1
EXHIBIT 1(b)
CMS ENERGY TRUST III
___ % TRUST PREFERRED SECURITIES
(liquidation amount $__ per preferred security)
fully and unconditionally guaranteed,
based on several obligations, by
CMS ENERGY CORPORATION
-------------------------------------------
UNDERWRITING AGREEMENT
_______ , 1999
[Name of Underwriter]
Ladies and Gentlemen:
CMS Energy Trust III, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and CMS Energy Corporation, a
Michigan corporation, as depositor of the Trust and as guarantor (the
"Company"), propose that the Trust, subject to the terms and conditions stated
herein, issue and sell to the firms named in Schedule I hereto (the
"Underwriters") an aggregate of ______ __% Trust Preferred Securities
(liquidation amount $__ per preferred security), representing undivided
beneficial interests in the assets of the Trust, guaranteed on a subordinated
basis by the Company as to the payment of distributions, and as to payments on
liquidation or redemption, to the extent set forth in a guarantee agreement (the
"Guarantee") between the Company and The Bank of New York, as trustee (the
"Guarantee Trustee").
The Firm Securities
1. Each of the Trust and the Company represents and warrants to,
and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (Registration No.
_________) (the "Initial Registration Statement") in respect of the
Securities, the Debentures, the Guarantee and the Common Stock issuable
upon the conversion or exchange of the Securities and/or Debentures has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
such registration statement, but including all documents incorporated
by reference in the prospectus included therein, to the Representatives
for each of the other Underwriters have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
document incorporated by
2
reference therein has heretofore been filed, or transmitted for filing,
with the Commission (other than prospectuses filed pursuant to Rule
424(b) of the rules and regulations of the Commission under the Act
each in the form heretofore delivered to the Representatives); no stop
order suspending the effectiveness of the Initial Registration
Statement is in effect and no proceedings for such purposes are pending
before or, to the knowledge of the Company, threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) under
the Act, is hereinafter called a "Preliminary Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the
registration statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
each as amended at the time such part of the registration statement
became effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, the Debentures,
the Guarantee and the Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the Securities in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
the Securities or through the Representatives on behalf of any
Underwriter expressly for use in the Prospectus as amended or
supplemented relating to such Securities or to any statements in or
omissions from that part of the Registration Statement that shall
constitute the Statements of Eligibility and Qualification under the
Trust Indenture Act (as defined herein) of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee;
2
3
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed (or, if
an amendment with respect to any such document was filed, when such
amendment was filed) with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and any further
documents so filed and incorporated by reference will, when they are
filed with the Commission, conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder; none of such documents, when filed
(or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and no such
further document, when it is filed, will contain an untrue statement of
a material fact or will omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading;
(d) There has not been any material and adverse change in
the business, properties or financial condition of the Company and its
Subsidiaries (as defined in Rule 405 under the Act, and hereinafter
called the "Subsidiaries"), taken as a whole, from that set forth in
the Registration Statement (other than changes referred to in or
contemplated by the Registration Statement or the Prospectus);
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Michigan and has all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus and
to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole; each significant
subsidiary (as defined in Rule 405 under the Act, and hereinafter
called a "Significant Subsidiary") of the Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has all
requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole; and the Company has the requisite power
and authority to authorize the offering of the Debentures, the
Guarantee and the Common Stock issuable upon the conversion or exchange
of the Securities and/or the Debentures, to exercise, deliver and
perform this Agreement, and to issue, sell and deliver the Debentures,
the Guarantee and the Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures;
(f) The shares of Common Stock of the Company issued and
outstanding prior to the issuance of the Securities have been duly
authorized and are validly issued, fully paid and non-assessable; the
shares of Common Stock issuable upon the conversion or exchange of the
Securities and/or the Debentures have been duly authorized and reserved
for issuance and, when
3
4
issued and delivered in accordance with the provisions of the
Securities and/or the Indenture, will be validly issued, fully paid and
non-assessable; the issuance of the Common Stock upon the conversion or
exchange of the Securities and/or the Debentures will not be subject to
preemptive or other similar rights;
(g) The Securities have been duly and validly authorized
by the Trust, and, when the Securities are issued and delivered, such
Securities will be validly issued, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust; the
Securities will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Securities is
not subject to any preemptive or other similar rights; the Securities
will have the rights set forth in the Trust Agreement, and the terms of
the Securities are valid and binding on the Trust;
(h) The Common Securities have been duly and validly
authorized by the Trust and upon delivery by the Trust to the Company
against payment therefor as described in the Prospectus, will be duly
and validly issued undivided beneficial interests in the assets of the
Trust and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; at
each Time of Delivery (as defined in Section 3 hereof), all of the
issued and outstanding Common
(i) Securities of the Trust will be directly owned by the
Company free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien"); and the Common Securities
and the Securities are the only interests authorized to be issued by
the Trust;
(j) Except for the outstanding shares of preferred stock
of Consumers Power Company and the 8.36% Trust Originated Preferred
Securities of Consumers Power Company Financing I, all of the
