EXHIBIT 10(z)
EXECUTION COPY
$300,000,000
CMS ENERGY CORPORATION
7.75% Senior Notes due 2010
Purchase Agreement
July 9, 2003
Citigroup Global Markets Inc.
As Representative of the several Initial Purchasers
named in Schedule I hereto
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CMS Energy Corporation, a Michigan corporation (the "Company"),
proposes to issue and sell to Citigroup Global Markets Inc. ("Citigroup") and
each of the other Initial Purchasers named in Schedule I hereto (collectively,
the "Initial Purchasers"), for whom Citigroup is acting as representative (in
such capacity, the "Representative"), an aggregate of $300,000,000 in principal
amount of its 7.75% Senior Notes due 2010 (the "Restricted Notes"), subject to
the terms and conditions set forth herein. The Restricted Notes are to be issued
pursuant to the provisions of the Indenture dated as of September 15, 1992
between the Company and Bank One Trust Company, N.A. (ultimate successor to NBD
Bank, National Association), as trustee (the "Trustee"), as supplemented and
amended by various supplemental indentures and as to be supplemented by the
Fourteenth Supplemental Indenture, to be dated as of July 17, 2003, establishing
the terms of the Restricted Notes (the "Supplemental Indenture") (as so
supplemented, the "Indenture"). Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
Holders (including subsequent transferees) of the Restricted Notes will
have the registration rights set forth in the registration rights agreement in
the form attached hereto as Exhibit A (the "Registration Rights Agreement"), to
be dated the Time of Purchase, for so long as such Restricted Notes constitute
Transfer Restricted Securities (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission") a
shelf registration statement (the "Registration Statement") pursuant to Rule 415
under the Securities Act of 1933, as amended (the "Act") relating to the
exchange or resale by certain holders of the Restricted Notes, and to use its
best efforts to cause such Registration Statement to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement. This Agreement, the Indenture, the Restricted Notes and the
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Operative Documents".
1. Offering Memorandum: The Restricted Notes will be offered and
sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Act. The Company has prepared a preliminary
offering memorandum dated July 9, 2003 (the
"Preliminary Offering Memorandum") and a confidential offering memorandum dated
July 9, 2003 (the "Offering Memorandum") relating to the Restricted Notes, which
incorporate by reference documents filed by the Company pursuant to Section 13,
14 or 15 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As used herein, the term "Preliminary Offering Memorandum" and "Offering
Memorandum" shall include respectively the documents incorporated by reference
therein. Any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Preliminary Offering Memorandum and Offering Memorandum
shall be deemed to include amendments or supplements to the Preliminary Offering
Memorandum and Offering Memorandum, and documents incorporated by reference
after the time of execution of this Agreement and prior to the termination of
the offering of the Restricted Notes by the Initial Purchasers.
Upon original issuance thereof, and until such time as the same is no
longer required pursuant to the Indenture, the Restricted Notes (and all
securities issued in exchange therefor or in substitution thereof) shall bear
the following legend:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) IN
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A")) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 UNDER THE SECURITIES ACT, (III)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (IV) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, (V) TO CMS ENERGY CORPORATION OR (VI) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE
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SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A)
ABOVE.
THE HOLDER OF THIS SECURITY AGREES THAT SUCH HOLDER WILL NOT ENGAGE IN
HEDGING TRANSACTIONS INVOLVING THIS SECURITY UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.
THIS SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON AND
PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS SECURITY TO REFLECT
ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION
THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY SHALL BE
DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.
THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS
OF, A REGISTRATION RIGHTS AGREEMENT DATED AS OF JULY 17, 2003 ENTERED
INTO BY THE COMPANY FOR THE BENEFIT OF CERTAIN HOLDERS OF SECURITIES
FROM TIME TO TIME.
2. Purchase and Sale: Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Company
agrees to sell to the respective Initial Purchasers, severally and not jointly,
and the respective Initial Purchasers, severally and not jointly, agree to
purchase from the Company at the purchase price specified in Schedule I hereto
(the "Purchase Price"), the respective principal amounts of Restricted Notes set
opposite their names in Schedule I hereto.
The Company hereby agrees that, without the prior written consent of
the Representative, it will not offer, sell, contract to sell or otherwise issue
debt securities substantially similar to the Restricted Notes for a period from
the date of the execution of this Agreement until the Time of Purchase.
3. Terms of Offering: The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "Exempt Resales") of
the Restricted Notes purchased hereunder on the terms set forth in the Offering
Memorandum solely to persons whom the Initial Purchasers reasonably believe to
be "qualified institutional buyers" as defined in Rule 144A under the Act or, at
the time any buy order for the Restricted Notes was or is originated, were or
are outside the United States and were or are not "U.S. persons" within the
meaning of Regulation S under the Act (such persons being referred to herein as
the "Eligible Purchasers"). The Initial Purchasers will offer the Restricted
Notes to Eligible Purchasers initially at a price equal to 100% of the principal
amount thereof. Such price may be changed at any time without notice.
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4. Payment and Delivery: Payment for the Restricted Notes shall
be made to the Company in federal or other immediately available funds in New
York City (or such other place or places of payment as shall be agreed upon by
the Company and the Representative in writing), upon the delivery of the
Restricted Notes at the offices of Pillsbury Winthrop LLP ("PW"), at Xxx Xxxxxxx
Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (or such other place or places of
delivery as shall be agreed upon by the Company and the Representative) to the
Representative for the respective accounts of the Initial Purchasers against
receipt therefor signed by the Representative on behalf of themselves and as
agent for the other Initial Purchasers. Such payment and delivery shall be made
at 10:00 A.M., New York time on July 17, 2003 (or on such later business day as
shall be agreed upon by the Company and the Representative in writing), unless
postponed in accordance with the provisions of Section 11 hereof. The day and
time at which payment and delivery for the Restricted Notes are to be made is
herein called the "Time of Purchase".
Delivery of the Restricted Notes shall be made in definitive, fully
registered form or global form, as specified by the Representative, in
authorized denominations registered in such names as the Representative may
request in writing to the Company not later than two full business days prior to
the Time of Purchase, or, if no such request is received, in the names of the
respective Initial Purchasers for the respective principal amounts of Restricted
Notes set forth opposite the name of each Initial Purchaser in Schedule I, in
denominations selected by the Company. The certificates evidencing the
Restricted Notes shall be delivered at the Time of Purchase for the account of
the Initial Purchasers, with any transfer taxes payable in connection with the
transfer of the Restricted Notes to the Initial Purchasers duly paid, against
payment of the Purchase Price therefor.
The Company agrees to make the Restricted Notes available for
inspection by the Initial Purchasers at the offices of PW at least 24 hours
prior to the Time of Purchase, in definitive, fully registered form, and as
requested pursuant to the preceding paragraph.
5. Conditions of Initial Purchasers' Obligations: The several
obligations of the Initial Purchasers hereunder are subject to the accuracy of
the representations and warranties, at and as of the Time of Purchase, on the
part of the Company, and to the following other conditions:
(a) That all legal proceedings to be taken in connection with
the issue and sale of the Restricted Notes shall be reasonably satisfactory in
form and substance to PW, counsel to the Initial Purchasers.
(b) That, at the Time of Purchase, the Representative shall be
furnished with the following opinions, dated the Time of Purchase:
(i) Opinion of Xxxxxx X. Xxxxxxxxx, Esq., Assistant
General Counsel of the Company, substantially to the effect set forth
in Exhibit B attached hereto;
(ii) Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, counsel to the Company, substantially to the effect set forth in
Exhibit C-1 and Exhibit C-2 attached hereto; and
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(iii) Opinion of PW, counsel to the Initial
Purchasers, in a form satisfactory to the Initial Purchasers.
(c) (i) That, on the date hereof and on the date of the
Time of Purchase, the Representative shall have received a letter from Ernst &
Young LLP ("E&Y") in form and substance satisfactory to the Initial Purchasers,
dated as of such date, (i) confirming that they are independent public
accountants with respect to the Company 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 Preliminary Offering Memorandum or
Offering Memorandum, as the case may be, complied as to form in all material
respects with the applicable accounting requirements of the Commission,
including the 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 Initial Purchasers reasonably request.
