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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 6, 1995
MICHIGAN CONSOLIDATED GAS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 1-7310 38-0478040
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 965-2430
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ITEM 5. OTHER EVENTS
The registrant is filing herewith the following exhibit in connection with the
offering by the registrant of its First Mortgage Bonds Designated Secured
Medium-Term Notes, Series B, pursuant to its registration statement on Form S-3
(No. 33-59093) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as described in the Prospectus Supplement dated June 6,
1995, to the Prospectus dated May 31, 1995, filed with the Securities and
Exchange Commission pursuant to Rule 424(b)(2) under the Securities Act of
1933:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
<S> <C>
1-1 Form of Distribution Agreement
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MICHIGAN CONSOLIDATED
GAS COMPANY
By /s/ DAVID R. NOWAKOWSKI
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DAVID R. NOWAKOWSKI
CONTROLLER, TREASURER
AND CHIEF ACCOUNTING OFFICER
Date: June 6, 1995
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description of Document Page
- ------- ----------------------- -----
<S> <C> <C>
1.1 Form of Distribution Agreement
</TABLE>
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EXHIBIT 1.1
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS DESIGNATED AS SECURED
MEDIUM-TERM NOTES, SERIES B
DISTRIBUTION AGREEMENT
June 6, 1995
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower, 10th Floor
World Financial Center
New York, New York 10281-1310
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
First Chicago Capital Markets, Inc.
One First National Plaza
Suite 0363
Chicago, Illinois 60670-0363
Lehman Brothers
Lehman Brothers Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Ladies and Gentlemen:
Michigan Consolidated Gas Company, a Michigan corporation (the "Company"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") (which terms shall, for all purposes of this
Agreement, with respect to Lehman Brothers Inc. include its affiliate, Lehman
Government Securities Inc.) with respect to the issue and sale by the Company
of up to an aggregate principal amount of $150,000,000 of its First Mortgage
Bonds designated as Secured Medium-Term Notes, Series B (the "Notes"). The
Notes will be issued from time to time 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
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the modification and restatement of the Original Indenture which became
effective on April 1, 1994, and the Thirty-third Supplemental Indenture
creating the series in which the Notes are to be issued. The term "Indenture",
as hereinafter used, means such Original Indenture, as so amended and
supplemented. The Notes will mature nine months or more from the date of issue
and will bear interest at rates to be specified in a pricing supplement to the
Note Prospectus referred to below. It is understood, however, that the Company
may from time to time authorize the issuance of additional Notes and that such
additional Notes may be sold to or through the Agents pursuant to the terms of
this Agreement, as though the issuance of such Notes were authorized as of the
date hereof.
1. Solicitations as Agents; Purchases as Principal.
(a) Appointment. Subject to the terms and conditions stated herein, the
Company hereby agrees that the Notes will be sold to or through the Agents;
provided, however, that the Company reserves the right to sell and may accept
offers to purchase the Notes directly on its own behalf. In addition, the
Company may from time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit offers to purchase Notes through any agent without
amending this Agreement to appoint such agent as an additional Agent hereunder
on the same terms and conditions as provided herein for the Agents and without
giving the Agents prior notice of such appointment. The Company may accept
offers to purchase Notes through an agent other than an Agent, provided that
(i) the Company shall not have solicited such offers, (ii) the Company and such
agent shall have executed an agreement with respect to such purchases having
terms and conditions (including, without limitation, commission rates) with
respect to such purchases substantially the same as the terms and conditions
that would apply to such purchases under this Agreement if such agent was an
Agent (which may be accomplished by incorporating by reference in such
agreement the terms and conditions of this Agreement) and (iii) the Company
shall provide the Agents with a copy of such agreement promptly following the
execution thereof. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, each Agent
agrees, as agent of the Company, to use its reasonable efforts to solicit
offers to purchase the Notes during each Offering Period (defined below) upon
the terms and conditions set forth in the Note Prospectus (defined below) as
then amended and supplemented. Each Agent may also purchase Notes from the
Company as principal for purposes of resale, as more fully described in
subsection (g) of this Section.
(b) Solicitation Period. Following the Commencement Date (defined below),
the Company shall notify each Agent from
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time to time as to the commencement of a period during which the Notes
may be offered and sold by such Agent (each period, commencing with such a
notification and ending at such time as the authorization for offers and sales
through such Agent shall have been suspended by the Company or such Agent as
provided hereunder, being herein referred to as an "Offering Period").
(c) Agent's Commission. The Company agrees to pay each Agent, as
consideration for soliciting the sale of the Notes, a commission in the form of
a discount, equal to the percentage of the principal amount of each Note sold
by the Company as a result of a solicitation made by an Agent as set forth on
Schedule I hereto.
(d) Solicitation of Offers. Each Agent is authorized to solicit orders for
the Notes only in denominations of $1,000 or any larger amount that is an
integral multiple of $1,000, at a purchase price equal to 100% of their
principal amount (unless otherwise specified in the applicable pricing
supplement). Each Agent shall communicate to the Company, orally, each
reasonable offer or indication of interest received by it to purchase Notes.
The Company shall have the sole right to accept offers to purchase the Notes
and may reject any such offer in whole or in part. Each Agent shall have the
right to reject, in its discretion reasonably exercised, any offer received by
it to purchase the Notes, without advising the Company, in whole or in part,
and any such rejection shall not be deemed a breach of its agreements contained
herein. In soliciting offers to purchase the Notes hereunder, each Agent is
acting solely as agent for the Company, and not as principal. Each Agent shall
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason.
Under no circumstances will an Agent be obligated to purchase any Notes for its
own account. If the Company shall default in its obligations to deliver Notes
to a purchaser whose offer it has accepted, the Company shall (a) hold the
Agents harmless against any loss, claim or damage arising from or as a result
of such default by the Company and (b) notwithstanding such default, pay to the
Agents any commission to which they would be entitled in connection with such
sale.
(e) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) shall be
agreed upon by the Company and the Agent and set forth in a pricing supplement
to be prepared in connection with each sale of the Notes. Each Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by it in the Administrative Procedures attached hereto
as Exhibit A (the "Procedures"). The
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Procedures may be amended only by written agreement from time to time of the
Company and the Agents.
(f) Delivery of Documents. The documents required to be delivered by
Section 4 of this Agreement shall be delivered at the offices of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Agents, 125 West 55th Street, New
York, N.Y. 10019-5389, on such date as may be mutually agreed to by the Company
and the Agents, which in no event shall be later than the time at which the
Agents commence solicitation of offers to purchase Notes hereunder (the
"Commencement Date").
(g) Purchases as Principal. Subject to the terms and conditions stated
herein, the Company agrees that, whenever the Company determines to sell Notes
directly to any of the Agents as principal for resale to others and such Agent
agrees to purchase Notes as principal, it will enter into a Terms Agreement
(defined below) relating to such sale in accordance with the provisions of this
Section 1(g). Each sale of Notes to any of the Agents as principal shall be
made in accordance with the terms of this Agreement and a supplemental
agreement which will provide for the sale of such Notes to, and the purchase
and reoffering thereof by, such Agent. Each such supplemental agreement,
whether oral (and confirmed in writing by such Agent to the Company, which may
be by facsimile transmission) or in writing is herein referred to as a "Terms
Agreement". Each such Terms Agreement, whether oral or in writing, shall be
with respect to such information (as applicable) as is specified in Exhibit B
hereto. Each Agent's commitment to purchase Notes pursuant to any Terms
Agreement shall be deemed to have been made on the basis of the representations
and warranties of the Company herein contained and shall be subject to the
terms and conditions herein set forth. Each Terms Agreement shall describe the
Notes to be purchased by any of the Agents pursuant thereto, specify the
principal amount of such Notes, the price to be paid to the Company for such
Notes, the rate at which interest will be paid on the Notes, the date, time and
place of delivery of the Notes and payment therefor (the "Purchase Date"), the
method of payment and any modification of the requirements for the delivery of
the opinions of counsel, the certificates from the Company, and the comfort
letter from Deloitte & Touche LLP, pursuant to Section 4. Such Terms Agreement
shall also specify the period of time referred to in Section 3(k).
Delivery of the certificates for Notes sold to any of the Agents pursuant to
any Terms Agreement shall be made as agreed to between the Company and such
Agent as set forth in the Terms Agreement, no later than the Purchase Date set
forth in such Terms Agreement, against payment of funds to the Company in the
net amount due to the Company for such Notes by the method and in the form set
forth in the Terms Agreement.
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Unless otherwise indicated in the applicable pricing supplement, any Note
sold to an Agent as principal shall be at a discount from the principal amount
of each such Note equivalent to the applicable commission set forth in Schedule
I hereto, and may be resold by such Agent to investors and other purchasers
from time to time in one or more transactions at varying prices determined at
the time of sale, or at a fixed public offering price, if so agreed. In
addition, such Agent may engage the services of any other broker or dealer in
connection with the resale of the Notes purchased by it as principal and may
allow any portion of the discount received in connection with such purchases
from the Company to such brokers or dealers.
(h) Other Activities of Agents. The Company acknowledges that nothing in
this Agreement shall prohibit any Agent from (i) acting as broker for the sale
of Notes by customers other than the Company, (ii) soliciting the sale of Notes
through the Agent as broker for the seller, soliciting the sale of Notes to the
Agent as principal and soliciting offers to buy Notes, (iii) purchasing Notes,
and (iv) offering and selling as principal for its own account Notes which the
Agent has purchased.
(i) Reliance. The Company and each Agent agree that any Notes purchased by
the Agents shall be purchased, and any Notes the placement of which an Agent
arranges shall be placed by such Agent, in reliance on the representations,
warranties, covenants and agreements of the Company contained herein and on the
terms and conditions and in the manner provided herein.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Agents that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration statement
on such form (Registration No. 33-59093) for the registration under the Act of
the Company's First Mortgage Bonds, including the Notes, which registration
statement was declared effective on May 31, 1995. The Company may from time to
time file with the Commission additional registration statements for the
registration of additional amounts of First Mortgage Bonds. At the time of the
offer and sale of any Note pursuant to this Agreement, such Note shall be
registered pursuant to an effective registration statement under the Act. Each
registration statement under which Notes are offered or sold pursuant to this
Agreement at the date hereof and at the date of such offer and sale meets and
will meet the requirements set forth in Rule 415(a)(1)(x) under the Act and
complies and will comply in all other material respects with said Rule.
