Exhibit (1)
CMS ENERGY TRUST I
7 % Convertible Quarterly Income Preferred Securities
(Convertible QUIPS (SM)*)
(liquidation amount $50 per preferred security)
fully and unconditionally guaranteed by,
and convertible into, common stock, $.01 par value, of
CMS ENERGY CORPORATION
________________________________
Placement Agreement
June 18, 1997
Franklin Income Fund
Franklin Utilities Fund
Franklin Valuemark Utility Equity Fund
Franklin Valuemark Income Securities Fund
Franklin Global Utilities Fund
Franklin Equity Income Fund
Franklin AGE High Income Fund
Franklin Multi-Income Trust
Franklin Universal Trust
Franklin Convertible Securities Fund
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxxxxx, Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated,
Xxxxxx Xxxxxxx & Co. Incorporated,
As Representatives of the several Agents named in Schedule II hereto
c/x Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
CMS Energy Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), and CMS Energy Corporation, a
Michigan corporation, as sponsor of the Trust and as guarantor
___________________________
*QUIPS is a servicemark of Xxxxxxx, Xxxxx & Co.
(the "Company"), propose that the Trust, subject to the terms and
conditions stated herein, issue and sell to the firms named in Schedule I
hereto (the "Purchasers") an aggregate of 3,450,000 of 7 % Convertible
Quarterly Income Preferred Securities (liquidation amount $50 per
preferred security)(the "Securities"), representing undivided beneficial
interests in the assets of the Trust, guaranteed on a subordinated basis
by the Company as to the payment of distributions, and as to payments on
liquidation or redemption, to the extent set forth in a guarantee
agreement (the "Guarantee") between the Company and The Bank of New York,
as trustee (the "Guarantee Trustee") and convertible into common stock,
$.01 par value per share ("Common Stock"), of the Company. The firms
named in Schedule II hereto (the "Agents") are acting, severally and not
jointly, as placement agents in connection with the public offering
contemplated by this Agreement, and each Agent shall be responsible for
placing that number of Securities set forth opposite the name of such
Agent in such Schedule. The firms designated as representatives of the
Agents are referred to collectively as the "Representatives." The Trust is
to purchase, with the proceeds from the sale of its Common Securities
(liquidation amount $50 per common security) (the "Common Securities") and
the sale of the Securities, 7 % Convertible Subordinated Debentures due
July 15, 2027 (the "Debentures") of the Company, to be issued pursuant to
a Subordinated Debt Indenture (the "Indenture") between the Company and
The Bank of New York, as trustee (the "Debenture Trustee").
The Company will be the holder of 100% of the Common Securities. The
Trust will be subject to the terms of an Amended and Restated Trust
Agreement (the "Trust Agreement"), among the Company and the trustees of
the Trust (the "CMS Trustees"), including The Bank of New York, as
property trustee (the "Property Trustee").
1. Each of the Trust and the Company represents and warrants to,
and agrees with, each of the Agents and each of the Purchasers that:
(a) A registration statement on Form S-3 (Registration
No. 333-27849) (the "Initial Registration Statement") in respect
of the Securities, the Debentures, the Guarantee and the Common
Stock issuable upon the conversion or exchange of the Securities
and/or Debentures has been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statement
and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives
and, excluding exhibits to such registration statement, but
including all documents incorporated by reference in the
prospectus included therein, to the Representatives for each of
the other Agents have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"),
filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been
filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act each in the form
heretofore delivered to the Representatives); no stop order
suspending the effectiveness of the Initial Registration Statement
is in effect and no proceedings for such purposes are pending
before or, to the knowledge of the Company, threatened by the
Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to
Rule 424(a) under the Act, is hereinafter called a "Preliminary
Prospectus"); the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the registration statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as
amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Securities, the
Debentures, the Guarantee and the Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures, in
the form in which it has most recently been filed, or transmitted
for filing, with the Commission on or prior to the date of this
Agreement, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act,
as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the
Prospectus as amended or supplemented shall be deemed to refer to
the Prospectus as amended or supplemented in relation to the
Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
4(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Agent
or through the Representatives on behalf of any Agent expressly
for use in the Prospectus as amended or supplemented relating to
such Securities or to any statements in or omissions from that
part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust
Indenture Act (as defined herein) of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee;
(c) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed
(or, if an amendment with respect to any such document was filed,
when such amendment was filed) with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated
thereunder, and any further documents so filed and incorporated by
reference will, when they are filed with the Commission, conform
in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission promulgated
thereunder; none of such documents, when filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and
no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made,
not misleading;
(d) There has not been any material and adverse change in
the business, properties or financial condition of the Company and
its Subsidiaries (as defined in Rule 405 under the Act, and
hereinafter called the "Subsidiaries"), taken as a whole, from
that set forth in the Registration Statement (other than changes
referred to in or contemplated by the Registration Statement or
the Prospectus);
(e) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Michigan and has all requisite authority to own or lease
its properties and conduct its business as described in the
Prospectus and to consummate the transactions contemplated hereby,
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business as
described in the Prospectus or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
Subsidiaries, taken as a whole; each significant subsidiary (as
defined in Rule 405 under the Act, and hereinafter called a
"Significant Subsidiary") of the Company has been duly organized
and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has all
requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business as described in the Prospectus
or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole; and
the Company has the requisite power and authority to authorize the
offering of the Debentures, the Guarantee and the Common Stock
issuable upon the conversion or exchange of the Securities and/or
the Debentures, to exercise, deliver and perform this Agreement,
and to issue, sell and deliver the Debentures, the Guarantee and
the Common Stock issuable upon the conversion or exchange of the
Securities and/or the Debentures;
(f) The shares of Common Stock of the Company issued and
outstanding prior to the issuance of the Securities have been duly
authorized and are validly issued, fully paid and non-assessable;
the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures have been duly
authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities
and/or the Indenture, will be validly issued, fully paid and
non-assessable; the issuance of the Common Stock upon the
conversion or exchange of the Securities and/or the Debentures
will not be subject to preemptive or other similar rights;
(g) The Securities have been duly and validly authorized
by the Trust, and, when the Securities are issued and delivered,
such Securities will be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust; the Securities will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of
the Securities is not subject to any preemptive or other similar
rights; the Securities will have the rights set forth in the Trust
