EXHIBIT (1)
CMS ENERGY CORPORATION
__% Senior Notes Due 2002
Underwriting Agreement
May __, 1997
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
CMS Energy Corporation, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and
sell to the several Underwriters (as defined in Section 14 hereof) its
Senior Unsecured Notes, to be in the aggregate principal amount, to mature
in the year and to have the interest rate specified in Schedule III hereto
(the "Securities"), and hereby confirms its agreement with the
Underwriters as set forth herein. The Securities shall be issued pursuant
to the Indenture dated as of September 15, 1992, between the Company and
NBD Bank, as Trustee (the "Trustee"), as amended and supplemented and to
be supplemented by various supplemental indentures, including the Third
Supplemental Indenture dated as of May __, 1997, relating to the
Securities (such Indenture as so amended and supplemented and to be
supplemented, the "Indenture"). The Underwriters have designated the
Representatives to execute this Agreement on their behalf and to act for
them in the manner provided in this Agreement.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), in accordance with the provisions
of the Securities Act of 1933, as amended (the "Act"), a registration
statement on Form S-3 (Registration No. 333-17289) including a prospectus
relating to the Securities and such registration statement has become
effective under the Act. The registration statement, at the time such
registration statement became effective and as it may have been thereafter
amended to the date of this Agreement (including the documents then
incorporated by reference therein) is hereinafter referred to as the
"Registration Statement." The prospectus forming a part of the
Registration Statement at the time the Registration Statement became
effective (including the documents then incorporated by reference therein)
is hereinafter referred to as the "Basic Prospectus," provided that in the
event that the Basic Prospectus shall have been amended, revised or
supplemented prior to the date of this Agreement, or if the Company shall
have supplemented the Basic Prospectus by filing any documents pursuant to
Section 13 or 14 or 15 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the time the Registration Statement became
effective and prior to the date of this Agreement, which documents are
deemed to be incorporated in the Basic Prospectus, the term "Basic
Prospectus" shall also mean such prospectus as so amended, revised or
supplemented. The Basic Prospectus, as it shall be revised or
supplemented to reflect the final terms of the offering and sale of the
Securities by a prospectus supplement relating to the Securities, and in
the form to be filed with, or transmitted for filing to, the Commission
pursuant to Rule 424 under the Act, is hereinafter referred to as the
"Prospectus." Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus
shall be deemed to include only amendments or supplements to the
Registration Statement or Prospectus, as the case may be, and documents
incorporated by reference therein after the date of this Agreement and
prior to the termination of the offering of the Securities by the
Underwriters.
1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set
forth, the Company agrees to sell to the respective Underwriters,
severally and not jointly, and the respective Underwriters, severally and
not jointly, agree to purchase from the Company, at the purchase price
specified in Schedule III hereto, the respective principal amounts of
Securities set opposite their names in Schedule II hereto.
The Company is advised by the Representatives that the
Underwriters propose to make a public offering of their respective
portions of the Securities as soon as practicable, in their judgment,
after this Agreement has become effective. The Company is further advised
by the Representatives that the Securities are to be offered to the public
initially at ___% of the principal amount of the Securities and to certain
dealers selected by you at a price that represents a concession not in
excess of __% of the principal amount of the Securities, and that any
Underwriter may allow, and such dealers may reallow, a concession not in
excess of __% of the principal amount of the Securities to certain other
dealers.
The Company hereby agrees that, without the prior written consent
of ____________________, the Company will not offer, sell, contract to
sell or otherwise issue debt securities substantially similar to the
Securities for a period from the date of the execution of this Agreement
to the day of the Time of Purchase (as hereinafter defined).
2. Payment and Delivery: Payment for the Securities shall be
made to the Company or its order in Federal or other immediately available
funds in New York City (or such other place or places of payment as shall
be agreed upon by the Company and the Representatives in writing), upon
the delivery of the Securities at the offices of Xxxx & Priest LLP, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place or places
of delivery as shall be agreed upon by the Company and the
Representatives) to the Representatives for the respective accounts of the
Underwriters against receipt therefor signed by the Representatives on
behalf of themselves and as agent for the other Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York time on May __,
1997 (or on such later business day as shall be agreed upon by the Company
and the Representatives in writing), unless postponed in accordance with
the provisions of Section 10 hereof. The day and time at which payment
and delivery for the Securities are to be made is herein called the "Time
of Purchase."
