EXHIBIT 1.1
MICHIGAN CONSOLIDATED GAS COMPANY
Debt Securities
Form of Underwriting Agreement
[DATE]
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time Michigan Consolidated Gas Company, a Michigan
corporation (the "Company"), proposes to enter into one or more Pricing
Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities")
to be issued under the Senior Indenture, dated as of June 1, 1998, between the
Company and Citibank, N.A., as trustee (in such capacity, the "Indenture
Trustee"), as amended and supplemented by various supplemental indentures
including the supplemental indenture (a "Supplemental Indenture") creating the
Designated Securities (the "Indenture"), as specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").
Payment of the principal of, premium, if any, and interest on each series
of Securities is to be secured by the pledge by the Company to the Indenture
Trustee of a First Mortgage Bond (each, a "Collateral Bond"), issued under and
ratably secured by the Indenture of Mortgage and Deed of Trust, dated as of
March 1, 1944 (the "Original Mortgage"), as supplemented and amended, including
specifically by the Twenty-ninth Supplemental Indenture, the Thirty-fifth
Supplemental Indenture dated as of June 18, 1998, and the [ ] Supplemental
Indenture, dated as of [ ] (the "Supplemental Indenture"), creating the series
in which the Collateral Bonds are to be issued and the supplemental indenture
establishing the issue of Collateral Bonds relating to the Designated Securities
(the "Mortgage").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the Indenture and the Supplemental Indenture thereto identified in
such Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representative. This underwriting agreement
(the "Agreement") shall not be construed as an obligation of the Company to sell
any of the Securities or as an obligation of any of the Underwriters to purchase
the Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate principal amount of such Designated Securities, the initial public
offering price of such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities, the names of the Representatives of such
Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture, and
the Registration Statement (as defined below) and prospectus with respect
thereto) the terms of such Designated Securities. A Pricing Agreement shall be
in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications, facsimile or any other
rapid transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (No. 333-[ ]) in respect of
the Securities has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to the
Representatives and including all documents incorporated by reference in the
prospectus contained therein, to the Representatives for each of the other
Underwriters have been declared effective by the Commission in such form; no
other document with respect to such registration statement or any post-effective
amendment thereto or document incorporated by reference therein (other than
prospectuses relating to the offering of securities other than the Designated
Securities) has heretofore been filed or transmitted for filing with the
Commission; and no stop order suspending the effectiveness of such registration
statement or any post-effective amendment thereto has been issued and no
proceeding for that purpose has been initiated or threatened by the Commission
(any preliminary prospectus included in such registration statement or any
post-effective amendment thereto or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Securities Act
of 1933, as amended (the "Act"), being hereinafter called a "Preliminary
Prospectus"; the various parts of such registration statement or any
post-effective amendment thereto, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, excluding the Statements of Eligibility and Qualification on
Form T-1 of the Mortgage Trustee and Indenture Trustee (the "Forms T-1"), each
as amended at the time such part of the registration statement became effective,
being hereinafter called the "Registration Statement" provided that if the
Company files a
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registration statement with the Commission pursuant to Rule 462(b) under the Act
(the "Rule 462(b) Registration Statement"), then, after such filing, all
references to the Registration Statement shall include the Rule 462(b)
Registration Statement; the prospectus relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the Company filed
pursuant to Sections 13(a) or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
respective rules and regulations of the Commission thereunder and the
Registration Statement does not, and as of its effective date and the effective
date of any amendment thereto 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, and the Prospectus
does not, and as of the applicable filing date of any amendment or supplement
thereto will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon
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and in conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to the Designated
Securities;
(d) Neither the Company nor any of its Significant Subsidiaries (as
defined below) has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any material change in the capital stock or long-term debt of the
Company or any of its Significant Subsidiaries or any material adverse change,
or any development involving a prospective material adverse change (in either
case not in the ordinary course of business), in or affecting the general
affairs, management, current or future consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus; "Significant Subsidiary" shall mean each subsidiary listed on
Schedule III to the Pricing Agreement; the only subsidiaries of the Company are
(i) those subsidiaries listed on Schedule III and (ii) 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
of the rules and regulations under the Act;
(e) 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, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
current or future consolidated financial position, shareholder's equity or
