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EXHIBIT 1.1
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS
UNDERWRITING AGREEMENT
May 18, 1995
Edward D. Jones & Co.
201 Progress Parkway
Maryland Heights, Missouri 63043
First of Michigan Corporation
100 Renaissance Center, 26th Floor
Detroit, Michigan 48243
Roney & Co.
One Griswold Street
Detroit, Michigan 48226
Ladies and Gentlemen:
1. Introductory. Michigan Consolidated Gas Company, a
Michigan corporation (the "Company"), proposes to issue and sell $30,000,000
aggregate principle amount of its First Mortgage Bonds consisting of
$10,000,000 principal amount of First Mortgage Bonds designated Secured Term
Notes, Series A (the "Series A Bonds") and $20,000,000 principal amount of
First Mortgage Bonds designated Secured Term Notes, Series B (the "Series B
Bonds") (the Series A Bonds together with the Series B Bonds are hereinafter
referred to collectively as the "Bonds"). The Bonds will be issued by the
Company under its Indenture of Mortgage and Deed of Trust (the "Original
Indenture") dated as of March 1, 1944 (under which Citibank, N.A. and Robert T.
Kirchner are now the Trustees), as heretofore amended and supplemented by
thirty-three supplemental indentures, including the Twenty-ninth Supplemental
Indenture dated as of July 15, 1989 providing for the modification and
restatement of the Original Indenture which became effective on April 1, 1994,
the Thirty-first Supplemental Indenture creating the series in which the Series
A Bonds are to be issued and the Thirty-second Supplemental Indenture creating
the series in which the Series B Bonds are to be issued. The term "Indenture",
as hereinafter used, means such Original Indenture, as so amended and
supplemented. The Company proposes to sell to the underwriters named in
Schedule II hereto (the
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"Underwriters"), acting severally and not jointly, Bonds in the aggregate
principal amount and with the terms specified in Schedule I hereto (the
"Purchased Bonds").
2. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, the Underwriters that:
(a) A registration statement on Form S-3 (Registration No.
33-44592) in respect of the Series A Bonds and a registration statement on Form
S-3 (Registration No. 33-49281) in respect of the Series B Bonds, including a
prospectus which is a combined prospectus relating to both the Series A Bonds
and the Series B Bonds pursuant to Rule 429 under the Act, have been filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act") and such registration statements have been
declared effective by the Commission; such registration statements, including
all exhibits thereto, the documents incorporated by reference at the time each
such registration statement became effective and, if applicable, including the
information omitted therefrom in reliance upon Rule 430A of the rules and
regulations of the Commission under the Act and contained in a final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, as amended and
supplemented to the date of this Agreement is referred to herein as the
"Registration Statement"; the prospectus, as amended and supplemented in the
form in which it has been most recently filed with the Commission on or after
the date of this Agreement is referred to herein as the "Prospectus"; any
preliminary form of Prospectus which may be filed pursuant to Rule 424(b) under
the Act is hereinafter referred to as a "Preliminary Prospectus"; any reference
herein to the Registration Statement and the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein as of the
date of such Registration Statement or Prospectus, as the case may be; all
references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement or the Prospectus (and all other references of like import) shall be
deemed to mean and include all such financial statements and schedules and
other information which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; all references in
this Agreement to any amendment or supplement to the Registration Statement or
the Prospectus shall be deemed to mean and include without limitation the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") which is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be; and all
references to the Prospectus as amended or supplemented in relation to Bonds
sold pursuant to this Agreement, in the form filed with the Commission pursuant
to Rule 424 under the Act, shall mean and include any documents incorporated by
reference therein as of the date of such filing;
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(b) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement or the Prospectus, or
any amendment or supplement thereto, at the time they were or hereafter are
filed with the Commission or amended, as the case may be, complied and will
comply 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 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 not misleading; and any further
documents so filed or incorporated by reference in the Registration Statement
or the Prospectus will, if and when such documents are filed with the
Commission, or when amended, as the case may be, comply 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 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; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
expressly for use in the Registration Statement or the Prospectus as amended or
supplemented to relate to a particular issuance of the Bonds;
(c) The Registration Statement and the Prospectus comply,
and any amendments or supplements thereto will comply, in all material respects
to the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date in the
case of the Registration Statement and any amendment thereto and as of the
applicable filing date in the case of the Prospectus and any supplement
thereto, include 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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an
Underwriter expressly for use in the Registration Statement or the Prospectus
as amended or supplemented to relate to a particular issuance of the Bonds;
(d) The financial statements and any supporting schedules
of the Company and its subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the financial
position of the Company and its subsidiaries as of the dates indicated and the
results of their operations for the periods specified; and, except as otherwise
stated therein, said financial statements have been prepared in conformity with
generally accepted accounting
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principles applied on a consistent basis; and the supporting schedules included
in the Registration Statement present fairly the information required to be
stated therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, otherwise than as set forth in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(i) there has not been any change in the capital stock or long-term debt
including capital lease obligations (other than changes resulting from sinking
fund and installment provisions under any long-term debt agreement (scheduled
payments on lease obligations) to which the Company or any of its subsidiaries
is a party, terms of the preferred stock of the Company and purchases in the
open market in anticipation thereof or any other changes which changes are not,
in the aggregate, material) of the Company or any of its subsidiaries, (ii)
there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise and (iii) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise;
(f) 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 Registration Statement
and the Prospectus and to execute and deliver this Agreement and to perform its
obligations hereunder; and the Company does not own or lease property or
conduct any business so as to require qualification as a foreign corporation
for the transaction of business in any jurisdiction where it is not qualified
to transact business, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise;
(g) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus, and is duly
qualified
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as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise; all of the issued and outstanding capital stock of each such
subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through its
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(h) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable;
(i) The Company has good and marketable title to the real
properties specifically described in and conveyed by the Indenture (except such