"Registration Statement" shall mean, as of any date, each effective
registration statement relating to First Mortgage Bonds
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pursuant to which Notes are or may then be offered or sold, including
incorporated documents, exhibits and financial statements, as amended at such
date. "Prospectus" shall mean the form of prospectus relating to First
Mortgage Bonds contained in the Registration Statement. The term "Preliminary
Prospectus" as used herein means a prospectus filed as part of any
post-effective amendment to the Registration Statement prior to the effective
date of such post-effective amendment, as contemplated in Rule 430 under the
Act. The Company has included and will include in each such Registration
Statement, or has filed or will file with the Commission pursuant to the
applicable paragraph of Rule 424(b) under the Act, a supplement to the form of
Prospectus included in each such Registration Statement relating to the Notes
and prior to any such filing will advise each Agent of all further information
(financial and other) with respect to the Company to be set forth therein. The
Prospectus so supplemented from time to time is hereinafter called the "Note
Prospectus". Any preliminary form of supplemental prospectus which may be
filed pursuant to Rule 424(b) under the Act is hereinafter called a
"Preliminary Supplemental Prospectus". Any reference herein to the
Registration Statement, any Preliminary Prospectus, any Preliminary
Supplemental Prospectus, the Prospectus, or the Note Prospectus, as amended and
supplemented, shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 that were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") on or before the effective date of the Registration Statement, or the
issue date of such Preliminary Prospectus, Preliminary Supplemental Prospectus,
the Prospectus, or the Note Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus, any Preliminary
Supplemental Prospectus, the Prospectus, or the Note Prospectus shall be deemed
to refer to and include (i) the filing of any document under the Exchange Act
after the effective date of the Registration Statement or the issue date of any
Preliminary Prospectus, any Preliminary Supplemental Prospectus, the
Prospectus, or the Note Prospectus, as the case may be, deemed to be
incorporated therein by reference and (ii) with respect to the Registration
Statement, the filing of any additional registration statement relating to
First Mortgage Bonds if Notes are to be offered or sold under such additional
registration statement.
(b) When the Registration Statement became effective, when any amendment to
the Registration Statement becomes effective (including the filing of any
document incorporated by reference in the Registration Statement), when any
supplement to the Prospectus (other than a supplement specifying the terms of
First Mortgage Bonds other than the Notes) or the Note Prospectus is filed with
the Commission pursuant to Rule 424(b) under the Act, as of the date hereof, on
each day during an Offering Period, and at the time of each delivery of Notes
to (i) any
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purchaser or his Agent whose offer to purchase such Notes was delivered to the
Company during an Offering Period and (ii) any Agent purchasing such Notes as
principal pursuant to a Terms Agreement (each such time referenced above being
referred to herein as a "Representation Date"):
(i) The Registration Statement and the Note 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 Note Prospectus and any
supplement thereto, 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 the Agents
expressly for use in the Registration Statement or Note Prospectus as
amended or supplemented to relate to a particular issuance of the
Notes;
(ii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement or the Note
Prospectus, or any amendment or supplement thereto, at the time they
were or hereafter are filed with the Commission or last 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 or will contain an untrue statement of a
material fact or omitted or will 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 the Agents expressly for use in the Note Prospectus
as amended or supplemented to relate to a particular issuance of the
Notes;
(iii) The financial statements and any supporting schedules
of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement and the Note 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 principles applied on a
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consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be
stated therein.
(iv) 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 Note 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 Note Prospectus;
and, since the respective dates as of which information is given in
the Registration Statement and the Note Prospectus, except as
otherwise stated therein, (A) 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 with the exception of the issuance by the Company of
$30,000 000 aggregate principal amount of First Mortgage Bonds on May
25, 1995, (B) 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 (C) 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;
(v) 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 Note 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;
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(vi) 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 Note 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 is
owned by the Company, directly or through its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity;
(vii) The Company has an authorized capitalization as set
forth in the Note 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;
(viii) 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
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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 by them as described in the Registration
Statement and Note 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
Note Prospectus, there are no legal or governmental proceedings
pending or threatened that would result in a material modification,
suspension or revocation thereof;
(ix) The Notes 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 Notes and Indenture will be
substantially in the form heretofore delivered to the Agents and
conform to the descriptions thereof in the Prospectus as originally
filed with the Commission and will conform with the descriptions
thereof in the Note Prospectus as amended or supplemented;
(x) 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
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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 subsection (viii)
above, and, in the case of property hereafter acquired, any thereof
existing at the time of acquisition;
(xi) 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 or
by which it or any of them or their properties may be bound; the issue
and sale of the Notes, the compliance by the Company with all of the
provisions of the Notes, 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 Notes, the issue and sale of the Notes or the
consummation of the other transactions contemplated by this Agreement
or the Indenture including the registration under the Act of the
Notes, 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 Commencement
Date, obtained and are,
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or will be at the Commencement 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
Agents of offers to purchase the Notes from the Company and with
purchases of the Notes by the Agents, as principal, as the case may
be, in each case in the manner contemplated hereby;
(xii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agent, will be a valid and legally binding agreement of the
Company.
(xiii) 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 Note 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 Note 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;
(xiv) Deloitte & Touche LLP are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(xv) The Company is a "public utility company" and 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);
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<PAGE> 13
(xvi) Immediately after the sale of the Notes by the
Company hereunder, the aggregate amount of the Notes which shall have
been issued and sold by the Company hereunder and of any First
Mortgage Bonds of the Company (other than the Notes) that shall have
been issued and sold pursuant to the Registration Statement will not
exceed the amount of First Mortgage Bonds registered under the
Registration Statement;
(xvii) 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");
(xviii) 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; and
(xix) The Notes, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the Indenture, will
be excluded or exempted under the provisions of the Commodity Exchange
Act.
(c) Any certificate signed by any director or officer of the
Company and delivered to any Agent or to counsel for the Agents in connection
with an offering of Notes through such Agent as agent, or the sale of Notes to
such Agent as principal shall be deemed a representation and warranty by the
Company to such Agent as to the matters covered thereby on the date of such
certificate and at each Representation Date subsequent thereto.
3. Covenants of the Company. The Company agrees with
each Agent that:
(a) The Company will give each Agent advance notice of its
intention to file or prepare any additional registration statement with respect
to the registration of additional Notes, any amendment to the Registration
Statement, any amendment or supplement to the Prospectus which would create a
Note Prospectus, or any amendment or supplement to the Note Prospectus (other
than an amendment or supplement providing solely for a change in the interest
rate of the Notes and other than a pricing supplement except with respect to
the Agent which made or presented the offer to purchase the applicable Note),
whether by filing of documents pursuant to the Act, the Exchange Act or
otherwise, and will furnish each Agent with copies thereof for its review a
reasonable time in advance of such proposed filing or preparation, as the case
may be, and will not file any such proposed amendment or supplement or other
documents in a form to which any Agent or counsel for the Agents shall
reasonably object. Subject to the foregoing sentence, the Company will
promptly cause the Prospectus together with each supplement thereto which would
create a Note Prospectus, and each Note
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<PAGE> 14
Prospectus together with each supplement thereto, to be filed with the
Commission pursuant to Rule 424(b) under the Act.
(b) The Company will promptly advise the Agents (i) when any
amendment to the Registration Statement shall have become effective, (ii) of
the filing of any amendment or supplement to the Prospectus which creates a
Note Prospectus, including the filing of documents incorporated therein by
reference, (iii) of the filing of any amendment or supplement to the Note
Prospectus, including the filing of documents incorporated therein by
reference, (iv) of any request by the Commission for any amendment of the
Registration Statement or amendment or supplement to the Prospectus which would
create a Note Prospectus, or any amendment of or supplement to the Note
Prospectus, or for any additional information or any comments with respect
thereto, (v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening
of any proceeding for that purpose and (vi) of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Notes for sale in any state or jurisdiction or the initiation or threatening of
any proceeding for such purpose. The Company will use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon
as possible the withdrawal thereof. The Company will inform you promptly, upon
your request, of the aggregate offering price or purchase price of First
Mortgage Bonds registered under the Registration Statement that remain
unissued, and will promptly advise you to suspend solicitations of orders to
purchase Notes at any time when all securities registered under the
Registration Statement have been issued.
(c) If, at any time when a prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a result of
which the Registration Statement or the Note 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 Note
Prospectus to comply with the Act or the Exchange Act or the rules and
regulations of the Commission thereunder, the Company will immediately notify
each Agent, such notice to be confirmed in writing, and, if so notified by the
Company, each Agent shall forthwith suspend solicitation of offers to purchase
Notes in the Agents' capacities as agent and cease sales of any Notes any Agent
may then own as principal; the Company promptly will prepare and file with the
Commission, subject to subsections (a) and (b) of this Section 3, an amendment
or supplement to the Registration Statement or Note Prospectus which will
correct such statement or omission or an amendment which will effect such
compliance and will supply such amended or supplemented Note Prospectus to each
Agent in such
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<PAGE> 15
quantities as such Agent may reasonably request. If such amendment or
supplement, and any documents, certificates and opinions furnished to each
Agent pursuant to Section 3(i) below in connection with the preparation or
filing of such amendment or supplement, are satisfactory in all respects to
each Agent, each Agent will, upon the filing of such amendment or supplement
with the Commission or effectiveness of an amendment to the Registration
Statement, resume its obligations to solicit offers to purchase Notes
hereunder.
(d) The Company will make generally available to its security
holders and deliver to each of the Agents as soon as practicable, but not later
than 15 months after the end of a fiscal quarter of the Company during which
any Notes are sold through or purchased by any of the Agents, a consolidated
earnings statement (which need not be audited) of the Company and its
subsidiaries for the 12-month period within such 15 months, which earnings
statement shall satisfy the provisions of Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including Rule 158 under
the Act).
(e) The Company will deliver to (i) each Agent and counsel
for the Agents 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 Agents may reasonably
request and (ii) as many copies of the Note Prospectus (as amended or
supplemented) as the Agents may reasonably request so long as the Agents are
required to deliver a Note Prospectus in connection with sales or solicitations
of offers to purchase the Notes.
(f) The Company will prepare, with respect to any Notes to be
sold through or to the Agent pursuant to this Agreement, a pricing supplement
with respect to such Notes in a form previously approved by the Agent and will
file such pricing supplement pursuant to Rule 424(b) under the Act not later
than the close of business of the Commission on the fifth business day after
the date on which such pricing supplement is first used or such earlier time as
such pricing supplement may be required to be filed with the Commission.
(g) The Company will use its best efforts to arrange for the
qualification of the Notes for sale under the laws of such jurisdictions as the
Agents 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),
will maintain such qualifications in effect so long as required for the
distribution of the Notes and will arrange for the determination of the
legality of the Notes for purchase by institutional investors.
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<PAGE> 16
(h) In the event that the Company exercises its right to sell
Notes directly on its own behalf, such sales shall be made in compliance with
Federal and state securities laws, including those relating to broker-dealer
and salesperson registration.
(i) The Company shall furnish to each Agent such documents,
certificates of officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement and the Note Prospectus, any amendments or supplements
thereto, the Indenture, the Notes, this Agreement, the Procedures and the
performance by the Company and the Agents of their respective obligations
hereunder and thereunder as any of the Agents may from time to time prior to
the termination of this Agreement reasonably request.
(j) The Company, during the period when the Note 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.
(k) During the period, if any, specified in the Terms
Agreement, the Company will not offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company, other than the Notes, without
the prior written consent of the Agents.