results of operations of the Company and its subsidiaries, taken as a whole;
and, except as described in the Registration Statement and the Prospectus, the
Company holds all material licenses, certificates and permits (or has
applications pending) from governmental authorities necessary for the conduct of
its business;
(f) Each Significant Subsidiary, if any, of the Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the power and authority
(corporate and other) to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the current or future consolidated financial
position, shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, except as described in the Registration
Statement and the Prospectus, each Significant Subsidiary of the Company holds
all material licenses, certificates and permits (or has applications pending)
from governmental authorities necessary for the conduct of its business;
(g) The Company has an authorized capitalization as set forth in the
Prospectus;
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(h) This Agreement has been duly authorized, executed and delivered by the
Company; and on and as of its date, the Pricing Agreement with respect to the
Designated Securities will have been duly authorized, executed and delivered by
the Company;
(i) The Company has good and marketable title to the properties
specifically described in and conveyed by the Mortgage (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 Mortgage, to permissible
encumbrances, as defined in the Mortgage, as to property acquired by the Company
subsequent to the execution of liens placed thereon at the time of such
acquisition as permitted by the Mortgage, 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 lien of the
Mortgage 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;
(j) The Mortgage is a first lien (subject to no prior liens, charges,
encumbrances or security interests, except current taxes and assessments not yet
due and minor encumbrances which do not materially impair the use of such
property for the purpose for which it is held by the Company), duly filed and
recorded (except for the [ ] Supplemental Indenture, which shall be properly
filed or properly received for record or filing), on substantially all of the
Company's tangible properties and franchises (other than items purchased for
resale in the ordinary course of business) and (subject to the necessity for
particular filings and recordings in the case of certain personal property) will
constitute a like lien on any such properties hereafter acquired by the Company
except that any such after-acquired property will be subject to prior liens and
encumbrances, if any, existing when acquired by the Company, except that the
Mortgage will not become a lien upon after-acquired real property in a new
county until it has been duly filed and recorded and except that the Mortgage
may not be effective as to property acquired subsequent to the filing of a case
with respect to the Company under the Bankruptcy Code (defined as ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, Sections 1 et seq., as amended);
(k) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated Securities
will have been duly executed, authenticated, issued and delivered, will be
entitled to the benefits of the Indenture and will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization or other laws of general
applicability relating to or affecting creditors' rights and (ii) general equity
principles; the Indenture and the Mortgage have been duly authorized and duly
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qualified under the Trust Indenture Act and, at the Time of Delivery for such
Designated Securities (as defined in Section 4 hereof), each of the Indenture
and the Mortgage will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, fraudulent transfer,
reorganization or other laws of general applicability relating to or affecting
creditors' rights and (ii) general equity principles; and each of the Indenture
and the Mortgage conforms, and the Designated Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or supplemented with
respect to such Designated Securities;
(l) The Collateral Bond has been duly authorized and, when the Collateral
Bond has been established, executed and authenticated in accordance with the
provisions of the Mortgage and pledged to the Indenture Trustee as contemplated
by the Indenture, the Collateral Bond will be entitled to the benefits of the
Mortgage and will be a valid and binding obligation of the Company, enforceable
in accordance with its terms except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, fraudulent transfer, reorganization or other laws
of general applicability relating to or affecting creditors' rights and (ii)
general equity principles; the payments of the principal of, premium, if any,
and interest on the Designated Securities to which a Pricing Agreement relates
are secured by the related Collateral Bond; assuming that the Indenture Trustee
holds the Collateral Bond as provided in the Indenture, the Indenture creates a
valid and perfected first priority security interest in the Collateral Bond; and
the Collateral Bond will conform, to the descriptions thereof contained in the
Prospectus as amended or supplemented;
(m) The issue and sale of the Designated Securities and the execution,
delivery and performance of and the compliance by the Company with all of the
provisions of the Designated Securities, the Collateral Bond, the Mortgage, the
Indenture, this Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any material contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other material agreement or instrument to which the
Company is a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such action result in any
violation of (i) any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties, except for a violation that would not reasonably be expected to have
a material adverse effect on the current or future consolidated financial
position, shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole; or (ii) the provisions of the Restated Articles
of Incorporation, as amended, or By-laws of the Company; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue and sale of
the Designated Securities, the execution, delivery, performance of and
compliance by the Company with all of the provisions of this Agreement and any
Pricing Agreement or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement, the Mortgage, or the
Indenture, except such as have been, or will have been prior to the Time of
Delivery, obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
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(n) The statements set forth in the Prospectus as amended or supplemented
with respect to the Designated Securities under the captions, "Description of
Notes", "Securities", "Description of the Senior Debt Securities" and
"Description of the First Mortgage Bonds" (or similar captions), insofar as they
purport to constitute a summary of the terms of the Designated Securities, and
under the captions "Plan of Distribution" and "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, and except for any statements made in reliance upon and in conformity
with written information furnished to the Company by any Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus, are accurate, complete and fair summaries in all material respects;
(o) Neither the Company nor any of its Significant Subsidiaries is (i) in
violation of its Restated Articles of Incorporation, or, as the case may be,
articles of incorporation or other equivalent document, or By-laws or (ii)
except for any default which would not reasonably be expected to have a material
adverse effect on the current or future consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole, in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound;
(p) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholder's
equity or results of operations of the Company and its subsidiaries, taken as a
whole; and, other than as set forth in the Prospectus, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(q) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(r) Deloitte & Touche LLP, who audited the audited financial statements
and supporting schedules of the Company and its consolidated subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus, are independent public accountants with respect to the Company and
its consolidated subsidiaries as required by the Act and the rules and
regulations thereunder;
(s) There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees or
indebtedness by the Company to or for the benefit of any of the executive
officers or directors of the Company which, individually or in the aggregate,
are material to the Company and its subsidiaries, taken as a whole, except as
disclosed in the Prospectus;
(t) The financial statements of the Company and its consolidated
subsidiaries 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
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consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
Company has no material contingent obligation which is not disclosed in the
Registration Statement and the Prospectus. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. If
applicable, the pro forma financial statements of the Company and its
consolidated subsidiaries and the related notes thereto included in the
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein;
(u) Other than as set forth in the Prospectus, the Company and its
Significant Subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
have received (or have pending) all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse effect
on the current or future consolidated financial position, shareholder's equity
or results of operations of the Company and its subsidiaries, taken as a whole;
and
(v) The Company is not a "holding company" but is an "affiliate" of a
"holding company" (within the meaning of the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act")), which holding company is exempt from the
provisions of the 1935 Act, other than Section 9(a)(2) thereof, pursuant to
Section 3(a)(1) thereof.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in the Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in the manner
specified in the Pricing Agreement relating thereto, payable to the order of the
Company, all at the place and time and date specified in such Pricing Agreement
or at such other place and time and date as the Representatives and the
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Company may agree upon in writing, such time and date being herein called the
"Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Securities or, if applicable, such earlier time as may be required by
Rule 424(b); to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of the Pricing
Agreement relating to such Securities and prior to the Time of Delivery for such
Securities unless the Company has furnished the Representatives for such
Securities with a copy for their review and comment a reasonable time period
prior to filing and has reasonably considered any comments of the
Representatives; to advise the Representatives promptly of any such amendment or
supplement after such Time of Delivery and furnish the Representatives with
copies thereof in such quantities as the Representatives may reasonably request;
to file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Designated Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of (i) the time when
any amendment to the Registration Statement has been filed or becomes effective
or any supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, (ii) the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any prospectus relating to the
Designated Securities, (iii) the suspension of the qualification of such
Designated Securities for offering or sale in any jurisdiction, (iv) the
initiation or threatening of any proceeding for any such purpose, or (v) any
request by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of the
issuance of any such stop order or of any such order preventing or suspending
