EXHIBIT NO. (1)(a)
EXHIBIT (1)(a)
CMS Energy Corporation
$125,000,000
General Term Notes (registered trademark), Series B
Due From Nine Months to Twenty-Five Years from Date of Issue
FORM OF
DISTRIBUTION AGREEMENT
____________, 1996
X. X. XXXXX & COMPANY
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
___________________________
___________________________
___________________________
Dear Sirs:
CMS Energy Corporation, a Michigan corporation (the "Company"),
confirms its agreement with each of you (the "Agents") with respect to the
issue and sale by the Company of up to $125,000,000 aggregate principal
amount of its General Term Notes (registered trademark), Series B (the
"Notes"). The Notes are to be issued under an Indenture, dated as of
January 15, 1994 as supplemented by a Second Supplemental Indenture dated
as of __________________ (such Indenture, as so supplemented, the
"Indenture"), between the Company and The Chase Manhattan Bank (National
Association), as trustee (the "Trustee"). The Notes will have the
maturities, annual interest rates, redemption provisions, if any, and
other terms specified in a pricing supplement to the Prospectus referred
to below.
Subject to the terms and conditions stated herein, the Company
hereby (i) appoints each of the Agents as the agent of the Company for the
purpose of soliciting and receiving offers to purchase the Notes and
(ii) agrees that, whenever the Company determines to sell Notes pursuant
to this Agreement, such Notes shall be sold pursuant to a supplemental
agreement between the Company and X. X. Xxxxx & Company (the "Purchasing
Agent") with the Purchasing Agent purchasing such Notes as principal; the
supplemental agreement will also specify the amount of Notes being sold
which have been solicited by each Agent. Each such supplemental agreement
(which shall be either oral, to be confirmed in writing, or written, and
in either case the written confirmation of an oral agreement or the
written supplemental agreement shall be substantially in the
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(registered trademark) Registered servicemark of X. X. Xxxxx & Company
- 2 -
form of Exhibit B hereto and may take the form of an exchange of any
standard form of written telecommunication between the Purchasing Agent
and the Company) is herein referred to as a "Terms Agreement". Any such
Terms Agreement may be signed on behalf of the Company by such persons as
are authorized from time to time by the Board of Directors of the Company
to bind the Company in this regard. Under no circumstances will any Agent
be obligated to purchase, or the Company be obligated to sell, any Notes,
unless a Terms Agreement has been entered into between the Company and the
Purchasing Agent with respect to such Notes.
1. Solicitations by the Agents of Offers To Purchase; Purchases
by the Purchasing Agent of Notes as Principal.
Following the Commencement Date (defined below), the Company shall
notify the Agents from time to time as to the commencement of a period
during which the Notes may be offered and sold by the Agents. On the
basis of the representations and warranties herein contained, but subject
to the terms and conditions herein set forth, the Agents will use their
respective reasonable best efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth in the Prospectus as then amended
and supplemented and as contemplated by the Note Administrative Procedures
attached hereto as Exhibit A ("the Procedures").
The Agents are authorized to solicit orders for the Notes only in
denominations of $1,000 or any amount in excess thereof which is a
multiple of $1,000 and, unless otherwise agreed to by the Company, at a
purchase price equal to 100% of their principal amount. In soliciting
offers to purchase the Notes hereunder, the Agents are acting solely as
agents for the Company, and not as principals. Each Agent shall
communicate to the Company, orally or in writing, each reasonable offer or
indication of interest received by it to purchase Notes. Each Agent shall
have the right to reject, in its discretion reasonably exercised, any
offer received by it to purchase the Notes, in whole or in part, and any
such rejection shall not be deemed a breach of its agreements contained
herein. The Company shall have the right to accept offers to purchase the
Notes and may reject any such offer in whole or in part. The obligations
of the Agents under this Agreement shall be several and not joint.
Each acceptance by the Company of an offer to purchase Notes shall
be in accordance with the terms of this Agreement and a Terms Agreement
which will provide for the sale of such Notes to, and the purchase and
reoffering thereof by, the Purchasing Agent as principal. The commitment
of the Purchasing Agent to purchase Notes pursuant to any Terms Agreement
(and any contemporaneous purchase of Notes by an Agent from the Purchasing
Agent) shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms
Agreement shall describe the Notes to be purchased pursuant thereto by the
Purchasing Agent as principal, specify the principal amount of such Notes,
the price to be paid to the Company for such Notes, the rate at which
interest will be paid on the Notes, the date and time of delivery of
payment for such Notes (the "Settlement Date"), whether the Notes provide
for a survivor's option or for optional redemption by the Company and on
what terms and conditions, the place of delivery of the Notes and payment
therefor, the method of payment and any requirements for the delivery of
the opinions of counsel, the certificates from the Company, and the letter
from Xxxxxx Xxxxxxxx LLP, pursuant to Section 6(B)(b). The Agents may
reallow any portion of the commission payable pursuant hereto to dealers
or purchasers in connection with the offer and sale of any Notes.
The Company agrees to pay to the Purchasing Agent, as consideration
for soliciting the sale of the Notes pursuant to a Terms Agreement, a
commission in the form of a discount equal to a percentage not greater
than 4%, which percentage shall be set forth in the applicable Terms
Agreement, of the principal amount of each Note sold by the Company; the
Purchasing Agent and the other Agent will share such commission in such
proportion as they may agree.
Delivery of the certificates for Notes pursuant to any Terms
Agreement shall be made as agreed to between the Company and the
Purchasing Agent as specified in the Terms Agreement, not later than the
Settlement Date set forth in such Terms Agreement, against payment of
funds to the Company in the net amount due to the Company for such Notes
by the method and in the form specified in the Terms Agreement.
The Agents and the Company agree to perform the respective duties
and obligations specifically provided to be performed by them in the
Procedures. The Procedures may be amended only by written agreement of
the Company and the Agents.
The documents required to be delivered by Section 6 of this
Agreement shall be delivered at the office of Xxxx & Priest, counsel for
the Agents, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on such date as
may be agreed to by the Company and the Agents (the "Commencement Date").
2. Other Activities of Agents. The Company acknowledges that
nothing in this Agreement shall prohibit any Agent from (i) acting as
broker for the sale of Notes by customers other than the Company,
(ii) soliciting the sale of Notes through such Agent as broker for a
seller, soliciting the sale of Notes to such Agent as principal and
soliciting offers to buy Notes, (iii) purchasing Notes in the secondary
market, and (iv) offering and selling as principal for its own account
Notes which such Agent has purchased.
3. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Agents as of the date hereof, as of the
Commencement Date and as of the times referred to in Section 4(g) hereof
(the Commencement Date and each such time hereinafter sometimes referred
to as a "Representation Date"), that:
(a) A registration statement (File No. ________) in
respect of $125,000,000 aggregate principal amount of debt
securities of the Company, including the Notes, has been filed with
the Securities and Exchange Commission (the "Commission"); such
registration statement and any posteffective amendment thereto,
each in the form heretofore delivered or to be delivered to the
Agents, including all documents incorporated by reference in the
prospectus contained therein, have been declared effective by the
Commission in such form, and no other document with respect to such
registration statement or other document incorporated by reference
therein has heretofore been filed or transmitted for filing with
the Commission; and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for
that purpose has been initiated or, to the Company's knowledge,
threatened by the Commission (any preliminary prospectus included
in such registration statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus"); such
registration statement, as amended at the time it became effective,
including all exhibits thereto and the documents incorporated by
reference therein at the time such registration statement became
effective, being hereinafter called the "Registration Statement";
the prospectus, including any prospectus supplement relating to the
Notes, 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, being 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, including any supplement
to the Prospectus that sets forth only the terms of a particular
issue of the Notes and the manner of distribution thereof (a
"Pricing Supplement"), 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 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 and include the Prospectus as amended
or supplemented (including the applicable Pricing Supplement) in
relation to the Notes sold pursuant to this Agreement, in the form
in which it is filed, or transmitted for filing, with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 4(a)(ii) hereof, including any documents incorporated by
reference therein as of the date of such filing or transmission);
(b) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of
such documents, when they were 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 any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not 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, in
light of the circumstances under which they were made, 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 Agent expressly for use in the
Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus
conform, and any amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects
to the requirements of the Act and the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and the Registration
Statement, as of its effective date, and the Prospectus, as of its
filing date, do not, and any amendments or supplements to the
Registration Statement or the Prospectus, will not 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, in light of the circumstances in which they
were made, 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 Agent expressly for use
in the Registration Statement or the Prospectus as amended or
supplemented or any such statements in or omissions from that part
of the Registration Statement that constitutes the Statement of
Eligibility on Form T-1 of the Trustee under the Trust Indenture
Act;
(d) Since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus
there has not been any material adverse change in the business,
properties, financial condition or results of operations of the
Company and its consolidated subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, as
amended or supplemented;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Michigan, with corporate power and corporate authority to
own or lease its properties and conduct its business as described
in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, in which the failure
to so qualify and be in good standing would materially and
adversely affect the business, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole.
