Exhibit 1
CMS Energy Corporation
$200,000,000
General Term Notes(R), Series D
Due From Nine Months to Twenty-Five Years from Date of Issue
DISTRIBUTION AGREEMENT
August __, 1997
X. X. XXXXX & COMPANY
00000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Dear Sirs:
CMS Energy Corporation, a Michigan corporation (the "Company"),
confirms its agreement with you (the "Agent," and together with such
additional agents as may be named from time to time, the "Agents") with
respect to the issue and sale by the Company of up to $200,000,000
aggregate principal amount of its General Term Notes(R), Series D (the
"Notes"). The Notes are to be issued under an Indenture, dated as of
January 15, 1994 as supplemented by a First Supplemental Indenture dated
as of January 20, 1994, a Second Supplemental Indenture dated as of March
19, 1996, a Third Supplemental Indenture dated as of March 17, 1997 and a
Fourth Supplemental Indenture dated as of August __, 1997 (such Indenture,
as so supplemented, the "Indenture"), between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"). The Notes will have the
maturities, annual interest rates, redemption provisions, if any, and
other terms specified in a pricing supplement to the Prospectus referred
to below.
Subject to the terms and conditions stated herein, the Company
hereby (i) appoints X. X. Xxxxx & Company as the agent of the Company for
the purpose of soliciting and receiving offers to purchase the Notes, (ii)
reserves the right, from time to time, to appoint additional agents for
the purpose of soliciting and receiving offers to purchase the Notes,
provided that (a) the Company shall furnish the Agents with reasonable
advance notification of the addition of any such agent, (b) such
_____________________
(R) Registered servicemark of X. X. Xxxxx and Company
additional agent shall be
acceptable to X. X. Xxxxx & Company and (c) each such additional agent shall
be required to become a party to this agreement and undertake the obligations of
an Agent hereunder pursuant to an Additional Agent Appointment Agreement
substantially in the form of Exhibit E hereto, and (iii) agrees that,
whenever the Company determines to sell Notes pursuant to this Agreement,
such Notes shall be sold pursuant to a supplemental agreement between the
Company and X. X. Xxxxx & Company (the "Purchasing Agent") with the
Purchasing Agent purchasing such Notes as principal; the supplemental
agreement will also specify the amount of Notes being sold which have been
solicited by each Agent. Each such supplemental agreement (which shall be
either oral, to be confirmed in writing, or written, and in either case the
written confirmation of an oral agreement or the written supplemental
agreement shall be substantially in the form of Exhibit B hereto and may take
the form of an exchange of any standard form of written telecommunication
between the Purchasing Agent and the Company) is herein referred to as a "Terms
Agreement." Any such Terms Agreement may be signed on behalf of the
Company by such persons as are authorized from time to time by the Board
of Directors of the Company to bind the Company in this regard. Under no
circumstances will any Agent be obligated to purchase, or the Company be
obligated to sell, any Notes, unless a Terms Agreement has been entered
into between the Company and the Purchasing Agent with respect to such
Notes.
1. SOLICITATIONS BY THE AGENTS OF OFFERS TO PURCHASE;
PURCHASES BY THE PURCHASING AGENT OF NOTES AS PRINCIPAL.
Following the Commencement Date (defined below), the Company shall
notify the Agents from time to time as to the commencement of a period
during which the Notes may be offered and sold by the Agents. On the
basis of the representations and warranties herein contained, but subject
to the terms and conditions herein set forth, the Agents will use their
respective reasonable best efforts to solicit offers to purchase the Notes
upon the terms and conditions set forth in the Prospectus as then amended
and supplemented and as contemplated by the Note Administrative Procedures
attached hereto as Exhibit A ("the Procedures").
The Agents are authorized to solicit orders for the Notes only in
denominations of $1,000 or any amount in excess thereof which is a
multiple of $1,000 and, unless otherwise agreed to by the Company, at a
purchase price equal to 100% of their principal amount. In soliciting
offers to purchase the Notes hereunder, the Agents are acting solely as
agents for the Company, and not as principals. Each Agent shall
communicate to the Company, orally or in writing, each reasonable offer or
indication of interest received by it to purchase Notes. Each Agent shall
have the right to reject, in its discretion reasonably exercised, any
offer received by it to purchase the Notes, in whole or in part, and any
such rejection shall not be deemed a breach of its agreements contained
herein. The Company shall have the right to accept offers to purchase the
Notes and may reject any such offer in whole or in part. The obligations
of the Agents under this Agreement shall be several and not joint.
Each acceptance by the Company of an offer to purchase Notes shall
be in accordance with the terms of this Agreement and a Terms Agreement
which will provide for the sale of such Notes to, and the purchase and
reoffering thereof by, the Purchasing Agent as principal. The commitment
of the Purchasing Agent to purchase Notes pursuant to any Terms Agreement
(and any contemporaneous purchase of Notes by an Agent from the Purchasing
Agent) shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms
Agreement shall describe the Notes to be purchased pursuant thereto by the
Purchasing Agent as principal, specify the principal amount of such Notes,
the price to be paid to the Company for such Notes, the rate at which
interest will be paid on the Notes, the date and time of delivery of
payment for such Notes (the "Settlement Date"), whether the Notes provide
for a survivor's option or for optional redemption by the Company and on
what terms and conditions, the place of delivery of the Notes and payment
therefor, the method of payment and any requirements for the delivery of
the opinions of counsel, the certificates from the Company, and the letter
from Xxxxxx Xxxxxxxx LLP, pursuant to Section 6(B)(b). The Agents may
reallow any portion of the commission payable pursuant hereto to dealers
or purchasers in connection with the offer and sale of any Notes.
The Company agrees to pay to the Purchasing Agent, as
consideration for soliciting the sale of the Notes pursuant to a Terms
Agreement, a commission in the form of a discount equal to a percentage
not greater than 4%, which percentage shall be set forth in the applicable
Terms Agreement, of the principal amount of each Note sold by the Company;
the Purchasing Agent and the other Agents will share such commission in
such proportion as they may agree.