the use of any prospectus relating to the Designated Securities or suspending
any such qualification, to promptly use every reasonable effort to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Designated Securities for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply, so far as it is able, with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of such Designated Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or as a securities dealer or to file a general
consent to service of process in any jurisdiction or to comply with any other
requirements deemed by the Company to be unduly burdensome;
(c) Prior to 3:00 p.m., New York City time, on the business day next
succeeding the date of the Pricing Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus as amended or supplemented in New
York City in such quantities as the Representatives may reasonably request, and,
if the delivery of a prospectus is required at any time in connection with the
offering or sale of the Designated Securities and if at such time any event
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shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its consolidated subsidiaries (which need
not be audited) complying with Section 11 (a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period beginning from the date of the Pricing Agreement for
such Designated Securities and continuing to and including the Time of Delivery
for such Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which mature more than
one year after such Time of Delivery and which are substantially similar to such
Designated Securities, without the prior written consent of the Representatives;
and
(f) At the Time of Delivery the Company will issue and deliver the related
Collateral Bond to the Indenture Trustee as security for the Designated
Securities.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the reasonable fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
reasonable expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, the
Mortgage, any Indenture, any Blue Sky and legal investment memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Securities;
(iii) all reasonable expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees (not to exceed $7,500) and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the reasonable fees and expenses
of any trustee and any agent of any trustee and the reasonable fees and
disbursements of counsel for any trustee in connection with the Mortgage, the
Indenture and the Securities; (vii) any filing fees incident to, and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with, any required review by the National Association
10
of Securities Dealers, Inc. of the terms of the sale of the Securities; and
(viii) all other reasonable costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section; it being acknowledged and agreed that the Underwriters shall have
no responsibility for payment of any of the foregoing costs, fees, disbursements
and expenses, whether reasonable or not. It is understood, however, that, except
as provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated the Time of Delivery for
such Designated Securities, with respect to this Agreement, the validity of the
Mortgage, the Indenture, the Designated Securities and the Collateral Bonds, the
Registration Statement, the Prospectus as amended or supplemented and other
related matters as the Representatives may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;
(c) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Vice President and General Counsel to the
Company, shall have furnished to the Representatives his written opinion, dated
the Time of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company (A) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus as amended or supplemented and (B) is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the current or future consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, except as described in the
Registration Statement and the Prospectus, the Company holds all
11
material licenses, certificates and permits (or has applications pending)
from governmental authorities necessary for the conduct of its business;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented;
(iii) Each Significant Subsidiary, if any, of the Company has been
duly incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the power and
authority (corporate and other) to own its property and to conduct its
business as described in the Prospectus as amended or supplemented and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not have a
material adverse effect on the current or future consolidated financial
position, shareholder's equity or results of operations of the Company and
its subsidiaries, taken as a whole; and, except as described in the
Registration Statement and the Prospectus as amended or supplemented, each
Significant Subsidiary of the Company holds all licenses, certificates and
permits (or has applications pending) from governmental authorities
necessary for the conduct of its business except where such failure to
hold necessary licenses, certificates or permits would not have a material
adverse effect on the current or future consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(iv) To the best of such counsel's knowledge after due inquiry and
other than as set forth in the Prospectus as amended or supplemented,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would, individually
or in the aggregate, have a material adverse effect on the current or
future consolidated financial position, shareholder's equity or results of
operations of the Company and its subsidiaries, taken as a whole; and, to
the best of such counsel's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;
(v) Each of this Agreement and the Pricing Agreement with respect
to the Designated Securities has been duly authorized, executed and
delivered by the Company;
(vi) The Company has good and marketable title to the properties
specifically described in and conveyed by the Mortgage (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