property as may have been disposed of or released from the lien thereof in
accordance with the terms thereof) subject only to the lien of the Indenture,
to permitted liens, as defined in the Indenture, as to property acquired by the
Company subsequent to the execution of the original Indenture, to any liens
existing thereon or purchase money liens placed thereon at the time of such
acquisition as permitted by the Indenture, and to certain other reservations,
rights of grantors under revocable permits, easements, licenses, zoning laws
and ordinances and restrictions and minor defects or irregularities of title
which do not materially impair the use of the property affected thereby in the
operation of the business of the Company; the Company has good title to all
personal property owned by it, free and clear of all liens, encumbrances and
defects except the liens of the Indenture and such liens, encumbrances and
defects as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company; 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 are not material and 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 are valid, subsisting and enforceable
easements with such exceptions as are not material and do not interfere with
the conduct of the business of the Company; the Company and its subsidiaries
possess all licenses, franchises, indeterminate permits, certificates, other
permits, authorizations, approvals, consents and orders of all governmental
authorities or agencies necessary for the ownership or lease of the properties
owned or leased by them and for the operation of the business carried on
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by them as described in the Registration Statement and the Prospectus, with
such exceptions and any burdensome provisions as are not material and do not
materially adversely affect the condition, financial or otherwise, of the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; all such licenses, franchises,
indeterminate permits, certificates, other permits, orders, authorizations,
approvals and consents are in full force and effect and except as otherwise set
forth in the Registration Statement and the Prospectus, there are no legal or
governmental proceedings pending or threatened that would result in a material
modification, suspension or revocation thereof;
(j) The Bonds have been duly and validly authorized for
issuance, offer and sale pursuant to this Agreement, and when issued,
authenticated and delivered pursuant to the provisions of this Agreement and
the Indenture against payment of the consideration therefor, will constitute
valid and legally binding obligations of the Company enforceable in accordance
with their terms and entitled to the benefits provided by the Indenture; the
Indenture has been duly authorized, executed and delivered by the Company and
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; the Bonds and Indenture will be substantially in the form
heretofore delivered to the Underwriters and conform to the descriptions
thereof in the Prospectus as originally filed with the Commission and will
conform with the descriptions thereof in the Prospectus as amended or
supplemented;
(k) The Indenture constitutes a legally valid and direct
enforceable first mortgage lien, except as the same may be limited by the laws
of the State of Michigan (where all of the property covered thereby is located)
affecting the remedies for the enforcement of the security provided for
therein, which laws do not make inadequate the remedies necessary for the
realization of the benefits of such security, or as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights, upon substantially all of the Company's
properties and franchises, now owned or hereafter acquired, free from all prior
liens, charges or encumbrances, except as hereinbefore set forth in paragraph
(i) above, and, in the case of property hereafter acquired, any thereof
existing at the time of acquisition;
(l) Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instrument
to which it is a party
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or by which it or any of them or their properties may be bound; the issue and
sale of the Bonds, the compliance by the Company with all of the provisions of
the Bonds, the execution, delivery and performance by the Company of this
Agreement, the execution, delivery and performance by the Company of the
Indenture, and the consummation of the transactions herein contemplated have
been duly authorized by all necessary corporate action of the Company and will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the property or
assets of the Company or any of its subsidiaries pursuant to the terms of, any
statute, indenture, mortgage, deed of trust, loan agreement, note, lease, or
other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries may be bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in a violation of the
provisions of the charter or by-laws of the Company, the charter or by-laws of
any of its subsidiaries, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of its or their properties; and all consents, approvals,
authorizations, orders, registrations or qualifications of or with any court or
any such regulatory authority or other governmental body required for the
solicitation of offers to purchase the Bonds, the issue and sale of the Bonds
or the consummation of the other transactions contemplated by this Agreement or
the Indenture including the registration under the Act of the Bonds, the
qualification of the Indenture under the Trust Indenture Act and the
authorizing order or orders of the Michigan Public Service Commission, have
been, or will have been prior to the Closing Date, obtained and are, or will be
at the Closing Date, in full force and effect, except such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or blue sky laws of any jurisdiction in connection with the
solicitation by the Underwriters of offers to purchase the Bonds from the
Company and with purchases of the Bonds by the Underwriters, as principal, as
the case may be, in each case in the manner contemplated hereby;
(m) This Agreement has been duly and validly authorized,
executed and delivered by the Company and, upon execution and delivery by the
Underwriters, will be a valid and legally binding agreement of the Company;
(n) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened, against or affecting the Company
or any of its subsidiaries, which is required to be disclosed in the
Registration Statement or the Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
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financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, or
which might materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of any transaction
contemplated by this Agreement; all pending legal or governmental proceedings
to which the Company or any subsidiary of the Company is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement or the Prospectus, including ordinary
routine litigation incidental to the business of the Company or any of its
subsidiaries, are, considered in the aggregate, not material; and there are no
contracts or documents of the Company or any of its subsidiaries which are
required to be filed as exhibits to the Registration Statement, or to any
documents incorporated by reference therein, by the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder, which
have not been so filed;
(o) Deloitte & Touche are independent public accountants
as required by the Act and the rules and regulations of the Commission
thereunder;
(p) The Company is a "subsidiary company" of a "holding
company" as such terms are defined in the Public Utility Holding Company Act of
1935 (the "1935 Act"), and such "holding company" and the Company are presently
exempt from the provisions of the 1935 Act (except Section 9(a)(2) thereof);
(q) Immediately after the sale of the Bonds by the
Company hereunder, the aggregate amount of the Bonds which shall have been
issued and sold by the Company hereunder and of any debt securities of the
Company (other than the Bonds) that shall have been issued and sold pursuant to
the Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement;
(r) None of the Company or any of its subsidiaries is an
"investment company" or under the "control" of an "investment company" as such
terms are defined under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
(s) The Company is in compliance with all provisions of
Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating to Disclosure
of Doing Business with Cuba.