Delivery of the Securities shall be made in definitive, fully
registered form in authorized denominations registered in such names as
the Representatives may request in writing to the Company not later than
two full business days prior to the Time of Purchase, or if no such
request is received, in the names of the respective Underwriters for the
respective principal amounts of Securities set forth opposite the name of
each Underwriter in Schedule II, in denominations selected by the Company.
The Company agrees to make the Securities available for inspection
by the Underwriters at the offices of _________________________________ at
least 24 hours prior to the Time of Purchase, in definitive, fully
registered form, and as requested pursuant to the preceding paragraph.
3. Conditions of Underwriters' Obligations: The several
obligations of the Underwriters hereunder are subject to the accuracy of
the warranties and representations on the part of the Company and to the
following other conditions:
(a) That all legal proceedings to be taken in connection
with the issue and sale of the Securities shall be reasonably
satisfactory in form and substance to Xxxx & Priest LLP, of New
York, New York, counsel to the Underwriters.
(b) That, at the Time of Purchase, the Representatives
shall be furnished with the following opinions, dated the day of
the Time of Purchase:
(1) Opinion of Xxxxxxx X. XxxXxxxxx, Esq.,
counsel to the Company, substantially to the effect set
forth in Exhibit A to this Agreement; and
(2) Opinion of Xxxx & Priest LLP, of New York,
New York, counsel to the Underwriters, substantially to
the effect set forth in Exhibit B to this Agreement.
(c) That on the date of the Time of Purchase the
Representatives shall have received a letter from Xxxxxx
Xxxxxxxx LLP in form and substance satisfactory to the
Representatives, dated as of such date, (i) confirming that they
are independent public accountants within the meaning of the Act
and the applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their opinion the
financial statements examined by them and included or incorporated
by reference in the Registration Statement complied as to form in
all material respects with the applicable accounting requirements
of the Commission, including applicable published rules and
regulations of the Commission, and (iii) covering, as of a date
not more than five business days prior to the date of such letter,
such other matters as the Representatives reasonably request.
(d) That, between the date of the execution of this
Agreement and the Time of Purchase, no material and adverse change
shall have occurred in the business, properties or financial
condition of the Company and its subsidiaries (as defined in Rule
405 under the Act, and hereafter called the "Subsidiaries"), taken
as a whole, which, in the judgment of the Representatives, after
reasonable inquiries on the part of the Representatives, impairs
the marketability of the Securities (other than changes referred
to in or contemplated by the Registration Statement or
Prospectus).
(e) That, prior to the Time of Purchase, no stop order
suspending the effectiveness of the Registration Statement shall
have been issued under the Act by the Commission or proceedings
therefor initiated or threatened.
(f) That, at the Time of Purchase, the Company shall have
delivered to the Representatives a certificate of an executive
officer of the Company to the effect that, to the best of his
knowledge, information and belief there shall have been no
material adverse change in the business, properties or financial
condition of the Company and its Subsidiaries, taken as a whole,
from that set forth in the Registration Statement or Prospectus
(other than changes referred to in or contemplated by the
Registration Statement or Prospectus).
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or
before the Time of Purchase by the terms hereof.
(h) That any additional documents or agreements
reasonably requested by the Representatives or their counsel to
permit the Underwriters to perform their obligations or permit
their counsel to deliver opinions hereunder shall have been
provided to them.
(i) That between the date of the execution of this
Agreement and the day of the Time of Purchase there has been no
downgrading of the investment ratings of any of the Company's
securities or of Consumers Energy Company's first mortgage bonds
by Standard & Poor's Corporation, Xxxxx'x Investors Service, Inc.
or Duff & Xxxxxx Credit Rating Co., and neither the Company nor
Consumers Energy Company shall have been placed on "credit watch"
or "credit review" with negative implications by any of such
statistical rating organizations if any of such occurrences shall,
in the reasonable judgment of the Representatives, after
reasonable inquiries on the part of the Representatives, impair
the marketability of the Securities.
(j) That any filing of the Prospectus and any supplements
thereto required pursuant to Rule 424 under the Act have been made
in compliance with Rule 424 in the time periods provided by
Rule 424.
4. Conditions of the Company's Obligations: The obligations of
the Company hereunder are subject to the satisfaction of the condition set
forth in Section 3(e).