outstanding capital stock of each of Consumers Energy Company and CMS
Enterprises Company is owned directly or indirectly by the Company,
free and clear of any Lien, and there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options
to acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interest in any of Consumers
Energy Company and CMS Enterprises Company or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options;
(k) The capital stock of the Company, including the Common
Stock, conforms in all material respects to the description thereof in
the Prospectus;
(l) 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;
4
5
(m) No order, license, consent, authorization or approval
of, or exemption by, or the giving of notice to, or the registration
with any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any
other place, was or is now required to be obtained by the Company to
authorize its execution or delivery of, or the performance of its
obligations under, this Agreement, except such as have been obtained or
may be required under state securities or Blue Sky laws or as referred
to in the Prospectus in connection with the purchase and distribution
of the Securities, the Guarantee and the Debentures;
(n) The execution and delivery of this Agreement by the
Trust, the compliance by the Trust with all of the provisions of this
Agreement, the issuance and sale of the Securities and the Common
Securities by the Trust, the purchase of the Debentures by the Trust,
the distribution of the Debentures by the Trust in the circumstances
contemplated by the Trust Agreement, the performance of this Agreement
and the consummation of the transactions contemplated by this Agreement
and by the Trust Agreement did not and will not conflict with, result
in a breach of any of the terms or provisions of, or constitute a
default or require the consent of any party under the Trust Agreement,
any material terms or provisions of any material agreement or
instrument to which the Trust is a party, any existing material
applicable law, rule or regulation or any judgment, order or decree of
any governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Trust or any of its properties or assets, or did
or will result in the creation or imposition of any Lien on the
Company's properties or assets;
(o) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all of the provisions of
this Agreement, the issuance and sale of the Securities and the Common
Securities by the Trust, the sale of the Debentures by the Company to
the Trust, the issuance by the Company of the Guarantee, the execution,
delivery and performance by the Company of the Guarantor Agreements (as
defined below), the issuance by the Company of the Common Stock upon
the conversion or exchange of the Securities and/or the Debentures, the
distribution of the Debentures by the Trust in the circumstances
contemplated by the Trust Agreement, the performance of this Agreement
and the consummation of the transactions contemplated by this
Agreement and the Guarantor Agreements did not and will not conflict
with, result in a breach of any of the terms or provisions of, or
constitute a default or require the consent of any party under the
Company's Articles of Incorporation or by-laws, any material terms or
provisions of any material agreement or instrument to which the Company
is a party, any existing material applicable law, rule or regulation or
any judgment, order or decree of any governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
of its properties or assets, or did or will result in the creation or
imposition of any Lien on the Company's properties or assets;
(p) Except as disclosed in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in equity
or otherwise) pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary by any governmental authority
that (i) questions the validity, enforceability or performance of this
Agreement or the Securities or (ii) if determined adversely, is likely
to have a material adverse effect on the business or financial
condition of the Company and its Subsidiaries, taken as a whole, or
materially adversely affect the ability of the Company to perform its
obligations hereunder or the consummation of the transactions
contemplated by this Agreement;
5
6
(q) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture, mortgage,
loan agreement, lease or other material agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries, or any of their
respective properties, may be bound;
(r) Neither the Company, the Trust nor any of the
Subsidiaries is and, after giving effect to the offering and sale of
the Securities, will not be an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment
Company Act"). The Trust is not required to be registered under the
Investment Company Act;
(s) The Securities and the shares of Common Stock issuable
upon the conversion or exchange of the Securities and/or the Debentures
have been approved for listing on the New York Stock Exchange, subject
to notice of issuance;
(t) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Business Trust Act of the State of Delaware (the "Delaware Business
Trust Act") with the trust power and authority to own property and
conduct its business as described in the Prospectus, and has conducted
and will conduct no business other than the transactions contemplated
by this Agreement and described in the Prospectus; the Trust is not a
party to or bound by any agreement or instrument other than this
Agreement, the Trust Agreement between the Company and the CMS Trustees
named therein and the agreements and instruments contemplated by the
Trust Agreement and described in the Prospectus; based on expected
operations and current law, the Trust is not and will not be classified
as an association taxable as a corporation for United States federal
income tax purposes; and, to the knowledge of each of the Company and
the Trust, the Trust is not a party to or subject to any action, suit
or proceeding of any nature;
(u) The Guarantee, the Debentures, the Trust Agreement and
the Indenture (collectively, the "Guarantor Agreements") have each been
duly authorized and when validly executed and delivered by the Company
and, in the case of the Guarantee, by the Guarantee Trustee and, in the
case of the Trust Agreement, by the CMS Trustees and, in the case of
the Indenture, by the Debenture Trustee, and, in the case of the
Debentures, when validly authenticated and delivered by the Debenture
Trustee and, in the case of the Guarantee, upon due execution,
authentication and delivery of the Debentures and upon payment
therefor, will constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered
in a proceeding at law or in equity); the Debentures are entitled to
the benefits of the Indenture; the Indenture has been duly qualified
under the Trust Indenture Act of 1939 (the "Trust Indenture Act"); and
(v) Each of the Preferred Securities, Guarantee,
Debentures and the relationship among each of them will conform in all
material respects to the description thereof contained in the
Prospectus.
