Exhibit (10)(c)
$400,000,000
CONSUMERS ENERGY COMPANY
$200,000,000 4.80% First Mortgage Bonds due 2009, Series G
$200,000,000 6.00% First Mortgage Bonds due 2014, Series I
-------------------------------
Purchase Agreement
August 19, 2003
Banc One Capital Markets, Inc.
Barclays Capital Inc.
J.P. Morgan Securities Inc.
ABN AMRO Incorporated
Huntington Capital Corp.
Tokyo-Mitsubishi International plc
Wachovia Securities, LLC
Comerica Securities, Inc.
Fifth Third Securities, Inc.
c/o Banc One Capital Markets, Inc.
1 Bank One Plaza, Suite IL 1-0595
Chicago, Illinois 60670
Ladies and Gentlemen:
Consumers Energy Company, a Michigan corporation (the "Company"), proposes to
issue and sell to Banc One Capital Markets, Inc., Barclays Capital Inc., J.P.
Morgan Securities Inc., ABN AMRO Incorporated, Huntington Capital Corp.,
Tokyo-Mitsubishi International plc, Wachovia Securities, LLC, Comerica
Securities, Inc. and Fifth Third Securities, Inc.. (each, an "Initial
Purchaser", and, collectively, the "Initial Purchasers") an aggregate of
$200,000,000 in principal amount of its 4.80% First Mortgage Bonds due 2009,
Series G (the "Series G Bonds") and an aggregate of $200,000,000 in principal
amount of its 6.00% First Mortgage Bonds due 2014, Series I (the "Series I
Bonds" and, together with the Series G Bonds, the "Restricted Bonds"), subject
to the terms and conditions set forth herein. The Restricted Bonds are to be
issued pursuant to the provisions of the Indenture dated as of September 1, 1945
between the Company and JPMorgan Chase Bank (ultimate successor to City Bank
Farmers Trust Company), as trustee (the "Trustee"), as supplemented and amended
by various supplemental indentures and as to be supplemented by the
Ninety-Second Supplemental Indenture, to be dated as of August 26, 2003,
establishing the terms of the Restricted Bonds (the "Supplemental Indenture")
(as so supplemented, the "Indenture"). Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Indenture.
Holders (including subsequent transferees) of the Restricted Bonds will
have the registration rights set forth in the registration rights agreement in
the form attached hereto as
Exhibit A (the "Registration Rights Agreement"), to be dated the Closing Date
(as defined below), for so long as such Restricted Bonds constitute Transfer
Restricted Securities (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
circumstances set forth therein, (i) a registration statement (the "Exchange
Offer Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), relating to first mortgage bonds, (A) in the principal amount of
$200,000,000 4.80% First Mortgage Bonds due 2009, Series H (the "Series H
Exchange Bonds") to be offered in exchange for the Series G Bonds and (B) in the
principal amount of $200,000,000 6.00% First Mortgage Bonds due 2014, Series J
(the "Series J Exchange Bonds" and, together with the Series H Exchange Bonds,
the "Exchange Bonds") to be offered in exchange for the Series I Bonds (such
offer to exchange being referred to as the "Exchange Offer") and (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement" and, together with the Exchange Offer Registration
Statement, the "Registration Statements") relating to the resale by certain
holders of the Restricted Bonds and to use its best efforts to cause such
Registration Statements to be declared and remain effective and usable for the
periods specified in the Registration Rights Agreement and to consummate the
Exchange Offer. The Restricted Bonds and the Exchange Bonds issuable in exchange
therefor are collectively referred to herein as the "Bonds". This Agreement, the
Indenture, the Bonds and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents".
1. Offering Memorandum: The Restricted Bonds will be
offered and sold to the Initial Purchasers pursuant to one or more exemptions
from the registration requirements under the Act. The Company has prepared a
confidential preliminary offering memorandum dated August 19, 2003 (the
"Preliminary Offering Memorandum") and a confidential offering memorandum dated
August 19, 2003 (the "Offering Memorandum") relating to the Restricted Bonds,
which incorporate by reference documents filed by the Company pursuant to
Section 13, 14 or 15 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As used herein, the term "Preliminary Offering Memorandum" and
"Offering Memorandum" shall include respectively the documents incorporated by
reference therein. Any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Preliminary Offering Memorandum and Offering
Memorandum shall be deemed to include amendments or supplements to the
Preliminary Offering Memorandum and Offering Memorandum, and documents
incorporated by reference after the time of execution of this Agreement and
prior to the termination of the offering of the Restricted Bonds by the Initial
Purchasers.
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Restricted Bonds (and
all securities issued in exchange therefor or in substitution thereof) shall
bear the following legend:
THE BONDS EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
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ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, (5) TO CONSUMERS ENERGY COMPANY OR (6) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES.
2. Agreement to Sell and Purchase: On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and the Initial Purchasers agree to
purchase from the Company, severally, the principal amount of Series G Bonds and
the principal amount of Series I Bonds set forth opposite the names of such
Initial Purchasers on Schedule A hereto at a purchase price equal to 99.191% of
the principal amount thereof with respect to the Series G Bonds (the "Series G
Purchase Price") and 99.841% of the principal amount thereof with respect to the
Series I Bonds (the "Series I Purchase Price" and, together with the Series G
Purchase Price, the "Purchase Price").
The Company hereby agrees that, without the prior written
consent of the Initial Purchasers, it will not offer, sell, contract to sell or
otherwise issue debt securities substantially similar to the Restricted Bonds
for a period from the date of the execution of this Agreement until the Closing
Date.
3. Terms of Offering: The Initial Purchasers have
advised the Company that the Initial Purchasers will make offers (the "Exempt
Resales") of the Restricted Bonds purchased hereunder on the terms set forth in
the Offering Memorandum solely to persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act or, at the time any buy order for the Bonds was or is originated, were or
are outside the United States and were or are not "U.S. persons" within the
meaning of Regulation S under the Act (such persons being referred to herein as
the "Eligible Purchasers"). The Initial Purchasers will offer the Series G Bonds
to Eligible Purchasers initially at a price equal to 99.173% of the principal
amount thereof and will offer the Series I Bonds to Eligible Purchasers
initially at a price equal to 99.191% of the principal amount thereof. Such
prices may be changed at any time without notice.
4. Delivery and Payment:
(a) Delivery of, and payment of the Purchase Price for,
the Restricted Bonds shall be made at the offices of Pillsbury Winthrop LLP, One
Battery Park Plaza, New York, NY 10004-1490, or such other location as may be
mutually acceptable. Payment for the Restricted Bonds shall be made to the
Company in federal or other funds immediately available in New
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York City against delivery of such Restricted Bonds for the account of the
Initial Purchasers at 10:00 a.m., New York City time, on August 26, 2003, or at
such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and the payment are herein called
the "Closing Date".
(b) Certificates for the Restricted Bonds shall be in
definitive form or global form, as specified by the Initial Purchasers, and
registered in such names and in such denominations as the Initial Purchasers
shall request in writing not later than one full business day prior to the
Closing Date. The certificates evidencing the Restricted Bonds shall be
delivered on the Closing Date for the account of the Initial Purchasers, with
any transfer taxes payable in connection with the transfer of the Restricted
Bonds to the Initial Purchasers duly paid, against payment of the Purchase Price
therefor plus accrued interest, if any, to the date of payment and delivery.
Certificates for the Restricted Bonds shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m., New York City time, on the
business day immediately preceding the Closing Date.
5. Agreements of the Company: In further consideration
of the agreements of the Initial Purchasers herein contained, the Company
covenants as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Restricted Bonds for
offering or sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(d) hereof, or the initiation of any proceeding by any
state securities commission or any other federal or state regulatory authority
for such purpose. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any
Restricted Bonds under any state securities or blue sky laws and, if at any time
any state securities commission or other federal or state regulatory authority
shall issue an order suspending the qualification or exemption of any Restricted
Bonds under any state securities or blue sky laws, the Company shall use its
best efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Offering Memorandum, and any amendments or supplements thereto, in such
quantities as the Initial Purchasers may reasonably request. Subject to the
Initial Purchasers' compliance with their representations and warranties and
agreements set forth in Section 7 hereof, the Company consents to the use of the
Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) For such period of time as the Initial Purchasers are
required by law or customary practice to deliver an offering memorandum in
respect of the Restricted Bonds, if any event shall have occurred as a result of
which it is necessary to amend or supplement the Offering Memorandum in order to
make the statements therein, in light of the circumstances when the Offering
Memorandum is delivered to an Eligible Purchaser, not misleading, or if it
becomes necessary to amend or supplement the Offering Memorandum to comply with
law, to forthwith prepare an appropriate amendment or supplement to the Offering
Memorandum and
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deliver to the Initial Purchasers, without charge, such number of copies thereof
as may be reasonably requested.
(d) To use its best efforts to qualify the Restricted
Bonds for offer and sale under the securities or blue sky laws of such
jurisdictions as the Initial Purchasers may designate and to pay (or cause to be
paid), or reimburse (or cause to be reimbursed) the Initial Purchasers and their
counsel for, reasonable filing fees and expenses in connection therewith
(including the reasonable fees and disbursements of counsel to the Initial
Purchasers 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.