5. Certain Covenants of the Company: In further consideration of
the agreements of the Underwriters herein contained, the Company covenants
as follows:
(a) To use its best efforts to cause any post-effective
amendments to the Registration Statement to become effective as
promptly as possible. During the time when a Prospectus is
required to be delivered under the Act, the Company will comply so
far as it is able with all requirements imposed upon it by the Act
and the rules and regulations of the Commission to the extent
necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of the
Prospectus.
(b) To deliver to each of the Representatives a conformed
copy of the Registration Statement and any amendments thereto
(including all exhibits thereto) and full and complete sets of all
comments of the Commission or its staff and all responses thereto
with respect to the Registration Statement and any amendments
thereto, and to furnish to the Representatives, for each of the
Underwriters, conformed copies of the Registration Statement and
any amendments thereto, without exhibits.
(c) As soon as the Company is advised thereof, the
Company will advise the Representatives and confirm the advice in
writing of: (i) the effectiveness of any amendment to the
Registration Statement, (ii) any request made by the Commission
for amendments to the Registration Statement or Prospectus or for
additional information with respect thereto, (iii) the suspension
of qualification of the Securities for sale under Blue Sky or
state securities laws, and (iv) the entry of a stop order
suspending the effectiveness of the Registration Statement or of
the initiation or threat or any proceedings for that purpose and,
if such a stop order should be entered by the Commission, to make
every reasonable effort to obtain the lifting or removal thereof.
(d) To deliver to the Underwriters, without charge, as
soon as practicable, and from time to time during such period of
time (not exceeding nine months) after the date of the Prospectus
as they are required by law to deliver a prospectus, as many
copies of the Prospectus (as supplemented or amended if the
Company shall have made any supplements or amendments thereto) as
the Representatives may reasonably request; and in case any
Underwriter is required to deliver a prospectus after the
expiration of nine months after the date of the Prospectus, to
furnish to the Representatives, upon request, at the expense of
such Underwriter, a reasonable quantity of a supplemental
prospectus or of supplements to the Prospectus complying with
Section 10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months)
after the date of the Prospectus as the Underwriters are required
by law to deliver a prospectus in respect of the Securities, if
any event shall have occurred as a result of which it is necessary
to amend or supplement the Prospectus in order to make the
statements therein, in light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it
becomes necessary to amend or supplement the Prospectus to comply
with law, to forthwith prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus and deliver
to the Underwriters, without charge, such number of copies thereof
as may be reasonably requested.
(f) To make generally available to the Company's security
holders, as soon as practicable, an "earning statement" (which
need not be audited by independent public accountants) covering a
twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months
thereafter, which shall comply in all material respects with and
satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(g) To use its best efforts to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to pay (or
cause to be paid), or reimburse (or cause to be reimbursed) the
Underwriters and their counsel for, reasonable filing fees and
expenses in connection therewith (including the reasonable fees
and disbursements of counsel to the Underwriters and filing fees
and expenses paid and incurred prior to the date hereof),
provided, however, that the Company shall not be required to
qualify to do business as a foreign corporation or as a securities
dealer or to file a general consent to service of process or to
file annual reports or to comply with any other requirements
deemed by the Company to be unduly burdensome.
(h) To pay all expenses, fees and taxes (other than
transfer taxes on sales by the respective Underwriters) in
connection with the issuance and delivery of the Securities,
except that the Company shall be required to pay the fees and
disbursements (other than disbursements referred to in
paragraph (g) of this Section 5) of Xxxx & Priest LLP, of New
York, New York, counsel to the Underwriters, only in the events
provided in paragraph (i) of this Section 5, the Underwriters
hereby agreeing to pay such fees and disbursements in any other
event, and that except as provided in Section (i), the Company
shall not be responsible for any out-of-pocket expenses of the
Underwriters in connection with their services hereunder.
(i) If the Underwriters shall not take up and pay for the
Securities due to the failure of the Company to comply with any of
the conditions specified in Section 3 hereof, or, if this
Agreement shall be terminated in accordance with the provisions of
Section 11 hereof prior to the Time of Purchase, to pay the
reasonable fees and disbursements of Xxxx & Priest LLP, counsel to
the Underwriters, and, if the Underwriters shall not take up and
pay for the Securities due to the failure of the Company to comply
with any of the conditions specified in Section 3 hereof, to
reimburse the Underwriters for their reasonable out-of-pocket
expenses, in an aggregate amount not exceeding a total of $3,000,
incurred in connection with the financing contemplated by this
Agreement.
