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EXHIBIT 1(a)
_____________________Shares
CMS ENERGY CORPORATION
Common Stock ($.01 par value)
______________________
Underwriting Agreement
_____________ __, 199_
To the Representatives named
in Schedule I hereto of the
Underwriters named in
Schedule II hereto
Dear Sirs:
CMS Energy Corporation, a Michigan corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined in Section 14
hereof) ________ shares of its Common Stock ($.01 par value) (the "Securities")
as indicated in Schedule II. The Underwriters have designated the
Representatives to execute this Agreement on their behalf and to act for them in
the manner provided in this Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), a registration statement on Form
S-3 (Registration No. ___________) including a prospectus relating to the
Securities, and such registration statement, has become effective under the Act.
The registration statement, at the time such registration statement, became
effective and as it may have been thereafter amended to the date of this
Agreement (including the documents then incorporated by reference therein) is
hereinafter referred to as the "Registration Statement." If the Company has
filed, or will file, an breviated registration statement to register additional
Securities pursuant to Rule 462(b) under the Act (the "Rule 462(b) Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462(b) 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
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amended, revised or supplemented prior to the date of this Agreement, or if
the Company shall have supplemented the Basic Prospectus by filing any documents
pursuant to Section 13 or 14 or 15 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the time the Registration Statement became
effective and prior to the date of this Agreement, which documents are deemed to
be incorporated in the Basic Prospectus, the term "Basic Prospectus" shall also
mean such prospectus as so amended, revised or supplemented. The Basic
Prospectus, as it shall be revised or supplemented to reflect the final terms of
the offering and sale of the Securities by a prospectus supplement relating to
the Securities, and in the form to be filed with, or transmitted for filing to,
the Commission pursuant to Rule 424 under the Act, is hereinafter referred to as
the "Prospectus." Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to include only amendments or supplements to the Registration
Statement or Prospectus, as the case may be, and documents incorporated by
reference therein after the date of this Agreement and prior to the termination
of the offering of the Securities by the Underwriters.
1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth, the
Company agrees to sell to the respective Underwriters, severally and not
jointly, and the respective Underwriters, severally and not jointly, agree to
purchase from the Company, at the purchase price of $ ________ a share (the
"Purchase Price"), the respective number of shares of Firm Securities set
opposite their names in Schedule II hereto.
The Company hereby agrees that, without the prior written consent of
_________________, the Company will not offer, sell, contract to sell or
otherwise dispose of any shares of common stock of the Company or any securities
convertible into or exercisable or exchangeable for common stock of the Company
other than the Securities for a period of ____ days after the date of this
Agreement, provided, that the Company may, in a manner generally consistent with
past practices regarding the numbers of shares issued by the Company from time
to time thereunder during such _____ day period, issue shares of CMS Energy
Common Stock and CMS Energy Class G Common Stock under its Stock Purchase Plan,
Performance Incentive Stock Plan, Employee Stock Ownership Plan and Employee
Savings and Incentive Plan.
The Company is advised by the Representatives that the Securities may
be offered by the Underwriters from time to time in one or more transactions
_____________________________________ on the New York Stock Exchange or on other
national securities exchanges on which the Company's Common Stock is traded, in
the over-the-counter market, through negotiated transactions or otherwise at
market prices prevailing at the time of the sale or at prices otherwise
negotiated.
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
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Xxxx LLP ("Xxxxxxx Xxxx"), 000 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 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 number of shares
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:
(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 ________________, counsel to the Underwriters.
(b) That, at the Time of Purchase, the Representatives shall be
furnished with the following opinions, dated the day of the Time of
Purchase:
(1) Opinion of Xxxxxxx X. XxxXxxxxx, Esq., counsel to the
Company, substantially to the effect set forth in Exhibit A to this
Agreement; and
(2) Opinion of ______________, counsel to the Underwriters,
substantially to the effect set forth in Exhibit B to this Agreement.
(c) That on the date of the Time of Purchase the Representatives
shall have received a letter from Xxxxxx Xxxxxxxx LLP in form and substance
satisfactory to the Representatives, dated as of such date, (i) confirming
that they are independent public accountants within the meaning of the Act
and the related rules and regulations adopted by the Commission, (ii)
stating that in their opinion the financial statements examined by
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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 the related rules and
regulations adopted by the Commission, and (iii) covering, as of a date not
more than four business days prior to the date of such letter, such other
matters as the Representatives reasonably request.