(f) The filing of the Registration Statement with respect
to the Notes has, and the issuance and sale of the Notes pursuant
to this Agreement and any Terms Agreement have, been duly
authorized by the Company, and, when Notes are authenticated and
issued pursuant to the Indenture and delivered against payment of
the consideration as specified in this Agreement and any applicable
Terms Agreement, such Notes will have been duly executed, issued
and delivered by the Company and will constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles and
will be entitled to the benefits provided by the Indenture; the
Indenture has been duly authorized, executed and delivered by the
Company and is duly qualified under the Trust Indenture Act and the
Indenture constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture
conforms, and the Notes will conform, in all material respects, to
the descriptions thereof contained in the Prospectus as amended or
supplemented to relate to each issuance of Notes;
(g) The issue and sale of the Notes and the compliance by
the Company with all of the provisions of the Notes, the Indenture,
this Agreement and any Terms Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with
or result in a breach of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company or any of its significant subsidiaries (as defined in Rule
405 as promulgated by the Commission under the Act) is a party or
by which the Company or any of its significant subsidiaries is
bound, or to which any of the property or assets of the Company or
any of its significant subsidiaries is subject, that is material to
the business, properties, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole, nor will such action result in any violation of the
provisions of the Articles of Incorporation, as amended, or the
By-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its significant
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Notes or the consummation by the Company of the
other transactions contemplated by this Agreement or any Terms
Agreement or the Indenture, except such as have been, or will have
been prior to the Commencement Date, obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the solicitation by
any Agent of offers to purchase Notes and with purchases of Notes
by such Agent as principal;
(h) Other than as set forth or contemplated in the
Prospectus, as amended or supplemented, there are no legal or
governmental proceedings pending to which the Company or any of its
significant subsidiaries is a party or of which any property of the
Company or any of its significant subsidiaries is the subject with
respect to which there is a reasonable likelihood of one or more
determinations which would individually or in the aggregate have a
material adverse effect on the business, properties, financial
condition or results of operations of the Company and its
consolidated subsidiaries, taken as a whole; and, to the best of
the Company's knowledge, no such proceedings are threatened by
governmental authorities or others;
(i) The Company is not subject to regulation under the
Investment Company Act of 1940, as amended;
(j) The Company will apply the net proceeds from the sale
of Notes for the purpose set forth in the Prospectus under the
caption "Use of Proceeds";
(k) To the best of the Company's knowledge, Xxxxxx
Xxxxxxxx LLP, who have audited certain financial statements of the
Company incorporated by reference in the Registration Statement and
the Prospectus, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder;
(l) Immediately after the sale of Notes by the Company
hereunder and under any Terms Agreement, the aggregate amount of
Notes which shall have been issued and sold by the Company
hereunder and under any Terms Agreement and of any debt securities
of the Company (other than such Notes) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration
Statement;
(m) Other than as set forth or contemplated in the
Prospectus, as amended or supplemented, the Company owns or
possesses all permits, licenses and other authorizations necessary
to own, lease or 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 own or possess any such permit, license
or other authorization would not have a material adverse effect on
the business, properties, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
permit, license or other authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, might reasonably be expected to have a material adverse
effect upon the business, properties, financial condition or
results of operations of the Company and its consolidated
subsidiaries, taken as a whole;
(n) Other than as set forth in the Prospectus as amended
or supplemented, no event or condition exists that constitutes, or
with the giving of notice or lapse of time or both would
constitute, a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company or any
of its significant subsidiaries or under any indenture, mortgage,
loan agreement or instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness for money
borrowed by the Company or any of its significant subsidiaries, if
such default would result in such indebtedness in an aggregate
principal amount exceeding $25,000,000 becoming or being declared
due and payable prior to the date on which it would otherwise
become due and payable.
4. Covenants of the Company. The Company agrees with each of
the Agents:
(a) (i) To make no amendment or supplement to the
Registration Statement or the Prospectus after the date of any
Terms Agreement by the Purchasing Agent to purchase Notes as
principal and prior to the related Settlement Date prior to having
afforded each Agent a reasonable opportunity to review and comment
on it and having reasonably considered any such comments; provided
however, that, if any amendment or supplement to the Registration
Statement or the Prospectus shall be transmitted for filing or
filed after the date of any Terms Agreement between the Company and
the Purchasing Agent for the purchase of Notes and prior to the
related Settlement Date, the Purchasing Agent may unilaterally
terminate such Terms Agreement and upon any such termination no
Agent shall have any further obligation under such Terms Agreement;
(ii) to prepare, with respect to any Notes to be sold through or to
such Agent pursuant to this Agreement, a Pricing Supplement with
respect to such Notes in a form previously approved by such Agent
and to file such Pricing Supplement pursuant to Rule 424(b) under
the Act within the applicable time period prescribed for such
filing by such Rule; (iii) to make no amendment or supplement to
the Registration Statement or Prospectus, other than any Pricing
Supplement, at any time prior to having afforded each Agent a
reasonable opportunity to review and promptly comment on it and
having reasonably considered any such comments; (iv) to file timely
all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (all such
reports and proxy or information statements which are so filed and
which have not been subsequently superseded shall be referred to as
the "Incorporated Documents") for so long as the delivery of a
prospectus is required in connection with the offering or sale of
the Notes, and during such period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has
become effective or any amendment or supplement to the Prospectus
(other than any Pricing Supplement that relates to Notes not
purchased through or by such Agent) 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 Notes, of the suspension of the qualification of
the Notes 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 amendment or supplement
of the Registration Statement or Prospectus or for additional
information; and (v) in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of any
such prospectus or suspending any such qualification, promptly to
use reasonable efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Agents may reasonably request to qualify such Notes for offering
and sale under the securities laws of such jurisdictions in the
United States as the Agents may reasonably request and 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 such Notes, provided that
in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to
service of process in any jurisdiction, take any action which would
subject it to general service of process in any jurisdiction where
it is not now subject or file annual reports with such
jurisdictions or comply with any other requirements deemed by the
Company in its reasonable judgment expressed in writing to the
Purchasing Agent to be unduly burdensome; and to inform the Agents
promptly of any notices it may receive from any state securities
agency which limits or will limit any such qualification or
exemption;
(c) To furnish the Agents with copies of the Prospectus
as amended or supplemented, in the form in which it is filed with
the Commission pursuant to Rule 424(b) of the Act, in such
quantities as the Agents may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of any Notes and if at such
time any event shall have occurred as a result of which it is
necessary to further amend or supplement the Prospectus in order
that the Prospectus will not 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, not misleading, or, if for any other
reason during such period it is necessary to further 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, the Exchange Act or the Trust Indenture Act,
to notify each Agent and request the Agents, in their capacity as
agents of the Company, to suspend solicitation of offers to
purchase Notes from the Company (and, if so notified, each Agent
shall cease such solicitations as soon as possible, but in any
event not later than one business day later); and if the Company
shall decide to amend or supplement the Registration Statement or
the Prospectus as then amended or supplemented, to so advise the
Agents by telephone (with confirmation in writing) and to prepare
and cause to be filed as soon as practicable with the Commission an
amendment or supplement to the Registration Statement or the
Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance; provided, however,
that if during such period an Agent continues to own Notes
purchased from the Company by such Agent as principal or an Agent
is otherwise required to deliver a prospectus in respect of
transactions in the Notes, the Company shall promptly prepare and
file with the Commission such an amendment or supplement;
(d) To make generally available to its security holders
as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as
defined in Rule 158(c) of the Act), an earnings statement of the
Company and its consolidated subsidiaries (which need not be
audited) covering a period of at least 12 months beginning after
the later of (i) the effective date of the Registration Statement,
(ii) the effective date of each post-effective amendment to the
Registration Statement, and (iii) the date of each filing by the
Company with the Commission of an Annual Report on Form 10-K that
is incorporated by reference in the Registration Statement, which
earning statements shall comply with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including,
at the option of the Company, Rule 158 of the Act);
(e) So long as any Notes are outstanding, to furnish to
such Agent, without charge, copies of its Annual Report on Form
10-K and other financial reports of the Company furnished or made
available to the public generally, and deliver to such Agent,
(i) as soon as they are available, copies of any Incorporated
Documents; and (ii) such additional publicly available information
concerning the business and financial condition of the Company as
such Agent may from time to time reasonably request;
(f) That, from the date of any Terms Agreement with the
Purchasing Agent and continuing to and including the related
Settlement Date, the Company will not, without the prior written
consent of each Agent, which consent shall not be unreasonably