(e) So long as the Bonds are outstanding, (i) to mail and
make generally available as soon as practicable after the end of each fiscal
year to the record holders of the Bonds a financial report of the Company on a
consolidated basis, all such financial reports to include a consolidated balance
sheet, a consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows as of the end
of and for such period, and for the period from the beginning of such year to
the close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(f) So long as any of the Restricted Bonds remain
outstanding and during any period in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, to make available to any holder of Restricted
Bonds in connection with any sale thereof and any prospective purchaser of such
Restricted Bonds from such holder, the information required by Rule 144A(d)(4)
under the Act.
(g) To pay all expenses, fees and taxes (other than
transfer taxes on sales by the Initial Purchasers) in connection with the
issuance and delivery of the Restricted Bonds, except that the Company shall be
required to pay the fees and disbursements (other than fees and disbursements
referred to in Section 5(d) hereof) of Pillsbury Winthrop LLP, counsel to the
Initial Purchasers, only in the events provided in Section 5(h) hereof, the
Initial Purchasers hereby agreeing to pay such fees and disbursements in any
other event, and that except as provided in such Section 5(h), the Company shall
not be responsible for any out-of-pocket expenses of the Initial Purchasers in
connection with their services hereunder.
(h) If the Initial Purchasers shall not take up and pay
for the Restricted Bonds due to the failure of the Company to comply with any of
the conditions specified in Section 10 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 11(b) hereof prior to
the Closing Date, to pay the reasonable fees and disbursements of Pillsbury
Winthrop LLP, counsel to the Initial Purchasers and, if the Initial Purchasers
shall not take up
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and pay for the Restricted Bonds due to the failure of the Company to comply
with any of the conditions specified in Section 10 hereof, to reimburse the
Initial Purchasers 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.
(i) During the period referred to in Section 5(c) hereof,
to not amend or supplement the Offering Memorandum unless the Company has
furnished the Initial Purchasers and counsel to the Initial Purchasers with a
copy for their review and comment a reasonable time prior to the making of such
amendment or supplement and has reasonably considered any comments of the
Initial Purchasers, and not to make any such amendment or supplement to which
such counsel shall reasonably object on legal grounds in writing after
consultation with the Initial Purchasers.
(j) During the period referred to in Section 5(c) hereof,
to furnish the Initial Purchasers with copies of all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
(k) During the period referred to in Section 5(c) hereof,
to comply with all requirements under the Exchange Act relating to the filing
with the Commission of its reports pursuant to Section 13 or 15(d) of the
Exchange Act and of its proxy statements pursuant to Section 14 of the Exchange
Act.
(l) To comply in all material respects with all of its
agreements set forth in the Registration Rights Agreement.
(m) To obtain the approval of The Depository Trust
Company ("DTC") for "book-entry" transfer of the Bonds, and to comply in all
material respects with all of its agreements set forth in the representation
letter or letters of the Company to DTC relating to the approval of the Bonds by
DTC for "book-entry" transfer.
(n) Not to (or permit any affiliate (as defined in Rule
144 under the Act) to) sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Restricted Bonds to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Restricted Bonds under the Act.
(o) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Bonds.
(p) To cause the Exchange Offer to be made in the
appropriate form to permit Exchange Bonds registered pursuant to the Act to be
offered in exchange for the Restricted Bonds and to comply in all material
respects with all applicable federal and state securities laws in connection
with the Exchange Offer.
(q) During the period of two years after the Closing
Date, not to, and not permit any of its affiliates (as defined in Rule 144 under
the Act) to, resell any of the Bonds which
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constitute "restricted securities" under Rule 144 under the Act that have been
reacquired by any of them.
(r) To take all reasonable action necessary to enable
Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc.
("S&P"), Moody's Investors Service, Inc. ("Moody's") and Fitch, Inc. ("Fitch")
to provide their respective credit ratings of the Restricted Bonds.
(s) (1) Within 10 days after the Closing Date, to deliver
the Supplemental Indenture in recordable form to the appropriate real estate
recording office in all jurisdictions specified in the Supplemental Indenture
for recording and deliver to the office of the Secretary of State of the State
of Michigan a UCC-1 financing statement relating to the Supplemental Indenture
for filing in such office and (2) within 25 days after the Closing Date, to
deliver to counsel to the Initial Purchasers a certificate signed by an officer
of the Company certifying that the actions required by the foregoing clause (1)
have been taken. The Company shall further provide counsel to the Initial
Purchasers, as soon as it is available, a copy of the related opinion of counsel
contemplated by Section 7.11(i) of the Indenture. To the extent not covered in
the opinion described in the previous sentence, the Company shall also provide
counsel to the Initial Purchasers, concurrently with the furnishing of such
opinion, a list of the recording information for all such filings.
6. Representations and Warranties of the Company: The
Company represents and warrants to, and agrees with, the Initial Purchasers
that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum does not, and any supplement or amendment to it will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this Section 6(a)
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued.
(b) The documents incorporated by reference in the
Preliminary Offering Memorandum and the Offering Memorandum, 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
7
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 Preliminary Offering Memorandum and the
Offering Memorandum 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
Preliminary Offering Memorandum and the Offering Memorandum or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Company.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Bonds are in the form contemplated by the
Indenture and have been duly authorized by the Company. At the Closing Date, the
Restricted Bonds will have been duly executed and delivered by the Company and,
when authenticated by the Trustee in the manner provided for in the Indenture,
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity), and will be entitled to the security afforded
by the Indenture equally and ratably with all securities outstanding thereunder.
The Bonds conform in all material respects to the descriptions thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(f) The Registration Rights Agreement has been duly
authorized by the Company. At the Closing Date, the Registration Rights
Agreement will have been duly executed and delivered by the Company and will
constitute a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity). The Registration Rights Agreement conforms in
all material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
(g) The Indenture has been duly authorized by the
Company. At the Closing Date, the Indenture will have been duly executed and
delivered by the Company and will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity (regardless of
whether enforcement is
8
considered in a proceeding at law or in equity); the Indenture conforms in all
material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum; and the Indenture conforms to the
requirements of the Trust Indenture Act of 1939, as amended (the "TIA").
(h) The Company has all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and has
made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and assets and to
conduct business in the manner described in the Preliminary Offering Memorandum
and the Offering Memorandum, except to the extent that the failure to obtain or
file would not have a material adverse effect on the Company.
(i) An appropriate order has been entered by the Federal
Energy Regulatory Commission under the Federal Power Act authorizing the
issuance and sale of the Bonds and such order is in full force and effect. No
other order, license, consent, authorization or approval of, or exemption by, or
the giving of notice to, or the registration with, any federal, state, local 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 any of the other Operative Documents,
except such as have been obtained or may be required under state securities or
blue sky laws or as referred to in the Offering Memorandum.
(j) None of the issuance and sale of the Bonds, or the
execution or delivery by the Company of, or the performance by the Company of
its obligations under, this Agreement or the other Operative Documents, did or
will conflict with, result in a breach of any of the terms or provisions of, or
constitute a default or require the consent of any party under, the Company's
Articles of Incorporation or by-laws, any material agreement or instrument to
which the Company is a party, any existing applicable law, rule or regulation or
any judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
properties or assets, or, except as described in the Offering Memorandum, 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 Offering Memorandum, there
is no action, suit, proceeding, inquiry or investigation (at law or in equity or
otherwise) pending or, to the knowledge of the Company, threatened against the
Company by any governmental authority that (i) questions the validity,
enforceability or performance of this Agreement or any of the other Operative
Documents or (ii) if determined adversely, is likely to have a material adverse
effect on the business or financial condition of the Company, or have a material
adverse effect on the ability of the Company to perform its obligations
hereunder or the ability of the Company to consummate the transactions
contemplated by this Agreement.
(l) There has not been any material and adverse change in
the business, properties or financial condition of the Company from that set
forth or incorporated by reference
9
in the Offering Memorandum (other than changes referred to in or contemplated by
the Offering Memorandum).
(m) Except as set forth in the Offering Memorandum, no
event or condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or failure to
perform by the Company in any material respect under any indenture, mortgage,
loan agreement, lease or other material agreement or instrument to which the
Company is a party or by which it may be bound.
(n) The Offering Memorandum, as of its date, contained
all the information specified in, and met the requirements of, Rule 144A(d)(4)
under the Act.
(o) When the Restricted Bonds are issued and delivered
pursuant to this Agreement, the Restricted Bonds will not be of the same class
(within the meaning of Rule 144A under the Act) as any security of the Company
that is listed on a national securities exchange registered under Section 6 of
the Exchange Act or that is quoted in a United States automated inter-dealer
quotation system. Except for the $250,000,000 aggregate principal amount of the
Company's 4.25% First Mortgage Bonds due 2008, Series A and the $375,000,000
aggregate principal amount of the Company's 5.375% First Mortgage Bonds due
2013, Series B, each issued on April 30, 2003 pursuant to an exemption from the
Act, and the Company's 4.00% First Mortgage Bonds due 2010, Series E, issued on
May 23, 2003 pursuant to an exemption from the Act, no securities of the same
class as the Restricted Bonds have been issued and sold by the Company within
the six-month period immediately prior to the date hereof.
