Execution Copy
EXHIBIT 1(a)
SEMCO ENERGY, INC.
(a Michigan corporation)
$30,000,000
6.49% Senior Notes Due 2009
UNDERWRITING AGREEMENT
September 16, 2002
McDonald Investments Inc.
As Representative of the Underwriters
▇▇▇▇▇▇▇▇ Investment Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SEMCO Energy, Inc., a Michigan corporation (the "Company"), agrees with
McDonald Investments, Inc. (the "Representative") to issue and sell to the
underwriters named in Schedule A hereto (the "Underwriters") pursuant to the
terms and subject to the conditions stated herein $30,000,000 principal amount
of 6.49% Senior Notes due 2009, which are hereinafter referred to as the
"Securities." The Securities will be issued under an Indenture dated as of
October 23, 1998, as supplemented from time to time, between the Company and
Bank One Trust Company, National Association, successor to NBD Bank, as Trustee
(as heretofore supplemented and as to be supplemented by a Fourth Supplemental
Indenture, to be dated on or about September 19, 2002 (the "Fourth Supplemental
Indenture" and collectively, the "Indenture")). Certain rights and terms of the
Securities are set forth in Schedule B hereto.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriters as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each of the
Underwriters, as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the Securities
Act of 1933, as amended (the "Act") and the rules and regulations
promulgated by the Securities and Exchange Commission (the
"Commission") thereunder (the "Act Regulations"). A registration
statement on Form S-3, as amended, with respect to the Securities and
certain other securities (File No. 333-91815), including a prospectus,
copies of which have been delivered to you, has been prepared and filed
by the Company and the Semco Capital Trusts I, II and III with the
Commission and, as amended, has been declared effective under the Act.
Such registration statements meet the requirements set forth in Rule
415(a)(1)(x) under the Act and comply in all other material respects
with said rule. No
stop order suspending the effectiveness of such registration statement,
as amended, has been issued and no proceeding for that purpose has been
initiated or, to the best knowledge of the Company, threatened by the
Commission. Such registration statement (including all documents filed
as part thereof or incorporated by reference therein), as amended and
supplemented at the time it became effective, is hereinafter referred
to as to the "Registration Statement." The Prospectus contained in the
Registration Statement at the time that the Registration Statement was
declared effective is hereinafter referred to as the "Basic
Prospectus."
The prospectus included in the Registration Statement, as
amended and supplemented to the date of this Agreement (including all
documents then incorporated by reference therein and including the
Preliminary Supplemental Prospectus (hereinafter defined) as further
supplemented by the Final Supplemental Prospectus (hereinafter
defined)), is hereinafter referred to as the "Prospectus." Any
reference herein to the Registration Statement, the Prospectus, the
Basic Prospectus, the Preliminary Supplemental Prospectus or the Final
Supplemental Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, or deemed to be
incorporated by reference therein, and filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), on or before the
date of such Registration Statement, Prospectus, Basic Prospectus,
Preliminary Supplemental Prospectus or Final Supplemental Prospectus.
Any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement or the Prospectus shall be
deemed to refer to and include, without limitation, the filing of any
document under the Exchange Act deemed to be incorporated therein by
reference after the date of such Registration Statement or Prospectus.
A prospectus supplement, subject to completion, dated
September 10, 2002 (the "Preliminary Supplemental Prospectus") has been
prepared and was filed pursuant to Rule 424(b)(2) under the Act ("Rule
424(b)(2)") on September 11, 2002. A prospectus supplement, dated the
date hereof, setting forth the terms of the Securities and of their
sale and distribution (the "Final Supplemental Prospectus") has been
prepared and will be filed pursuant to Rule 424(b)(2).
The Preliminary Supplemental Prospectus was, and the
Prospectus delivered to the Underwriter for use in connection with this
offering will be, identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Conformity to Requirements of the Act and TIA.