withheld, issue or announce the proposed issuance of, offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company which both mature more than 9 months after such Settlement
Date and are substantially similar to the Notes and which are
expected to be distributed on a retail basis in a manner comparable
to that set forth in Exhibit A;
(g) That each execution and delivery by the Company of a
Terms Agreement with the Purchasing Agent shall be deemed to be an
affirmation to each Agent that the representations and warranties
of the Company contained in this Agreement are true and correct as
of the date of such Terms Agreement, as though made at and as of
such date, and an undertaking that such representations and
warranties will be true and correct as of the Settlement Date for
the Notes relating to such sale, as though made at and as of such
date (except that such representations and warranties shall be
deemed to relate to the Registration Statement and the Prospectus,
as amended and supplemented, relating to such Notes);
(h) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than (A) a Current Report pursuant to Section 13 or 15(d) of
the Exchange Act on Form 8-K relating exclusively to the previous
issuance of Notes under the Registration Statement or (B) a
Quarterly Report on Form 10-Q under the Exchange Act, unless, in
the case of clause (B), the Agents shall otherwise request), and
each time the Company sells Notes to the Purchasing Agent as
principal and the applicable Terms Agreement specifies the delivery
of an opinion or opinions by Xxxx & Priest, counsel to the Agent,
as a condition to the purchase of Notes pursuant to such Terms
Agreement, at the request of such Agent, Xxxx & Priest shall
furnish to such Agent its written opinion, dated the date of such
amendment, supplement, incorporation or Settlement Date relating to
such sale, as the case may be, in form reasonably satisfactory to
such Agent to the effect that such Agent may rely on the opinion of
such counsel as to the matters referred to in Section 6(A)(c),
which was last furnished to such Agent to the same extent as though
it was dated the date of such letter authorizing reliance (except
that the statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date or, in lieu of such opinion, an opinion
of the same tenor as the opinion of such counsel as to the matters
referred to in Section 6(A)(c), but modified to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date), and reasonably in advance of the time
that any such opinion is to be delivered the Company shall furnish
to such counsel such papers and information as they may reasonably
request to enable them to pass on such matters;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than (A) a Current Report pursuant to Section 13 or 15(d) of
the Exchange Act on Form 8-K relating exclusively to the previous
issuance of Notes under the Registration Statement or (B) a
Quarterly Report on Form 10-Q under the Exchange Act, unless, in
the case of clause (B), the Agents shall otherwise request), and
each time the Company sells Notes to the Purchasing Agent as
principal and the applicable Terms Agreement specifies the delivery
of an opinion under this Section 4(i) as a condition to the
purchase of Notes pursuant to such Terms Agreement, the Company
shall furnish or cause to be furnished forthwith to such Agent the
written opinion or opinions of counsel to the Company or such other
counsel for the Company reasonably satisfactory to such Agent,
dated the date of such amendment, supplement, incorporation or
Settlement Date relating to such sale, as the case may be, in form
reasonably satisfactory to such Agent to the effect that such Agent
may rely on the opinion of such counsel as to the matters referred
to in Exhibit C hereof, which was last furnished to such Agent to
the same extent as though it was dated the date of such letter
authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date or, in lieu
of such opinion, an opinion of the same tenor as the opinion of
such counsel as to the matters referred to in Exhibit C hereof but
modified to relate to the Registration Statement and the Prospectus
as amended and supplemented to such date);
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement) and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the
Prospectus (other than (A) a Current Report pursuant to Section 13
or 15(d) of the Exchange Act on Form 8-K relating exclusively to
the previous issuance of Notes under the Registration Statement or
(B) a Quarterly Report on Form 10-Q under the Exchange Act, unless,
in the case of clause (B), the Agents shall otherwise request), in
either case to set forth financial information included in or
derived from the Company's consolidated financial statements or
accounting records, and each time the Company sells Notes to the
Purchasing Agent as principal and the applicable Terms Agreement
specifies the delivery of a letter under this Section 4(j) as a
condition to the purchase of Notes pursuant to such Terms
Agreement, the Company shall cause Xxxxxx Xxxxxxxx LLP forthwith to
furnish such Agent a letter, dated the date of such amendment,
supplement, incorporation or Settlement Date relating to such sale,
as the case may be, in form reasonably satisfactory to such Agent,
of the same tenor as the letter referred to in Exhibit D hereof but
modified to relate to the Registration Statement and the Prospectus
as amended or supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting
records of the Company, to the extent such financial statements and
other information are available as of a date not more than five
business days prior to the date of such letter; provided, however,
that, with respect to any financial information or other matter,
such letter may reconfirm as true and correct at such date as
though made at and as of such date, rather than repeat, statements
with respect to such financial information or other matter made in
the letter referred to in Exhibit D hereof which was last furnished
to such Agent; and
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than a Current Report pursuant to Section 13 or 15(d) of the
Exchange Act on Form 8-K relating exclusively to the previous
issuance of Notes under the Registration Statement), and each time
the Company sells Notes to the Purchasing Agent as principal and
the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(k) as a condition to the purchase
of Notes pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement, amendment,
incorporation or Settlement Date, as the case may be, in such form
and executed by such officers of the Company as shall be reasonably
satisfactory to such Agent (or, in the case of certificates
delivered pursuant to Section 6(B)(b) hereof, by such other
employees authorized by the Board of Directors of the Company to
execute and deliver such certificates), to the effect that the
statements contained in the certificate referred to in Section 6
hereof which was last furnished to such Agent are true and correct
at such date as though made at and as of such date (except that
such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date) or, in lieu of such certificate, certificates of the same
tenor as the certificates referred to in said Section 6 but
modified to relate to the Registration Statement and the Prospectus
as amended and supplemented to such date.
5. Payment of Expenses. The Company covenants and agrees with
each Agent that the Company will pay or reimburse all expenses incident to
this Agreement, including the following: (i) the reasonable fees and
expenses of one counsel for the Agents in connection with the
establishment of the program contemplated hereby, the preparation of a
blue sky survey of qualifications and exemptions to offer and sell notes
in the various states in the United States, the District of Colombia,
Puerto Rico and Guam, and any opinions to be rendered by such counsel
hereunder and in connection with the transactions contemplated hereunder;
provided that if this Agreement shall be terminated in accordance with
Section 8 hereof the Company shall not be obligated to reimburse any Agent
for any expenses referred to in this clause incurred after such
termination, unless (A) a Terms Agreement between the Company and the
Purchasing Agent is in effect but the time of delivery to any Agent of the
Note or Notes relating thereto has not occurred or (B) such Agent holds
any Notes for resale, except that in the case of (B) the Company shall not
be obligated to reimburse any Agent for any such expenses incurred after
the earlier of (1) the date on which such Notes are resold and (2) the
expiration of 90 days after the termination of this Agreement in
accordance with Section 8 hereof; (ii) to the extent the Company has
agreed to print any of the following, the cost of printing any Terms
Agreement, any Indenture, any blue sky survey and any other documents in
connection with the offering, purchase, sale and delivery of the Notes;
(iii) all expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as provided in Section 4(b)
hereof, including reasonable fees and disbursements of one counsel for the
Agents in connection with such qualification and in connection with the
blue sky survey, provided that the Company shall not be obligated to
reimburse the Agents for any legal fees referred to in this clause (iii)
in excess of $6,500 for services rendered in connection with the initial
survey preparation and qualifications, or for any such legal fees in
excess of $1,000 per year for services rendered in connection with the
annual renewals of such qualifications in the various jurisdictions;
(iv) any fees charged by securities rating services for rating the Notes;
(v) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Notes; (vi) the cost of preparing the Notes; (vii) the fees and expenses
of any Trustee and any agent of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any
Trustee or such agent in connection with any Indenture and the Notes; and
(viii) taxes (other than transfer taxes on sales by the Agents or Dealers)
in connection with the issuance and delivery of the Notes. Except as
provided in this Section, Section 7 and Section 8 hereof, each Agent shall
pay all other costs and expenses it incurs.
6. Conditions to the Obligations of the Agents. (A) The
obligations of each Agent to solicit offers to purchase the Notes pursuant
to Section 1 hereof will, unless waived by such Agent expressly in
writing, be subject to the accuracy of the representations and warranties
on the part of the Company made herein as of the date hereof and as of the
Commencement Date, to the accuracy of the statements of the Company's
officers made in each certificate furnished pursuant to the provisions
hereof, to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and observed
and to the following additional conditions precedent:
(a) (i) The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes shall
have been filed with the Commission pursuant to Rule 424(b) under
the Act 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; (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and (iii) all requests for additional
information on the part of the Commission shall have been complied
with.
(b) The Company shall have furnished to such Agent an
opinion or opinions of the counsel to the Company, dated the
Commencement Date, substantially to the effect set forth in
Exhibit C hereto. Any of the opinions set forth therein may be
delivered by another counsel for the Company who is reasonably
satisfactory to the Agents.
(c) Such Agent shall have received from Xxxx & Priest,
counsel for the Agent, an opinion, dated the Commencement Date,
with respect to the issuance and sale of the Notes, the Indenture,
the Registration Statement, as amended as of the Commencement Date,
the Prospectus, as amended and supplemented as of the Commencement
Date, and other related matters as such Agent may reasonably
require; and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of
enabling them to pass on such matters.