(p) Neither the Company nor any affiliate (as defined in
Rule 144 under the Act) of the Company has directly, or through any agent, (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Act) which is or will be integrated
with the sale of the Restricted Bonds in a manner that would require the
registration under the Act of the Restricted Bonds or (ii) engaged in any form
of general solicitation or general advertising in connection with the offering
of the Restricted Bonds (as those terms are used in Regulation D under the Act),
or in any manner involving a public offering within the meaning of Section 4(2)
of the Act, including, but not limited to, publication or release of articles,
notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
(q) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(r) None of the Company nor any of its affiliates (as
defined in Rule 144 under the Act) or any person acting on its or their behalf
(other than the Initial Purchasers, as to whom the Company makes no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act with respect to the Restricted
Bonds.
(s) No registration under the Act of the Restricted Bonds
is required for the sale of the Restricted Bonds to the Initial Purchasers as
contemplated hereby or for the Exempt
10
Resales (assuming the accuracy of the Initial Purchasers' representation and
warranty and agreement set forth in Section 7 hereof).
(t) The Company, after giving effect to the offering and
sale of the Restricted Bonds, will not be an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(u) The Company has good and marketable title to all its
important properties described in the Offering Memorandum and to substantially
all other real estate and property specifically described in the Indenture as
subject to the lien thereof except (a) that released or retired in accordance
with the provisions of the Indenture, (b) leased offices, garages and service
buildings, (c) leased nuclear fuel, (d) certain electric substations and gas
regulator stations and other facilities erected on sites under leases,
easements, permits or contractual arrangements, (e) certain pollution control
facilities, which are subject to security interests granted to various
municipalities and economic development corporations under installment sales
contracts, (f) as to electric and gas transmission and distribution lines, many
of such properties are constructed on rights-of-way by virtue of franchises or
pursuant to easements only, and (g) as to certain gas storage fields, the
Company's interest in certain of the gas rights and rights of storage and other
rights incidental thereto are in the nature of an easement or leasehold interest
only. The Indenture constitutes, as security for the Restricted Bonds, a valid
direct first mortgage lien on the real estate, property and franchises, subject
only to excepted encumbrances as defined therein and except as otherwise
expressly stated therein and subject to Michigan Compiled Laws Annotated Section
324.20138, which provides under certain circumstances for the creation of
priority liens on property of the Company in favor of the State of Michigan
covering reimbursement for any expense incurred in a response activity under the
Michigan Environmental Response Act. The Indenture is effective to create the
lien intended to be created thereby. Real estate, property or franchises in the
State of Michigan hereafter acquired by the Company will become subject to the
lien of the Indenture, at the time of acquisition, subject to liens existing
thereon at the time of acquisition, and subject to excepted encumbrances, and
subject to any necessary filing and recording before the intervention of any
lien not expressly excepted thereby, and subject to the qualification above with
respect to the enforceability of the Indenture.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 10 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties:
Upon the authorization by the Initial Purchasers of the release of the
Restricted Bonds, the Initial Purchasers propose to offer the Restricted Bonds
for sale upon the terms and conditions set forth in this Agreement and the
Offering Memorandum and the Initial Purchasers hereby represent and warrant to,
and agree with, the Company that:
(a) they each will offer and sell the Restricted Bonds
only to Eligible Purchasers;
11
(b) they each are Accredited Investors (as defined in
Regulation D under the Act); and
(c) they each will not offer or sell the Restricted Bonds
by any form of general solicitation or general advertising, including, but not
limited to, the methods described in Rule 502(c) under the Act.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law,
to indemnify and hold harmless each of the Initial Purchasers and each person,
if any, who controls any such Initial Purchaser 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 Initial
Purchasers 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 Preliminary Offering Memorandum or Offering Memorandum, or, if
the Preliminary Offering Memorandum or Offering Memorandum shall be amended or
supplemented, in the Preliminary Offering Memorandum or Offering Memorandum as
so amended or supplemented 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 the Preliminary Offering Memorandum or
Offering Memorandum or in the Preliminary Offering Memorandum or Offering
Memorandum as so amended or supplemented, in reliance upon and in conformity
with information furnished in writing to the Company by, or on behalf of, any
Initial Purchaser expressly for use therein and except that this indemnity shall
not inure to the benefit of any Initial Purchaser (or any person controlling
such Initial Purchaser) on account of any losses, claims, damages, liabilities
or actions, suits or proceedings arising from the sale of the Restricted Bonds
to any person if a copy of the Offering Memorandum, 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 Initial Purchaser 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 Restricted Bonds involved in such sale, and the
omission or alleged omission or untrue statement or alleged untrue statement was
corrected in the Offering Memorandum 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 Restricted Bonds hereunder, and the indemnity agreement
contained in this Section 8 shall survive any termination of this
12
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 Initial Purchaser agrees severally and jointly,
to the extent permitted by law, to indemnify, hold harmless and reimburse the
Company, each other Initial Purchaser, and each person, if any, who controls the
Company or such other Initial Purchaser 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 Preliminary Offering Memorandum or Offering Memorandum or in the Preliminary
Offering Memorandum or Offering Memorandum, as amended or supplemented (if
applicable), in reliance upon and in conformity with information furnished in
writing to the Company by such Initial Purchaser expressly for use therein.
The indemnity agreement on the part of each Initial Purchaser
contained in this Section 8(b) and the representations and warranties of such
Initial Purchaser 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
Restricted Bonds hereunder, and the indemnity agreement contained in this
Section 8(b) shall survive any termination of this Agreement. The liabilities of
each Initial Purchaser in this Section 8(b) are in addition to any other
liabilities of each Initial Purchaser 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) hereof,
such person (the "Indemnified Person") shall notify the person against whom such
indemnity may be sought (the "Indemnifying Person") promptly after any assertion
of such claim threatening to institute an action, suit or proceeding or if such
an action, suit or proceeding is commenced against such Indemnified Person,
promptly after such Indemnified Person shall have been served with a summons or
other first legal process, giving information as to the nature and basis of the
claim. Failure to so notify the Indemnifying Person shall not, however, relieve
the Indemnifying Person from any liability which it may have on account of the
indemnity under Section 8(a) or 8(b) hereof 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 any Initial
Purchaser in the case of parties indemnified pursuant to Section 8(b) hereof and
by the Company in the case of parties indemnified pursuant to Section 8(a)
hereof. 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
13
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 Person shall repay to the Indemnifying Person
such fees and expenses of such separate counsel as the Indemnifying Person shall
have reimbursed. It is understood that the Indemnifying Person shall not, in
connection with any litigation or proceeding or related litigation or
proceedings in the same jurisdiction as to which the Indemnified Persons are
entitled to such separate representation, be liable under this Agreement for the
reasonable fees and out-of-pocket expenses of more than one separate firm
(together with not more than one appropriate local counsel) for all such
Indemnified Persons. Subject to the next paragraph, all such fees and expenses
shall be reimbursed by payment to the Indemnified Persons of such reasonable
fees and expenses of counsel promptly after payment thereof by the Indemnified
Persons.
In furtherance of the requirement above that fees and expenses
of any separate counsel for the Indemnified Persons shall be reasonable, the
Initial Purchasers and the Company agree that the Indemnifying Person's
obligations to pay such fees and expenses shall be conditioned upon the
following:
(i) 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;
(ii) 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
(iii) the Company and the Initial
Purchasers 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
14
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 Section 8
above is unavailable to or insufficient to hold harmless an Indemnified Person
under this Section 8 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 this
Section 8 above 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 Restricted Bonds.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law, then each Indemnifying Person shall contribute
to such amount paid or payable by such Indemnified Person in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of each Indemnifying Person, if any, on the one hand and the Indemnified
Person on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions, suits or
proceedings (including governmental investigations) in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Initial Purchasers 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 discounts or
commissions received by the Initial Purchasers, in each case as set forth in the
Offering Memorandum, bear to the aggregate offering price of the Restricted
Bonds. 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 Initial Purchasers 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 Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation (even if the Initial Purchasers 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 8(d). 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 8(d) shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Person in connection with investigating or defending any such
actions, suits or proceedings (including governmental proceedings) or claims,
provided that the provisions of this Section 8 above have been complied with (in
all material respects) in respect of any separate counsel for such Indemnified
Person. Notwithstanding the provisions of this Section 8(d), no Initial
Purchaser shall be required to contribute any amount greater than the excess of
(i) the total price at which the Restricted Bonds sold and distributed by it to
the public were offered to the public over (ii) the amount of any damages which
such Initial Purchaser 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)
15
of the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
The agreement with respect to contribution contained in this
Section 8(d) shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or the Initial Purchasers, and
shall survive delivery of and payment for the Restricted Bonds hereunder and any
termination of this Agreement.
9. Survival: The respective indemnities, agreements,
representations, warranties and other statements of the Company and the Initial
Purchasers 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 the Initial Purchasers or any controlling person of the
Initial Purchasers, the Company, or any officer, director or controlling person
of the Company, and shall survive delivery of and payment for the Bonds.
10. Conditions of Initial Purchasers' Obligations: The
several obligations of the Initial Purchasers shall be subject to the condition
that all representations and warranties and other statements of the Company
herein are, at and as of the Closing Date, true and correct, the condition that
the Company shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) That all legal proceedings to be taken in connection
with the issue and sale of the Restricted Bonds shall be reasonably satisfactory
in form and substance to Pillsbury Winthrop LLP, counsel to the Initial
Purchasers.