(d) That, between the date of the execution of this Agreement and
the Time of Purchase, no material and adverse change shall have occurred in
the business, properties or financial condition of the Company and its
subsidiaries (as defined in Rule 405 under the Act, and hereafter called
the "Subsidiaries"), taken as a whole, which, in the judgment of the
Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities (other than
changes referred to in or contemplated by the Registration Statement or
Prospectus).
(e) That, prior to the Time of Purchase, no stop order suspending
the effectiveness of the Registration Statement shall have been issued
under the Act by the Commission or proceedings therefor initiated or
threatened.
(f) That, at the Time of Purchase, the Company shall have
delivered to the Representatives a certificate of an executive officer of
the Company to the effect that, to the best of his knowledge, information
and belief there shall have been no material adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement or Prospectus (other than changes referred to in or contemplated
by the Registration Statement or Prospectus).
(g) That the Company shall have performed such of its obligations
under this Agreement as are to be performed at or before the Time of
Purchase by the terms hereof.
(h) That any additional documents or agreements reasonably
requested by the Representatives or their counsel to permit the
Underwriters to perform their obligations or permit their counsel to
deliver opinions hereunder shall have been provided to them.
(i) That between the date of the execution of this Agreement and
the day of the Time of Purchase there has been no downgrading of the
investment ratings of any of the Company's securities or of Consumers
Energy Company's first mortgage bonds by Standard & Poor's Ratings Group,
Xxxxx'x Investors Service, Inc. or Duff & Xxxxxx Credit Rating Co., and
neither the Company nor Consumers Energy Company shall have been placed on
"credit watch" or "credit review" with negative implications by any of such
statistical rating organizations if any of such occurrences shall, in the
reasonable judgment of the Representatives, after reasonable inquiries on
the part of the Representatives, impair the marketability of the
Securities.
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(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.
(k) That the Securities, at the Time of Purchase, shall have been
duly listed, subject to notice of issuance, on the New York Stock Exchange.
(l) That, prior to the Time of Purchase, the Company shall file a
Rule 462(b) Registration Statement and that such Rule 462(b) Registration
Statement shall have become effective under the Act.
4. Conditions of the Company's Obligations: The obligations of the
Company hereunder are subject to the satisfaction of the condition set forth in
Section 3(e).
5. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To use its best efforts to cause any post-effective amendments
to the Registration Statement to become effective as promptly as possible.
During the time when a Prospectus is required to be delivered under the
Act, the Company will comply so far as it is able with all requirements
imposed upon it by the Act and the rules and regulations of the Commission
to the extent necessary to permit the continuance of sales of or dealings
in the Securities in accordance with the provisions hereof and of the
Prospectus.
(b) To deliver to each of the Representatives a conformed copy of
the Registration Statement and any amendments thereto (including all
exhibits thereto) and full and complete sets of all comments of the
Commission or its staff and all responses thereto with respect to the
Registration Statement and any amendments thereto and to furnish to the
Representatives, for each of the Underwriters, conformed copies of the
Registration Statement and any amendments thereto without exhibits.
(c) As soon as the Company is advised thereof, the Company will
advise the Representatives and confirm the advice in writing of: (i) the
effectiveness of any amendment to the Registration Statement, (ii) any
request made by the Commission for amendments to the Registration Statement
or Prospectus or for additional information with respect thereto, (iii) the
suspension of qualification of the Securities for sale under Blue Sky or
state securities laws, and (iv) the entry of a stop order suspending the
effectiveness of the Registration Statement or of the initiation or threat
or any proceedings for that purpose and, if such a stop order should be
entered by the Commission, to make every reasonable effort to obtain the
lifting or removal thereof.
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(d) To deliver to the Underwriters, without charge, as soon as
practicable, and from time to time during such period of time (not
exceeding nine months) after the date of the Prospectus as they are
required by law to deliver a prospectus, as many copies of the Prospectus
(as supplemented or amended if the Company shall have made any supplements
or amendments thereto) as the Representatives may reasonably request; and
in case any Underwriter is required to deliver a prospectus after the
expiration of nine months after the date of the Prospectus, to furnish to
the Representatives, upon request, at the expense of such Underwriter, a
reasonable quantity of a supplemental prospectus or of supplements to the
Prospectus complying with Section 10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months) after the
date of the Prospectus as the Underwriters are required by law to deliver a
prospectus in respect of the Securities, if any event shall have occurred
as a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if it
becomes necessary to amend or supplement the Prospectus to comply with law,
to forthwith prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus and deliver to the Underwriters, without
charge, such number of copies thereof as may be reasonably requested.