(l) On or prior to the date on which there shall be released
to the general public interim financial statement information related to the
Company with respect to each of the first three quarters of any fiscal year or
preliminary financial statement information with respect to any fiscal year,
the Company shall furnish such information to the Agents, confirmed in writing,
and shall cause the Note Prospectus to be amended or supplemented to include or
incorporate by reference financial information with respect thereto and
corresponding information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall be necessary
for an understanding thereof or as shall be required by the Act or the rules
and regulations of the Commission thereunder.
(m) On or prior to the date on which there shall be released
to the general public financial information included in or derived from the
audited financial statements of the Company for the preceding fiscal year, the
Company shall cause the Registration Statement and the Note Prospectus to be
amended, whether by the filing of documents pursuant to the Exchange Act, the
Act or otherwise, to include or incorporate by reference such audited financial
statements and the report or reports, and consent or consents to such inclusion
or incorporation by reference, of the independent accountants with respect
thereto,
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<PAGE> 17
as well as such other information and explanations as shall be necessary for an
understanding of such financial statements or as shall be required by the Act
or the rules and regulations of the Commission thereunder.
4. Conditions to the Obligations of the Agents. The
obligations of each Agent to solicit offers to purchase the Notes as agent of
the Company and to purchase Notes as principal shall be subject to the accuracy
of the representations and warranties on the part of the Company contained
herein and 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
precedent:
(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 threatened by, the Commission.
(b) The Company shall have furnished to each Agent the
opinion of Susan K. McNish, General Counsel and Secretary for the Company,
dated the Commencement Date, in form and substance satisfactory to the Agents
and their counsel, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Michigan, with corporate power and authority to own its properties
and conduct its business as described in the Registration Statement
and the Note 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;
(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 Note
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
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<PAGE> 18
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 Notes, the compliance by the Company with all of the
provisions of the Notes, 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, 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-laws 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 Notes, the issue and sale of
the Notes or the consummation of the other transactions contemplated
by this Agreement or the Indenture, including the registration under
the Act of the Notes, the qualification of the Indenture under the
Trust Indenture Act and the authorizing order or orders of the
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<PAGE> 19
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 Agents of offers to purchase the Notes from the
Company and with purchases of the Notes by the Agents 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 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
Note 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 Note 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,
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<PAGE> 20
threatened, against or affecting the Company or any of its
subsidiaries, which is required to be disclosed in the Registration
Statement or the Note 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 Note 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 Note 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, 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 Note Prospectus under "Use of
Proceeds", "Description of the Offered Notes", "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 Note 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
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<PAGE> 21
or the Note 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 Note 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 Note 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
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 Note
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;
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<PAGE> 22
(xii) Except as to property acquired subsequent to the date of
execution of the Thirty-third Supplemental Indenture relating to the
Notes, 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
pipelines, 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;
(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;
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<PAGE> 23
(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 Notes have
been paid;
(xv) The Notes, 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 Notes will be entitled to the benefits of the Indenture; and
the Notes will, and the Indenture does, conform to the descriptions
thereof in the Note Prospectus as amended or supplemented;
(xvi) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
(xvii) The Notes, in the form(s) certified by the Company as of the
date hereof, when issued, authenticated and delivered pursuant to the
provisions of this Agreement and the Indenture, will be excluded or
exempted from the provisions of the Commodity Exchange Act, assuming
the accuracy of any certifications of factual matters furnished by the
Agents or the Company in connection with the issuance thereof;
(xviii) The Company is a "public utility company" and 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);
(xix) 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
(xx) 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) Each Agent shall have received from LeBoeuf, Lamb, Greene
& MacRae, L.L.P., counsel for the Agents, an opinion, dated the Commencement
Date, with respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Note Prospectus and other related matters as any of
the Agents
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<PAGE> 24
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
Commencement Date, 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 in which they were made, not
misleading or that the Note 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 Commencement Date, or (if such opinion is being delivered in
connection with the purchase of Notes by the Agent as principal pursuant to
Section 1(g) hereof) at the date of any Terms Agreement and at the Purchase
Date with respect hereto, 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 in 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 Agents.
(e) At the Commencement Date, there shall not have been,
since the respective dates as of which information is given in the Registration
Statement and the Note Prospectus, as amended and supplemented, or since the
date of any agreement by any Agent to purchase Notes as principal, 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 Commencement 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
Commencement 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 Commencement Date and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued
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<PAGE> 25
and no proceedings for that purpose have been initiated or, to his or her
knowledge, threatened by the Commission.
(f) At the Commencement Date, each Agent shall have received
from Deloitte & Touche LLP a letter dated the Commencement Date in form and
substance satisfactory to each Agent, to the effect set forth below and as to
such other matters as the Agents 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 Note 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 Agents;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included
in the Note 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
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<PAGE> 26
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 Note 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 Note Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Note 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 Note
Prospectus as amended or supplemented;
(C) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Note 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
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<PAGE> 27
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 Note Prospectus as amended or
supplemented, except in all instances for changes, increases
or decreases which the Note 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 Note 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
Agents, in each case as compared with the corresponding period
in the preceding year and with any other period of
corresponding length specified by the Agents, except in each
case for increases or decreases which the Note 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 consolidated
financial statements incorporated by reference in the
Registration Statement and the Note 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 Note 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
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<PAGE> 28
since the latest Annual Report on Form 10-K and which are specified by
the Agents, 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) Other than as set forth or contemplated in the
Registration Statement and the Note 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 Note 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 Note 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 Agents so material and
adverse as to make it impracticable or inadvisable to commence or continue the
offering of the Notes as contemplated by the Registration Statement or the Note
Prospectus.
(h) The Company shall have furnished to the Agents and
counsel for the Agents, such further information, certificates and documents as
the Agents may reasonably request from time to time; and all proceedings taken
by the Company in connection with the issuance and sale of Notes as herein
contemplated shall be satisfactory in form and substance to the Agents and
counsel for the Agents.
If any of the conditions specified in this Section 4 shall not
have been fulfilled when and as provided in this Agreement (or, at the option
of the Agent, any applicable Terms Agreement by the Agent to purchase Notes as
principal), or if any of the opinions or certificates mentioned above or
elsewhere in this Agreement (or any applicable Terms Agreement) shall not be in
all material respects reasonably satisfactory in form and substance to an Agent
and its counsel, this Agreement (or any applicable Terms Agreement) with
respect to such Agent, and all obligations of such Agent hereunder or
thereunder, as the case may be, may be terminated by such Agent by notice to
the Company at any time and any such termination shall be without liability of
any party to any other party, except that the covenant
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<PAGE> 29
regarding provision of an earnings statement set forth in Section 3(d) hereof,
the provisions concerning payment of expenses under Section 11 hereof, the
indemnity and contribution agreement set forth in Sections 9 and 10 hereof, the
provisions concerning the representations and indemnities to survive set forth
in Section 13 hereof, the provisions relating to governing law set forth in
Section 17 and the provisions relating to successors set forth in Section 15
hereof shall remain in full force and effect.
5. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through the Agent as agent shall be made by the Company
to the Agent for the account of any purchaser only against payment therefor in
immediately available funds. In the event that a purchaser shall fail either
to accept delivery of or to make payment for a Note on the date fixed for
settlement, the Agent shall promptly notify the Company and deliver the Note to
the Company, and, if the Agent has theretofore paid the Company for such Note,
the Company will promptly return such funds to the Agent. If such failure
occurred for any reason other than default by the Agent in the performance of
its obligations hereunder, the Company will reimburse the Agent for its loss of
the use of the funds for the period such funds were credited to the Company's
account.
6. Additional Covenants of the Company. The Company
covenants and agrees with each Agent that:
(a) Each acceptance by it of an offer for the purchase of
Notes (whether to the Agent as principal or through the Agent as agent), and
each delivery of Notes to the Agent (whether to the Agent as principal or
through the Agent as agent), shall be deemed to be an affirmation that the
representations and warranties of the Company contained in this Agreement and
in any certificate theretofore delivered to the Agent pursuant hereto are true
and correct at the time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and correct
at the time of delivery to the purchaser or its agent, or to the Agent, of the
Note or Notes relating to such acceptance or sale, as the case may be, as
though made at and as of each such time (and it is understood that such
representations and warranties shall relate to the Registration Statement and
Note Prospectus as amended and supplemented to each such time).
(b) Each time that (i) the Registration Statement or the Note
Prospectus is amended (which for the purposes of this Section 6 shall include
the filing by the Company of materials incorporated by reference in the
Registration Statement or the Note Prospectus) or supplemented (other than by
an amendment or supplement relating to any offering of securities other than
the Notes or providing solely for the terms of any Notes or for a change deemed
immaterial in the reasonable opinion of the Agents), (ii) the Prospectus is
supplemented to create a Note
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<PAGE> 30
Prospectus, (iii) (if required in connection with the purchase of the Notes by
the Agent as principal) the Company sells Notes to an Agent as principal or
(iv) if the Company issues and sells Notes in a form not previously certified
to the Agents by the Company, the Company will deliver or cause to be delivered
forthwith to each Agent a certificate of the Company signed by 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 date of the
effectiveness of such amendment, the date of filing of such supplement or
materials, or the date of such sale, as the case may be, in form and substance
satisfactory to each Agent, to the effect that the statements contained in the
certificate referred to in Section 4(e) that was last furnished to each Agent
(either pursuant to Section 4(e) or pursuant to this Section 6(b)) are true and
correct at the time of the effectiveness of such amendment (which for the
purposes of this Agreement in the case of the filing of materials incorporated
by reference shall be the date of the filing of such materials), the filing of
such supplement or the date of sale, as the case may be, as though made at and
as of such time (except that such statements shall be deemed to relate to the
Registration Statement, as amended at the time of effectiveness of such
amendment, and to the Prospectus or the Note Prospectus (as the case may be),
as amended and supplemented at the date of such certificate) or, in lieu of
such certificate, a certificate of the same tenor as the certificate referred
to in Section 4(e) but modified, as necessary, to relate to the Registration
Statement, as amended at the time of the effectiveness of such amendment, and
to the Prospectus or the Note Prospectus (as the case may be), as amended and
supplemented at the date of delivery of such certificate.