(ii) That, on the date hereof, the Representative
shall have received a letter from each of PricewaterhouseCoopers LLP and Price
Waterhouse, each in form and substance satisfactory to the Initial Purchasers,
dated as of such date, (i) confirming that each are independent public
accountants with respect to (A) the Company and the Midland Cogeneration Venture
Limited Partnership, in the case of PricewaterhouseCoopers LLP, and (B) the
Company and Jorf Lasfar Energy Company S.C.A., in the case of Price Waterhouse,
each within the meaning of the Act and the applicable published rules and
regulations of the Commission thereunder, (ii) stating that in each of their
opinions the financial statements examined by them and referred to in the letter
of E&Y complied as to form in all material respects with the applicable
accounting requirements of the Commission, including the 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 Initial Purchasers reasonably request.
(d) Subsequent to the date hereof or, if earlier, the dates as
of which information is given in the Offering Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in Section 5(c) hereof
or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries taken as a whole, except as
set forth in or contemplated in the Offering Memorandum (exclusive of any
amendment or supplement thereto), the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the judgment of the Representative, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Restricted Notes as contemplated in the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(e) That, at the Time of Purchase, the Company shall have
delivered to the Representative a certificate of an executive officer of the
Company to the effect that, to the best of his or her knowledge, information and
belief, (i) there shall have been no material adverse change in the condition
(financial or otherwise), earnings, business or properties of the Company from
that set forth in the Offering Memorandum (other than changes referred to in or
contemplated by the Offering Memorandum) and (ii) the representations and
warranties of the
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Company in this Agreement are true and correct on and as of the Time of Purchase
with the same effect as if made at the Time of Purchase, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied hereunder at or prior to the Time of Purchase.
(f) That the Company shall have executed and delivered the
Registration Rights Agreement and shall have furnished the Representative signed
counterparts of the Supplemental Indenture.
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or before the Time of
Purchase by the terms hereof.
(h) That the Company shall have complied with the provisions
of Section 6(c) hereof with respect to the furnishing of the Offering
Memorandum.
(i) That, at the Time of Purchase, the Restricted Notes shall
be rated at least B+ by Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc. ("S&P"), B3 by Xxxxx'x Investors Service, Inc.
("Moody's") and B+ by Fitch, Inc. ("Fitch"), and the Company shall have
delivered to the Representative a letter, dated the Time of Purchase, from each
such rating agency, or other evidence reasonably satisfactory to the
Representative, confirming that the Restricted Notes have been assigned such
ratings; and between the date of the execution of this Agreement and the Time of
Purchase, there has been no downgrading or withdrawal of the investment ratings
of the Restricted Notes, securities of the Company or securities of Consumers
Energy Company by any nationally recognized statistical rating agency, and no
such rating agency shall have publicly announced that it has under surveillance
or review, with possible negative implications, any such rating.
(j) The Restricted Notes shall have been designated as
PORTAL-eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD") and the Restricted
Notes shall be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
(k) That any additional documents or agreements reasonably
requested by the Initial Purchasers or their counsel to permit the Initial
Purchasers to perform their obligations or permit their counsel to deliver
opinions hereunder shall have been provided to them.
6. Certain Covenants of the Company: In further consideration of
the agreements of the Initial Purchasers herein contained, the Company covenants
as follows:
(a) To advise the Representative promptly and, if requested by
the Representative, confirm such advice in writing, of the issuance by any state
securities commission of any stop order suspending the qualification or
exemption from qualification of any Restricted Notes for offering or sale in any
jurisdiction designated by the Initial Purchasers pursuant to Section 6(d)
hereof, or the initiation of any proceeding by any state securities commission
or any other federal or state regulatory authority for such purpose. The Company
shall use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Restricted Notes under any
state securities or blue sky laws and, if at any time any state securities
commission or other federal or state regulatory authority
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shall issue an order suspending the qualification or exemption of any Restricted
Notes under any state securities or blue sky laws, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To deliver to the Initial Purchasers, without charge, as
soon as practicable, as many copies of the Offering Memorandum (as supplemented
or amended if the Company shall have made any supplements or amendments thereto)
as the Initial Purchasers may reasonably request. Subject to the Initial
Purchasers' compliance with their representations and warranties and agreements
set forth in Section 8 hereof, the Company consents to the use of the Offering
Memorandum, and any amendments and supplements thereto required pursuant hereto,
by the Initial Purchasers in connection with Exempt Resales.
(c) For such period of time as the Initial Purchasers are
required by law or customary practice to deliver an offering memorandum in
respect of the Restricted Notes, if any event shall have occurred as a result of
which it is necessary to amend or supplement the Offering Memorandum in order to
make the statements therein, in light of the circumstances when the Offering
Memorandum is delivered to an Eligible Purchaser, not misleading, or if it
becomes necessary to amend or supplement the Offering Memorandum to comply with
law, to forthwith prepare an appropriate amendment or supplement to the Offering
Memorandum and deliver to the Initial Purchasers, without charge, such number of
copies thereof as may be reasonably requested.
(d) To use its best efforts to qualify the Restricted Notes
for offer and sale under the securities or blue sky laws of such jurisdictions
as the Initial Purchasers may designate and to pay (or cause to be paid), or
reimburse (or cause to be reimbursed) the Initial Purchasers and their counsel
for, reasonable filing fees and expenses in connection therewith (including the
reasonable fees and disbursements of counsel to the Initial Purchasers 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.
(e) So long as the Restricted Notes are outstanding, (i) to
mail and make generally available as soon as practicable after the end of each
fiscal year to the record holders of the Restricted Notes a financial report of
the Company on a consolidated basis, all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
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(f) So long as any of the Restricted Notes are "restricted
securities" within the meaning of Rule 144(a)(3) under the Act and remain
outstanding and during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, to make available to any holder of Restricted
Notes in connection with any sale thereof and any prospective purchaser of such
Restricted Notes from such holder, the information required by Rule 144A(d)(4)
under the Act.
(g) To pay all expenses, fees and taxes (other than transfer
taxes on sales by the respective Initial Purchasers) in connection with the
issuance and delivery of the Restricted Notes, except that the Company shall be
required to pay the fees and disbursements (other than disbursements referred to
in Section 6(d) hereof) of PW, counsel to the Initial Purchasers, only in the
events provided in Section 6(h) hereof, the Initial Purchasers hereby agreeing
to pay such fees and disbursements in any other event, and that except as
provided in such Section 6(h), the Company shall not be responsible for any
out-of-pocket expenses of the Initial Purchasers in connection with their
services hereunder.
(h) If the Initial Purchasers shall not take up and pay for
the Restricted Notes due to the failure of the Company to comply with any of the
conditions specified in Section 5 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 12 hereof prior to the
Time of Purchase or the Date of Delivery, as the case may be, to pay the
reasonable fees and disbursements of PW, counsel to the Initial Purchasers, and,
if the Initial Purchasers shall not take up and pay for the Restricted Notes due
to the failure of the Company to comply with any of the conditions specified in
Section 5 hereof, to reimburse the Initial Purchasers for their reasonable
out-of-pocket expenses not to exceed $3,000 incurred in connection with the
financing contemplated by this Agreement.
(i) During the period referred to in Section 6(c) hereof, to
not amend or supplement the Offering Memorandum unless the Company has furnished
the Initial Purchasers and counsel to the Initial Purchasers with a copy for
their review and comment a reasonable time prior to the making of such amendment
or supplement and has reasonably considered any comments of the Initial
Purchasers, and not to make any such amendment or supplement to which such
counsel shall reasonably object on legal grounds in writing after consultation
with the Initial Purchasers.