On the effective date of the Registration Statement, the Registration
Statement, including the Basic Prospectus, as amended and supplemented
at that time, conformed in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "TIA"),
and the applicable rules and regulations of the Commission thereunder,
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; on the date of the
Preliminary Supplemental Prospectus, the Preliminary Supplemental
Prospectus conformed in all material respects to the requirements of
the Act and the Act
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Regulations, and did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and on the
date of this Agreement, the Registration Statement and the Prospectus
conform, and at the Closing Time (hereinafter defined) they will
conform, in all material respects, to the requirements of the Act, the
Act Regulations and the TIA and the applicable rules and regulations of
the Commission thereunder, and on the date of this Agreement do not,
and at the Closing Time will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form
T-1) under the TIA of the Trustee or (ii) the information contained in
or omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the Underwriter
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
(iii) Incorporated Documents. Each document filed or
to be filed pursuant to the Exchange Act and incorporated by reference,
or deemed to be incorporated by reference, in the Registration
Statement and the Prospectus (including any document to be filed
pursuant to the Exchange Act which will constitute an amendment to the
Prospectus) conformed or, when so filed, will conform in all material
respects to the requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, and none of such
documents included or, when so filed, will include, any untrue
statement of a material fact or omitted or, when so filed, will omit,
to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were or are made, not misleading.
(iv) Independent Accountants. 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 with respect to the
Company and its Subsidiaries as required by the Act and the Act
Regulations.
(v) Financial Statements. The financial statements
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 income, cash
flows and changes in common shareholders equity of the Company and its
consolidated Subsidiaries for the periods specified; such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved, other than as noted therein. The supporting
schedules, if any, incorporated by reference in the Registration
Statement and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The pro forma financial
information and the related notes thereto, incorporated by reference in
the Registration Statement and the Prospectus, have been
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prepared in accordance with the applicable published rules and
regulations of the Commission with respect to pro forma financial
information, and the assumptions used in preparing such information are
reasonable. The selected financial information and the financial data
included or incorporated by reference in the Prospectus present fairly
the information shown therein and have been calculated in compliance
with Item 503(d) of Regulation S-K of the Commission and compiled on a
basis consistent with that of the audited financial statements
incorporated by reference in the Registration Statement and the
Prospectus, subject to year-end audit adjustments. The audited
consolidated financial statements and financial statement schedules and
the unaudited consolidated financial statements incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Act, the Act Regulations and the Exchange Act and
the related rules and regulations adopted thereunder. The unaudited
consolidated financial data of the Company and its subsidiaries for
July of 2002 furnished by the Company to PricewaterhouseCoopers LLP in
connection with the issuance of Securities contemplated hereby are
stated on a basis substantially consistent with that of the audited
consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus.
(vi) No Material Adverse Change in Business. Since
the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (1) 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, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (2) there have been no transactions entered into by the
Company or any of its Subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its Subsidiaries considered as one enterprise, and (3) except for
regular quarterly dividends on the common stock in amounts per share
that are consistent with past practice, 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) Good Standing of the Company. The Company has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Michigan and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement and the Indenture; and
the Company is duly qualified as a foreign corporation to transact
business and is in good standing in Alaska and each other 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, individually
or in the aggregate with all other such failures, would not result in a
Material Adverse Effect.
(viii) Good Standing of Subsidiaries. Each
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) (each a "Subsidiary" and, collectively,
the "Subsidiaries") has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and
operate its properties
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and to conduct its business 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 so to qualify or to be in
good standing, would not, individually or in the aggregate with all
other such failures, result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through Subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity, and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only Subsidiaries of the
Company are (1) the Subsidiaries listed on Schedule C hereto and (2)
certain other Subsidiaries which, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(ix) Authorization of Agreement. This Agreement has
been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(x) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is, or will as the result of the
transactions contemplated hereby, be in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in 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 it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments"), 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 the property or assets of the Company or any of its
Subsidiaries, except for such defaults or violations that would not,
individually or in the aggregate, result in a Material Adverse Effect.
