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EXHIBIT 1(b)
$________________
CONSUMERS ENERGY COMPANY
$________ Senior Notes Due ________
Underwriting Agreement
[Date]
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
Consumers Energy Company, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Underwriters (as defined in Section 14 hereof) certain debt
securities, to be in the aggregate principal amount, to mature in the year and
to have the interest rate specified in Schedule III hereto (the "Securities"),
and hereby confirms its agreement with the Underwriters as set forth herein. The
Securities shall be issued pursuant to the Indenture dated as of February 1,
1998, between the Company and The Chase Manhattan Bank, as Trustee (the
"Trustee"), as amended and supplemented and to be supplemented by various
supplemental indentures. The Underwriters have designated the Representatives to
execute this Agreement on their behalf and to act for them in the manner
provided in this Agreement.
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The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), a registration statement on Form
S-3, as amended (Registration No. ),
including a prospectus relating to the Securities and such registration
statement has become effective under the Act. The registration statement, as
amended, at the time such registration statement became effective and as it may
have been thereafter amended to the date of this Agreement (including the
documents then incorporated by reference therein) is hereinafter referred to as
the "Registration Statement." The prospectus forming a part of the Registration
Statement at the time the Registration Statement became effective (including the
documents then incorporated by reference therein) is hereinafter referred to as
the "Basic Prospectus," provided that in the event that the Basic Prospectus
shall have been amended, revised or supplemented prior to the date of this
Agreement, or if the Company shall have supplemented the Basic Prospectus by
filing any documents pursuant to Section 13 or 14 or 15 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the time the
Registration Statement became effective and prior to the date of this Agreement,
which documents are deemed to be incorporated in the Basic Prospectus, the term
"Basic Prospectus" shall also mean such prospectus as so amended, revised or
supplemented. The Basic Prospectus, as it shall be revised or supplemented to
reflect the final terms of the offering and sale of the Securities by a
prospectus supplement relating to the Securities, and in the form to be filed
with, or transmitted for filing to, the Commission pursuant to Rule 424 under
the Act, is hereinafter referred to as the "Prospectus." Any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to include only amendments or
supplements to the Registration Statement or Prospectus, as the case may be, and
documents incorporated by reference therein after the date of this Agreement and
prior to the termination of the offering of the Securities by the Underwriters.
Each of the Securities will be secured by First Mortgage Bonds ("First
Mortgage Bonds"), in the same aggregate principal amount, having the same stated
interest rate, maturity date and other terms as the Securities they secure, as
described in the Prospectus (as defined below). The First Mortgage Bonds are to
be issued by the Company under its Indenture, dated as of September 1, 1945,
between the Company and The Chase Manhattan Bank, as trustee (in such capacity,
the "Mortgage Trustee"), as amended and supplemented and to be supplemented by
various supplemental indentures (such Indenture, as so amended and supplemented
and to be supplemented, the "Mortgage").
1. Purchase and Sale: Upon the basis of the representations and warranties
and on the terms and subject to the conditions herein set forth, the Company
agrees to sell
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to the respective Underwriters, severally and not jointly, and the respective
Underwriters, severally and not jointly, agree to purchase from the Company, at
the purchase price specified in Schedule III hereto, the respective principal
amounts of Securities set opposite their names in Schedule II hereto.
The Company is advised by the Representatives that the Underwriters
propose to make a public offering of their respective portions of the Securities
as soon as practicable, in their judgment, after this Agreement has become
effective.
2. Payment and Delivery: Payment for the Securities shall be made to the
Company or its order in Federal or other immediately available funds in New York
City (or such other place or places of payment as shall be agreed upon by the
Company and the Representatives in writing), upon the delivery of the Securities
at the offices of Skadden, Arps, Slate, Xxxxxxx and Xxxx, LLP ("Skadden, Arps"),
at Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or such other place or places of
delivery as shall be agreed upon by the Company and the Representatives) to the
Representatives for the respective accounts of the Underwriters against receipt
therefor signed by the Representatives on behalf of themselves and as agent for
the other Underwriters. Such payment and delivery shall be made at 10:00 A.M.,
New York time on (or on such later business day as shall be
agreed upon by the Company and the Representatives in writing), unless postponed
in accordance with the provisions of Section 10 hereof. The day and time at
which payment and delivery for the Securities are to be made is herein called
the "Time of Purchase."