(j) During the period referred to in Section 6(c) hereof, to
furnish the Initial Purchasers with copies of all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(k) During the period referred to in Section 6(c) hereof, to
comply with all requirements under the Exchange Act relating to the timely
filing with the Commission of its reports pursuant to Section 13 or 15(d) of the
Exchange Act and of its proxy statements pursuant to Section 14 of the Exchange
Act.
(l) To comply in all material respects with all of its
agreements set forth in the Registration Rights Agreement.
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(m) To obtain the approval of DTC for "book-entry" transfer of
the Restricted Notes, and to comply in all material respects with all of its
agreements set forth in the representation letter or letters of the Company to
DTC relating to the approval of the Restricted Notes by DTC for "book-entry"
transfer.
(n) Not to (or permit any affiliate (as defined in Rule 144
under the Act) to) sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Restricted Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Restricted Notes under the Act.
(o) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Restricted Notes.
(p) During the period of two years after the Time of Purchase,
not to, and not permit any of its affiliates (as defined in Rule 144 under the
Act) to, resell any of the Restricted Notes which constitute "restricted
securities" under Rule 144 under the Act that have been reacquired by any of
them.
(q) To take all reasonable action necessary to enable S&P,
Xxxxx'x and Fitch to provide their respective credit ratings of the Restricted
Notes.
(r) Until the second anniversary of the Time of Purchase, not
to, and not to permit any affiliates under its control to, purchase any
Restricted Notes unless, immediately upon any such purchase, the Company or any
such affiliate shall submit such Restricted Notes to the Trustee for
cancellation.
(s) Not to, and not to permit any of its affiliates or any
person acting on its or their behalf (other than the Initial Purchasers, as to
which no agreement is made) to, directly or indirectly, make offers or sales of
any security, or solicit offers to buy any security, under circumstances that
would require the registration of the Restricted Notes under the Act.
(t) Any information provided by the Company to publishers of
publicly available databases about the terms of the Restricted Notes shall
include a statement that the Restricted Notes have not been registered under the
Act and are subject to restrictions under Rule 144A under the Act and Regulation
S under the Act.
(u) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Restricted Notes.
(v) The Company will cause the proceeds of the issuance and
sale of the Restricted Notes to be applied for the purposes described in the
Offering Memorandum.
7. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, each of the Initial Purchasers
that:
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(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum does not, and any supplement or amendment to it will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this Section 7(a)
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued.
(b) The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum, when they were filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed) with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and incorporated by
reference will, when they are filed with the Commission, conform in all material
respects to the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder; none of such documents, when it was
filed (or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State of
Michigan and has all requisite authority to own or lease its properties and
conduct its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum 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
Preliminary Offering Memorandum and the Offering Memorandum 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.
(d) The Restricted Notes are in the form contemplated by the
Indenture and have been duly authorized by the Company. At the Time of Purchase,
the Restricted Notes will have been duly executed and delivered by the Company
and, when authenticated by the Trustee in the manner provided for in the
Indenture and delivered against payment therefor as provided in this Agreement,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement
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is considered in a proceeding at law or in equity), and will be entitled to the
security afforded by the Indenture equally and ratably with all securities
outstanding thereunder. The Restricted Notes conform in all material respects to
the descriptions thereof in the Preliminary Offering Memorandum and the Offering
Memorandum. 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 and in good standing under the laws of the
jurisdiction of its formation, has all requisite authority to own or lease its
properties and conduct its business as described in the Offering Memorandum 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 Offering
Memorandum 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 Significant
Subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company, and the Company has full corporate power and authority
to enter into this Agreement.
(f) The Registration Rights Agreement has been duly authorized
by the Company. At the Time of Purchase, the Registration Rights Agreement will
have been duly executed and delivered by the Company and will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is considered in a proceeding at law
or in equity). The Registration Rights Agreement conforms in all material
respects to the description thereof in the Preliminary Offering Memorandum and
the Offering Memorandum.
(g) The Indenture has been duly authorized by the Company. At
the Time of Purchase, the Indenture will have been duly executed and delivered
by the Company and will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by 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 Indenture conforms in
all material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum; and the Indenture conforms to the
requirements of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(h) Except for the outstanding shares of preferred stock of
Consumers Energy Company, the 8.36% Trust Originated Preferred Securities of
Consumers Power Company Financing I, the 8.20% Trust Originated Preferred
Securities of Consumers Energy Company Financing II, the 9 1/4% Trust Originated
Preferred Securities of Consumers Energy Company Financing III, the 9.00% Trust
Preferred Securities of Consumers Energy Company Financing IV, the 7 3/4%
Convertible Quarterly Income Preferred Securities of CMS Energy Trust I and the
7 1/4% PEPS Units of CMS Energy Trust III, all of the outstanding capital stock
of each of Consumers Energy Company and CMS Enterprises Company is owned
directly or indirectly by the Company, free and clear of any security interest,
claim, lien or other encumbrance (except as disclosed in the Offering
Memorandum) or preemptive rights, and there are no outstanding rights
11
(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.
(i) The Company 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 business in the manner described in the Preliminary Offering Memorandum
and the Offering Memorandum, except to the extent that the failure to obtain or
file would not have a material adverse effect on the Company.
(j) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with, any
federal, state, local or other governmental department, commission, board,
bureau, agency or instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is now required to
be obtained by the Company to authorize its execution or delivery of, or the
performance of its obligations under, this Agreement or any of the other
Operative Documents, except such as have been obtained or may be required under
state securities or blue sky laws or as referred to in the Offering Memorandum.
(k) None of the issuance or sale of the Restricted Notes, or
the execution or delivery by the Company of, or the performance by the Company
of its obligations under, this Agreement or the other Operative Documents, did
or will 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 agreement or instrument to
which it is a party, any existing applicable law, rule or regulation or any
judgment, order or decree of any government, governmental instrumentality or
court, domestic 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.
(l) Except as disclosed in the Offering Memorandum, 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, by any governmental authority that (i) questions the validity,
enforceability or performance of this Agreement or any of the other Operative
Documents or (ii) if determined adversely, is likely to have a material adverse
effect on the business or financial condition of the Company, or materially
adversely affect the ability of the Company to perform its obligations hereunder
or the consummation of the transactions contemplated by this Agreement.
(m) There has not been any material and adverse change in the
business, properties, prospects or financial condition of the Company from that
set forth or incorporated by reference in the Offering Memorandum (other than
changes referred to in or contemplated by the Offering Memorandum).
12
(n) Except as set forth in the Offering Memorandum, 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 in any material respect under any indenture, mortgage, loan
agreement, lease or other material agreement or instrument to which the Company
is a party or by which it or any of its properties may be bound.
(o) The Offering Memorandum, as of its date, contained all the
information specified in, and met the requirements of, Rule 144A(d)(4) under the
Act.
(p) When the Restricted Notes are issued and delivered
pursuant to this Agreement, the Restricted Notes will not be of the same class
(within the meaning of Rule 144A under the Act) as any security of the Company
that is listed on a national securities exchange registered under Section 6 of
the Exchange Act or that is quoted in a United States automated inter-dealer
quotation system. No securities of the same class as the Restricted Notes have
been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(q) Neither the Company nor any affiliate (as defined in Rule
144 under the Act) of the Company has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Act) which is or will be integrated with the
sale of the Restricted Notes in a manner that would require the registration
under the Act of the Restricted Notes or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of the
Restricted Notes (as those terms are used in Regulation D under the Act), or in
any manner involving a public offering within the meaning of Section 4(2) of the
Act, including, but not limited to, publication or release of articles, notices
or other communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(r) None of the Company nor any of its affiliates (as defined
in Rule 144 under the Act) or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning of
Regulation S under the Act with respect to the Restricted Notes.
(s) No registration under the Act of the Restricted Notes is
required for the sale of the Restricted Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales (assuming the accuracy of the
Initial Purchasers' representation and warranty and agreement set forth in
Section 8 hereof).
(t) The Company, after giving effect to the offering and sale
of the Restricted Notes, will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(u) The Restricted Notes satisfy the eligibility requirements
of Rule 144A(d)(3) under the Act.
