1
Exhibit (1)(a)
__________________
CMS ENERGY CORPORATION
[CMS ENERGY MICHIGAN LIMITED PARTNERSHIP]
_____________________
_____________________
General Terms of Underwriting Agreement
______________, 199_
To the Representatives named in
Schedule I hereto of the Under-
writers named in Schedule II
hereto
Dear Sirs:
CMS Energy Corporation, a Michigan corporation [CMS Energy
Michigan Limited Partnership, a Michigan Limited Partnership] (the "Company"),
proposes to issue and sell to the several Underwriters (as defined in Section
14 hereof) ____________________ (the "Firm Securities") [with such terms] as
indicated in Schedule II. [If there is to be an over-allotment option, the
Company also proposes to issue and sell to the several Underwriters not more
than ____________________________________________(the "Additional Securities")
if and to the extent that the Representatives (as defined in Section 14 hereof)
shall have determined to exercise, on behalf of the Underwriters, the right to
purchase such securities granted to the Underwriters in Section 1 hereof.] The
Firm Securities [and the Additional Securities] are hereinafter collectively
referred to as the Securities. The Underwriters have designated the
Representatives to execute this Agreement on their behalf and to act for them
in the manner provided in this Agreement.
The Company has prepared and filed, with the Securities and
Exchange Commission (the "Commission"), in accordance with the provisions of
the Securities Act of 1933, as amended (the "Act"), a registration statement on
Form S-3 (Registration No. 33-____) including a prospectus relating to the
Securities and such registration statement has become effective under the Act.
The registration statement at the time it initially became effective and as it
may have been thereafter amended to the date of this Agreement (including the
documents then incorporated by reference therein) is hereinafter referred to as
the "Registration Statement." The prospectus relating to theSecurities and
forming a part of the Registration Statement at the time the Registration
Statement initially became effective (including the documents then incorporated
by reference therein) is hereinafter referred to as the "Basic Prospectus"
provided that in the event that the Basic Prospectus shall have been amended,
revised or supplemented
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prior to the date of this Agreement, or if the Company shall have supplemented
the Basic Prospectus by filing any documents pursuant to Section 13 or 14 or 15
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after
the time the Registration Statement initially became effective and prior to the
date of this Agreement, which documents are deemed to be incorporated in the
Basic Prospectus, the term "Basic Prospectus" shall also mean such prospectus
as so amended, revised or supplemented. The Basic Prospectus, as it shall be
supplemented to reflect the terms of the offering and sale of the Securities by
a prospectus supplement relating to the Securities, to be filed with, or
transmitted for filing to, the Commission pursuant to Rule 424 under the Act,
is hereinafter referred to as the "Prospectus." Any reference herein to the
terms "amend," "amendment" or "supplement" with respect to the Registration
Statement or the Prospectus shall be deemed to include only amendments or
supplements to the Registration Statement or Prospectus, as the case may be,
and documents incorporated by reference therein after the date of this
Agreement and prior to the termination of the offering of the Securities by the
Underwriters.
1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth, the
Company agrees to sell to the respective Underwriters, severally and not
jointly, and the respective Underwriters, severally and not jointly, agree to
purchase from the Company, at the purchase price of _________ (the "Purchase
Price"), the respective amount of Firm Securities set opposite their names in
Schedule II hereto.
[In addition, on the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth, the
Company agrees to sell to the Underwriters, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to _________
Additional Securities at the Purchase Price. Additional Securities may be
purchased as provided in Section 2 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Securities.
If any Additional Securities are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Securities
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of Additional Securities to be purchased as the number of Firm
Securities set forth in Schedule II opposite the name of such Underwriter bears
to the total number of Firm Securities.]
The Company hereby agrees that, without the prior written
consent of ____________, the Company will not offer, sell, contract to sell or
otherwise dispose of any Securities or any securities convertible into or
exercisable or exchangeable for the Securities other than the Securities for a
period of ___ days after the date of this Agreement, provided, that the Company
may, during such ___ day period, issue Securities under its dividend
reinvestment, employee incentive and employee stock ownership plans.