(j) Prior to the termination of the offering of the
Securities, to not file any amendment to the Registration
Statement or supplement to the Prospectus (including the Basic
Prospectus) unless the Company has furnished the Representatives
and counsel to the Underwriters with a copy for their review and
comment a reasonable time prior to filing and has reasonably
considered any comments of the Representatives, or any such
amendment or supplement to which such counsel shall reasonably
object on legal grounds in writing, after consultation with the
Representatives.
(k) To furnish the Representatives with copies of all
documents required to be filed with the Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act subsequent to the time
the Registration Statement becomes effective and prior to the
termination of the offering of the Securities.
(l) So long as may be required by law for the
distribution of the Securities by the Underwriters or by any
dealers that participate in the distribution thereof, the Company
will comply with all requirements under the Exchange Act relating
to the timely filing with the Commission of its reports pursuant
to Section 13 of the Exchange Act and of its proxy statements
pursuant to Section 14 of the Exchange Act.
6. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, each of the Underwriters
that:
(a) The Registration Statement has become effective under
the Act; a true and correct copy of the Registration Statement in
the form in which it became effective has been delivered to each
of the Representatives and to the Representatives for each of the
Underwriters (except that copies delivered for the Underwriters
excluded exhibits to such Registration Statement); any filing of
the Prospectus and any supplements thereto required pursuant to
Rule 424(b) has been or will be made in the manner required by
Rule 424(b) and within the time period required by Section 3(j)
hereof; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purposes are pending before or, to the knowledge of the Company,
threatened by the Commission. On the effective date of the
Registration Statement, the Registration Statement and the Basic
Prospectus complied, or were deemed to have complied, and on its
respective issue date, each preliminary prospectus filed pursuant
to Rule 424(b) complied, and the Basic Prospectus complied, and on
its issue date, the Prospectus will comply, or will be deemed to
comply, in all material respects with the applicable provisions of
the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the published rules and regulations of the
Commission, none of the Registration Statement on its effective
date, the Basic Prospectus on its issue date, or any other
preliminary prospectus, on its issue date, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as of its issue date
and, as amended or supplemented, if applicable, as of the Time of
Purchase, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except that the Company makes no warranty or
representation to any Underwriter with respect to any statements
or omissions made therein in reliance upon and in conformity with
information furnished in writing to the Company by, or through the
Representatives on behalf of, any Underwriter expressly for use
therein, or to any statements in or omissions from that part of
the Registration Statement that shall constitute the Statement of
Eligibility and Qualification under the Trust Indenture Act of the
Trustee under the Indenture.
(b) The documents incorporated by reference in the
Registration Statement, any preliminary prospectus, the Basic
Prospectus and the Prospectus, when they were filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder,
and any further documents so filed and incorporated by reference
will, when they are filed with the Commission, conform in all
material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder;
none of such documents, when 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
Prospectus and to consummate the transactions contemplated hereby,
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business as
described in the Prospectus or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Subsidiaries
taken as a whole. Each significant subsidiary (as defined in
Rule 405 under the Act, and hereinafter called a "Significant
Subsidiary") of the Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has all requisite authority to
own or lease its properties and conduct its business as described
in the Prospectus and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of
its business as described in the Prospectus or its ownership or
leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
(d) The Securities are in the form contemplated by
the Indenture and have been duly authorized by the Company. At
the Time of Purchase, the Securities 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 is
considered in a proceeding at law or in equity). The Securities
conform in all material respects to the descriptions thereof in
the Prospectus.
(e) 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 Prospectus; and the
Indenture has been duly qualified under the Trust Indenture Act.
(f) Except for the outstanding shares of preferred
stock of Consumers Energy Company and the 8.36% Trust Originated
Preferred Securities of Consumers Power Company Financing I, all
of the outstanding capital stock of each of Consumers Energy
Company and CMS Enterprises Company is owned directly or
indirectly by the Company, free and clear of any security
interest, claim, lien, or other encumbrance or preemptive rights,
and (ii) there are no outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in any of Consumers Energy
Company and CMS Enterprises Company or any contract, commitment,
agreement, understanding or arrangement of any kind relating to
the issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options.
(g) Each of the Company and its Significant
Subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a
material adverse effect on the Company and its Subsidiaries, taken
as a whole.