Delivery of the certificates for Notes pursuant to any Terms
Agreement shall be made as agreed to between the Company and the
Purchasing Agent as specified in the Terms Agreement, not later than the
Settlement Date set forth in such Terms Agreement, against payment of
funds to the Company in the net amount due to the Company for such Notes
by the method and in the form specified in the Terms Agreement.
The Agents and the Company agree to perform the respective duties
and obligations specifically provided to be performed by them in the
Procedures. The Procedures may be amended only by written agreement of
the Company and the Agents.
The documents required to be delivered by Section 6 of this
Agreement shall be delivered at the office of Xxxx & Priest LLP, counsel
for the Agents, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on such
date as may be agreed to by the Company and the Agents (the "Commencement
Date").
2. OTHER ACTIVITIES OF AGENTS. The Company acknowledges that
nothing in this Agreement shall prohibit any Agent from (i) acting as
broker for the sale of Notes by customers other than the Company, (ii)
soliciting the sale of Notes through such Agent as broker for a seller,
soliciting the sale of Notes to such Agent as principal and soliciting
offers to buy Notes, (iii) purchasing Notes in the secondary market, and
(iv) offering and selling as principal for its own account Notes which
such Agent has purchased.
3. REPRESENTATIONS AND WARRANTIES. The Company represents
and warrants to, and agrees with, the Agents as of the date hereof, as of
the Commencement Date and as of the times referred to in Section 4(g)
hereof (the Commencement Date and each such time hereinafter sometimes
referred to as a "Representation Date"), that:
(a) A registration statement (File No. 333-_____) in
respect of $200,000,000 aggregate principal amount of debt
securities of the Company, including the Notes, has been filed
with the Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered
to the Agents, including all documents incorporated by reference
in the prospectus contained therein, have been declared effective
by the Commission in such form, and no other document with respect
to such registration statement or other document incorporated by
reference therein has heretofore been filed or transmitted for
filing with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued and
no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission (any preliminary
prospectus included in such registration statement or filed with
the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), being hereinafter called a "Preliminary
Prospectus"); such registration statement, as amended at the time
it became effective, including all exhibits thereto and the
documents incorporated by reference therein at the time such
registration statement became effective, being hereinafter called
the "Registration Statement"; the prospectus, including any
prospectus supplement relating to the Notes, in the form in which
it has most recently been filed, or transmitted for filing, with
the Commission on or prior to the date of this Agreement, being
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of
the Notes and the manner of distribution thereof (a "Pricing
Supplement"), shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the
Prospectus as amended or supplemented (including the applicable
Pricing Supplement) in relation to the Notes sold pursuant to this
Agreement, in the form in which it is filed, or transmitted for
filing, with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 4(a)(ii) hereof, including any
documents incorporated by reference therein as of the date of such
filing or transmission);
(b) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none
of such documents, when they were filed, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents are filed
with the Commission, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Agent
expressly for use in the Prospectus as amended or supplemented;
(c) The Registration Statement and the Prospectus
conform, and any amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects
to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and the Registration
Statement, as of its effective date, and the Prospectus, as of its
filing date, do not, and any amendments or supplements to the
Registration Statement or the Prospectus will not, contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Agent expressly for use
in the Registration Statement or the Prospectus as amended or
supplemented or any such statements in or omissions from that part
of the Registration Statement that constitutes the Statement of
Eligibility on Form T-1 of the Trustee under the Trust Indenture
Act;
(d) Since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus
there has not been any material adverse change in the business,
properties, financial condition or results of operations of the
Company and its consolidated subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, as
amended or supplemented;
(e) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of Michigan, with corporate power and corporate
authority to own or lease its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, in which the
failure to so qualify and be in good standing would materially and
adversely affect the business, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole;
(e) The filing of the Registration Statement with
respect to the Notes has, and the issuance and sale of the Notes
pursuant to this Agreement and any Terms Agreement have, been duly
authorized by the Company, and, when Notes are authenticated and
issued pursuant to the Indenture and delivered against payment of
the consideration as specified in this Agreement and any
applicable Terms Agreement, such Notes will have been duly
executed, issued and delivered by the Company and will constitute
valid and legally binding obligations of the Company, enforceable
in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles and will be entitled to the benefits
provided by the Indenture; the Indenture has been duly authorized,
executed and delivered by the Company and is duly qualified under
the Trust Indenture Act and the Indenture constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
and the Indenture conforms, and the Notes will conform, in all
material respects, to the descriptions thereof contained in the
Prospectus as amended or supplemented to relate to each issuance
of Notes;
(f) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the Notes,
the Indenture, this Agreement and any Terms Agreement, and the
consummation of the transactions herein and therein contemplated
will not conflict with or 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 agreement or
instrument to which the Company or any of its significant
subsidiaries (as defined in Rule 405 as promulgated by the
Commission under the Act) is a party or by which the Company or
any of its significant subsidiaries is bound, or to which any of
the property or assets of the Company or any of its significant
subsidiaries is subject, that is material to the business,
properties, financial condition or results of operations of the
Company and its consolidated subsidiaries, taken as a whole, nor
will such action result in any violation of the provisions of the
Articles of Incorporation, as amended, or the By-laws of the
Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its significant subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of
the Notes or the consummation by the Company of the other
transactions contemplated by this Agreement or any Terms Agreement
or the Indenture, except such as have been, or will have been
prior to the Commencement Date, obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the solicitation by
any Agent of offers to purchase Notes and with purchases of Notes
by such Agent as principal;
(g) Other than as set forth or contemplated in the
Prospectus, as amended or supplemented, there are no legal or
governmental proceedings pending to which the Company or any of
its significant subsidiaries is a party or of which any property
of the Company or any of its significant subsidiaries is the
subject with respect to which there is a reasonable likelihood of
one or more determinations which would individually or in the
aggregate have a material adverse effect on the business,
properties, financial condition or results of operations of the
Company and its consolidated subsidiaries, taken as a whole; and,
to the best of the Company's knowledge, no such proceedings are
threatened by governmental authorities or others;
(h) The Company is not subject to regulation under
the Investment Company Act of 1940, as amended;
(i) The Company will apply the net proceeds from the
sale of Notes for the purpose set forth in the Prospectus under
the caption "Use of Proceeds";
(j) To the best of the Company's knowledge, Xxxxxx
Xxxxxxxx LLP, who have audited certain financial statements of the
Company incorporated by reference in the Registration Statement
and the Prospectus, are independent public accountants as required
by the Act and the rules and regulations of the Commission
thereunder;
(k) Immediately after the sale of Notes by the
Company hereunder and under any Terms Agreement, the aggregate
amount of Notes which shall have been issued and sold by the
Company hereunder and under any Terms Agreement and of any debt
securities of the Company (other than such Notes) that shall have
been issued and sold pursuant to the Registration Statement will
not exceed the amount of debt securities registered under the
Registration Statement;
(l) Other than as set forth or contemplated in the
Prospectus, as amended or supplemented, the Company owns or
possesses all permits, licenses and other authorizations necessary
to own, lease or 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 own or possess any such permit, license
or other authorization would not have a material adverse effect on
the business, properties, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
permit, license or other authorization which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, might reasonably be expected to have a material adverse
effect upon the business, properties, financial condition or
results of operations of the Company and its consolidated
subsidiaries, taken as a whole; and
(m) Other than as set forth in the Prospectus as
amended or supplemented, no event or condition exists that
constitutes, or with the giving of notice or lapse of time or both
would constitute, a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company
or any of its significant subsidiaries or under any indenture,
mortgage, loan agreement or instrument under which there may be
issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any of its
significant subsidiaries, if such default would result in such
indebtedness in an aggregate principal amount exceeding
$25,000,000 becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable.