6
7
2. Subject to the terms and conditions herein set forth, (a) the
Trust and the Company agree that the Trust shall issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at a purchase price per share of $___ per Security, the
number of Securities set forth opposite the name of such Underwriter in Schedule
I hereto.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Securities will be
used by the Trust to purchase the Debentures of the Company, the Company at each
Time of Delivery will pay to _________., for the accounts of the several
Underwriters, an amount equal to $___ per Security for the Securities to be
delivered by the Company hereunder at the Time of Delivery.
3. The Securities to be purchased by each Underwriter shall be
delivered by or on behalf of the Trust to _____________., through the facilities
of The Depository Trust Company ("DTC"), for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by certified or official bank check or checks, payable to the order of
the Trust in federal or other immediately available funds. The Trust will cause
the certificates representing the Securities to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) at the office of DTC or its designated custodian (the "Designated
Office"). The Securities to be purchased by each Underwriter hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Trust with the DTC or its designated
custodian. The time and date of such delivery and payment shall be 9:30 a.m.,
New York City time, on _________, 1999 or such other time and date as
_____________ and the Trust and the Company may agree upon in writing. Such time
and date are herein called the "Time of Delivery".
(a) At each Time of Delivery, the Company will pay, or
cause to be paid, the commission payable at such Time of Delivery to
the Underwriters under Section 2 hereof in immediately available funds.
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 6 hereof,
including the cross-receipt for the Securities and any additional
documents requested by the Underwriters pursuant to Section 6(m)
hereof, will be delivered at such time and date at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000 (the "Closing Location"), and the Securities will
be delivered at the Designated Office, all at the Time of Delivery. A
meeting will be held at the Closing Location prior to the Time of
Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 3, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to
close.
4. The Trust and the Company, jointly and severally, agree with
each of the Underwriters:
(a) To prepare the Prospectus as amended and supplemented
in relation to the Securities in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 424(b); prior
to the Time of Delivery, to make no further amendment or any supplement
to the Registration Statement or Prospectus as amended or supplemented
7
8
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, and to make no such amendment or supplement to which
such counsel shall reasonably object on legal grounds in writing, after
consultation with the Representatives; to timely file all reports and
any definitive proxy or information statements required to be filed by
the Trust or the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Securities, of the suspension
of the qualification of the Securities, the Debentures or the shares of
Common Stock, if any, issuable upon the conversion or exchange of the
Securities and/or the Debentures for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Regis- tration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time during the period of time (not exceeding nine months)
after the date of the Prospectus when a Prospectus is required to be
delivered under the Act to furnish the Underwriters in New York City
with copies of the Prospectus as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time after the expiration
of nine months in connection with the offering or sale of the
Securities, the Debentures or the shares of Common Stock, if any,
issuable upon the conversion or exchange of the Securities and/or the
Debentures and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to prepare and file such document and to furnish without
charge to each Underwriter as many copies as the Representatives may
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(c) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
8
9
(d) To make generally available to the Company's
securityholders, as soon as practicable but in any event not later than
eighteen months after the effective date of the Registration Statement,
an "earning statement" (which need not be audited by independent public
accountants) covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later than
15 months thereafter, which shall comply in all material respects with
the provisions of Section 11(a) of the Act and Rule 158 under the Act);
(e) To use its best efforts to qualify the Securities, the
Debentures, the Guarantee and the shares of Common Stock issuable upon
conversion or exchange of the Securities and/or the Debentures for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate, to comply with such
laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, and to pay (or cause to be paid), or
reimburse (or cause to be reimbursed) the Underwriters and their
counsel for, reasonable filing fees and expenses in connection
therewith (including the reasonable fees and disbursements of counsel
to the Underwriters and filing fees and expenses paid and incurred
prior to the date hereof), provided, however, that the Company shall
not be required to qualify to do business as a foreign corporation or
as a securities dealer or to file a general consent to service of
process or to file annual reports or to comply with any other
requirements deemed by the Company to be unduly burdensome;
(f) During the period beginning from the date hereof and
continuing for a period of 90 days after the issuance of the
Securities, not to offer, sell, contract to sell or otherwise dispose
of (i) any Securities or any preferred stock or any other securities of
the Company which are substantially similar to the Securities,
including any guarantee of such securities, or any securities
convertible into or exchangeable for or representing the right to
receive any of the foregoing securities, or (ii) any shares of any
class of Common Stock of the Company, other than shares of Common Stock
issuable upon conversion of the Securities or pursuant to the Company's
Stock Purchase Plan, the Performance Incentive Stock Plan, the Employee
Stock Ownership Plan and the Employee Savings and Incentive Plan,
without the prior written consent of the Representatives;
(g) To issue the Guarantee concurrently with the issuance
and sale of the Securities as contemplated herein;
(h) To use the net proceeds received by it from the sale
of the Securities in the case of the Trust, and the Debentures, in the
case of the Company, pursuant to this Agreement in the manner specified
in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the Securities and the shares of Common Stock issuable upon
the conversion or exchange of the Securities and/or, if the Securities
are exchanged for Debentures, Debentures on the New York Stock
Exchange; and
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling
the Company to satisfy any obligation to issue shares of its Common
Stock upon the conversion or exchange of the Securities and/or the
Debentures.