(xi) Absence of Labor Dispute. No labor dispute with
the employees of the Company or any Subsidiary exists or, to the
knowledge of the Company, is imminent which may reasonably be expected
to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action,
suit, proceeding, inquiry or investigation before or brought 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 subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein, if any), or
which, individually or in the aggregate, might reasonably be expected
to result in a Material Adverse Effect, or which, individually or in
the aggregate, might reasonably be expected to materially and adversely
affect the properties, assets or operations thereof or the consummation
of
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the transactions contemplated in this Agreement or the performance by
the Company of its obligations hereunder.
(xiii) Accuracy of Exhibits. 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 which are required to be filed as exhibits thereto, which
have not been so described and filed as required.
(xiv) Possession of Intellectual Property. The
Company and its Subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names and
other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, would, individually or in the aggregate with all other
such items, result in a Material Adverse Effect.
(xv) Possession of Licenses and Permits. The Company
and its subsidiaries possess such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies as are necessary to conduct the business
now operated by them except for any failure to possess such a
Governmental License that would not, individually or in the aggregate
with all other such failures, have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to 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 to the extent that the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not, individually or in the aggregate
with all other such invalidities and failures, have a Material Adverse
Effect; and neither the Company nor any of its Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvi) Title to Property. The Company and its
Subsidiaries have good and marketable title to all real property owned
by the Company and its Subsidiaries and good title to all other
properties material to the business of the Company and its Subsidiaries
considered as one enterprise, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (1) are described in the
Prospectus or (2) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of
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such property by the Company or any of its Subsidiaries; and all of the
leases and subleases material to the business of the Company and its
Subsidiaries, considered as one enterprise, and under which the Company
or any of its Subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary
to the continued possession and use of the leased or subleased premises
under any such lease or sublease.
(xvii) Investment Company Act - Company. The Company
is not, 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 will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(xviii) Environmental Laws. Except as described in
the Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (1) neither the Company
nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without 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,
"Environmental Laws"), (2) the Company and its Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(3) there are no pending or to the Company's knowledge 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 and (4) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its Subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(xix) Authorization, etc., of the Indenture and the
Securities. The Indenture (other than the Fourth Supplemental
Indenture) has been, and at the Closing Time, the Fourth Supplemental
Indenture will have been, duly authorized, executed and delivered by
the Company and is a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general
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equitable principles (regardless of whether enforcement is considered
in a proceeding in equity or at law); the Securities have been duly
authorized by the Company for offer, sale, issuance and delivery
pursuant to this Agreement and, when issued, authenticated and
delivered in the manner provided for in the Indenture and delivered
against payment of the consideration therefor, will constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally or by general equitable principles (regardless of whether
enforcement is considered in a proceeding in equity or at law); the
Securities will be in the form contemplated by the Indenture; and each
holder of Securities will be entitled to the benefits of the Indenture;
the Indenture and the Securities 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.
(xx) Company Consummation of Transactions. The
issuance by the Company of the Securities, the compliance by the
Company with all of the provisions of this Agreement, the Securities
and the Indenture, the execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions
contemplated herein and therein and in the Registration Statement
(including the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default or Repayment
Event (as defined herein) under, or result in the creation of or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary pursuant to, any of the
Agreements and Instruments, nor will such action result in any
violation of any of the provisions of the Restated Articles of
Incorporation or By-laws of the Company or any subsidiary or any
existing law or statute or any order, rule, regulation, judgment, writ
or decree of any court, government or governmental agency or body
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations; the Commission has issued an order
under the Act declaring the Registration Statement effective and
qualifying the Indenture under the TIA, and no other filing with, or
consent, approval, authorization, license, order, registration,
qualification or decree of or with any such court or governmental
authority, agency or body, domestic or foreign, is necessary or
required in connection with the due authorization, execution and
delivery of this Agreement by the Company or the issuance, sale and
delivery of the Securities or the consummation by the Company of the
other transactions contemplated by this Agreement or the Securities,
except such as have already been obtained under the Act or the Act
Regulations or may be required under state securities or Blue Sky laws.
As used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any Subsidiary.
