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EXHIBIT 1.2
MICHIGAN CONSOLIDATED GAS COMPANY
(A MICHIGAN CORPORATION)
DEBT SECURITIES
PURCHASE AGREEMENT
JUNE 18, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Michigan Consolidated Gas Company (the "Company"), a Michigan
corporation, confirms its agreement (this "Agreement") with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of
the other Underwriters named in Schedule II hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and First
Chicago Capital Markets, Inc. are acting as representatives (in such capacity,
the "Representatives") with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the principal
amount set forth in Schedule II of $75,000,000 aggregate principal amount of the
Company's Extendable MandatOry Par Put Remarketed Securities (sm)
("MOPPRS(sm)"), due June 30, 2038 (the "Securities"). The Securities will be
issued by the Company under its Indenture, dated as of June 1, 1998 (the
"Indenture"), between the Company and Citibank, N.A., as trustee (the
"Trustee"), which will be secured by the concurrent issuance and delivery to the
Trustee of the Company's First Mortgage Bonds, Collateral Series A (the
"COLLATERAL BONDS"), issued under and ratably secured by the Indenture
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of Mortgage and Deed of Trust dated as of March 1, 1944 (the "ORIGINAL SECURED
INDENTURE"), as supplemented and amended by thirty-five indentures supplemental
thereto, including specifically the Twenty-ninth Supplemental Indenture, and the
Thirty-fifth Supplemental Indenture creating the series in which the Collateral
Bonds are to be issued (the "THIRTY-FIFTH SUPPLEMENTAL INDENTURE") (the Original
Secured Indenture and all supplemental indentures thereto being referred to
collectively herein as the "Secured Indenture"), in a principal amount equal to
that of and having other terms that mirror those of the Securities. The Company
proposes to sell to the Underwriters Securities of the designation, with the
terms and the aggregate principal amount specified in Schedule I hereto.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-56333) covering the
registration of debt securities of the Company, including the Securities, under
the Securities Act of 1933, as amended (the "1933 ACT") including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 ACT REGULATIONS") and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
this Agreement. Such registration statement, as so amended, has been declared
effective by the Commission. Such registration statement, as so amended,
including the exhibits and schedules thereto, if any, and the information, if
any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "RULE 430A INFORMATION") or Rule 434(d) of the 1933 Act
Regulations (the "RULE 434 INFORMATION"), is referred to herein as the
"REGISTRATION STATEMENT"; and the final prospectus and the prospectus supplement
relating to the offering of the Securities, are collectively referred to herein
as the "Prospectus"; provided, however, that all references to the "Registration
Statement" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934
ACT"), prior to the execution of this Agreement; provided, further, that if the
Company files a registration statement with the Commission pursuant to Section
462(b) of the 1933 Act Regulations (the "RULE 462(b) REGISTRATION STATEMENT"),
then after such filing, all references to "Registration Statement" shall be
deemed to include the Rule 462(b) Registration statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
the term "PROSPECTUS" shall refer to the final or preliminary prospectus and the
applicable term sheet (a "TERM SHEET") and all references in this Agreement to
the date of such Prospectus shall mean the date of the applicable Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
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All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus) or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter that:
(i) No stop order suspending the effectiveness of the
Registration Statement or any Rule 464(b) Registration Statement has been issued
under the 1933 Act and no proceeding for that purpose has been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has
been complied with.
(ii) The Company meets the requirements for the use of Form
S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act. At the
respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the Commission) became
effective and as of the date hereof, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Trust Indenture Act of 1939, as amended (the
"1939 ACT"), and the rules and regulations of the Commission under the 1939 Act
(the "1939 ACT REGULATIONS") and did not 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 not misleading.
Neither the Prospectus nor any amendments or supplements thereto, at the time
that the Prospectus or any such amendment or supplement was issued and at the
Closing Date, included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through
▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement or the Prospectus.
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Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with the offering of the Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act, and the rules and
regulations of Commission thereunder (the "1934 Act Regulations"), and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was issued
and on the Closing Date, did not 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 the light of the circumstances
under which they were or are made, not misleading.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates indicated
and the statements of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified. Such
financial state ments have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or incorporated by
reference in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The ratio of
earnings to fixed charges included in the Prospectus has been calculated in
compliance with Item 503(d) of Regulation S-K of the Commission. The selected
financial information and the summary financial data included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no development
which could reasonably be expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise (a "MATERIAL ADVERSE EFFECT"), whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by the
Company or any of its
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subsidiaries, other than those arising in the ordinary course of business, which
are material with respect to the Company and its subsidiaries, considered as one
enterprise, (C) except for regular quarterly dividends on the Company's common
stock in amounts per share that are consistent with past practice or the
applicable charter document or supplement thereto, respectively, there has been
no dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vii) 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 authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing would not, singly or in the aggregate, have a
Material Adverse Effect.
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus, and is duly qualified
as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not, singly or in the
aggregate, have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and outstanding
shares of capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and all such
shares are owned by the Company, directly or through its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of the subsidiaries was
issued in violation of preemptive or other similar rights arising by operation
of law, under the charter or by-laws of any subsidiary or under any agreement to
which the Company or any subsidiary is a party, or otherwise.