(d) The Company shall have furnished to such Agent a
certificate of the Company, signed by any of the Chairman of the
Board, the President or the Chief Financial Officer, dated the
Commencement Date, to the effect that to the best of such person's
knowledge after reasonable investigation:
(i) this Agreement is substantially in the form
presented to and approved by the Board of Directors of the
Company;
(ii) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the date of such certificate
with the same effect as if made on the date of such
certificate, and the Company has complied with all the
agreements and satisfied all the conditions on its part to
be performed or satisfied as a condition to the obligations
of such Agent under this Agreement;
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, as amended and supplemented, there has been no
material adverse change in the business, properties,
financial condition or results of operations of the Company
and its consolidated subsidiaries, taken as a whole, other
than those changes reflected in or contemplated by the
Prospectus, as amended and supplemented as of the date of
the certificate;
(iv) no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings
for such purposes are pending before or threatened by the
Commission; and
(v) whether any downgrading shall have occurred in
the rating accorded the Company's debt securities by
Standard & Poor's Corporation ("S&P"), Xxxxx'x Investors
Service, Inc. ("Moody's") or Xxxx & Xxxxxx Credit Rating Co.
("Xxxx & Xxxxxx") or whether S&P, Moody's or Xxxx & Xxxxxx
has placed on "credit watch" or "credit review" with
negative implications the Company's debt securities.
(e) Xxxxxx Xxxxxxxx LLP shall have furnished to such
Agent a letter or letters, dated the Commencement Date, in form and
substance satisfactory to such Agent, confirming that they are
independent public accountants within the meaning of the Act and
the Exchange Act and the respective applicable published rules and
regulations thereunder.
(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, as amended and supplemented, there shall not have been
(i) any downgrade or placement on "credit watch" or "credit review"
as described in the certificate referred to in paragraph (A)(d)(v)
of this Section 6 or (ii) any material adverse change in the
business, properties, financial condition or results of operations
of the Company and its consolidated subsidiaries, taken as a whole,
the effect of which, in the reasonable judgment of such Agent after
reasonable inquiry, is to impair the marketability of the Notes.
(g) There shall not have occurred: (i)(A) a suspension
or material limitation in trading in securities generally on the
New York Stock Exchange, (B) a suspension in trading in any
securities of the Company on any exchange or over-the-counter
market, or (C) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities, if the effect of any such occurrence is such as to
impair, in the reasonable judgment of such Agent, after reasonable
inquiry, the marketability of the Notes; or (ii) the outbreak or
material 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 occurrence on the financial markets
of the United States is such as to impair, in the reasonable
judgment of such Agent, after reasonable inquiry, the marketability
of the Notes.
(h) The Company shall have furnished to such Agent such
further information, certificates and documents as such Agent may
reasonably request from time to time. Any certificate signed by
any officer of the Company and delivered to such Agent or its
counsel and delivered explicitly pursuant to the terms of this
Agreement shall be deemed a representation and a warranty by the
Company to such Agent as to matters covered thereby, as if set
forth herein.
(B) The obligations of the Purchasing Agent to purchase Notes
pursuant to any Terms Agreement entered into by it pursuant to Section 1
hereof will be subject to the accuracy of the representations and
warranties on the part of the Company herein as of the date of such Terms
Agreement and as of the Settlement Date thereunder, to the accuracy of the
statements of the Company's officers made in each certificate furnished
pursuant to the provisions hereof, to the performance and observance by
the Company of all covenants and agreements contained herein and in such
Terms Agreement on its part to be performed and observed and to the
following additional conditions precedent (which cannot be waived by the
Purchasing Agent in any respect without the consent of each other Agent):
(a) (i) The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes shall
have been filed with the Commission pursuant to Rule 424(b) under
the Act 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; (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and (iii) all requests for additional
information on the part of the Commission shall have been complied
with.
(b) Upon the request of any Agent, such Agent shall have
received, appropriately updated and modified, (i) a certificate of
the Company, dated as of the Settlement Date, to the effect set
forth in Section 6(A)(d), (ii) the opinion or opinions of the
counsel to the Company or such other counsel satisfactory to such
Agent, dated as of the Settlement Date, to the effect set forth in
Section 6(A)(b), (iii) the opinion of Xxxx & Priest, counsel for
the Agent, dated as of the Settlement Date, to the effect set forth
in Section 6(A)(c) and/or (iv) the letter or letters of Xxxxxx
Xxxxxxxx LLP, dated as of the Settlement Date, to the effect set
forth in Section 6(A)(e).
(c) The conditions set forth in Sections 6(A)(f) and
6(A)(g) shall have been satisfied.
(d) Prior to the Settlement Date, the Company shall have
furnished to any Agent such further information, certificates and
documents as such Agent may reasonably request.
If any of the conditions specified in this Section 6(B) shall not have
been fulfilled in all material respects when and as provided in this
Agreement and in such Terms Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement and in such
Terms Agreement shall not be in all material respects reasonably
satisfactory in form and substance to such Agent and its counsel, such
Terms Agreement and all obligations of any Agent thereunder may be
cancelled at, or at any time prior to, the Settlement Date by such Agent.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Agent against any losses, claims, damages
or liabilities, joint or several, to which such Agent 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, the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing, 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 Agent for
any legal or other expenses reasonably incurred by such Agent in
connection with investigating or defending any such action or claim;
provided, however, that the Company shall not be liable to provide any
indemnity hereunder 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, the Registration Statement, the Prospectus,
or any amendment or supplement to any of the foregoing in reliance upon
and in conformity with written information furnished to the Company by any
Agent expressly for use in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any amendment or supplement to any of the
foregoing and provided further that the Company will not be liable to
provide any indemnity hereunder to any Agent with respect to any loss,
claim, damage or liability arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission to
state a material fact in any Preliminary Prospectus which had been
corrected in the Prospectus as amended or supplemented if the person
asserting any such loss, claim, liability, charge or damage purchased
Notes from an Agent but was not sent or given a copy of the Prospectus as
so amended or supplemented at or prior to the written confirmation of the
sale of such Notes to such person.
(b) Each Agent, severally and not jointly, will indemnify and
hold harmless the Company against any losses, claims, damages or
liabilities to which 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, the Registration Statement, the Prospectus, or any
amendment or supplement to any of the foregoing, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any such amendment or
supplement to any of the foregoing in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly for
use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof, enclosing a
copy of all papers served; but the omission to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection unless, and only to
the extent that, such omission results in the forfeiture of substantive
rights or defenses by the indemnifying party. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall assume the defense of any such litigation or proceeding, including
the employment of counsel and the payment of all expenses. Any
indemnified party 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 party unless
(i) the indemnifying party and the indemnified party 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 party and (y) the indemnified party and, in the written
opinion of counsel to such indemnified party, 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 party shall be reimbursed by the indemnifying party to the
indemnified party. If there is a conflict as described in clause (ii)
above, and the indemnified parties have participated in the litigation or
proceeding utilizing separate counsel whose fees and expenses have been
reimbursed by the indemnifying party and the indemnified parties, or any
of them, are found to be solely liable, such indemnified parties shall
repay to the indemnifying party such fees and expenses of such separate
counsel as the indemnifying party shall have reimbursed. It is understood
that the indemnifying party shall not, in connection with any litigation
or proceeding or related litigation or proceedings in the same
jurisdiction as to which the indemnified parties 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
parties. Subject to the next paragraph, all such fees and expenses shall
be reimbursed by payment to the indemnified parties of such reasonable
fees and expenses of counsel promptly after payment thereof by the
indemnified parties. Such counsel shall be designated in writing by such
Agent in the case of parties indemnified pursuant to Section 7(b) and by
the Company in the case of parties indemnified pursuant to Section 7(a).
An indemnifying party will not be liable for any settlement or any action
or claim effected without its written consent (which consent will not be
unreasonably withheld).
In furtherance of the requirement above that fees and
expenses of any separate counsel for the indemnified parties shall be
reasonable, each Agent and the Company agree that the indemnifying party'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 parties pursuant to clause (ii) of the preceding
paragraph, the indemnified parties shall in good faith fully
consult with the indemnifying party in advance as to the selection
of such counsel; and
(2) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the indemnifying party (but nothing herein shall be
deemed to require the furnishing to the indemnifying party 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 such Agent shall cooperate in
monitoring and controlling the fees and expenses of separate
counsel for indemnified parties for which the indemnifying party is
liable hereunder, and the indemnified party shall use every
reasonable effort to cause such separate counsel to minimize the
duplication of activities as between themselves and counsel to the
indemnifying party.