9
10
5. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's and the Company's counsel and
accountants in connection with the registration of the Securities and the shares
of Common Stock issuable upon conversion of the Securities and/or the Debentures
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of any delivery to the
Underwriters of any Blue Sky Memorandum; (iii) all expenses in connection with
the qualification of the Securities, the Debentures and the shares of Common
Stock issuable upon the conversion or exchange of the Securities and/or the
Debentures for offering and sale under state securities laws as provided in
Section 4(e) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey(s) up to an aggregate amount not to exceed $5,000; (iv) any fees
charged by securities rating services for rating the Securities; (v) the cost of
preparing the certificates for the Securities and the Debentures; (vi) the fees
and expenses of the CMS Trustees, the Debenture Trustee and the Guarantee
Trustee and any other agent thereof and the fees and disbursements of their
counsel (it being understood that as among the Company and the Trust and such
trustees, such fees and expenses shall not exceed $5,000); (vii) the cost and
charges of any transfer agent or registrar or dividend disbursing agent; and
(viii) all other reasonable costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that, except as provided in this
Section, and Section 7 hereof, the Underwriters will pay all of their own costs
and expenses, including, without limitation, the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
6. The obligations of the Underwriters shall be subject, in the
discretion of the Representatives, to the condition that all representations and
warranties and other statements of the Trust and the Company herein are, at and
as of each Time of Delivery, true and correct, the condition that the Trust and
the Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Underwriters, shall have furnished to the Representatives such
written opinion or opinions (a draft of each such opinion is attached
as Annex II(a) hereto), dated the Time of Delivery, with respect to the
incorporation of the Company and the formation of the Trust, insofar as
the federal laws of the United States and the laws of the State of New
York or the General Corporation Law of the State of Delaware or the
Delaware Business Trust Act are concerned, the validity of the
Securities, the Debentures, the Guarantee and the Prospectus, as well
as such other related matters as the
10
11
Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Xxxxxxx X. Xxx Xxxxxx, Assistant General Counsel to
the Company, shall have furnished to the Representatives his written
opinion or opinions (a draft of each such opinion is attached as Annex
II(b) hereto), dated the Time of Delivery, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of
Michigan, with power and authority (corporate and
other) to own its properties and conduct its business
as described in the Prospectus, as amended and
supplemented;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, as amended or supplemented,
and all of the issued shares of capital stock of the
Company (including the Securities) have been duly and
validly authorized and issued and are fully paid and
non-assessable; the shares of Common Stock issuable
upon the conversion or exchange of the Securities
and/or Debentures have been duly authorized and
reserved for issuance and, if and when issued and
delivered in accordance with the provisions of the
Trust Agreement and the Indenture, will be validly
issued, fully paid and non- assessable, and will
conform to the description of the Common Stock
contained in the Prospectus in all material respects;
and the issuance of such Common Stock is not subject
to any preemptive or other similar rights;
(iii) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company
or any of its Subsidiaries is a party or of which any
property of the Company or any of its Subsidiaries is
the subject which, if determined adversely to the
Company or any of its Subsidiaries, would in the
aggregate have a material adverse effect on the
current or future consolidated financial position,
securityholders' equity or results of operations of
the Company and its Subsidiaries; and to the best of
such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities
or threatened by others;
(iv) Each of this Agreement, the Indenture and the
Guarantee have been duly authorized, executed and
delivered by the Company; and the Debentures have been
duly authenticated in accordance with the Indenture
and delivered and paid for in accordance herewith;
(v) To the best knowledge of such counsel, there are no
outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments or sale or
Liens related to or entitling any person to purchase
or otherwise to acquire any shares of the capital
stock of, or other ownership interest in, any
Significant Subsidiary;
11
12
(vi) The issuance and sale of the Securities being
delivered at the Time of Delivery, the compliance by
the Company with all the provisions of this Agreement
and the consummation of the transactions contemplated
herein, the issuance and sale of the Securities and
the Common Securities by the Trust, the sale of the
Debentures by the Company to the Trust, the issuance
by the Company of the Guarantee, the execution,
delivery and performance by the Company of the
Guarantor Agreements, the issuance by the Company of
the Common Stock upon the conversion or exchange of
the Securities and/or the Debentures, the distribution
of the Debentures by the Trust in the circumstances
contemplated by the Trust Agreement and the
performance of this Agreement and the consummation of
the transactions contemplated by this Agreement and
the Guarantor Agreements will not conflict with or
result in a breach or violation of any of the material
terms or provisions of, or constitute a default under,
any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to
such counsel to which the Company or any of its
Subsidiaries is a party or by which the Company is
bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject (except
for such breaches or violations or defaults that would
not have a material adverse effect on the business,
property or financial condition of the Trust or of the
Company and its Subsidiaries, taken as a whole), nor
will such action result in any violation of the
provisions of the Articles of Incorporation or by-laws
of the Company or any statute or any currently
existing order, rule or regulation known to such
counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its
Subsidiaries or any of its properties (other than the
securities or Blue Sky laws of the various states, as
to which such counsel need express no opinion);
(vii) No consent, approval, authorization, order,
registration or qualification of or with any such
court or governmental agency or body is required for
the issuance and sale of the Securities or the
consummation by the Company of the transactions