Any certificate signed by any director or officer of the
Company and delivered to the Underwriters or counsel for the Underwriters in
connection with the issuance and sale of the Bonds pursuant to this Agreement
shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
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3. Purchase, Offering and Delivery -- Closing Date. On the
basis of the representations, warranties, covenants and agreements herein
contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees to
purchase from the Company, severally and not jointly, at the purchase price set
forth in Schedule I hereto, the respective principal amounts of the Purchased
Bonds set forth opposite each Underwriter's name in Schedule II hereto. It is
understood that the Underwriters propose to offer the Purchased Bonds for sale
to the public as set forth in the Prospectus Supplement (as hereinafter
defined) relating to the Purchased Bonds. The Company will deliver the
Purchased Bonds to Edward D. Jones & Co. for the respective accounts of the
several Underwriters through the facilities of The Depository Trust Company in
such names and in such denominations as they may direct by notice in writing to
the Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the Closing Date (as hereinafter defined) or, if no such
direction is received, in the names of the respective Underwriters, against
payment of the purchase price therefor by certified or official bank check or
checks, or by wire transfer in the type of funds specified in Schedule I,
payable to the order of the Company, at the location specified in said
Schedule. The time and date of delivery and closing shall be the time and date
specified in Schedule I hereto; provided, however, that such time or date may
be accelerated or extended by agreement between the Company and the
Underwriters. The time and date of such payment and delivery are herein
sometimes referred to as the "Closing Date".
The Company agrees to make the Purchased Bonds available to
Edward D. Jones & Co. for examination on behalf of the Underwriters at the
office specified in Schedule I hereto not later than 10:00 A.M., New York Time,
on the business day preceding the Closing Date.
4. Agreements. The Company agrees with the Underwriters that:
(a) Promptly following the execution of this Agreement, the
Company will cause the Prospectus, including as part thereof a prospectus
supplement relating to the Purchased Bonds (the "Prospectus Supplement"), to be
filed with, or mailed for filing to, the Commission pursuant to Rule 424 under
the Act and the Company will promptly advise the Underwriters when such filing
or mailing has been made. Prior to such filing or mailing, the Company will
cooperate with the Underwriters in the preparation of the Prospectus Supplement
in a form reasonably acceptable to the Underwriters.
(b) The Company will notify the Underwriters immediately, and
confirm the notice in writing, of (i) the effectiveness of any amendment to the
Registration Statement,
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(ii) any request by the Commission for any amendment to the Registration
Statement or any supplement to the Prospectus or for any additional
information, (iii) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose and (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Purchased Bonds for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. The Company will not file any amendment to
the Registration Statement or supplement to the Prospectus unless the Company
has furnished the Underwriters a copy for their review a reasonable time prior
to the filing thereof and will not file any such proposed amendment or
supplement to which the Underwriters or counsel for the Underwriters reasonably
object or which is not in compliance with the Act and the rules and regulations
of the Commission thereunder. The Company will use its best efforts to prevent
the issuance of any such stop order and, if any stop order is issued, to obtain
as soon as possible the withdrawal thereof.
(c) The Company will prepare and file with the
Commission, promptly upon the reasonable request of the Underwriters, any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Underwriters may be necessary to enable the Underwriters
to continue the distribution of the Bonds and will use its best efforts to
cause the same to become effective as promptly as possible.
(d) If, at any time when a prospectus relating to the
Purchased Bonds is required to be delivered under the Act, any event occurs as
a result of which the Registration Statement or the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it shall be
necessary to amend or supplement the Registration Statement or the Prospectus
to comply with the Act or the Exchange Act or the rules and regulations of the
Commission thereunder, the Company will promptly prepare and file with the
Commission, subject to paragraph (b) of this Section 4, an amendment or
supplement to the Registration Statement or the Prospectus which will correct
such statement or omission or an amendment which will effect such compliance,
and the Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(e) The Company will make generally available to its
security holders and deliver to each of the Underwriters as soon as
practicable, but not later than 45 days (or 90 days, in the case of a period
that is also the Company's fiscal year) after the close of the period covered
thereby, an earnings statement of
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the Company and its subsidiaries (in form complying with the provisions of Rule
158 under the Act) covering a twelve-month period beginning not later than the
first day of the Company's fiscal quarter next following the "effective date"
(as defined in said Rule 158) of the Registration Statement.