(xxi) Regulation M. None of the Company and its
Subsidiaries or any of their respective directors, officers or
controlling persons, has taken, directly or indirectly,
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any action resulting in a violation of Regulation M under the Exchange
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.
(xxii) Public Utility Holding Company Act. The
Company is presently exempt from the provisions of the Public Utility
Holding Company Act of 1935 (except Section 9(a)(2) thereof).
(b) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its Subsidiaries delivered to the Underwriter
or to counsel for the Underwriter shall be deemed a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
Section 2. Sale and Delivery to Underwriters; Closing.
(a) Sale to Underwriters. The Company agrees to issue and sell
to each Underwriter the respective principal amount of the Securities set forth
opposite that Underwriter's name in Schedule A hereto, and on the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, each Underwriter,
severally and not jointly, agrees to purchase the Securities from the Company,
at a purchase price of 99.35% of the principal amount thereof.
(b) Payment. The Securities will be represented by one or more
definitive global Securities in book-entry form which will be deposited with The
Depository Trust Company ("DTC") or its designated custodian. The Company will
deliver the Securities, against payment by or on behalf of each Underwriter of
the purchase price therefor by wire transfer as set forth below, by causing DTC
to credit the Securities to the account of each Underwriter. The time and date
of such delivery and payment shall be 10:00 A.M., New York City time, on
September 19, 2002, or such other time not later than ten business days after
such date as shall be agreed upon by the Representative and the Company (such
time and date of payment and delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately available
funds to a bank account located in the United States and designated in writing
at least forty-eight hours prior to the Closing Time by the Company to the
Representative. The documents to be delivered at the Closing Time by or on
behalf of the parties hereto pursuant to Section 5 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Representative pursuant to Section 5(g) hereof, will be delivered at such time
and date at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be agreed upon by
the Representative and the Company.
(c) Denominations; Registration. Global certificates for the
Securities shall be in such denominations and registered in such names as the
Underwriters may request in writing at least one full business day before the
Closing Time. The certificates for the Securities will be made available for
examination by the Representative at the office of DTC or its designated
custodian not later than 10:00 A.M. (Eastern time) on the business day prior to
the Closing Time.
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Section 3. Covenants and Agreements. The Company covenants and agrees
with each of the Underwriters as follows:
(a) Delivery of Prospectus. The Company will furnish, without
charge to the Underwriters, the Preliminary Supplemental Prospectus and the
Prospectus, any documents incorporated by reference therein at or after the date
thereof (including documents from which information has been so incorporated)
and any supplements and amendments thereto that the Underwriters may reasonably
request so long as the Underwriters are required to deliver a prospectus. The
Prospectus and any amendments or supplements thereto will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(b) Filing. The Company will cause the Final Supplemental
Prospectus to be filed pursuant to, and in compliance with, Rule 424(b)(2) and
will promptly advise the Underwriters (i) when any amendment to the Registration
Statement shall have been filed, but with respect to documents filed pursuant to
the Exchange Act and incorporated by reference into the Registration Statement,
such notice shall only be required during such time as the Underwriters are
required in the reasonable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, to deliver a prospectus, (ii) of any request by the Commission for
any amendment of the Registration Statement, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose,
and (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The Company
will use its best efforts to prevent the issuance of any such stop order or the
suspension of any such qualification. So long as the Underwriters are required
in the reasonable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP to deliver a prospectus, the
Company will not file any amendment to the Registration Statement or supplement
to the Prospectus unless the Company has furnished one copy of such amendment or
supplement to the Underwriters and to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, and, if such
amendment or supplement is to be filed on or prior to the Closing Time, or under
circumstances in which the Underwriters are required in the reasonable opinion
of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP to deliver a Prospectus, unless the Underwriters or
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP shall not reasonably have objected thereto.