(b) That, at the Closing Date, the Initial Purchasers
shall be furnished with the following opinions, dated the Closing Date:
(i) opinions of Skadden, Arps, Slate,
Meagher & Flom LLP, counsel to the Company, substantially to the effect
set forth in Exhibit B-1 and Exhibit B-2 to this Agreement;
(ii) opinion of Pillsbury Winthrop LLP,
counsel to the Initial Purchasers, as to such matters as the Initial
Purchasers shall reasonably request; and
(iii) opinion of Robert C. Shrosbree,
Assistant General Counsel of CMS Energy Corporation, the parent of the
Company, substantially to the effect set forth in Exhibit C to this
Agreement.
(c) (i) That on the date of the Offering Memorandum and
on the Closing Date, the Initial Purchasers shall have received a letter from
Ernst & Young LLP in form and substance satisfactory to the Initial Purchasers,
dated as of such respective dates, (A) confirming that they are independent
public accountants with respect to the Company within the meaning of the Act and
the applicable rules and regulations adopted by the Commission thereunder, (B)
stating that in their opinion the financial statements examined by them and
included or incorporated by
16
reference in the Preliminary Offering Memorandum or Offering Memorandum, as the
case may be, complied as to form in all material respects with the applicable
accounting requirements of the Commission, including the applicable rules and
regulations adopted by the Commission, and (C) covering, as of a date not more
than three business days prior to the date of such letter, such other matters as
the Initial Purchasers reasonably request.
(ii) That on the date of the Offering Memorandum,
the Initial Purchasers shall have received a letter from PricewaterhouseCoopers
LLP in form and substance satisfactory to the Initial Purchasers, dated as of
such date, (A) confirming that they are independent public accountants with
respect to the Company and the Midland Cogeneration Venture Limited Partnership
within the meaning of the Act and the applicable rules and regulations adopted
by the Commission thereunder, (B) stating that in their opinion the financial
statements examined by them and referred to in the letter of Ernst &Young LLP
complied as to form in all material respects with the applicable accounting
requirements of the Commission, including the applicable rules and regulations
adopted by the Commission, and (C) covering, as of a date not more than three
business days prior to the date of such letter, such other matters as the
Initial Purchasers reasonably request.
(d) That, between the date of the execution of this
Agreement and the Closing Date, no material adverse change shall have occurred
in the business, properties or financial condition of the Company, taken as a
whole, which, in the reasonable judgment of the Initial Purchasers, impairs the
marketability of the Restricted Bonds (other than changes referred to in or
contemplated by the Offering Memorandum).
(e) That, at the Closing Date, the Company shall have
delivered to the Initial Purchasers a certificate of an executive officer of the
Company to the effect that, to the best of his or her knowledge, information and
belief, there shall have been no material adverse change in the business,
properties or financial condition of the Company from that set forth in the
Offering Memorandum (other than changes referred to in or contemplated by the
Offering Memorandum).
(f) That the Company shall have executed and delivered
the Registration Rights Agreement and shall have furnished the Initial
Purchasers signed counterparts of the Supplemental Indenture.
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or before the Closing
Date by the terms hereof.
(h) That the Company shall have complied with the
provisions of Section 5(c) hereof with respect to the furnishing of the Offering
Memorandum.
(i) That, at the Closing Date, the Restricted Bonds shall
be rated at least BBB- by S&P, Baa3 by Moody's and BB+ by Fitch, and the Company
shall have delivered to the Initial Purchasers a letter, dated the Closing Date,
from each such rating agency, or other evidence reasonably satisfactory to the
Initial Purchasers, confirming that the Restricted Bonds have been assigned such
ratings; and since the date of this Agreement, there shall not have occurred a
downgrading or withdrawal in the rating assigned to the Restricted Bonds or any
of the Company's other securities by any nationally recognized statistical
rating agency, and no
17
such rating agency shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of the Restricted
Bonds or any of the Company's other securities.
(j) That any additional documents or agreements
reasonably requested by the Initial Purchasers or their counsel to permit the
Initial Purchasers to perform their obligations or permit their counsel to
deliver opinions hereunder shall have been provided to them.
11. Effectiveness and Termination of Agreement; Initial
Purchasers Default:
(a) This Agreement shall become effective upon the
execution and delivery of this Agreement by the parties hereto.
(b) This Agreement may be terminated at any time prior to
the Closing Date by the Initial Purchasers 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 any
exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (iv) any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the United
States is such as to make it, in the Initial Purchasers' judgment, impracticable
to market such Restricted Bonds; or (v) a downgrading or withdrawal in the
rating assigned to the Restricted Bonds or any of the Company's other securities
by any nationally recognized statistical rating agency, or a public announcement
by any such rating agency that it has under surveillance or review, with
possible negative implications, its rating of the Restricted Bonds or any of the
Company's other securities.
If any of the Initial Purchasers elect to terminate this
Agreement, as provided in this Section 11, they will promptly notify the Company
by telephone or telecopy, confirmed by letter. If this Agreement shall not be
carried out by the Initial Purchasers for any reason permitted hereunder, or if
the sale of the Restricted Bonds to the Initial Purchasers 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 except as provided in Section 5(g) hereof and shall not be liable to
the Initial Purchasers for the loss of anticipated profits from the transactions
contemplated by this Agreement and the Initial Purchasers shall be under no
liability to the Company.
(c) If on the Closing Date any one or more of the Initial
Purchasers 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 Restricted Bonds which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of the Restricted
Bonds which such defaulting Initial Purchaser or Initial Purchasers, as the case
may be, agreed but failed or refused to purchase is not more than one-tenth of
the aggregate principal amount of the Restricted Bonds to be purchased on such
date by all Initial Purchasers, each non defaulting Initial Purchaser shall be
obligated severally, in the proportion which the principal amount of the
Restricted Bonds set forth opposite its name in Schedule A bears to the
aggregate principal
18
amount of the Restricted Bonds which all the non-defaulting Initial Purchaser or
Initial Purchasers, as the case may be, agreed but failed or refused to purchase
on such date; provided that in no event shall the aggregate principal amount of
the Restricted Bonds which any Initial Purchaser has agreed to purchase pursuant
to Section 2 hereof be increased pursuant to this Section 11(c) by an amount in
excess of one-ninth of such principal amount of the Restricted Bonds which such
Initial Purchaser agreed to purchase without the written consent of such Initial
Purchaser. If on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase Restricted Bonds and the aggregate principal
amount of the Restricted Bonds with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of the Restricted Bonds to be
purchased by all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Company for purchase of such Restricted Bonds are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Initial Purchaser and the Company.
In any such case which does not result in the termination of this Agreement,
either the Initial Purchasers or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this Section 11(c) shall
not relieve any defaulting Initial Purchaser from liability in respect of any
default of any such Initial Purchaser under this Agreement.
(d) Notwithstanding the foregoing, the provisions of
Sections 5(e), 5(i), 8 and 9 shall survive any termination of this Agreement.
12. Miscellaneous: Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Consumers Energy Company, One Energy Plaza, Jackson, Michigan 49201,
Attention: Executive Vice President and Chief Financial Officer (Telecopy
517-788-2186), and (ii) if to the Initial Purchasers, to (A) Banc One Capital
Markets, Inc., 1 Bank One Plaza, Suite IL 1-0595, Chicago, Illinois 60670,
Attention: Structuring & Execution (Telecopy 312-732-4773), (B) Barclays Capital
Inc., 200 Park Avenue, New York, New York 10166, Attention: Syndicate Department
(Telecopy 212-412-7305) and (C) J.P. Morgan Securities Inc., 270 Park Avenue,
New York, New York 10017, Attention: Transaction Execution Group, 7th Floor
(Telecopy 212-834-6702), or in any case to such other address as the person to
be notified may have requested in writing.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, and their respective successors and
assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of the
Restricted Bonds from an Initial Purchaser merely because of such purchase.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
19
Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchasers.
Very truly yours,
CONSUMERS ENERGY COMPANY
By: /s/ Thomas J. Webb
------------------------------------
Name: Thomas J. Webb
Title: Executive Vice President and
Chief Financial Officer
Accepted:
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL INC.
J.P. MORGAN SECURITIES INC.
ABN AMRO INCORPORATED, INC.
HUNTINGTON CAPITAL CORP.
TOKYO-MITSUBISHI INTERNATIONAL PLC
WACHOVIA SECURITIES, LLC
COMERICA SECURITIES, INC.
FIFTH THIRD SECURITIES, INC.BY: BANC ONE CAPITAL MARKETS, INC.