The Company is advised by the Representatives that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon as this Agreement has become effective. The Company is
further advised by the Representatives that the Securities are to be offered to
the public initially at ________ (the public offering price) and to certain
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dealers selected by you at a price that represents a concession not in excess
of _________ under the public offering price, and that any Underwriter may
allow, and such dealers may allow, a concession, not in excess of ____ per
________, to certain other dealers.
2. Payment and Delivery: Payment for the Firm Securities shall be made
to the Company or its order by __________, as requested by the Company, payable
in ___________________ funds, at the offices of_______________________________
__________________________________ (or such other place or places of payment as
shall be agreed upon by the Company and the Underwriters in writing), upon the
delivery of the Firm Securities at said offices (or such other place or places
of delivery as shall be agreed upon by the Company and the Representatives) to
the Representatives for the respective accounts of the Underwriters against
receipt therefor signed by the Representatives on behalf of themselves and as
agent for the other Underwriters. Such payment and delivery shall be made at
10:00 A.M., New York time on ____________, 199_ (or on such later business day
as shall be agreed upon by the Company and the Representatives in writing),
unless postponed in accordance with the provisions of Section 10 hereof. The
day and time at which payment and delivery for the Firm Securities are to be
made is herein called the "Time of Purchase".
[Payment for any Additional Shares shall also be made to the
Company or its order by ____________, as requested by the Company, payable in
New York Clearing House funds, at the offices of ____________________________
__________________________________________ (or such other place or places of
payment as shall be agreed upon by the Company and the Representatives in
writing) upon the delivery of the Additional Securities at said offices (or
such other place or places of delivery as shall be agreed upon by the Company
and the Representatives in writing) against receipt therefor as aforesaid at
10:00 A.M., New York time, on such date (which may be the same as the Time of
Purchase but shall in no event be earlier than the Time of Purchase nor later
than ten business days after the giving of the notice hereinafter referred to)
as shall be designated in a written notice to the Company from the
Representatives of their determination, on behalf of the Underwriters, to
purchase a number, specified in said notice, of Additional Shares, or on such
other date, in any event not later than _____________, 199_, as shall be
designated in writing by them. The day and time at which payment and delivery
for the Additional Securities are to be made is hereinafter called the "Time of
Additional Purchase." The notice of the determination to exercise the option
to purchase Additional Shares and of the Time of Additional Purchase may be
given at any time within 30 days after the date of this Agreement.]
Delivery of the Securities shall be made in definitive, fully
registered form in authorized denominations registered in such names as the
Representatives may request in writing to the Company not later than three full
business days prior to the Time of Purchase [or Time of Additional Purchase, as
the case may be], or if no such request is received, in the names of the
respective Underwriters for the respective number of shares of Firm Securities,
set forth opposite the name of each Underwriter in Schedule II, [and in the
case of Additional Securities, for the respective number of shares determined
in accordance with Section 1 hereof, in each case] in denominations selected by
the Company.
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The Company agrees to make the Securities available for
inspection by the Underwriters at the offices of ______________________
________ at least 24 hours prior to the Time of Purchase, [or the Time of
Additional Purchase, as the case may be,] in definitive, fully registered form,
and as requested pursuant to the preceding paragraph.
3. Conditions of Underwriters' Obligations: The several obligations
of the Underwriters hereunder are subject to the accuracy of the warranties and
representations on the part of the Company and to the following other
conditions:
(a) That all legal proceedings to be taken in connection with
the issue and sale of the Securities shall be reasonably satisfactory
in form and substance to Messrs. Reid & Priest, of New York, New York,
counsel to the Underwriters.
(b) That, at the Time of Purchase [and the Time of Additional
Purchase,] the Representatives shall be furnished with the following
opinions, dated the day of the Time of Purchase [or Time of Additional
Purchase, as the case may be]:
(1) Opinions of Denise M. Sturdy, Esq. and Messrs.
Sidley & Austin, of Chicago, Illinois, counsel to the Company,
substantially to the effect set forth in Exhibit A of this Agreement;
and
(2) Opinion of Messrs. Reid & Priest, of New York,
New York, counsel to the Underwriters, substantially to the effect set
forth in Exhibit B to this Agreement.
(c) That at the Time of Purchase [and Time of Additional
Purchase] the Representatives shall have received a letter from Arthur
Andersen LLP. in form and substance satisfactory to the
Representatives, on and dated as of the day of the Time of Purchase [or
the Time of Additional Purchase, as the case may be,] (i) confirming
that they are independent public accountants within the meaning of the
Act and the applicable published rules and regulations of the
Commission thereunder, (ii) stating that in their opinion the financial
statements examined by them and included in the Registration Statement
complied as to form in all material respects with the applicable
accounting requirements of the Commission, including applicable
published rules and regulations of the Commission, and (iii) covering,
as of a date not more than five business days prior to the date of such
letter, such other matters as the Representatives reasonably request.
(d) That, between the date of the execution of this Agreement
and the Time of Purchase [and the Time of Additional Purchase, as the
case may be,] no material and adverse change shall have occurred in the
business, properties or financial condition of the Company and its
subsidiaries (as defined in Rule 405 under the Act, and hereafter
called the "Subsidiaries"), taken as a whole, which, in the judgment of
the Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities (other
than changes referred to in or contemplated by the Registration
Statement).