(c) Continual Compliance with Securities Laws. If, at any time
when a prospectus relating to the Securities is required to be delivered under
the Act, any event occurs as a result of which the Final Supplemental Prospectus
as then supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein in the
light of the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement the Final
Supplemental Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify the
Underwriters of such event, (ii) prepare and file with the Commission, subject
to the Underwriters' prior review, an amendment or supplement which will correct
such statement or omission or effect such compliance and (iii) supply any
supplemented Final Supplemental Prospectus to the Underwriters in such
quantities as the Underwriters may reasonably request.
- 10 -
(d) Delivery of Registration Statements. The Company will
furnish or will deliver to the Underwriters and counsel for the Underwriters,
without charge, conformed 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 photocopies of all consents and
certificates of experts. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriter 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) Blue Sky Qualifications. 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 as the Underwriters may designate and to maintain such
qualifications in effect for a period of not less than one year from the
effective date of the Registration Statement; 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 the distribution of the Securities.
(f) Rule 158. The Company will timely file such reports
pursuant to the Exchange Act as are necessary in order to make generally
available to its securityholders and deliver to the Underwriters 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 Act
(including Rule 158 thereunder).
(g) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(h) Restriction on Sale of Securities. During a period of 45
days from the date of the Prospectus, the Company will not, without the
Underwriters' prior written consent, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any securities substantially similar to the
Securities or file any registration statement under the Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Securities, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Securities or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to the Securities to be issued hereunder.
(i) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the Act or the Exchange
Act, will file all documents
- 11 -
required to be filed with the Commission pursuant to the Exchange Act within the
time periods required by the Exchange Act and the rules and regulations of the
Commission thereunder.
(j) Regulation M. None of the Company or any of 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 Exchange 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.
Section 4. Payment of Expenses.
(a) Expenses. The Company covenants and agrees with the
Underwriters that the Company will pay or cause to be paid all expenses incident
to the performance of its obligations under this Agreement, including, without
limitation, (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, and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any fees and
expenses relating to the eligibility and issuance of the Securities in
book-entry form and the cost of obtaining CUSIP or other identification numbers
for the Securities, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities, under
securities laws in accordance with the provisions of Section 3(e) hereof,
including filing fees and the reasonable 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 preparation,
printing, mailing and delivery to the Underwriters of copies of the Preliminary
Supplemental Prospectus, and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) any fees
charged by securities rating services for rating the Securities and (x) the fees
and expenses of the Trustee under the Indenture and any agent of the Trustee and
the fees and disbursements of counsel for the Trustee.
(b) Termination of Agreement. If this Agreement is terminated
by the Underwriters in accordance with the provisions of Section 5 or 9 hereof,
the Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties of the Company contained in Section 1 hereof or in certificates
of officers 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) Effectiveness of Registration Statement. The Registration
Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the
- 12 -
Registration Statement shall have been issued under the 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 reasonable satisfaction of counsel to the Underwriters. A Final Supplemental
Prospectus containing information relating to the description of the Securities,
the specific method of distribution thereof and similar matters shall have been
filed with the Commission in accordance with Rule 424(b)(2).
(b) Opinion of Counsel for Company. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ PLLC, special counsel for the Company, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, General Counsel to the Company, in form and substance satisfactory to
counsel for the Underwriters, in combination, substantially to the effect set
forth in Exhibit A hereto and to such further effect as counsel to the
Underwriters may reasonably request. Such counsel may state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, with respect to
such matters as it may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel to the Company. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(d) No Adverse Occurrences and Officers' Certificates. At
Closing Time, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Prospectus, any change
that would have a Material Adverse Effect, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
the Closing Time, to the effect that (i) there has been no such change that
would have a Material Adverse Effect, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or, to such officer's
knowledge, are contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution
of this Agreement, the Underwriters shall have received from
PricewaterhouseCoopers LLP a letter dated such date, in form and substance
satisfactory to the Underwriter, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
or incorporated by reference in the Registration Statement and the Prospectus.
- 13 -
(f) Bring-down Comfort Letter. At Closing Time, the
Underwriters shall have received from PricewaterhouseCoopers LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(g) Additional Documents. At Closing Time 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 Underwriters and counsel for
the Underwriters.