(h) No order, license, consent, authorization or
approval of, or exemption by, or the giving of notice to, or the
registration with any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is
now required to be obtained by the Company to authorize its
execution or delivery of, or the performance of its obligations
under, this Agreement or the Securities, except such as have been
obtained or may be required under state securities or Blue Sky
laws or as referred to in the Basic Prospectus. Each of the
Company and its Significant Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and
permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Basic Prospectus, except to the extent that the failure to obtain
or file would not have a material adverse effect on the Company
and its Subsidiaries, taken as a whole.
(i) None of the issuance and sale of the Securities,
or the execution or delivery by the Company of, or the performance
by the Company of its obligations under, this Agreement 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.
(j) Except as disclosed in the Basic Prospectus,
there is no action, suit, proceeding, inquiry or investigation (at
law or in equity or otherwise) pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary by any
governmental authority that (i) questions the validity,
enforceability or performance of this Agreement or the Securities
or (ii) if determined adversely, is likely to have a material
adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or materially
adversely affect the ability of the Company to perform its
obligations hereunder or the consummation of the transactions
contemplated by this Agreement.
(k) There has not been any material and adverse
change in the business, properties or financial condition of the
Company and its Subsidiaries, taken as a whole, from that set
forth in the Registration Statement (other than changes referred
to in or contemplated by the Registration Statement or the Basic
Prospectus).
(l) Except as set forth in the Basic Prospectus, no
event or condition exists that constitutes, or with the giving of
notice or lapse of time or both would constitute, a default or any
breach or failure to perform by the Company or any of its
Significant Subsidiaries in any material respect under any
indenture, mortgage, loan agreement, lease or other material
agreement or instrument to which the Company or any of its
Significant Subsidiaries is a party or by which it or any of its
Significant Subsidiaries, or any of their respective properties,
may be bound.
7. Representation and Warranties of Underwriters: Each
Underwriter warrants and represents that the information, if any,
furnished in writing to the Company through the Representatives expressly
for use in the Registration Statement and Prospectus is correct in all
material respects as to such Underwriter. Each Underwriter, in addition
to other information furnished to the Company for use in the Registration
Statement and Prospectus, herewith furnishes to the Company for use in the
Registration Statement and Prospectus, the information stated herein with
regard to the public offering, if any, by such Underwriter and represents
and warrants that such information is correct in all material respects as
to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by
law, to indemnify and hold harmless each of the Underwriters and
each person, if any, who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange
Act, against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject
under the Act or otherwise, and to reimburse the Underwriters and
such controlling person or persons, if any, for any legal or other
expenses incurred by them in connection with defending any action,
suit or proceeding (including governmental investigations) as
provided in Section 8(c) hereof, insofar as such losses, claims,
damages, liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary
prospectus as of its issue date (if used prior to the date of the
Basic Prospectus), the Basic Prospectus (if used prior to the date
of the Prospectus), the Prospectus, or, if the Prospectus shall be
amended or supplemented, in the Prospectus as so amended or
supplemented (if such Prospectus or such Prospectus as amended or
supplemented is used after the period of time referred to in
Section 5(e) hereof, it shall contain or be used with such
amendments or supplements as the Company deems necessary to comply
with Section 10(a) of the Act), or arise out of or are based upon
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission which was made in such preliminary prospectus,
Basic Prospectus, Registration Statement or Prospectus, or in the
Prospectus as so amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company
by, or through the Representatives on behalf of, any Underwriter
expressly for use therein or with any statements in or omissions
from that part of the Registration Statement that shall constitute
the Statement of Eligibility and Qualification under the Trust
Indenture Act of the Trustee under the Indenture, and except that
this indemnity shall not inure to the benefit of any Underwriter
(or any person controlling such Underwriter) on account of any
losses, claims, damages, liabilities or actions, suits or
proceedings arising from the sale of the Securities to any person
if a copy of the Prospectus, as the same may then be supplemented
or amended (excluding, however, any document then incorporated or
deemed incorporated therein by reference), was not sent or given
by or on behalf of such Underwriter to such person (i) with or
prior to the written confirmation of sale involved or (ii) as soon
as available after such written confirmation, relating to an event
occurring prior to the payment for and delivery to such person of
the Securities involved in such sale, and the omission or alleged
omission or untrue statement or alleged untrue statement was
corrected in the Prospectus as supplemented or amended at such
time.