4. COVENANTS OF THE COMPANY. The Company agrees with each of
the Agents:
(a) (i) To make no amendment or supplement to the
Registration Statement or the Prospectus after the date of any
Terms Agreement by the Purchasing Agent to purchase Notes as
principal and prior to the related Settlement Date prior to having
afforded each Agent a reasonable opportunity to review and comment
on it and having reasonably considered any such comments; provided
however, that, if any amendment or supplement to the Registration
Statement or the Prospectus shall be transmitted for filing or
filed after the date of any Terms Agreement between the Company
and the Purchasing Agent for the purchase of Notes and prior to
the related Settlement Date, the Purchasing Agent may unilaterally
terminate such Terms Agreement and upon any such termination no
Agent shall have any further obligation under such Terms
Agreement; (ii) to prepare, with respect to any Notes to be sold
through or to such Agent pursuant to this Agreement, a Pricing
Supplement with respect to such Notes in a form previously
approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b) under the Act within the applicable time
period prescribed for such filing by such Rule; (iii) to make no
amendment or supplement to the Registration Statement or
Prospectus, other than any Pricing Supplement, at any time prior
to having afforded each Agent a reasonable opportunity to review
and promptly comment on it and having reasonably considered any
such comments; (iv) to file timely all reports and any definitive
proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act (all such reports and proxy or
information statements which are so filed and which have not been
subsequently superseded shall be referred to as the "Incorporated
Documents") for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Notes, and
during such period to advise such Agent, promptly after the
Company receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or has become effective
or any amendment or supplement to the Prospectus (other than any
Pricing Supplement that relates to Notes not purchased through or
by such Agent) has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Notes, of the
suspension of the qualification of the Notes for offering or sale
in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in
the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any such prospectus or
suspending any such qualification, promptly to use reasonable
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as
the Agents may reasonably request to qualify such Notes for
offering and sale under the securities laws of such jurisdictions
in the United States as the Agents may reasonably request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Notes, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to
service of process in any jurisdiction, take any action which
would subject it to general service of process in any jurisdiction
where it is not now subject or file annual reports with such
jurisdictions or comply with any other requirements deemed by the
Company in its reasonable judgment expressed in writing to the
Purchasing Agent to be unduly burdensome; and to inform the Agents
promptly of any notices it may receive from any state securities
agency which limits or will limit any such qualification or
exemption;
(c) To furnish the Agents with copies of the
Prospectus as amended or supplemented, in the form in which it is
filed with the Commission pursuant to Rule 424(b) of the Act, in
such quantities as the Agents may from time to time reasonably
request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of any Notes and if
at such time any event shall have occurred as a result of which it
is necessary to further amend or supplement the Prospectus in
order that the Prospectus will not include an untrue statement of
a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or, if
for any other reason during such period it is necessary to further
amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify each Agent and request the Agents, in
their capacity as agents of the Company, to suspend solicitation
of offers to purchase Notes from the Company (and, if so notified,
each Agent shall cease such solicitations as soon as possible, but
in any event not later than one business day later); and if the
Company shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, to so
advise the Agents by telephone (with confirmation in writing) and
to prepare and cause to be filed as soon as practicable with the
Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that
will correct such statement or omission or effect such compliance;
provided, however, that if during such period an Agent continues
to own Notes purchased from the Company by such Agent as principal
or an Agent is otherwise required to deliver a prospectus in
respect of transactions in the Notes, the Company shall promptly
prepare and file with the Commission such an amendment or
supplement;
(d) To make generally available to its security
holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) of the Act), an earnings
statement of the Company and its consolidated subsidiaries (which
need not be audited) covering a period of at least 12 months
beginning after the later of (i) the effective date of the
Registration Statement, (ii) the effective date of each post-
effective amendment to the Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an
Annual Report on Form 10-K that is incorporated by reference in
the Registration Statement, which earning statements shall comply
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company,
Rule 158 of the Act);
(e) So long as any Notes are outstanding, to furnish
to such Agent, without charge, copies of its Annual Report on Form
10-K and other financial reports of the Company furnished or made
available to the public generally, and deliver to such Agent, (i)
as soon as they are available, copies of any Incorporated
Documents; and (ii) such additional publicly available information
concerning the business and financial condition of the Company as
such Agent may from time to time reasonably request;
(f) That, from the date of any Terms Agreement with
the Purchasing Agent and continuing to and including the related
Settlement Date, the Company will not, without the prior written
consent of each Agent, which consent shall not be unreasonably
withheld, issue or announce the proposed issuance of, offer, sell,
contract to sell or otherwise dispose of any debt securities of
the Company which both mature more than 9 months after such
Settlement Date and are substantially similar to the Notes and
which are expected to be distributed on a retail basis in a manner
comparable to that set forth in Exhibit A;
(g) That each execution and delivery by the Company
of a Terms Agreement with the Purchasing Agent shall be deemed to
be an affirmation to each Agent that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the date of such Terms Agreement, as though made at
and as of such date, and an undertaking that such representations
and warranties will be true and correct as of the Settlement Date
for the Notes relating to such sale, as though made at and as of
such date (except that such representations and warranties shall
be deemed to relate to the Registration Statement and the
Prospectus, as amended and supplemented, relating to such Notes);
(h) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than (A) a Current Report pursuant to Section 13 or 15(d)