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(e) That, prior to the Time of Purchase [and Time of
Additional Purchase,] no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Act by the
Commission or proceedings therefor initiated or threatened.
(f) That, at the Time of Purchase [and Time of Additional
Purchase,] the Company shall have delivered to the Representatives a
certificate of an executive officer of the Company to the effect that,
to the best of his knowledge, information and belief there shall have
been no material adverse changes in the business, properties or
financial condition of the Company and its Subsidiaries, taken as a
whole, from that set forth in the Registration Statement or Prospectus
(other than changes referred to in or contemplated by the Registration
Statement or Prospectus).
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or before
the Time of Purchase [and Time of Additional Purchase] by the terms
hereof.
(h) That any additional documents or agreements reasonably
requested by the Representatives or their counsel to permit the
Underwriters to perform their obligations or permit their counsel to
deliver opinions hereunder shall have been provided to them.
(i) That between the date of the execution of this Agreement
and the day of the Time of Purchase [or the Time of Additional
Purchase, as the case may be,] there has been no downgrading of the
investment ratings of any of the Company's securities or of Consumers
Power Company's first mortgage bonds by Standard & Poor's Corporation,
Moody's Investors Service, Inc. or Duff & Phelps Credit Rating Co., and
neither the Company nor Consumers Power Company shall have been placed
on "credit watch" or "credit review" with negative implications by any
of such statistical rating organizations if any of such occurrences
shall, in the reasonable judgment of the Representatives, after
reasonable inquiries on the part of the Representatives, impair the
marketability of the Securities.
(j) That any filing of the Prospectus and any supplements
thereto required pursuant to Rule 424 under the Act have been made in
compliance with Rule 424 in the time periods provided by Rule 424, or
at such later time as may be acceptable to the Representatives.
4. Conditions of the Company's Obligations: The obligations of the
Company hereunder are subject to the satisfaction of the condition set forth in
Section 3(e).
5. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To use its best efforts to cause any post-effective
amendments to the Registration Statement to become effective as
promptly as possible. During the time
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when a Prospectus is required to be delivered under the Act, the
Company will comply so far as it is able with all requirements
imposed upon it by the Act and the rules and regulations of the
Commission to the extent necessary to permit the continuance of sales
of or dealings in the Securities in accordance with the provisions
hereof and of the Prospectus.
(b) To deliver to each of the Representatives a signed copy
of the Registration Statement (including all exhibits thereto) and full
and complete sets of all comments of the Commission or its staff and
all responses thereto with respect to the Registration Statement and to
furnish to the Underwriters conformed copies of the Registration
Statement without exhibits.
(c) As soon as the Company is advised thereof, the Company
will advise the Representatives and confirm the advice in writing of:
(i) the effectiveness of any amendment to the Registration Statement,
(ii) any request made by the Commission for amendments to the
Registration Statement or Prospectus or for additional information with
respect thereto, (iii) the suspension of qualification of the
Securities for sale under Blue Sky or state securities laws, and (iv)
the entry of a stop order suspending the effectiveness of the
Registration Statement or of the initiation or threat or any
proceedings for that purpose and, if such a stop order should be
entered by the Commission, to make every reasonable effort to obtain
the lifting or removal thereof.
(d) To deliver to the Underwriters, without charge, as soon
as practicable, and from time to time during such period of time (not
exceeding nine months) after the date of the Prospectus as they are
required by law to deliver a prospectus, as many copies of the
Prospectus (as supplemented or amended if the Company shall have made
any supplements or amendments thereto) as the Representatives may
reasonably request; and in case any Underwriter is required to deliver
a prospectus after the expiration of nine months after the date of the
Prospectus, to furnish to the Representatives, upon request, at the
expense of such Underwriter, a reasonable quantity of a supplemental
prospectus or of supplements to the Prospectus complying with Section
10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months) after
the date of the Prospectus as the Underwriters are required by law to
deliver a prospectus in respect of the Securities, if any event shall
have occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it becomes necessary to amend or
supplement the Prospectus to comply with law, to forthwith prepare and
file with the Commission an appropriate amendment or supplement to the
Prospectus and deliver to the Underwriters, without charge, such number
of copies thereof as may be reasonably requested.
(f) To make generally available to the Company's security
holders, as soon as practicable, an "earning statement" (which need not
be audited by independent public
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accountants) covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later than
15 months thereafter, which shall comply in all material respects with
and satisfy the provisions of Section 11(a) of the Act and Rule 158
under the Act.