13
(v) The Company has been advised by the NASD's PORTAL Market
that the Restricted Notes have been designated PORTAL-eligible securities in
accordance with the rules and regulations of the NASD.
(w) The Company's chief executive officer and chief financial
officer are responsible for establishing and maintaining the Company's
disclosure controls and procedures. The Company's management, under the
direction of the Company's principal executive and financial officers, has
evaluated the effectiveness of the Company's disclosure controls and procedures
as of a date within 90 days of the filing of the Company's most recent annual
report on Form 10-K/A. Based on such evaluation, the Company's chief executive
officer and chief financial officer have concluded that the Company's disclosure
controls and procedures are effective to ensure that material information was
presented to them and properly disclosed. There have been no significant changes
in the Company's internal controls or in other factors that could significantly
affect internal controls subsequent to such evaluation.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 5
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
8. Representations and Warranties of Initial Purchasers: Upon the
authorization by the Initial Purchasers of the release of the Restricted Notes,
the Initial Purchasers propose to offer the Restricted Notes for sale upon the
terms and conditions set forth in this Agreement and the Offering Memorandum and
the Initial Purchasers hereby represent and warrant to, and agree with, the
Company that:
(a) they each will offer and sell the Restricted Notes
only to Eligible Purchasers;
(b) they each are Accredited Investors (as defined in
Regulation D under the Act); and
(c) they each will not offer or sell the Restricted Notes
by any form of general solicitation or general advertising, including, but not
limited to, the methods described in Rule 502(c) under the Act.
9. Indemnification:
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each of the Initial Purchasers and each person, if
any, who controls any such Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act or otherwise, and to reimburse the Initial
Purchasers and such controlling person or persons, if any, for any legal or
other expenses incurred by them in connection with defending any action, suit or
proceeding (including governmental investigations) as provided in Section 9(c)
hereof, insofar as such losses, claims, damages, liabilities or actions, suits
or proceedings (including governmental investigations) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in
14
the Preliminary Offering Memorandum or the Offering Memorandum, or, if the
Preliminary Offering Memorandum or the Offering Memorandum shall be amended or
supplemented, in the Preliminary Offering Memorandum or the Offering Memorandum
as so amended or supplemented or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or actions arise out of or are based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission which was made in the Preliminary Offering Memorandum or the
Offering Memorandum or in the Preliminary Offering Memorandum or the Offering
Memorandum as so amended or supplemented, in reliance upon and in conformity
with information furnished in writing to the Company by, or through the
Representative on behalf of, any Initial Purchaser expressly for use therein and
except that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability or action, suit or proceeding arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in the Preliminary Offering Memorandum if
copies of the Offering Memorandum were timely delivered to the Initial
Purchasers pursuant to Section 6 hereof and a copy of the Offering Memorandum
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of the
Initial Purchasers to the person asserting such loss, claim, damage or liability
or action, suit or proceeding and if the Offering Memorandum (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability or action, suit or proceeding.
The Company's indemnity agreement contained in this Section
9(a), and the covenants, representations and warranties of the Company contained
in this Agreement, shall remain in full force and effect regardless of any
investigation made by or on behalf of any person, and shall survive the delivery
of and payment for the Restricted Notes hereunder, and the indemnity agreement
contained in this Section 9 shall survive any termination of this Agreement. The
liabilities of the Company in this Section 9(a) are in addition to any other
liabilities of the Company under this Agreement or otherwise.
(b) Each Initial Purchaser agrees, severally and not jointly,
to the extent permitted by law, to indemnify, hold harmless and reimburse the
Company, each other Initial Purchaser, and each person, if any, who controls the
Company or any such other Initial Purchaser within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, to the same extent and upon the same
terms as the indemnity agreement of the Company set forth in Section 9(a)
hereof, but only with respect to alleged untrue statements or omissions made in
the Preliminary Offering Memorandum or the Offering Memorandum, as amended or
supplemented (if applicable), in reliance upon and in conformity with
information furnished in writing to the Company by such Initial Purchaser
expressly for use therein.
The indemnity agreement on the part of each Initial Purchaser
contained in this Section 9(b) and the representations and warranties of such
Initial Purchaser contained in this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the Company or
any other person, and shall survive the delivery of and payment for the
Restricted Notes hereunder, and the indemnity agreement contained in this
Section 9(b) shall survive any termination of this Agreement. The liabilities of
each Initial Purchaser in this
15
Section 9(b) are in addition to any other liabilities of such Initial Purchaser
under this Agreement or otherwise.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened against any
person as to which indemnity may be sought under Section 9(a) or 9(b) hereof,
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 Section 9(a) or 9(b) hereof 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 Representative
in the case of parties indemnified pursuant to Section 9(b) hereof and by the
Company in the case of parties indemnified pursuant to Section 9(a) hereof. Any
Indemnified Person shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person and (y)
the Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel would be
inappropriate due to actual or likely conflicts of interest between them, in
either of which cases the reasonable fees and expenses of counsel (including
disbursements) for such Indemnified Person shall be reimbursed by the
Indemnifying Person to the Indemnified Person. If there is a conflict as
described in clause (ii) above, and the Indemnified Persons have participated in
the litigation or proceeding utilizing separate counsel whose fees and expenses
have been reimbursed by the Indemnifying Person and the Indemnified Persons, or
any of them, are found to be solely liable, such Indemnified Persons shall repay
to the Indemnifying Person such fees and expenses of such separate counsel as
the Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or proceeding
or related litigation or proceedings in the same jurisdiction as to which the
Indemnified Persons are entitled to such separate representation, be liable
under this Agreement for the reasonable fees and out-of-pocket expenses of more
than one separate firm (together with not more than one appropriate local
counsel) for all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the Indemnified Persons
of such reasonable fees and expenses of counsel promptly after payment thereof
by the Indemnified Persons.
In furtherance of the requirement above that fees and expenses
of any separate counsel for the Indemnified Persons shall be reasonable, the
Initial Purchasers and the Company agree that the Indemnifying Person's
obligations to pay such fees and expenses shall be conditioned upon the
following:
16
(1) 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;
(2) reimbursable fees and expenses of such
separate counsel shall be detailed and supported in a manner
reasonably acceptable to the Indemnifying Person (but nothing
herein shall be deemed to require the furnishing to the
Indemnifying Person of any information, including, without
limitation, computer print-outs of lawyers' daily time
entries, to the extent that, in the judgment of such counsel,
furnishing such information might reasonably be expected to
result in a waiver of any attorney-client privilege); and
(3) the Company and the Representative 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 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 9, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
(d) If the indemnification provided for in Section 9 above is
unavailable to or insufficient to hold harmless an Indemnified Person under this
Section 9 in respect of any losses, claims, damages or liabilities (or actions,
suits or proceedings (including governmental investigations) in respect thereof)
referred to therein, then each Indemnifying Person under this Section 9 shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Indemnifying Person on the one hand and the Indemnified Person on the
other from the offering of the Restricted Notes. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable
17
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the total discounts or commissions
received by the Initial Purchasers, in each case as set forth in the Offering
Memorandum, bear to the aggregate public offering price of the Restricted Notes.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Initial Purchasers on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 9(d). The amount paid
or payable by an Indemnified Person as a result of the losses, claims, damages
or liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to above in this Section 9(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
actions, suits or proceedings (including governmental proceedings) or claim,
provided that the provisions of this Section 9 have been complied with (in all
material respects) in respect of any separate counsel for such Indemnified
Person. Notwithstanding the provisions of this Section 9(d), in no case shall
any Initial Purchaser be responsible for any amount in excess of the purchase
discount or commission applicable to the Restricted Notes purchased by such
Initial Purchaser hereunder. 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 Initial Purchasers' obligations in this Section 9(d) to
contribute are several in proportion to their respective obligations and not
joint.
The agreement with respect to contribution contained in this Section
9(d) shall remain in full force and effect regardless of any investigation made
by or on behalf of the Company or any Initial Purchaser, and shall survive
delivery of and payment for the Restricted Notes hereunder and any termination
of this Agreement.