(f) The Company will deliver to (i) each Underwriter and
counsel for the Underwriters as many signed and conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) as
the Underwriters may reasonably request and (ii) as many copies of the
Prospectus (as amended or supplemented) as the Underwriters may reasonably
request so long as the Underwriters are required to deliver a Prospectus under
the Act or the Exchange Act or the respective applicable rules and regulations
of the Commission thereunder.
(g) The Company will use its best efforts to arrange
for the qualification of the Purchased Bonds for sale under the laws of such
jurisdictions as the Underwriters may designate (provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in, or to
execute or file any general consent to service of process under the laws of,
any jurisdiction), and will maintain such qualifications in effect so long as
required for the distribution of the Purchased Bonds.
(h) Whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, the Company will pay
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including, without limiting the generality of the foregoing,
(i) all costs, taxes and expenses incident to the issue and delivery of the
Purchased Bonds to the Underwriters, (ii) all fees and expenses of the
Company's counsel and accountants, (iii) all costs and expenses incident to the
preparing, printing and filing of the Registration Statement (including all
exhibits thereto), any Preliminary Prospectus, the Prospectus, the Prospectus
Supplement and any amendments thereof or supplements thereto, (iv) all costs
and expenses incurred in connection with "Blue Sky" qualifications, including
filing fees and fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Memorandum and any Legal Investment Survey, (v) all fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Bonds, (vi) all costs and expenses
incident to the examination of the legality of the Purchased Bonds for
investment and the rating of the Purchased Bonds, and (vii) all costs and
expenses of the printing and distribution of all documents in connection with
the Purchased Bonds. Except as provided in this Section 4(h), Section 7 and
Section 8 hereof, the Underwriters will pay all
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their own costs and expenses, including the fees of their counsel and any
advertising expenses in connection with any offer they may make.
(i) During the period beginning from the date of this
Agreement and continuing to and including the later of (i) the termination of
trading restrictions on the Purchased Bonds, as notified to the Company by the
Underwriters, and (ii) the Closing Date, the Company will not offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which mature more than one year after the Closing Date and which are
substantially similar to the Purchased Bonds, without the prior written consent
of the Underwriters; provided, however, that in no event shall the foregoing
period extend more than thirty calendar days from the date of this Agreement.
(j) The Company will use the net proceeds received by it
from the sale of the Bonds in the manner specified in the Prospectus under "Use
of Proceeds."
(k) The Company, during the period when the Prospectus is
required to be delivered under the Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange Act
within the time periods required by the Exchange Act and the rules and
regulations of the Commission thereunder.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for the Purchased Bonds
shall be subject to the accuracy of the representations and warranties on the
part of the Company contained herein as of the date hereof and the Closing
Date, to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that purpose
shall then be pending before or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriters or withdrawn.
(b) The Company shall have furnished to the Underwriters
the opinion of Susan K. McNish, General Counsel and Secretary for the
Company, dated the Closing Date, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the
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laws of the State of Michigan, with corporate power and authority to
own its properties and conduct its business as described in the
Registration Statement and the Prospectus and to execute and deliver
this Agreement and to perform its obligations hereunder; and the
Company does not own or lease property or conduct any business so as
to require qualification as a foreign corporation for the transaction
of business in any jurisdiction where it is not qualified to transact
business, except where the failure to so qualify would not have a
material adverse on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise;
(ii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and
the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; all of the issued and
outstanding capital stock of each such subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and,
to the best of such counsel's knowledge and information, is owned by
the Company, directly or through its subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity;
(iii) to the best of such counsel's knowledge,
neither the Company nor any of its subsidiaries is in violation of its
charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan, agreement, note or lease to which
it is a party or by which it or any of them or their properties may be
bound; the issue and sale of the Bonds, the compliance by the Company
with all of the provisions of the Bonds, the execution, delivery and
performance by the Company of this Agreement, the execution, delivery
and performance by the Company of the Indenture and the consummation
of the transactions herein contemplated have been duly authorized by
all necessary corporate actions of the Company and do not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under,
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or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company or any
of its subsidiaries pursuant to the terms of, any statute of the State
of Michigan or any jurisdictional subdivision thereof, any indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the charter or by-law of
the Company, the charter or by-laws of any of its subsidiaries, or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company, any
of its subsidiaries or any of its or their properties; and all
consents, approvals, authorizations, orders, registrations or
qualifications of or with any court or any such regulatory authority
or other governmental body required by the laws of the State of
Michigan or any jurisdictional subdivision thereof for the
solicitation of offers to purchase the Bonds, the issue and sale of
the Bonds or the consummation of the other transactions contemplated
by this Agreement or the Indenture, including the registration under
the Act of the Bonds, the qualification of the Indenture under the
Trust Indenture Act and the authorizing order or orders of the
Michigan Public Service Commission, have been obtained and are in full
force and effect, except such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws or any jurisdiction in connection with the
solicitation by the Underwriters of offers to purchase the Bonds from
the Company and with purchases of the Bonds by the Underwriters as
principal, as the case may be, in each case in the manner contemplated
hereby;
(iv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated
by reference as exhibits thereto; the descriptions thereof or
references thereto are correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument so described, referred
to, filed or incorporated by reference;
(v) The Company and its subsidiaries have valid licenses,
franchises, indeterminate permits, certificates, other permits,
authorizations, approvals, consents, orders
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and other operating rights from the Federal Energy Regulatory
Commission, the State of Michigan, or political subdivisions thereof,
authorizing it to carry on its utility business in the municipalities
and rural areas in which it conducts its utility business in Michigan
with such exceptions as, in the opinion of such counsel, are not
material and do not interfere with the conduct of its business, all
such indeterminate permits, franchises, necessity certificates or
other operating rights are in full force and effect, with such
exceptions as are described in the Prospectus as amended or
supplemented and other exceptions and any burdensome provisions as, in
the opinion of such counsel, are not material and do not materially