By: /s/ Robert Nordlinger
--------------------------
Name: Robert Nordlinger
Title: Managing Director
SCHEDULE A
Principal Amount of Series G Principal Amount of Series I
Initial Purchasers Bonds to be Purchased Bonds to be Purchased
------------------ --------------------- ---------------------
Banc One Capital Markets, Inc. $ 50,000,000 $ 50,000,000
Barclays Capital Inc. $ 50,000,000 $ 50,000,000
J.P. Morgan Securities Inc. $ 50,000,000 $ 50,000,000
ABN AMRO Incorporated $ 10,000,000 $ 10,000,000
Huntington Capital Corp. $ 10,000,000 $ 10,000,000
Tokyo-Mitsubishi International plc $ 10,000,000 $ 10,000,000
Wachovia Securities, LLC $ 10,000,000 $ 10,000,000
Comerica Securities, Inc. $ 5,000,000 $ 5,000,000
Fifth Third Securities, Inc. $ 5,000,000 $ 5,000,000
------------ ------------
$200,000,000 $200,000,000
============ ============
A-1
EXHIBIT A
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 26, 2003, by Consumers Energy Company, a Michigan
corporation (the "Company"), and Banc One Capital Markets, Inc., Barclays
Capital Inc., J.P. Morgan Securities Inc., ABN AMRO Incorporated, Huntington
Capital Corp., Tokyo-Mitsubishi International plc, Wachovia Securities, LLC,
Comerica Securities, Inc. and Fifth Third Securities, Inc. (each an "Initial
Purchaser" and, collectively, the "Initial Purchasers"), which have agreed to
purchase the Company's $200,000,000 4.80% First Mortgage Bonds due 2009, Series
G (the "Series G Bonds") and $200,000,000 6.00% First Mortgage Bonds due 2014,
Series I (the "Series I Bonds" and together with the Series G Bonds, the
"Restricted Bonds") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated August
19, 2003 (the "Purchase Agreement"), by the Company and the Initial Purchasers.
In order to induce the Initial Purchasers to purchase the Restricted Bonds, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchasers in the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Purchase Agreement. As used in this Agreement, the
following capitalized terms shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Advice: As defined in Section 6(d) hereof.
Agreement: As defined in the first paragraph hereof.
Bonds: The Restricted Bonds and the Exchange Bonds.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: Exchange Bonds that are
acquired by a Broker-Dealer in the Exchange Offer in exchange for Restricted
Bonds that such Broker-Dealer acquired for its own account as a result of
market-making activities or other trading activities (other than Restricted
Bonds acquired directly from the Company or any of its affiliates).
Business Day: Any day except a Saturday, Sunday or other day in the
City of New York, or in the city of the primary corporate trust office of the
Trustee, on which banks are authorized to close.
Certificated Securities: Bonds that are not in Global Bond form.
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Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Company: As defined in the first paragraph hereof.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Bonds to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the
minimum period required pursuant to Section 3(b) hereof and (c) the delivery by
the Company to the Registrar of the Series H Bonds in the same aggregate
principal amount as the aggregate principal amount of the Series G Bonds
tendered by Holders thereof and the delivery by the Company to the Registrar of
the Series J Bonds in the same aggregate principal amount as the aggregate
principal amount of the Series I Bonds tendered by holders thereof, in each
case, pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Restricted Bonds, each
Interest Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Bonds: The Series H Bonds and the Series J Bonds.
Exchange Offer: The Series G Exchange Offer and/or the Series I
Exchange Offer, as the case may be.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchasers
propose to sell the Restricted Bonds to certain "qualified institutional
buyers", as such term is defined in Rule 144A under the Act, or to persons who
are not "U.S. persons", as such term is defined in Regulation S under the Act.
Global Bond: As defined in the Bonds.
Global Bond Holder: As defined in the Bonds.
Holder: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indemnified Person: As defined in Section 8(c) hereof.
Indemnifying Person: As defined in Section 8(c) hereof.
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Indenture: Indenture dated as of September 1, 1945, between the Company
and the Trustee, as supplemented by various supplemental indentures.
Initial Purchaser: As defined in the first paragraph hereof.
Initial Purchasers: As defined in the first paragraph hereof.
Interest Payment Date: As defined in the Bonds.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, trust, limited
liability company, unincorporated organization, or a government or agency or
political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
Purchase Agreement: As defined in the second paragraph hereof.
Record Holder: With respect to any Damages Payment Date, each Person
who is a Holder of Bonds on the record date with respect to the Interest Payment
Date on which such Damages Payment Date shall occur.
Registrar: As defined in the Indenture.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Bonds pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) which is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
Restricted Bonds: As defined in the first paragraph hereof.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
S-3 Ineligibility Date: As defined in Section 12(l) hereof.
Series G Bonds: As defined in the first paragraph hereof.
Series G Exchange Offer: The registration by the Company under the Act
of the Series H Bonds pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities relating to Series G
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Bonds the opportunity to exchange all such outstanding Transfer Restricted
Securities relating to Series G Bonds for Series H Bonds in an aggregate
principal amount equal to the aggregate principal amount of the Transfer
Restricted Securities relating to Series G Bonds tendered in such exchange offer
by such Holders.
Series I Bonds: As defined in the first paragraph hereof.
Series I Exchange Offer: The registration by the Company under the Act
of the Series J Bonds pursuant to the Exchange Offer Registration Statement
pursuant to which the Company shall offer the Holders of all outstanding
Transfer Restricted Securities relating to Series I Bonds the opportunity to
exchange all such outstanding Transfer Restricted Securities relating to Series
I Bonds for Series J Bonds in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities relating to
Series I Bonds tendered in such exchange offer by such Holders.
Series H Bonds: The Company's 4.80% First Mortgage Bonds due 2009,
Series H, to be issued pursuant to the Indenture (i) in the Exchange Offer or
(ii) upon the request of any Holder of Series G Bonds covered by a Shelf
Registration Statement, in exchange for such Series G Bonds.
Series J Bonds: The Company's 6.00% First Mortgage Bonds due 2014,
Series J, to be issued pursuant to the Indenture (i) in the Exchange Offer or
(ii) upon the request of any holder of Series I Bonds covered by a Shelf
Registration Statement, in exchange for such Series I Bonds.
Shelf Filing Date: As defined in Section 4(a) hereof.
Shelf Registration Statement: As defined in Section 4(a) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Restricted Bond, until the
earliest to occur of (a) the date on which such Restricted Bond is exchanged in
the Exchange Offer and entitled to be resold to the public by the Holder thereof
without complying with the prospectus delivery requirements of the Act, (b) the
date on which such Restricted Bond has been disposed of in accordance with a
Shelf Registration Statement, (c) the date on which such Restricted Bond is
disposed of by a Broker-Dealer pursuant to the "Plan of Distribution"
contemplated by the Exchange Offer Registration Statement (including delivery of
the Prospectus contained therein) or (d) the date on which such Restricted Bond
is distributed to the public pursuant to Rule 144 under the Act.
Trustee: JPMorgan Chase Bank (ultimate successor to City Bank Farmers
Trust Company), as trustee under the Indenture.
Underwritten Offering or Underwritten Registration: An offering or
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
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SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) hereof have been
complied with), the Company shall (i) cause to be filed with the Commission as
soon as practicable after the Closing Date, but in no event later than 240 days
after the Closing Date, the Exchange Offer Registration Statement, (ii) use its
reasonable best efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than 330
days after the Closing Date, (iii) in connection with the foregoing, (A) file
all pre-effective amendments to such Exchange Offer Registration Statement as
may be necessary in order to cause such Exchange Offer Registration Statement to
become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the Exchange Bonds to be made under the blue sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) upon the effectiveness of such Exchange Offer Registration Statement,
commence and Consummate the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting registration of the Exchange Bonds to be offered in
exchange for the Restricted Bonds that are Transfer Restricted Securities and to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) hereof.
(b) The Company shall use its reasonable best efforts to cause the
Exchange Offer Registration Statement to be effective continuously, and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 Business Days. The Company shall cause the Exchange Offer to comply with
all applicable federal and state securities laws. No securities other than the
Bonds shall be included in the Exchange Offer Registration Statement. The
Company shall use its best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 days thereafter.
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Restricted Broker-Dealer who holds Restricted Bonds
that are Transfer Restricted Securities and that were acquired for the account
of such Broker-Dealer as a result of market-making activities or other trading
activities, may exchange such Restricted Bonds (other than Transfer Restricted
Securities acquired directly from the Company or any affiliate of the Company)
pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed to be
an "underwriter" within the meaning of the Act and must, therefore, deliver a
prospectus meeting the requirements of the Act in connection with its initial
sale of each Exchange Bond received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
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Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers that the Commission may require in order
to permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Bonds held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) hereof to the extent necessary to
ensure that it is available for sales of Broker-Dealer Transfer Restricted
Securities by Restricted Broker-Dealers, and to ensure that such Registration
Statement conforms with the requirements of this Agreement, the Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of one year from the date on which the Exchange Offer is
Consummated.