(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 Company on
the one hand and an Agent on the other from the offering of the Notes to
which such loss, claim, damage or liability (or action in respect thereof)
relates; if, and only if, contribution solely on the basis of relative
benefits is found to be unavailable, 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 not only
such relative benefits but also the relative fault of the Company on the
one hand and such Agent 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 Company on the one
hand and such Agent 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 Company bear to the total underwriting discounts
and commissions received by such Agent, in each case as set forth in the
table on the cover page of the Prospectus as amended or supplemented to
relate to a particular offering of Notes. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or such Agent 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 each Agent
agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if the
Agents 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. Notwithstanding the
provisions of this subsection (d), no Agent shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Agent 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 Agents in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations with respect to such Notes
and not joint. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 7(d), will
notify any such party or parties from whom contribution may be sought, but
the omission to so notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
under this Section 7(d). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(e) The obligations of the Company under this Section 7 shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls any Agent within the meaning of the Act; and the obligations
of each Agent under this Section 7 shall be in addition to any liability
which such Agent may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
8. Termination.
This Agreement may be terminated at any time either by the Company
as to any of the Agents or by any of the Agents insofar as this Agreement
relates to such Agent upon the giving of written notice of such
termination to such Agent or Agents or to the Company, as the case may be;
provided that Section 10 shall survive only for the term provided therein
and only with respect to the parties covered thereby. In the event of
termination of this Agreement (other than with respect to section 10), no
terminating party or parties with respect to which this Agreement is
terminated shall have any liability to the other parties hereto, except as
follows: (a) as provided in the first sentence of the fourth paragraph of
Section 1 and Sections 4(c), 5, 7, 9 and 11; (b) (i) if at the time of
termination a Terms Agreement is in effect between the Purchasing Agent
and the Company but the time of delivery to any Agent of the Note or Notes
relating thereto has not occurred or (ii) if the Agent or Agents shall
then own any Note or Notes purchased pursuant to a Terms Agreement, then
the Company's representations and warranties stated in Section 3 and its
obligations under the sixth paragraph of Section 1 and Sections 4(a),
4(b), 4(d), 4(e), 4(f), 4(i), 4(j) and 4(k), with respect to clause (i)
above, shall remain in full force and effect and not be terminated and,
with respect to clause (ii) above, shall remain in full force and effect
and not be terminated until the earlier of the date on which such Notes
are resold or the expiration of 90 days from such termination; provided,
however that with respect to clause (ii) above, the Company may repurchase
any such Notes from the Agents at the net price sold to the Agents on
original issuance and thereby terminate its obligations hereunder; and
(c) if the Company shall terminate this Agreement within six months of the
date hereof, other than as a result of a breach hereof by an Agent, the
Company shall be obligated, in addition to any matters covered by clauses
(a) and (b) of this Section 8, to reimburse the Agents for the reasonable
out-of-pocket expenses incurred by the Agents in connection with the
execution of this Agreement and the offering and sale of Notes.
9. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agents or the
Company or any of the officers, directors or controlling persons referred
to in section 7 hereof, and will survive delivery of and payment for the
Notes, and the indemnity agreement contained in Section 7 hereof shall
survive any termination of this Agreement.
10. Grant of License.
(a) Grant of Non-Exclusive License. Upon the terms and
conditions hereinafter set forth, the Purchasing Agent hereby grants to
the Company and to each other Agent (for purposes of this Section 10, each
such party is referred to as a "Licensee") and each Licensee hereby
accepts a non-exclusive, non-transferable (except as provided under
paragraph (f) hereunder) license to use the service marks owned by the
Purchasing Agent in respect of the names "General Term Notes" and "GTN"
that it has used in connection with its business activities, and in which
the Purchasing Agent asserts common law interests (hereinafter referred to
collectively as "Marks") in connection with such Licensee's furtherance of
this Agreement, including use of such Marks as part of such Licensee's
marketing materials or other similar uses. No Licensee shall have any
interest in or right to use the Marks except as set forth herein.
(b) Non-Exclusivity of License. Nothing in this Section 10
shall prevent the Purchasing Agent from granting any other license for the
use of the Marks or from utilizing the Marks or permitting the Marks to be
utilized by others in any manner whatsoever.
(c) Term. The term of this license shall continue in force as
to the Purchasing Agent and (without regard to any other Licensee)
(i) with respect to the Company, for so long as the Notes shall be
outstanding and (ii) with respect to each other Agent, for as long as this
Agreement or that Co-Agent Agreement between the Purchasing Agent and
such Agent with respect to the Notes issued under this Agreement shall be
in effect, in each case subject to earlier termination in accordance with
the provisions of either this Agreement or any such Co-Agent Agreement, as
the case may be.
(d) Ownership of Marks. Each Licensee specifically acknowledges
the Purchasing Agent's ownership rights in the Marks. In connection with
the use of the Marks, no Licensee shall in any manner represent that it
has any ownership in the Marks or any registrations thereof and agrees
that nothing in this Agreement shall give such Licensee any ownership
interest in any of the Marks other than the right to use the Marks in
accordance with this Section 10.
No Licensee will, during the term of this Section 10 or at any time
thereafter, attack the validity of any of the Marks or the Purchasing
Agent's interests therein, nor will any Licensee attack any application
for registration of any of the Marks, or take any position contrary to
that of the Purchasing Agent in any proceedings pertaining to registration
of any of the Marks.
Each Licensee shall, whether during or after the term of this
Agreement, execute and deliver to the Purchasing Agent such documents as
the Purchasing Agent may reasonably request to establish or confirm the
Purchasing Agent's ownership interest in the Marks.
(e) Quality Control and Regulatory Compliance. Each Licensee
agrees that it will make no use of the Marks that would tend to reflect
adversely upon the Purchasing Agent, its business reputation, the GTN
business and/or market, or would violate or reflect adversely upon the
Purchasing Agent with regard to the Commission, the National Association
of Securities Dealers, Inc., or any other governmental authority or
securities association or other regulatory matters. The common law
understanding of the reasonable man standard, given the facts and
circumstances then facing such Licensee, its agents and employees, shall
apply when making a determination pursuant to this paragraph (e). Any
proposed use of the Marks outside of the terms contemplated by this
Paragraph shall be submitted to the Purchasing Agent for its written
approval prior to said proposed use.
(f) Assignment of Sublicense by Licensee. This Section 10 and
all rights and duties in and with respect to the Marks hereunder are
personal to each Licensee and shall not, without the prior written consent
of the Purchasing Agent, which consent may not be unreasonably withheld,
be assigned, mortgaged, sublicensed or otherwise encumbered or transferred
by such Licensee, except by operation of law. The Purchasing Agent may
assign its rights under this Section 10 to any person or entity without
the consent of any Licensee and upon such assignment the Purchasing Agent
shall be relieved from any further liability under this Agreement. The
Purchasing Agent shall furnish prior written notice of any such assignment
to each Licensee.
(g) Unauthorized Use. Each Licensee will notify the Purchasing
Agent in writing of any unauthorized use of any of the Marks which come to
such Licensee's attention.
(h) Indemnification; Infringement.
(I) The Purchasing Agent hereby indemnifies each Licensee and
holds it harmless from and against any loss, liability,
penalty, deficiency, damage or out-of-pocket expense
(including, without limitation, reasonable legal fees and
expenses) which such Licensee may suffer, sustain or become
subject to resulting from, arising out of or caused by any
suit, action or proceeding brought by a third party claiming
or alleging in any manner that the use of any of the Marks
by such Licensee has infringed upon the rights of others;
provided, however, that the Purchasing Agent shall not be
liable or responsible to indemnify a Licensee if the claimed
or alleged infringement results from such Licensee's
violation of this Section 10 or bad faith, willful
misfeasance or gross negligence.
(II) Each Licensee will notify the Purchasing Agent promptly in
writing of any claim that the use of any of the Marks
infringes the rights of others, or of the institution of any
legal actions or suits predicated upon such claimed
infringement, and any such suit or action will be diligently
defended at the sole expense of and under the sole control
of the Purchasing Agent.
(i) Termination.
(I) This Section 10 shall remain in effect throughout the term
stated in paragraph (c) above until and unless it is earlier
terminated pursuant to the terms of paragraph (i)(II) below.
(II) This Section 10 may be terminated as to the Purchasing Agent
and any Licensee (without regard to another Licensee) as
follows:
A. By the Purchasing Agent in the event that such Licensee
shall fail to perform any obligation imposed upon such
Licensee by this Section 10 or violate any terms of this
Section 10. The Purchasing Agent will give such Licensee
written notice setting forth the particulars of any such
breach and, unless such Licensee has cured such breach or is
in the process of curing such breach, this Section 10 will
terminate ten (10) days after receipt by such Licensee of
such written notice. With respect to the Company, nothing
in this paragraph shall be construed to require such
Licensee to retire, redeem or repurchase any Notes issued by
it pursuant to this Distribution Agreement, or successor
Distribution Agreements, otherwise left outstanding in the
event of termination hereunder.
B. With respect to each other Agent (and not as to the
Company), in the event that any Co-Agent Agreement between
the Purchasing Agent and such Agent/Licensee terminates for
any reason, or in the event of its expiration, this
Section 10 shall immediately and automatically terminate.
(j) Effect of Termination or Expiration. On termination or
expiration of this Section 10 all rights and licenses granted to each
Licensee hereunder shall immediately and automatically terminate. In such
event, each Licensee agrees to discontinue all uses of the Marks and any
words confusingly similar thereto within ten (10) days of such termination
or expiration. After such termination, no Licensee nor any affiliate of
Licensee shall allude in any public statement or advertisement to the
Marks. Each Licensee agrees that it will at no future time adopt or use,
without the Purchasing Agent's prior written consent, a word or mark which
is reasonably likely to be similar to or confused with any of the Marks.
The Purchasing Agent shall retain sole authority and control over all of
the Marks, and all rights in the Marks shall remain the property of the
Purchasing Agent.
(k) Royalty. The license granted herein shall be royalty-free.