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, and except as otherwise
set forth in the Registration Statement and the Prospectus as amended
or supplemented, there are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge, threatened that
would result in a material modification, suspension or revocation
thereof;
(vi) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to such counsel's knowledge, threatened, against or
affecting the Company or any of its subsidiaries, which is required to
be disclosed in the Registration Statement or the Prospectus (other
than as disclosed therein), or which might result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, or which might
materially and adversely affect the properties or assets thereof or
which might materially and adversely affect the consummation of any
transaction contemplated by this Agreement; all pending legal or
governmental proceedings to which the Company or any subsidiary of the
Company is a party or of which any of their respective property or
assets is the subject which are not described in the Registration
Statement or the Prospectus, including ordinary routine litigation
incidental to the business of the Company or any of its subsidiaries,
are, considered in the aggregate, not material;
(vii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and nonassessable;
(viii) The Company has good title to all personal property
owned by it, free and clear of all liens,
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encumbrances and defects except the liens of the Indenture and such
liens, encumbrances and defects as do not materially affect the value
of such property and do not interfere with the use made and proposed
to be made of such property by the Company; and 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 are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries;
(ix) The information in the Prospectus under
"Capitalization at March 31, 1995", "Use of Proceeds", "Description of
the Offered Bonds", "Capitalization at September 30, 1992", "The
Company" and "Description of the New Bonds", to the extent that they
constitute matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is correct in all material respects; such counsel has no reason to
believe that, as of the effective date of the Registration Statement,
either the Registration Statement or the Prospectus (or, as of its
date, any amendment or supplement thereto made by the Company
prior to the date of such 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 the date of such opinion, either the
Registration Statement or the Prospectus (or any such amendment or
supplement thereto) contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(x) The Registration Statement is effective under the
Act; no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act or, proceedings therefor
instituted or, to the best of such counsel's knowledge, threatened by
the Commission; the Registration Statement and the Prospectus and any
further amendments and supplements thereto prior to the date of such
opinion and the documents incorporated by reference in the
Registration Statement and the Prospectus as amended or supplemented
(other than financial statements and related schedules and other
financial or statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion), when they
were filed with the Commission or amended, complied as to form in all
material respects with the requirements of the Act and the Exchange
Act, as applicable and the rules and regulations of the Commission
thereunder; such counsel has no reason to believe that any such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of the Registration Statement, an
untrue statement of a
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material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and, in the case of other documents filed under the Act or
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein not misleading;
(xi) The documents incorporated by reference in the
Prospectus at the time they were filed with the Commission or amended
(other than the financial statements and related schedules and other
financial or statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion), 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 such counsel has no reason to believe
that any of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of the
Registration Statement, 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, and, in the
case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein not misleading;
(xii) Except as to property acquired subsequent to the date
of execution of the Thirty-third Supplemental Indenture, the Company
has good title to the property specifically or generally described in
the Indenture as subject to the lien of the Indenture (except such
property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien
of the Indenture, to permitted liens, as defined in the Indenture, as
to property acquired by the Company subsequent to the execution of the
Original Indenture, to any liens existing thereon or purchase money
liens placed thereon at the time of such acquisition as permitted by
the Indenture, and to certain other reservations, rights of grantors
under revocable permits, easements, licenses, zoning laws and
ordinances and restrictions and minor defects or irregularities of
title which do not, in the opinion of such counsel, materially impair
the use of the property affected thereby in the operation of the
business of the Company; the pipeline, distribution main and
underground gas storage easements enjoyed by the Company are valid,
subsisting and enforceable easements with such exceptions as are not
material and do not interfere with the conduct of the business of the
Company;
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(xiii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and constitutes a legally valid
and direct enforceable first mortgage lien, except as the same may be
limited by the laws of the State of Michigan (where the property
covered thereby is located) affecting the remedies for the enforcement
of the security provided for therein, which laws do not, in the
opinion of such counsel, make inadequate the remedies necessary for
the realization of the benefits of such security, or as the same may
be limited by bankruptcy, insolvency, reorganization or other laws
relating to or affecting the enforcement of creditors' rights, upon
substantially all of the Company's properties and franchises, now
owned or hereafter acquired, free from all prior liens, charges or
encumbrances other than the lien of the Indenture, permitted liens, as
defined in the Indenture, as to property acquired by the Company
subsequent to the execution of the Original Indenture, any liens
existing thereon or purchase money liens placed thereon at the time of
such acquisition as permitted by the Indenture, and certain other
reservations, rights of grantors under revocable permits, easements,
zoning laws and ordinances and restrictions and minor defects or
irregularities of title which do not, in the opinion of such counsel,
materially impair the use of the property affected thereby in the
operation of the business of the Company; the Indenture has been duly
qualified under the Trust Indenture Act;
(xiv) All taxes and fees required to be paid by the laws of
the State of Michigan and jurisdictional subdivisions thereof with
respect to the execution of the Indenture and the issuance of the
Bonds have been paid;
(xv) The Bonds, in the form(s) certified by the Company as
of the date hereof, have been duly authorized for issuance, offer and
sale pursuant to this Agreement, and when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor, will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and each
holder of Bonds will be entitled to the benefits of the Indenture; and
the Bonds will, and the Indenture does, conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(xvi) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
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(xvii) The Company is a "subsidiary company" of a "holding
company" as such terms are defined in the 1935 Act, and such "holding
company" and the Company are presently exempt from the provisions of
the 1935 Act (except Section 9(a)(2) thereof);
(xviii) None of the Company or any of its subsidiaries is an
"investment company" or under the "control" of an "investment company"
as such terms are defined under the 1940 Act; and
(xix) The Company is in compliance with all provisions of
Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating to
Disclosure of Doing Business with Cuba.