Agreement, and the terms of the Securities are valid and binding
on the Trust;
(h) The Common Securities have been duly and validly
authorized by the Trust and upon delivery by the Trust to the
Company against payment therefor as described in the Prospectus,
will be duly and validly issued undivided beneficial interests in
the assets of the Trust and will conform in all material respects
to the description thereof contained in the Prospectus; the
issuance of the Common Securities is not subject to preemptive or
other similar rights; at the Time of Delivery (as defined in
Section 3 hereof), all of the issued and outstanding Common
Securities of the Trust will be directly owned by the Company free
and clear of any security interest, mortgage, pledge, claim, lien
or encumbrance (each, a "Lien"); and the Common Securities and the
Securities are the only interests authorized to be issued by the
Trust;
(i) Except for the outstanding shares of preferred stock
of Consumers Power Company and the 8.36% Trust Originated
Preferred Securities of Consumers Power Company Financing I, all
of the outstanding capital stock of each of Consumers Energy
Company and CMS Enterprises Company is owned directly or
indirectly by the Company, free and clear of any Lien, and there
are no outstanding rights (including, without limitation,
preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock
or other equity interest in any of Consumers Energy Company and
CMS Enterprises Company or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance
of any such capital stock, any such convertible or exchangeable
securities or any such rights, warrants or options;
(j) The capital stock of the Company, including the
Common Stock, conforms in all material respects to the description
thereof in the Prospectus;
(k) Each of the Company and its Significant Subsidiaries
has all necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and
all courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Prospectus, except to the extent that the failure
to obtain or file would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole;
(l) No order, license, consent, authorization or approval
of, or exemption by, or the giving of notice to, or the
registration with any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, and no filing, recording, publication or
registration in any public office or any other place, was or is
now required to be obtained by the Company to authorize its
execution or delivery of, or the performance of its obligations
under, this Agreement, except such as have been obtained or may be
required under state securities or Blue Sky laws or as referred to
in the Prospectus in connection with the purchase and distribution
of the Securities, the Guarantee and the Debentures;
(m) The execution and delivery of this Agreement by the
Trust, the compliance by the Trust with all of the provisions of
this Agreement, the issuance and sale of the Securities and the
Common Securities by the Trust, the purchase of the Debentures by
the Trust, the distribution of the Debentures by the Trust in the
circumstances contemplated by the Trust Agreement, the performance
of this Agreement and the consummation of the transactions
contemplated by this Agreement and by the Trust Agreement did not
and will not conflict with, result in a breach of any of the terms
or provisions of, or constitute a default or require the consent
of any party under the Trust Agreement, any material terms or
provisions of any material agreement or instrument to which the
Trust is a party, any existing material applicable law, rule or
regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Trust or any of its properties or assets, or did or will
result in the creation or imposition of any Lien on the Company's
properties or assets;
(n) The execution and delivery of this Agreement by the
Company, the compliance by the Company with all of the provisions
of this Agreement, the issuance and sale of the Securities and the
Common Securities by the Trust, the sale of the Debentures by the
Company to the Trust, the issuance by the Company of the
Guarantee, the execution, delivery and performance by the Company
of the Guarantor Agreements (as defined below), the issuance by
the Company of the Common Stock upon the conversion or exchange of
the Securities and/or the Debentures, the distribution of the
Debentures by the Trust in the circumstances contemplated by the
Trust Agreement, the performance of this Agreement and the
consummation of the transactions contemplated by this Agreement
and the Guarantor Agreements did not and will not conflict with,
result in a breach of any of the terms or provisions of, or
constitute a default or require the consent of any party under the
Company's Articles of Incorporation or by-laws, any material terms
or provisions of any material agreement or instrument to which the
Company is a party, any existing material applicable law, rule or
regulation or any judgment, order or decree of any governmental
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its properties or assets, or did or
will result in the creation or imposition of any Lien on the
Company's properties or assets;
(o) Except as disclosed in the Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in
equity or otherwise) pending or, to the knowledge of the Company,
threatened against the Company or any Subsidiary by any
governmental authority that (i) questions the validity,
enforceability or performance of this Agreement or the Securities
or (ii) if determined adversely, is likely to have a material
adverse effect on the business or financial condition of the
Company and its Subsidiaries, taken as a whole, or materially
adversely affect the ability of the Company to perform its
obligations hereunder or the consummation of the transactions
contemplated by this Agreement;
(p) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture,
mortgage, loan agreement, lease or other material agreement or
instrument to which the Company or any of its Significant
Subsidiaries is a party or by which it or any of its Significant
Subsidiaries, or any of their respective properties, may be bound;
(q) Neither the Company, the Trust nor any of the
Subsidiaries is and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Trust is not required to be
registered under the Investment Company Act;
(r) The shares of Common Stock issuable upon the
conversion or exchange of the Securities and/or the Debentures
have been approved for listing on the New York Stock Exchange,
subject to notice of issuance;
(s) The Trust has been duly created and is validly
existing as a statutory business trust in good standing under the
Business Trust Act of the State of Delaware (the "Delaware
Business Trust Act") with the trust power and authority to own
property and conduct its business as described in the Prospectus,
and has conducted and will conduct no business other than the
transactions contemplated by this Agreement and described in the
Prospectus; the Trust is not a party to or bound by any agreement
or instrument other than this Agreement, the Trust Agreement
between the Company and the CMS Trustees named therein and the
agreements and instruments contemplated by the Trust Agreement and
described in the Prospectus; based on expected operations and
current law, the Trust is not and will not be classified as an
association taxable as a corporation for United States federal
income tax purposes; and, to the knowledge of each of the Company
and the Trust, the Trust is not a party to or subject to any
action, suit or proceeding of any nature;
(t) The Guarantee, the Debentures, the Trust Agreement
and the Indenture (collectively, the "Guarantor Agreements") have
each been duly authorized and when validly executed and delivered
by the Company and, in the case of the Guarantee, by the Guarantee
Trustee and, in the case of the Trust Agreement, by the
CMS Trustees and, in the case of the Indenture, by the Debenture
Trustee, and, in the case of the Debentures, when validly
authenticated and delivered by the Debenture Trustee and, in the
case of the Guarantee, upon due execution, authentication and
delivery of the Debentures and upon payment therefor, will
constitute valid and binding obligations of the Company,
enforceable in accordance with their respective terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity); the Debentures are entitled to the benefits of the
Indenture; the Indenture has been duly qualified under the Trust
Indenture Act of 1939 (the "Trust Indenture Act"); and
(u) Each of the Preferred Securities, Guarantee,
Debentures and the relationship among each of them will conform in
all material respects to the description thereof contained in the
Prospectus.