The Company's indemnity agreement contained in this
Section 8(a), and the covenants, representations and warranties of
the Company contained in this Agreement, shall remain in full
force and effect regardless of any investigation made by or on
behalf of any person, and shall survive the delivery of and
payment for the Securities hereunder, and the indemnity agreement
contained in this Section 8 shall survive any termination of this
Agreement. The liabilities of the Company in this Section 8(a)
are in addition to any other liabilities of the Company under this
Agreement or otherwise.
(b) Each Underwriter agrees, severally and not
jointly, to the extent permitted by law, to indemnify, hold
harmless and reimburse the Company, its directors and such of its
officers as shall have signed the Registration Statement, each
other Underwriter and each person, if any, who controls the
Company or any such other Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent and upon the same terms as the indemnity agreement of
the Company set forth in Section 8(a) hereof, but only with
respect to alleged untrue statements or omissions made in the
Registration Statement, the Basic Prospectus or in the Prospectus,
as amended or supplemented, (if applicable) in reliance upon and
in conformity with information furnished in writing to the Company
by such Underwriter expressly for use therein.
The indemnity agreement on the part of each Underwriter
contained in this Section 8(b) and the representations and
warranties of such Underwriter contained in this Agreement shall
remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any other person, and shall
survive the delivery of and payment for the Securities hereunder,
and the indemnity agreement contained in this Section 8(b) shall
survive any termination of this Agreement. The liabilities of
each Underwriter in Section 8(b) are in addition to any other
liabilities of such Underwriter under this Agreement or otherwise.
(b) If a claim is made or an action, suit or
proceeding (including governmental investigations) is commenced or
threatened against any person as to which indemnity may be sought
under Section 8(a) or 8(b), such person (the "Indemnified Person")
shall notify the person against whom such indemnity may be sought
(the "Indemnifying Person") promptly after any assertion of such
claim threatening to institute an action, suit or proceeding or if
such an action, suit or proceeding is commenced against such
Indemnified Person, promptly after such Indemnified Person shall
have been served with a summons or other first legal process,
giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however,
relieve the Indemnifying Person from any liability which it may
have on account of the indemnity under Section 8(a) or 8(b) if the
Indemnifying Person has not been prejudiced in any material
respect by such failure. Subject to the immediately succeeding
sentence, the Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel
and the payment of all expenses, with such counsel being
designated, subject to the immediately succeeding sentence, in
writing by the Representatives in the case of parties indemnified
pursuant to Section 8(b) and by the Company in the case of parties
indemnified pursuant to Section 8(a). Any Indemnified Person
shall have the right to participate in such litigation or
proceeding and to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying
Person and (y) the Indemnified Person and, in the written opinion
of counsel to such Indemnified Person, representation of both
parties by the same counsel would be inappropriate due to actual
or likely conflicts of interest between them, in either of which
cases the reasonable fees and expenses of counsel (including
disbursements) for such Indemnified Person shall be reimbursed by
the Indemnifying Person to the Indemnified Person. If there is a
conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding
utilizing separate counsel whose fees and expenses have been
reimbursed by the Indemnifying Person and the Indemnified Persons,
or any of them, are found to be solely liable, such Indemnified
Persons shall repay to the Indemnifying Person such fees and
expenses of such separate counsel as the Indemnifying Person shall
have reimbursed. It is understood that the Indemnifying Person
shall not, in connection with any litigation or proceeding or
related litigation or proceedings in the same jurisdiction as to
which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable
fees and out-of-pocket expenses of more than one separate firm
(together with not more than one appropriate local counsel) for
all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the
Indemnified Persons of such reasonable fees and expenses of
counsel promptly after payment thereof by the Indemnified Persons.
In furtherance of the requirement above that fees and
expenses of any separate counsel for the Indemnified Persons shall
be reasonable, the Representatives and the Company agree that the
Indemnifying Person's obligations to pay such fees and expenses
shall be conditioned upon the following:
(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 Representatives shall
cooperate in monitoring and controlling the fees and
expenses of separate counsel for Indemnified Persons for
which the Indemnifying Person is liable hereunder, and the
Indemnified Person shall use every reasonable effort to
cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the
Indemnifying Person.