Delivery of the Securities shall be made in definitive, fully
registered form in authorized denominations registered in such names as the
Representatives may request in writing to the Company not later than two full
business days prior to the Time of Purchase, or if no such request is received,
in the names of the respective Underwriters for the respective principal amounts
of Securities set forth opposite the name of each Underwriter in Schedule II, in
denominations selected by the Company.
The Company agrees to make the Securities available for inspection by
the Underwriters at the offices of Skadden, Arps, at least 24 hours prior to the
Time of Purchase, in definitive, fully registered form, and as requested
pursuant to the preceding paragraph.
3. Conditions of Underwriters' Obligations: The several obligations of the
Underwriters hereunder are subject to the accuracy of the warranties and
representations on the part of the Company and to the following other conditions
precedent:
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(a) That all legal proceedings to be taken in connection with the
issue and sale of the Securities shall be reasonably satisfactory
in form and substance to Skadden, Arps, counsel to the
Underwriters.
(b) That, at the Time of Purchase, the Representatives shall be
furnished with the following opinions, dated the day of the Time
of Purchase:
(i) Opinion of Xxxxxxx X. XxxXxxxxx, Esq., counsel to the
Company, substantially in a form satisfactory to the
Representatives; and
(ii) Opinion of Skadden, Arps, counsel to the Underwriters,
substantially in a form satisfactory to the
Representatives.
(c) That on the date hereof and on the date of the Time of Purchase
the Representatives shall have received a letter from Xxxxxx
Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx") in form and substance
satisfactory to the Representatives, dated as of such date, (i)
confirming that they are independent public accountants within the
meaning of the Act and the applicable published rules and
regulations of the Commission thereunder, (ii) stating that in
their opinion the financial statements examined by them and
included or incorporated by reference in the Registration
Statement complied as to form in all material respects with the
applicable accounting requirements of the Commission, including
applicable published rules and regulations of the Commission, and
(iii) covering, as of a date not more than five business days
prior to the date of such letter, such other matters as the
Representatives reasonably request.
(d) That, between the date of the execution of this Agreement and the
Time of Purchase, no material and adverse change shall have
occurred in the business, properties or financial condition of the
Company which, in the judgment of the
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Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities
(other than changes referred to in or contemplated by the
Registration Statement or Prospectus).
(e) That, prior to the Time of Purchase, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the Act by the Commission or proceedings therefor initiated
or threatened.
(f) That, at the Time of Purchase, the Company shall have delivered to
the Representatives a certificate of an executive officer of the
Company to the effect that, to the best of his knowledge,
information and belief there shall have been no material adverse
change in the business, properties or financial condition of the
Company from that set forth in the Registration Statement or
Prospectus (other than changes referred to in or contemplated by
the Registration Statement or Prospectus).
(g) That the Company shall have performed such of its obligations
under this Agreement as are to be performed at or before the Time
of Purchase by the terms hereof.
(h) That any additional documents or agreements reasonably requested
by the Representatives or their counsel to permit the Underwriters
to perform their obligations or permit their counsel to deliver
opinions hereunder shall have been provided to them.
(i) That between the date of the execution of this Agreement and the
day of the Time of Purchase there has been no downgrading of the
investment ratings of any of the Company's securities by Standard
& Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., Xxxxx'x Investors Service, Inc. or Fitch, Inc.,
and the Company shall not have been placed on "credit watch" or
"credit review" with negative implications by any of such
statistical rating organizations if any of such occurrences shall,
in
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the reasonable judgment of the Representatives, after reasonable
inquiries on the part of the Representatives, impair the
marketability of the Securities.
(j) That any filing of the Prospectus and any supplements thereto
required pursuant to Rule 424 under the Act have been made in
compliance with Rule 424 in the time periods provided by Rule 424.
4. Conditions of the Company's Obligations: The obligations of the Company
hereunder are subject to the satisfaction of the condition set forth in Section
3(e).
5. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To use its best efforts to cause any post-effective amendments to
the Registration Statement to become effective as promptly as
possible. During the time when a Prospectus is required to be
delivered under the Act, the Company will comply so far as it is
able with all requirements imposed upon it by the Act and the
rules and regulations of the Commission to the extent necessary to
permit the continuance of sales of or dealings in the Securities
in accordance with the provisions hereof and of the Prospectus.