contemplated herein, except such as have been
obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under state securities or Blue Sky
laws (as to which such counsel need express no
opinion) in connection with the purchase and
distribution of the Securities;
(viii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its respective
charters or bylaws or in default in the performance or
observance of any material obligation, agreement,
covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party
or by which it or any of its properties may be bound,
except for such violations or defaults the existence
of which would not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole;
(ix) The statements made in the Prospectus under the
captions "Description of the Preferred Securities",
"Description of the Guarantee", "Description of the
12
13
Debentures", and "Relationship Among the Preferred
Securities, the Debenture and the Guarantee", insofar
as such statements constitute summaries of legal
matters or documents referred to therein, are accurate
in all material respects; the Securities, the
Debentures, the Guarantee, the Trust Agreement, the
Indenture and the Common Securities conform as to
legal matters to the description thereof and to the
statements in regard thereto contained in the
Registration Statement and the Prospectus;
(x) The Company is not an "investment company" within the
meaning of the Investment Company Act. The Trust is
not required to be registered under the Investment
Company Act;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
[operating statistics,] financial statements, notes,
auditors' reports and related schedules therein, and
any other financial [or statistical] data included or
incorporated by reference therein, as to which such
counsel need express no opinion), when they became
effective or were filed with the Commission, as the
case may be, complied as to form in all material
respects with the requirements of the Act or the
Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; [and they
have no reason to believe that any of such documents,
when they became effective or were so filed, as the
case may be, contained, in the case of a registration
statement which became effective under the Act, an
untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not
misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made when such
documents were so filed, not misleading];
(xii) The Registration Statement and the Prospectus as
amended or supplemented, and any further amendments
and supplements thereto made by the Company prior to
the Time of Delivery (other than the [operating
statistics,] financial statements, notes, auditors'
reports and related schedules and any other financial
[or statistical] data included or incorporated by
reference therein, as to which such counsel need
express no opinion), comply as to form in all material
respects with the requirements of the Act and the
rules and regulations thereunder; although they do not
assume any responsibility for the accuracy,
completeness or fairness of the statements contained
in the Registration Statement or the Prospectus,
except for those referred to in the opinion in
subsection (ix) of this Section 6(c), they have no
reason to believe that, as of its effective date, the
Registration Statement or any further amendment
thereto made by the Company prior to the Time of
Delivery (other than the [operating statistics,]
financial statements, notes, auditors' reports and
related schedules and any other financial [or
statistical] data included or incorporated by
reference therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that, as of its
date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the
[operating statistics,] financial statements, notes,
auditors' reports and related schedules and any other
financial [or statistical] data included or
incorporated by reference therein, as to which such
counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state
13
14
a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading or that, as of the Time
of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the
[operating statistics,] financial statements, notes,
auditors' reports and related schedules and any other
financial [or statistical] data included or
incorporated by reference therein, as to which such
counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a
material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and they do not know
of any amendment to the Registration Statement
required to be filed or any contracts or other
documents of a character required to be filed as an
exhibit to the Registration Statement or required to
be incorporated by reference into the Prospectus as
amended or supplemented or required to be described in
the Registration Statement or the Prospectus as
amended or supplemented which are not filed or
incorporated by reference or described as required;
(xiii) Upon due execution, authentication and delivery of the
Securities and upon payment therefor, the Guarantor
Agreements will be legally valid and binding
obligations of the Company enforceable in accordance
with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights
generally or by general principles of equity
(regardless of whether enforcement is considered in a
proceeding at law or in equity); the Debentures are
entitled to the benefits of the Indenture; the
Indenture has been duly qualified under the Trust
Indenture Act; and
(xiv) To the best of such counsel's knowledge, the Trust is
not a party to or bound by any agreement or instrument
other than this Agreement, the Trust Agreement and the
agreements and instruments contemplated by the Trust
Agreement and described in the Prospectus; and to the
best of such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Trust
is a party or of which any property of the Trust is
the subject and no such proceedings are threatened or
contemplated by governmental authorities or threatened
by others.
(d) The foregoing opinions may be limited to the laws of
Delaware, Michigan and the federal law of the United States. In giving
such opinion, such counsel may rely, as to matters of Delaware law,
upon the opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
14
15
Delaware counsel to the Trust and the Company, in which case the
opinion shall state that such counsel believes that you and he are
entitled to so rely.
(e) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special tax
counsel to the Trust and the Company, shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion
is attached as Annex II(c) hereto), dated the Time of Delivery, in form
and substance satisfactory to the Representatives, to the effect that:
(i) The Trust will be classified as a grantor trust and
not as an association taxable as a corporation; and
(ii) The discussion set forth in the Prospectus under the
captions _____________ is a fair and accurate summary
of the matters addressed therein, based upon the
assumptions stated or referred to therein.