(ix) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights arising by
operation of law, under the charter or by-laws of the Company, under any
agreement to which the Company or any of its subsidiaries is a party or
otherwise.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
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(xi) The Securities have been duly authorized for issuance and
sale pursuant to this Agreement and at the Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered by the Company against payment of the purchase price
therefor, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity, (the
"BANKRUPTCY EXCEPTIONS"). The Securities will be in the form contemplated by,
and entitled to the benefits of, the Indenture and conform in all material
respects to the description thereof contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement.
(xii) The Collateral Bonds have been duly authorized for
issuance and delivery to the Trustee, and at the Closing Date will have been
duly executed by the Company and, when authenticated in the manner provided for
in the Secured Indenture and delivered by the Company as security for the
Securities, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions. The
Collateral Bonds will be in the form contemplated by, and entitled to the
benefits of, the Secured Indenture and conform in all material respects to the
description thereof contained in the Prospectus and will be substantially in the
form filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement.
(xiii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and qualified under the 1939 Act and
constitutes a valid and legally binding instrument, enforceable against the
Company in accordance with its terms except to the extent that the enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture conforms in
all material respects to the description thereof contained in the Prospectus and
will be in substantially the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(xiv) The issuance and delivery by the Company of the
Collateral Bonds to the Trustee constitute a sale by the Company of the
Collateral Bonds to the Trustee as of the Closing Date, or, if not a sale, the
grant by the Company to the Trustee of a perfected security interest in the
Collateral Bonds for the benefit of the holders of the Senior Notes.
(xv) The Secured Indenture constitutes a legally valid and
enforceable first mortgage lien, except as the same may be limited by the laws
of the State of Michigan (where all of the property covered thereby is located)
affecting the remedies for the enforcement of the security provided for therein,
which laws do not make inadequate the remedies necessary for the realization of
the benefits of such security, or as the same may be limited by the Bankruptcy
Exceptions, upon substantially all of the Company's properties and franchises,
now owned or
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hereafter acquired, free from all prior liens, charges or encumbrances, except
as set forth in subparagraph xxiii below, and in the case of property hereafter
acquired, any thereof existing at the time of acquisition.
(xvi) None of the Company or any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, note, lease, loan
or credit agreement or any other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, or in violation of any applicable law, rule or regulation or any
judgment, order, writ or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties or assets, which
violation or default would, singly or in the aggregate, have a Material Adverse
Effect.
(xvii) The execution, delivery and performance by the Company
of this Agreement, the Mandatory Tender Remarketing Agreement, to be dated as of
the Closing Date, between the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇, as Remarketing Agent
with respect to the Securities (the "Mandatory Tender Remarketing Agreement"),
the Reset Remarketing Agreement, to be dated as of the Closing Date, between the
Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ as Reset Remarketing Agent with respect to the
Securities (the "Reset Remarketing Agreement" and, together with the Mandatory
Tender Remarketing Agreement, the "Remarketing Agreements"); the execution,
delivery and performance by the Company of the Indenture, the Securities, the
Thirty-fifth Supplemental Indenture to the Original Secured Indenture, the
Collateral Bonds and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby; and the consummation of the transactions
contemplated herein and therein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the issuance
and delivery of the Collateral Bonds, and the use of the proceeds from the sale
of the Securities as described in the Prospectus under the caption "Use of
Proceeds"); and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them may be bound (other than the
lien of the Indenture), or to which any property or assets of the Company or any
subsidiary thereof is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not, singly or in the aggregate,
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter of by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule or regulation, judgment,
order, writ or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective property, assets or operations.
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(xviii) On the Closing Date, the Remarketing Agreements will
have been validly authorized, executed and delivered by the Company and will
constitute a valid and legally binding instrument, enforceable against the
Company in accordance with its terms except to the extent that the enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xix) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of its subsidiary's principal suppliers,
manufacturers, customers or contractors which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xx) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which is required to be
disclosed in the Registration Statement and the Prospectus (other than as
disclosed therein), or which might reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect, or which might be reasonably
expected to materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated by this Agreement,
or the Remarketing Agreements or the performance by the Company of its
obligations hereunder and thereunder; and the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary thereof is a
party or of which any of their respective properties or operations is the
subject which are not described in the Registration Statement and the
Prospectus, including ordinary routine litigation incidental to the business,
could not reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect.
(xxi) There are no contracts or documents which are required
to be described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto which have
not been so described and/or filed as required.
(xxii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Company of its obligations hereunder, in connection
with (a) the offering, issuance or sale of the Securities under this Agreement,
(b) the issuance and delivery to the Trustee of the Collateral Bonds, or (c) the
consummation of the transactions contemplated by this Agreement, the Indenture
and the Remarketing Agreements, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or foreign or
state securities or blue sky laws.