(c) The Underwriters shall have received from LeBoeuf,
Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, an opinion, dated
the Closing Date, with respect to the issuance and sale of the Purchased Bonds,
the Indenture, the Registration Statement, the Prospectus and other related
matters as the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(d) In giving their opinions required by subsections (b)
and (c), respectively, of this Section, Susan K. McNish, Esq. and LeBoeuf,
Lamb, Greene & MacRae, L.L.P. shall each additionally state that nothing has
come to their attention that would lead them to believe that the Registration
Statement (other than the financial statements and related schedules and other
financial or statistical data included or incorporated by reference therein, as
to which counsel need express no opinion), at the time it became effective or
at the date of the Prospectus Supplement, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and related schedules and other
financial or statistical data included or incorporated by reference therein, as
to which counsel need express no opinion), at the date of the Prospectus
Supplement or at the Closing Date, as the case may be, included (or includes)
an untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In giving their
opinion, LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely as to matters of
Michigan law upon the opinion of Susan K. McNish, Esq. which opinion shall be
in form and substance satisfactory to counsel for the Underwriters.
(e) At the Closing Date, there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, as amended and
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supplemented, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and you shall have received a
certificate of the Chairman of the Board, the President or a Vice President of
the Company and by the chief financial or accounting officer of the Company,
dated the Closing Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties contained in this
Agreement are true and correct with the same force and effect as though
expressly made at and as of the Closing Date, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Date and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or, to his or her knowledge, threatened by
the Commission.
(f) At the time of execution of this Agreement, the
Underwriters shall have received from Deloitte & Touche LLP a letter dated the
date of such execution of this Agreement, in form and substance satisfactory to
the Underwriters, to the effect set forth below and as to such other matters as
the Underwriters may reasonably request, that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial
statements and any supplementary financial information and schedules
audited (and, if applicable, prospective financial statements and/or
pro forma financial information examined) by them and included or
incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations thereunder; and if
applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial
data, pro forma financial information, prospective financial
statements and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been furnished to the Underwriters;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and
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financial position of the Company for the five most recent fiscal
years included in the Prospectus and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(iv) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
including a reading of the unaudited consolidated financial statements
and other information referred to below, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) The unaudited consolidated financial
statements set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as they apply to
Form 10-Q and the published rules and regulations thereunder
or are not presented in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited consolidated financial
statements set forth in the Company's Annual Report on Form
10-K for the most recent year ended incorporated by reference
in the Registration Statement and the Prospectus as amended or
supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Registration Statement and the Prospectus as amended or
supplemented;
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(C) any unaudited pro forma consolidated
condensed financial statements included or incorporated by
reference in the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of delivery of such letter, there have
been any changes in the capital stock or long-term debt
including capital lease obligations (except for sinking fund
and installment requirements under their long-term debt
agreements, terms of the preferred stock of the Company and
purchases in the open market in anticipation thereof) or any
increase in short-term debt, or any decrease in consolidated
common shareholder's equity (other than periodic dividends
declared to stockholders) of the Company and its consolidated
subsidiaries, in each case as compared with the corresponding
amounts shown in the latest consolidated statement of
financial position incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented, except in all instances for changes, increases
or decreases which the Prospectus as amended or supplemented,
including financial information incorporated by reference,
discloses have occurred or may occur or which are described in
such letter;
(E) for the period from the date of the latest
consolidated financial statements included or incorporated by
reference in the Prospectus to the end of the latest period
for which consolidated financial statements are available
there were any decreases in consolidated operating revenues,
operating income, net income or earnings available for common
stock of the Company and its consolidated subsidiaries, or any
increases in any items specified by the Underwriters, in each
case as compared with the corresponding period in the
preceding year and with any other period of corresponding
length specified by the Underwriters, except in each case for
increases or decreases which the Prospectus as amended or
supplemented, including financial information incorporated by
reference, discloses have occurred or may occur or which are
described in such letter; and
(F) The unaudited consolidated financial
statements referred to in Clause (E) are not stated on a basis
substantially consistent with the audited
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consolidated financial statements incorporated by reference in the
Registration Statement and the Prospectus as amended or supplemented;
(v) In addition to the limited procedures, inspection of
minute books, inquiries and other procedures referred to in clause
(iii) and (iv) above, they have carried out certain other specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus as amended or supplemented and the
Registration Statement, in the Company's Annual Report on Form 10-K
for the latest year ended and in the Company's Quarterly Reports on
Form 10-Q since the latest Annual Report on Form 10-K and which are
specified by the Underwriters, and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement.
(g) At the Closing Date, the Underwriters shall have
received from Deloitte & Touche LLP a letter, dated the Closing Date, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (f) of this Section., except that the specified date referred to
shall be a date not more than five days prior to the Closing Date.