(b) To deliver to each of the Representatives a conformed copy of the
Registration Statement and any amendments thereto (including all
exhibits thereto) and full and complete sets of all comments of
the Commission or its staff and all responses thereto with respect
to the Registration Statement and any amendments thereto, and to
furnish to the Representatives, for each of the Underwriters,
conformed copies of the Registration Statement and any amendments
thereto, without exhibits.
(c) As soon as the Company is advised thereof, the Company will advise
the Representatives and confirm the advice in writing of: (i) the
effectiveness of any amendment to the Registration Statement, (ii)
any request made by the
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Commission for amendments to the Registration Statement or
Prospectus or for additional information with respect thereto,
(iii) the suspension of qualification of the Securities for sale
under Blue Sky or state securities laws, and (iv) the entry of a
stop order suspending the effectiveness of the Registration
Statement or of the initiation or threat or any proceedings for
that purpose and, if such a stop order should be entered by the
Commission, to make every reasonable effort to obtain the lifting
or removal thereof.
(d) To deliver to the Underwriters, without charge, as soon as
practicable, and from time to time during such period of time (not
exceeding nine months) after the date of the Prospectus as they
are required by law to deliver a prospectus, as many copies of the
Prospectus (as supplemented or amended if the Company shall have
made any supplements or amendments thereto) as the Representatives
may reasonably request; and in case any Underwriter is required to
deliver a prospectus after the expiration of nine months after the
date of the Prospectus, to furnish to the Representatives, upon
request, at the expense of such Underwriter, a reasonable quantity
of a supplemental prospectus or of supplements to the Prospectus
complying with Section 10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months) after the date
of the Prospectus as the Underwriters are required by law to
deliver a prospectus in respect of the Securities, if any event
shall have occurred as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it becomes
necessary to amend or supplement the Prospectus to comply with
law, to forthwith prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus and deliver
to the Underwriters, without charge, such number of copies thereof
as may be reasonably requested.
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(f) To use its best efforts to qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions
as the Representatives may designate and to pay (or cause to be
paid), or reimburse (or cause to be reimbursed) the Underwriters
and their counsel for, reasonable filing fees and expenses in
connection therewith (including the reasonable fees and
disbursements of counsel to the Underwriters and filing fees and
expenses paid and incurred prior to the date hereof), provided,
however, that the Company shall not be required to qualify to do
business as a foreign corporation or as a securities dealer or to
file a general consent to service of process or to file annual
reports or to comply with any other requirements deemed by the
Company to be unduly burdensome.
(g) To pay all expenses, fees and taxes (other than transfer taxes on
sales by the respective Underwriters) in connection with the
issuance and delivery of the Securities, except that the Company
shall be required to pay the fees and disbursements (other than
disbursements referred to in paragraph (g) of this Section 5) of
Skadden, Arps, counsel to the Underwriters, only in the events
provided in paragraph (i) of this Section 5, the Underwriters
hereby agreeing to pay such fees and disbursements in any other
event, and that except as provided in Section (i), the Company
shall not be responsible for any out-of-pocket expenses of the
Underwriters in connection with their services hereunder
(h) If the Underwriters shall not take up and pay for the Securities
due to the failure of the Company to comply with any of the
conditions specified in Section 3 hereof, or, if this Agreement
shall be terminated in accordance with the provisions of Section
11 hereof prior to the Time of Purchase, to pay the reasonable
fees and disbursements of Skadden, Arps, counsel to the
Underwriters, and, if the Underwriters shall not take up and pay
for the Securities due to the failure of the Company to comply
with any of the conditions specified in Section 3 hereof, to
reimburse the Underwriters for their reasonable out-of-pocket
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expenses, in an aggregate amount not exceeding a total of $3,000,
incurred in connection with the financing contemplated by this
Agreement.
(i) Prior to the termination of the offering of the Securities, to not
file any amendment to the Registration Statement or supplement to
the Prospectus (including the Basic Prospectus) unless the Company
has furnished the Representatives and counsel to the Underwriters
with a copy for their review and comment a reasonable time prior
to filing and has reasonably considered any comments of the
Representatives, or any such amendment or supplement to which such
counsel shall reasonably object on legal grounds in writing, after
consultation with the Representatives.