10. Survival: The respective indemnities, agreements,
representations, warranties and other statements of the Company and the Initial
Purchasers 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 the Initial Purchasers or any controlling person of the
Initial Purchasers, the Company, or any officer, director or controlling person
of the Company, and shall survive delivery of and payment for the Restricted
Notes.
11. Substitution of Initial Purchasers: If any Initial Purchaser
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 Restricted Notes which it had agreed
to purchase on the Time of Purchase, the Representative shall immediately notify
the Company and the Representative and the other Initial Purchasers may, within
36 hours of the giving of such notice, determine to purchase, or to procure one
or more other members of
18
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), satisfactory to the Company,
to purchase, upon the terms herein set forth, the principal amount of Restricted
Notes which the defaulting Initial Purchaser had agreed to purchase. If any
non-defaulting Initial Purchaser or Initial Purchasers shall determine to
exercise such right, the Representative 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 Representative shall
fail to give such notice, or shall within such 36-hour period give written
notice to the Company that no other Initial Purchaser or Initial Purchasers, or
others, will exercise such right, then this Agreement may be terminated by the
Company, upon like notice given to the Representative 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 Initial Purchasers to
purchase and pay for the respective principal amounts of Restricted Notes which
they had severally agreed to purchase hereunder, as herein above provided, and,
in addition, the principal amount of Restricted Notes which the defaulting
Initial Purchaser shall have so failed to purchase up to a principal amount
thereof equal to one-ninth (1/9) of the respective principal amounts of
Restricted Notes which such non-defaulting Initial Purchasers 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 Restricted Notes which such defaulting Initial Purchaser
had agreed to purchase, or that portion thereof which the remaining Initial
Purchasers shall not be obligated to purchase pursuant to Section 11(a) hereof.
In the event the Company shall exercise its rights under Section 11(a)
and/or Section 11(b) hereof, the Company shall give written notice thereof to
the Representative 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 Section 11(a) and/or Section
11(b) hereof, the Company shall be deemed to have elected to terminate this
Agreement.
Any action taken by the Company under this Section 11 shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement. Termination by the Company under
this Section 11 shall be without any liability on the part of the Company or any
non-defaulting Initial Purchaser.
In the computation of any period of 36 hours referred to in this
Section 11, 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.
12. Termination of Agreement: This Agreement shall become
effective upon the execution and delivery of this Agreement by the parties
hereto.
19
This Agreement may be terminated at any time prior to the Time of
Purchase by the Representative if, prior to such time, any of the following
events shall have occurred: (i) trading in the Company's common stock, par value
$0.01 per share, shall have been suspended by the Commission or the New York
Stock Exchange or trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such exchange; (ii) a banking moratorium shall have been declared
either by U.S. federal or New York State authorities; or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on the financial markets of the United States is such as to impair, in the
sole judgment of the Representative, the marketability of the Restricted Notes.
If the Representative elects to terminate this Agreement, as provided
in this Section 12, the Representative will promptly notify the Company and each
other Initial Purchaser by telephone or telecopy, confirmed by letter. If this
Agreement shall not be carried out by any Initial Purchaser for any reason
permitted hereunder, or if the sale of the Restricted Notes to the Initial
Purchasers 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 Initial Purchaser
or to any member of any selling group for the loss of anticipated profits from
the transactions contemplated by this Agreement and the Initial Purchasers 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 6(e), 6(i), 9
and 10 shall survive any termination of this Agreement.
13. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to the following
addresses or be sent by telecopy as follows: (i) if to the Initial Purchasers or
the Representative, to Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: General Counsel (Telecopy 212-816-7912); and
(ii) if to the Company, to CMS Energy Corporation, Xxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Executive Vice President and Chief Financial Officer
(Telecopy 517-788-2186).
14. Parties in Interest: This Agreement has been and is made
solely for the benefit of the Initial Purchasers, the Company, the Initial
Purchasers' directors and officers and the controlling persons, if any, referred
to herein, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 11
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
15. Definition of Certain Terms: All obligations of the Initial
Purchasers hereunder are several and not joint. The term "successors" as used in
this Agreement shall not include any purchaser, as such purchaser, of any of the
Restricted Notes from any of the respective Initial Purchasers.
16. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
20
17. Waiver of Tax Confidentiality: Notwithstanding anything herein
to the contrary, purchasers of the Restricted Notes (and each employee,
representative or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any transaction contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to the purchasers
of the Restricted Notes relating to such U.S. tax treatment and U.S. tax
structure, other than any information for which nondisclosure is reasonably
necessary in order to comply with applicable securities laws.
18. Counterparts: This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
21
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and, upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Initial Purchasers and the Company.
Very truly yours,
CMS ENERGY CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President and Treasurer
Confirmed and accepted as
of the date first written above:
CITIGROUP GLOBAL MARKETS INC.
As Representative of the several Initial Purchasers
named in Schedule I hereto
By: CITIGROUP GLOBAL MARKETS INC.
By:/s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Director
SCHEDULE I
Principal Amount of Restricted
Initial Purchasers Notes Purchase Price
------------------ ----- --------------
Citigroup Global Markets Inc. $120,000,000 $115,401,600
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx $105,000,000 $100,976,400
Incorporated
Deutsche Bank Securities Inc. $ 75,000,000 $ 72,126,000
------------ ------------
Total $300,000,000 $288,504,000
============ ============
I-1
EXHIBIT A
This Registration Rights Agreement (this "Agreement") is made and
entered into as of July 17, 2003, by CMS Energy Corporation, a Michigan
corporation (the "Company"), and Citigroup Global Markets Inc., as
representative of the Initial Purchasers (the "Initial Purchasers") listed on
Schedule I to the Purchase Agreement (as defined below), pursuant to which the
Initial Purchasers have agreed to purchase the Company's $300,000,000 7.75%
Senior Notes due 2010 (the "Restricted Notes").
This Agreement is made pursuant to the Purchase Agreement, dated July
9, 2003 (the "Purchase Agreement"), between the Company and Citigroup Global
Markets Inc., as representative of the Initial Purchasers. In order to induce
the Initial Purchasers to purchase the Restricted Notes, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution
and delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 5(f) of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement. As used in this Agreement, the
following capitalized terms shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Advice: As defined in Section 6(d) hereof.
Agreement: As defined in the first paragraph hereof.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Exchange Notes that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Restricted
Notes that such Broker-Dealer acquired for its own account as a result of
market-making activities or other trading activities (other than Restricted
Notes acquired directly from the Company or any of its affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the primary corporate trust office of the
Trustee, on which banks are authorized to close.
Certificated Securities: Notes that are not in Global Note form.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Company: As defined in the first paragraph hereof.
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Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (c) the delivery by
the Company to the Security Registrar of the Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of the Restricted
Notes tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Restricted Notes, each
Interest Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Company's 7.75% Senior Notes due 2010, to be issued
pursuant to the Indenture (i) in the Exchange Offer or (ii) upon the request of
any Holder of Restricted Notes covered by a Shelf Registration Statement, in
exchange for such Restricted Notes.
Exchange Offer: The registration by the Company under the Act of the
Exchange Notes pursuant to the Exchange Offer Registration Statement pursuant to
which the Company shall offer the Holders of all outstanding Transfer Restricted
Securities relating to Restricted Notes the opportunity to exchange all such
outstanding Transfer Restricted Securities relating to Restricted Notes for
Exchange Notes in an aggregate principal amount equal to the aggregate principal
amount of the Transfer Restricted Securities relating to Restricted Notes
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Restricted Notes to certain "qualified institutional
buyers", as such term is defined in Rule 144A under the Act, or to persons who
are not "U.S. persons", as such term is defined in Regulation S under the Act.
Global Note: As defined in the Notes.
Holder: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indemnified Person: As defined in Section 8(c) hereof.
Indemnifying Person: As defined in Section 8(c) hereof.
Indenture: Indenture dated as of September 15, 1992, between the
Company and the Trustee, as supplemented by various supplemental indentures.