The Company shall promptly provide sufficient copies of the latest
version of such Prospectus to such Restricted Broker-Dealers promptly upon
request, and in no event later than one day after such request, at any time
during such one-year period in order to facilitate such sales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file
an Exchange Offer Registration Statement with respect to the Exchange Bonds
because the Exchange Offer is not permitted by applicable law or Commission
policy (after the procedures set forth in Section 6(a)(i) hereof have been
complied with) or (ii) any Holder of Transfer Restricted Securities shall notify
the Company within 20 Business Days following the Consummation of the Exchange
Offer that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the
Exchange Bonds acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, the Company shall, provided that the Company is then eligible to use Act
Form S-3 and subject to Section 12(l) hereof, (x) cause to be filed on or prior
to 90 days after the date on which the Company determines that it is not
required to file the Exchange Offer Registration Statement pursuant to clause
(i) above or 90 days after the date on which the Company receives the notice
specified in clause (ii) above (each such date, a "Shelf Filing Date") a shelf
registration statement pursuant to Rule 415 under the Act (which may be an
amendment to the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement")), relating to all Transfer Restricted Securities
the Holders of which shall have provided the information required pursuant to
Section 4(b) hereof, and (y) use its best efforts to cause such Shelf
Registration Statement to become effective on or prior to 180 days after the
Shelf Filing Date. Subject to Section 12(l) hereof, if the Company is not
eligible to use Act Form S-3 on a Shelf Filing Date, then its obligation to file
a Shelf Registration Statement shall be deferred until the 30th day after the
earliest time that such eligibility is restored. If, after the Company has filed
an Exchange Offer Registration Statement which satisfies the requirements of
Section 3(a) hereof, the Company is required to file and make effective a Shelf
Registration Statement solely because the
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Exchange Offer shall not be permitted under applicable federal law, then the
filing of the Exchange Offer Registration Statement shall be deemed to satisfy
the requirements of clause (x) above. Such an event shall have no effect on the
requirements of clause (y) above. The Company shall use its reasonable best
efforts to keep the Shelf Registration Statement discussed in this Section 4(a)
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i) hereof)
following the date on which such Shelf Registration Statement first becomes
effective under the Act.
(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, such
information specified in Item 507 of Regulation S-K for use in connection with
any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled
to liquidated damages pursuant to Section 5 hereof unless and until such Holder
shall have used its best efforts to provide all such information. Each Holder as
to which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any such Registration Statement has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement, (iii) the Exchange Offer has not been
Consummated within 30 calendar days after the Exchange Offer Registration
Statement is first declared effective by the Commission or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within 15 Business Days by a post-effective amendment to
such Registration Statement that cures such failure and that is itself declared
effective within five Business Days (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the Company agrees to pay
liquidated damages in the form of additional interest on the Transfer Restricted
Securities to each Holder of Transfer Restricted Securities, from and including
the date on which any Registration Default shall occur to, but excluding, the
date on which such Registration Default has been cured, at a rate of 0.50% per
annum. Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if applicable, the
Shelf Registration Statement), in the case of clause (i) above, (2) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of clause (ii) above,
(3) upon Consummation of the Exchange Offer, in the case of clause (iii) above,
or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional
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Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable, in the case of clause (iv) above, the liquidated
damages payable with respect to the Transfer Restricted Securities as a result
of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All additional interest shall be paid on each payment date to the
Global Bond Holder by wire transfer of immediately available funds or by federal
funds check and to Holders of Certificated Securities by mailing checks to their
registered addresses on the books of the Company or the Trustee for such
payment. All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such security shall have
been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company shall comply with all applicable provisions of
Section 6(c) hereof, shall use its reasonable best efforts to effect such
exchange and to permit the sale of Broker-Dealer Transfer Restricted Securities
being sold in accordance with the intended method or methods of distribution
thereof, and shall comply with all of the following provisions:
(i) If, following the date hereof, there has been
published a change in Commission policy with respect to exchange offers
such as the Exchange Offer, such that in the reasonable opinion of
counsel to the Company there is a substantial question as to whether
the Exchange Offer is permitted by applicable federal law, the Company
hereby agrees to seek a no-action letter or other favorable decision
from the Commission allowing the Company to Consummate an Exchange
Offer for the Restricted Bonds. The Company hereby agrees to pursue the
issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Company hereby agrees to take all
such other actions as are reasonably requested by the Commission or
otherwise required in connection with the issuance of such decision,
including without limitation (A) participating in telephonic
conferences with the Commission, (B) delivering to the Commission staff
an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that such an
Exchange Offer should be permitted and (C) diligently pursuing a
resolution (which need not be favorable) by the Commission staff of
such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an affiliate of the Company, (B) it is
not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any Person to participate in, a
distribution of the Exchange Bonds to be issued in the Exchange Offer
and (C) it is acquiring the Exchange
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Bonds in its ordinary course of business. Each Holder hereby
acknowledges and agrees that any Broker-Dealer and any such Holder
using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on
the position of the Commission enunciated in Morgan Stanley and Co.
Inc. (available June 5, 1991) and Exxon Capital Holdings Corp.
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling (available July 2, 1993), and similar no-action
letters (including, if applicable, any no-action letter obtained
pursuant to clause (i) above), and (2) must comply with the
registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K if the resales are of Exchange Bonds obtained by such Holder in
exchange for Restricted Bonds acquired by such Holder directly from the
Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental letter
to the Commission (A) stating that the Company is registering the
Exchange Offer in reliance on the position of the Commission enunciated
in Exxon Capital Holdings Corp. (available May 13, 1988), Morgan
Stanley and Co. Inc. (available June 5, 1991) and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that the Company has not entered into any arrangement or
understanding with any Person to distribute the Exchange Bonds to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange Offer
is acquiring the Exchange Bonds in its ordinary course of business and
has no arrangement or understanding with any Person to participate in
the distribution of the Exchange Bonds received in the Exchange Offer
and (C) any other undertaking or representation required by the
Commission as set forth in any no-action letter obtained pursuant to
clause (i) above.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall comply with all the provisions of
Section 6(c) hereof and shall use its best efforts to effect such registration
to permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without limitation,
any Exchange Offer Registration Statement and the
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related Prospectus, to the extent that the same are required to be available to
permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 hereof, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain a material misstatement or omission or (B) not to be effective
and usable for resale of Transfer Restricted Securities during the
period required by this Agreement, the Company shall file promptly an
appropriate amendment to such Registration Statement, (1) in the case
of clause (A), correcting any such misstatement or omission, and (2) in
the case of clauses (A) and (B), using its best efforts to cause such
amendment to be declared effective and such Registration Statement and
the related Prospectus to become usable for their intended purpose(s)
as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, or such shorter
period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act,
and to comply fully with Rules 424, 430A and 462, as applicable, under
the Act in a timely manner; and comply with the provisions of the Act
with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, confirm such advice
in writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating thereto, (C)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
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of the circumstances under which they were made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or blue sky laws,
the Company shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to the Initial Purchaser(s), each selling
Holder named in any Registration Statement or Prospectus and each of
the underwriter(s) in connection with such sale, if any, before filing
with the Commission, copies of any Registration Statement or any
Prospectus included therein or any amendments or supplements to any
such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such Holders and underwriter(s) in connection with such sale, if
any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any amendment
or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which the
selling Holders of the Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s) in connection with such
sale, if any, shall reasonably object within five Business Days after
the receipt thereof;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders and
to the underwriter(s) in connection with such sale, if any, make the
Company's representatives available for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by
the selling Holders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant retained by such selling Holders or any of such
underwriter(s), all financial and other records, material corporate
documents and properties of the Company and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s) in connection with such sale, if any, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to
have included therein, including, without limitation,
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information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount
of Transfer Restricted Securities being sold to such underwriter(s),
the purchase price being paid therefor and any other terms of the
offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(viii) if requested in writing by any selling Holder and
each of the underwriter(s) in connection with such sale, if any,
furnish, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(ix) if requested in writing by any selling Holder and
each of the underwriter(s), if any, deliver, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company hereby consents to the use (in accordance with
law) of the Prospectus and any amendment or supplement thereto by each
of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement
thereto;
(x) enter into such agreements (including an underwriting
or similar agreement) and make such representations and warranties and
take all such other actions in connection therewith in order to
expedite or facilitate the disposition of the Transfer Restricted
Securities pursuant to any Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder of Transfer
Restricted Securities or underwriter in connection with any sale or
resale pursuant to any Registration Statement contemplated by this
Agreement, and in such connection, whether or not an underwriting or
similar agreement is entered into and whether or not the registration
is an Underwritten Registration, the Company shall:
(A) furnish (or in the case of clauses (2) and
(3) below, use its best efforts to furnish) to each selling
Holder and each underwriter, if any, upon the effectiveness of
the Shelf Registration Statement and to each Restricted
Broker-Dealer upon Consummation of the Exchange Offer:
(1) a certificate, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, signed on behalf of the Company by
(x) the President or any Vice President and (y) a
principal financial or accounting officer of the
Company, confirming, as of the
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date thereof, the matters set forth in Sections 10(d)
and 10(e) of the Purchase Agreement and such other
similar matters as the Holders, underwriter(s) and/or
Restricted Broker-Dealers may reasonably request;
(2) an opinion, dated the date of
Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as
the case may be, of counsel for the Company covering
matters similar to those set forth in Section
10(b)(i) of the Purchase Agreement and such other
matters as the Holders, underwriter(s) and/or
Restricted Broker-Dealers may reasonably request, and
in any event including a statement to the effect that
such counsel has participated in conferences with