(c) Each time that (i) the Registration Statement or the Note
Prospectus is amended or supplemented (which for the purposes of this Section 6
shall include the filing by the Company of materials incorporated by reference
in the Registration Statement or the Note Prospectus) or supplemented (other
than by an amendment or supplement relating to any offering of securities other
than the Notes or providing solely for the terms of any Notes or for a change
deemed immaterial in the reasonable opinion of the Agents), (ii) the Prospectus
is supplemented to create a Note Prospectus, (iii) (if required in connection
with the purchase of the Notes by the Agent as principal) the Company sells
Notes to an Agent as principal, or (iv) if the Company issues and sells Notes
in a form not previously certified to the Agents by the Company, the Company
shall furnish to or cause to be furnished forthwith to each Agent a written
opinion of Susan K. McNish, Esquire, General Counsel and Secretary of the
Company to the effect set forth in Section 4(b) but modified as necessary to
relate to the Registration Statement and the Note Prospectus as amended and
supplemented to the time of delivery of such opinion; provided, however, that
such opinion need not be furnished with respect to
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<PAGE> 31
an amendment or supplement providing solely for the terms of any Notes or for a
change deemed immaterial in the reasonable opinion of any of the Agents. Any
such opinion shall be dated the date of the effectiveness of such amendment,
the date of filing of such supplement or materials or the date of such sale, as
the case may be, in form and substance satisfactory to each Agent. In lieu of
such opinion, such counsel may furnish to each Agent a letter to the effect
that each Agent may rely on such counsel's last opinion to the same extent as
though it were dated the date of such letter authorizing reliance on such last
opinion (except that statements in such last opinion will be deemed to relate
to the Registration Statement, as amended at the time of the effectiveness of
such amendment, and to the Prospectus or the Note Prospectus (as the case may
be), as amended and supplemented at the date of delivery of such letter).
(d) Each time that (i) the Registration Statement or the Note
Prospectus is amended or supplemented to set forth additional financial
information or there is filed with the Commission any document incorporated by
reference into the Note Prospectus which contains additional financial
information or (ii) (if required in connection with the purchase of the Notes
by the Agent as principal) the Company sells Notes to an Agent as principal,
the Company shall cause Deloitte & Touche LLP, its independent auditors,
forthwith to furnish each Agent a letter, dated the date of the effectiveness
of such amendment, the date of filing of such supplement or document or the
date of such sale, as the case may be, in form and substance satisfactory to
each Agent, of the same tenor as the portions of the letter referred to in
subsections (i), (ii) and (iii) of Section 4(f), but modified to relate to the
Registration Statement and Note Prospectus, as amended and supplemented to the
date of such letter, and of the same tenor as the portions of the letter
referred to in subsections (iv) and (v) of Section 4(f), with such changes as
may be necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Company.
7. Right of Agent Who Agreed to Purchase as Principal to
Refuse to Purchase. The Company agrees that any Agent who has agreed to
purchase and pay for any Note as principal, shall have the right to refuse to
purchase such Note if, at the date of delivery of such Note, either (a) any
condition set forth in Section 4 shall not be satisfied or (b) subsequent to
the agreement to purchase such Note, 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, taken as a whole, shall have occurred the effect of which is, in
the judgment of such Agent, so material and adverse as to make it impractical
or inadvisable to proceed with the delivery of such Note. Notwithstanding the
foregoing, under no circumstances
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<PAGE> 32
shall any such Agent have any duty or obligation to exercise the judgment
permitted to be exercised under this Section 7.
8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls such Agent
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, Prospectus or
Note 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 the Agents expressly for use
in the Registration Statement (or any amendment thereto) or any
Preliminary Prospectus, Prospectus or Note 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
Agents), 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 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 Agent 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
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<PAGE> 33
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, Prospectus or Note Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by the Agents expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus, Prospectus
or Note 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 Agents 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 Agents, as
incurred, in such proportion so that each Agent is responsible for that portion
represented by the percentage that the total commissions and underwriting
discounts received by such Agent to the date of such liability, 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
person, if any, who controls an Agent within the meaning of Section 15 of the
Act shall have the same rights to contribution as such Agent, 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. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this
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<PAGE> 34
Agreement is terminated, the Company will pay all costs and expenses incident
to the performance of its obligations under this Agreement, including, without
limiting the generality of the foregoing:
(a) The preparation, printing and filing of the Registration
Statement (including all exhibits thereto) and any amendments and supplements
thereto, and any Preliminary Prospectus, Prospectus or Note Prospectus, and any
amendments or supplements thereto;
(b) The preparation, filing and reproduction of this
Agreement;
(c) The preparation, printing, issuance and delivery of the
Notes, including fees and expenses relating to the use of book- entry notes;
(d) The fees and disbursements of the Company's accountants
and counsel, of the Trustee and its counsel, and of any Calculation Agent;
(e) The reasonable fees and disbursements of counsel to the
Agents;
(f) The qualification of the Notes under state securities
laws, including filing fees and the reasonable fees and disbursements of
counsel for the Agents in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Note Prospectus and any amendments or supplements thereto,
and the delivery by the Agents of the Note Prospectus and any amendments or
supplements thereto in connection with solicitation or confirmations of sales
of the Notes;
(h) The preparation, printing, reproducing and delivery to
the Agents of copies of the Supplemental Indenture relating to the Notes;
(i) Any fees charged by rating agencies for the rating of the
Notes;
(j) The fees and expenses incurred in connection with the
listing of the Notes on any securities exchange;
(k) The fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc.;
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<PAGE> 35
(l) Any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company;
(m) The cost of providing any CUSIP or other identification
numbers for the Notes; and
(n) The fees and expenses of any Depositary and any nominees
thereof in connection with the Notes.
11. Termination. (a) This Agreement (excluding any Terms
Agreement hereunder by an Agent to purchase Notes as principal) may be
terminated for any reason, at any time either by the Company or by such Agent
upon the giving of thirty days' written notice of such termination to such
Agent or the Company, as the case may be.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Agent purchasing thereunder, immediately upon
notice given to the Company prior to the close of business on the Purchase Date
relating thereto (i) if there has been, since the date of the Terms 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 shall have
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 such Agent, impracticable to market the Notes or to enforce
contracts for the sale of the Notes, or (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 or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company as of
the date of any applicable principal purchase shall have been lowered since
that date 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 the Agent's attention any facts that would cause the Agent to believe that
the Note Prospectus, at the time it was required to be delivered to a purchaser
of Notes, included an untrue statement or a material fact or omitted to state a
material fact necessary in order to
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<PAGE> 36
make the statements therein, in light of the circumstances existing at the time
of such delivery, not misleading.
(c) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except that (i) each Agent shall be entitled to any commission earned in
accordance with Section 1(c) hereof, (ii) if at the time of termination (A) any
Agent shall own any Notes purchased by it as principal with the intention of
reselling them or (B) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 3 and 6 hereof shall remain in effect until such Notes are so resold
or delivered, as the case may be, and (iii) the covenant set forth in Section
3(d) hereof, the provisions of Sections 8, 9, 10, 12, 14 and 16 hereof shall
remain in full force and effect.
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
certificates of officers of the Company set forth in or made pursuant hereto or
thereto will remain in full force and effect, regardless of any investigation
made by or on behalf of any Agent or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for any of the Notes.
13. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Agents, will be mailed,
delivered or telegraphed and confirmed to it at the address specified in
Schedule II 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 Notes from the
Agents.
15. Counterparts. This Agreement may be executed in
counterparts all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
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<PAGE> 37
16. Governing Law; Forum. This Agreement will be governed by
and construed in accordance with the laws of the State of New York. Any suit,
action or proceeding brought by the Company against any Agent in connection
with or arising under this Agreement shall be brought solely in the state or
federal court of appropriate jurisdiction located in the Borough of Manhattan,
The City of New York.
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<PAGE> 38
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and each Agent.
Very truly yours,
MICHIGAN CONSOLIDATED GAS COMPANY
By: /s/ Stephen Ewing
-------------------------------
Name: Stephen Ewing
Title: President and Chief
Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By: /s/ Scott G. Primrose
-------------------------------
Name: Scott G. Primrose
Title: Director
A.G. EDWARDS & SONS, INC.
By: /s/ Robert P. Barnidge
-------------------------------
Name: Robert P. Barnidge
Title: Vice President
FIRST CHICAGO CAPITAL MARKETS, INC.
By: /s/ Kimberly A. Hunter
-------------------------------
Name: Kimberly A. Hunter
Title: Vice President
LEHMAN BROTHERS INC.
By: /s/ Mary L. deVeer
-------------------------------
Name: Mary L. deVeer
Title: Managing Director
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<PAGE> 39
SCHEDULE I
MICHIGAN CONSOLIDATED GAS COMPANY
First Mortgage Bonds Designated
Secured Medium-Term Notes, Series B
Commission Schedule
<TABLE>
<CAPTION>
Maturity Ranges Commission Rate
- --------------- ---------------
<S> <C>
More than 9 months to less than 1 year .125%
1 year to less than 18 months .150
18 months to less than 2 years .200
2 years to less than 3 years .250
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 6 years .500
6 years to less than 7 years .550
7 years to less than 8 years .600
8 years to less than 9 years .600
9 years to less than 10 years .600
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
Beyond 30 years To be negotiated
</TABLE>
<PAGE> 40
SCHEDULE II
ADDRESS FOR NOTICES TO AGENTS
Notices to Merrill Lynch & Co. shall be directed to it at:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower
10th Floor
New York, New York 10281-1310
Attn: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
Notices to A.G. Edwards & Sons, Inc. shall be directed to it at:
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Attn: Debt Syndicate/John Meiners
Telephone: (314) 289-5800
Telecopy: (314) 289-5989
Notices to First Chicago Capital Markets, Inc. shall be directed to it at:
First Chicago Capital Markets, Inc.
153 West 51st Street
New York, New York 10019
Attn: Linda A. Dawson
Telephone: (212) 373-1319
Telecopy: (212) 373-1391
Notices to Lehman Brothers Inc. shall be directed to it at:
Lehman Brothers
Lehman Brothers, Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200
Attn: MTN Product Management
Telephone: (212) 526-2040
Telecopy: (212) 528-1718
<PAGE> 41
EXHIBIT A
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS DESIGNATED AS MEDIUM-TERM NOTES, SERIES B
ADMINISTRATIVE PROCEDURES
JUNE 6, 1995
First Mortgage Bonds designated as Secured Medium-Term Notes, Series B (the
"Notes") are to be offered on a continuing basis by Michigan Consolidated Gas
Company, a Michigan corporation (the "Company"), to or through Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, A.G. Edwards & Sons,
Inc., First Chicago Capital Markets, Inc. and Lehman Brothers, Lehman Brothers
Inc. (including its affiliate, Lehman Government Securities Inc.)(each an
"Agent" and, collectively, the "Agents"), pursuant to a Distribution Agreement
dated June 6, 1995 (the "Distribution Agreement") between the Company and the
Agents. The Distribution Agreement provides both for the sale of Notes by the
Company to one or more of the Agents as principal for resale to investors and
other purchasers and for the sale of Notes by the Company directly to investors
(as may from time to time be agreed to by the Company and the related Agent or
Agents) in which case the Agents will act as agents of the Company in
soliciting Note purchases.
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related
Agent or Agents and the Company (which terms shall be agreed upon orally, with
written confirmation prepared by the related Agent or Agents and mailed to the
Company). If agreed upon by any Agent or Agents and the Company, such Agent or
Agents, acting solely as agent or agents for the Company and not as principal,
will use reasonable efforts to solicit offers to purchase the Notes. Only
those provisions in these Administrative Procedures that are applicable to the
particular role that an Agent will perform shall apply.