Initial Purchasers: As defined in the first paragraph hereof.
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Interest Payment Date: As defined in the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Restricted Notes and the Exchange Notes.
Person: An individual, partnership, corporation, trust, limited
liability company, unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Purchase Agreement: As defined in the second paragraph hereof.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Notes on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Restricted Notes: As defined in the first paragraph hereof.
S-3 Ineligibility Date: As defined in Section 12(l) hereof.
Security Registrar: As defined in the Indenture.
Shelf Registration Statement: As defined in Section 4(a) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur
of (a) the date on which such Restricted Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Restricted Note has been disposed of in accordance with a Shelf Registration
Statement, (c) the date on which such Restricted Note is disposed of by a
Broker-
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Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained therein)
or (d) the date on which such Restricted Note is distributed to the public
pursuant to Rule 144 under the Act.
Trustee: Bank One Trust Company, N.A. (ultimate successor to NBD Bank,
National Association), as trustee under the Indenture.
Underwritten Offering or Underwritten Registration: An offering or
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) hereof have been
complied with), the Company shall (i) cause to be filed with the Commission as
soon as practicable after the Closing Date, but in no event later than 240 days
after the Closing Date, the Exchange Offer Registration Statement, (ii) use its
reasonable best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 330
days after the Closing Date, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause such Exchange Offer Registration Statement to
become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Notes to be made under the blue sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Exchange Notes to be offered in
exchange for the Restricted Notes that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) hereof.
(b) The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Notes shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 days thereafter.
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(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Restricted Broker-Dealer who holds Restricted Notes
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Restricted Notes (other than Transfer Restricted
Securities acquired directly from the Company or any affiliate of the Company)
pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Exchange Note received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) hereof to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request, and in no event later than one day after such request, at any time
during such one-year period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement with respect to the Exchange Notes
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a)(i) hereof have been
complied with) or (ii) any Holder of Transfer Restricted Securities shall notify
the Company within 20 Business Days following the Consummation of the Exchange
Offer that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, the Company shall, if, and when, the Company is eligible to use Act Form
S-3, (x) cause to be filed on or prior to 180 days after the date on which the
Company determines that it is not required to file the Exchange Offer
Registration Statement pursuant to clause (i) above or 180 days after the date
on which the Company receives the notice specified in clause (ii) above a shelf
registration statement pursuant to Rule 415 under the Act (which may be an
amendment to
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the Exchange Offer Registration Statement (in either event, the "Shelf
Registration Statement")), relating to all Transfer Restricted Securities the
Holders of which shall have provided the information required pursuant to
Section 4(b) hereof, and (y) use its best efforts to cause such Shelf
Registration Statement to become effective on or prior to 270 days after the
date on which the Company becomes obligated to file such Shelf Registration
Statement. If, after the Company has filed an Exchange Offer Registration
Statement which satisfies the requirements of Section 3(a) hereof, the Company
is required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer shall not be permitted under applicable federal law,
then the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (x) above. Such an event shall have no effect
on the requirements of clause (y) above. The Company shall use its reasonable
best efforts to keep the Shelf Registration Statement discussed in this Section
4(a) continuously effective, supplemented and amended as required by and subject
to the provisions of Sections 6(b) and (c) hereof to the extent necessary to
ensure that it is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a), and to ensure that
it conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i) hereof)
following the date on which such Shelf Registration Statement first becomes
effective under the Act.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K for use in connection with
any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled
to liquidated damages pursuant to Section 5 hereof unless and until such Holder
shall have used its best efforts to provide all such information. Each Holder as
to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 30 calendar days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within 15 Business Days by a post-effective amendment to
such Registration Statement that cures such failure and that is itself declared
effective within five Business Days (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Company agrees to pay
liquidated damages in the form of additional interest on the Transfer Restricted
Securities to each Holder of Transfer Restricted
A-6
Securities, from and including the date on which any Registration Default shall
occur to, but excluding, the date on which such Registration Default has been
cured, at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of such Registration Default and shall increase by
0.25% per annum at the end of each subsequent 90-day period, but in no event
shall such rate exceed 0.50% per annum. Notwithstanding anything to the contrary
set forth herein, (1) upon filing of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of clause
(i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of clause (ii) above, (3) upon Consummation of the Exchange Offer, in the case
of clause (iii) above, or (4) upon the filing of a post-effective amendment to
the Registration Statement or an additional Registration Statement that causes
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement) to again be declared effective or made usable, in the
case of clause (iv) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or
(iv), as applicable, shall cease.
All additional interest shall be paid on each payment date to the
Holder of Global Notes by wire transfer of immediately available funds or by
federal funds check and to Holders of Certificated Securities by mailing checks
to their registered addresses on the books of the Company or the Trustee for
such payment. All obligations of the Company set forth in the preceding
paragraph that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such security
shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) hereof, shall use its reasonable best efforts to effect such
exchange and to permit the sale of Broker-Dealer Transfer Restricted Securities
being sold in accordance with the intended method or methods of distribution
thereof, and shall comply with all of the following provisions:
(i) If, following the date hereof, there has been
published a change in Commission policy with respect to exchange offers
such as the Exchange Offer, such that in the reasonable opinion of
counsel to the Company there is a substantial question as to whether
the Exchange Offer is permitted by applicable federal law, the Company
hereby agrees to seek a no-action letter or other favorable decision
from the Commission allowing the Company to Consummate an Exchange
Offer for the Restricted Notes. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company hereby agrees to take all
such other actions as are reasonably requested by the Commission or
otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff
an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that such an
A-7
Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an affiliate of the Company, (B) it is
not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate in, a
distribution of the Exchange Notes to be issued in the Exchange Offer
and (C) it is acquiring the Exchange Notes in its ordinary course of
business. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on
the date of this Agreement rely on the position of the Commission
enunciated in Xxxxxx Xxxxxxx and Co. Inc. (available June 5, 1991) and
Exxon Capital Holdings Corp. (available May 13, 1988), as interpreted
in the Commission's letter to Shearman & Sterling (available July 2,
1993), and similar no-action letters (including, if applicable, any
no-action letter obtained pursuant to clause (i) above), and (2) must
comply with the registration and prospectus delivery requirements of
the Act in connection with a secondary resale transaction and that such
a secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Exchange Notes obtained by such Holder in
exchange for Restricted Notes acquired by such Holder directly from the
Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental letter
to the Commission (A) stating that the Company is registering the
Exchange Offer in reliance on the position of the Commission enunciated
in Exxon Capital Holdings Corp. (available May 13, 1988), Xxxxxx
Xxxxxxx and Co. Inc. (available June 5, 1991) and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Exchange Notes to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer
is acquiring the Exchange Notes in its ordinary course of business and
has no arrangement or understanding with any Person to participate in
the distribution of the Exchange Notes received in the Exchange Offer
and (C) any other undertaking or representation required by the
Commission as set forth in any no-action letter obtained pursuant to
clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) hereof and shall use its best
A-8
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof (as indicated in the information furnished to
the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company
will prepare and file with the Commission a Registration Statement relating to
the registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof within the time periods
and otherwise in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without limitation,
any Exchange Offer Registration Statement and the related Prospectus, to the
extent that the same are required to be available to permit sales of
Broker-Dealer Transfer Restricted Securities by Restricted Broker-Dealers), the
Company shall:
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 hereof, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, (1) in the case
of clause (A), correcting any such misstatement or omission, and (2) in
the case of clauses (A) and (B), using its best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, confirm such advice
in writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or
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supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Act or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any
of the preceding purposes, (D) of the existence of any fact or the
happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by reference therein
untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or blue sky laws,
the Company shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to the Initial Purchaser(s), each selling
Holder named in any Registration Statement or Prospectus and each of
the underwriter(s) in connection with such sale, if any, before filing
with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any
such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such Holders and underwriter(s) in connection with such sale, if
any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any amendment
or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which the
selling Holders of the Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s) in connection with such
sale, if any, shall reasonably object within five Business Days after
the receipt thereof;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders and
to the underwriter(s) in connection with such sale, if any, make the
Company's representatives available for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by
the selling Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such
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selling Holders or any of such underwriter(s), all financial and other
records, material corporate documents and properties of the Company and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement
or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering
of the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(viii) if requested in writing by any selling Holder and
each of the underwriter(s) in connection with such sale, if any,
furnish, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(ix) if requested in writing by any selling Holder and