(xxiii) The Company has good and marketable title to the
properties specifically described in and conveyed by the Secured Indenture
(except such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien of the
Secured Indenture, to permissible encumbrances, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the execution of
the Original
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Secured Indenture, to any liens existing thereon or purchase money liens placed
thereon at the time of such acquisition as permitted by the Secured Indenture,
and to certain other reservations, rights of grantors under revocable permits,
easements, licenses, zoning laws and ordinances and restrictions and minor
defects or irregularities of title which do not materially impair the use of the
property affected thereby in the operation of the business of the Company; the
Company and its subsidiaries have good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except the liens of the Secured Indenture and such liens,
encumbrances and defects as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as do not interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries; the pipeline, distribution main and underground
gas storage easements enjoyed by the Company and its subsidiaries are valid,
subsisting and enforceable easements with such exceptions as do not materially
interfere with the conduct of the business of the Company and its subsidiaries.
(xxiv) The Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals, consents, orders
and other operating rights (collectively, the "Governmental Licenses") issued by
the Federal Energy Regulatory Commission, the State of Michigan, and all other
federal, state, local or foreign regulatory agencies or bodies, governmental
authorities or agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and to conduct the business now
operated by each of them; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except where
the failure to so comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect except when the failure of such Governmental Licenses to be in full force
and effect would not, singly or in the aggregate, have a Material Adverse Effect
and contain no unduly burdensome provisions that would interfere with the
conduct of the business of the Company and its subsidiaries, considered as one
enterprise and, except as otherwise set forth in the Registration Statement and
the Prospectus, there are no legal or governmental proceedings pending or
threatened that would result in a material modification, suspension or
revocation thereof.
(xxv) The Company is a "public utility company" and a
"subsidiary company" of MCN Energy Group ("MCN"), a "holding company," as such
terms are defined in the Public Utility Holding Company Act of 1935 (the "1935
Act"), and such "holding company" and the Company are presently exempt from the
provisions of the 1935 Act (except Section 9 thereof).
(xxvi) Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) none of the Company or any of its subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance
or code, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment
(including, without
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limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products (collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, the "ENVIRONMENTAL LAWS"), (B)
the Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are in compliance with
their requirements, or (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries.
(xxvii) None of the Company or its subsidiaries is, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus, and
upon the issuance and delivery to the Trustee of the Collateral Bonds, none will
be, an "investment company" or an entity under the "control" of an "investment
company" as such terms are defined under the Investment Company Act of 1940, as
amended (the "1940 Act").
(xxviii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder (collectively, the
"Cuba Act") or is exempt therefrom.
(xxix) None of the Company and its subsidiaries or any of
their respective directors, officers or controlling persons, has taken, directly
or indirectly, any action resulting in a violation of Regulation M under the
1934 Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(xxx) No "forward looking statement" (as defined in Rule 175
under the ▇▇▇▇ ▇▇▇) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable basis
or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as the case may be, to each Underwriter as to the
matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at the price per
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security set forth in Schedule I hereto, the respective principal amounts of the
Securities set forth opposite the name of the such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Delivery of and payment for the Securities shall be made at the
offices of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 a.m. (Eastern time) on the third
(fourth, if pricing of the Securities occurs after 4:30 p.m. (Eastern time) on
any given day) business day after the date of execution of this Agreement
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being referred to herein as the "Closing Date").
(c) The Collateral Bonds that will secure the obligations of the
Company in respect of the Securities will be issued and delivered to the Trustee
of the Collateral Bonds on the Closing Date.
(d) On the Closing Date the Company shall deliver the Securities to The
Depository Trust Company, on behalf of the Representatives, for the account of
each Underwriter against payment to the Company by wire transfer of immediately
available funds to a bank account designated by the Company. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(e) Upon delivery, the Securities shall be in registered form and in
such denominations as set forth on Schedule I hereto. The certificates
representing the Securities shall be registered in the name of Cede & Co. and
shall be made available for inspection by the Representatives in New York, New
York not later than 10:00 a.m. (Eastern time) on the business day prior to the
Closing Date.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Company
will cause the Prospectus, including as a part thereof a prospectus supplement
relating to the Securities and the Collateral Bonds, to be filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and will take
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus.
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(b) The Company, subject to Section 3(c), will comply with the
requirements of Rule 430A or Rule 434 of the 1933 Act Regulations, as
applicable, and will notify the Representatives immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) The Company will give the Representatives notice of their intention
to file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Representatives with copies of any such Rule
462(b) Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file any such Rule 462(b) Registration Statement, Term Sheet,
amendment, supplement or revision to which the Representatives or counsel for
the Underwriters shall object.
(d) The Company has furnished or will deliver to the Representatives
and counsel for the Underwriters, without charge, signed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts, and will also deliver
to the Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits)
for each of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be
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identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(f) The Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement any
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(c), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Representatives may designate; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for so long as may
be required in connection with distribution of the Securities.
(h) The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its securityholders and
to deliver to the Representatives as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"USE OF PROCEEDS."
(j) On the Closing Date, the Company will issue and deliver the
Collateral Bonds to the Trustee as security for the Securities as described in
the Prospectus under the caption "DESCRIPTION OF THE NOTES--Security; Release
Date."