(f) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special
Delaware counsel to the Trust and the Company, shall have furnished to
the Representatives, the Company and the Trust their written opinion or
opinions (a draft of each such opinion is attached as Annex II(d)
hereto), dated the Time of Delivery, in form and substance satisfactory
to the Representatives, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by the Trust;
(ii) The Trust has been duly created and is validly
existing in good standing as a business trust under
the Delaware Business Trust Act and has the business
trust power and authority to conduct its business as
described in the Registration Statement and the
Prospectus;
(iii) The Trust Agreement has been duly authorized, executed
and delivered by each of the Company and the Trust,
and constitutes a valid and binding agreement of each
of the Company and the Trust, enforceable against the
Company in accordance with its terms, except as
enforcement thereof may be limited by (a) bankruptcy,
insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization,
moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b)
general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or
at law);
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the power and authority to
(a) execute and deliver, and to perform its
obligations pursuant to, this Agreement, and (b) issue
and perform its obligations under the Securities and
Common Securities;
(v) The execution and delivery by the Trust of this
Agreement, and the perfor xxxxx by the Trust of its
obligations thereunder, have been duly authorized by
all necessary action on the part of the Trust;.
15
16
(vi) The Securities have been duly authorized for issuance
by the Trust and, when executed and authenticated by
the property trustee in accordance with the terms of
the Trust Agreement and delivered and paid for in
accordance with this Agreement, will be fully paid and
non-assessable undivided beneficial interests in the
assets of the Trust and will entitle the holders
thereof to the benefits of this Agreement except to
the extent that enforcement of the Trust Agreement may
be limited by (a) bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, morato rium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles
of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and
the holders of the Securities will be entitled to the
same limitation of personal liability extended to
stockholders of private corporations for profit
organized under the General Corporation Law of the
State of Delaware, except that the holders of
Securities may be obligated, pursuant to the Trust
Agreement, to make payments, including (i) to provide
indemnity and/or security in connection with and pay
taxes or governmental charges arising from transfers
of the Securities and (ii) to provide security and
indemnity in connection with requests of or directions
to the property trustee to exercise its rights and
powers under the Trust Agreement; the issuance of the
Securities is not subject to preemptive or other
similar rights under the Delaware Business Trust Act
or the Trust Agreement;
(vii) The Common Securities have been duly authorized for
issuance by the Trust and, when executed and
authenticated by the property trustee in accordance
with the terms of the Trust Agreement and delivered
and paid in accordance with the Common Securities
Purchase Agreement, dated as of , , between the
Company and the Trust, will be validly issued,
undivided beneficial interests in the assets of the
Trust; the issuance of the Common Securities is not
subject to preemptive or other similar rights under
the Delaware Business Trust Act or the Trust
Agreement;
(viii) None of the execution and delivery by the Trust of, or
the performance by the Trust of its obligations under,
this Agreement, or the issuance and sale of the
Securities by the Trust in accordance with the terms
of this Agreement or the consummation of the other
transactions contemplated hereby, will contravene any
provision of applicable law or the Trust Agreement or
any agreement or other instrument governed by the laws
of the State of Delaware binding upon the Trust as set
forth in the Trust's certificate, or any judgment,
order or decree applicable to the Trust as set forth
in the Trust's certificate, of any governmental
authority; and
(ix) No governmental approval is required for the issuance
and sale of the Securities and the Common Securities
by the Trust pursuant to this Agree ment or the
consummation of the other transactions contemplated
hereby, except such as have been obtained and made.
16
17
(g) [On the date of the Prospectus and also] at the Time
of Delivery, the independent accountants of the Company who have
certified the financial statements of the Company and its consolidated
Subsidiaries included or incorporated by reference in the Registration
Statement shall have furnished to the Representatives a letter, dated
as of such date, (i) confirming that they are independent public
accountants within the meaning of the Act and the applicable published
rules and regulations of the Commission thereunder, (ii) stating that
in their opinion the financial statements examined by them and included
or incorporated by reference in the Registration Statement complied as
to form in all material respects with the applicable accounting
requirements of the Commission, including applicable published rules
and regulations of the Commission, and (iii) covering, as of a date not
more than five business days prior to the date of such letter, such
other matters as the Representatives reasonably request;
(h) That, between the date of the execution of this
Agreement and the Time of Delivery, no material and adverse change
shall have occurred in the business, properties or financial condition
of the Company and its Subsidiaries, taken as a whole, which, in the
judgment of the Representatives, impairs the marketability of the
Securities (other than changes referred to in or contemplated by the
Registration Statement or Prospectus);
(i) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, [and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or preferred stock or the Company's financial strength or
claims paying ability];
(j) The Trust Agreement, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form
reasonably satisfactory to the Representatives;
(k) The Securities and the shares of Common Stock issuable
upon the conversion or exchange of the Securities and/or Debentures
shall have been duly listed, subject to notice of issuance, on the New
York Stock Exchange;
(l) The Company shall have complied with the provisions of
Section 4(b) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(m) The Trust and the Company shall have furnished or
caused to be furnished to the Representatives at the Time of Delivery
certificates of officers of the Trust and the Company to the effect
that to the best of such person's knowledge, information and belief (i)
there has been no material adverse change in the business, properties
or financial condition of the Company and its Subsidiaries, taken as a
whole or the Trust from that set forth in the Registration Statement or
Prospectus (other than changes referred to in or contemplated by the
Registration Statement or Prospectus), (ii) the representations and
warranties of the Trust and the Company herein at and as of such Time
of Delivery are true and correct, (iii) the Trust and the Company have
complied with all agreements and satisfied all conditions on their part
to be performed or satisfied at or prior to the Time of Delivery, and
(iv) no stop order suspending the effectiveness of the
17
18
Registration Statement has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
7. The obligations of the Company and the Trust shall be subject,
in the discretion of the Company and the Trust, to the condition that the
Registration Statement shall be effective under the Act and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the Act or proceedings therefor initiated or threatened by the
Commission.