The Indemnifying Person shall not be liable for any
settlement of any litigation or proceeding effected without the
written consent of the Indemnifying Person, but if settled with
such consent or if there be a final judgment for the plaintiff,
the Indemnifying Person agrees, subject to the provisions of this
Section 8, to indemnify the Indemnified Person from and against
any loss, damage, liability or expenses by reason of such
settlement or judgment. The Indemnifying Person shall not,
without the prior written consent of the Indemnified Persons,
effect any settlement of any pending or threatened litigation,
proceeding or claim in respect of which indemnity has been
properly sought by the Indemnified Persons hereunder, unless such
settlement includes an unconditional release by the claimant of
all Indemnified Persons from all liability with respect to claims
which are the subject matter of such litigation, proceeding or
claim.
9. Contribution: If the indemnification provided for in
Section 8 above is unavailable to or insufficient to hold harmless an
Indemnified Person under such Section in respect of any losses, claims,
damages or liabilities (or actions, suits or proceedings (including
governmental investigations) in respect thereof) referred to therein, then
each Indemnifying Person under Section 8 shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by
the Indemnifying Person on the one hand and the Indemnified Person on the
other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such
amount paid or payable by such Indemnified Person in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of each Indemnifying Person, if any, on the one hand and
the Indemnified Person on the other in connection with the statements or
omissions which resulted in such 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 benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the total underwriting discounts and
commission received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public
offering price of the Securities. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this Section 9. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages or
liabilities (or actions, suits or proceedings (including governmental
proceedings) in respect thereof) referred to above in this Section 9 shall
be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating or defending any
such action, suits or proceedings (including governmental proceedings) or
claim, provided that the provisions of Section 8 have been complied with
(in all material respects) in respect of any separate counsel for such
Indemnified Person. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount greater than the
excess of (i) the total price at which the Securities underwritten by it
and distributed to the public were offered to the public over (ii) the
amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9 to
contribute are several in proportion to their respective underwriting
obligations and not joint.
The agreement with respect to contribution contained in Section 9
hereof shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter, and
shall survive delivery of and payment for the Securities hereunder and any
termination of this Agreement.
10. Substitution of Underwriters: If any Underwriter under this
agreement shall fail or refuse (otherwise than for some reason sufficient
to justify in accordance with the terms hereof, the termination of its
obligations hereunder) to purchase the Securities which it had agreed to
purchase on the Time of Purchase, the Representatives shall immediately
notify the Company and the Representatives and the other Underwriters may,
within 36 hours of the giving of such notice, determine to purchase, or to
procure one or more other members of the National Association of
Securities Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
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 Securities which the defaulting
Underwriter had agreed to purchase. If any non-defaulting Underwriter or
Underwriters shall determine to exercise such right, the Representatives
shall give written notice to the Company of such determination within 36
hours after the Company shall have received notice of any such default,
and thereupon the Time of Purchase shall be postponed for such period, not
exceeding three business days, as the Company shall determine. If in the
event of such a default, the Representatives shall fail to give such
notice, or shall within such 36-hour period give written notice to the
Company that no other Underwriter or Underwriters, or others, will
exercise such right, then this Agreement may be terminated by the Company,
upon like notice given to the Representatives within a further period of
36 hours. If in such case the Company shall not elect to terminate this
Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to
purchase and pay for the respective principal amounts of
Securities which they had severally agreed to purchase hereunder,
as hereinabove provided, and, in addition, the principal amount of
Securities which the defaulting Underwriter shall have so failed
to purchase up to a principal amount thereof equal to one-ninth
(1/9) of the respective principal amounts of Securities which such
non-defaulting Underwriters have otherwise agreed to purchase
hereunder; and/or
(b) to procure one or more other members of the NASD
(or, if not members of the NASD, who are foreign banks, dealers or
institutions not registered under the Exchange Act and who agree
in making sales to comply with the NASD's Rules of Fair Practice),
to purchase, upon the terms herein set forth, the principal amount
of Securities which such defaulting Underwriter had agreed to
purchase, or that portion thereof which the remaining Underwriters
shall not be obligated to purchase pursuant to the foregoing
clause (a).
In the event the Company shall exercise its rights under
clause (a) and/or (b) above, the Company shall give written notice thereof
to the Representatives within such further period of 36 hours, and
thereupon the Time of Purchase shall be postponed for such period, not
exceeding five business days, as the Company shall determine. In the
event the Company shall be entitled to but shall not elect to exercise its
rights under clause (a) and/or (b), the Company shall be deemed to have
elected to terminate this Agreement.