(l) Reservation of Rights in the Marks. Rights in the Marks,
other than those specifically granted herein, are reserved by the
Purchasing Agent for its own use. Upon the termination of this Section 10
for any reason whatsoever, all rights to the Marks shall revert to the
Purchasing Agent without the necessity of any act on its part.
(m) Unenforceable Provisions. If any provision or part of this
Section 10 is declared unenforceable by a court of competent jurisdiction,
each and every other provision, or part hereof, shall continue in full
force and effect.
(n) Waiver. The failure or delay of the Purchasing Agent or any
Licensee to insist upon the performance of any of the terms and conditions
of this Section 10 or to exercise or enforce any right or obligation
herein conferred, shall not be construed to be a waiver of any such terms,
conditions, rights or obligations and either party may, within the time
provided by applicable law, take measures to enforce any or all such
rights and obligations.
(o) Remedies. In the event of the breach or default in the
terms of this Section 10 by the Purchasing Agent or any Licensee, the
non-breaching or non-defaulting party shall be entitled to all legal and
equitable remedies provided by law.
The Purchasing Agent and each Licensee agree that damages may be
insufficient to compensate Purchasing Agent in the event that any of the
terms of this Section 10 are not complied with, and therefore, agree that
in such event, Purchasing Agent may seek injunctive relief and specific
performance of the terms hereof, in addition to all other rights or
remedies, and that to obtain such an injunction Purchasing Agent shall not
be required to show any actual damage or to post any bond or other
security.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Company, will be mailed
or delivered or sent by facsimile transmission or telegraph and confirmed
to it at CMS Energy, attention of Xxxx X. Xxxxxx, Senior Vice President
and Chief Financial Officer, facsimile transmission number (000) 000-0000,
and if sent to the Agent, will be mailed or delivered or sent by facsimile
transmission or telegraph and confirmed to it at X. X. Xxxxx & Company,
00000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000, attention:
Xxxxxxx X. Xxxxx, facsimile transmission number (000) 000-0000. Any party
hereto may change its address or facsimile number set out in this Section
11 by a notice given to the other parties in accordance herewith.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
The term "successors" as used in this Agreement shall not include a
purchaser, as such purchaser, of Notes from any Agent or from any selected
dealer acting through such Agent.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed wholly within such jurisdiction,
except that Section 10 of this Agreement will be governed by and construed
in accordance with the laws of the State of Michigan.
14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement between the Company and you.
Very truly yours,
CMS Energy Corporation
By:
------------------------
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
X. X. XXXXX & COMPANY
By:
------------------------
Title:
A-1
Exhibit A
CMS Energy Corporation
Note Administrative Procedures
___________, 1996
The General Term Notes (registered trademark), Series B (the
"Notes") of CMS Energy Corporation (the "Company") are being offered on a
continuous basis. The Notes are being offered by X. X. Xxxxx & Company
(the "Purchasing Agent") and __________________ (collectively, the
"Agents") pursuant to a Distribution Agreement among the Company and the
Agents dated as of the date hereof (the "Distribution Agreement") and one
or more terms agreements substantially in the form attached to the
Distribution Agreement as Exhibit B (each, a "Terms Agreement"). The
Notes are being resold by the Purchasing Agent (and by any Agent that
purchases them from the Purchasing Agent) to (i) customers of the Agents
or (ii) selected broker-dealers for distribution to their customers
pursuant to a Master Selected Dealers Agreement (a "Dealers Agreement")
attached hereto as Schedule I. The Notes have been registered with the
Securities and Exchange Commission (the "Commission") and will be issued
under an Indenture dated as of January 15, 1994 as supplemented by a
Second Supplemental Indenture dated as of ___________________ (the
"Indenture") between the Company and The Chase Manhattan Bank (National
Association) (the "Trustee"). Terms used herein but not defined herein
shall have the meanings assigned to them in the Indenture, unless
otherwise required by the context.
The Notes will be issued only in fully registered form without
coupons, and each tranche of the Notes (a "Tranche") will have the annual
interest rate, maturity and other terms set forth in a Pricing Supplement
(as defined in the Distribution Agreement). Each Tranche will be
represented by (i) one or more global certificates (each, a "Global
Certificate") without coupons registered in the name of the nominee of the
depositary, The Depository Trust Company, or any successor depositary
selected by the Company ("DTC", which term, as used herein, includes any
successor depositary selected by the Company), representing up to
$150,000,000 principal amount of all such Notes that have the same
interest rate and Stated Maturity or (ii) one or more certificates
("Individual Certificates") registered in the name of, and delivered to,
the Holder thereof or a Person designated by such Holder. Each Global
Certificate representing all or part of a Tranche will be delivered to the
Trustee, as custodian for DTC, and each of the Notes in such Tranche (a
"Book-Entry Note") will be recorded in the book-entry system maintained by
DTC. An owner of a Book-Entry Note will not be entitled to receive a
certificate representing such Note except in the circumstances described
in the Prospectus (as defined in the Distribution Agreement).
Administrative procedures to be followed in connection with, and
certain specific terms of, the offering of Notes for sale by the Agents
and the sale as a result thereof by the Company are stated below.
Book-Entry Notes will be
------------------------
(registered trademark) Registered servicemark of X. X. Xxxxx & Company
A-2
issued in accordance with the administrative procedures set forth in
Part I hereof, and notes represented by Individual Certificates
("Certificated Notes") will be issued in accordance with the
administrative procedures set forth in Part II hereof. The Company will
advise the Purchasing Agent and the Trustee in writing of those persons
handling administrative responsibilities with whom the Purchasing Agent
and the Trustee are to communicate regarding orders to purchase Notes and
the details of their delivery. To the extent the procedures set forth
below conflict with the provisions of the Notes, the Indenture or the
Distribution Agreement, the relevant provisions of the Notes, the
Indenture and the Distribution Agreement shall control. To the extent the
Notes, if any, are sold through the Agents, acting as agents and not as
principals, the following procedures shall be modified as necessary to
reflect that sale.
PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES
Procedure for Rate The Company and the Purchasing Agent will
Setting and Posting: discuss from time to time the aggregate principal
amount and maturities of, and the interest rates
to be borne by, each Tranche of Book-Entry Notes
that may be purchased by the Purchasing Agent.
If the Company decides to set aggregate principal
amounts and maturities of, and rates to be borne
by, any Tranche to be purchased by the Purchasing
Agent (the setting of such amounts, maturities
and rates by the Company to be referred to herein
as a "Posting"), or if the Company decides to
change amounts, maturities or rates previously
posted, the Company will promptly advise the
Purchasing Agent of the amounts, maturities and
rates to be posted. The Purchasing Agent will
thereafter promptly advise the other Agents of
the amount, maturities and rates to be posted.
Offering of Notes: In the event that there is a Posting, each of the
Agents will communicate the aggregate principal
amount and maturities of, and the interest rates
to be borne by, each Tranche that is the subject
of the Posting to each of the broker-dealers (the
"Dealers") that has entered into a dealers
agreement (a "Dealers Agreement") with such Agent
and, pursuant to such Dealers Agreement, will
solicit offers to purchase the Notes in the
Tranche from the Dealers.
Purchase of Notes by The Purchasing Agent will, no later than 4 P.M.
the Purchasing (Eastern time) on the sixth day subsequent to the
Agent: day on which such Posting occurs, or if such
sixth day is not a day on which commercial banks
in New York City are not required or authorized
to be closed (such a day, a "Business Day"), on
the next succeeding Business Day, or on such
later Business Day and time as shall be mutually
agreed upon by the Company and the Agents (any
such day, a "Trade Date"), (i) complete, execute
and deliver to the Company a Terms Agreement that
sets forth, among other things, the amount of
each Tranche that the Purchasing Agent is
offering to purchase (and the amount of such
Notes which have been solicited by each Agent) or
(ii) inform the Company that none of the Notes of
a particular Tranche will be purchased by the
Purchasing Agent. Immediately upon receipt of a
completed and executed Terms Agreement from the
Purchasing Agent, the Company will (i) execute
and deliver such Terms Agreement to the
Purchasing Agent or (ii) inform the Purchasing
Agent that its offer to purchase the Notes of a
particular Tranche has been rejected. The
Purchasing Agent will immediately inform the
other Agents of the action taken by the Company.
Preparation of If any offer by the Purchasing Agent to purchase
Pricing Supplement: Notes is accepted by or on behalf of the Company,
the Company, with the approval of each Agent,
will prepare a Pricing Supplement reflecting the
terms of each Tranche and will arrange to have
ten copies thereof filed with the Commission in
accordance with the applicable paragraph of
Rule 424(b) under the Securities Act of 1933, as
amended (the "Act"), and will supply one copy of
such Pricing Supplement to each Agent and to the
Trustee. Each Agent will deliver, or will cause
to be delivered, copies of the applicable Pricing
Supplement to (i) each of the Dealers that
purchased such Notes pursuant to a Dealers
Agreement in sufficient amounts so that a copy of
the applicable Pricing Supplement can be
delivered to each such Dealer and each purchaser
of Notes from such Dealer and (ii) each purchaser
of Notes from such Agent (other than such
Dealers).