each of the underwriter(s), if any, deliver, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company hereby consents to the use (in accordance with
law) of the Prospectus and any amendment or supplement thereto by each
of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(x) enter into such agreements (including an underwriting
or similar agreement) and make such representations and warranties and
take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting or
similar agreement is entered into and whether or not the registration
is an Underwritten Registration, the Company shall:
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(A) furnish (or in the case of clauses (2) and
(3) below, use its best efforts to furnish) to each selling
Holder and each underwriter, if any, upon the effectiveness of
the Shelf Registration Statement and to each Restricted
Broker-Dealer upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, signed on behalf of the Company by
(x) the President or any Vice President and (y) a
principal financial or accounting officer of the
Company, confirming, as of the date thereof, the
matters set forth in Sections 5(d) and 5(e) of the
Purchase Agreement and such other similar matters as
the Holders, underwriter(s) and/or Restricted
Broker-Dealers may reasonably request;
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, of counsel for the Company covering
matters similar to those set forth in Section 5(b)(i)
of the Purchase Agreement and such other matters as
the Holders, underwriter(s) and/or Restricted
Broker-Dealers may reasonably request, and in any
event including a statement to the effect that such
counsel has participated in conferences with officers
and other representatives of the Company,
representatives of the independent public accountants
for the Company and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying
as to materiality to a large extent upon facts
provided to such counsel by officers and other
representatives of the Company and without
independent check or verification), no facts came to
such counsel's attention that caused such counsel to
believe that the applicable Registration Statement,
at the time such Registration Statement or any
post-effective amendment thereto became effective
and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the
Exchange Offer, 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 the
Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer, as of
the date of Consummation,
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contained 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, not
misleading. Without limiting the foregoing, such
counsel may state further that such counsel assumes
no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of
the financial statements, Notes and schedules and
other financial data included in any Registration
Statement contemplated by this Agreement or the
related Prospectus; and
(3) a customary comfort letter, dated
as of the date of effectiveness of the Shelf
Registration Statement or the date of Consummation of
the Exchange Offer, as the case may be, from the
Company's independent accountants, in the customary
form and covering matters of the type customarily
covered in comfort letters to underwriters in
connection with primary underwritten offerings, and
affirming the matters set forth in the comfort
letters delivered pursuant to Section 5(c)(i) and
Section 5(c)(ii) of the Purchase Agreement, without
exception;
(B) set forth in full or incorporate by
reference in the underwriting or similar agreement, if any, in
connection with any sale or resale pursuant to any Shelf
Registration Statement, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to
be indemnified pursuant to said Section 8; and
(C) deliver such other documents and
certificates as may be reasonably requested by the selling
Holders, the underwriter(s), if any, and Restricted
Broker-Dealers, if any, to evidence compliance with clause (A)
above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company pursuant to this clause (C);
the above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company contemplated in clause (A)(1)
above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted Broker-Dealer
promptly and, if requested by such Persons, shall confirm such advice in
writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or blue sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may request and do any and all other
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acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Restricted
Notes covered by any Shelf Registration Statement contemplated by this
Agreement, Exchange Notes having an aggregate principal amount equal to
the aggregate principal amount of Restricted Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder; such Exchange Notes to be registered in the name of such Holder
or in the name of the purchaser(s) of such Notes, as the case may be;
in return, the Restricted Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) subject to clause (i) above, if any fact or event
contemplated by clause (iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The Depository
Trust Company;
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(xvii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use its best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earning
statement meeting the requirements of Rule 158 under the Act (which
need not be audited) covering a twelve-month period beginning after the
effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of a notice of actions to be
taken as referred to in Section 6(c)(i) hereof or any notice from the Company of
the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
such Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xv) hereof, or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus (the "Advice"). If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof
to and including the date when each selling Holder
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covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xv) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees; (ii) all fees and expenses of
compliance with federal securities and state blue sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Exchange Notes
to be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and (other than in connection with the Exchange Offer) the Holders
of Transfer Restricted Securities; (v) all application and filing fees, if any,
in connection with listing the Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with the Shelf Registration Statement, the
Company will reimburse the Holders of Transfer Restricted Securities registered
pursuant to the Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel, who shall be chosen by the Holders
of a majority in principal amount of the Transfer Restricted Securities for
whose benefit the Shelf Registration Statement is being prepared in consultation
with the Company.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each Holder and each Person, if any, who controls
any Holder within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act or
otherwise ("Indemnified Holder"), and to reimburse the Holders and such
controlling Person or Persons, if any, for any legal or other expenses incurred
by them in connection with defending any action, suit or proceeding (including
governmental investigations) as provided in Section 8(c) hereof, insofar as such
losses, claims, damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement, or, if any Registration Statement shall be amended or supplemented,
in the Registration Statement as so amended or supplemented, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or
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omission or alleged omission which was made in the Registration Statement or in
the Registration Statement as so amended or supplemented, in reliance upon and
in conformity with information furnished in writing to the Company by any Holder
expressly for use therein.
The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any Person, and the indemnity agreement contained in
this Section 8 shall survive any termination of this Agreement. The liabilities
of the Company in this Section 8 are in addition to any other liabilities of the
Company under this Agreement or otherwise.
(b) Each Holder agrees, severally and not jointly, to the extent
permitted by law, to indemnify, hold harmless and reimburse the Company and each
Person, if any, who controls the Company within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, to the same extent and upon the same
terms as the indemnity agreement of the Company set forth in Section 8(a)
hereof, but only with respect to alleged untrue statements or omissions made in
the Registration Statement or in the Registration Statement, as amended or
supplemented (if applicable), in reliance upon and in conformity with
information furnished in writing to the Company by such Holder expressly for use
therein.
The indemnity agreement on the part of each Holder contained in this
Section 8(b) shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any other Person, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement.
(c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against any person as to
which indemnity may be sought under Section 8(a) or 8(b) hereof, 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 Section 8(a) or 8(b) hereof 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 a majority in
principal amount of the Holders in the case of parties indemnified pursuant to
Section 8(b) hereof and by the Company in the case of parties indemnified
pursuant to Section 8(a) hereof. 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
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parties by the same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the reasonable fees
and expenses of counsel (including disbursements) for such Indemnified Person
shall be reimbursed by the Indemnifying Person to the Indemnified Person. If
there is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing separate
counsel whose fees and expenses have been reimbursed by the Indemnifying Person,
and the Indemnified Persons, or any of them, are found to be solely liable, such
Indemnified Person shall repay to the Indemnifying Parties such fees and
expenses of such separate counsel as the Indemnifying Person shall have
reimbursed. It is understood that the Indemnifying Person shall not, in
connection with any litigation or proceeding or related litigation or
proceedings in the same jurisdiction as to which the Indemnified Persons are
entitled to such separate representation, be liable under this Agreement for the
reasonable fees and out-of-pocket expenses of more than one separate firm
(together with not more than one appropriate local counsel) for all such
Indemnified Persons. Subject to the next paragraph, all such fees and expenses
shall be reimbursed by payment to the Indemnified Persons of such reasonable
fees and expenses of counsel promptly after payment thereof by the Indemnified
Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Holders
and the Company agree that the Indemnifying Person's obligations to pay such
fees and expenses shall be conditioned upon the following:
(1) in case separate counsel is proposed to be retained
by the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel;
(2) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including, without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment of
such counsel, furnishing such information might reasonably be expected
to result in a waiver of any attorney-client privilege); and
(3) the Company and the Holders 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 against the Indemnified Person, 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
A-18
claim in respect of which indemnity has been properly sought by the Indemnified
Persons hereunder, unless such settlement includes an unconditional release by
the claimant of all Indemnified Persons from all liability with respect to
claims which are the subject matter of such litigation, proceeding or claim.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an Indemnified Person under this
Section 8 in respect of any losses, claims, damages or liabilities (or actions,
suits or proceedings (including governmental investigations) in respect thereof)
referred to therein, then each Indemnifying Person under this Section 8 shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Indemnifying Person on the one hand and the Indemnified Person on the
other from the sale of the Transfer Restricted Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Holders on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Holders 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 in this Section 8. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental proceedings) in respect
thereof) referred to in this Section 8 shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Person in connection with
investigating or defending any such actions, suits or proceedings (including
governmental proceedings) or claims, provided that the provisions of this
Section 8 have been complied with (in all material respects) in respect of any
separate counsel for such Indemnified Person. Notwithstanding the provisions of
this Section 8, no Holder shall be required to contribute any amount greater
than the excess of the amount by which the total received by such Holder with
respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder 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 Holders' obligations in this Section 8 to
contribute are several in proportion to their respective obligations and not
joint.