8. (a) The Trust and the Company, jointly and severally, will, to
the extent permitted by law, indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with [investigating or] defending any such
action or claim as such expenses are incurred; provided, however, that (i)
neither the Trust nor the Company shall be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
and the Company by any Underwriter through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Securities or with
any statements in or omissions from that part of the Registration Statement that
shall constitute the Statements of Eligibility and Qualification under the Trust
Indenture Act of the Debenture Trustee, the Guarantee Trustee and the Property
Trustee, and except that this indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on account of any
losses, claims, damages, liabilities or actions, suits or proceedings arising
from the sale of the Securities to any person if a copy of the Prospectus, as
the same may then be supplemented or amended (excluding, however, any document
then incorporated or deemed incorporated therein by reference), was not sent or
given by or on behalf of such Underwriter to such person (i) with or prior to
the written confirmation of sale involved or (ii) as soon as available after
such written confirmation, relating to an event occurring prior to the payment
for and delivery to such person of the Securities involved in such sale, and the
omission or alleged omission or untrue statement or alleged untrue statement was
corrected in the Prospectus as supplemented or amended at such time.
(b) Each Underwriter, severally and not jointly, will
indemnify and hold harmless the Trust and the Company against any
losses, claims, damages or liabilities to which the Trust and the
Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Securities, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein
18
19
not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Trust and
the Company by such Underwriter through the Representatives expressly
for use therein; and will reimburse the Trust and the Company for any
legal or other expenses reasonably incurred by the Trust and the
Company in connection with [investigating or] defending any such action
or claim as such expenses are incurred.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened
against any person as to which indemnity may be sought under subsection
(a) or (b), such person (the "Indemnified Person") shall notify the
person against whom such indemnity may be sought (the "Indemnifying
Person"), promptly after any assertion of such claim threatening to
institute an action, suit or proceeding or if such an action, suit or
proceeding is commenced against such Indemnified Person, promptly after
such Indemnified Person shall have been served with a summons or other
first legal process, giving information as to the nature and basis of
the claim. Failure to so notify the Indemnifying Person shall not,
however, relieve the Indemnifying Person from any liability which it
may have on account of the indemnity under subsection (a) or (b) if the
Indemnifying Person has not been prejudiced in any material respect by
such failure. Subject to the immediately succeeding sentence, the
Indemnifying Person shall assume the defense of any such litigation or
proceeding,including the employment of counsel and the payment of all
expenses, with such counsel being designated, subject to the
immediately succeeding sentence, in writing by the Representatives in
the case of parties indemnified pursuant to subsection (b) and by the
Company in the case of parties indemnified pursuant to subsection (a).
Any Indemnified Person shall have the right to participate in such
litigation or proceeding and to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include (x) the Indemnifying Person and (y) the
Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and expenses
of counsel (including disbursements) for such Indemnified Person shall
be reimbursed by the Indemnifying Person to the Indemnified Person. If
there is a conflict as described in clause (ii) above, and the
Indemnified Persons have participated in the litigation or proceeding
utilizing separate counsel whose fees and expenses have been reimbursed
by the Indemnifying Person and the Indemnified Persons, or any of them,
are found to be solely liable, such Indemnified Persons shall repay to
the Indemnifying Person such fees and expenses of such separate counsel
as the Indemnifying Person shall have reimbursed. It is understood that
the Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same
jurisdiction as to which the Indemnified Persons are entitled to such
separate representation, be liable under this Agreement for the
reasonable fees and out-of-pocket expenses for more than one separate
firm (together with not more than one appropriate local counsel) for
all such Indemnified Persons. Subject to the next paragraph, all such
fees and expenses shall be reimbursed by payment to the Indemnified
Persons of such reasonable fees and expenses of counsel promptly after
payment
19
20
thereof by the Indemnified Persons. Such firms shall be selected and
designated in writing by ____________.
9. In furtherance of the requirement above that fees and expenses
of any separate counsel for the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's obligations
to pay such fees and expenses shall be conditioned upon the following:
(a) in case separate counsel is proposed to be retained by
the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel;
(b) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment of
such counsel, furnishing such information might reasonably be expected
to result in a waiver of any attorney-client privilege); and
(c) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate counsel
for Indemnified Persons for which the Indemnifying Person is liable
hereunder, and the Indemnified Person shall use every reasonable
effort to cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the Indemnifying
Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
(d) If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Trust and the Company on the one hand and the Underwriters on
the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above and such failure
resulted in the indemnifying party being prejudiced in a material way,
then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault
of the Trust and the Company on the one hand and the Underwriters
20
21
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the
Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Trust and the
Company and the total underwriting discounts and commissions received
by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Trust and
the Company on the one hand or such Underwriters on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Trust, the Company and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, provided that the
provisions of subsection (c) have been complied with (in all material
respects) in respect of any separate counsel for such indemnified
party. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount greater than the
excess of (i) the total price at which the Securities underwritten by
it and distributed to the public were offered to the public over (ii)
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of the Underwriters
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and
not joint.