(j) To furnish the Representatives with copies of all documents
required to be filed with the Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act subsequent to the time the
Registration Statement becomes effective and prior to the
termination of the offering of the Securities.
(k) To use its best efforts to provide notice to the Representative as
to the date upon which a Release Date (as defined in the Mortgage)
will occur, and to the extent practicable, to provide such notice
at least 30 days prior to the occurrence of such Release Date.
(l) So long as may be required by law for the distribution of the
Securities by the Underwriters or by any dealers that participate
in the distribution thereof, the Company will comply with all
requirements under the Exchange Act relating to the timely filing
with the Commission of its reports pursuant to Section 13 of the
Exchange Act and of its proxy statements pursuant to Section 14 of
the Exchange Act.
6. Representations and Warranties of the Company: The Company represents
and warrants to, and agrees with, each of the Underwriters that:
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(a) The Registration Statement has become effective under the Act; a
true and correct copy of the Registration Statement in the form in
which it became effective has been delivered to each of the
Representatives and to the Representatives for each of the
Underwriters (except that copies delivered for the Underwriters
excluded exhibits to such Registration Statement); any filing of
the Prospectus and any supplements thereto required pursuant to
Rule 424(b) has been or will be made in the manner required by
Rule 424(b) and within the time period required by Section 3(j)
hereof; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purposes are pending before or, to the knowledge of the Company,
threatened by the Commission. On the effective date of the
Registration Statement, the Registration Statement and the Basic
Prospectus complied, or were deemed to have complied, and on its
respective issue date, each preliminary prospectus filed pursuant
to Rule 424(b) complied, and the Basic Prospectus complied, and on
its issue date, the Prospectus will comply, or will be deemed to
comply, in all material respects with the applicable provisions of
the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the published rules and regulations of the
Commission, none of the Registration Statement on its effective
date, the Basic Prospectus on its issue date, or any other
preliminary prospectus, on its issue date, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as of its issue date
and, as amended or supplemented, if applicable, as of the Time of
Purchase, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except that the Company makes no warranty or
representation to any Underwriter with respect to any statements
or omissions made therein in reliance upon and in conformity with
information furnished in writing to the Company by, or
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through the Representatives on behalf of, any Underwriter
expressly for use therein, or to any statements in or omissions
from that part of the Registration Statement that shall constitute
the Statement of Eligibility and Qualification under the Trust
Indenture Act of the Trustee under the Indenture.
(b) The documents incorporated by reference in the Registration
Statement, any preliminary prospectus, the Basic Prospectus and
the Prospectus, when they were filed (or, if an amendment with
respect to any such document was filed, when such amendment was
filed) with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder, and any further
documents so filed and incorporated by reference will, when they
are filed with the Commission, conform in all material respects to
the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder; none of such documents,
when it was filed (or, if an amendment with respect to any such
document was filed, when such amendment was filed), contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; and no such further document, when it
is filed, will contain an untrue statement of a material fact or
will omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(c) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
Michigan and has all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus
and to consummate the transactions contemplated hereby, and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the
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conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company.
(d) The Securities are in the form contemplated by the Indenture and
have been duly authorized by the Company. At the Time of Purchase,
the Securities will have been duly executed and delivered by the
Company and, when authenticated by the Trustee in the manner
provided for in the Indenture and delivered against payment
therefor as provided in this Agreement, will constitute valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding
at law or in equity). The Securities conform in all material
respects to the descriptions thereof in the Prospectus.
(e) This Agreement has been duly authorized, executed and delivered by
the Company, and the Company has full corporate power and
authority to enter into this Agreement.
(f) Each of the Indenture and the Mortgage has been duly authorized by
the Company. At the Time of Purchase, the Indenture and the
Mortgage will have been duly executed and delivered by the Company
and will constitute a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity); the Indenture and
the Mortgage conform in all material respects
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to the description thereof in the Prospectus; and the Indenture
and the Mortgage conform to the requirements of the Trust
Indenture Act.