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(k) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933
Act Regulations, then immediately following the execution of this Agreement, the
Company will prepare, and file or transmit for filing with the Commission in
accordance with such Rule 430A or Rule 434 and Rule 424(b) of the 1933 Act
Regulations, copies of an amended Prospectus, or Term Sheet, or, if required by
such Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus), containing all information so omitted.
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933
Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on the date of
this Agreement and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
(m) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) So long as any of the Securities are outstanding, to furnish the
Representatives copies of all reports and financial statements furnished by the
Company to each securities exchange on which securities issued by the Company
may be listed pursuant to requirements of or agreements with such exchange or to
the Commission pursuant to the 1934 Act of the 1934 Act Regulations.
(o) During a period of fifteen days from the date of the Prospectus,
the Company will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇,
directly or indirectly, issue, pledge, sell, offer to sell, grant any option for
the sale of or otherwise transfer or dispose of, any debt securities of the
Company which mature more than one year after the Closing Date and which are
substantially similar to the Securities, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇, except for the offer by the Company of $75,000,000 aggregate
principal amount of its Resetable MAndatory Putable/remarketable Securities
("MAPS(sm)") due June 30, 2038.
(p) None of the Company, its subsidiaries or any of their respective
directors, officers or controlling persons, will take, directly or indirectly,
any action resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including,
without limitation, expenses related to the following, if incurred: (i) the
preparation, delivery, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto; (ii) the printing and delivery to the Underwriters of this
Agreement, the
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Indenture, the Remarketing Agreements and any and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities and the issuance and delivery of the Collateral Bonds; (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, as well as the preparation, issuance and delivery of the
certificates for the Collateral Bonds to the Trustee, including any costs, taxes
and expenses incident to the issuance and delivery of the Securities; (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors
or agents; (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto; (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheet, the Prospectus and any amendments or
supplements thereto, and the printing and delivery of any additional Prospectus
and any amendments or supplements thereto as may be contemplated by the
Remarketing Agreements; (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto; (viii)
the fees and disbursements of the Trustee, including the fees and disbursements
of counsel to the Trustee; (ix) any fees payable to the Commission; and (x) any
fees payable in connection with the rating of the Securities by rating agencies.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of LeBoeuf, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained or in
certificates of any officer of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and on the date hereof and on
the Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b) (or any required post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of Rule 430A), or, if the Company has elected to rely upon Rule
434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b).
(b) On the Closing Date the Representatives shall have received:
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(1) The favorable opinion, dated as of the Closing Date, of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary of the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Michigan.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus and
to enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Effect.
(iv) The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock were issued in violation of
preemptive or other similar rights arising by operation of law, under
the charter or by-laws of the Company; under any agreement to which the
Company, or any of its subsidiaries is a party, or otherwise.
(v) The Securities are in the form
contemplated by the Indenture, have been duly and validly authorized
by the Company and, when executed by the Company and authenticated by
the Trustee in the manner provided for in the Indenture and delivered
by the Company against payment of the purchase price therefor, will
constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions. Each holder of the Securities will be entitled
to the benefits provided by the Indenture; the form of certificate
used to evidence the Securities is in due and proper form and complies
with the requirements of the Indenture; and the Securities and the
Indenture conform in all material respects to the descriptions thereof
contained in the Prospectus.
(vi) The Collateral Bonds are in the form
contemplated by the Secured Indenture, have been duly and validly
authorized by the Company and, when executed by the Company and
authenticated by the Trustee in the manner provided for in the
Indenture, and issued and delivered by the Company to the Trustee as
security for the Securities, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that
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enforcement thereof may be limited by the Bankruptcy Exceptions. The
form of certificate used to evidence the Collateral Bonds is in due and
proper form and complies with the requirements of the Secured
Indenture; and the Collateral Bonds and the Secured Indenture conform
in all material respects to the descriptions thereof contained in the
Prospectus.
(vii) The issuance and delivery by the Company
of the Collateral Bonds to the Trustee constitute a sale by the Company
of the Collateral Bonds to the Trustee as of the Closing Date, or, if
not a sale, the grant by the Company to the Trustee of a perfected
security interest in the Collateral Bonds for the benefit of the
holders of the Senior Notes.
(viii) Except as to property acquired
subsequent to the date of execution of the Thirty-fourth Supplemental
Indenture, the Company has good and marketable title to the property
specifically or generally described in the Secured Indenture (except
such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien
of the Secured Indenture, to permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
execution of the Original Secured Indenture, to any liens existing
thereon or purchase money liens placed thereon at the time of such
acquisition as permitted by the Secured Indenture, and to certain other
reservations, rights of grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company; the pipeline,
distribution main and underground gas storage easements enjoyed by the
Company and its subsidiaries are valid, subsisting and enforceable
easements with such exceptions as are not material and do not interfere
with the conduct of the business of the Company and its subsidiaries.