(e) The obligations of the Trust and the Company under
this Section 7 shall be in addition to any liability which the Trust
and the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 7 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Company, each Regular Trustee and to each person, if any, who controls
the Trust and the Company within the meaning of the Act.
10. If any Underwriter under this Agreement shall fail or refuse
(otherwise than for some reason sufficient to justify in accordance with the
terms hereof, the termination of its obligations hereunder) to purchase the
Securities which it had agreed to purchase on the Time of Purchase, the
Representatives shall immediately notify the Company and the Representatives and
the other Underwriters may, within 36 hours of the giving of such notice,
determine to purchase, or to procure one or more other members of the National
Association of Securities Dealers, Inc. ("NASD") (or, if not members of the
NASD, who are foreign banks, dealers or institutions not registered under the
Exchange Act and who agree in making sales to comply with the NASD's Rules of
Fair Practice), satisfactory in the Company to purchase, upon the terms herein
set forth, the principal amount of Securities which the defaulting
21
22
Underwriter had agreed to purchase. If any non-defaulting Underwriter or
Underwriters shall determine to exercise such right, the Representatives shall
give written notice to the Company of such determination within 36 hours after
the Company shall have received notice of any such default, and thereupon the
Time of Purchase shall be postponed for such period, not exceeding three
business days, as the Company shall determine. If in the event of such a
default, the Representatives shall fail to give such notice, or shall within
such 36-hour period give written notice to the Company that no other Underwriter
or Underwriters, or others, will exercise such right, then this Agreement may be
terminated by the Company, upon like notice given to the Representatives within
a further period of 36 hours. If in such case the Company shall not elect to
terminate this Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to
purchase and pay for the respective principal amounts of Securities
which they had severally agreed to purchase hereunder, as hereinabove
provided, and, in addition, the principal amount of Securities which
the defaulting Underwriter shall have so failed to purchase up to a
principal amount thereof equal to one-ninth (1/9) of the respective
principal amounts of Securities which such non-defaulting Underwriters
have otherwise agreed to purchase hereunder; and/or
(b) to procure one or more other members of the NASD (or,
if not members of the NASD, who are foreign banks, dealers or
institutions not registered under the Exchange Act and who agree in
making sales to comply with the NASD's Rules of Fair Practice), to
purchase, upon the terms herein set forth, the principal amount of
Securities which such defaulting Underwriter had agreed to purchase, or
that portion thereof which the remaining Underwriters shall not be
obligated to purchase pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under clause (a)
and/or (b) above, the Company shall give written notice thereof to the
Representatives within such further period of 36 hours, and thereupon the Time
of Purchase shall be postponed for such period, not exceeding five business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Agreement.
Any action taken by the Company under this Section 9 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. Termination by the Company under this Section
9 shall be without any liability on the part of the Company or any
non-defaulting Underwriter.
In the computation of any period of 36 hours referred to in this
section 9, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday which would otherwise be included in such
period of time.
11. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Trust, the Company, or any officer, director, Regular
Trustee or controlling person of the Trust or the Company, and shall survive
delivery of and payment for the Securities.
22
23
12. This Agreement may be terminated at any time prior to the Time
of Delivery by the Representatives if, prior to such time, any of the following
events shall have occurred: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (v) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities on the terms and in the manner contemplated in the Prospectus;
If the Representatives elect to terminate this Agreement, as
provided in this Section 11, the Representatives will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Underwriter for any
reason permitted hereunder, or if the sale of the Securities to the Underwriters
as herein contemplated shall not be carried out because the Company is not able
to comply with the terms hereof, the Company shall not be under any obligation
under this Agreement and shall not be liable to any Underwriter or to any member
of any selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement and the Underwriters shall be under no liability
to the Company nor be under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5
and 7 shall survive any termination of this Agreement.
13. In all dealings hereunder, the Representatives shall act on
behalf of each of the Underwriters, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representatives jointly or by on behalf of the
Representatives.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the Representa tives in care of
_______________; and if to the Trust or the Company shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 7(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Trust and the Company by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Trust, the Company and, to the extent provided
in Sections 7 and 9 hereof, the officers, directors and administrative trustees
of the Trust, the Company and each person who controls the Trust, the Company or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Securities from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
23
24
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
24
25
If the foregoing is in accordance with your understanding,
please sign and return to us one for the Trust, the Company and one for each of
the Representatives plus one for each counsel counterparts hereof.
Very truly yours,
CMS ENERGY TRUST III
By:_________________________________________
Name:
Title: Administrative Trustee
CMS ENERGY CORPORATION
By:_________________________________________
Name:
Title:
Accepted as of the date hereof:
[Underwriters]
BY:_______________________________________________________
25