Mortgage, to permissible encumbrances, as defined in the Mortgage, as to
property acquired by the Company subsequent to the execution of liens
placed thereon at the time of such acquisition as permitted by the
Mortgage, 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 title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except
12
the liens of the Mortgage 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;
(vii) The Designated Securities have been duly authorized, executed
and delivered by the Company, in conformity with the provisions of the
Indenture, and, when such Designated Securities are authenticated by the
Indenture Trustee in accordance with the provisions of the Indenture, such
Designated Securities will be entitled to the benefits of the Indenture,
and will be valid and legally binding obligations of the Company,
enforceable in accordance with their terms except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, fraudulent transfer,
reorganization or other laws of general applicability relating to or
affecting creditors' rights and (ii) general equity principles; and the
Designated Securities, the Indenture and the Mortgage conform in all
material respects to the descriptions thereof in the Prospectus as amended
or supplemented with respect to such Designated Securities;
(viii) Each of the Indenture and the Mortgage has been duly
authorized, executed and delivered by the Company and constitutes a valid
and legally binding instrument, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, or other laws of general
applicability relating to or affecting creditors' rights and (ii) general
equity principles; and each of the Indenture and the Mortgage has been
duly qualified under the Trust Indenture Act;
(ix) The Mortgage is a first lien (subject to no prior liens,
charges, encumbrances or security interests, except current taxes and
assessments not yet due and minor encumbrances which, in such counsel's
opinion, do not materially impair the use of such property for the purpose
for which it is held by the Company), duly filed and recorded (except for
the [ ] Supplemental Indenture which has been properly filed or properly
delivered for record or filing), on substantially all of the Company's
tangible properties and franchises (other than items purchased for resale
in the ordinary course of business) and (subject to the necessity for
particular filings and recordings in the case of certain personal
property) will constitute a like lien on any such properties hereafter
acquired by the Company except that any such after-acquired property will
be subject to prior liens and encumbrances, if any, existing when acquired
by the Company, except that the Mortgage will not become a lien upon
after-acquired real property in a new county until it has been duly filed
and recorded and except that the Mortgage may not be effective as to
property acquired subsequent to the filing of a case with respect to the
Company under the Bankruptcy Code;
13
(x) The Collateral Bond has been duly authorized, executed and
delivered by the Company and established in conformity with the provisions
of the Mortgage, and, when the Collateral Bond has been authenticated in
accordance with the provisions of the Mortgage and pledged to the
Indenture Trustee as contemplated by the Indenture, the Collateral Bond
will be entitled to the benefits of the Mortgage and will be a valid and
legally binding obligation of the Company, enforceable in accordance with
its terms except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, fraudulent transfer, reorganization or other laws
of general applicability relating to or affecting creditors' rights and
(ii) general equity principles; the payments of the principal of, premium,
if any, and interest on the Designated Securities to which the Pricing
Agreement relates are secured by the related Collateral Bond; assuming
that the Indenture Trustee holds the Collateral Bond as provided in the
Indenture, the Indenture creates a valid and perfected first priority
security interest in the Collateral Bond; and the Collateral Bond conforms
to the description thereof contained in the Prospectus as amended or
supplemented;
(xi) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Collateral Bond, the Mortgage, the Indenture, this
Agreement and the Pricing Agreement with respect to the Designated
Securities and the consummation of the transactions herein and therein
contemplated will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease
or other agreement or instrument known to such counsel after due inquiry,
to which the Company is a party or by which the Company is bound or to
which any of the property or assets of the Company is subject, or any
statute or any order, rule or regulation of any court or governmental
agency, including, without limitation, the Michigan Public Service
Commission, or any body having jurisdiction over the Company or any of its
properties, except (A) that such counsel need express no opinion as to
rights to indemnity which may be limited by applicable law, and (B) any
such conflict, breach, violation or default that would not reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or (ii) result in any violation of the
provisions of the Restated Articles of Incorporation, as amended, or
By-laws of the Company;
(xii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency, including,
without limitation, the Michigan Public Service Commission, or any other
body is required for the issue and sale of the Designated Securities or
the consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Mortgage or the Indenture,
except such as have been obtained under the Act and the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Designated
Securities by the Underwriters;
(xiii) The statements set forth in the Prospectus, as supplemented
with respect to the Designated Securities and the Collateral Bond under
the captions "Description of Notes", "Securities", "Description of the
Senior Debt Securities" and "Description of the First Mortgage Bonds" (or