(h) Rating. At the Closing Time there shall not have been
subsequent to the date hereof any decrease in the rating of any of the Company's
debt securities to a rating below one of the four highest rating categories for
debt securities ("Investment Grade") by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such rating or of
a possible change to a rating below Investment Grade.
(i) Termination of Agreement. 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 Underwriters by notice to the Company at
any time at or prior to Closing Time, 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) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls either Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange 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) or the omission
or alleged 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 included in the Basic Prospectus, the Registration
Statement, the Preliminary Supplemental Prospectus, the Final
Supplemental 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;
- 14 -
(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 reasonable fees and disbursements of counsel
chosen by the Underwriter), 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 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 such
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or such Preliminary Supplemental Prospectus, the Final Supplemental
Prospectus or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of the Company's directors, each of the Company's officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act 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), Preliminary Supplemental Prospectus, the Final Supplemental
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 expressly for use in the Registration Statement (or
any amendment thereto) or such Preliminary Supplemental Prospectus, the Final
Supplemental Prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. 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. An indemnifying party will be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any liability required to be
indemnified hereunder, but, if such indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by the Company in the
case of
- 15 -
parties indemnified pursuant to Section 6(a) above and by the Representative in
the case of parties indemnified pursuant to Section 6(b) above; provided that
such counsel shall be reasonably satisfactory to the indemnified party. In the
event that such indemnifying party elects to assume the defense of any such suit
and retain such counsel, the indemnified party in the suit may retain additional
counsel but shall bear the fees and expenses of such counsel unless (i) such
indemnifying party shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include the indemnified parties and the
indemnified parties have been advised by such counsel that one or more legal
defenses may be available to them which may not be available to such
indemnifying party, in which case such indemnifying party shall not be entitled
to assume the defense of such suit on behalf of the indemnified parties,
notwithstanding its obligation to bear the reasonable fees and expenses of such
counsel, it being understood, however, that such indemnifying party shall not,
in connection with any one such suit or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
one local firm in each jurisdiction) at any time for all of the indemnified
parties, which firm shall be designated in writing by the Representative in the
case of parties indemnified pursuant to Section 6(a) above and by the Company in
the case of parties indemnified pursuant to Section 6(b) above. Except as
specified in Section 6(d) below, such indemnifying party shall not be liable to
indemnify any person for any settlement of any such claim effected without such
indemnifying party's consent. 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) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel for which
indemnity is available hereunder, such indemnifying party agrees that it shall
be liable for any settlement of the nature contemplated by Section 6(a) 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.
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
- 16 -
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 of 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 the Securities
pursuant to this Agreement received by the Company and the total underwriting
commission received by the Underwriters in each case as set forth on the cover
of the Prospectus, bear to each other.
The relative fault of the Company on the one hand and of the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or 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 Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective principal
amounts of Securities they have purchased hereunder, and not joint.
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 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 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 Act) 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 Act or Section 20 of the
Exchange 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
- 17 -
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties, agreements, indemnities and other
statements contained in this Agreement or contained in certificates of officers
of the Company, its officers or any of its Subsidiaries submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the Underwriters or a controlling person,
or by or on behalf of the Company, and shall survive delivery of the Securities
to the Underwriters.
Section 9. Termination of Agreement.
(a) Termination in General. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, by notice given to
the Company prior to delivery of and payment for the Securities, if at any time
prior to such time (i) there has been, subsequent to the date hereof or, if
earlier, the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Final Supplemental
Prospectus (exclusive of any supplement thereto), any change, or any development
involving a prospective change, in or affecting the business or properties of
the Company and its Subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Supplemental Prospectus (exclusive of any supplement
thereto) the effect of which is, in the reasonable judgment of the
Representative, so material and adverse as to make it impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof) and the Final
Supplemental Prospectus (exclusive of any supplement thereto), or (ii) there has
been, subsequent to the date hereof, any decrease in the rating of any of the
Company's debt securities to a level below Investment Grade by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act) or any notice given of any intended or potential decrease
in any such rating or of a possible change in any such rating to a rating below
Investment Grade, or (iii) if trading in the common stock or any other security
of the Company has been suspended or limited by the Commission or the New York
Stock Exchange, or if trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, or (iv) a banking moratorium shall have been
declared either by Federal or New York or Michigan state authorities, or (v)
there shall have occurred any material adverse change in the financial markets
in the United States, any crisis or change in political, financial or economic
conditions, or any outbreak or escalation of hostilities, act of terrorism,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the reasonable judgment of the Underwriters, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Supplemental Prospectus (exclusive of any supplement thereto).