(f) To make generally available to the Company's security holders,
as soon as practicable, an "earning statement" (which need not be audited
by independent public accountants) covering a twelve-month period
commencing after the effective date of the Registration Statement and
ending not later than 15 months thereafter, which shall comply in all
material respects with and satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
(g) To use its best efforts to qualify the Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may designate and to pay (or cause to be paid), or
reimburse (or cause to be reimbursed) the Underwriters and their counsel
for, reasonable filing fees and expenses in connection therewith (including
the reasonable fees and disbursements of counsel to the Underwriters and
filing fees and expenses paid and incurred prior to the date hereof),
provided, however, that the Company shall not be required to qualify to do
business as a foreign corporation or as a securities dealer or to file a
general consent to service of process or to file annual reports or to
comply with any other requirements deemed by the Company to be unduly
burdensome.
(h) To pay all expenses, fees and taxes (other than transfer taxes
on sales by the respective Underwriters) in connection with the issuance
and delivery of the Securities, except that the Company shall be required
to pay the fees and disbursements (other than disbursements referred to in
paragraph (g) of this Section 5) of Xxxxxxx Xxxx, counsel to the
Underwriters, only in the events provided in paragraph (i) of this Section
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the Underwriters hereby agreeing to pay such fees and disbursements in any
other event, and that except as provided in Section (i), the Company shall
not be responsible for any out-of-pocket expenses of the Underwriters in
connection with their services hereunder.
(i) If the Underwriters shall not take up and pay for the
Securities due to the failure of the Company to comply with any of the
conditions specified in Section 3 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 11 hereof prior to
the Time of Purchase, to pay the reasonable fees and disbursements of
Xxxxxxx Xxxx, counsel to the Underwriters, and, if the Underwriters shall
not take up and pay for the Securities due to the failure of the Company to
comply with any of the conditions specified in Section 3 hereof, to
reimburse the Underwriters for their reasonable out-of-pocket expenses, in
an aggregate amount not exceeding a total of $3,000, incurred in connection
with the financing contemplated by this Agreement.
(j) Prior to the termination of the offering of the Securities, to
not file any amendment to the Registration Statement or supplement to the
Prospectus (including the Basic Prospectus) unless the Company has
furnished the Representatives and counsel to the Underwriters with a copy
for their review and comment a reasonable time prior to filing and has
reasonably considered any comments of the Representatives, or any such
amendment or supplement to which such counsel shall reasonably object on
legal grounds in writing, after consultation with the Representatives.
(k) To furnish the Representatives with copies of all documents
required to be filed with the Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act subsequent to the time the Registration Statement
becomes effective and prior to the termination of the offering of the
Securities.
(l) So long as may be required by law for 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 with the Commission of its reports pursuant to Section 13 of the
Exchange Act and of its proxy statements pursuant to Section 14 of the
Exchange Act.
6. Representations and Warranties of the Company: The Company represents
and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statement has become effective under the Act;
a true and correct copy of the Registration Statement in the form in which
it became effective has been delivered to each of the Representatives and
to the Representatives for each of the Underwriters (except that copies
delivered for the Underwriters excluded exhibits to such Registration
Statement); any filing of the Prospectus and any supplements thereto
required pursuant to Rule 424(b) has been or will be made in the manner
required by Rule
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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 initial
effective date of the Registration Statement, the Registration Statement
and the Basic Prospectus complied, or were deemed to have complied, on the
effective date of the Rule 462(b) Registration Statement, the Rule 462(b)
Registration Statement will comply, 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 and the related rules and regulations of
the Commission, none of the Registration Statement on its effective date,
the Basic Prospectus or 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 light of the circumstances under which they
were made, not misleading, except that the Company makes no warranty or
representation to any Underwriter with respect to any statements or
omissions made therein in reliance upon and in conformity with information
furnished in writing to the Company by, or through the Representatives on
behalf of, any Underwriter expressly for use therein.
(b) The documents incorporated by reference in the Registration
Statement, any preliminary prospectus, the Basic 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
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Prospectus and to consummate the transactions contemplated hereby, and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its Subsidiaries taken as a whole. Each significant subsidiary (as
defined in Rule 405 under the Act, and hereinafter called a "Significant
Subsidiary") of the Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has all requisite authority to own or lease its properties
and conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Subsidiaries, taken
as a whole.