(ix) The Secured Indenture constitutes a
legally valid and enforceable first mortgage lien, except as the same
may be limited by the laws of the State of Michigan (where the property
covered thereby is located) affecting the remedies for the enforcement
of the security provided for therein, which laws do not, in the opinion
of such counsel, make inadequate the remedies necessary for the
realization of the benefits of such security, or as the same may be
limited by the Bankruptcy Exceptions, upon substantially all of the
Company's properties and franchises, now owned or hereafter acquired,
free from all prior liens, charges or encumbrances other than the lien
of the Secured Indenture, permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
execution of the Original Secured Indenture, any liens existing thereof
or purchase money liens placed thereon at the time of such acquisition
as permitted by the grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company.
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(x) All taxes and fees required to be paid by
the laws of the State of Michigan and jurisdictional subdivisions
thereof with respect to the execution of the Thirty-Fifth Supplemental
Indenture and the issuance and delivery of the Collateral Bonds have
been paid.
(xi) Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would
not, individually or in the aggregate, have a Material Adverse Effect.
Except as otherwise disclosed in the Registration Statement and the
Prospectus, all of the issued and outstanding capital stock of each
such subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable and all such shares are owned
by the Company, directly or through its subsidiaries and, to the best
of such counsel's knowledge, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of any subsidiary of the Company
was issued in violation of preemptive or other similar rights of any
securityholder of such subsidiary.
(xii) This Agreement has been duly authorized,
executed and delivered by the Company.
(xiii) The Registration Statement, including
any Rule 462(b) Registration Statement, has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings therefor have been initiated or threatened
by the Commission.
(xiv) The Registration Statement, including any
Rule 462(b) Registration Statement, the Rule 430A Information and the
Rule 434 Information, as applicable, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein, as to which such counsel need
express no opinion), complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations; the
Indenture and the Statements of Eligibility on Form T-1 with respect to
the Trustee filed with the Commission as part of the Registration
Statement complied as to form in all material respects with the
requirements of the 1939 Act and the 1939 Act Regulations.
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(xv) The documents incorporated by reference
in the Prospectus (other than the financial statements and supporting
schedules therein, as to which such counsel need express no opinion),
when they were filed with the Commission complied as to form in all
material respects with the requirements of the 1934 Act and the 1934
Act Regulations.
(xvi) The Company meets the registrant
requirements for use of Form S-3 under the 1933 Act Regulations.
(xvii) The Indenture has been duly and validly
authorized, executed and delivered by the Company and qualified under
the 1939 Act and, assuming due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by the Bankruptcy
Exceptions.
(xviii) The Secured Indenture has been duly and
validly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that the enforcement thereof may be limited by the
Bankruptcy Exceptions; the Secured Indenture has been duly qualified
under the 1939 Act.
(xix) The Thirty-Fifth Supplemental Indenture
to the Original Secured Indenture has been duly and validly authorized,
executed and delivered by the Company and qualified under the 1939 Act
and, assuming due authorization, execution and delivery thereof by the
Trustee, constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except as the
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xx) Each of the Remarketing Agreements has
been validly authorized, executed and delivered by the Company and will
constitute a valid and legally binding instrument, enforceable against
the Company in accordance with its terms, except to the extent that the
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xxi) All taxes and fees required to be paid
by the laws of the State of Michigan and jurisdictional subdivisions
thereof with respect to the execution of the Indenture and the issuance
of the Securities have been paid.
(xxii) The execution, delivery and performance
by the Company of this Agreement, and the Remarketing Agreements; the
execution, delivery and performance by the Company of the Indenture,
the Securities, the Thirty-fifth Supplemental Indenture to the Original
Secured Indenture, the Collateral Bonds and any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated hereby or
thereby; the consummation of the transactions contemplated herein and
therein and in the Registration
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Statement and Prospectus (including the issuance and sale of the
Securities, the issuance and delivery to the Trustee of the Collateral
Bonds, and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds"); and
compliance by the Company with its obligations hereunder and thereunder
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary thereof pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to such counsel, to which the Company or its
subsidiaries is a party or by which any of them may be bound, or to
which any of the properties, assets or operations of the Company or its
subsidiaries is subject, except for such conflicts, breaches, defaults,
liens, charges or encumbrances that would not, singly or in the
aggregate, result in a Material Adverse Effect, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any if its subsidiaries, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to such
counsel, of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, assets or
operations.
(xxiii) To the best of such counsel's
knowledge, there is not any action, suit, proceeding, inquiry or
investigation pending or threatened before or by any court or
governmental agency or body, domestic or foreign, pending or
threatened, against or affecting the Company or any of its subsidiaries
which is required to be dis closed in the Registration Statement and
the Prospectus (other than as disclosed therein), or which might
reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated in this
Agreement, the Indenture, the Thirty-Fifth Supplemental Indenture to
the Original Secured Indenture or the Remarketing Agreements, or the
performance by the Company of its obligations hereunder and thereunder;
and the aggregate of all pending legal or governmental proceedings to
which the Company or any of its subsidiaries is a party or to which any
of their respective property or assets is the subject which are not
described in the Registration Statement or the Prospectus, including
ordinary routine litigation incidental to the business of the Company
or its subsidiaries, could not reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect.