(h) Other than as set forth or contemplated in the
Registration Statement and the Prospectus as amended or supplemented (i) the
Company or any of its subsidiaries shall not have sustained since the date of
the latest audited financial statements included or incorporated by reference
in the Registration Statement and the Prospectus as amended or supplemented any
material loss or interference with its business; and (ii) since the respective
dates as of which information is given in the Registration Statement and the
Prospectus as amended or supplemented there shall not have been any change in
the capital stock or long-term debt including capital lease obligations (other
than changes resulting from sinking fund and installment provisions under any
long-term debt agreement (scheduled payments on lease obligations) to which the
Company or any of its subsidiaries is a party, terms of the preferred stock of
the Company and purchases in the open market in anticipation thereof) or any
change, or any development involving a prospective change, in or affecting the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, the effect of which in
any such case described in clause (i) or (ii) of this subsection (g) is in the
judgment of the Underwriters so material and adverse as to make it
impracticable or inadvisable to
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commence or continue the offering of the Bonds as contemplated by the
Registration Statement or the Prospectus.
(i) Subsequent to the date of this Agreement (1) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized securities rating organization" as
that term is defined by the Commission for purposes of Rule 436(g) of
Regulation C, or (2) no review of the rating assigned to any debt securities of
the Company with a view to possible downgrading or with negative implications
for the Company shall have been announced.
(j) Prior to the Closing Date, the Company shall have
furnished to the Underwriters such further information, certificates and
documents as the Underwriters may reasonably request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions or certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance
to the Underwriters and its counsel, this Agreement and all obligations of the
Underwriters hereunder may be terminated at, or at any time prior to, the
Closing Date by the Underwriters.
6. Conditions of Company's Obligation. The obligation of the
Company to deliver the Purchased Bonds upon payment therefor shall be subject
to the following conditions:
On the Closing Date, the order of the Michigan Public Service
Commission referred to in Section 2(1) hereof shall be in full force and effect
substantially in the form in which originally entered; the Indenture shall be
qualified under the Trust Indenture Act as and to the extent required by such
Act; and no stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for that purpose shall then be
pending before, or threatened by, the Commission.
In case any of the conditions specified above in this Section
6 shall not have been fulfilled, this Agreement may be terminated by the
Company by delivering written notice of termination to the Underwriters. Any
such termination shall be without liability of any party to any other party
except to the extent provided in Section 4(h) and Section 7 hereof.
7. Reimbursement of Underwriters' Expenses. If the sale of
the Purchased Bonds provided for herein is not consummated because any
condition to the obligations of the Underwriters or the Company set forth in
Section 5, Section 6 or Section 11 hereof, respectively, is not satisfied or
because of any refusal, inability or failure on the part of the Company to
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perform any agreement herein or comply with any provision hereof other than by
reason of a default by the Underwriters, the Company will bear and pay the
expenses specified in Section 4(h) hereof and, in addition to its obligations
pursuant to Sections 8 and 9 hereof, the Company will reimburse the
Underwriters severally for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel for the Underwriters) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Purchased Bonds, and promptly upon demand the Company will pay such amounts to
the Underwriters.
8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; unless such untrue statement or omission or
such alleged untrue statement or omission was made in reliance upon
and in conformity with written information furnished to the Company by
an Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or any Preliminary Prospectus or Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees and disbursements of counsel chosen by the
Underwriters), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or any
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claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above.
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any Preliminary Prospectus
or Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by an Underwriter
expressly for use in the Registration Statement (or any amendment thereto) or
such Preliminary Prospectus or Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any such action. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable to or insufficient to hold
harmless the indemnified parties although applicable in accordance with its
terms, the Company and the Underwriters shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
said indemnity agreement incurred by the Company and one or more of the
Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to
the initial public offering price appearing thereon and the Company is
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each
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person, if any, who controls an Underwriter within the meaning of Section 15 of
the Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act shall have the same rights to
contribution as the Company.
10. Default by Underwriters. If one or more of the
Underwriters shall fail on the Closing Date to purchase and pay for the
Purchased Bonds agreed to be purchased by such Underwriter hereunder (the
"Defaulted Bonds") and such failure to purchase shall constitute a default in
the performance of its obligations under this Agreement, the remaining
Underwriters shall have the right, within 48 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
persons, to purchase all, but not less than all, of the Defaulted Bonds in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Underwriters shall not have completed such arrangements within such 48-hour
period, then:
(a) if the number of Defaulted Bonds does not exceed 10%
of the aggregate principal amount of the Purchased Bonds, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters; or
(b) if the number of Defaulted Bonds exceeds 10% of the
aggregate principal amount of the Purchased Bonds the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligations to
purchase any, of the Defaulted Bonds and if such nondefaulting Underwriters
does not purchase all the Defaulted Bonds, this Agreement will terminate
without liability to any nondefaulting Underwriter.
In the event of a default by any Underwriter as set forth in
this Section 10, the Underwriters or the Company shall have the right to
postpone the Closing Date for such period not exceeding five business days in
order that the required changes in the Registration Statement and the
Prospectus Supplement or in any other documents or arrangements may be
effected, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby be
made necessary. Nothing contained in this Agreement shall relieve any
defaulting Underwriter of its liability to the Company and any nondefaulting
Underwriters for damages occasioned by its default hereunder.