(d) The shares of Common Stock of the Company outstanding prior to
the issuance of the Securities have been duly authorized and are validly
issued, full paid and non-assessable.
(e) The Securities have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of such Securities
will not be subject to any preemptive or similar rights.
(f) The capital stock of the Company conforms in all material respects
to the description thereof in the Prospectus.
(g) Except for the outstanding shares of preferred stock of Consumers
Energy Company, the 8.36% Trust Originated Preferred Securities of
Consumers Power Company Financing I, the 8.20% Trust Originated Preferred
Securities of Consumers Energy Financing II, all of the outstanding capital
stock of each of Consumers Energy Company and CMS Enterprises Company is
owned directly or indirectly by the Company, free and clear of any security
interest, claim, lien, or other encumbrance or preemptive rights, and (ii)
there are no outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in
any of Consumers Energy Company and CMS Enterprises Company or any
contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any such capital stock, any such convertible or
exchangeable securities or any such rights, warrants or options.
(h) Each of the Company and its Significant Subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates and
permits of and from, and has
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made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file would
not have a material adverse effect on the Company and its Subsidiaries,
taken as a whole.
(i) No order, license, consent, authorization or approval of, or
exemption by, or the giving of notice to, or the registration with any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, and no filing, recording,
publication or registration in any public office or any other place, was or
is now required to be obtained by the Company to authorize its execution or
delivery of, or the performance of its obligations under, this Agreement or
the Securities, except such as have been obtained or may be required under
state securities or Blue Sky laws or as referred to in the Basic
Prospectus.
(j) Neither the execution or delivery by the Company of, nor the
performance by the Company of its obligations under, this Agreement did or
will conflict with, result in a breach of any 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 of 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 or any Subsidiary by any governmental authority that (i)
questions the validity, enforceability or performance of this Agreement or
the Securities or (ii) if determined adversely, is likely to have a
material adverse effect on the business or financial condition of the
Company and the Subsidiaries, taken as a whole, or material adversely
affect the ability of the Company to perform its obligations hereunder 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 and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement (other than changes referred to in or contemplated by the
Registration Statement or the Basic Prospectus).
(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 or any of its Significant
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Subsidiaries in any material respect under any indenture, mortgage, loan
agreement, lease or other material agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which it or
any of its Significant Subsidiaries, or any of their respective properties,
may be bound.
7. Representation and Warranties of Underwriters: Each Underwriter
warrants and represents that the information, if any, furnished in writing to
the Company through the Representatives expressly for use in the Registration
Statement and Prospectus is correct in all material respects to such
Underwriter. Each Underwriter, in addition to other information furnished to the
Company for use in the Registration Statement and Prospectus, herewith furnishes
to the Company for use in the Registration Statement and Prospectus, the
information stated herein with regard to the public offering, if any, by such
Underwriter and represents and warrants that such information is correct in all
material respects as to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each of the Underwriters and each person, if
any, who controls any such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject under the Act or otherwise, and to reimburse the
Underwriters and such controlling person or persons, if any, for any legal
or other expenses incurred by them in connection with defending any action,
suit or proceeding (including governmental investigations) as provided in
Section 8(c) hereof, insofar as such losses, claims, damages, liabilities
or actions, suits or proceedings (including governmental investigations)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus as of its issue date (if used prior to the date of
the Basic Prospectus), the Basic Prospectus (if used prior to the date of
the Prospectus), the Prospectus, or, if the Prospectus shall be amended or
supplemented, in the Prospectus as so amended or supplemented (if such
Prospectus or such Prospectus as amended or supplemented is used after the
period of time referred to in Section 5(e) hereof, it shall contain or be
used with such amendments or supplements as the Company deems necessary to
comply with Section 10(a) of the Act), or arise out of or are based upon
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
actions arise out of or are based upon any such untrue statement or alleged
untrue statement or omission or alleged omission which was made in such
preliminary Prospectus, Basic Prospectus, Registration Statement or
Prospectus, or in the Prospectus as so amended or supplemented, in reliance
upon and in conformity with information furnished in writing to the Company
by, or through the Representatives on behalf of, any Underwriter expressly
for use therein, and except that this indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of
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any losses, claims, damages, liabilities or actions, suits or proceedings
arising from the sale of the Securities to any person if a copy of the
Prospectus, as the same may then be supplemented or amended (excluding,
however, any document then incorporated or deemed incorporated therein by
reference), was not sent or given by or on behalf of such Underwriter to
such person (i) with or prior to the written confirmation of sale involved
or (ii) as soon as available after such written confirmation, relating to
an event occurring prior to the payment for and delivery to such person of
the Securities involved in such sale, and the omission or alleged omission
or untrue statement or alleged untrue statement was corrected in the
Prospectus as supplemented or amended at such time.