(xxiv) The information in the Prospectus under
the captions "Summary," "The Company," "Use of Proceeds," "Description
of the First Mortgage Bonds," and "Description of the Senior Debt
Securities" and in the Registration Statement under Item 14, to the
extent that they involve matters of law, summaries of legal matters,
the Company's charter and by-laws or legal proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
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(xxv) To the best of such counsel's
knowledge, there are no statutes or regulations that are required
to be described in the Prospectus that are not described as required.
(xxvi) To the best of such counsel's knowledge
and information, neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws and no default by the Company or
any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan or credit agreement, note, lease,
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties or assets are bound, except for violations and
defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xxvii) All descriptions in the Prospectus of
contracts and other documents to which the Company or any of its
subsidiaries is a party are accurate in all material respects. To the
best of such counsel's knowledge and information, there are no
franchises, contracts, indentures, mortgages, loan or credit
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or incorporated by
reference as exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and
the descriptions thereof or references thereto are correct in all
material respects. No default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in the Secured Indenture, any other contract, indenture,
mortgage, agreement, note lease or other instrument so described,
referred to, filed or incorporated by reference.
(xxviii) All legally required proceedings in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
Agreement (other than the filing of post-issuance reports, the
non-filing of which would not render the Securities invalid), and in
connection with the issuance and delivery to the Trustee of the
Collateral Bonds, have been taken; and no filing with, authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign (other than under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as may be required under the securities or
blue sky laws of the various states, as to which such counsel need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of this Agreement, the
Remarketing Agreements or the Thirty-Fifth Supplemental Indenture, or
for the offering, issuance and sale of the Securities, the issuance and
delivery of the Collateral Bonds, or the performance by the Company of
its obligations in this Agreement, the Thirty-Fifth Supplemental
Indenture, the Indenture, the Remarketing Agreements and the
Securities.
(xxix) The Company and its subsidiaries
possess all licenses, franchises, permits, certificates,
authorizations, approvals, consents, orders and other
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operating rights (collectively, the "Governmental Licenses") issued by
the Federal Energy Regulatory Commission; the State of Michigan, and
all other federal, state, local or foreign regulatory agencies or
bodies, governmental authorities or agencies necessary for the
ownership or lease of the material properties owned or leased by each
of them and for the operation of the business carried on by each of
them as described in the Registration Statement and the Prospectus
except where the failure to so comply would not, singly or in the
aggregate, have a Material Adverse Effect; all such licenses,
franchises, permits, certificates, authorizations, approvals, consents
and orders are in full force and effect, except when the failure of
such Governmental Licenses to be in full force and effect would not,
singly or in the aggregate, have a Material Adverse Effect; and contain
no unduly burdensome provisions that would interfere with the conduct
of the business of the Company or its subsidiaries, considered as one
enterprise and, except as otherwise set forth in the Registration
Statement or the Prospectus, there are no legal or governmental
proceedings pending or threatened that would result in a material
modification, suspension or revocation thereof.
(xxx) Each of the Company and its
subsidiaries has good and marketable title to all material real and
personal property owned by each of them, in each case, free and
clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Registration Statement and the Prospectus or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not materially interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and any real property and buildings held under lease by
the Company, or its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the conduct of the business of
the Company or such subsidiaries.
(xxxi) The Company is not an "investment
company" or an entity under the "control" of an "investment company" as
such terms are defined in the ▇▇▇▇ ▇▇▇.
(xxxii) MCN and the Company are presently
exempt from the provisions of the Public Utility Holding Company Act of
1935 (except Section 9 thereof) which would otherwise require either of
them to register thereunder.
Moreover, such counsel shall confirm that
nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement, including any Rule
430A Information and Rule 434 Information (if applicable)(except for
financial statements and the notes thereto, the financial schedules
and any other financial data included or incorporated by reference
therein, as to which such counsel need express no opinion), at the time
such Registration Statement became effective or at the date of this
Agreement, 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
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statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and
the notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein, as to which such
counsel need express no opinion), at the time the Prospectus were
issued, at the time of any such amended or supplemented Prospectus were
issued or at the Closing Date, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Date, of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Company, in
form and substance satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters,
to the effect that:
(i) The Registration Statement, including any
Rule 462(b) Registration Statement, is effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings therefor have been initiated or,
to the best of such counsel's knowledge, threatened by the Commission.
(ii) The Registration Statement, including any
Rule 462(b) Registration Statement, the Rule 430A Information and the
Rule 434 Information, as applicable, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein, as to which such counsel need
express no opinion), complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(iii) The statements in the Prospectus under
the captions "Description of the Senior Debt Securities" and
"Description of the First Mortgage Bonds," to the extent that they
involve matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, have been reviewed by such counsel
and are correct in all material respects.
(iv) Assuming that the Remarketing Agreements
being delivered at the Closing Date have been duly authorized, executed
and delivered by the Company under Michigan law, each of them is a
valid and legally binding agreement of the Company, enforceable against
the Company in accordance with its terms except to the extent that the
enforcement thereof may be limited by the Bankruptcy Exceptions.