of the Exchange Act on Form 8-K relating exclusively to the
previous issuance of Notes under the Registration Statement or (B)
a Quarterly Report on Form 10-Q under the Exchange Act, unless, in
the case of clause (B), the Agents shall otherwise request), and
each time the Company sells Notes to the Purchasing Agent as
principal and the applicable Terms Agreement specifies the
delivery of an opinion or opinions by Xxxx & Priest LLP, counsel
to the Agent, as a condition to the purchase of Notes pursuant to
such Terms Agreement, at the request of such Agent, Xxxx & Priest
LLP shall furnish to such Agent its written opinion, dated the
date of such amendment, supplement, incorporation or Settlement
Date relating to such sale, as the case may be, in form reasonably
satisfactory to such Agent to the effect that such Agent may rely
on the opinion of such counsel as to the matters referred to in
Section 6(A)(c), which was last furnished to such Agent to the
same extent as though it was dated the date of such letter
authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to such date or, in
lieu of such opinion, an opinion of the same tenor as the opinion
of such counsel as to the matters referred to in Section 6(A)(c),
but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date), and
reasonably in advance of the time that any such opinion is to be
delivered the Company shall furnish to such counsel such papers
and information as they may reasonably request to enable them to
pass on such matters;
(i) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than (A) a Current Report pursuant to Section 13 or 15(d)
of the Exchange Act on Form 8-K relating exclusively to the
previous issuance of Notes under the Registration Statement or (B)
a Quarterly Report on Form 10-Q under the Exchange Act, unless, in
the case of clause (B), the Agents shall otherwise request), and
each time the Company sells Notes to the Purchasing Agent as
principal and the applicable Terms Agreement specifies the
delivery of an opinion under this Section 4(i) as a condition to
the purchase of Notes pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such
Agent the written opinion or opinions of counsel to the Company or
such other counsel for the Company reasonably satisfactory to such
Agent, dated the date of such amendment, supplement, incorporation
or Settlement Date relating to such sale, as the case may be, in
form reasonably satisfactory to such Agent to the effect that such
Agent may rely on the opinion of such counsel as to the matters
referred to in Exhibit C hereof, which was last furnished to such
Agent to the same extent as though it was dated the date of such
letter authorizing reliance (except that the statements in such
last opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date or, in lieu of such opinion, an opinion of the same tenor as
the opinion of such counsel as to the matters referred to in
Exhibit C hereof but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date);
(j) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement) and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the
Prospectus (other than (A) a Current Report pursuant to Section 13
or 15(d) of the Exchange Act on Form 8-K relating exclusively to
the previous issuance of Notes under the Registration Statement or
(B) a Quarterly Report on Form 10-Q under the Exchange Act,
unless, in the case of clause (B), the Agents shall otherwise
request), in either case to set forth financial information
included in or derived from the Company's consolidated financial
statements or accounting records, and each time the Company sells
Notes to the Purchasing Agent as principal and the applicable
Terms Agreement specifies the delivery of a letter under this
Section 4(j) as a condition to the purchase of Notes pursuant to
such Terms Agreement, the Company shall cause Xxxxxx Xxxxxxxx LLP
forthwith to furnish such Agent a letter, dated the date of such
amendment, supplement, incorporation or Settlement Date relating
to such sale, as the case may be, in form reasonably satisfactory
to such Agent, of the same tenor as the letter referred to in
Exhibit D hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Company, to the extent
such financial statements and other information are available as
of a date not more than five business days prior to the date of
such letter; provided, however, that, with respect to any
financial information or other matter, such letter may reconfirm
as true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such
financial information or other matter made in the letter referred
to in Exhibit D hereof which was last furnished to such Agent; and
(k) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than by a
Pricing Supplement), each time a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus
(other than a Current Report pursuant to Section 13 or 15(d) of
the Exchange Act on Form 8-K relating exclusively to the previous
issuance of Notes under the Registration Statement), and each time
the Company sells Notes to the Purchasing Agent as principal and
the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(k) as a condition to the purchase
of Notes pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such supplement, amendment,
incorporation or Settlement Date, as the case may be, in such form
and executed by such officers of the Company as shall be
reasonably satisfactory to such Agent (or, in the case of
certificates delivered pursuant to Section 6(B)(b) hereof, by such
other employees authorized by the Board of Directors of the
Company to execute and deliver such certificates), to the effect
that the statements contained in the certificate referred to in
Section 6 hereof which was last furnished to such Agent are true
and correct at such date as though made at and as of such date
(except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate,
certificates of the same tenor as the certificates referred to in
said Section 6 but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
date.
5. PAYMENT OF EXPENSES. The Company covenants and agrees
with each Agent that the Company will pay or reimburse all expenses
incident to this Agreement, including the following: (i) the reasonable
fees and expenses of one counsel for the Agents in connection with the
preparation of a blue sky survey of qualifications and exemptions to offer
and sell notes in the various states in the United States, the District of
Colombia, Puerto Rico and Guam; (ii) to the extent the Company has agreed
to print any of the following, the cost of printing any Terms Agreement,
any Indenture, any blue sky survey and any other documents in connection
with the offering, purchase, sale and delivery of the Notes; (iii) any
filing fees in connection with the qualification of the Notes for offering
and sale under state securities laws as provided in Section 4(b) hereof;
(iv) any fees charged by securities rating services for rating the Notes;
(v) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. ("NASD") of the terms of the sale
of the Notes; (vi) the cost of preparing the Notes; (vii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer or
paying agent of the Company and the fees and disbursements of counsel for
any Trustee or such agent in connection with any Indenture and the Notes;
and (viii) taxes (other than transfer taxes on sales by the Agents or
Dealers) in connection with the issuance and delivery of the Notes.