(g) The First Mortgage Bonds are in the form contemplated by the
Mortgage and have been duly authorized by the Company. At the Time
of Purchase, the First Mortgage Bonds (i) will have been duly
executed and delivered by the Company and, when authenticated by
the Mortgage Trustee in the manner provided for in the Mortgage,
(ii) will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general
principals of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity), will be entitled
to the security afforded by the Mortgage equally and ratably with
all securities outstanding thereunder and (iii) will be owned and
held by the Trustee, in trust, for the benefit of the holders of
all securities from time to time outstanding under the Indenture.
The First Mortgage Bonds conform in all material respects to the
descriptions thereof in the Prospectus.
(h) The Company has all necessary consents, authorizations, approvals,
orders, certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure
to obtain or file would not have a material adverse effect on the
Company.
(i) An appropriate order has been entered by the Federal Energy
Regulatory Commission under the Federal Power Act authorizing the
issuance and sale of the Securities and the issuance of the First
Mortgage Bonds, and such order is in
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full force and effect. No other order, license, consent,
authorization or approval of, or exemption by, or the giving of
notice to, or the registration with any federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, and no filing, recording, publication
or registration in any public office or any other place, was or is
now required to be obtained by the Company to authorize its
execution or delivery of, or the performance of its obligations
under, this Agreement or the Securities, except such as have been
obtained or may be required under state securities or Blue Sky
laws or as referred to in the Basic Prospectus.
(j) None of the issuance and sale of the Securities, or the First
Mortgage Bonds, or the execution or delivery by the Company of, or
the performance by the Company of its obligations under, this
Agreement did or will conflict with, result in a breach of any of
the terms or provisions of, or constitute a default or require the
consent of any party under the Company's Articles of Incorporation
or by-laws, any material agreement or instrument to which it is a
party, any existing applicable law, rule or regulation or any
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or assets, or did or
will result in the creation or imposition of any lien on the
Company's properties or assets.
(k) Except as disclosed in the Basic Prospectus, there is no action,
suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened
against the Company, by any governmental authority that (i)
questions the validity, enforceability or performance of this
Agreement or the Securities or (ii) if determined adversely, is
likely to have a material adverse effect on the business or
financial condition of the Company, or materially adversely affect
the ability of the Company to perform its obligations hereunder
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or the consummation of the transactions contemplated by this
Agreement.
(l) There has not been any material and adverse change in the
business, properties or financial condition of the Company from
that set forth in the Registration Statement (other than changes
referred to in or contemplated by the Registration Statement or
the Basic Prospectus).
(m) Except as set forth in the Basic Prospectus, no event or condition
exists that constitutes, or with the giving of notice or lapse of
time or both would constitute, a default or any breach or failure
to perform by the Company in any material respect under any
indenture, mortgage, loan agreement, lease or other material
agreement or instrument to which the Company is a party or by
which it or any of its properties may be bound.
7. Representation and Warranties of Underwriters: Each Underwriter warrants
and represents that the information, if any, furnished in writing to the Company
through the Representatives expressly for use in the Registration Statement and
Prospectus is correct in all material respects as to such Underwriter. Each
Underwriter, in addition to other information furnished to the Company for use
in the Registration Statement and Prospectus, herewith furnishes to the Company
for use in the Registration Statement and Prospectus, the information stated
herein with regard to the public offering, if any, by such Underwriter and
represents and warrants that such information is correct in all material
respects as to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to indemnify
and hold harmless each of the Underwriters and each person, if
any, who controls any such Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, against
any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the
Act or otherwise, and to reimburse the Underwriters and such
controlling person or persons, if any, for any legal or other
expenses
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incurred by them in connection with defending any action, suit or
proceeding (including governmental investigations) as provided in
Section 8(c) hereof, insofar as such losses, claims, damages,
liabilities or actions, suits or proceedings (including
governmental investigations) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any preliminary
prospectus as of its issue date (if used prior to the date of the
Basic Prospectus), the Basic Prospectus (if used prior to the date
of the Prospectus), the Prospectus, or, if the Prospectus shall be
amended or supplemented, in the Prospectus as so amended or
supplemented (if such Prospectus or such Prospectus as amended or
supplemented is used after the period of time referred to in
Section 5(e) hereof, it shall contain or be used with such
amendments or supplements as the Company deems necessary to comply
with Section 10(a) of the Act), or arise out of or are based upon
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission which was made in such preliminary prospectus,
Basic Prospectus, Registration Statement or Prospectus, or in the
Prospectus as so amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company
by, or through the Representatives on behalf of, any Underwriter
expressly for use therein or with any statements in or omissions
from that part of the Registration Statement that shall constitute
the Statement of Eligibility and Qualification under the Trust
Indenture Act of the Trustee under the Indenture, and except that
this indemnity shall not inure to the benefit of any Underwriter
(or any person controlling such Underwriter) on account of any
losses, claims, damages, liabilities or actions, suits or
proceedings arising from the sale of the Securities to any person
if a copy of the Prospectus, as the same may then be supplemented
or amended (excluding,
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however, any document then incorporated or deemed incorporated
therein by reference), was not sent or given by or on behalf of
such Underwriter to such person (i) with or prior to the written
confirmation of sale involved or (ii) as soon as available after
such written confirmation, relating to an event occurring prior to
the payment for and delivery to such person of the Securities
involved in such sale, and the omission or alleged omission or
untrue statement or alleged untrue statement was corrected in the
Prospectus as supplemented or amended at such time.