The Notes will be issued as part of a new series of the Company's First
Mortgage Bonds under its Indenture of Mortgage and Deed of Trust dated as of
March 1, 1944 (the "Original Indenture") under which Citibank, N.A. (the
"Trustee") and Robert T. Kirchner are now the trustees, as supplemented and
amended 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 and the Thirty-third Supplemental Indenture dated as of May 1, 1995
creating the series in which the Notes are to be issued (the Original
<PAGE> 42
Indenture, as supplemented by said supplemental indentures and as restated by
the New Restating Supplemental Indenture is referred to herein as the
"Indenture"). Citibank, N.A. will act as the Paying Agent with respect to the
Notes.
A Registration Statement (the "Registration Statement", which term shall
include any additional registration statements or amendments thereto filed in
connection with the Notes as provided in the Distribution Agreement) with
respect to the Notes has been filed with the Securities and Exchange Commission
(the "Commission"). The most recent base Prospectus included in the
Registration Statement, as supplemented with respect to the Notes, is herein
referred to as the "Prospectus". The most recent supplement to the Prospectus
setting forth the purchase price, interest rate, maturity date and other terms
of the Notes (as applicable) is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented by
one or more fully registered Notes (each, a "Book-Entry Note") delivered to the
Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in the
book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the investor or other purchaser thereof or a
person designated by such investor or other purchaser. Owners of beneficial
interests in Notes issued in book-entry form will be entitled to physical
delivery of Notes in certificated form equal in principal amount to their
respective beneficial interests only upon certain limited circumstances
described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth in
Part I hereof. Additionally, Notes issued in book-entry form will be issued in
accordance with the procedures set forth in Part II hereof and Notes issued in
certificated form will be issued in accordance with the procedures set forth in
Part III hereof. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture or the Notes, as the
case may be.
-2-
<PAGE> 43
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of
Issuance/Authentication: Each Note will be dated as of the
date of its authentication by the
Trustee. Each Note shall also bear an
original issue date (the "Original Issue
Date"). The Original Issue Date shall
remain the same for all Notes
subsequently issued upon transfer,
exchange or substitution of an original
Note regardless of their dates of
authentication.
Maturities: Each Note will mature on a date selected
by the investor or other purchaser and
agreed to by the Company, or selected by
the Company and agreed to by the
investor or other purchaser from nine
months or more from its Original Issue
Date.
Registration: Unless otherwise provided in the
applicable Pricing Supplement, Notes
will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the
applicable Pricing Supplement, Notes
will be issued in denominations of
$1,000 or any integral multiple of
$1,000 in excess thereof.
Redemption/Repayment: The Notes will be subject to repayment
at the option of the Holders thereof in
accordance with the terms of the Notes
on their respective Repayment Dates, if
any. Repayment Dates, if any, will be
fixed at the time of sale and set forth
in the applicable Pricing Supplement and
in the applicable Note. If no Repayment
Dates are indicated with respect to a
Note, such Note will not be repayable at
the option of the Holder prior to its
Stated Maturity.
-3-
<PAGE> 44
The Notes will be subject to redemption
by the Company on and after their
respective Redemption Dates, if any.
Redemption Dates, if any, will be fixed
at the time of sale and set forth in the
applicable Pricing Supplement and in the
applicable Note. If no Redemption Dates
are indicated with respect to a Note,
such Note will not be redeemable prior
to its Stated Maturity.
Calculation of
Interest: Interest (including payments for
partial periods) will be calculated and
paid on the basis of a 360-day year of
twelve 30-day months.
Interest: General. Each Note will bear interest
in accordance with its terms. Unless
otherwise provided in an applicable
Pricing Supplement, interest on each
Note will accrue from the Original Issue
Date of such Note for the first interest
period and from the most recent Interest
Payment Date to which interest has been
paid for all subsequent interest
periods. Each payment of interest will
include interest accrued through the day
preceding, as the case may be, the
Interest Payment Date, the Stated
Maturity, any Redemption Date or any
Repayment Date (each Stated Maturity,
Redemption Date or Repayment Date is
referred to herein as "Maturity").
Interest payable at Maturity will be
payable to the Person to whom the
principal of such Note is payable. If
an Interest Payment Date with respect to
any Note falls on a day that is not a
Business Day, the payment of interest
required to be made on such Interest
Payment Date need not be made on such
day, but may be made on the next
succeeding Business Day with the same
force and effect as if made on such
Interest Payment Date and no interest
shall accrue on such
-4-
<PAGE> 45
payment for the period from and after
such Interest Payment Date. If the date
of Maturity of a Note is not a Business
Day, the payment of principal and
interest due on such day shall be made
on the next succeeding Business Day and
no interest shall accrue on such payment
for the period from and after such
Maturity.
Record Dates. Unless otherwise
indicated in an applicable Pricing
Supplement, the Record Date with respect
to any Interest Payment Date shall mean
the last Business Day which is more than
10 calendar days prior to such Interest
Payment Date.
Interest Payment Dates. Interest
payments will be made on each Interest
Payment Date commencing with the
first Interest Payment Date following
the Original Issue Date; provided,
however, the first payment of interest
on any Note originally issued between a
Record Date and an Interest Payment Date
will occur on the Interest Payment Date
following the next Record Date.
Unless otherwise provided in an
applicable Note, interest payments on
the Notes will be made semiannually on
February 1 and August 1 of each year
and at Maturity.
Acceptance and
Rejection of Offers
from Solicitation as
Agents: If agreed upon by any Agent and the
Company, such Agent acting solely as
agent for the Company and not as
principal will solicit purchases of the
Notes. Each Agent will communicate to
the Company orally, each reasonable
offer to purchase Notes solicited by
such Agent on an agency basis, other
than those offers rejected by such
Agent.
-5-
<PAGE> 46
Each Agent has the right, in its
discretion reasonably exercised, to
reject any proposed purchase of Notes,
as a whole or in part, and any such
rejection is not deemed a breach of the
Agent's agreement contained in the
Distribution Agreement. The Company has
the sole right to accept or reject any
proposed purchase of the Notes, in whole
or in part, and any such rejection is
not deemed a breach of the Company's
agreement contained in the Distribution
Agreement. Each Agent has agreed to
make reasonable efforts to assist the
Company in obtaining performance by each
purchaser whose offer to purchase Notes
has been solicited by such Agent and
accepted by the Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is
accepted by the Company, the Company
will promptly prepare a Pricing
Supplement reflecting the terms of such
Note and will arrange to file it with
the Commission in accordance with Rule
424 under the Securities Act of 1933, as
amended. Information to be included in
the Pricing Supplement shall include:
1. the name of the Company;
2. the title of the securities,
including series designation,
if any;
3. the date of the Pricing Supplement
and the dates of the Prospectus and
Prospectus Supplement to which the
Pricing Supplement relates;
4. the name of the Offering Agent (as
hereinafter defined);
5. whether such Notes are being sold
to the Offering Agent as principal
or to an investor or other
purchaser through the
-6-
<PAGE> 47
Offering Agent acting as agent
for the Company;
6. with respect to Notes sold to the
Offering Agent as principal,
whether such Notes will be
resold by the Offering Agent
to investors and other
purchasers (i) at a fixed
public offering price of a
specified percentage of their
Principal Amount, (ii) at
varying prices related to
prevailing market prices at
the time of resale to be
determined by the Offering
Agent or (iii) at 100% of
their Principal Amount;
7. with respect to Notes sold to an
investor or other purchaser
through the Offering Agent
acting as agent for the
Company, whether such Notes
will be sold at (i) 100% of
their Principal Amount or
(ii) at a specified
percentage of their principal
amount;
8. the Offering Agent's commission or
underwriting discount;
9. net proceeds to the Company;
10. the Principal Amount, Original
Issue Date, Stated Maturity,
Initial Redemption Date, if
any, Initial Redemption
Percentage, if any, Annual
Redemption Percentage
Reduction, if any, and
Repayment Date or Dates, if
any, the Interest Rate, the
Interest Payment Date or
Dates (if other than February
1 and August 1 of each year)
and the Record Date or Dates;
11. the information with respect to
the terms of the Notes set
forth below (whether or not
the applicable Note is a
Book-
-7-
<PAGE> 48
Entry Note or a Certificated Note)
under "Procedures for Notes
Issued in Book-Entry Form --
Settlement Procedures", items
1, 2, 6, 7 and 8; and
12. any other provisions of the Notes
material to investors or
other purchasers of the Notes
not otherwise specified in
the Prospectus or Pricing
Supplement.
One copy of such filed document
will be sent by telecopy, overnight,
express or special delivery (for
delivery as soon as practicable
following the trade, but in no event
later than 11:00 a.m. on the Business
Day following the applicable trade
date) to the Agent which made or
presented the offer to purchase the
applicable Note (in such capacity, the
"Offering Agent") and the Trustee at
the following applicable address: if to
Merrill Lynch & Co.: via overnight,
express or special delivery packages
only, to: Tritech Services, 40
Colonial Drive, Piscataway, New Jersey
08854, Attention: Prospectus
Operations/Susannah Putnam, telephone:
(908) 885-2769; if to Merrill Lynch &
Co. via all other types of deliveries,
to: Tritech Services, #4 Corporate
Place, Corporate Park 287, Piscataway,
New Jersey 08854, Attention:
Prospectus Operations/Nachman
Kimerling, telephone: (908) 885-2769,
telecopier: (908) 885-2774/2775/2776;
if to A.G. Edwards & Sons, Inc., to:
A.G. Edwards & Sons, Inc., One North
Jefferson, St. Louis, Missouri 63103,
Attention: Debt Syndicate/John Meiners,
telephone: (314) 289-5800, telecopier:
(314) 289-5989; if to First Chicago
Capital Markets, Inc., to: Operations
Manager, Medium-Term Notes, First
Chicago Capital Markets, Inc., One
First
-8-
<PAGE> 49
National Plaza, Mail Suite 0307,
Chicago, Illinois 60670, Attention:
Cherie McKnight, telephone: (312)
732-9633; if to Lehman Brothers Inc.,
by telecopy to: Lehman Brothers Inc.,
c/o ADP, Prospectus Services, 536
Broadhollow Road, Melville, New York
11747, Attention: Mike Ward,
telephone: (516) 254-7106, telecopier:
(516) 249-7942, and by hand to: Lehman
Brothers Inc., 3 World Financial
Center, 9th Floor, New York, New York
10285-0900, Attention: Brunnie Vazquez,
telephone: (212) 526-8400; and if to
the Trustee, to: Citibank, N.A., 120
Wall Street, Floor 13, New York, New
York 10043, Attention: Wafaa Orfy,
telephone: (212) 412-6260, telecopier:
(212) 480-1614. For record keeping
purposes, one copy of each Pricing
Supplement, as so filed, shall also be
mailed or telecopied to: Merrill Lynch
& Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, World Financial
Center, North Tower, 10th Floor, New
York, New York, 10281-1310, Attention:
MTN Product Management, telephone:
(212) 449-7476, telecopier: (212)
449-2234. One copy of each such
Pricing Supplement shall also be mailed
or telecopied to the Agents' counsel at
LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
125 West 55th Street, New York, New
York 10019-5389, Attention: William S.