Except as provided in this Section, Section 7 and Section 8 hereof, each
Agent shall pay all other costs and expenses it incurs.
6. CONDITIONS TO THE OBLIGATIONS OF THE AGENTS. (A) The
obligations of each Agent to solicit offers to purchase the Notes pursuant
to Section 1 hereof will, unless waived by such Agent expressly in
writing, be subject to the accuracy of the representations and warranties
on the part of the Company made herein as of the date hereof and as of the
Commencement Date, to the accuracy of the statements of the Company's
officers made in each certificate furnished pursuant to the provisions
hereof, to the performance and observance by the Company of all covenants
and agreements herein contained on its part to be performed and observed
and to the following additional conditions precedent:
(a) (i) The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes
shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; (ii) no stop order suspending
the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and (iii) all requests
for additional information on the part of the Commission shall
have been complied with.
(b) The Company shall have furnished to such Agent an
opinion or opinions of the counsel to the Company, dated the
Commencement Date, substantially to the effect set forth in
Exhibit C hereto. Any of the opinions set forth therein may be
delivered by another counsel for the Company who is reasonably
satisfactory to the Agents.
(c) Such Agent shall have received from Xxxx & Priest
LLP, counsel for the Agent, an opinion, dated the Commencement
Date, with respect to the issuance and sale of the Notes, the
Indenture, the Registration Statement, as amended as of the
Commencement Date, the Prospectus, as amended and supplemented as
of the Commencement Date, and other related matters as such Agent
may reasonably require; and the Company shall have furnished to
such counsel such documents as they may reasonably request for the
purpose of enabling them to pass on such matters.
(d) The Company shall have furnished to such Agent a
certificate of the Company, signed by any of the Chairman of the
Board, the President or the Chief Financial Officer, dated the
Commencement Date, to the effect that to the best of such person's
knowledge after reasonable investigation:
(i) this Agreement is substantially in the form
presented to and approved by the Board of Directors of the
Company;
(ii) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the date of such
certificate with the same effect as if made on the date of
such certificate, and the Company has complied with all
the agreements and satisfied all the conditions on its
part to be performed or satisfied as a condition to the
obligations of such Agent under this Agreement;
(iii) since the date of the most recent
financial statements included or incorporated by reference
in the Prospectus, as amended and supplemented, there has
been no material adverse change in the business,
properties, financial condition or results of operations
of the Company and its consolidated subsidiaries, taken as
a whole, other than those changes reflected in or
contemplated by the Prospectus, as amended and
supplemented as of the date of the certificate;
(iv) no stop order suspending the effectiveness
of the Registration Statement is in effect, and no
proceedings for such purposes are pending before or
threatened by the Commission; and
(v) since the date of the Prospectus, as amended
and supplemented, no downgrading shall have occurred in
the rating accorded the Company's debt securities by
Standard & Poor's Corporation ("S&P"), Xxxxx'x Investors
Service, Inc. ("Xxxxx'x"), Xxxx & Xxxxxx Credit Rating Co.
("Xxxx & Xxxxxx") or Fitch Investors Service, L.P.
("Fitch") and none of S&P, Moody's, Xxxx & Xxxxxx or Fitch
has placed on "credit watch" or "credit review" with
negative implications the Company's debt securities.
(e) Xxxxxx Xxxxxxxx LLP shall have furnished to such
Agent a letter or letters, dated the Commencement Date, in form
and substance satisfactory to such Agent, confirming that they are
independent public accountants within the meaning of the Act and
the Exchange Act and the respective applicable published rules and
regulations thereunder.
(f) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, as amended and supplemented, there shall not have been
(i) any downgrade or placement on "credit watch" or "credit
review" as described in the certificate referred to in paragraph
(A)(d)(v) of this Section 6 or (ii) any material adverse change in
the business, properties, financial condition or results of
operations of the Company and its consolidated subsidiaries, taken
as a whole, the effect of which, in the reasonable judgment of
such Agent after reasonable inquiry, is to impair the
marketability of the Notes.
(g) There shall not have occurred: (i)(A) a
suspension or material limitation in trading in securities
generally on the New York Stock Exchange, (B) a suspension in
trading in any securities of the Company on any exchange or over-
the-counter market, or (C) a general moratorium on commercial
banking activities in New York declared by either Federal or New
York State authorities, if the effect of any such occurrence is
such as to impair, in the reasonable judgment of such Agent, after
reasonable inquiry, the marketability of the Notes; or (ii) the
outbreak or material escalation of hostilities involving the
United States or the declaration by the United States of a
national emergency or war, if the effect of any such occurrence on
the financial markets of the United States is such as to impair,
in the reasonable judgment of such Agent, after reasonable
inquiry, the marketability of the Notes.
(h) The Company shall have furnished to such Agent
such further information, certificates and documents as such Agent
may reasonably request from time to time. Any certificate signed
by any officer of the Company and delivered to such Agent or its
counsel and delivered explicitly pursuant to the terms of this
Agreement shall be deemed a representation and a warranty by the
Company to such Agent as to matters covered thereby, as if set
forth herein.
(B) The obligations of the Purchasing Agent to purchase Notes
pursuant to any Terms Agreement entered into by it pursuant to Section 1
hereof will be subject to the accuracy of the representations and
warranties on the part of the Company herein as of the date of such Terms
Agreement and as of the Settlement Date thereunder, to the accuracy of the
statements of the Company's officers made in each certificate furnished
pursuant to the provisions hereof, to the performance and observance by
the Company of all covenants and agreements contained herein and in such
Terms Agreement on its part to be performed and observed and to the
following additional conditions precedent (which cannot be waived by the
Purchasing Agent in any respect without the consent of each other Agent):
(a) (i) The Prospectus as amended or supplemented
(including the Pricing Supplement) with respect to such Notes
shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in
accordance with Section 4(a) hereof; (ii) no stop order suspending
the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and (iii) all requests
for additional information on the part of the Commission shall
have been complied with.