(g) To use its best efforts to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to pay (or cause
to be paid), or reimburse (or cause to be reimbursed) the Underwriters
and their counsel for, reasonable filing fees and expenses in
connection therewith (including the reasonable fees and disbursements
of counsel to the Underwriters and filing fees and expenses paid and
incurred prior to the date hereof), provided, however, that the Company
shall not be required to qualify to do business as a foreign
corporation or as a securities dealer or to file a general consent to
service of process or to file annual reports or to comply with any
other requirements deemed by the Company to be unduly burdensome.
(h) To pay all expenses, fees and taxes (other than transfer
taxes on sales by the respective Underwriters) in connection with the
issuance and delivery of the Securities, except that the Company shall
be required to pay the fees and disbursements (other than disbursements
referred to in paragraph (g) of this Section 5) of Reid & Priest, of
New York, New York, counsel to the Underwriters, only in the events
provided in paragraph (i) of this Section 5, the Underwriters hereby
agreeing to pay such fees and disbursements in any other event, and
that except as provided in Section (i), the Company shall not be
responsible for any out-of-pocket expenses of the Underwriters in
connection with their services hereunder.
(i) If the Underwriters shall not take up and pay for the
Firm Securities due to the failure of the Company to comply with any of
the conditions specified in Section 3 hereof, or, if this Agreement
shall be terminated in accordance with the provisions of Section 11
hereof prior to the Time of Purchase, to pay the fees and disbursements
of Reid & Priest, counsel to the Underwriters, and, if the Underwriters
shall not take up and pay for the Firm Securities due to the failure of
the Company to comply with any of the conditions specified in Section 3
hereof, to reimburse the Underwriters for their reasonable
out-of-pocket expenses, in an aggregate amount not exceeding a total of
___, incurred in connection with the financing contemplated by this
Agreement.
(j) Prior to the termination of the offering of the
Securities, to not file any amendment to the Registration Statement or
supplement to the Prospectus (including the Basic Prospectus) unless
the Company has furnished the Representatives and counsel to the
Underwriters with a copy for their review and comment a reasonable time
prior to filing and has reasonably considered any comments of the
Representatives, or any such amendment or supplement to which such
counsel shall reasonably object on legal grounds in writing, after
consultation with the Representatives.
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(k) To furnish the Representatives with copies of all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act subsequent to the time the
Registration Statement becomes effective and prior to the termination
of the offering of the Securities.
6. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statement has become effective under the
Act; any filing of the Prospectus and any supplements thereto required
pursuant to Rule 424(b) have been or will be made in the manner
required by Rule 424(b) and within the time period required by Section
3(j) hereof; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purposes are pending before or, to the knowledge of the Company,
threatened by the Commission. On the effective date of the
Registration Statement, the Registration Statement and the Basic
Prospectus complied, or were deemed to have complied, on its issue
date, the Basic Prospectus complied, and on its issue date, the
Prospectus will comply, or will be deemed to comply, in all material
respects with the applicable provisions of the Act and the published
rules and regulations of the Commission, the Registration Statement on
its effective date, and the Basic Prospectus on its issue date, did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus, as of its issue
date and, as amended or supplemented, if applicable, as of the Time of
Purchase [and Time of Additional Purchase,] will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the Company makes no
warranty or representation to any Underwriter with respect to any
statements or omissions made therein in reliance upon and in conformity
with information furnished in writing to the Company by, or through the
Representatives on behalf of, any Underwriter expressly for use therein
[or to that part of the Registration Statement which consists of the
Statement of Eligibility of the Trustee on Form T-1 under the Trust
Indenture Act of 1939 (the "Trust Indenture Act")]. [The Indenture
complies in all material respects with the requirements of the Trust
Indenture Act.]
(b) The documents incorporated by reference in the
Registration Statement, the Basic Prospectus and the Prospectus, when
it was filed (or, if an amendment with respect to any such document was
filed, when such amendment was filed) with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and any
further documents so filed and incorporated by reference will, when
they are filed with the Commission, conform in all material respects to
the requirements of the Exchange Act and the rules and regulations of
the Commission promulgated thereunder; none of such documents, when
filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a
material fact or omitted to state
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a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed,
will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they are made, not misleading.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Michigan and has all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus and
to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole. Each significant
subsidiary (as defined in Rule 405 under the Act, and hereinafter
called a "Significant Subsidiary") of the Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has all
requisite authority to own or lease its properties and conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business as described in the Prospectus or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
[(_) The Company has been duly organized and is validly
existing as a limited partnership in good standing under the laws of
the State of Michigan and has all requisite authority to own or lease
its properties and conduct its business as described in the Prospectus
and to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company.]