2. Subject to the terms and conditions herein set forth, the
Trust and the Company agree that the Trust shall issue and sell to each of
the Purchasers, and each of the Purchasers agrees, jointly and severally,
to purchase from the Trust, at a purchase price per share of $50 per
Security, the number of Securities set forth opposite the name of such
Purchaser in Schedule I hereto.
As compensation to the Agents for their acting, severally
and not jointly, as placement agents hereunder, and in view of the fact
that the proceeds of the sale of the Securities will be used by the Trust
to purchase the Debentures of the Company, the Company at the Time of
Delivery will pay to Xxxxxxx, Xxxxx & Co., for the accounts of the several
Agents, an amount equal to $0.75 per Security for the Securities to be
delivered by the Company hereunder at the Time of Delivery.
3. (a) The Securities to be purchased by each Purchaser shall
be delivered by or on behalf of the Trust to such Purchaser, through the
facilities of The Depository Trust Company ("DTC"), for the account of
such Purchaser, against payment by or on behalf of such Purchaser of the
purchase price therefor by certified or official bank check or checks,
payable to the order of the Trust in federal or other immediately
available funds. The Trust will cause the certificates representing the
Securities to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) at the
office of DTC or its designated custodian (the "Designated Office"). The
Securities to be purchased by each Purchaser hereunder will be represented
by one or more definitive global Securities in book-entry form which will
be deposited by or on behalf of the Trust with the DTC or its designated
custodian. The time and date of such delivery and payment shall be 9:30
a.m., New York City time, on June 20, 1997 or such other time and date as
Xxxxxxx, Xxxxx & Co., the Purchasers, the Trust and the Company may agree
upon in writing. Such time and date are herein called the "Time of
Delivery".
At the Time of Delivery, the Company will pay, or cause to
be paid, the commission
payable at the Time of Delivery to the Agents under Section 2 hereof in
immediately available funds.
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 6 hereof,
including the cross-receipt for the Securities, will be delivered at such
time and date at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at the
Time of Delivery. A meeting will be held at the Closing Location prior to
the Time of Delivery, at which meeting the final drafts of the documents
to be delivered pursuant to the preceding sentence will be available for
review by the parties hereto. For the purposes of this Section 3, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
4. The Trust and the Company, jointly and severally, agree with
each of the Agents and each of the Purchasers:
(a) To prepare the Prospectus as amended and supplemented
in relation to the Securities in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable,
such earlier time as may be required by Rule 424(b); prior to the Time of
Delivery, to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented unless the
Company has furnished the Representatives and counsel to the Agents with a
copy for their review and comment a reasonable time prior to filing and
has reasonably considered any comments of the Representatives, and to make
no such amendment or supplement to which such counsel shall reasonably
object on legal grounds in writing, after consultation with the
Representatives; to timely file all reports and any definitive proxy or
information statements required to be filed by the Trust or the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such
same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities, the
Debentures or the shares of Common Stock, if any, issuable upon the
conversion or exchange of the Securities and/or the Debentures for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from time
to time during the period of time (not exceeding nine months) after the
date of the Prospectus when a Prospectus is required to be delivered under
the Act to furnish the Agents in New York City with copies of the
Prospectus as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time after the expiration of nine months in
connection with the offering or sale of the Securities, the Debentures or
the shares of Common Stock, if any, issuable upon the conversion or
exchange of the Securities and/or the Debentures and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Act or the Exchange Act, to prepare and file such document and to furnish
without charge to each Agent as many copies as the Representatives may
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(c) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act;
(d) To make generally available to the Company's
securityholders, as soon as practicable but in any event not later than
eighteen months after the effective date of the Registration Statement, an
"earning statement" (which need not be audited by independent public
accountants) covering a twelve-month period commencing after the effective
date of the Registration Statement and ending not later than 15 months
thereafter, which shall comply in all material respects with the
provisions of Section 11(a) of the Act and Rule 158 under the Act);
(e) To use its best efforts to qualify the Securities,
the Debentures, the Guarantee and the shares of Common Stock issuable upon
conversion or exchange of the Securities and/or the Debentures for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representatives may designate, to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the
Securities, and to pay (or cause to be paid), or reimburse (or cause to be
reimbursed) the Agents and their counsel for, reasonable filing fees and
expenses in connection therewith (including the reasonable fees and
disbursements of counsel to the Agents and filing fees and expenses paid
and incurred prior to the date hereof), provided, however, that the
Company shall not be required to qualify to do business as a foreign
corporation or as a securities dealer or to file a general consent to
service of process or to file annual reports or to comply with any other
requirements deemed by the Company to be unduly burdensome;
(f) During the period beginning from the date hereof and
continuing for a period of 90 days after the issuance of the Securities,
not to offer, sell, contract to sell or otherwise dispose of (i) any
Securities or any preferred stock or any other securities of the Company
which are substantially similar to the Securities, including any guarantee
of such securities, or any securities convertible into or exchangeable for
or representing the right to receive any of the foregoing securities, or
(ii) any shares of any class of Common Stock of the Company, other than
shares of Common Stock issuable upon conversion of the Securities or
pursuant to the Company's Stock Purchase Plan, Performance Incentive Stock
Plan, Employee Stock Ownership Plan and Employee Savings and Incentive
Plan, without the prior written consent of the Representatives;
(g) To issue the Guarantee concurrently with the issuance
and sale of the Securities as contemplated herein;
(h) To use the net proceeds received by it from the sale
of the Securities in the case of the Trust, and the Debentures, in the
case of the Company, pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of
issuance, the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or, if the Securities are exchanged for
Debentures, Debentures on the New York Stock Exchange; and
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligation to issue shares of its Common Stock upon
the conversion or exchange of the Securities and/or the Debentures.