Lamb, Esq., telephone: (212) 424-8170,
telecopier: (212) 424-8500.
Outdated Pricing Supplements, and the
supplemented Prospectuses to which
they are attached (other than those
retained for files) will be destroyed.
Settlement: The receipt of immediately available
funds by the Company in payment
for a Note and the authentication and
delivery of such Note shall, with
respect to such
-9-
<PAGE> 50
Note shall, with respect to such
Note, constitute "settlement". Offers
accepted by the Company will be settled
in three Business Days, or at a time as
the purchaser and the Company shall
agree, pursuant to the timetable for
settlement set forth in Parts II and
III hereof under "Settlement
Procedures" with respect to Book-Entry
Notes and Certificated Notes,
respectively (each such date fixed for
settlement is hereinafter referred to
as a "Settlement Date"). If procedures
A and B of the applicable Settlement
Procedures with respect to a particular
offer are not completed on or before
the time set forth under the applicable
"Settlement Procedures Timetable", such
offer shall not be settled until the
Business Day following the completion
of settlement procedures A and B or
such later date as the purchaser and
the Company shall agree.
The foregoing settlement procedures may
be modified, with respect to any
purchase of Notes by an Agent as
principal, if so agreed by the Company
and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to
change the interest rate or any
other variable term on any Notes being
sold by the Company, the Company will
promptly advise the Agents and the
Trustee by facsimile transmission and
the Agents will forthwith suspend
solicitation of offers to purchase such
Notes. The Agents will telephone the
Company with recommendations as to the
changed interest rates or other
variable terms. At such time as the
Company advises the Agents and the
Trustee by facsimile transmission of
the new interest rates or other
variable terms, the Agents may resume
solicitation of offers to purchase such
Notes.
-10-
<PAGE> 51
Until such time only "indications of
interest" may be recorded. Immediately
after acceptance by the Company of an
offer to purchase Notes at a new
interest rate or new variable term, the
Company, the Offering Agent and the
Trustee shall follow the procedures set
forth under the applicable "Settlement
Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the
Agents to suspend solicitation of
offers to purchase Notes at any time.
Upon receipt of such instructions, the
Agents will forthwith suspend
solicitation of offers to purchase from
the Company until such time as the
Company has advised them that
solicitation of offers to purchase may
be resumed. If the Company decides to
amend or supplement the Registration
Statement or the Prospectus (other than
to establish or change interest rates,
maturities, prices or other similar
variable terms with respect to the
Notes), it will promptly advise the
Agents and will furnish the Agents and
their counsel with copies of the
proposed amendment or supplement. One
copy of such filed document, along with
a copy of the cover letter sent to the
Commission, will be delivered or mailed
to the Agents, their counsel and the
Trustee at the following respective
addresses: to Merrill Lynch & Co. at:
MTN Product Management, Merrill Lynch &
Co., Merrill Lynch World Headquarters,
North Tower, World Financial Center,
10th Floor, New York, New York 10281-
1310, telephone: (212) 449-7476,
telecopier: (212) 449- 2234; to A.G.
Edwards & Sons, Inc. at: A.G. Edwards &
Sons, Inc., One North Jefferson, St.
Louis, Missouri 63103, telephone: (314)
289-5800, telecopier: (314) 289-
-11-
<PAGE> 52
5989; to First Chicago Capital Markets,
Inc. at: Operations Manager,
Medium-Term Notes, First Chicago
Capital Markets, Inc., One First
National Plaza, Mail Suite 0307,
Chicago, Illinois 60670, Attention:
Cherie McKnight, telephone: (312)
732-9633; to Lehman Brothers Inc. at:
Lehman Brothers Inc., 3 World Financial
Center, 12th Floor, New York, New York
10285-1200, Attention: Medium-Term Note
Department, telephone: (212) 526-2040,
telecopier: (212) 528-1718; and the
Trustee at: Citibank, N.A., 120 Wall
Street, Floor 13, New York, New York
10043, Attention: Wafaa Orfy,
telephone: (212) 412-6260, telecopier:
(212) 480-1614. For record keeping
purposes, one copy of each such
document, as so filed, shall also be
mailed or telecopied to the Agents'
counsel at LeBoeuf, Lamb, Greene &
MacRae, L.L.P., 125 West 55th Street,
New York, New York 10019-5389,
Attention: William S. Lamb, Esq.,
telephone: (212) 424-8170, telecopier:
(212) 424-8500.
In the event that at the time the
solicitation of offers to purchase from
the Company is suspended (other than to
establish or change interest rates,
maturities, prices or other similar
variable terms with respect to the
Notes) there shall be any offers to
purchase Notes that have been accepted
by the Company which have not been
settled, the Company will promptly
advise the Agents and the Trustee
whether such offers may be settled and
whether copies of the Prospectus as
theretofore amended and/or supplemented
as in effect at the time of the
suspension may be delivered in
connection with the settlement of such
offers. The Company will have the sole
responsibility for such decision and
for any arrangements which may
-12-
<PAGE> 53
be made in the event that the Company
determines that such offers may not
be settled or that copies of such
Prospectus may not be so delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent
Prospectus and applicable Pricing
Supplement must accompany or precede
the earlier of (a) the written
confirmation of a sale sent to an
investor or other purchaser or its
agent and (b) the delivery of Notes to
an investor or other purchaser or its
agent.
Authenticity of
Signatures: The Agents will have no obligations or
liability to the Company or the
Trustee in respect of the authenticity
of the signature of any officer,
employee or agent of the Company or the
Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents
with an adequate supply of all
documents incorporated by reference in
the Registration Statement.
Business Day: As used herein, "Business Day" means,
unless otherwise specified in the
applicable Pricing Supplement, any day
other than a Saturday or Sunday or a
day on which the offices of the Trustee
in the Borough of Manhattan, the City
and State of New York, are authorized
or required to be closed pursuant to
the authorization of law.
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form for
eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in
-13-
<PAGE> 54
accordance with its respective obligations under a Letter of Representations
from the Company and the Trustee to DTC, dated June 6, 1995 and a Certificate
Agreement, dated October 31, 1988, between the Trustee and DTC, as amended (the
"Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance:
All Notes issued in book-entry
form having the same Original Issue
Date, Interest Rate, Day Count
Convention, redemption and/or repayment
terms, if any, and Stated Maturity
(collectively, the "Fixed Rate Terms")
will be represented initially by a
single global security in fully
registered form without coupons (each,
a "Book-Entry Note").
Each Book-Entry Note will be dated and
issued as of the date of its
authentication by the Trustee. The
date from which interest will begin to
accrue with respect to each Book-Entry
Note will be (a) with respect to an
original Book-Entry Note (or any
portion thereof), its Original Issue
Date and (b) with respect to any
Book-Entry Note (or portion thereof)
issued subsequently upon exchange of a
Book-Entry Note or in lieu of a
destroyed, lost or stolen Book-Entry
Note, the most recent Interest Payment
Date to which interest has been paid or
duly provided for on the predecessor
Book-Entry Note or Notes (or if no such
payment or provision has been made, the
Original Issue Date of the predecessor
Book-Entry Note or Notes), regardless
of the date of authentication of such
subsequently issued Book-Entry Note.
No Book-Entry Note shall represent any
Note issued in certificated form.
For other variable terms with respect
to the Notes, see the Prospectus and
the applicable Pricing Supplement.
-14-
<PAGE> 55
Except as provided in the Prospectus,
no owner of a beneficial interest in a
Book-Entry Note shall be entitled to
receive any Note issued in certificated
form with respect to such beneficial
interest.
Identification:
The Company has arranged with
the CUSIP Service Bureau of Standard &
Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of one
series of CUSIP numbers, which series
consists of approximately 900 CUSIP
numbers which have been reserved for
and relating to Book-Entry Notes and
the Company has delivered to each of
the Trustee and DTC such list of such
CUSIP numbers. The Company will assign
CUSIP numbers to Book-Entry Notes as
described below under Settlement
Procedure B. DTC will notify the CUSIP
Service Bureau periodically of the
CUSIP numbers that the Company has
assigned to Book-Entry Notes. The
Trustee will notify the Company at any
time when fewer than 100 of the
reserved CUSIP numbers remain
unassigned to Book-Entry Notes, and, if
it deems necessary, the Company will
reserve and obtain additional CUSIP
numbers for assignment to Book-Entry
Notes. Upon obtaining such additional
CUSIP numbers, the Company will deliver
a list of such additional numbers to
the Trustee and DTC. Book-Entry Notes
having an aggregate principal amount in
excess of $150,000,000 and otherwise
required to be represented by the same
Global Certificate will instead be
represented by two or more Global
Certificates which shall all be
assigned the same CUSIP number.
Registration: Unless otherwise specified by DTC,
each Book-Entry Note will be
registered in the name of Cede & Co.,
as nominee for DTC, on the
-15-
<PAGE> 56
register maintained by the Trustee
under the Indenture. The beneficial
owner of a Note issued in book-entry
form (i.e., an owner of a beneficial
interest in a Book-Entry Note) (or
one or more indirect participants in
DTC designated by such owner) will
designate one or more participants in
DTC (with respect to such Note issued
in book-entry form, the "Participants")
to act as agent for such beneficial
owner in connection with the book-entry
system maintained by DTC, and DTC will
record in book-entry form, in
accordance with instructions provided
by such Participants, a credit balance
with respect to such Note issued in
book-entry form in the account of such
Participants. The ownership interest
of such beneficial owner in such Note
issued in book-entry form will be
recorded through the records of such
Participants or through the separate
records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of beneficial ownership
interests in a Book-Entry Note will be
accomplished by book entries made by
DTC and, in turn, by Participants (and
in certain cases, one or more indirect
participants in DTC) acting on behalf
of beneficial transferors and
transferees of such Book-Entry Note.