[(d) The shares of common stock of the Company outstanding
prior to the issuance of the Securities have been duly authorized and
are validly issued, fully paid and non-assessable.]
[(e) The Securities have been duly authorized and, when
issued and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Securities will not be subject to any preemptive or similar
rights.]
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(f) The capital stock of the Company conforms in all material
respects to the description thereof in the Prospectus.
(g) Each of the Company and its Significant Subsidiaries has
all necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
(h) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any
other place, was or is now required to be obtained by the Company to
authorize its execution or delivery of, or the performance of its
obligations under, this Agreement[, the Indenture] or the Securities,
except such as have been obtained or may be required under state
securities or Blue Sky laws or as referred to in the Basic Prospectus.
Each of the Company and its Significant Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Basic Prospectus, except to
the extent that the failure to obtain or file would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
(i) Neither the execution or delivery by the Company of, nor
the performance by the Company of its obligations under, this
Agreement[, the Indenture or the Securities] 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 [Agreement of Limited Partnership] or
by-laws, any material agreement or instrument to which it is a party,
any existing applicable law, rule or regulation or any judgment, order
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or assets, or did or will result in the creation or
imposition of any lien on the Company's properties or assets.
(j) Except as disclosed in the Basic Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in equity
or otherwise) pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary by any governmental authority
that (i) questions the validity, enforceability or performance of this
Agreement[, the Indenture] or the Securities or (ii) if determined
adversely, is likely to have a material adverse effect on the business
or financial condition of the Company
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and the Subsidiaries, taken as a whole, or materially adversely affect
the ability of the Company to perform its obligations hereunder or
the consummation of the transactions contemplated by this Agreement.
(k) There has not been any material and adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement (other than changes referred to or contemplated by the
Registration Statement or the Basic Prospectus).
(l) Except as set forth in the Prospectus, no event or
condition exists that constitutes, or with the giving of notice or
lapse of time or both would constitute, a default or any breach or
failure to perform by the Company or any of its Significant
Subsidiaries in any material respect under any indenture, mortgage,
loan agreement, lease or other material agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or
by which it or any of its Significant Subsidiaries, or any of their
respective properties, may be bound.
(m) So long as may be required for the distribution of the
Securities by the Underwriters or by any dealers that participate in
the distribution thereof the Company will comply with all requirements
under the Exchange Act relating to the timely filing with the
Commission of its reports pursuant to Section 13 of the Exchange Act
and of its proxy statements pursuant to Section 14 of the Exchange Act.
7. Representation and Warranties of Underwriters:
Each Underwriter warrants and represents that the information,
if any, furnished in writing to the Company through the Representatives
expressly for use in the Registration Statement and Prospectus is correct in
all material respects as to such Underwriter. Each Underwriter, in addition to
other information furnished to the Company for use in the Registration
Statement and Prospectus, herewith furnishes to the Company for use in the
Registration Statement and Prospectus, the information stated herein with
regard to the public offering, if any, by such Underwriter and represents and
warrants that such information is correct in all material respects as to such
Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each of the Underwriters and each person,
if any, who controls any such Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act or otherwise, and to
reimburse the Underwriters and such controlling person or persons, if
any, for any legal or other expenses incurred by them in connection
with defending any action, suit or proceeding (including governmental
investigations) as provided in Section 8(b) hereof, insofar as
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such losses, claims, damages, liabilities or actions, suits or
proceedings (including governmental investigations) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Basic
Prospectus (if used prior to the date of the Prospectus), the
Prospectus, or, if the Prospectus shall be amended or supplemented, in
the Prospectus as so amended or supplemented (if such Prospectus or
such Prospectus as amended or supplemented is used after the period of
time referred to in Section 5(e) hereof, it shall contain or be used
with such amendments or supplements as the Company deems necessary to
comply with Section 10(a) of the Act), or arise out of or are based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
which was made in such Basic Prospectus, Registration Statement or
Prospectus, or in the Prospectus as so amended or supplemented, in
reliance upon and in conformity with information furnished in writing
to the Company by, or through the Representatives on behalf of, any
Underwriter expressly for use therein, [or with any statements in or
omissions from the part of the Registration Statement that shall
constitute the Statement of Eligibility and Qualification under the
Trust Indenture Act of the Trustee] and except that this indemnity
shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) on account of any losses, claims,
damages, liabilities or actions, suits or proceedings arising from the
sale of the Securities to any person if a copy of the Prospectus, as
the same may then be supplemented or amended, was not sent or given by
or on behalf of such Underwriter to such person (i) with or prior to
the written confirmation of sale involved or (ii) as soon as available
after such written confirmation, relating to an event occurring prior
to the payment for and delivery to such person of the Securities
involved in such sale, and the omission or alleged omission or untrue
statement or alleged untrue statement was corrected in the Prospectus
as supplemented or amended at such time.