Any action taken by the Company under this Section 10 shall not
relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement. Termination by the
Company under this Section 10 shall be without any liability on the part
of the Company or any non-defaulting Underwriter.
In the computation of any period of 36 hours referred to in this
Section 10, there shall be excluded a period of 24 hours in respect of
each Saturday, Sunday or legal holiday which would otherwise be included
in such period of time.
11. Termination of Agreement: This Agreement may be terminated
at any time prior to the Time of Purchase by the Representatives, if,
prior to such time (i) trading generally in securities on the New York
Stock Exchange shall have been suspended by the Commission or the New York
Stock Exchange, (ii) trading of any securities of the Company shall have
been suspended on any exchange or over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by federal or New York State authorities or (iv) there shall have
occurred any outbreak or material escalation of hostilities or any
material adverse disruption in financial markets or any other calamity or
crisis, the effect of which on the financial markets of the United States
is such as to impair, in the Representatives' reasonable judgment, after
having made due inquiry, the marketability of the Securities.
If the Representatives elect to terminate this Agreement, as
provided in this Section 11, the Representatives will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Underwriter for
any reason permitted hereunder, or if the sale of the Securities to the
Underwriters as herein contemplated shall not be carried out because the
Company is not able to comply with the terms hereof, the Company shall not
be under any obligation under this Agreement and shall not be liable to
any Underwriter or to any member of any selling group for the loss of
anticipated profits from the transactions contemplated by this Agreement
and the Underwriters shall be under no liability to the Company nor be
under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5(g),
5(i), 8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise
expressly provided, be in writing and be delivered at or mailed to the
following addresses or be sent by telecopy as follows: if to the
Underwriters or the Representatives, to the Representatives at the address
or number, as appropriate, designated in Schedule I hereto, and, if to the
Company, to CMS Energy Corporation, Attention: Senior Vice President -
Finance, Fairlane Plaza South, Suite 1100, 000 Xxxx Xxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx 00000 (Telecopy: 313-436-9548).
13. Parties in Interest: The Agreement herein set forth has been
and is made solely for the benefit of the Underwriters, the Company
(including the directors thereof and such of the officers thereof as shall
have signed the Registration Statement), and the controlling persons, if
any, referred to in Section 8 hereof, and their respective successors,
assigns, executors and administrators, and, except as expressly otherwise
provided in Section 10 hereof, no other person shall acquire or have any
right under or by virtue of this Agreement.
14. Definition of Certain Terms: The term "Underwriters," as
used herein, shall be deemed to mean the several persons, firms or
corporations, named in Schedule II hereto (including the Representatives
herein mentioned, if so named), and the term "Representatives," as used
herein, shall be deemed to mean the representative or representatives
designated by, or in the manner authorized by, the Underwriters in
Schedule I hereto. All obligations of the Underwriters hereunder are
several and not joint. If there shall be only one person, firm or
corporation named in Schedule I and Schedule II hereto, the term
"Underwriters" and the term "Representatives," as used herein, shall mean
such person, firm or corporation. If the firm or firms listed in
Schedule I hereto are the same as the firm or firms listed in Schedule II
hereto, then the terms "Underwriters" and "Representatives," as used
herein, shall each be deemed to refer to such firm or firms. The term
"successors" as used in this Agreement shall not include any purchaser, as
such purchaser, of any of the Securities from any of the respective
Underwriters.
15. Governing Law: This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us counterparts hereof, and upon the acceptance hereof
by you, this letter and such acceptance hereof shall constitute a binding
agreement between each of the Underwriters and the Company.
Very truly yours,
CMS ENERGY CORPORATION
By:
Accepted: May __, 1997
_____________________________________
_____________________________________
_____________________________________
_____________________________________
As Representatives
By: _________________________________
By:
Schedule I
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
Attention: Syndicate Desk
Telecopy:
Schedule II
Underwriters Principal Amount of Securities
to be Purchased
. . . . . . . . . . . . . . . . . . . . . . . . . . . __________
. . . . . . . . . . . . . . . . . . . . . . . . . . . __________
. . . . . . . . . . . . . . . . . . . . . . . . . . . __________
. . . . . . . . . . . . . . . . . . . . . . . . . . . __________
Total. . . . . . . __________
Schedule III
Information Regarding the Securities
1. Aggregate Principal Amount:
2. Maturity Date:
3. Interest Rate: ___%
4. Price to be paid to the Company: ___% of the principal amount