officers and other representatives of the Company,
representatives of the independent public accountants
for the Company and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying
as to materiality to a large extent upon facts
provided to such counsel by officers and other
representatives of the Company and without
independent check or verification), no facts came to
such counsel's attention that caused such counsel to
believe that the applicable Registration Statement,
at the time such Registration Statement or any
post-effective amendment thereto became effective
and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the
Exchange Offer, 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 the
Prospectus contained in such Registration Statement
as of its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer, as of
the date of Consummation, contained 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, not misleading. Without
limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility
for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, Bonds and schedules and other financial
data included in any Registration Statement
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contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated
as of the date of effectiveness of the Shelf
Registration Statement or the date of Consummation of
the Exchange Offer, as the case may be, from the
Company's independent accountants, in the customary
form and covering matters of the type customarily
covered in comfort letters to underwriters in
connection with primary underwritten offerings, and
affirming the matters set forth in the comfort
letters delivered pursuant to Section 10(c)(i) and
Section 10(c)(ii) of the Purchase Agreement, without
exception;
(B) set forth in full or incorporate by
reference in the underwriting or similar agreement, if any, in
connection with any sale or resale pursuant to any Shelf
Registration Statement, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to
be indemnified pursuant to said Section 8; and
(C) deliver such other documents and
certificates as may be reasonably requested by the selling
Holders, the underwriter(s), if any, and Restricted
Broker-Dealers, if any, to evidence compliance with clause (A)
above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company pursuant to this clause (C);
the above shall be done at each closing under such underwriting or similar
agreement, as and to the extent required thereunder, and if at any time the
representations and warranties of the Company contemplated in clause (A)(1)
above cease to be true and correct, the Company shall so advise the
underwriter(s), if any, the selling Holders and each Restricted Broker-Dealer
promptly and, if requested by such Persons, shall confirm such advice in
writing;
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the
securities or blue sky laws of such jurisdictions as the selling
Holders or underwriter(s), if any, may request and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
applicable Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would
subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
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(xii) (A) issue, upon the request of any Holder of
Series G Bonds covered by any Shelf Registration Statement contemplated
by this Agreement, Series H Bonds having an aggregate principal amount
equal to the aggregate principal amount of Series G Bonds surrendered
to the Company by such Holder in exchange therefor or being sold by
such Holder; such Series H Bonds to be registered in the name of such
Holder or in the name of the purchaser(s) of such Bonds, as the case
may be; in return, the Series G Bonds held by such Holder shall be
surrendered to the Company for cancellation;
(B) issue, upon the request of any Holder of
Series I Bonds covered by any Shelf Registration Statement contemplated
by this Agreement, Series J Bonds having an aggregate principal amount
equal to the aggregate principal amount of Series I Bonds surrendered
to the Company by such Holder in exchange therefor or being sold by
such Holder; such Series J Bonds to be registered in the name of such
Holder or in the name of the purchaser(s) of such Bonds, as the case
may be; in return, the Series I Bonds held by such Holder shall be
surrendered to the Company for cancellation;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as
the Holders or the underwriter(s), if any, may request at least two
Business Days prior to such sale of Transfer Restricted Securities;
(xiv) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof
or the underwriter(s), if any, to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) subject to clause (i) above, if any fact or event
contemplated by clause (iii)(D) above shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee with printed certificates for the
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Transfer Restricted Securities which are in a form eligible for deposit
with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified independent
underwriter") that is required to be retained in accordance with the
rules and regulations of the NASD, and use its best efforts to cause
such Registration Statement to become effective and approved by such
governmental agencies or authorities as may be necessary to enable the
Holders selling Transfer Restricted Securities to consummate the
disposition of such Transfer Restricted Securities;
(xviii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earning
statement meeting the requirements of Rule 158 under the Act (which
need not be audited) covering a twelve-month period beginning after the
effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders of Bonds to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of a notice of actions to be
taken as referred to in Section 6(c)(i) hereof or any notice from the Company of
the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof,
such Holder will forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xv) hereof, or until it is advised in writing by the Company that
the use of the Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the
Prospectus (the "Advice"). If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of either such notice. In the event the Company shall give any such
notice, the time period regarding the effectiveness of such Registration
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Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended
by the number of days during the period from and including the date of the
giving of such notice pursuant to Section 6(c)(i) or Section 6(c)(iii)(D) hereof
to and including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xv) hereof or shall have received the
Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees; (ii) all fees and expenses of
compliance with federal securities and state blue sky or securities laws; (iii)
all expenses of printing (including printing certificates for the Exchange Bonds
to be issued in the Exchange Offer and printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel for
the Company and (other than in connection with the Exchange Offer) the Holders
of Transfer Restricted Securities; (v) all application and filing fees, if any,
in connection with listing the Bonds on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
(b) In connection with the Shelf Registration Statement, the
Company will reimburse the Holders of Transfer Restricted Securities registered
pursuant to the Shelf Registration Statement for the reasonable fees and
disbursements of not more than one counsel, who shall be chosen by the Holders
of a majority in principal amount of the Transfer Restricted Securities for
whose benefit the Shelf Registration Statement is being prepared in consultation
with the Company.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each Holder and each Person, if any, who controls
any Holder 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 ("Indemnified Holder"), and to reimburse the Holders 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 any Registration
Statement, or, if any Registration Statement shall be amended or supplemented,
in the Registration Statement as so amended or supplemented, or arise out of or
are based upon any omission or
A-17
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 the Registration Statement or in the
Registration Statement as so amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company by any Holder
expressly for use therein.
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 the indemnity agreement contained in
this Section 8 shall survive any termination of this Agreement. The liabilities
of the Company in this Section 8 are in addition to any other liabilities of the
Company under this Agreement or otherwise.
(b) Each Holder agrees, severally and not jointly, to the extent
permitted by law, to indemnify, hold harmless and reimburse the Company and each
Person, if any, who controls the Company 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 or in the Registration Statement, as amended or
supplemented (if applicable), in reliance upon and in conformity with
information furnished in writing to the Company by such Holder expressly for use
therein.
The indemnity agreement on the part of each Holder contained in this
Section 8(b) shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any other Person, and the
indemnity agreement contained in this Section 8(b) shall survive any termination
of this Agreement.
(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) hereof, such Person
(the "Indemnified Person") shall notify the Person against whom such indemnity
may be sought (the "Indemnifying Person") promptly after any assertion of such
claim threatening to institute an action, suit or proceeding or, if such an
action, suit or proceeding is commenced against such Indemnified Person,
promptly after such Indemnified Person shall have been served with a summons or
other first legal process, giving information as to the nature and basis of the
claim. Failure to so notify the Indemnifying Person shall not, however, relieve
the Indemnifying Person from any liability which it may have on account of the
indemnity under Section 8(a) or 8(b) hereof 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 a majority in
principal amount of the Holders in the case of parties indemnified pursuant to
Section 8(b) hereof and by the Company in the case of parties indemnified
pursuant to Section 8(a) hereof. 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
A-18
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 Person shall repay
to the Indemnifying Parties such fees and expenses of such separate counsel as
the Indemnifying Person shall have reimbursed. It is understood that the
Indemnifying Person shall not, in connection with any litigation or proceeding
or related litigation or proceedings in the same jurisdiction as to which the
Indemnified Persons are entitled to such separate representation, be liable
under this Agreement for the reasonable fees and out-of-pocket expenses of more
than one separate firm (together with not more than one appropriate local
counsel) for all such Indemnified Persons. Subject to the next paragraph, all
such fees and expenses shall be reimbursed by payment to the Indemnified Persons
of such reasonable fees and expenses of counsel promptly after payment thereof
by the Indemnified Persons.
In furtherance of the requirement above that fees and expenses of any
separate counsel for the Indemnified Persons shall be reasonable, the Holders
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 Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel;
(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 Holders 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 against the Indemnified Person, the Indemnifying Person agrees, subject
to the provisions of this Section 8, to indemnify the Indemnified Person
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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 Person under this
Section 8 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 this 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 sale of the Transfer Restricted Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each Indemnifying Person shall contribute to such amount
paid or payable by such Indemnified Person in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative 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 Holders 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 Holders agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation
(even if the Holders 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 in this Section 8. 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 in this Section 8 shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnified Person in connection with
investigating or defending any such actions, suits or proceedings (including
governmental proceedings) or claims, provided that the provisions of this
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 8, no Holder shall be required to contribute any amount greater
than the excess of the amount by which the total received by such Holder with
respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent
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misrepresentation. The Holders' obligations in this Section 8 to contribute are
several in proportion to their respective obligations and not joint.
The agreement with respect to contribution contained in this Section 8
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Company or any Holder, and shall survive any termination of
this Agreement.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder of Transfer Restricted Securities, to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in customary underwriting arrangements entered
into in connection therewith and (b) completes and executes all reasonable
questionnaires, powers of attorney, and other documents required under the terms
of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
For any Underwritten Offering, the investment banker or investment
bankers and manager or managers for any Underwritten Offering that will
administer such offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company. The Holders of Transfer Restricted
Securities included in any such Underwritten Offering shall be responsible for
paying all underwriting or placement fees charged, or costs or expenses
incurred, by such investment bankers and managers in connection with such
Underwritten Offering. Such investment bankers and managers are referred to
herein as the "underwriters".