In each instance that a Pricing Supplement is
prepared, each of the Agents will affix, or will
cause to be affixed, copies of the Pricing
Supplement to the Prospectus prior to their
distribution to purchasers of the Notes from such
Agent (other than Dealers that are purchasers of
Notes from such Agent with a view to their
distribution pursuant to a Dealers Agreement) and
will be responsible for determining that Dealers
purchasing Notes from such Agent have sufficient
copies of the most current version of the Pricing
Supplements and the related Prospectus to deliver
copies of such Pricing Supplement attached to the
Prospectus to every purchaser of the Notes, as
appropriate. The Agent and the Dealers will
destroy any Pricing Supplements, and any
Prospectuses to which they are attached (other
than those retained for files), that remain in
their possession after Pricing Supplements have
been delivered to the purchasers of Notes.
Delivery of A copy of the Prospectus and a Pricing Supplement
Prospectus: relating to a Book-Entry Note must accompany or
precede any written offer of such Note,
confirmation of the purchase of such Note and
payment for such Note by its purchaser (other
than an Agent or Dealer). Each of the Agents and
the Dealers will deliver a Prospectus and Pricing
Supplement as herein described with respect to
each Book-Entry Note sold by any of them, along
with a confirmation of sale, to each purchaser on
the Business Day immediately following the Trade
Date.
Issuance: On the Settlement Date (as defined in the
Distribution Agreement) for each Tranche sold
pursuant to the Distribution Agreement, the
Company will issue and will cause the Trustee to
authenticate one or more Global Certificates.
Each Global Certificate will be dated and issued
as of the date of its authentication by the
Trustee.
Registration: Each Global Certificate will be registered in the
name of CEDE & CO., as nominee for DTC, on the
Securities Register. The beneficial owner of a
Book-Entry Note (or an indirect participant in
DTC designated by such owner) will designate a
participant in DTC (with respect to such Note,
the "Participant") to act as agent for such
beneficial owner in connection with the
book-entry system maintained by DTC, and DTC will
record in book-entry form, in accordance with
instructions provided by the Participant, a
credit balance indicating that the Participant is
the record holder of the Note. The ownership
interest of the beneficial owner in such Note
will be recorded through the records of the
Participant or through the separate records of
the Participant and an indirect participant in
DTC.
Denominations: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess thereof
that is an integral multiple of $1,000. Global
Certificates will be denominated in principal
amounts not in excess of $150,000,000. If a
Tranche having an aggregate principal amount in
excess of $150,000,000 would, but for the
preceding sentence, be represented by a single
Global Certificate, then one Global Certificate
will be authenticated and issued to represent
each $150,000,000 principal amount of such
Tranche and an additional Global Certificate will
be authenticated and issued to represent any
remaining principal amount of such Tranche. In
such a case, each of the Global Securities
representing such Book-Entry Notes or Notes shall
be assigned the same CUSIP number.
Settlement: The receipt by the Company of immediately
available funds in payment for a Tranche and the
authentication and issuance of the Global
Certificate(s) representing such Tranche shall
constitute "Settlement" with respect to the Notes
constituting such Tranche. The Settlement Date
with respect to any purchase of Book-Entry Notes
from the Company by the Purchasing Agent will be
a date on or before the fifth Business Day next
succeeding the Trade Date, unless otherwise
agreed by each Agent and the Company and
specified in the applicable Terms Agreement.
Settlement The following Settlement Procedures will be
Procedures: performed by the Company, the Trustee, each Agent
and each of the Dealers with regard to each
Tranche of Book-Entry Notes issued by the Company
on a Trade Date:
A. The Purchasing Agent will advise the
Company in writing of the following
settlement information:
1. Aggregate principal amount.
2. Stated maturity.
3. Interest rate.
4. Monthly, quarterly or semi-annual
interest payments.
5. Settlement date.
6. Agents' price.
7. Dealers' selling concession.
8. Optional Redemption (if any).
9. Survivor's Option (if any).
B. The Company will advise the Trustee by
telephone (confirmed in writing at any
time on the same date) or electronic
transmission (i) of the information set
forth in Settlement Procedure "A" above,
(ii) that the Notes are Book-Entry Notes
and (iii) confirm the identity of the
Purchasing Agent as purchaser.
C. The Trustee will enter a pending deposit
message through DTC's Participant
Terminal System, providing the following
settlement information to DTC, the Agents
and Standard & Poor's Corporation:
1. The information set forth in
Settlement Procedure "A".
2. Initial Interest Payment Date for
such Tranche of Notes, number of
days by which such date succeeds
the related Regular Record Date and
amount of interest payable on such
Interest Payment Date.
3. CUSIP number of the Global
Certificate(s) representing such
Tranche of Notes.
4. Whether such Global Certificates(s)
will represent any other Tranche of
Book-Entry Notes (to the extent
known at such time).
D. The Trustee will complete the Global
Certificate(s) representing such Tranche
or the Company will prepare and deliver
to the Trustee a completed Global
Certificate representing such Tranche.
E. The Trustee will authenticate the Global
Certificate(s) representing such Tranche.
F. DTC will credit such Tranche to the
Trustee's participant account at DTC.
G. The Trustee will enter a Same-Day Funds
Settlement System ("SDFS") deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Tranche
to the Trustee's participant account and
credit the Notes belonging to such
Tranche to the Purchasing Agent's
participant account and (ii) debit the
Purchasing Agent's settlement account and
credit the Trustee's settlement account
for an amount equal to the aggregate
principal amount of such Notes, less the
underwriting discount. The entry of such
a deliver order shall constitute a
representation and warranty by the
Trustee to DTC that (i) the Global
Certificate(s) representing such Book-
Entry Notes has or have been issued and
authenticated and (ii) the Trustee is
holding such Global Certificate(s)
pursuant to the Letter of Representations
with respect to such Notes between the
Company, the Trustee and DTC.
H. The Purchasing Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit Notes received from the Trustee
pursuant to settlement procedure "G"
above to the Purchasing Agent's
participant account and to credit such
Notes to the participant accounts of
Participants (including other Agents)
that (A) will hold such Notes as Dealers
that purchased the Notes from the
Purchasing Agent pursuant to a Dealers
Agreement or as representatives of such
Dealers or (B) will hold the Notes on
behalf of a purchaser of the Notes from
the Purchasing Agent (other than such
Dealers), (ii) in the case of
Participants that will hold the Notes as
described in (A) above, to debit the
settlement accounts of such Participants
and credit the settlement account of the
Purchasing Agent for an amount equal to
the aggregate principal amount of such
Notes, less the applicable selling
concession, and, (iii) in the case of
Participants that will hold the Notes as
described in (B) above, to debit the
settlement accounts of such Participants
and credit the settlement account of the
Purchasing Agent for an amount equal to
the aggregate principal amount of such
Notes.
I. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "G" and "H" will be
settled in accordance with SDFS operating
procedures in effect on the Settlement
Date.
J. The Trustee will credit to an account of
the Company maintained at the Trustee
funds available for immediate use in the
amount transferred to the Trustee in
accordance with Settlement Procedure "G".
Settlement Settlement Procedures "A" through "J" set forth
Procedures above shall be completed as soon as possible but
Timetable: not later than the respective times (Eastern
time) set forth below, or such later time as may
be agreed upon by the Company and the Purchasing
Agent:
Settlement
Procedure Time
A 4:00 P.M. on the Trade Date
B 5:00 P.M. on the Trade Date
C 2:00 P.M. on the Business Day
before Settlement Date
D 3:00 P.M. on Business Day
before Settlement Date
E 9:00 A.M. on Settlement Date
F 10:00 A.M. on Settlement Date
G-H 2:00 P.M. on Settlement Date
I 4:45 P.M. on Settlement Date
J 5:00 P.M. on Settlement Date
Settlement Procedure "I" is subject to extension
in accordance with the events specified in SDFS
operating procedures in effect on the Settlement
Date.
If Settlement of a Tranche of Book-Entry Notes is
rescheduled or canceled, the Trustee will deliver
to DTC, through DTC's Participant Terminal
System, a cancellation message to such effect by
no later than 2:00 P.M. (Eastern time) on the
Business Day immediately preceding the scheduled
Settlement Date.
Trustee Not to Nothing herein shall be deemed to require the
Risk Funds: Trustee to risk or expend its own funds in
connection with any payment to the Company, or
the Purchasing Agent or any Dealer, it being
understood by all parties that payments made by
the Trustee to the Company or the Purchasing
Agent shall be made only to the extent that funds
are provided to such Trustee for such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with specimen signatures
of the Trustee's officers, employees or agents
who have been authorized by the Trustee to
authenticate Global Certificates, but the Agents
will not have any obligation or liability to the
Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee
on any Global Certificate.
A-9
PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES
The Trustee will serve as registrar and transfer agent in
connection with the Certificated Notes.
Procedure for Rate The Company and the Purchasing Agent will discuss
Setting and Posting: from time to time the aggregate principal amount
and maturities of, and the interest rates to be
borne by, each Tranche of Certificated Notes that
may be purchased by the Purchasing Agent.