similar captions), insofar as they purport to constitute a summary
14
of the terms of the Designated Securities and the Collateral Bond, and
under the captions "Plan of Distribution" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents referred
to therein (except for any statements made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus) are accurate, complete and fair summaries in
all material respects;
(xiv) Neither the Company nor any of its Significant Subsidiaries
is in violation of its Restated Articles of Incorporation, or, as the case
may be, articles of incorporation or other equivalent document, or By-laws
or, except for any default which would not reasonably be expected to have
a material adverse effect on the current or future consolidated financial
position, shareholder's equity or results of operations of the Company and
its subsidiaries, taken as a whole, in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which it is a party or by which
it or any of its properties may be bound;
(xv) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company", as such
term is defined in the Investment Company Act;
(xvi) The Company is not a "holding company" but is an "affiliate"
of a "holding company" (within the meaning of the Public Utility Holding
Company Act of 1935, as amended (the "1935 Act")), which holding company
is exempt from the provisions of the 1935 Act, other than Section 9(a)(2)
thereof, pursuant to Section 3(a)(1) thereof;
(xvii) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules and other financial data therein and except for those parts of
the Registration Statement which constitute the Forms T-1, as to which
such counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
and
(xviii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules and other
financial data therein and except for those parts of the Registration
Statement which constitute the Forms T-1, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the respective
rules and regulations of the Commission thereunder; although such counsel
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in subsection
(xiii) of this Section 7(c); such counsel has no reason to believe that,
as of its effective date, the Registration Statement or any further
amendment thereto (including the filing of the Company's most recent
Annual Report on Form 10-K with the Commission) made by the Company prior
to the Time of Delivery (other than the financial statements and related
schedules and other financial data therein and except for those parts of
the Registration Statement which constitute the Forms T-1, as to which
such counsel need express no opinion) 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, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to
15
the Time of Delivery (other than the financial statements and related
schedules and other financial data therein and except for those parts of
the Registration Statement which constitute the Forms T-1, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related
schedules and other financial data therein and except for those parts of
the Registration Statement which constitute the Forms T-1, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and such counsel does not know of any amendment to
the Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or supplemented
which are not filed or incorporated by reference or described as required;
(d) Hunton & ▇▇▇▇▇▇▇▇, LLP, counsel to the Company, shall have furnished
to the Representatives their written opinion, dated the Time of Delivery for
such Designated Securities, in form and substance satisfactory to the
Representatives, to the same effect with respect to the matters enumerated in
paragraphs (i)(A),(v),(vii), (viii),(x),(xii),(xiii),(xvi),(xvii) and (xviii) of
subsection (c) of this Section 7 as the opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. In
rendering such opinion, such counsel may state that their opinion is limited to
matters governed by the federal laws of the United States of America and the
laws of the State of New York and may rely, as to (y) all matters of Michigan
law and (z) the due authorization, execution and delivery by the Company of the
Mortgage (other than the Thirty-fifth and the [ ] Supplemental Indentures) and
the Indenture (other than the Supplemental Indenture), upon the opinion of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. referred to above;
(e) Except as otherwise agreed, on the date of the Pricing Agreement
relating to the Designated Securities, the independent accountants of the
Company who have audited the audited financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement
shall have furnished to the Representatives a letter or letters dated the date
of the Pricing Agreement, each in a form satisfactory to you;
(f) At the Time of Delivery for such Designated Securities, the
independent accountants of the Company who have audited the audited financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have
16
furnished to the Representatives a "bring down" letter or letters dated at the
Time of Delivery, each in a form satisfactory to you or, if no letter has been
previously delivered pursuant to paragraph (e) above, a letter to the effect
specified pursuant to such paragraph (e), but dated at the Time of Delivery;
(g) (i) Neither the Company nor any of its Significant Subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Securities, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented prior to the
date of the Pricing Agreement relating to the Designated Securities, there shall
not have been any change in the capital stock or long-term debt of the Company
or any of its Significant Subsidiaries or any material adverse change, or any
development involving a prospective material adverse change (other than such as
may have occurred in the ordinary course of business), in or affecting the
general affairs, management, financial position, shareholder's equity or results
of operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus as amended or supplemented
prior to the date of the Pricing Agreement relating to the Designated