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(v) The Securities, the Indenture and the
Remarketing Agreements conform in all material respects to the
descriptions thereof contained in the Prospectus.
(vi) No authorization, approval, consent,
order, registration, qualification of or with any court or federal or
New York state governmental authority or agency is required for the
issuance and sale of the Securities by the Company to the Underwriters,
or the issuance and delivery to the Trustee by the Company of the
Collateral Bonds, or the performance by the Company of its obligations
under the Agreement, the Indenture, the Secured Indenture, the
Thirty-Fifth Supplemental Indenture, the Remarketing Agreements, the
Securities, and the Collateral Bonds except such as has been obtained
and made under the federal securities laws or such as may be required
under the securities or blue sky laws of the various states, as to
which such counsel need express no opinion.
Moreover, such counsel shall confirm that
nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement, including any Rule
430A Information and Rule 434 Information (if applicable)(except for
financial statements and the notes thereto, the financial schedules and
any other financial data included or incorporated by reference therein,
as to which such counsel need express no opinion), at the time such
Registration Statement became effective or at the date of this
Agreement, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or
any amendment or supplement thereto (except for financial statements
and the notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein, as to which such
counsel need express no opinion), at the time the Prospectus were
issued, at the time of any such amended or supplemented Prospectus were
issued or at the Closing Date, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(3) The favorable opinion, dated as of the Closing Date, of
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the Underwriters, in
form and substance satisfactory to the Representatives, with respect to such
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In giving such opinion, LeBoeuf, Lamb,
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P. may rely as to certain matters of Michigan law upon the
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., counsel for the Company, which shall be
delivered in accordance with Section 5(b)(1) hereof.
(4) The opinion, dated as of the Closing Date, of Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Company, generally to
the effect that, subject to the qualifications and limitations stated therein
and in the Prospectus, the statements set forth in the
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Prospectus under the caption "Certain United States Federal Income Tax
Considerations," insofar as they purport to constitute summaries of matters of
United States federal tax law and regulations or legal conclusions with respect
thereto, constitute accurate summaries of the matters discussed therein in all
material respects.
(c) On the Closing Date, the Representatives shall have received a
certificate of the President or a Vice President of the Company and of the Chief
Financial Officer or Chief Accounting Officer of the Company, dated as of the
Closing Date, to the effect that (i) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Date,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied on or prior to the Closing Date, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(d) At the time of the execution of this Agreement, the Representatives
shall have received from Deloitte & Touche LLP a letter dated such date in form
and substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth below and as to such other matters as the Representatives may
reasonably request, that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial statements
and any financial statement schedules audited by them and included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented, comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated financial statements included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented,
for the periods specified in such letter, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of the Company
and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials
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of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited condensed consolidated financial
statements set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations as they apply to Form 10-Q or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements set forth in the Company's Annual Report
on Form 10-K for the most recent year ended incorporated by
reference in the Registration Statement and the Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus, as amended or
supplemented, do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements included or incorporated by reference in
the Prospectus, as amended or supplemented, do not comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations or
the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of this Agreement, there has been any
decrease or increase in the capital stock or any increase or
decrease in long-term debt including capital lease obligations
and current maturities (except for sinking fund and
installment requirements under their long-term debt
agreements, terms of the preferred securities of
subsidiaries and purchases in the open market in anticipation
thereof) or any increase in short-term debt, or any decrease
in consolidated common shareholders' equity of the Company and
its consolidated subsidiaries (other than periodic dividends
declared to shareholders), in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position of the Company and its
subsidiaries incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented,
except in each case for increases or decreases which the
Prospectus as amended or supplemented, including financial
information incorporated by reference, discloses have occurred
or may occur or which are described in such letter; and
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(E) for the period from the date of the latest
consolidated financial statements included or incorporated by
reference in the Prospectus, as amended or supplemented, to
the end of the latest period for which unaudited condensed
consolidated financial statements or financial information are
available there were any decreases in consolidated operating
revenues, operating income, net income or earnings available
for Common Stock of the Company and its consolidated
subsidiaries, or any increases in any items specified by the
Representatives, in each case as compared with the
corresponding period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus, as amended or supplemented,
including financial information incorporated by reference,
discloses have occurred or may occur or which are described in
such letter; and
(F) the unaudited condensed consolidated financial
statements referred to in Clause (E) are not stated on a basis
substantially consistent with the audited consolidated
financial statements incorporated by reference in the
Registration Statement and the Prospectus, as amended or
supplemented.
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus, as amended or supplemented, and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) In addition to the limited procedures, reading of
minutes, inquiries and other procedures referred to in clause (iii)
and (iv) above, they have carried out certain other specified
procedures,not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information which are derived from the
general accounting and financial records of the Company and its
subsidiaries, which appear in the Prospectus, as amended or
supplemented, and the Registration Statement, in The Company's Annual
Report on Form 10-K for the latest year ended and in the Company's
Quarterly Reports on Form 10-Q since the latest Annual Report on Form
10-K and which are specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with
the accounting and financial records of the Company and its
subsidiaries and have found them to be in agreement; and
(vi) If applicable and agreed to by the parties to this
Agreement, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the selected financial data, pro forma financial information,
prospective financial statements, consolidating financial statements
and/or
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condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the Representatives.