5. The Company covenants and agrees with the several Agents and
the several Purchasers that the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Trust's and the
Company's counsel and accountants in connection with the registration of
the Securities and the shares of Common Stock issuable upon conversion of
the Securities and/or the Debentures and all other expenses in connection
with the preparation, printing and filing of the Registration Statement,
any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to
the Agents and dealers and the Purchasers; (ii) the cost of any delivery
to the Agents and the Purchasers of any Blue Sky Memorandum; (iii) all
expenses in connection with the qualification of the Securities, the
Debentures and the shares of Common Stock issuable upon the conversion or
exchange of the Securities and/or the Debentures for offering and sale
under state securities laws as provided in Section 4(e) hereof, including
the fees and disbursements of counsel for the Agents in connection with
such qualification and in connection with the Blue Sky survey(s) up to an
aggregate amount not to exceed $5,000; (iv) any fees charged by securities
rating services for rating the Securities; (v) the cost of preparing the
certificates for the Securities and the Debentures; (vi) the fees and
expenses of the CMS Trustees, the Debenture Trustee and the Guarantee
Trustee and any other agent thereof and the fees and disbursements of
their counsel (it being understood that as among the Company and the Trust
and such trustees, such fees and expenses shall not exceed $5,000);
(vii) the cost and charges of any transfer agent or registrar or dividend
disbursing agent; and (viii) all other reasonable costs and expenses
incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section, and Section 8 hereof,
the Agents and the Purchasers will pay all of their own costs and
expenses, including, without limitation, the fees of their counsel.
6. The obligations of the Agents, in the discretion of the
Representatives, and the obligations of the Purchasers, shall be subject
to the condition that all representations and warranties and other
statements of the Trust and the Company herein are, at and as of the Time
of Delivery, true and correct, the condition that the Trust and the
Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to the Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 4(a) hereof; if the Company has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission
shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the Agents, shall have furnished to the Representatives such
written opinion or opinions (a draft of each such opinion is
attached as Xxxxx XX(a) hereto), dated the Time of Delivery, with
respect to the incorporation of the Company and the formation of
the Trust, insofar as the federal laws of the United States and
the laws of the State of New York or the General Corporation Law
of the State of Delaware or the Delaware Business Trust Act are
concerned, the validity of the Securities, the Debentures, the
Guarantee and the Prospectus, as well as such other related
matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Xxxxxxx X. Xxx Xxxxxx, Assistant General Counsel to
the Company, shall have furnished to the Representatives his
written opinion or opinions (a draft of each such opinion is
attached as Xxxxx XX(b) hereto), dated the Time of Delivery, in
form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company is a duly organized and validly
existing corporation in good standing under the laws of
Michigan, with power and authority (corporate and other)
to own its properties and conduct its business as
described in the Prospectus, as amended and supplemented;
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, as amended or
supplemented, and all of the issued shares of capital
stock of the Company (including the Securities) have been
duly and validly authorized and issued and are fully paid
and non-assessable; the Common Stock initially issuable
upon conversion of the Debentures has been duly authorized
and reserved for issuance by the Company upon such
conversion and, if and when issued upon conversion of the
Debentures in accordance with the terms of the Indenture,
such Common Stock will be validly issued, fully paid and
nonassessable; and no holder thereof will be subject to
personal liability solely by reason of being such a
holder; and the Common Stock will conform to the
description of the Common Stock contained in the
Prospectus in all material respects; and the issuance of
such Common Stock is not subject to any preemptive or
other similar rights;
(iii) To the best of such counsel's knowledge
and other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which
any property of the Company or any of its Subsidiaries is
the subject which, if determined adversely to the Company
or any of its Subsidiaries, would in the aggregate have a
material adverse effect on the current or future
consolidated financial position, securityholders' equity
or results of operations of the Company and its
Subsidiaries; and to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(iv) This Agreement has been duly authorized,
executed and delivered by the Company;
(v) To the best knowledge of such counsel, there
are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments or
sale or Liens related to or entitling any person to
purchase or otherwise to acquire any shares of the capital
stock of, or other ownership interest in, any Significant
Subsidiary;
(vi) The issuance and sale of the Securities
being delivered at the Time of Delivery, the compliance by
the Company with all the provisions of this Agreement and
the consummation of the transactions contemplated herein,
the issuance and sale of the Securities and the Common
Securities by the Trust, the sale of the Debentures by the
Company to the Trust, the issuance by the Company of the
Guarantee, the execution, delivery and performance by the
Company of the Guarantor Agreements, the issuance by the
Company of the Common Stock upon the conversion or
exchange of the Securities and/or the Debentures, the
distribution of the Debentures by the Trust in the
circumsstances contemplated by the Trust Agreement and the
performance of this Agreement and the consummation of the
transactions contemplated by this Agreement and the
Guarantor Agreements will not conflict with or result in a
breach or violation of any of the material terms or
provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to
which the Company or any of its Subsidiaries is a party or
by which the Company is bound or to which any of the
property or assets of the Company or any of its
Subsidiaries is subject (except for such breaches or
violations or defaults that would not have a material
adverse effect on the business, property or financial
condition of the Trust or of the Company and its
Subsidiaries, taken as a whole), nor will such action
result in any violation of the provisions of the Articles
of Incorporation or by-laws of the Company or any statute
or any currently existing order, rule or regulation known
to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
Subsidiaries or any of its properties (other than the
securities or Blue Sky laws of the various states, as to
which such counsel need express no opinion);
(vii) No consent, approval, authorization,
order, registration or qualification of or with any such
court or governmental agency or body is required for the
issuance and sale of the Securities or the consummation by