11. Termination of Agreement. (a) The Underwriters may
terminate this Agreement, by notice to the Company, at any time at or prior to
the Closing Date (i) if there has been, since
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the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or any outbreak or escalation of hostilities or other
national or international calamity or crisis the effect of which is such as to
make it, in the judgment of the Underwriters, impracticable to market the Bonds
or to enforce contracts for the sale of the Bonds, (iii) if trading in the
Common Stock of MCN Corporation, a Michigan corporation which is the holding
company for the Company, has been suspended by the Commission, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or Michigan authorities, (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company shall
have been lowered since the date of this Agreement or if any such rating agency
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any debt securities of the
Company, or (v) if there shall have come to an Underwriter's attention any
facts that would cause the Underwriters to believe that the Prospectus, at the
time it was required to be delivered to a purchaser of Bonds, included an
untrue statement or a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading.
(b) If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 4(h).
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 8 hereof, and shall survive delivery of and payment for the Purchased
Bonds. The provisions of Sections 7 and 8 hereof shall survive the termination
or cancellation of this Agreement.
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13. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Underwriters, will
be mailed, delivered or telegraphed and confirmed to it at the address
specified in Schedule I hereto, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it, at 500 Griswold Street, Detroit,
Michigan 48226, attention of the Secretary with a copy to the Treasurer.
14. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder. The term "successors and assigns" as used in this Agreement shall
not include any purchaser, as such purchaser, of any of the Purchased Bonds
from the Underwriters.
15. Representation When No Representatives. In the
event that no Underwriters are named in Schedule II hereto, the term
"Underwriters" shall be deemed for all purposes of this Agreement to be the
Underwriter or Underwriters named as such in Schedule I hereto, the principal
amount of the Purchased Bonds to be purchased by any such Underwriter shall be
that set opposite its name in Schedule I hereto and all references to the
"Representatives" shall be deemed to be the Underwriter or Underwriters named
in such Schedule I.
16. Counterparts. This Agreement may be executed in
counterparts all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
17. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
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If the foregoing is in accordance with your understanding of
our agreement, please indicate your acceptance thereof in the space provided
below for that purpose, whereupon this letter and your acceptance shall
represent a binding agreement between the Company and the several Underwriters.
Very truly yours,
MICHIGAN CONSOLIDATED GAS COMPANY
By: /s/ Stephen E. Ewing
----------------------
Name: Stephen E. Ewing
Title: President and
Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
EDWARD D. JONES & CO.
By: /s/ James A. Krekeler
-----------------------
Name: James A. Krekeler
Title: Principal
FIRST OF MICHIGAN CORPORATION
By: /s/ J. Michael Davis
----------------------
Name: J. Michael Davis
Title: First Vice President
RONEY & CO.
By: /s/ John C. Donnelly
----------------------
Name: John C. Donnelly
Title: Director of Corporate Finance
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SCHEDULE I
UNDERWRITERS: Edward D. Jones & Co.
First of Michigan Corporation
Roney & Co.
PURCHASE PRICE AND DESCRIPTION OF BONDS:
TITLE: 7.50% Secured Term Notes, Series A, due May 1, 2020
PRINCIPAL AMOUNT: $10,000,000
PURCHASE PRICE: 96.50%
INTEREST RATE: 7.50%
INTEREST PAYMENT DATES: Each May 1 and each November 1,
commencing November 1, 1995
INITIAL PUBLIC OFFERING PRICE: 100.00%
MATURITY: May 1, 2020
SINKING FUND PROVISIONS: None
REDEMPTION PROVISIONS: As set forth in the Prospectus
Supplement dated May 18, 1995.
TITLE: 7.50% Secured Term Notes, Series B, due May 1, 2020
PRINCIPAL AMOUNT: $20,000,000
PURCHASE PRICE: 96.50%
INTEREST RATE: 7.50%
INTEREST PAYMENT DATES: Each May 1, and each November 1,
commencing November 1, 1995
INITIAL PUBLIC OFFERING PRICE: 100.00%
MATURITY: May 1, 2020
SINKING FUND PROVISIONS: None
REDEMPTION PROVISIONS: As set forth in the Prospectus
Supplement dated May 18, 1995.
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OTHER PROVISIONS:
TIME AND DATE OF DELIVERY AND PAYMENT:
TIME: 10:00 a.m. (New York Time)
DATE: May 25, 1995
PLACE OF DELIVERY AND PAYMENT:
DELIVERY - Edward D. Jones & Co.
c/o The Depository Trust Company
55 Water Street
New York, New York 10041
PAYMENT - Wire Transfer
FUNDS - Same day funds
OFFICE FOR EXAMINATION OF BONDS:
Edward D. Jones & Co.
12555 Manchester Road
St. Louis, Missouri 63131-3729
ADDRESS FOR NOTICES TO UNDERWRITERS PURSUANT TO SECTION 13 OF UNDERWRITING
AGREEMENT:
Edward D. Jones & Co.
12555 Manchester Road
St. Louis, Missouri 63131-3729
First of Michigan Corporation
100 Renaissance Center, 26th Floor
Detroit, Michigan 48243
Roney & Co.
One Griswold Street
Detroit, Michigan 48226
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SCHEDULE II
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
SERIES A SERIES B
NAME OF UNDERWRITER BONDS BONDS
------------------- --------- ---------
Edward D. Jones & Co.................. $ 7,020,000 $13,980,000
First of Michigan Corporation......... 1,650,000 3,350,000
Roney & Co............................ 1,330,000 2,670,000
----------- -----------
Total................ $10,000,000 $20,000,000
=========== ===========