Exchanges: The Trustee may deliver to DTC and the
CUSIP Service Bureau at any time a
written notice specifying (a) the CUSIP
numbers of two or more Book-Entry Notes
outstanding on such date that represent
Book-Entry Notes having the same Fixed
Rate Terms (other than Original Issue
Dates), and for which interest has been
paid to the same date; (b) a date,
occurring at least 30 days after such
written
-16-
<PAGE> 57
notice is delivered and at least 30
days before the next Interest Payment
Date for the related Notes issued in
book-entry form, on which such
Book-Entry Notes shall be exchanged for
a single replacement Book-Entry Note;
and (c) a new CUSIP number, obtained
from the Company, to be assigned to
such replacement Book-Entry Note. Upon
receipt of such a notice, DTC will send
to its Participants (including the
Trustee) a written reorganization
notice to the effect that such exchange
will occur on such date. Prior to the
specified exchange date, the Trustee
will deliver to the CUSIP Service
Bureau written notice setting forth
such exchange date and the new CUSIP
number and stating that, as of such
exchange date, the CUSIP numbers of the
Book-Entry Notes to be exchanged will
no longer be valid. On the specified
exchange date, the Trustee will
exchange such Book-Entry Notes for a
single Book-Entry Note bearing the new
CUSIP number and the CUSIP numbers of
the exchanged Book-Entry Notes will, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned. Notwithstanding
the foregoing, if the Book-Entry Notes
to be exchanged exceed $150,000,000 in
aggregate principal amount, one
replacement Book-Entry Note will be
authenticated and issued to represent
each $150,000,000 of principal amount
of the exchanged Book-Entry Notes and
an additional Book-Entry Note or Notes
will be authenticated and issued to
represent any remaining principal
amount of such Book-Entry Notes (See
"Denominations" below).
Denominations: Notes issued in book-entry form
will be issued in denominations
of $1,000 and integral multiples of
$1,000 in excess thereof. Book-Entry
Notes will be denominated in
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principal amounts not in excess of
$150,000,000. If one or more Notes
issued in book-entry form having an
aggregate principal amount in excess of
$150,000,000 would, but for the
preceding sentence, be represented by a
single Book-Entry Note, then one
Book-Entry Note will be issued to
represent each $150,000,000 principal
amount of such Note or Notes issued in
book-entry form and an additional Book-
Entry Note or Notes will be issued to
represent any remaining principal
amount of such Note or Notes issued in
book-entry form. In such a case, each
of the Book-Entry Notes representing
such Note or Notes issued in book-entry
form shall be assigned the same CUSIP
number.
Payments of Principal
and Interest: Payments of Interest Only.
Promptly after each Record Date, the
Trustee will deliver to the Company and
DTC a written notice specifying by
CUSIP number the amount of interest to
be paid on each Book-Entry Note on the
following Interest Payment Date (other
than an Interest Payment Date
coinciding with Maturity) and the total
of such amounts. DTC will confirm the
amount payable on each Book-Entry Note
on such Interest Payment Date by
reference to the daily bond reports
published by Standard & Poor's
Corporation. On such Interest Payment
Date, the Company will pay to the
Trustee in immediately available funds
an amount sufficient to pay the
interest then due and owing, and upon
receipt of such funds from the Company,
the Trustee in turn will pay to DTC,
such total amount of interest due
(other than at Maturity), at the times
and in the manner set forth below under
"Manner of Payment".
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Payments at Maturity. On or about the
first Business Day of each month,
the Trustee will deliver to the Company
and DTC a written list of principal,
interest and premium, if any, to be
paid on each Book-Entry Note maturing
either at Stated Maturity, on a
Redemption Date in, or for which an
Option to Elect Repayment has been
received with respect to, the following
month. The Trustee, the Company and
DTC will confirm the amounts of such
principal, premium, if any, and
interest payments with respect to a
Book-Entry Note on or about the fifth
Business Day preceding the Maturity of
such Book-Entry Note. At such
Maturity, the Company will pay to the
Trustee in immediately available funds
an amount sufficient to make such
Maturity payment, and upon receipt of
such funds the Trustee in turn will pay
to DTC, the principal amount of such
Note, together with interest and
premium, if any, due at such Maturity,
at the times and in the manner set
forth below under "Manner of Payment".
Promptly after payment to DTC of the
principal, interest and premium, if
any, due at the Maturity of such
Book-Entry Note, the Trustee will
cancel such Book-Entry Note and deliver
it to the Company with an appropriate
debit advice. On the first Business
Day of each month, the Trustee will
deliver to the Company a written
statement indicating the total
principal amount of outstanding Book-
Entry Notes as of the close of business
on the immediately preceding Business
Day.
Manner of Payment. The total amount of
any principal, premium, if any,
and interest due on Book-Entry Notes on
any Interest Payment Date or at
Maturity shall be paid by the Company
to the Trustee in funds available for
use by the
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Trustee no later than 1:00 p.m., New
York City time, on such date. The
Company will make such payment on such
Book-Entry Notes to an account
specified by the Trustee. Upon receipt
of such funds, the Trustee will pay by
separate wire transfer (using Fedwire
message entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve Bank of
New York previously specified by DTC,
in funds available for immediate use by
DTC, each payment of interest,
principal and premium, if any, due on a
Book-Entry Note on such date.
Thereafter on such date, DTC will pay,
in accordance with its SDFS operating
procedures then in effect, such amounts
in funds available for immediate use to
the respective Participants in whose
names such Notes are recorded in the
book-entry system maintained by DTC.
Neither the Company nor the Trustee
shall have any responsibility or
liability for the payment by DTC of the
principal of, premium, if any, or
interest on, the Book-Entry Notes to
such Participants.
Withholding Taxes. The amount of any
taxes required under applicable law to
be withheld from any interest payment
on a Note will be determined and
withheld by the Participant, indirect
participant in DTC or other Person
responsible for forwarding payments and
materials directly to the beneficial
owner of such Note.
Settlement
Procedures: Settlement Procedures with regard to
each Note in book-entry form purchased
by each Agent, as principal, or sold by
each Agent, as agent of the Company,
will be as follows:
A. The Offering Agent will advise the
Company by telephone,
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confirmed by facsimile, of the
following Settlement information:
1. Principal Amount of the Note.
2. Interest Rate.
3. Interest Payment Dates.
4. Price to public, if any, of the
Note (or whether the Note is being
offered at varying prices
relating to prevailing market
prices at time of resale as
determined by the Offering
Agent).
5. Trade Date.
6. Settlement Date (Original Issue
Date).
7. Stated Maturity.
8. Redemption provisions, if any,
including: Initial Redemption
Date, Initial Redemption
Percentage and Annual
Redemption Percentage
Reduction.
9. Repayment Date(s), if any.
10. Net proceeds to the Company.
11. The Offering Agent's commission or
underwriting discount.
12. Whether such Notes are being sold
to the Offering Agent as
principal or to an investor
or other purchaser through
the Offering Agent acting as
agent for the Company.
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<PAGE> 62
13. Whether such Note is being issued
with Original Issue Discount
and the terms thereof.
14. Such other information specified
with respect to the Notes
(whether by Addendum or
otherwise).
B. The Company will assign a
CUSIP number to the Book-Entry Note
representing such Note and then advise
the Trustee by facsimile transmission
or other electronic transmission of the
above settlement information received
from the Offering Agent, such CUSIP
number and the name of the Offering
Agent.
C. The Trustee will communicate to DTC
and the Offering Agent through DTC's
Participant Terminal System, a pending
deposit message specifying the
following settlement information:
1. The information set forth in the
Settlement Procedure A.
2. Identification numbers of the
participant accounts
maintained by DTC on behalf
of the Trustee and the
Offering Agent.
3. Initial Interest Payment Date for
such Note, number of days by
which such date succeeds the
related Record Date for DTC
purposes and, if then
calculable, the amount of
interest payable on such
Interest Payment Date (which
amount shall have been
confirmed by the Trustee).
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4. CUSIP number of the Book-Entry Note
representing such Note.
5. Whether such Book-Entry Note
represents any other Notes
issued or to be issued in
book-entry form.
DTC will arrange for each pending
deposit message described above
to be transmitted to Standard & Poor's
Corporation, which will use the
information in the message to include
certain terms of the related Book-
Entry Note in the appropriate daily
bond report published by Standard &
Poor's Corporation.
D. The Trustee will complete and
authenticate the Book-Entry
Note representing such Note.
E. DTC will credit such Note to the
participant account of the
Trustee maintained by DTC.
F. The Trustee will enter an SDFS
deliver order through DTC's
Participant Terminal System instructing
DTC (i) to debit such Note to the
Trustee participant account and credit
such Note to the participant account of
the Offering Agent maintained by DTC
and (ii) to debit the settlement
account of the Offering Agent and
credit the settlement account of the
Trustee maintained by DTC, in an amount
equal to the price of such Note less
such Offering Agent's discount or
underwriting commission, as applicable.
Any entry of such a deliver order shall
be deemed to constitute a
representation and warranty by the
Trustee to DTC that (i) the Book-Entry
Note
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<PAGE> 64
representing such Note has been issued
and authenticated and (ii) the Trustee
is holding such Book-Entry Note
pursuant to the Certificate Agreement.
G. In the case of Notes sold through
the Offering Agent, as agent,
the Offering Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Note to the Offering Agent's
participant account and credit such
Note to the participant account of the
Participants maintained by DTC and (ii)
to debit the settlement accounts of
such Participants and credit the
settlement account of the Offering
Agent maintained by DTC in an amount
equal to the initial public offering
price of such Note.
H. Transfers of funds in accordance
with SDFS deliver orders described in
Settlement Procedures F and G will be
settled in accordance with SDFS
operating procedures in effect on the
Settlement Date.
I. Upon receipt, the Trustee will pay
the Company, by wire transfer of
immediately available funds to an
account specified by the Company to the
Trustee from time to time, in the
amount transferred to the Trustee in
accordance with Settlement Procedure F.
J. The Trustee will send a copy of the
Book-Entry Note by first class mail to
the Company together with a
statement setting forth the principal
amount of Notes Outstanding as of the
related Settlement Date after giving
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<PAGE> 65
effect to such transaction and all
other offers to purchase Notes
of which the Company has advised the
Trustee but which have not yet been
settled.
K. If the Note was sold through the
Offering Agent, as agent, the Offering
Agent will confirm the purchase of
such Note to the investor or other
purchaser either by transmitting to the
Participant with respect to such Note a
confirmation order through DTC's
Participant Terminal System or by
mailing a written confirmation to such
investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted
by the Company, Settlement Procedures "A"
through "K" set forth above shall be
completed as soon as possible but not
later than the respective times (New York
City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date
B As soon as practicable following
the trade, but in no event
later than 12:00 noon on the
second Business Day
immediately preceding the
Settlement Date
C As soon as practicable following
the trade, but in no event
later than 2:00 p.m. on the
second Business Day
immediately preceding the
Settlement Date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
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<PAGE> 66
F-G No later than 2:00 p.m. on
Settlement Date
H 4:45 p.m. on Settlement Date
I-J 5:00 p.m. on Settlement Date
If a sale is to be settled more than
one Business Day after the trade date,
Settlement Procedures A, B, and C may,
if necessary, be completed at any time
prior to the specified times on the
first Business Day after such trade
date. Settlement Procedure H is
subject to extension in accordance with
any extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the Settlement
Date.
If settlement of a Note issued in
book-entry form is rescheduled or
canceled, the Trustee will deliver to
DTC, through DTC's Participant Terminal
System, a cancellation message to such
effect by no later than 2:00 p.m., New
York City time, on the Business Day
immediately preceding the scheduled
Settlement Date.