the Company of the transactions contemplated herein,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities
or Blue Sky laws (as to which such counsel need express no
opinion) in connection with the purchase and distribution
of the Securities;
(viii) Neither the Company nor any of its
Significant Subsidiaries is in violation of its respective
charters or bylaws or in default in the performance or
observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it or any of
its properties may be bound, except for such violations or
defaults the existence of which would not have a material
adverse effect on the Company and its Subsidiaries, taken
as a whole;
(ix) The statements made in the Prospectus under
the captions "Description of the Preferred Securities",
"Description of the Guarantee", "Description of the
Debentures", and "Relationship Among the Preferred
Securities, the Debenture and the Guarantee", insofar as
such statements constitute summaries of legal matters or
documents referred to therein, are accurate in all
material respects; the Securities, the Debentures, the
Guarantee, the Trust Agreement, the Indenture and the
Common Securities conform as to legal matters to the
description thereof and to the statements in regard
thereto contained in the Registration Statement and the
Prospectus;
(x) The Company is not an "investment company"
within the meaning of the Investment Company Act. The
Trust is not required to be registered under the
Investment Company Act;
(xi) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the
operating statistics, financial statements, notes,
auditors' reports and related schedules therein, and any
other financial or statistical data included or
incorporated by reference therein, as to which such
counsel need express no opinion), when they became
effective or were filed with the Commission, as the case
may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the
Commission thereunder; and they have no reason to believe
that any of such documents, when they became effective or
were so filed, as the case may be, contained, in the case
of a registration statement which became effective under
the Act, an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading,
or, in the case of other documents which were filed under
the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which
they were made when such documents were so filed, not
misleading;
(xii) The Registration Statement and the
Prospectus as amended or supplemented, and any further
amendments and supplements thereto made by the Company
prior to the Time of Delivery (other than the operating
statistics, financial statements, notes, auditors' reports
and related schedules and any other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no
opinion), comply as to form in all material respects with
the requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility
for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in
subsection (ix) of this Section 6(c), they have no reason
to believe that, as of its effective date, the
Registration Statement or any further amendment thereto
made by the Company prior to the Time of Delivery (other
than the operating statistics, financial statements,
notes, auditors' reports and related schedules and any
other financial or statistical data included or
incorporated by reference therein, as to which such
counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or
any further amendment or supplement thereto made by the
Company prior to the Time of Delivery (other than the
operating statistics, financial statements, notes,
auditors' reports and related schedules and any other
financial or statistical data included or incorporated by
reference therein, as to which such counsel need express
no opinion) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading or that, as of
the Time of Delivery, either the Registration Statement or
the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior
to the Time of Delivery (other than the operating
statistics, financial statements, notes, auditors' reports
and related schedules and any other financial or
statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; and they do not know of
any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to
be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed
or incorporated by reference or described as required;
(xiii) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except
to the extent that (a) enforcement thereof may be limited
by (i) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law) and (b) the waiver of
usury contained in Section 5.13 of the Base Indenture may
be unenforceable;
(xiv) The Debentures have been duly
authorized for issuance by the Company and, when
authenticated by the Debenture Trustee in accordance with
the terms of the Indenture, will be validly issued by the
Company and will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with
their terms, except to the extent that (a) enforcement
thereof may be limited by (i) bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other
similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) and (b) the waiver of
usury contained in Section 5.13 of the Base Indenture may
be unenforceable;
(xv) The Trust Agreement has been duly
authorized, executed and delivered by the Company, and
constitutes 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 (a) bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors'
rights generally and (b) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law);
(xvi) The Guarantee has been duly authorized,
executed and delivered by the Company, and constitutes a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except
to the extent that enforcement thereof may be limited by
(i) bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law) ; and
(xvii) To the best of such counsel's
knowledge, the Trust is not a party to or bound by any
agreement or instrument other than this Agreement, the
Trust Agreement and the agreements and instruments
contemplated by the Trust Agreement and described in the
Prospectus; and to the best of such counsel's knowledge,
there are no legal or governmental proceedings pending to
which the Trust is a party or of which any property of the
Trust is the subject and no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
The foregoing opinions may be limited to the laws of
Delaware, Michigan and the federal law of the United States. In giving
such opinion, such counsel may rely, as to matters of Delaware law, upon
the opinion of Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special Delaware
counsel to the Trust and the Company, in which case the opinion shall
state that such counsel believes that you and he are entitled to so rely.
(d) Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special tax
counsel to the Trust and the Company, shall have furnished to the
Representatives such opinion or opinions (a draft of each such
opinion is attached as Xxxxx XX(c) hereto), dated the Time of
Delivery, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Trust will be classified as a grantor
trust and not as an association taxable as a corporation;
and
(ii) The discussion set forth in the Prospectus
under the captions "Risk Factors -- Option to Extend
Interest Payment Period; Tax Consequences" and "--
Proposed Tax Legislation" and "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the
matters addressed therein, based upon the assumptions
stated or referred to therein.