Securities, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse to the
Company and its subsidiaries, taken as a whole, as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for purposes of
Rule 436(g) (2) under the Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or shall have
otherwise given any notice of a possible change in any such rating that does not
indicate the direction of the possible change;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by Federal, New York, or Michigan
State authorities; (iv) a material disruption in commercial banking or
securities settlement or clearance services in the United States or the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, or other crisis or calamity;
or (v) any material adverse change in financial markets in the United States, if
the effect of any such event specified in clauses (iv) and (v) in the judgment
of the Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Securities on the terms and in
the manner contemplated in the Prospectus as first amended or
17
supplemented relating to the Designated Securities; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of the
Company herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (g) of this
Section and as to such other matters as the Representatives may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees, and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each such indemnified party for any legal or other expenses
reasonably incurred by such party in connection with investigating or defending
any such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Designated Securities, or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Designated Securities or with respect to any statements in or
omissions from that part of the Registration Statement that shall constitute the
Statements of Eligibility and Qualification under the Trust Indenture Act of the
Trustee, and except that this indemnity shall not inure to the benefit of any
Underwriter on account of any losses, claims, damages, liabilities or actions,
suits or proceedings arising from the sale of the Designated Securities to any
person if a copy of the Prospectus, as the same may then be supplemented or
amended (excluding, however, any document then incorporated or deemed
incorporated therein by reference), was provided by the Company to the
Representatives (sufficiently in advance of the Time of Delivery to allow for
distribution by the Time of Delivery) but was not sent or given, if required by
the Act to be sent or given, to such person by or on behalf of such Underwriter
to such person with or prior to the written confirmation of sale involved and
the omission or alleged omission or untrue statement or alleged untrue statement
was corrected in the Prospectus as supplemented or amended at such time.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Company and each of its directors, officers, employees, and agents,
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, against any losses, claims,
18
damages or liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the Designated
Securities, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by each such indemnified party in connection with investigating or
defending any such action or claim as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: [ ].
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof giving information as to the nature and basis of the claim;
but the omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than under
such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. If the indemnifying party assumes the defense, selected counsel
may be counsel to the indemnifying party, unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of separate
counsel for the indemnified party or (ii) in the written opinion of counsel to
such indemnified party, representation of both parties by the same counsel would
be inappropriate due to actual or likely conflicts of interest between them or
defenses available to the indemnified party which are different from, additional
to or in competition with those available to the indemnifying party, in either
of which cases the reasonable fees and expenses of such separate counsel
(including disbursements) for such indemnified party shall be reimbursed by the
indemnifying party to the indemnified party. It is understood that the
indemnifying party shall not, in connection with any litigation or proceeding or
related litigation or proceedings in the same jurisdiction as to which the
indemnified parties are entitled to such separate representation, be liable
under this Agreement for the reasonable fees and out-of-pocket expenses for more
than one separate firm (together with not more than one appropriate local
counsel) for all such indemnified parties.
19
(d) In furtherance of the requirement above that fees and expenses of
counsel (to the extent the indemnifying party does not assume the defense) or
any separate counsel for the indemnified parties shall be reasonable, the
Underwriters and the Company agree that the indemnifying party's obligations to
pay such fees and expenses shall be conditioned upon the following:
(i) in case separate counsel is proposed to be retained by the
indemnified parties pursuant to clause (ii) of the preceding paragraph,
the indemnified parties shall, if appropriate, in good faith fully consult
with the indemnifying party in advance as to the selection of such
counsel; and
(ii) reimbursable fees and expenses of such separate counsel shall
be detailed and supported in a manner reasonably acceptable to the
indemnifying party (but nothing herein shall be deemed to require the
furnishing to the indemnifying party of any information, including,
without limitation, computer print-outs of lawyers' daily time entries, to
the extent that, in the judgment of such counsel, furnishing such
information might reasonably be expected to result in a waiver of any
attorney-client privilege) and presented to the indemnifying party as soon
as practicable following receipt of such counsel's invoice.