(b) Liabilities. 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 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
- 18 -
Section 10. 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 McDonald Investments Inc., ▇▇▇▇▇▇▇▇ Investment
Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Fixed Income
Syndicate Department, with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP, 3200 National City
Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.
Section 11. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters and the Company 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 and 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 contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, 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 the Underwriters
shall be deemed to be a successor by reason merely of such purchase.
Section 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 13. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 14. Authority of Representative. The Representative represents
and warrants that it has been authorized by the Underwriters to enter into this
Agreement on their behalf and to act for them in the manner hereinbefore
provided.
Section 15. Execution in Counterparts. This Agreement may be executed
by any one or more of the parties hereto in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
- 19 -
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, will become a binding agreement
among the Underwriters and the Company in accordance with its terms.
Very truly yours,
SEMCO ENERGY, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President and CFO
CONFIRMED AND ACCEPTED,
as of the date first above written:
McDONALD INVESTMENTS INC.
Acting as Representative of the Underwriters
(including itself)identified in Schedule A
annexed hereto.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
- 20 -
SCHEDULE A
Underwriters
Principal Amount
of Securities to
Underwriter be Purchased
----------- ----------------
McDonald Investments Inc. $ 21,000,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. 9,000,000
-------------
Total - $ 30,000,000
=============
Sch A-1
SCHEDULE B
Terms of Securities
Title of Securities: 6.49% Senior Notes Due 2009
Maturity: October 1, 2009
Interest Rate: 6.49% per annum
Denominations: $1,000 and integral multiples of $1,000
Price to Public: 100% of principal amount
Interest Payment Dates: Interest payable semiannually on
April 1 and October 1 of each year,
beginning April 1, 2003
Sinking Funding Provisions: None
Sch B-1
SCHEDULE C
List of Subsidiaries
SEMCO Energy Ventures, Inc.
Alaska Pipeline Company
Aretech Information Services, Inc.
Hotflame Gas, Inc.
Natcomm, Inc.
Sch C-1
EXHIBIT A
Form of Opinion of Company's Counsel
to be Delivered Pursuant Section 5(b)
(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 to own, lease and operate its
properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Underwriting Agreement, the
Indenture and the Securities;
(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 with all
other such failures, result in a Material Adverse Effect;
(iv) each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business 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 so to qualify or to be in good standing would not,
individually or in the aggregate with all other such failures, result in a
Material Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock of each Subsidiary
has been duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, directly or through subsidiaries, 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 was issued in
violation of the preemptive or similar rights arising by operation of law, under
the organizational documents of any Subsidiary or under any agreement to which
the Company or any Subsidiary is a party or otherwise;
(v) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms;
(vi) the Registration Statement and all post-effective amendments, if
any, have been declared effective under the 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 of our knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued
under the Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission;
(vii) the Registration Statement, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and
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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 or omitted therefrom, as to which we
express no opinion) complied as to form in all material respects with the
requirements of the Act and the Act Regulations;
(viii) the documents incorporated by reference in the Prospectus (other
than the financial statements and supporting schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we express no opinion), when they were filed with the Commission complied as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder;
(ix) there is not pending or, to the best of our knowledge, threatened,
any action, suit, proceeding, inquiry or investigation, to which the Company or
any subsidiary is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental agency or
body, domestic or foreign, which, individually or in the aggregate with all
other such items, might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely affect
the properties, assets or operations thereof or the consummation of the
transactions contemplated in the Underwriting Agreement or the performance by
the Company of its obligations thereunder;
(x) the information in the Final Supplemental Prospectus under the
caption "Description of the Senior Notes" and in the attached Basic Prospectus
under the caption "Description of Debt Securities" accurately summarizes in all