Failure to Settle: If the Trustee fails to enter an
SDFS deliver order with respect to a
Book-Entry Note issued in book-entry
form pursuant to Settlement Procedure
F, the Trustee may deliver to DTC,
through DTC's Participant Terminal
System, as soon as practicable a
withdrawal message instructing DTC to
debit such Note to the participant
account of the Trustee maintained at
DTC. DTC will process the withdrawal
message, provided that such participant
account contains a principal amount of
the Book-Entry Note representing such
Note that is at least equal to the
principal amount to be debited. If
withdrawal messages are processed with
respect to all the Notes
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<PAGE> 67
represented by a Book-Entry Note, the
Trustee will mark such Book-Entry Note
"canceled", make appropriate entries in
its records and send certification of
destruction of such canceled Book-Entry
Note to the Company. The CUSIP number
assigned to such Book-Entry Note shall, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned. If withdrawal
messages are processed with respect to a
portion of the Notes represented by a
Book-Entry Note, the Trustee will exchange
such Book-Entry Note for two Book-Entry
Notes, one of which shall represent the
Book-Entry Notes for which withdrawal
messages are processed and shall be
canceled immediately after issuance, and
the other of which shall represent the
other Notes previously represented by the
surrendered Book-Entry Note and shall bear
the CUSIP number of the surrendered
Book-Entry Note.
In the case of any Note sold through
the Offering Agent, as agent, if the
purchase price for any Book-Entry Note
is not timely paid to the Participants
with respect to such Note by the
beneficial investor or other purchaser
thereof (or a person, including an
indirect participant in DTC, acting on
behalf of such investor or other
purchaser), such Participants and, in
turn, the related Offering Agent may enter
SDFS deliver orders through DTC's
Participant Terminal System reversing the
orders entered pursuant to Settlement
Procedures F and G, respectively.
Thereafter, the Trustee will deliver the
withdrawal message and take the related
actions described in the preceding
paragraph. If such failure shall have
occurred for any reason other than default
by the applicable Offering Agent to
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<PAGE> 68
perform its obligations hereunder or
under the Distribution Agreement, the
Company will reimburse such Offering Agent
for its loss of the use of funds during
the period when the funds were credited to
the account of the Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a
Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect. In
the event of a failure to settle with
respect to a Note that was to have been
represented by a Book-Entry Note also
representing other Notes, the Trustee will
provide, in accordance with Settlement
Procedure D, for the authentication and
issuance of a Book-Entry Note representing
such remaining Notes and will make
appropriate entries in its records.
PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
Denominations: The Certificated Notes will be
issued in denominations of $1,000 and
integral multiples of $1,000 in excess
thereof.
Payments of Principal
and Interest: Upon presentment and delivery of the
Certificated Note, the Trustee upon
receipt of immediately available funds
from the Company will pay the principal
amount of each Certificated Note at
Maturity and the final installment of
interest in immediately available funds.
All interest payments on a Certificated
Note, other than interest due at Maturity,
will be made at the Corporate Trust Office
of the Trustee or, at the option of the
Company, may be made by check mailed to
the address of the person entitled thereto
as such address shall appear in the
Security Register or by wire transfer of
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<PAGE> 69
immediately available funds if appropriate
wire transfer instructions have been
received in writing by the Trustee not
less than 15 days prior to the applicable
Interest Payment Date.
The Trustee will provide monthly to the
Company a list of the principal, premium,
if any, and interest to be paid on
Certificated Notes maturing in the next
succeeding month. The Trustee will be
responsible for withholding taxes on
interest paid as required by applicable
law, but shall be relieved from any such
responsibility if it acts in good faith
and in reliance upon an opinion of
counsel.
Certificated Notes presented to the
Trustee at Maturity for payment will be
canceled by the Trustee. All canceled
Certificated Notes held by the Trustee
shall be destroyed, and the Trustee shall
furnish to the Company a certificate with
respect to such destruction.
Settlement
Procedures: Settlement Procedures with regard to each
Certificated Note purchased by any Agent,
as principal, or through any Agent, as
agent, shall be as follows:
A. The Offering Agent will advise the
Company by telephone of the
following Settlement information with
regard to each Note:
1. Exact name in which the
Certificated Note(s) is to be
registered (the "Registered
Owner").
2. Exact address or addresses of the
Registered Owner for
delivery, notices and
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payments of principal and
interest.
3. Taxpayer identification number of
the Registered Owner.
4. Principal Amount of the
Certificated Note.
5. Denomination of the Certificated
Note.
6. Interest Rate.
7. Interest Payment Dates.
8. Price to public of the Certificated
Note (or whether the Note is
being offered at varying
prices relating to prevailing
market prices at time of
resale as determined by the
Offering Agent).
9. Trade Date.
10. Settlement Date (Original Issue
Date).
11. Stated Maturity.
12. Net proceeds to the Company.
13. The Offering Agent's commission or
underwriting discount.
14. Whether such Notes are being sold
to the Offering Agent as
principal or to an investor
or other purchaser through
the Offering Agent acting as
agent for the Company.
15. Redemption provisions, if any,
including: Initial Redemption
Date, Initial Redemption
Percentage and
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<PAGE> 71
Annual Redemption Percentage
Reduction.
16. Repayment Date(s), if any.
17. Whether such Note is being issued
with Original Issue Discount
and the terms thereof.
18. Such other information specified
with respect to the Notes
(whether by Addendum or
otherwise).
B. After receiving such settlement
information from the Offering Agent,
the Company will advise the
Trustee of the above settlement
information by facsimile transmission
confirmed by telephone. The Company
will prepare a Pricing Supplement to
the Prospectus and deliver copies to
the Agent and will cause the Trustee to
issue, authenticate and deliver Notes.
C. The Trustee will complete the
Certificated Note in the form
approved by the Company, the Offering
Agent and the Trustee, and will make
three copies thereof (herein called
"Stub 1", "Stub 2" and "Stub 3"):
1. Certificated Note with the Offering
Agent's confirmation, if
traded on a principal basis,
or the Offering Agent's
customer confirmation, if
traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
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<PAGE> 72
4. Stub 3 for the Company.
D. With respect to each trade, the
Trustee will deliver the Certificated
Notes and Stub 2 thereof to the
Offering Agent at the following
applicable address: if to Merrill
Lynch, to: Merrill Lynch Money Markets
Clearance, 55 Water Street, Concourse
Level, N.S.C.C. Window, New York, New
York 10041, Attention: Al Mitchell,
telephone: (212) 558-2405, telecopier:
(212) 558-2457; if to A.G. Edwards &
Sons, Inc., to: A.G. Edwards & Sons,
Inc., 77 Water Street, 6th Floor, New
York, New York 10004, Attention: Carlos
Velez, telephone: (212) 952-7228; if to
First Chicago Capital Markets, Inc.,
to: Bankers Trust, 16 Wall Street, 5th
Floor, Window 51, New York, New York
10015, Attention: Jim Murray,
telephone: (212) 618-2370; and if to
Lehman Brothers Inc., to: Lehman
Government Securities Inc. [Lehman
Commercial Paper Inc.], 101 Hudson
Street, 29th Floor, Jersey City, New
Jersey 07302, Attention: Eddie
Steffens, telephone: (201) 524-5085.
The Trustee will keep Stub 1. The
Offering Agent will acknowledge receipt
of the Certificated Note through a
broker's receipt and will keep Stub 2.
Delivery of the Certificated Note will
be made only against such
acknowledgment of receipt. Upon
determination that the Certificated
Note has been authorized, delivered and
completed as aforementioned, the
Offering Agent will wire the net
proceeds of the Certificated Note after
deduction of its applicable
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<PAGE> 73
commission to the Company pursuant
to standard wire instructions given
by the Company.
E. In the case of Notes sold through the
Offering Agent, as agent, the
Offering Agent will deliver the
Certificated Note (with confirmations),
as well as a copy of the Prospectus and
any applicable Pricing Supplement or
Supplements received from the Trustee
to the purchaser against payment in
immediately available funds.
F. The Trustee will send Stub 3 to the
Company.
Settlement For offers to purchase Certificated Notes
Procedures accepted by the Company, Settlement
Timetable: Procedures "A" through "F" set forth
above shall be completed as soon as
possible but not later than the respective
times (New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date
B 3:00 p.m. on Business Day
prior to Settlement Date
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Notes sold through the
Offering Agent, as agent, if an investor
or other purchaser of a Certificated Note
from the Company shall either fail to
accept delivery of or make payment for a
Certificated Note on the date fixed for
settlement, the Offering Agent will
forthwith notify the Trustee and the
Company by telephone, confirmed in
writing, and return
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the Certificated Note to the Trustee.
The Trustee, upon receipt of the
Certificated Note from the Offering Agent,
will immediately advise the Company and
the Company will promptly arrange to
credit the account of the Offering
Agent in an amount of immediately
available funds equal to the amount
previously paid to the Company by such
Offering Agent in settlement for the
Certificated Note. Such credits will be
made on the Settlement Date if possible,
and in any event not later than the
Business Day following the Settlement
Date; provided that the Company has
received notice on the same day. If such
failure shall have occurred for any reason
other than failure by such Offering Agent
to perform its obligations hereunder or
under the Distribution Agreement, the
Company will reimburse such Offering Agent
for its loss of the use of funds during
the period when the funds were credited to
the account of the Company. Immediately
upon receipt of the Certificated Note in
respect of which the failure occurred, the
Trustee will cancel and destroy the
Certificated Note, make appropriate
entries in its records to reflect the fact
that the Note was never issued, and
accordingly notify in writing the Company.
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<PAGE> 75
EXHIBIT B
MICHIGAN CONSOLIDATED GAS COMPANY
First Mortgage Bonds Designated As
Secured Medium-Term Notes, Series B
TERMS AGREEMENT
, 199
----------- -
Michigan Consolidated Gas Company
500 Griswold Street
Detroit, Michigan 48226
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement dated June 6, 1995 (the "Agreement"), between you and Michigan
Consolidated Gas Company (the "Company"), the undersigned agrees to purchase
the following First Mortgage Bonds designated as Secured Medium-Term Notes,
Series B of the Company:
Aggregate Principal Amount:
Interest Rate:
Interest Reset Period:
Maximum or Minimum Interest Rates:
Spread and/or Spread Multiplier:
Date of Maturity:
Interest Payment Dates:
Record Dates:
Redemption/Repayment:
Price to Public:
Purchase Price: % of Principal Amount [plus accrued
interest from , 199 ]
------ -
Purchase Date and Time:
Other Provisions:
Place for Delivery of Notes and Payment Therefor:
<PAGE> 76
Form:
Method of Payment:
Modification, if any, in the requirements to deliver the documents specified in
Section 6 of the Agreement:
Period during which additional debt securities of the Company may not be sold
pursuant to Section 3(k) of the Agreement:
[ ]
By:
------------------------------
Accepted:
MICHIGAN CONSOLIDATED GAS COMPANY
By:
------------------------------
Name:
Title:
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