(e) Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, special
Delaware counsel to the Trust and the Company, shall have
furnished to the Representatives, the Company and the Trust their
written opinion or opinions (a draft of each such opinion is
attached as Annex II(d) hereto), dated the Time of Delivery, in
form and substance satisfactory to the Representatives, to the
effect that:
(i) This Agreement has been duly authorized,
executed and delivered by the Trust;
(ii) The Trust has been duly created and is
validly existing in good standing as a business trust
under the Delaware Business Trust Act and has the business
trust power and authority to conduct its business as
described in the Registration Statement and the
Prospectus;
(iii) The Trust Agreement has been duly
authorized, executed and delivered by each of the Company
and the Trust, and constitutes a valid and binding
agreement of each of the Company and the Trust,
enforceable against the Company in accordance with its
terms, except as enforcement thereof may be limited by
(a) bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless
of whether enforcement is considered in a proceeding in
equity or at law);
(iv) Under the Delaware Business Trust Act and
the Trust Agreement, the Trust has the power and authority
to (a) execute and deliver, and to perform its obligations
pursuant to, this Agreement, and (b) issue and perform its
obligations under the Securities and Common Securities;
(v) The execution and delivery by the Trust of
this Agreement, and the performance by the Trust of its
obligations thereunder, have been duly authorized by all
necessary action on the part of the Trust;.
(vi) The Securities have been duly
authorized for issuance by the Trust and, when executed
and authenticated by the Property Trustee in accordance
with the terms of the Trust Agreement and delivered and
paid for in accordance with this Agreement, will be fully
paid and non-assessable undivided beneficial interests in
the assets of the Trust and will entitle the holders
thereof to the benefits of this Agreement except to the
extent that enforcement of the Trust Agreement may be
limited by (a) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless
of whether enforcement is considered in a proceeding in
equity or at law); and the holders of the Securities will
be entitled to the same limitation of personal liability
extended to stockholders of private corporations for
profit organized under the General Corporation Law of the
State of Delaware, except that the holders of Securities
may be obligated, pursuant to the Trust Agreement, to make
payments, including (i) to provide indemnity and/or
security in connection with and pay taxes or governmental
charges arising from transfers of the Securities and
(ii) to provide security and indemnity in connection with
requests of or directions to the Property Trustee to
exercise its rights and powers under the Trust Agreement;
the issuance of the Securities is not subject to
preemptive or other similar rights under the Delaware
Business Trust Act or the Trust Agreement;
(vii) The Common Securities have been duly
authorized for issuance by the Trust and, when executed
and authenticated by the Property Trustee in accordance
with the terms of the Trust Agreement and delivered and
paid in accordance with the Common Securities Purchase
Agreement, dated as of June 20, 1997, between the Company
and the Trust, will be validly issued, undivided
beneficial interests in the assets of the Trust; the
issuance of the Common Securities is not subject to
preemptive or other similar rights under the Delaware
Business Trust Act or the Trust Agreement;
(viii) None of the execution and delivery by
the Trust of, or the performance by the Trust of its
obligations under, this Agreement, or the issuance and
sale of the Securities by the Trust in accordance with the
terms of this Agreement or the consummation of the other
transactions contemplated hereby, will contravene any
provision of applicable law or the Trust Agreement or any
agreement or other instrument governed by the laws of the
State of Delaware binding upon the Trust as set forth in
the Trust's certificate, or any judgment, order or decree
applicable to the Trust as set forth in the Trust's
certificate, of any governmental authority; and
(ix) No governmental approval is required for
the issuance and sale of the Securities and the Common
Securities by the Trust pursuant to this Agreement or the
consummation of the other transactions contemplated
hereby, except such as have been obtained and made.
(f) On the date of the Prospectus and also at the Time of
Delivery, the independent accountants of the Company who have
certified the financial statements of the Company and its
consolidated Subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to the
Representatives a letter, dated as of such date, (i) confirming
that they are independent public accountants within the meaning of
the Act and the applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their opinion the
financial statements examined by them and included or incorporated
by reference in the Registration Statement complied as to form in
all material respects with the applicable accounting requirements
of the Commission, including applicable published rules and
regulations of the Commission, and (iii) covering, as of a date
not more than five business days prior to the date of such letter,
such other matters as the Representatives reasonably request;
(g) That, between the date of the execution of this
Agreement and the Time of Delivery, no material and adverse change
shall have occurred in the business, properties or financial
condition of the Company and its Subsidiaries, taken as a whole,
which, in the judgment of the Representatives, impairs the
marketability of the Securities (other than changes referred to in
or contemplated by the Registration Statement or Prospectus);
(h) That, between the date of the execution of this
Agreement and the Time of Delivery, there has been no downgrading
of the investment ratings of the Company's debt securities or
preferred stock by Standard & Poor's Corporation, Xxxxx'x
Investors Service, Inc. or Duff & Xxxxxx Credit Rating Co., and
the Company shall not have been placed on "credit watch" or
"credit review" with negative implications by any of such
statistical rating organizattions if any of such occurrences
shall, in the judgment of the Representatives, after reasonable
inquiries on the part of the Representatives, impair the
marketability of the Securities;
(i) The Trust Agreement, the Guarantee and the Indenture
shall have been executed and delivered, in each case in a form
reasonably satisfactory to the Representatives;
(j) The shares of Common Stock issuable upon the
conversion or exchange of the Securities and/or Debentures shall
have been duly listed, subject to notice of issuance, on the New
York Stock Exchange;
(k) The Company shall have complied with the provisions
of Section 4(b) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date
of this Agreement; and
(l) The Trust and the Company shall have furnished or
caused to be furnished to the Representatives at the Time of
Delivery certificates of officers of the Trust and the Company to
the effect that to the best of such person's knowledge,
information and belief (i) there has been no material adverse
change in the business, properties or financial condition of the
Company and its Subsidiaries, taken as a whole or the Trust from
that set forth in the Registration Statement or Prospectus (other
than changes referred to in or contemplated by the Registration
Statement or Prospectus), (ii) the representations and warranties
of the Trust and the Company herein at and as of the Time of
Delivery are true and correct, (iii) the Trust and the Company
have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Time of
Delivery, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the Commission.