The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in this
Agreement, shall remain in full force and effect regardless of any investigation
made by or on behalf of any person, and shall survive the delivery of and
payment for the Securities hereunder, and the indemnity agreement contained in
this Section 8 shall survive any termination of this Agreement. The liabilities
of the Company in this Section 8(a) are in addition to any other liabilities of
the Company under this Agreement or otherwise.
(b) Each Underwriter agrees, severally and not jointly, to the extent
permitted by law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as shall have
signed the Registration Statement, each other Underwriter and each
person, if any, who controls the Company or any such other
Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, to the same extent and upon the same terms
as the indemnity agreement of the Company set forth in Section
8(a) hereof, but only with respect to alleged untrue statements or
omissions made in the Registration Statement, the Basic Prospectus
or in the Prospectus, as amended or supplemented, (if applicable)
in reliance upon and in conformity with information furnished in
writing to the Company by such Underwriter expressly for use
therein.
The indemnity agreement on the part of each Underwriter contained in
this Section 8(b) and the representations and warranties of such Underwriter
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or
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on behalf of the Company or any other person, and shall survive the delivery of
and payment for the Securities hereunder, and the indemnity agreement contained
in this Section 8(b) shall survive any termination of this Agreement. The
liabilities of each Underwriter in Section 8(b) are in addition to any other
liabilities of such Underwriter under this Agreement or otherwise.
(c) If a claim is made or an action, suit or proceeding (including
governmental investigations) is commenced or threatened against
any person as to which indemnity may be sought under Section 8(a)
or 8(b), such person (the "Indemnified Person") shall notify the
person against whom such indemnity may be sought (the
"Indemnifying Person") promptly after any assertion of such claim
threatening to institute an action, suit or proceeding or if such
an action, suit or proceeding is commenced against such
Indemnified Person, promptly after such Indemnified Person shall
have been served with a summons or other first legal process,
giving information as to the nature and basis of the claim.
Failure to so notify the Indemnifying Person shall not, however,
relieve the Indemnifying Person from any liability which it may
have on account of the indemnity under Section 8(a) or 8(b) if the
Indemnifying Person has not been prejudiced in any material
respect by such failure. Subject to the immediately succeeding
sentence, the Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel
and the payment of all expenses, with such counsel being
designated, subject to the immediately succeeding sentence, in
writing by the Representatives in the case of parties indemnified
pursuant to Section 8(b) and by the Company in the case of parties
indemnified pursuant to Section 8(a). Any Indemnified Person shall
have the right to participate in such litigation or proceeding and
to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless
(i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include (x) the Indemnifying Person and
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(y) the Indemnified Person and, in the written opinion of counsel
to such Indemnified Person, representation of both parties by the
same counsel would be inappropriate due to actual or likely
conflicts of interest between them, in either of which cases the
reasonable fees and expenses of counsel (including disbursements)
for such Indemnified Person shall be reimbursed by the
Indemnifying Person to the Indemnified Person. If there is a
conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding
utilizing separate counsel whose fees and expenses have been
reimbursed by the Indemnifying Person and the Indemnified Persons,
or any of them, are found to be solely liable, such Indemnified
Persons shall repay to the Indemnifying Person such fees and
expenses of such separate counsel as the Indemnifying Person shall
have reimbursed. It is understood that the Indemnifying Person
shall not, in connection with any litigation or proceeding or
related litigation or proceedings in the same jurisdiction as to
which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable
fees and out-of-pocket expenses of more than one separate firm
(together with not more than one appropriate local counsel) for
all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the
Indemnified Persons of such reasonable fees and expenses of
counsel promptly after payment thereof by the Indemnified Persons.