material respects the terms of the Securities and the Indenture;
(xi) the Securities conform as to legal matters in all material
respects to the descriptions thereof contained in the Final Supplemental
Prospectus under the caption "Description of the Senior Notes" and in the
attached Basic Prospectus under the caption "Description of Debt Securities";
(xii) all descriptions in the Registration Statement of contracts and
other documents to which the Company or its Subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other documents or instruments required to be described or referred to in the
Registration Statement or to be filed 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;
(xiii) neither the Company nor any subsidiary is in violation of its
charter or by-laws and, to the best of our knowledge, 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 agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed or incorporated by reference as an exhibit to the
Registration Statement;
(xiv) except as set forth in the Final Supplemental Prospectus, the
Company and its Subsidiaries possess and are in compliance with all approvals,
certificates, authorizations,
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licenses and permits issued by the appropriate state, Federal or foreign
regulatory agencies or bodies necessary to conduct their business as described
in the Final Supplemental Prospectus, except where the failure to possess such
approvals, certificates, authorizations, licenses and permits or to be in
compliance therewith would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect, and to the knowledge of such counsel,
none of the Company or any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such approval,
certificate, authorization, license or permit which, individually or in the
aggregate with all other such failures, if it became the subject of an
unfavorable decision, ruling or finding, would be reasonably likely to have a
Material Adverse Effect;
(xv) no filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the Act and the 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 we need express
no opinion) is necessary or required in connection with (1) the due
authorization, execution and delivery of the Underwriting Agreement, (2) the
offering, issuance, sale and delivery of the Securities by the Company or (3)
the consummation by the Company of the transactions contemplated in the
Underwriting Agreement;
(xvi) the issuance and sale by the Company of the Securities, the
compliance by the Company with all of the provisions of the Underwriting
Agreement, the Securities and the Indenture, the execution, delivery and
performance by the Company of the Underwriting Agreement and the Indenture, and
the consummation of the transactions contemplated therein and in the
Registration Statement (including the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of Proceeds")
do not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default or Repayment Event under, or
result in the creation of or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any subsidiary pursuant to, any of the
Agreements and Instruments, nor will any such action result in any violation of
the provisions of the Restated Articles of Incorporation or By-laws of the
Company or of any subsidiary or any existing law or statute or any order, rule,
regulation, judgment, writ or decree of any court, government or governmental
agency or body having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations;
(xvii) the Company is not, and upon the issuance and sale of the
Securities as contemplated in the Underwriting Agreement and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended;
(xviii) the Securities are in the form prescribed in or pursuant to the
Indenture, have been duly and validly authorized for issuance and sale by all
necessary corporate action on the part of the Company and, when executed and
delivered by the Company and authenticated by the Trustee under the Indenture as
specified in or pursuant to the Indenture, will be valid and binding obligations
of the Company, enforceable in accordance with their terms, except as such
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enforceability is subject to the effect of any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(xix) the Indenture has been duly authorized, executed and delivered by
the Company and constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except as such enforceability is
subject to the effect of any applicable bankruptcy, insolvency, reorganization
or other law relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is considered in
proceeding in equity or at law);
(xx) the Indenture has been duly qualified under the TIA; and
(xxi) the Company is presently exempt from the provisions of the Public
Utility Holding Company Act of 1935 (except Section 9(a)(2) thereof). Nothing
has come to our attention that would lead us to believe that the Registration
Statement or any amendment thereto, (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which we make no comment), at the time such
Registration Statement or any such amendment became effective, 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 (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no comment), at the respective times the
Preliminary Supplemental Prospectus and the Final Supplemental Prospectus were
issued or at the Closing Time, 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.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
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