(b) Upon the request of any Agent, such Agent shall
have received, appropriately updated and modified, (i) a
certificate of the Company, dated as of the Settlement Date, to
the effect set forth in Section 6(A)(d), (ii) the opinion or
opinions of the counsel to the Company or such other counsel
satisfactory to such Agent, dated as of the Settlement Date, to
the effect set forth in Section 6(A)(b), (iii) the opinion of Xxxx
& Priest LLP, counsel for the Agent, dated as of the Settlement
Date, to the effect set forth in Section 6(A)(c) and/or (iv) the
letter or letters of Xxxxxx Xxxxxxxx LLP, dated as of the
Settlement Date, to the effect set forth in Section 6(A)(e).
(c) The conditions set forth in Sections 6(A)(f) and
6(A)(g) shall have been satisfied.
(d) Prior to the Settlement Date, the Company shall
have furnished to any Agent such further information, certificates
and documents as such Agent may reasonably request.
If any of the conditions specified in this Section 6(B) shall not have
been fulfilled in all material respects when and as provided in this
Agreement and in such Terms Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement and in such
Terms Agreement shall not be in all material respects reasonably
satisfactory in form and substance to such Agent and its counsel, such
Terms Agreement and all obligations of any Agent thereunder may be
cancelled at, or at any time prior to, the Settlement Date by such Agent.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will
indemnify and hold harmless each Agent against any losses, claims, damages
or liabilities, joint or several, to which such Agent may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Agent for
any legal or other expenses reasonably incurred by such Agent in
connection with investigating or defending any such action or claim;
provided, however, that the Company shall not be liable to provide any
indemnity hereunder in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, the Registration Statement, the Prospectus,
or any amendment or supplement to any of the foregoing in reliance upon
and in conformity with written information furnished to the Company by any
Agent expressly for use in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any amendment or supplement to any of the
foregoing and provided further that the Company will not be liable to
provide any indemnity hereunder to any Agent with respect to any loss,
claim, damage or liability arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission to
state a material fact in any Preliminary Prospectus which had been
corrected in the Prospectus as amended or supplemented if the person
asserting any such loss, claim, liability, charge or damage purchased
Notes from an Agent but was not sent or given a copy of the Prospectus as
so amended or supplemented at or prior to the written confirmation of the
sale of such Notes to such person.
(b) Each Agent, severally and not jointly, will indemnify and
hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, or any
amendment or supplement to any of the foregoing, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, or any such amendment or
supplement to any of the foregoing in reliance upon and in conformity with
written information furnished to the Company by such Agent expressly for
use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof, enclosing a
copy of all papers served; but the omission to so notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party unless, and only to the extent that, such omission
results in the forfeiture of substantive rights or defenses by the
indemnifying party. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall assume the defense of
any such litigation or proceeding, including the employment of counsel and
the payment of all expenses. Such counsel shall be designated in writing
by such Agent in the case of parties indemnified pursuant to Section 7(b)
and by the Company in the case of parties indemnified pursuant to Section
7(a). Any indemnified party 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 party
unless (i) the indemnifying party and the indemnified party 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 party and (y) the indemnified party and, in the written
opinion of counsel to such indemnified party, 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 party shall be reimbursed by the indemnifying party to the
indemnified party. If there is a conflict as described in clause (ii)
above, and the indemnified parties have participated in the litigation or
proceeding utilizing separate counsel whose fees and expenses have been
reimbursed by the indemnifying party and the indemnified parties, or any
of them, are found to be solely liable, such indemnified parties shall
repay to the indemnifying party such fees and expenses of such separate
counsel as the indemnifying party shall have reimbursed. It is understood
that the indemnifying party shall not, in connection with any litigation
or proceeding or related litigation or proceedings in the same
jurisdiction as to which the indemnified parties 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
parties. Subject to the next paragraph, all such fees and expenses shall
be reimbursed by payment to the indemnified parties of such reasonable
fees and expenses of counsel promptly after payment thereof by the
indemnified parties. An indemnifying party will not be liable for any
settlement or any action or claim effected without its written consent
(which consent will not be unreasonably withheld).
In furtherance of the requirement above that fees and
expenses of any separate counsel for the indemnified parties shall be
reasonable, each Agent and the Company agree that the indemnifying party'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 parties pursuant to clause (ii) of the
preceding paragraph, the indemnified parties shall in good faith
fully consult with the indemnifying party 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 party (but nothing herein shall be
deemed to require the furnishing to the indemnifying party 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 such Agent shall cooperate in
monitoring and controlling the fees and expenses of separate
counsel for indemnified parties for which the indemnifying party
is liable hereunder, and the indemnified party shall use every
reasonable effort to cause such separate counsel to minimize the
duplication of activities as between themselves and counsel to the
indemnifying party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and an Agent on the other from the offering of the Notes to
which such loss, claim, damage or liability (or action in respect thereof)
relates; if, and only if, contribution solely on the basis of relative
benefits is found to be unavailable, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and such Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and such Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by such Agent, in each case as set forth in the
table on the cover page of the Prospectus as amended or supplemented to
relate to a particular offering of Notes. 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 such Agent 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 each Agent
agree that it would not be just and equitable if contribution pursuant to
this subsection (d) were determined by pro rata allocation (even if the
Agents were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Agent shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of
the Agents in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations with respect to such Notes
and not joint. Any party entitled to contribution, promptly after receipt
of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 7(d), will
notify any such party or parties from whom contribution may be sought, but
the omission to so notify will not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
under this Section 7(d). No party will be liable for contribution with
respect to any action or claim settled without its written consent (which
consent will not be unreasonably withheld).