In furtherance of the requirement above that fees and expenses of
any separate counsel for the Indemnified Persons shall be
reasonable, the Representatives and the Company agree that the
Indemnifying Person's obligations to pay such fees and expenses
shall be conditioned upon the following:
(2) in case separate counsel is proposed to be retained by the
Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully
consult with the Indemnifying Person in advance as to the
selection of such counsel;
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(3) reimbursable fees and expenses of such separate counsel
shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein
shall be deemed to require the furnishing to the
Indemnifying Person of any information, including without
limitation, computer print-outs of lawyers' daily time
entries, to the extent that, in the judgment of such
counsel, furnishing such information might reasonably be
expected to result in a waiver of any attorney-client
privilege); and
(4) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate
counsel for Indemnified Persons for which the Indemnifying
Person is liable hereunder, and the Indemnified Person shall
use every reasonable effort to cause such separate counsel
to minimize the duplication of activities as between
themselves and counsel to the Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in Section 8 above
is unavailable to or insufficient to hold harmless an Indemnified Person under
such Section in respect of any losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in respect
thereof) referred to therein, then each Indemnifying Person under Section 8
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
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benefits received by the Indemnifying Person on the one hand and the Indemnified
Person on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and commission received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 9. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental proceedings) in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action, suits or proceedings
(including governmental proceedings) or claim, provided that the provisions of
Section 8 have been complied with (in all material respects) in respect of any
separate counsel for such Indemnified Person. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any amount
greater than the excess of (i) the total price at which the Securities
underwritten by it and distributed to the public were offered to the public over
(ii) the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent
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misrepresentation. The Underwriters' obligations in this Section 9 to contribute
are several in proportion to their respective underwriting obligations and not
joint.
The agreement with respect to contribution contained in Section 9
hereof shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any Underwriter, and shall survive
delivery of and payment for the Securities hereunder and any termination of this
Agreement.
10. Substitution of Underwriters: If any Underwriter under this
agreement shall fail or refuse (otherwise than for some reason sufficient to
justify in accordance with the terms hereof, the termination of its obligations
hereunder) to purchase the Securities which it had agreed to purchase on the
Time of Purchase, the Representatives shall immediately notify the Company and
the Representatives and the other Underwriters may, within 36 hours of the
giving of such notice, determine to purchase, or to procure one or more other
members of the National Association of Securities Dealers, Inc. ("NASD") (or, if
not members of the NASD, who are foreign banks, dealers or institutions not
registered under the Exchange Act and who agree in making sales to comply with
the NASD's Rules of Fair Practice), satisfactory to the Company, to purchase,
upon the terms herein set forth, the principal amount of Securities which the
defaulting Underwriter had agreed to purchase. If any non-defaulting Underwriter
or Underwriters shall determine to exercise such right, the Representatives
shall give written notice to the Company of such determination within 36 hours
after the Company shall have received notice of any such default, and thereupon
the Time of Purchase shall be postponed for such period, not exceeding three
business days, as the Company shall determine. If in the event of such a
default, the Representatives shall fail to give such notice, or shall within
such 36-hour period give written notice to the Company that no other Underwriter
or Underwriters, or others, will exercise such right, then this Agreement may be
terminated by the Company, upon like notice given to the Representatives within
a further period of 36 hours. If in such case the Company shall not elect to
terminate this Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase and pay
for the respective principal amounts of Securities which they had
severally agreed to purchase hereunder, as herein above provided,
and, in addition, the principal amount of Securities which the
defaulting Underwriter shall have so failed to purchase up to a
principal amount thereof equal to one-ninth (1/9) of the
respective principal amounts
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of Securities which such non-defaulting Underwriters have
otherwise agreed to purchase hereunder; and/or
(b) to procure one or more other members of the NASD (or, if not
members of the NASD, who are foreign banks, dealers or
institutions not registered under the Exchange Act and who agree
in making sales to comply with the NASD's Rules of Fair Practice),
to purchase, upon the terms herein set forth, the principal amount
of Securities which such defaulting Underwriter had agreed to
purchase, or that portion thereof which the remaining Underwriters
shall not be obligated to purchase pursuant to the foregoing
clause (a).
