any losses, claims, damages, liabilities or actions,
suits or proceedings arising from the sale of the Securities to any person if a
copy of the Prospectus, as the same may then be supplemented or amended
(excluding, however, any document then incorporated or deemed incorporated
therein by reference), was not sent or given by or on behalf of such
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.
(b) Each Underwriter, severally and not jointly, will indemnify
and hold harmless the Trust and the Company against any losses, claims, damages
or liabilities to which the Trust and the Company may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Trust and the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Trust and the
Company for any legal or other expenses reasonably incurred by the Trust and
the Company in connection with [investigating or] defending any such action or
claim as such expenses are incurred.
(c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as
to which indemnity may be sought under subsection (a) or (b), such person (the
"Indemnified Person") shall notify the person against whom such indemnity may
be sought (the "Indemnifying Person"), promptly after any assertion of such
claim threatening to institute an action, suit or proceeding or if such an
action, suit or proceeding is commenced against such Indemnified Person,
promptly after such Indemnified Person shall have been served with a summons or
other first legal process, giving information as to the nature and basis of the
claim. Failure to so notify the Indemnifying Person shall not, however,
relieve the Indemnifying Person from any liability which it may have on account
of the indemnity under subsection (a) or (b) if the Indemnifying Person has not
been prejudiced in any material respect by such failure. Subject to the
immediately succeeding sentence, the Indemnifying Person shall assume the
defense of any such litigation or proceeding, including the employment of
counsel and the payment of all expenses, with such counsel being designated,
subject to the immediately succeeding sentence, in writing by the
Representatives in the case of parties indemnified pursuant to subsection (b)
and by the Company in the case of parties indemnified pursuant to subsection
(a). Any Indemnified Person shall have the right to participate in such
litigation or proceeding and to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include (x) the
Indemnifying Person and (y) the Indemnified Person and, in the written opinion
of counsel to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or likely conflicts of
interest between them, in either of which cases the
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reasonable fees and expenses of counsel (including disbursements) for such
Indemnified Person shall be reimbursed by the Indemnifying Person to the
Indemnified Person. If there is a conflict as described in clause (ii) above,
and the Indemnified Persons have participated in the litigation or proceeding
utilizing separate counsel whose fees and expenses have been reimbursed by the
Indemnifying Person and the Indemnified Persons, or any of them, are found to
be solely liable, such Indemnified Persons shall repay to the Indemnifying
Person such fees and expenses of such separate counsel as the Indemnifying
Person shall have reimbursed. It is understood that the Indemnifying Person
shall not, in connection with any litigation or proceeding or related
litigation or proceedings in the same jurisdiction as to which the Indemnified
Persons are entitled to such separate representation, be liable under this
Agreement for the reasonable fees and out-of-pocket expenses for more than one
separate firm (together with not more than one appropriate local counsel) for
all such Indemnified Persons. Subject to the next paragraph, all such fees and
expenses shall be reimbursed by payment to the Indemnified Persons of such
reasonable fees and expenses of counsel promptly after payment thereof by the
Indemnified Persons. Such firms shall be selected and designated in writing by
Xxxxxxx, Xxxxx & Co.
In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's
obligations to pay such fees and expenses shall be conditioned upon the
following:
(a) in case separate counsel is proposed to be retained by the
Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel;
(b) reimbursable fees and expenses of such separate counsel
shall be detailed and supported in a manner reasonably acceptable to
the Indemnifying Person (but nothing herein shall be deemed to require
the furnishing to the Indemnifying Person of any information,
including without limitation, computer print-outs of lawyers' daily
time entries, to the extent that, in the judgment of such counsel,
furnishing such information might reasonably be expected to result in
a waiver of any attorney-client privilege); and
(c) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate counsel
for Indemnified Persons for which the Indemnifying Person is liable
hereunder, and the Indemnified Person shall use every reasonable
effort to cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the Indemnifying
Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
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(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Trust and the Company on the one hand and
the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above and such failure resulted in the
indemnifying party being prejudiced in a material way, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Trust and the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Trust and the Company on the one hand and
such Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from such offering (before deducting expenses) received
by the Trust and the Company and the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Trust and the
Company on the one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Trust, the Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the 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 subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim, provided that the provisions of
subsection (c) have been complied with (in all material respects) in respect of
any separate counsel for such indemnified party. Notwithstanding the
provisions of this subsection (d), no 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 obligations of the Underwriters in this subsection (d)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Securities and not joint.
(e) The obligations of the Trust and the Company under this
Section 7 shall be in addition to any liability which the Trust and the Company
may otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Underwriter within the meaning of the
Act; and the obligations of the Underwriters under this Section 7 shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company, each Regular Trustee and to each person, if any, who
controls the Trust and the Company within the meaning of the Act.
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9. (a) 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 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), satisfactory in the Company to purchase, upon the terms herein
set forth, the principal amount 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 principal amounts of Securities which they
had severally agreed to purchase hereunder, as hereinabove provided,
and, in addition, the principal amount of Securities which the
defaulting Underwriter shall have so failed to purchase up to a
principal amount thereof equal to one-ninth (1/9) of the respective
principal amounts 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 principal amount 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 9 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 9 shall be without any liability on the part of the Company or any
non-defaulting Underwriter.
In the computation of any period of 36 hours referred to in this
section 9, 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.
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10. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Trust, the Company, or any officer, director, Regular
Trustee or controlling person of the Trust or the Company, and shall survive
delivery of and payment for the Securities.
11. This Agreement may be terminated at any time prior to the Time
of Delivery by the Representatives if, prior to such time, any of the following
events shall have occurred: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York
Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this Clause (v) in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities on the terms and in the manner contemplated in
the Prospectus;
If the Representatives elect to terminate this Agreement, as provided
in this Section 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 and 7
shall survive any termination of this Agreement.
12. In all dealings hereunder, the Representatives shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives jointly or by Xxxxxxx, Xxxxx &
Co. on behalf of the Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the Representatives in care of Xxxxxxx, Xxxxx &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Trust or the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 7(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Trust and the Company
by the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
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13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Trust, the Company and, to the extent
provided in Sections 7 and 9 hereof, the officers, directors and administrative
trustees of the Trust, the Company and each person who controls the Trust, the
Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us one for the Trust, the Company and one for each of the
Representatives plus one for each counsel counterparts hereof.
Very truly yours,
CMS ENERGY TRUST I
By:---------------------------------------
Name:
Title: Administrative Trustee
CMS ENERGY CORPORATION
By:
---------------------------------------
Name:
Title:
Accepted as of the date hereof:
XXXXXXX, XXXXX & CO.
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO.
BY:
---------------------------------------
(XXXXXXX, XXXXX & CO.)
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