(e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any,
who controls any Agent within the meaning of the Act; and the obligations
of each Agent under this Section 7 shall be in addition to any liability
which such Agent may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
8. TERMINATION.
This Agreement may be terminated at any time either by the Company
as to any of the Agents or by any of the Agents insofar as this Agreement
relates to such Agent upon the giving of written notice of such
termination to such Agent or Agents or to the Company, as the case may be;
provided that Section 10 shall survive only for the term provided therein
and only with respect to the parties covered thereby. In the event of
termination of this Agreement (other than with respect to section 10), no
terminating party or parties with respect to which this Agreement is
terminated shall have any liability to the other parties hereto, except as
follows: (a) as provided in the first sentence of the fourth paragraph of
Section 1 and Sections 4(c), 5, 7, 9 and 11; (b) (i) if at the time of
termination a Terms Agreement is in effect between the Purchasing Agent
and the Company but the time of delivery to any Agent of the Note or Notes
relating thereto has not occurred or (ii) if the Agent or Agents shall
then own any Note or Notes purchased pursuant to a Terms Agreement, then
the Company's representations and warranties stated in Section 3 and its
obligations under the sixth paragraph of Section 1 and Sections 4(a),
4(b), 4(d), 4(e), 4(f), 4(i), 4(j) and 4(k), with respect to clause (i)
above, shall remain in full force and effect and not be terminated and,
with respect to clause (ii) above, shall remain in full force and effect
and not be terminated until the earlier of the date on which such Notes
are resold or the expiration of 90 days from such termination; provided,
however that with respect to clause (ii) above, the Company may repurchase
any such Notes from the Agents at the net price sold to the Agents on
original issuance and thereby terminate its obligations hereunder; and (c)
if the Company shall terminate this Agreement within six months of the
date hereof, other than as a result of a breach hereof by an Agent, the
Company shall be obligated, in addition to any matters covered by clauses
(a) and (b) of this Section 8, to reimburse the Agents for the reasonable
out-of-pocket expenses incurred by the Agents in connection with the
execution of this Agreement and the offering and sale of Notes including,
but not limited to, the reasonable fees and expenses of one counsel for
the Agents in connection with the establishment of the program
contemplated hereby.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Agents set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agents or the
Company or any of the officers, directors or controlling persons referred
to in section 7 hereof, and will survive delivery of and payment for the
Notes, and the indemnity agreement contained in Section 7 hereof shall
survive any termination of this Agreement.
10. GRANT OF LICENSE.
(a) Grant of Non-Exclusive License. Upon the terms and
conditions hereinafter set forth, the Purchasing Agent hereby grants to
the Company and to each other Agent (for purposes of this Section 10, each
such party is referred to as a "Licensee") and each Licensee hereby
accepts a non-exclusive, non-transferable (except as provided under
paragraph (f) hereunder) license to use the service marks owned by the
Purchasing Agent in respect of the names "General Term Notes" and "GTN"
that it has used in connection with its business activities, and in which
the Purchasing Agent asserts common law interests (hereinafter referred to
collectively as "Marks") in connection with such Licensee's furtherance of
this Agreement, including use of such Marks as part of such Licensee's
marketing materials or other similar uses. No Licensee shall have any
interest in or right to use the Marks except as set forth herein.
(b) Non-Exclusivity of License. Nothing in this Section 10
shall prevent the Purchasing Agent from granting any other license for the
use of the Marks or from utilizing the Marks or permitting the Marks to be
utilized by others in any manner whatsoever.
(c) Term. The term of this license shall continue in force as
to the Purchasing Agent and (without regard to any other Licensee) (i)
with respect to the Company, for so long as the Notes shall be outstanding
and (ii) with respect to each other Agent, for as long as this Agreement
or that Co-Agent Agreement between the Purchasing Agent and such Agent
with respect to the Notes issued under this Agreement shall be in effect,
in each case subject to earlier termination in accordance with the
provisions of either this Agreement or any such Co-Agent Agreement, as the
case may be.
(d) Ownership of Marks. Each Licensee specifically
acknowledges the Purchasing Agent's ownership rights in the Marks. In
connection with the use of the Marks, no Licensee shall in any manner
represent that it has any ownership in the Marks or any registrations
thereof and agrees that nothing in this Agreement shall give such Licensee
any ownership interest in any of the Marks other than the right to use the
Marks in accordance with this Section 10.
No Licensee will, during the term of this Section 10 or at any
time thereafter, attack the validity of any of the Marks or the Purchasing
Agent's interests therein, nor will any Licensee attack any application
for registration of any of the Marks, or take any position contrary to
that of the Purchasing Agent in any proceedings pertaining to registration
of any of the Marks.
Each Licensee shall, whether during or after the term of this
Agreement, execute and deliver to the Purchasing Agent such documents as
the Purchasing Agent may reasonably request to establish or confirm the
Purchasing Agent's ownership interest in the Marks.
(e) Quality Control and Regulatory Compliance. Each Licensee
agrees that it will make no use of the Marks that would tend to reflect
adversely upon the Purchasing Agent, its business reputation, the GTN
business and/or market, or would violate or reflect adversely upon the
Purchasing Agent with regard to the Commission, the NASD or any other
governmental authority or securities association or other regulatory
matters. The common law understanding of the reasonable man standard,
given the facts and circumstances then facing such Licensee, its agents
and employees, shall apply when making a determination pursuant to this
paragraph (e). Any proposed use of the Marks outside of the terms
contemplated by this Paragraph shall be submitted to the Purchasing Agent
for its written approval prior to said proposed use.
(f) Assignment of Sublicense by Licensee. This Section 10 and
all rights and duties in and with respect to the Marks hereunder are
personal to each Licensee and shall not, without the prior written consent
of the Purchasing Agent, which consent may not be unreasonably withheld,
be assigned, mortgaged, sublicensed or otherwise encumbered or transferred
by such Licensee, except by operation of law. The Purchasing Agent may
assign its rights under this Section 10 to any person or entity without
the consent of any Licensee and upon such assignment the Purchasing Agent
shall be relieved from any further liability under this Agreement. The
Purchasing Agent shall furnish prior written notice of any such assignment
to each Licensee.