7. The obligations of the Company and the Trust shall be
subject, in the discretion of the Company and the Trust, to the condition
that the Registration Statement shall be effective under the Act and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the Act or proceedings therefor initiated or
threatened by the Commission.
8. (a) The Trust and the Company, jointly and severally, will,
to the extent permitted by law, indemnify and hold harmless each Agent
against any losses, claims, damages or liabilities, joint or several, to
which such Agent may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will
reimburse each Agent for any legal or other expenses reasonably incurred
by such Agent in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that
neither the Trust nor the Company shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust and the Company
by any Agent through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities or with
any statements in or omissions from that part of the Registration
Statement that shall constitute the Statements of Eligibility and
Qualification under the Trust Indenture Act of the Debenture Trustee, the
Guarantee Trustee and the Property Trustee, and except that this indemnity
shall not inure to the benefit of any Agent (or any person controlling
such Agent) on account of any losses, claims, damages, liabilities or
actions, suits or proceedings arising from the sale of the Securities to
any person if a copy of the Prospectus, as the same may then be
supplemented or amended (excluding, however, any document then
incorporated or deemed incorporated therein by reference), was not sent or
given by or on behalf of such Agent to such person (i) with or prior to
the written confirmation of sale involved or (ii) as soon as available
after such written confirmation, relating to an event occurring prior to
the payment for and delivery to such person of the Securities involved in
such sale, and the omission or alleged omission or untrue statement or
alleged untrue statement was corrected in the Prospectus as supplemented
or amended at such time.
(b) Each Agent, severally and not jointly, will indemnify and
hold harmless the Trust and the Company against any losses, claims,
damages or liabilities to which the Trust and the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust and the Company
by such Agent through the Representatives expressly for use therein; and
will reimburse the Trust and the Company for any legal or other expenses
reasonably incurred by the Trust and the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened against
any person as to which indemnity may be sought under subsection (a) or
(b), such person (the "Indemnified Person") shall notify the person
against whom such indemnity may be sought (the "Indemnifying Person"),
promptly after any assertion of such claim threatening to institute an
action, suit or proceeding or if such an action, suit or proceeding is
commenced against such Indemnified Person, promptly after such Indemnified
Person shall have been served with a summons or other first legal process,
giving information as to the nature and basis of the claim. Failure to so
notify the Indemnifying Person shall not, however, relieve the
Indemnifying Person from any liability which it may have on account of the
indemnity under subsection (a) or (b) if the Indemnifying Person has not
been prejudiced in any material respect by such failure. Subject to the
immediately succeeding sentence, the Indemnifying Person shall assume the
defense of any such litigation or proceeding, including the employment of
counsel and the payment of all expenses, with such counsel being
designated, subject to the immediately succeeding sentence, in writing by
the Representatives in the case of parties indemnified pursuant to
subsection (b) and by the Company in the case of parties indemnified
pursuant to subsection (a). Any Indemnified Person shall have the right
to participate in such litigation or proceeding and to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense
of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include (x) the Indemnifying Person and (y) the
Indemnified Person and, in the written opinion of counsel to such
Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or likely conflicts of interest
between them, in either of which cases the reasonable fees and expenses of
counsel (including disbursements) for such Indemnified Person shall be
reimbursed by the Indemnifying Person to the Indemnified Person. If there
is a conflict as described in clause (ii) above, and the Indemnified
Persons have participated in the litigation or proceeding utilizing
separate counsel whose fees and expenses have been reimbursed by the
Indemnifying Person and the Indemnified Persons, or any of them, are found
to be solely liable, such Indemnified Persons shall repay to the
Indemnifying Person such fees and expenses of such separate counsel as the
Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or
proceeding or related litigation or proceedings in the same jurisdiction
as to which the Indemnified Persons are entitled to such separate
representation, be liable under this Agreement for the reasonable fees and
out-of-pocket expenses for more than one separate firm (together with not
more than one appropriate local counsel) for all such Indemnified Persons.
Subject to the next paragraph, all such fees and expenses shall be
reimbursed by payment to the Indemnified Persons of such reasonable fees
and expenses of counsel promptly after payment thereof by the Indemnified
Persons. Such firms shall be selected and designated in writing by
Xxxxxxx, Xxxxx & Co.
In furtherance of the requirement above that fees and expenses of
any separate counsel for the Indemnified Persons shall be reasonable, the
Representatives and the Company agree that the Indemnifying Person's
obligations to pay such fees and expenses shall be conditioned upon the
following:
(a) in case separate counsel is proposed to be retained by
the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully
consult with the Indemnifying Person in advance as to the
selection of such counsel;
(b) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment
of such counsel, furnishing such information might reasonably be
expected to result in a waiver of any attorney-client privilege);
and
(c) the Company and the Representatives shall cooperate in
monitoring and controlling the fees and expenses of separate
counsel for Indemnified Persons for which the Indemnifying Person
is liable hereunder, and the Indemnified Person shall use every
reasonable effort to cause such separate counsel to minimize the
duplication of activities as between themselves and counsel to the
Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement of
any litigation or proceeding effected without the written consent of the
Indemnifying Person, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees, subject
to the provisions of this Section 8, to indemnify the Indemnified Person
from and against any loss, damage, liability or expenses by reason of such
settlement or judgment. The Indemnifying Person shall not, without the
prior written consent of the Indemnified Persons, effect any settlement of
any pending or threatened litigation, proceeding or claim in respect of
which indemnity has been properly sought by the Indemnified Persons
hereunder, unless such settlement includes an unconditional release by the
claimant of all Indemnified Persons from all liability with respect to
claims which are the subject matter of such litigation, proceeding or
claim.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Trust and the
Company on the one hand and the Agents on the other from the offering of
the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above and such failure resulted in the indemnifying party being prejudiced
in a material way, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Trust and the Company on the one hand and the Agents
on the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Trust and the Company on the one hand
and such Agents on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Trust and the Company bear to the total placement fees
received by such Agents. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Trust and the
Company on the one hand or such Agents on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Trust, the Company and
the Agents agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Agents were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim, provided that the
provisions of subsection (c) have been complied with (in all material
respects) in respect of any separate counsel for such indemnified party.