No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action 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.
The indemnifying party shall not be liable for any settlement of any
litigation or proceeding effected without the written consent of the
indemnifying party, which consent shall not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees, subject to the provisions of this Section 8, to
indemnify the indemnified party from and against any loss, damage, liability or
expenses by reason of such settlement or judgment.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated Securities
on the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, and the indemnifying party has been prejudiced in
any material respect by such failure, then
20
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (e) 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 subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated 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 such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (e)
to contribute are several in proportion to their respective underwriting
obligations with respect to such Securities and not joint.
(f) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have; and the
obligations of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have.
9. (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall
21
have the right to postpone the Time of Delivery for such Designated Securities
for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Pricing Agreement
with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the principal amount of Designated Securities which such Underwriter
agreed to purchase under the Pricing Agreement relating to such Designated
Securities and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Designated
Securities which such Underwriter agreed to purchase under such Pricing
Agreement) of the Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Designated Securities of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Securities are not delivered by or on behalf of the
22
Company as provided herein, the Company will reimburse the Underwriters through
the Representatives for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) reasonably incurred by the Underwriters (and
approved in writing by the Representatives) in making preparations for the
purchase, sale and delivery of such Designated Securities, but the Company shall
then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the directors, officers, employees
and agents of the Company and any Underwriter and each person who controls the
Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when commercial banking institutions
in New York, New York are open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
23
Very truly yours,
Michigan Consolidated Gas Company
By: ______________________________
Name:
Title:
Accepted as of the date hereof:
[ ]
As Representatives of the several Underwriters
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
24
ANNEX I
PRICING AGREEMENT
[ ]
As Representatives of the several
Underwriters named in Schedule I hereto,
[date]
Ladies and Gentlemen:
Michigan Consolidated Gas Company, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated [ ] (the "Underwriting Agreement"), between
the Company on the one hand and [ ], as representatives of the several
underwriters named herein, on the other hand to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
ANNEX I-1
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the provisions of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
Michigan Consolidated Gas Company
By: ______________________________
Name:
Title:
Accepted as of the date hereof:
[ ]
As Representatives of the several Underwriters
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
ANNEX I-2
SCHEDULE I
UNDERWRITER PRINCIPAL AMOUNT
Total........................... $[ ]
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
AGGREGATE PRINCIPAL AMOUNT:
PRICE TO PUBLIC:
PURCHASE PRICE BY UNDERWRITERS:
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Same day funds.
INDENTURE OF MORTGAGE AND DEED OF TRUST:
Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, as
supplemented and amended, including specifically by the Twenty-ninth
Supplemental Indenture dated as of July 15, 1989, the Thirty-fifth
Supplemental Indenture dated as of June 18, 1998, and the [ ]
Supplemental Indenture, dated as of [ ] between the Company and
Citibank, N.A., as Mortgage Trustee.
INDENTURE:
Senior Indenture dated as of June 1, 1998, as amended and supplemented by
and through a [ ] Supplemental Indenture, dated as of [ ]
between the Company and Citibank, N.A.
MATURITY:
INTEREST RATE:
DAY COUNT:
INTEREST PAYMENT DATES:
REDEMPTION PROVISIONS:
As set forth in the Designated Securities.
SINKING FUND PROVISIONS:
TIME OF DELIVERY:
CLOSING LOCATION FOR DELIVERY OF SECURITIES:
Hunton & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NAMES AND ADDRESSES OF REPRESENTATIVES:
SCHEDULE III
SIGNIFICANT SUBSIDIARIES