(g) Unauthorized Use. Each Licensee will notify the
Purchasing Agent in writing of any unauthorized use of any of the Marks
which come to such Licensee's attention.
(h) Indemnification; Infringement.
(I) The Purchasing Agent hereby indemnifies each Licensee and
holds it harmless from and against any loss, liability,
penalty, deficiency, damage or out-of-pocket expense
(including, without limitation, reasonable legal fees and
expenses) which such Licensee may suffer, sustain or
become subject to resulting from, arising out of or caused
by any suit, action or proceeding brought by a third party
claiming or alleging in any manner that the use of any of
the Marks by such Licensee has infringed upon the rights
of others; provided, however, that the Purchasing Agent
shall not be liable or responsible to indemnify a Licensee
if the claimed or alleged infringement results from such
Licensee's violation of this Section 10 or bad faith,
willful misfeasance or gross negligence.
(II) Each Licensee will notify the Purchasing Agent promptly in
writing of any claim that the use of any of the Marks
infringes the rights of others, or of the institution of
any legal actions or suits predicated upon such claimed
infringement, and any such suit or action will be
diligently defended at the sole expense of and under the
sole control of the Purchasing Agent.
(i) Termination.
(I) This Section 10 shall remain in effect throughout the term
stated in paragraph (c) above until and unless it is
earlier terminated pursuant to the terms of paragraph
(i)(II) below.
(II) This Section 10 may be terminated as to the Purchasing
Agent and any Licensee (without regard to another
Licensee) as follows:
A. By the Purchasing Agent in the event that such
Licensee shall fail to perform any obligation imposed upon
such Licensee by this Section 10 or violate any terms of
this Section 10. The Purchasing Agent will give such
Licensee written notice setting forth the particulars of
any such breach and, unless such Licensee has cured such
breach or is in the process of curing such breach, this
Section 10 will terminate ten (10) days after receipt by
such Licensee of such written notice. With respect to the
Company, nothing in this paragraph shall be construed to
require such Licensee to retire, redeem or repurchase any
Notes issued by it pursuant to this Distribution
Agreement, or successor Distribution Agreements, otherwise
left outstanding in the event of termination hereunder.
B. With respect to each other Agent (and not as to the
Company), in the event that any Co-Agent Agreement between
the Purchasing Agent and such Agent/Licensee terminates
for any reason, or in the event of its expiration, this
Section 10 shall immediately and automatically terminate.
(j) Effect of Termination or Expiration. On termination or
expiration of this Section 10 all rights and licenses granted to each
Licensee hereunder shall immediately and automatically terminate. In such
event, each Licensee agrees to discontinue all uses of the Marks and any
words confusingly similar thereto within ten (10) days of such termination
or expiration. After such termination, no Licensee nor any affiliate of
any Licensee shall allude in any public statement or advertisement to the
Marks. Each Licensee agrees that it will at no future time adopt or use,
without the Purchasing Agent's prior written consent, a word or mark which
is reasonably likely to be similar to or confused with any of the Marks.
The Purchasing Agent shall retain sole authority and control over all of
the Marks, and all rights in the Marks shall remain the property of the
Purchasing Agent.
(k) Royalty. The license granted herein shall be royalty-
free.
(l) Reservation of Rights in the Marks. Rights in the Marks,
other than those specifically granted herein, are reserved by the
Purchasing Agent for its own use. Upon the termination of this Section 10
for any reason whatsoever, all rights to the Marks shall revert to the
Purchasing Agent without the necessity of any act on its part.
(m) Unenforceable Provisions. If any provision or part of
this Section 10 is declared unenforceable by a court of competent
jurisdiction, each and every other provision, or part hereof, shall
continue in full force and effect.
(n) Waiver. The failure or delay of the Purchasing Agent or
any Licensee to insist upon the performance of any of the terms and
conditions of this Section 10 or to exercise or enforce any right or
obligation herein conferred, shall not be construed to be a waiver of any
such terms, conditions, rights or obligations and either party may, within
the time provided by applicable law, take measures to enforce any or all
such rights and obligations.
(o) Remedies. In the event of the breach or default in the
terms of this Section 10 by the Purchasing Agent or any Licensee, the
non-breaching or non-defaulting party shall be entitled to all legal and
equitable remedies provided by law.
The Purchasing Agent and each Licensee agree that damages may be
insufficient to compensate the Purchasing Agent in the event that any of
the terms of this Section 10 are not complied with, and therefore, agree
that in such event, the Purchasing Agent may seek injunctive relief and
specific performance of the terms hereof, in addition to all other rights
or remedies, and that to obtain such an injunction the Purchasing Agent
shall not be required to show any actual damage or to post any bond or
other security.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Company, will be mailed
or delivered or sent by facsimile transmission or telegraph and confirmed
to it at CMS Energy Corporation, Fairlane Plaza South, 000 Xxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, attention: Xxxx X. Xxxxxx,
Senior Vice President, Chief Financial Officer and Treasurer, facsimile
transmission number (000) 000-0000, and if sent to any of the Agents, will
be mailed or delivered or sent by facsimile transmission or telegraph and
confirmed to them at their respective addresses and facsimile transmission
numbers, as follows: if to X. X. Xxxxx & Company, to it at 00000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000, attention:
Xxxxxx X. Xxxx, facsimile transmission number (000) 000-0000. Any party
hereto may change its address or facsimile number set out in this Section
11 by a notice given to the other parties in accordance herewith.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section
7 hereof, and no other person will have any right or obligation hereunder.
The term "successors" as used in this Agreement shall not include a
purchaser, as such purchaser, of Notes from any Agent or from any selected
dealer acting through such Agent.
13. Applicable Law. This Agreement and each Terms Agreement
will be governed by and construed in accordance with the laws of the State
of New York applicable to agreements made and to be performed wholly
within such jurisdiction, except that Section 10 of this Agreement will be
governed by and construed in accordance with the laws of the State of
Michigan.
14. Counterparts. This Agreement may be executed in any
number of 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.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement between the Company and you.
Very truly yours,
CMS Energy Corporation
By: __________________________
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
X. X. XXXXX & COMPANY
By: __________________________
Title: _____________________