The Company's indemnity agreement contained in this Section
8(a), and the covenants, representations and warranties of the Company
contained in this Agreement, shall remain in full force and effect
regardless of any investigation made by or on behalf of any person, and
shall survive the delivery of and payment for the Securities hereunder,
and the indemnity agreement contained in this Section 8 shall survive
any termination of this Agreement. The liabilities of the Company in
this Section 8(a) are in addition to any other liabilities of the
Company under this Agreement or otherwise.
(b) Each Underwriter agrees, severally and not jointly, to
the extent permitted by law, to indemnify, hold harmless and reimburse
the Company, its directors and such of its officers as shall have
signed the Registration Statement, each other Underwriter and each
person if any, who controls the Company or any such other Underwriter
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the same extent and upon the same terms as the
indemnity agreement of the Company set forth in Section 8(a) hereof,
but only with respect to alleged untrue statements or omissions made in
the
13
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Registration Statement, the Basic Prospectus or in the Prospectus, as
amended or supplemented, (if applicable) in reliance upon and in
conformity with information furnished in writing to the Company by such
Underwriter expressly for use therein.
The indemnity agreement on the part of each Underwriter
contained in this Section 8(b) and the representations and warranties
of such Underwriter contained in this Agreement shall remain in full
force and effect regardless of any investigation made by or on behalf
of the Company or any other person, and shall survive the delivery of
and payment for the Securities hereunder, and the indemnity agreement
contained in this Section 8(b) shall survive any termination of this
Agreement. The liabilities of each Underwriter in Section 8(b) are in
addition to any other liabilities of such Underwriter under this
Agreement or otherwise.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened
against any person as to which indemnity may be sought under Section
8(a) or 8(b), such person (the "Indemnified Person") shall notify the
person against whom such indemnity may be sought (the "Indemnifying
Person") promptly after any assertion of such claim threatening to
institute an action, suit or proceeding or if such an action, suit or
proceeding, is commenced against such Indemnified Person promptly after
such Indemnified Person shall have been served with a summons or other
first legal process, giving information as to the nature and basis of
the claim. Failure to so notify the Indemnifying Person shall not,
however, relieve the Indemnifying Person from any liability which it
may have on account of the indemnity under Section 8(a) or 8(b) if the
Indemnifying Person has not been prejudiced in any material respect by
such failure. The Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel and
the payment of all expenses. Any Indemnified Person shall have the
right to participate in such litigation or proceeding and to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include (x) the Indemnifying Person
and (y) the Indemnified Person and, in the written opinion of counsel
to such Indemnified Person, representation of both parties by the same
counsel would be inappropriate due to actual or likely conflicts of
interest between them, in either of which cases the reasonable fees and
expenses of counsel (including disbursements) for such Indemnified
Person shall be reimbursed by the Indemnifying Person to the
Indemnified Person. If there is a conflict as described in clause (ii)
above, and the Indemnified Persons have participated in the litigation
or proceeding utilizing separate counsel whose fees and expenses have
been reimbursed by the Indemnifying Person and the Indemnified Persons,
or any of them, are found to be solely liable, such Indemnified Persons
shall repay to the Indemnifying Person such fees and expenses of such
separate counsel as the Indemnifying Person shall have reimbursed. It
is understood that the Indemnifying Person shall not, in connection
with any litigation or proceeding or related litigation or proceedings
in the same jurisdiction as to which the
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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. Such counsel shall be designated in
writing by the Representatives in the case of parties indemnified pursuant to
Section 8(b) and by the Company in the case of parties indemnified pursuant to
Section 8(a).
In furtherance of the requirement above that fees and expenses
of any separate counsel for the Indemnified Persons shall be
reasonable, the Representatives and the Company agree that the
Indemnifying Person's obligations to pay such fees and expenses shall
be conditioned upon the following:
(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; and
(2) reimbursable fees and expenses of such
separate counsel shall be detailed and supported in a manner
reasonably acceptable to the Indemnifying Person (but nothing
herein shall be deemed to require the furnishing to the
Indemnifying Person of any information, including without
limitation, computer print-outs of lawyers' daily time
entries, to the extent that, in the judgment of such counsel,
furnishing such information might reasonably be expected to
result in a waiver of any attorney-client privilege); and
(3) the Company and the Representatives shall
cooperate in monitoring and controlling the fees and expenses
of separate counsel for Indemnified Persons for which the
Indemnifying Person is liable hereunder, and the Indemnified
Person shall use every reasonable effort to cause such
separate counsel to minimize the duplication of activities as
between themselves and counsel to the Indemnifying Person.