In the event the Company shall exercise its rights under clause (a)
and/or (b) above, the Company shall give written notice thereof to the
Representatives within such further period of 36 hours, and thereupon the Time
of Purchase shall be postponed for such period, not exceeding five business
days, as the Company shall determine. In the event the Company shall be entitled
to but shall not elect to exercise its rights under clause (a) and/or (b), the
Company shall be deemed to have elected to terminate this Agreement.
Any action taken by the Company under this Section 10 shall not relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement. Termination by the Company under this Section
10 shall be without any liability on the part of the Company or any
non-defaulting Underwriter.
In the computation of any period of 36 hours referred to in this
Section 10, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday which would otherwise be included in such
period of time.
11. Termination of Agreement: This Agreement may be terminated at any
time prior to the Time of Purchase by the Representatives, if, prior to such
time (i) trading generally in securities on the New York Stock Exchange shall
have been suspended by the Commission or the New York Stock Exchange, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or over-the-counter market, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by federal or New York
State authorities or (iv) there shall have occurred any outbreak or material
escalation of hostilities or any material adverse
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disruption in financial markets or any other calamity or crisis, the effect of
which on the financial markets of the United States is such as to impair, in the
Representatives' reasonable judgment, after having made due inquiry, the
marketability of the Securities.
If the Representatives elect to terminate this Agreement, as provided
in this Section 11, the Representatives will promptly notify the Company and
each other Underwriter by telephone or telecopy, confirmed by letter. If this
Agreement shall not be carried out by any Underwriter for any reason permitted
hereunder, or if the sale of the Securities to the Underwriters as herein
contemplated shall not be carried out because the Company is not able to comply
with the terms hereof, the Company shall not be under any obligation under this
Agreement and shall not be liable to any Underwriter or to any member of any
selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement and the Underwriters shall be under no liability
to the Company nor be under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5(g), 5(i), 8
and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following addresses
or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and, if to the Company, to
Consumers Energy Company, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, 00000,
Attention: Senior Vice President and Chief Financial Officer (Telecopy:
517-788-0351).
13. Parties in Interest: The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company (including the
directors thereof and such of the officers thereof as shall have signed the
Registration Statement), and the controlling persons, if any, referred to in
Section 8 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 10
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
14. Definition of Certain Terms: The term "Underwriters," as used
herein, shall be deemed to mean the several persons, firms or corporations,
named in Schedule II hereto (including the Representatives herein mentioned, if
so named), and the term "Representatives," as used herein, shall be deemed to
mean the representative or representatives designated by, or in the manner
authorized by, the Underwriters in Schedule I
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hereto. All obligations of the Underwriters hereunder are several and not joint.
If there shall be only one person, firm or corporation named in Schedule I and
Schedule II hereto, the term "Underwriters" and the term "Representatives," as
used herein, shall mean such person, firm or corporation. If the firm or firms
listed in Schedule I hereto are the same as the firm or firms listed in Schedule
II hereto, then the terms "Underwriters" and "Representatives," as used herein,
shall each be deemed to refer to such firm or firms. The term "successors" as
used in this Agreement shall not include any purchaser, as such purchaser, of
any of the Securities from any of the respective Underwriters.
15. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between each of the Underwriters and the Company.
Very truly yours,
CONSUMERS ENERGY COMPANY
By:
---------------------------
Name:
Title:
Confirmed and accepted as
of the date first written above:
By:
By:
-----------------------
Name:
Title:
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Schedule I: Representatives
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Schedule II: Underwriters
Senior Notes Due
Principal Amount
of Securities
Underwriters to be Purchased
------------ ---------------
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Schedule III
Information Regarding the Securities
Senior Notes Due
1. Aggregate Principal Amount:
2. Maturity Date:
3. Interest Rate:
4. Price to be paid to the Company:
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