If the Company decides to set aggregate principal
amounts and maturities of, and rates to be borne
by, any Tranche to be purchased by the Purchasing
Agent (the setting of such amounts, maturities
and rates to be referred to herein as "Posting"),
or if the Company decides to change amounts,
maturities or rates previously posted, the
Company will promptly advise the Purchasing Agent
of the amounts, maturities and rates to be
posted. The Purchasing Agent will thereafter
promptly advise the other Agents of the amounts,
maturities, and rates to be posted.
Offering of Notes: In the event that there is a Posting, each of the
Agents will communicate the aggregate principal
amount and maturities of, and the interest rates
to be borne by, each Tranche of Certificated
Notes that is the subject of the Posting to each
of the broker-dealers (the "Dealers") that have
entered into a Dealers Agreement with such Agent
and pursuant to such Dealers Agreement, will
solicit offers to purchase the Notes in the
Tranche from the Dealers.
Purchase of Notes by The Purchasing Agent will, no later than 4 P.M.
the Purchasing Agent: (Eastern time) on the sixth day subsequent to the
day on which such Posting occurs, or if such
sixth day is not a Business Day, on the next
succeeding Business Day, or on such later day and
time as shall be mutually agreed upon by the
Company and the Agents (any such day a "Trade
Date"), (i) complete, execute and deliver a Terms
Agreement that sets forth, among other things,
the amount of each Tranche that the Purchasing
Agent is offering to purchase (and the amount of
such Notes which have been solicited by each
Agent) or (ii) inform the Company that none of
the Notes of a particular Tranche will be
purchased by the Purchasing Agent. Immediately
upon receipt of a completed and executed Terms
Agreement from the Purchasing Agent, the Company
will (i) execute and deliver such Terms Agreement
to the Purchasing Agent or (ii) inform the
Purchasing Agent that its offer to purchase the
Notes of a particular Tranche has been rejected.
The Purchasing Agent will immediately inform the
other Agents of the action taken by the Company.
Preparation of If any offer by the Purchasing Agent to purchase
Pricing Supplement: Notes is accepted by or on behalf of the Company,
the Company, with the approval of each Agent,
will prepare a Pricing Supplement reflecting the
terms of each Tranche and will arrange to have
ten copies thereof filed with the Commission in
accordance with the applicable paragraph of
Rule 424(b) under the Securities Act of 1933, as
amended (the "Act") and will supply one copy of
such Pricing Supplement to each Agent and to the
Trustee. Each Agent will deliver, or will cause
to be delivered, copies of the applicable Pricing
Supplement to (i) each of the Dealers that
purchased such Notes pursuant to a Dealers
Agreement in sufficient amounts so that a copy of
the Pricing Supplement can be delivered to each
such Dealer and each purchaser of Notes from such
Dealer and (ii) each purchaser of Notes from such
Agent (other than such Dealers).
In each instance that a Pricing Supplement is
prepared, each of the Agents will affix, or will
cause to be affixed, copies of the Pricing
Supplement to the Prospectus prior to their
distribution to purchasers of the Notes from such
Agent (other than Dealers that are purchasing
Notes from such Agent with a view to their
distribution pursuant to a Dealers Agreement) and
will be responsible for determining that Dealers
purchasing Notes from such Agent have sufficient
copies of the most current version of the Pricing
Supplements and the related Prospectus to deliver
copies of such Pricing Supplement attached to the
Prospectus to every purchaser of the Notes, as
appropriate. The Agents and the Dealers will
destroy any Pricing Supplements, and any
Prospectus to which they are attached (other than
those retained for files), that remain in their
possession after Pricing Supplements have been
delivered to the purchasers of Notes.
Delivery of A copy of the Prospectus and a Pricing Statement
Prospectus: relating to a Certificated Note must accompany or
precede any written offer of such Note,
confirmation of the purchase of such Note and
payment for such Note by its purchaser (other
than an Agent or Dealer). Each of the Agents and
the Dealers will deliver a Prospectus and Pricing
Supplement as herein described with respect to
each Certificated Note sold by any of them, along
with a confirmation of sale, to each purchaser on
the Business Day immediately following the Trade
Date.
Issuance: On the Settlement Date (as defined in the
Distribution Agreement) for each Tranche sold
pursuant to the Distribution Agreement, the
Company will issue and will cause the Trustee to
authenticate Individual Certificates representing
the Notes in the Tranche. Each Individual
Certificate will be dated and issued as of the
date of its authentication by the Trustee.
Registration: Certificated Notes will be issued only in fully
registered form without coupons.
Denominations: The denomination of any Certificated Note will be
a minimum of $1,000 or any amount in excess
thereof that is an integral multiple of $1,000.
Settlement: The Settlement Date with respect to any purchase
of Certificated Notes from the Company by the
Purchasing Agent will be a date on or before the
fifth day that is a Business Day next succeeding
the Trade Date, unless otherwise agreed by each
Agent and the Company and specified in the
applicable Terms Agreement. The Company will
instruct the Trustee to effect delivery of
Certificated Notes no later than 3:00 P.M.,
Eastern time, on the Settlement Date to the
Purchasing Agent.
Settlement The following Settlement Procedures will be
Procedures: performed by the Company, the Trustee, each Agent
and each of the Dealers with regard to each
Tranche of Certificated Notes issued by the
Company on a Trade Date:
A. The Purchasing Agent will advise the
Company in writing of the following
settlement information:
1. Aggregate principal amount.
2. Stated maturity.
3. Interest rate.
4. Monthly, quarterly or semi-annual
interest payments.
5. Settlement date.
6. Agents' price.
7. Dealers' selling concession.
8. Optional Redemption (if any).
9. Survivor's Option (if any).
B. The Company will advise the Trustee by
telephone (confirmed in writing at any
time on the same date) or electronic
transmission (i) of the information set
forth in Settlement Procedure "A" above,
(ii) that the Notes are Certificated
Notes and (iii) confirm the identity of
the Purchasing Agent as purchaser.
C. The Trustee will complete the Individual
Certificates representing such Tranche or
the Company will prepare and deliver to
the Trustee a completed Global
Certificate representing such Tranche.
D. The Trustee will authenticate the
Individual Certificates representing such
Tranche.
E. Delivery of each Certificated Note by the
Trustee will be made when the Trustee
receives notice from the Company that it
has received payment from the Purchasing
Agent of an amount in immediately
available funds equal to the face value
of such Certificated Note less such
Agent's discount.
Settlement Settlement Procedures "A" through "E" set forth
Procedures above shall be completed as soon as possible but
Timetable: not later than the respective times (Eastern
time) set forth below, or such later time as may
be agreed upon by the Company and the purchasing
Agent(s):
Settlement
Procedure Time
A-B 3:00 P.M. on Business Day
before Settlement Date
C-D 2:15 P.M. on Settlement Date
E 3:00 P.M. on Settlement Date
Trustee Not to Risk Nothing herein shall be deemed to require the
Funds: Trustee to risk or expend its own funds in
connection with any payment to the Company, or
the Purchasing Agent or any Dealer, it being
understood by all parties that payments made by
the Trustee to the Company or the Purchasing
Agent shall be made only to the extent that funds
are provided to such Trustee for such purpose.
Authenticity of The Company will cause the Trustee to furnish the
Signatures: Agents from time to time with specimen signatures
of the Trustee's officers, employees or agents
who have been authorized by the Trustee to
authenticate Certificated Notes, but the Agents
will not have any obligation or liability to the
Company or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of the Company or the Trustee
on any Certificated Note.
B-1
EXHIBIT B
NAME OF ISSUER
General Term Notes (registered trademark), Series B
Due From Nine Months to Twenty-Five Years from Date of Issue
TERMS AGREEMENT
, 19
CMS Energy Corporation
[Address of Issuer]
Attention: __________
Subject in all respects to the terms and conditions of the
Distribution Agreement dated , 1996, among X. X. Xxxxx & Company,
___________________________ and you (the "Agreement"), the undersigned
agrees to purchase the following Notes of CMS Energy Corporation:
CUSIP:
Aggregate Principal Amount:
Interest Rate:
Interest Payment Date(s) (Monthly or Otherwise):
Stated Maturity Date:
Price to Public: __________% of Principal Amount
Purchase Price: __________% of Principal Amount
Selling Concession:
Settlement Date and Time:
Survivor's Option:
Optional Redemption, if any:
Initial Redemption Date:
Redemption Price: initially ____% of Principal Amount and
declining by ___% of the Principal Amount on each anniversary of
the Initial Redemption Date until the Redemption Price is 100% of
the Principal Amount.
------------------------
(registered trademark) Registered servicemark of X. X. Xxxxx & Company
B-2
Place for Delivery of Notes and Payment Therefor:
Method of Payment:
Principal Amount
of Notes Solicited
by Such Agent
Agents
X. X. Xxxxx & Company. . . . . . . . . . . . $
--------------
Total . . . . . . . . . . . . . . . . . . $
===============
Modification, if any, in the requirements to deliver the documents
specified in Section 6(B)(b) of the Agreement:
Other Provisions:
X.X. XXXXX & COMPANY
By:
----------------------------
Title:
----------------------
Accepted:
CMS ENERGY CORPORATION
By:
------------------------------
Title:
------------------------