The Indemnifying Person shall not be liable for any settlement
of any litigation or proceeding effected without the written consent of
the Indemnifying Person, but if settled with such consent or if there
be a final judgment for the plaintiff, the Indemnifying Person agrees,
subject to the provisions of this Section 8, to indemnify the
Indemnified Person from and against any loss, damage, liability or
expenses by reason of such settlement or judgment. The Indemnifying
Person shall not, without the prior written consent of the Indemnified
Persons, effect any settlement of any pending or threatened litigation,
proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement
includes
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an unconditional release by the claimant of all Indemnified Persons
from all liability with respect to claims which are the subject matter
of such litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in Section 8
above is unavailable to or insufficient to hold harmless an Indemnified Person
under such Section in respect of any losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in
respect thereof) referred to therein, then each Indemnifying Person under
Section 8 shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (or actions
in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Indemnifying Person on the one hand and the
Indemnified Person on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each Indemnifying Person shall contribute to
such amount paid or payable by such Indemnified Person in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of each Indemnifying Person, if any, on the one hand and the Indemnified
Person on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions, suits or
proceedings (including governmental investigations) in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts and commission received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
9. The amount paid or payable by an Indemnified Person as a result of the
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental proceedings) in respect thereof) referred to above in
this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action, suits or proceedings (including governmental
proceedings) or claim, provided that the provisions of Section 8 have been
complied with (in all material respects) in respect of any separate counsel for
such Indemnified Person. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount greater than the excess
of (i) the total price at which the Securities underwritten by it and
distributed to the public were offered to the public over (ii) the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be
16
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entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 9 to
contribute are several in proportion to their respective underwriting
obligations and not joint.
The agreement with respect to contribution contained in
Section 9 hereof shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter, and shall
survive delivery of and payment for the Securities hereunder and any
termination of this Agreement.
10. Substitution of Underwriters: If any Underwriter under this
agreement shall fail or refuse (otherwise than for some reason sufficient to
justify in accordance with the terms hereof, the termination of its obligations
hereunder) to purchase the Securities which it had agreed to purchase on the
Time of Purchase [or Time of Additional Purchase,] the Representatives shall
immediately notify the Company and the Representatives and the other
Underwriters may, within 36 hours of the giving of such notice, determine to
purchase, or to procure one or more other members of the National Association
of Securities Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
foreign banks, dealers or institutions not registered under the Securities
Exchange Act and who agree in making sales to comply with the NASD's Rules of
Fair Practice), satisfactory to the Company, to purchase, upon the terms herein
set forth, the number of shares of Securities which the defaulting Underwriter
had agreed to purchase. If any non-defaulting Underwriter or Underwriters
shall determine to exercise such right, the Representatives shall give written
notice to the Company of such determination within 36 hours after the Company
shall have received notice of any such default, and thereupon the Time of
Purchase [or Time of Additional Purchase, as the case may be,] shall be
postponed for such period, not exceeding three business days, as the Company
shall determine. If in the event of such a default, the Representatives shall
fail to give such notice, or shall within such 36-hour period give written
notice to the Company that no other Underwriter or Underwriters, or others,
will exercise such right, then this Agreement may be terminated by the Company,
upon like notice given to the Representatives within a further period of 36
hours. If in such case the Company shall not elect to terminate this
Agreement, it shall have the right, irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase
and pay for the respective amount of Securities which they had
severally agreed to purchase hereunder, as hereinabove provided, and,
in addition, the amount of Securities which the defaulting Underwriter
shall have so failed to purchase up to an amount of Securities thereof
equal to one-ninth (1/9) of the respective amount of Securities which
such non-defaulting Underwriters have otherwise agreed to purchase
hereunder; and/or
(b) to procure one or more other members of the NASD (or, if
not members of the NASD, who are foreign banks, dealers or institutions
not registered under the Exchange Act and who agree in making sales to
comply with the NASD's Rules of Fair Practice), to purchase, upon the
terms herein set forth, the amount of Securities which such defaulting
Underwriter had agreed to purchase, or that portion thereof which the
17
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remaining Underwriters shall not be obligated to purchase pursuant to
the foregoing clause (a).