The Company's indemnity agreement contained in this Section 8(a), and
the covenants, representations and warranties of the Company contained in
this Agreement, shall remain in full force and effect regardless of any
investigation made by or on behalf of any person, and shall survive the
delivery of and payment for the Securities hereunder, and the indemnity
agreement contained in this Section 8 shall survive any termination of this
Agreement. The liabilities of the Company in this Section 8(a) are in
addition to any other liabilities of the Company under this Agreement or
otherwise.
(b) Each underwriter agrees, severally and not jointly, to the
extent permitted by law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as shall have signed the
Registration Statement, each other Underwriter and each person, if any, who
controls the Company or any such other Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
and upon the same terms as the indemnity agreement of the Company set forth
in Section 8(a) hereof, but only with respect to alleged untrue statements
or omissions made in the Registration Statement, the Basic Prospectus or in
the Prospectus, as amended or supplemented, (if applicable) in reliance
upon and in conformity with information furnished in writing to the Company
by such Underwriter expressly for use therein.
The indemnity agreement on the part of each Underwriter contained in
this Section 8(b) and the representations and warranties of such Underwriter
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any other person, and
shall survive the delivery of and payment for the Securities hereunder, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement. The liabilities of each Underwriter in Section 8(b) are in
addition to any other liabilities of such Underwriter under this Agreement or
otherwise.
(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
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Indemnified Person, promptly after such Indemnified Person shall have been
served with a summons or other first legal process, giving information as
to the nature and basis of the claim. Failure to so notify the Indemnifying
Person shall not, however, relieve the Indemnifying Person from any
liability which it may have on account of the indemnity under Section 8(a)
or 8(b) if the Indemnifying Person has not been prejudiced in any material
respect by such failure. Subject to the immediately succeeding sentence,
the Indemnifying Person shall assume the defense of any such litigation or
proceeding, including the employment of counsel and the payment of all
expenses, with such counsel being designated, subject to the immediately
succeeding sentence, in writing by the Representatives in the case of
parties indemnified pursuant to Section 8(b) and by the Company in the case
of parties indemnified pursuant to Section 8(a). Any Indemnified Person
shall have the right to participate in such litigation or proceeding and to
retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person and
(y) the Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and expenses of
counsel (including disbursements) for such Indemnified Person shall be
reimbursed by the Indemnifying Person to the Indemnified Person. If there
is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing
separate counsel whose fees and expenses have been reimbursed by the
Indemnifying Person and the Indemnified Persons, or any of them, are found
to be solely liable, such Indemnified Persons shall repay to the
Indemnifying Person such fees and expenses of such separate counsel as the
Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same jurisdiction as
to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses of more than one separate firm (together with not
more than one appropriate local counsel) for all such Indemnified Persons.
Subject to the next paragraph, all such fees and expenses shall be
reimbursed by payment to the Indemnified Persons of such reasonable fees
and expenses of counsel promptly after payment thereof by the Indemnified
Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel of the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's obligations
to pay such fees and expenses shall be conditioned upon the following:
(1) in case separate counsel is proposed to be retained by the
Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified
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Persons shall in good faith fully consult with the Indemnifying Person
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 Person (but nothing herein shall be deemed to require
the furnishing to the Indemnifying Person of any information,
including without limitation, computer print-outs of lawyers' daily
time entries, to the extent that, in the judgment of such counsel,
furnishing such information might reasonably be expected to result in
a waiver of any attorney-client privilege); and
(3) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate counsel
for Indemnified Persons for which the Indemnifying Person is liable
hereunder, and the Indemnified Person shall use every reasonable
effort to cause such separate counsel to minimize the duplication of
activities as between themselves and counsel to the Indemnifying
Person.