(e) On the Closing Date, the Representatives shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Date, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to the Closing Date.
(f) On the Closing Date, the Securities shall be rated at least "A2" by
▇▇▇▇▇'▇ Investors Service Inc. and "A" by Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇- ▇▇▇▇, Inc.; and the Company shall have delivered to the
Representatives a letter, dated the Closing Date, from such rating agencies, in
form satisfactory to the Representatives, confirming that the Securities have
such ratings; and since the date of this Agreement there shall not have occurred
any decrease in the ratings of any of the securities of the Company or of the
Securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the 1933 Act Regulations) and no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the securities
of the Company or of the Securities.
(g) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, may be
terminated by the Representatives by notice to the Company at any time on or
prior to the Closing Date, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged
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omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, provided,
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees, expenses and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that such indemnity with respect to the preliminary prospectus shall
not inure to the benefit of the Underwriters (or any person controlling such
Underwriters) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities which are the subject thereof
if such person did not receive a copy of the Prospectus (or the Prospectus as
amended or supplemented) (in each case exclusive of the documents from which
information is incorporated by reference) at or prior to the written
confirmation of the sale of such Securities to such person in any case where the
Company complied with its obligations under Sections 3(e) and 3(g) hereof and
any such untrue statement or omission or alleged untrue statement or omission of
a material fact contained in such preliminary prospectus (or any amendment or
supplement thereto) was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the
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1934 Act against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
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SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, 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 hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of such Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of such Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand 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 or by the Underwriters 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 7 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 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of
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any damages which such Underwriter has otherwise been required to pay by reason
of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the aggregate principal amount of Securities set forth opposite
their respective names in Schedule II to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any termination or cancellation of this Agreement or
any investigation made by or on behalf of any Underwriter or controlling person,
or by or on behalf of the Company, and shall survive delivery of and payment for
the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to the
Company at any time on or prior to the Closing Date, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change or any
development which could reasonably be expected to result in a prospective
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company or any of its affiliates has
been suspended or limited by the Commission, the National Association of
Securities Dealers, Inc. ("NASD") or the New York Stock Exchange, or if trading
generally on either the American Stock Exchange, the New York Stock Exchange or
in the over-the-counter market has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
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securities have been required, by either of said exchanges or by such system or
by order of the Commission, NASD or any other governmental authority, or (iv) if
a banking moratorium has been declared by either Federal, New York or Michigan
authorities.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided, further, that Sections 1, 6, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Date to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "DEFAULTED
SECURITIES"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone the Closing Date for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇ Schlopy
with a copy to LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.; notices to the
Company shall be directed to it at Michigan Consolidated Gas Company, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
-▇▇-
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Vice President, General
Counsel and Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company, and the Underwriters and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein or therein
contained. This Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors and legal representatives, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
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35
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, shall become a binding
agreement among the Underwriters and the Company in accordance with its terms.
Very truly yours,
MICHIGAN CONSOLIDATED GAS
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ III
---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇ III
Title: Senior Vice President
and Chief Financial
Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
FIRST CHICAGO CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Authorized Signatory
For themselves and as Representatives of the other
Underwriters named in Schedule II hereto.
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36
SCHEDULE I
REPRESENTATIVES: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
First Chicago Capital Markets, Inc.
PURCHASE PRICE AND DESCRIPTION OF THE SECURITIES:
TITLE: Extendable MandatOry Par Put Remarketed Securities (sm)
("MOPPRS(sm)") due June 30, 2038.
PRINCIPAL AMOUNT: $75,000,000
PURCHASE PRICE: 101.819% of the principal amount thereof.
INDENTURE: Indenture, dated as of June 1, 1998, between Michigan
Consolidated Gas Company and Citibank, N.A., as trustee.
DATE OF MATURITY: June 30, 2038.
INTEREST RATE: 6.45%
INTEREST PAYMENT DATES: June 30 and December 30.
REDEMPTION PROVISIONS: As set forth in the Prospectus under the
caption headed "Description of the Notes -
Redemption."
AUTHORIZED DENOMINATIONS: $1,000 and integral multiples thereof.
OTHER PROVISIONS:
TIME AND DATE OF DELIVERY AND PAYMENT:
TIME: 9:00 A.M. (Eastern time)
DATE: June 23, 1998
LOCATION: LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
37
PLACE OF DELIVERY AND PAYMENT:
DELIVERY: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
c/o The Depository Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
PAYMENT: Wire Transfer of same day funds.
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38
SCHEDULE II
Principal Amount
Name of Underwriter of the Securities
------------------- -----------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated............................. $37,500,000
First Chicago Capital Markets, Inc. ....................... $37,500,000
-----------
Total...................................................... $75,000,000
===========