In the event the Company shall exercise its rights under
clause (a) and/or (b) above, the Company shall give written notice thereof to
the Representatives within such further period of 36 hours, and thereupon the
Time of Purchase [or the Time of Additional Purchase] shall be postponed for
such period, not exceeding five business days, as the Company shall determine.
In the event the Company shall be entitled to but shall not elect to exercise
its rights under clause (a) and/or (b), the Company shall be deemed to have
elected to terminate this Agreement.
Any action taken by the Company under this Section 10 shall
not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement. Termination by the Company under
this Section 10 shall be without any liability on the part of the Company or
any non-defaulting Underwriter.
In the computation of any period of 36 hours referred to in
this Section 10, there shall be excluded a period of 24 hours in respect of
each Saturday, Sunday or legal holiday which would otherwise be included in
such period of time.
11. Termination of Agreement: This Agreement may be terminated at any
time prior to the Time of Purchase, [and the option referred to in Section 1
hereof, if exercised, may be canceled at any time prior to the Time of
Additional Purchase,] by the Representatives, if prior to such time (i) trading
in securities on the New York Stock Exchange shall have been generally
suspended by the Commission or the New York Stock Exchange, (ii) trading of any
securities of the Company shall have been suspended on any exchange or
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by federal or New York State
authorities or (iv) there shall have occurred any outbreak or material
escalation of hostilities or any other calamity or crisis, the effect of which
on the financial markets of the United States is such as to impair, in the
Representatives' reasonable judgment, after having made due inquiry, the
marketability of the Securities.
If the Representatives elect to terminate this Agreement, as
provided in this Section 11, the Representatives will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Underwriter for any
reason permitted hereunder, or if the sale of the Securities to the
Underwriters as herein contemplated shall not be carried out because the
Company is not able to comply with the terms hereof, the Company shall not be
under any obligation under this Agreement and shall not be liable to any
Underwriter or to any member of any selling group for the loss of anticipated
profits from the transactions contemplated by this Agreement and the
Underwriters shall be under no liability to the Company nor be under any
liability under this Agreement to one another.
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Notwithstanding the foregoing, the provisions of Sections
5(g), 5(i), 8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following
addresses or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and, if to the Company, to CMS
Energy Corporation, Attention: Senior Vice President - Finance, Fairlane Plaza
South, Suite 1100, 330 Town Center Drive, Dearborn, Michigan 48126 (Telecopy -
313-436-9548).
13. Parties in Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company (including the
directors thereof and such of the officers thereof as shall have signed the
Registration Statement), and the controlling persons, if any, referred to in
Section 8 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 10
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
14. Definition of Certain Terms: The term "Underwriters", as used
herein, shall be deemed to mean the several persons, firms or corporations,
named in Schedule II hereto (including the Representatives herein mentioned, if
so named), and the term "Representatives", as used herein, shall be deemed to
mean the representative or representatives designated by, or in the manner
authorized by, the Underwriters in Schedule I hereto. All obligations of the
Underwriters hereunder are several and not joint. If there shall be only one
person, firm or corporation named in Schedule I and Schedule II hereto, the
term "Underwriters" and the term "Representatives", as used herein, shall mean
such person, firm or corporation. If the firm or firms listed in Schedule I
hereto are the same as the firm or firms listed in Schedule II hereto, then the
terms "Underwriters" and "Representatives", as used herein, shall each be
deemed to refer to such firm or firms. The term "successors" as used in this
Agreement shall not include any purchaser, as such purchaser, of any of the
Securities from any of the respective Underwriters.
15. Governing Law: This Agreement shall be governed by, and construe
in accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one or more
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
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If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters and the Company.
Very truly yours,
CMS ENERGY CORPORATION
[CMS ENERGY MICHIGAN
LIMITED PARTNERSHIP]
By:_____________________________
Accepted, _______________, 199_
______________________________
As Representatives
By: _____________________________
By:____________________________
20
SCHEDULE I
Representatives
21
Schedule II
Underwriter Number, Principal or Amount of
----------- Firm Securities
to be Purchased
---------------
Total . . . . . . . . . . . . . . . . . . . . . . . . .
------------
22
Exhibit A
[Matters to be addressed by opinion of Sidley & Austin and Denise M. Sturdy,
Esq.]
23
Exhibit B
[Matters to be addressed by Denise M. Sturdy, Esq.]
24
Exhibit C
[Matters to be addressed by opinion of Reid & Priest which may rely upon
opinion of Denise M. Sturdy, Esq. and Sidley & Austin as to matters of Michigan
law and as to the exemption of the Company under the Public Utility Holding
Company Act of 1935]