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The agreement with respect to contribution contained in this Section 8
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any Holder, and shall survive any termination of
this Agreement.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company. The Holders of Transfer Restricted
Securities included in any such Underwritten Offering shall be responsible for
paying all underwriting or placement fees charged, or costs or expenses
incurred, by such investment bankers and managers in connection with such
Underwritten Offering. Such investment bankers and managers are referred to
herein as the "underwriters".
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, in the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by the Company of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.
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The Company has not previously entered into any agreement granting any
registration rights with respect to its securities to any Person. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company will not take any
action, or voluntarily permit any change to occur, with respect to the Notes
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless (i) in the case
of Section 5 hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to or departure from the provisions hereof that relates exclusively to
the rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the rights of
other Holders whose securities are not being tendered pursuant to such Exchange
Offer may be given by the Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Security Registrar under the Indenture, with a copy to
the Security Registrar; and
(ii) if to the Company:
CMS Energy Corporation
Xxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000, Attention: Executive
Vice President and Chief Financial Officer
With a copy at the same address to:
Xxxxxx X. Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
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Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities directly from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
(l) S-3 Ineligibility. If the Company is not eligible to use Act
Form S-3 by the 270th day after the date on which it determines that it is not
required to file the Exchange Offer Registration Statement pursuant to Section
4(a)(i) hereof or the 270th day after the date on which it receives the notice
specified in Section 4(a)(ii) hereof (either, the "S-3 Ineligibility Date"), the
Company shall (A) cause to be filed as soon as practicable after the S-3
Ineligibility Date a registration statement containing a resale prospectus on
whatever Act form the Company is then eligible to use relating to all Transfer
Restricted Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof and (B) use its best efforts to cause
such shelf registration statement to become effective as soon as practicable.
A-22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CMS ENERGY CORPORATION
By: ___________________________________
Name:
Title:
CONFIRMED AND ACCEPTED
AS OF THE DATE FIRST ABOVE WRITTEN:
CITIGROUP GLOBAL MARKETS INC.,
for itself and as Representative
of the Initial Purchasers
By: _________________________________
Name:
Title:
A-23
EXHIBIT B
1. The Company is a duly organized, validly existing corporation in good
standing under the laws of the State of Michigan.
2. All legally required corporate proceedings in connection with the
authorization, issuance and validity of the Restricted Notes and the sale of the
Restricted Notes by the Company in accordance with the Purchase Agreement have
been taken; and no approval, authorization, consent or order of any governmental
regulatory body is required with respect to the issuance and sale of the
Restricted Notes (other than in connection with or in compliance with the
provisions of the securities or blue sky laws of any state, as to which I
express no opinion).
3. I do not know of any legal or governmental proceedings that would be
required to be described in the Offering Memorandum if it were a registration
statement filed by the Company under the Act that are not described as required,
nor of any contracts or documents of a character so required to be described in
the Offering Memorandum that are not described as required.
4. The statements made in the Offering Memorandum under the caption
"Description of the Notes" and "Exchange Offer; Registration Rights" constitute
summaries of legal matters or documents referred to therein and are accurate in
all material respects; and the Indenture and the Restricted Notes conform as to
legal matters to the descriptions thereof and to the statements in regard
thereto contained in such section of the Offering Memorandum.
5. Each document incorporated in the Offering Memorandum as such document
was originally filed pursuant to the Exchange Act (except for (i) the operating
statistics, financial statements and schedules contained or incorporated by
reference therein (including the notes thereto and the auditors' reports
thereon) and (ii) the other financial or statistical information contained or
incorporated by reference therein, as to which I express no opinion) complied as
to form when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder.
6. The Purchase Agreement has been duly authorized, executed and delivered
by the Company.
7. The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Initial Purchasers, is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by 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).
8. The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery of the Indenture
by the Trustee, will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally
B-1
or by general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity).
9. The Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder. It is not
necessary in connection with the offer, sale and delivery of the Restricted
Notes to the Initial Purchasers in the manner contemplated by the Purchase
Agreement or in connection with the Exempt Resales to qualify the Indenture
under the Trust Indenture Act.
10. The Restricted Notes are in the form contemplated by the Indenture,
have been duly authorized, executed and delivered by the Company and, assuming
the due authentication thereof by the Trustee and upon payment and delivery in
accordance with the Purchase Agreement, will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by
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 Restricted Notes are entitled to the security afforded by the
Indenture equally and ratably with all securities presently outstanding
thereunder, and no stamp taxes in respect of the original issue thereof are
payable.
11. The issuance and sale of the Restricted Notes in accordance with the
terms of the Indenture and the Purchase Agreement do not violate the provisions
of the Restated Articles of Incorporation or the Bylaws of the Company, and will
not result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company is a party.
12. The Company is not an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
13. The Company (i) is a "holding company", as such term is defined in the
Public Utility Holding Company Act of 1935, as amended, and (ii) is currently
exempt from all provisions of the Public Utility Holding Company Act of 1935, as
amended, except Section 9(a)(2) thereof.
14. No registration under the Act of the Restricted Notes is required for
the sale of the Restricted Notes to the Initial Purchasers as contemplated by
the Purchase Agreement or for the Exempt Resales assuming (i) that each of the
Initial Purchasers is an Eligible Purchaser or an Accredited Investor (as
defined in Regulation D under the Act), (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements contained in
Section 8 of the Purchase Agreement, and (iii) the accuracy of the
representations of the Company set forth in Sections 6(e), 6(n), 7(o), 7(q) and
7(s) of the Purchase Agreement.
15. Nothing has come to my attention that would lead me to believe that the
Offering Memorandum (other than (i) the operating statistics, financial
statements and schedules contained or incorporated by reference therein
(including the notes thereto and the auditors' reports thereon) and (ii) the
other financial or statistical information contained or incorporated by
B-2
reference therein, as to which I express no opinion), as of its date or at the
date hereof contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
B-3
EXHIBIT C-1
1. The offer, sale and delivery of the Restricted Notes to the Initial
Purchasers in the manner contemplated by the Purchase Agreement and the Offering
Memorandum and the initial resale of the Restricted Notes by the Initial
Purchasers in the manner contemplated in the Offering Memorandum and the
Purchase Agreement, do not require registration under the Act and the
Supplemental Indenture does not require qualification under the Trust Indenture
Act, it being understood that we do not express any opinion as to any subsequent
reoffer or resale of any of the Restricted Notes.
2. The Registration Rights Agreement is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
C-1-1
EXHIBIT C-2
No facts have come to our attention that have caused us to believe that the
Offering Memorandum, as of its date and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial data and financial projections included therein or excluded
therefrom). For purposes of the foregoing, we note that the Offering Memorandum
has been prepared in the context of a Rule 144A transaction and not as part of a
registration statement under the Act and does not contain all the information
that would be required in a registration statement under the Act.
C-2-1