The Indemnifying Person shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees, subject to the
provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in Section 8 above
is unavailable to or insufficient to hold harmless an Indemnified Person under
such Section in respect of any losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in respect
thereof) referred to therein, then each Indemnifying Person under Section 8
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Person on the one hand and the Indemnified Person
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
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losses, claims, damages or liabilities (or action, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting discounts
and commission received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this Section 9. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental proceedings) in respect
thereof) referred to above in this Section 9 shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action, suits or proceedings
(including governmental proceedings) or claim, provided that the provisions of
Section 8 have been complied with (in all material respects) in respect of any
separate counsel for such Indemnified Person. Notwithstanding the provisions of
this Section 9, no Underwriter shall be required to contribute any amount
greater than the excess of (i) the total price at which the Securities
underwritten by it and distributed to the public were offered to the public over
(ii) the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this Section 9 to contribute are several in
proportion to their respective underwriting obligations and not joint.
The agreement with respect to contribution contained in Section 9
hereof shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any Underwriter, and shall survive
delivery of and payment for the Securities hereunder and any termination of this
Agreement.
10. Substitution of Underwriters: If any Underwriter under this agreement
shall fail or refuse (otherwise than for some reason sufficient to justify in
accordance with the terms hereof, the termination of its obligations hereunder)
to purchase the Securities which it had agreed to purchase on the Time of
Purchase, the Representatives shall immediately notify the Company and the
Representatives and the other Underwriters may, within 36 hours of the giving of
such notice, determine to purchase, or to procure one or more other members of
the National Association of Securities Dealers, Inc. ("NASD") (or, if not
members of the NASD, who are
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foreign banks, dealers or institutions not registered under the Securities
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 number of shares 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 number of shares which they had severally agreed to
purchase hereunder, as hereinabove provided, and, in addition, the number
of shares of Securities which the defaulting Underwriter shall have so
failed to purchase up to a number of shares thereof equal to one-ninth
(1/9) of the respective number of shares 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 number of shares 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 Underwriting.
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In the computation of any period of 36 hours referred to in this
Section 10, there shall be excluded a period of 24 hours in respect of each
Saturday, Sunday or legal holiday which would otherwise be included in such
period of time.
11. Termination of Agreement: This Agreement may be terminated at any time
prior to the Time of Purchase by the Representatives, if, prior to such time (i)
trading generally in securities on the New York Stock Exchange shall have been
suspended by the Commission or the New York Stock Exchange, (ii) trading of any
securities of the Company shall have been suspended on any exchange or
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by federal or New York State
authorities or (iv) there shall have occurred any outbreak or material
escalation of hostilities or any material adverse disruption in financial
markets or any other calamity or crisis, the effect of which on the financial
markets of the United States is such as to impair, in the Representatives'
reasonable judgment, after having made due inquiry, the marketability of the
Securities.
If the Representatives elect to terminate this Agreement, as provided
in this Section 11, the Representatives will promptly notify the Company and
each other Underwriter by telephone or telecopy, confirmed by letter. If this
Agreement shall not be carried out by any Underwriter for any reason permitted
hereunder, or if the sale of the Securities to the Underwriters as herein
contemplated shall not be carried out because the Company is not able to comply
with the terms hereof, the Company shall not be under any obligation under this
Agreement and shall not be liable to any Underwriter or to any member of any
selling group for the loss of anticipated profits from the transactions
contemplated by this Agreement and the Underwriters shall be under no liability
to the Company nor be under any liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5(g), 5(i),
8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following addresses
or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and if the to the Company, to CMS
Energy Corporation, Attention: Senior Vice President and Chief Financial
Xxxxxxx, Xxxxxxxx Xxxxx Xxxxx, Xxxxx 0000, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000 (Telecopy: 313-436-9548).
13. Parties in Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company (including the
directors thereof and such of the officers thereof as shall have signed the
Registration Statement), and the controlling persons, if any, referred to in
Section 8 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 10
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
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14. Definition of Certain Terms: The term "Underwriters," as used
herein, shall be deemed to mean the several persons, firms or corporations named
in Schedule II hereto (including the Representatives herein mentioned, if so
named), and the term "Representatives," as used herein, shall be deemed to mean
the representative or representatives designated by, or in the manner authorized
by, the Underwriters in Schedule I hereto. All obligations of the 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,
CMS ENERGY CORPORATION
By:__________________________________________
Accepted as of: _____________ ___, 199_
By:_____________________________
Name:
Title:
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Schedule I
__________________________
Attn:
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Schedule II
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
___________________................................... ______________
Total............................. ______________
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