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to
exercise all rights provided herein, in the Indenture, in the Purchase Agreement
or granted by law, including recovery of liquidated or other damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by the Company of the provisions of this
Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
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(b) No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The Company has not
previously entered into any agreement granting any registration rights with
respect to its securities to any Person. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Bonds. The Company will not take any
action, or voluntarily permit any change to occur, with respect to the Bonds
that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless (i) in the case
of Section 5 hereof and this Section 12(d)(i), the Company has obtained the
written consent of Holders of all outstanding Transfer Restricted Securities and
(ii) in the case of all other provisions hereof, the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to or departure from the provisions hereof that relates exclusively to
the rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the rights of
other Holders whose securities are not being tendered pursuant to such Exchange
Offer may be given by the Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities subject to such Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar; and
(ii) if to the Company:
Consumers Energy Company
One Energy Plaza
Jackson, Michigan 49201
Telecopier No.: (517) 788-2186, Attention: Chief
Financial Officer
With a copy at the same address to:
Robert C. Shrosbree, Esq.
Telecopier No.: (313) 436-9225
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the
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mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and
on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities directly from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
(l) S-3 Ineligibility. If the Company becomes required to file a
Shelf Registration Statement but is not eligible to use Act Form S-3 by the
240th day after the date of this Agreement (the "S-3 Ineligibility Date"), the
Company shall (A) cause to be filed as soon as practicable after the S-3
Ineligibility Date a Shelf Registration Statement containing a resale prospectus
on whatever Act form the Company is then eligible to use relating to all
Transfer Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof and (B) use its best
efforts to cause such Shelf Registration Statement to become effective as soon
as practicable.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
CONSUMERS ENERGY COMPANY
By: ______________________________
Name: Thomas J. Webb
Title: Executive Vice President and
Chief Financial Officer
BANC ONE CAPITAL MARKETS, INC.
BARCLAYS CAPITAL INC.
J.P. MORGAN SECURITIES INC.
ABN AMRO INCORPORATED
HUNTINGTON CAPITAL CORP.
TOKYO-MITSUBISHI INTERNATIONAL PLC
WACHOVIA SECURITIES, LLC
COMERICA SECURITIES, INC.
FIFTH THIRD SECURITIES, INC.
By: Banc One Capital Markets, Inc.
By: ________________________________
Name:
Title:
A-24
EXHIBIT B-1
1. The offer, sale and delivery of the Restricted Bonds to the Initial
Purchasers in the manner contemplated by the Purchase Agreement and the Offering
Memorandum and the initial resale of the Restricted Bonds by the Initial
Purchasers in the manner contemplated in the Offering Memorandum and the
Purchase Agreement, do not require registration under the Act and the
Supplemental Indenture does not require qualification under the TIA, it being
understood that we do not express any opinion as to any subsequent reoffer or
resale of any of the Restricted Bonds.
2. The Registration Rights Agreement is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms.
B-1-1
EXHIBIT B-2
No facts have come to our attention that have caused us to believe that the
Offering Memorandum, as of its date and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial data and financial projections included therein or excluded
therefrom). For purposes of the foregoing, we note that the Offering Memorandum
has been prepared in the context of a Rule 144A transaction and not as part of a
registration statement under the Act and does not contain all the information
that would be required in a registration statement under the Act.
B-2-1
EXHIBIT C
1. The Company is a duly organized, validly existing corporation in good
standing under the laws of the State of Michigan.
2. All legally required corporate proceedings in connection with the
authorization, issuance and validity of the Restricted Bonds and the sale of the
Restricted Bonds by the Company in accordance with the Purchase Agreement have
been taken and an appropriate order has been entered by the Federal Energy
Regulatory Commission under the Federal Power Act authority for the issuance and
sale of the Restricted Bonds and such order is in full force and effect; and no
approval, authorization, consent or other order of any governmental regulatory
body is required with respect to the issuance and sale of the Restricted Bonds
(other than in connection with or in compliance with the provisions of the
securities or blue sky laws of any state, as to which I express no opinion).
3. I do not know of any legal or governmental proceedings that would be
required to be described in the Offering Memorandum if it were a registration
statement filed by the Company under the Act that are not described as required,
nor of any contracts or documents of a character so required to be described in
the Offering Memorandum that are not described as required.
4. The statements made in the Offering Memorandum under the caption
"Description of the Bonds" constitute summaries of legal matters or documents
referred to therein and are accurate in all material respects; and the
Restricted Bonds conform as to legal matters to the descriptions thereof and to
the statements in regard thereto contained in such section of the Offering
Memorandum.
5. Each document incorporated in the Offering Memorandum as such document
was originally filed pursuant to the Exchange Act (except for (i) the operating
statistics, financial statements and schedules contained or incorporated by
reference therein (including the notes thereto and the auditors' reports
thereon), (ii) the other financial or statistical information contained or
incorporated by reference therein and (iii) the exhibits thereto, as to which I
express no opinion) complied as to form when so filed in all material respects
with the Exchange Act and the applicable rules and regulations of the Commission
thereunder.
6. The Purchase Agreement has been duly authorized, executed and delivered
by the Company.
7. The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Initial Purchasers, is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity).
8. The Indenture has been duly authorized, executed and delivered by the
Company and, assuming due authorization, execution and delivery of the Indenture
by the Trustee, will be a
C-1
valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally or by general principles of
equity (regardless of whether enforcement is considered in a proceeding at law
or in equity).
9. The Indenture complies as to form in all material respects with the
requirements of the TIA and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder. It is not necessary in
connection with the offer, sale and delivery of the Restricted Bonds to the
Initial Purchasers in the manner contemplated by the Purchase Agreement or in
connection with the Exempt Resales to qualify the Indenture under the TIA.
10. The Restricted Bonds are in the form contemplated by the Indenture,
have been duly authorized, executed and delivered by the Company and, assuming
the due authentication thereof by the Trustee and upon payment and delivery in
accordance with the Purchase Agreement, will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity); the Restricted Bonds are entitled to the security afforded by the
Indenture equally and ratably with all securities presently outstanding
thereunder, and no stamp taxes in respect of the original issue thereof are
payable.
11. The Company has good and marketable title to all its important
properties described in the Offering Memorandum and to substantially all other
real estate and property specifically described in the Indenture as subject to
the lien thereof except (a) that released or retired in accordance with the
provisions of the Indenture, (b) leased offices, garages and service buildings,
(c) leased nuclear fuel, (d) certain electric substations and gas regulator
stations and other facilities erected on sites under leases, easements, permits
or contractual arrangements, (e) certain pollution control facilities, which are
subject to security interests granted to various municipalities and economic
development corporations under installment sales contracts, (f) as to electric
and gas transmission and distribution lines, many of such properties are
constructed on rights-of-way by virtue of franchises or pursuant to easements
only, and (g) as to certain gas storage fields, the Company's interest in
certain of the gas rights and rights of storage and other rights incidental
thereto are in the nature of an easement or leasehold interest only; the
Indenture constitutes, as security for the Restricted Bonds, a valid direct
first mortgage lien on the real estate, property and franchises, subject only to
excepted encumbrances as defined therein and except as otherwise expressly
stated therein and subject to Michigan Compiled Laws Annotated Section
324.20138, which provides under certain circumstances for the creation of
priority liens on property of the Company in favor of the State of Michigan
covering reimbursement for any expense incurred in a response activity under the
Michigan Environmental Response Act; the Indenture is effective to create the
lien intended to be created thereby; and real estate, property or franchises in
the State of Michigan, hereafter acquired by the Company, will become subject to
the lien of the Indenture, at the time of acquisition, subject to liens existing
thereon at the time of acquisition, and subject to excepted encumbrances, and
subject to any necessary filing and recording before the intervention of any
lien not expressly excepted thereby, and subject to the qualification above with
respect to the enforceability of the Indenture.
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12. The Exchange Bonds are in the form contemplated by the Indenture, have
been duly authorized by the Company and, assuming the due delivery and execution
thereof by the Company and the due authentication thereof by the Trustee in
accordance with the Registration Rights Agreement, will constitute valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or by general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).
13. The issuance and sale of the Restricted Bonds in accordance with the
terms of the Indenture and the Purchase Agreement do not violate the provisions
of the Restated Articles of Incorporation or the Bylaws of the Company, and will
not result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company is a party.
14. The Company is not an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
15. The Company (i) is a "public utility" and a "subsidiary company" of a
"holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, and (ii) is currently exempt from all
provisions of the Public Utility Holding Company Act of 1935, as amended, except
Section 9(a)(2) thereof.
16. No registration under the Act of the Restricted Bonds is required for
the sale of the Restricted Bonds to the Initial Purchasers as contemplated by
the Purchase Agreement or for the Exempt Resales assuming (i) that each of the
Initial Purchasers is an Eligible Purchaser or an Accredited Investor (as
defined in Regulation D under the Act), (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements contained in
Section 7 of the Purchase Agreement, and (iii) the accuracy of the
representations of the Company set forth in Sections 5(e), 5(n), 6(n), 6(p),
6(q), and 6(r)of the Purchase Agreement.
17. Nothing has come to my attention that would lead me to believe that the
Offering Memorandum (other than (i) the operating statistics, financial
statements and schedules contained or incorporated by reference therein
(including the notes thereto and the auditors' reports thereon), (ii) the other
financial or statistical information contained or incorporated by reference
therein and (iii) the exhibits thereto, as to which I express no opinion), as of
its date or at the date hereof contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
C-3