Notwithstanding the provisions of this subsection (d), no Agent shall be
required to contribute any amount greater than the excess of (i) the total
price at which the Securities placed by it and distributed to the public
were offered to the public over (ii) the amount of any damages which such
Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of
the Agents in this subsection (d) to contribute are several in proportion
to their respective placement fees and not joint.
(e) The obligations of the Trust and the Company under this
Section 8 shall be in addition to any liability which the Trust and the
Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Agent within the
meaning of the Act; and the obligations of the Agents under this Section 8
shall be in addition to any liability which the respective Agents may
otherwise have and shall extend, upon the same terms and conditions, to
each officer and director of the Company, each Administrative Trustee
under the Trust Agreement and to each person, if any, who controls the
Trust and the Company within the meaning of the Act.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Trust and the Company and the
several Agents, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Agent or any controlling
person of any Agent, or the Trust, the Company, or any officer, director,
Administrative Trustee or controlling person of the Trust or the Company,
and shall survive delivery of and payment for the Securities.
10. This Agreement may be terminated at any time prior to the
Time of Delivery by the Representatives if, prior to such time, any of the
following events shall have occurred: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or
New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities on the terms and in the manner contemplated in
the Prospectus.
If the Representatives elect to terminate this Agreement, as
provided in this Section 10, the Representatives will promptly notify the
Company and each other Agent by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Agent for any
reason permitted hereunder, or if the sale of the Securities to the Agents
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 Agent or to
any member of any selling group for the loss of anticipated profits from
the transactions contemplated by this Agreement and the Agents shall be
under no liability to the Company nor be under any liability under this
Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections 5 and 8
shall survive any termination of this Agreement.
11. In all dealings hereunder, the Representatives shall act on
behalf of each of the Agents, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of
any Agent made or given by the Representatives jointly or by Xxxxxxx,
Xxxxx & Co. on behalf of the Representatives.
All statements, requests, notices and agreements hereunder shall
be in writing, and if to the Purchasers shall be delivered or sent by
mail, telex or facsimile transmission to 000 Xxxxxxxx Xxxxxx Xxxxxxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxx Xxxx; and if to the Agents
shall be delivered or sent by mail, telex or facsimile transmission to the
Representatives in care of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the
Trust or the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any
notice to an Agent pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Agent at its address
set forth in its Agents' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Trust and the Company
by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Agents, the Trust, the Company and, to the
extent provided in Sections 8 and 9 hereof, the officers, directors and
administrative trustees of the Trust, the Company and each person who
controls the Trust, the Company or any Agent, and their respective heirs,
executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Purchaser shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us one for the Trust, the Company, each of the
Purchasers and each of the Representatives plus one for each counsel
counterparts hereof.
Very truly yours,
CMS Energy Trust I
By: A.M. Xxxxxx
_____________________
Xxxx X. Xxxxxx
Administrative Trustee
CMS Energy Corporation
By: A.M. Xxxxxx
_____________________
Xxxx X. Xxxxxx
Senior Vice President,
Chief Financial
Officer and Treasurer
Accepted as of the date hereof:
Franklin Income Fund
Franklin Utilities Fund
Franklin Valuemark Utility Equity Fund
Franklin Valuemark Income Securities Fund
Franklin Global Utilities Fund
Franklin Equity Income Fund
Franklin AGE High Income Fund
Franklin Multi-Income Trust
Franklin Universal Trust
Franklin Convertible Securities Fund
By: XX Xxxxxxx
_________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
Xxxxxx Xxxxxxx & Co. Incorporated,
As Representatives of the several Agents named in Schedule II hereto
By: Xxxxxxx, Xxxxx & Co.
_________________________________
(Xxxxxxx, Xxxxx & Co.)
Schedule I
Number of
Securities
to be
Purchasers Purchased
Franklin Income Fund . . . . . . 1,600,000
Franklin Utilities Fund . . . . 705,000
Franklin Valuemark Utility
Equity Fund . . . . . . . . . . 175,000
Franklin Valuemark Income
Securities Fund . . . . . . . . 160,000
Franklin Global Utilities Fund . 35,000
Franklin Equity Income Fund. . . 80,000
Franklin AGE High Income Fund. . 530,000
Franklin Multi-Income Trust. . . 22,000
Franklin Universal Trust . . . . 70,000
Franklin Convertible Securities
Fund . . . . . . . . . . . . . 73,000
---------
Total . . . . . . . . . . 3,450,000
=========
Schedule II
Number of
Securities
to be
Agents Placed
Xxxxxxx, Xxxxx & Co. . . . . . . 1,725,000
Xxxxxxx Lynch, Xxxxxx, Xxxxxx &
Xxxxx Incorporated. . . . . . . 690,000
Xxxxxx Xxxxxxx & Co.
Incorporated. . . . . . . . . . 690,000
BancAmerica Securities, Inc. . . 57,500
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation. . . . . 57,500
First of Michigan Corporation. . 57,500
Xxxxxxxxxxx & Co., Inc.. . . . . 57,500
Prudential Securities
Incorporated . . . . . . . . . 57,500
Xxxxx & Co., LLC . . . . . . . . 57,500
---------
Total. . . . . . . . . . . 3,450,000
=========
