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Exhibit 1.1
__________ Shares
CMS NOMECO OIL & GAS CO.
Common Stock (no par value)
Underwriting Agreement
__________, 1996
To the Representatives named in
Schedule I hereto of the Under-
writers named in Schedule II
hereto
Dear Sirs:
CMS NOMECO Oil & Gas Co., a Michigan corporation (the "Company"),
proposes to issue and sell to the several Underwriters (as defined in Section
14 hereof) __________ shares of its Common Stock (no par value) (the "Firm
Securities") as indicated in Schedule II. The Company also proposes to issue
and sell to the several Underwriters not more than _________ shares of its
Common Stock (no par value) (the "Additional Securities") if and to the extent
that the Representatives (as defined in Section 14 hereof) shall have
determined to exercise, on behalf of the Underwriters, the right to purchase
such shares of common stock granted to the Underwriters in Section 1 hereof.
The Firm Securities and the Additional Securities are hereinafter collectively
referred to as the "Securities." The Underwriters have designated the
Representatives to execute this Agreement on their behalf and to act for them
in the manner provided in this Agreement.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), in accordance with the provisions of
the Securities Act of 1933, as amended (the "Act"), a registration statement on
Form S-1 (Registration No. 33-63693) including a prospectus relating to the
Securities and certain amendments to such registration statement, and such
registration statement, as so amended, has become effective under the Act. The
registration statement as amended at the time when it became effective and as
it may have been thereafter amended to the date of this Agreement, including a
registration statement (if any) filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and including in
each case information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A or Rule 434 under the Act,
is hereinafter referred to as the "Registration Statement." The prospectus
forming a part of the Registration Statement at the time the Registration
Statement became effective (including the documents then incorporated by
reference therein) is hereinafter referred to as the "Basic Prospectus,"
provided that in the event that the Basic Prospectus shall have been amended,
revised or supplemented prior to the date of this Agreement, or if the Company
shall have supplemented the Basic Prospectus by filing any documents pursuant
to Section 13 or 14 or 15 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the time the Registration Statement became
effective and prior to the date of this
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Agreement, which documents are deemed to be incorporated in the Basic
Prospectus, the Term "Basic Prospectus" shall also mean such prospectus as so
amended, revised or supplemented. The Basic Prospectus, as it shall be revised
or supplemented to reflect the final terms of the offering and sale of the
Securities and in the form to be filed with, or transmitted for filing to, the
Commission pursuant to Rule 424 under the Act, is hereinafter referred to as
the "Prospectus."
1. Purchase and Sale: Upon the basis of the representations and
warranties and on the terms and subject to the conditions herein set forth, the
Company agrees to sell to the respective Underwriters, severally and not
jointly, and the respective Underwriters, severally and not jointly, agree to
purchase from the Company, at the purchase price of $____________ a share (the
"Purchase Price"), the respective number of shares of Firm Securities set
opposite their names in Schedule II hereto.
In addition, on the basis of the representations and warranties
and on the terms and subject to the conditions herein set forth, the Company
agrees to sell to the Underwriters, and the Underwriters shall have a one-time
right to purchase, severally and not jointly, up to _________ shares of
Additional Securities at the Purchase Price. Additional Securities may be
purchased as provided in Section 2 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Securities.
If any Additional Securities are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of shares of Additional
Securities (subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the total
number of shares of Additional Securities to be purchased as the number of
shares of Firm Securities set forth in Schedule II opposite the name of such
Underwriter bears to the total number of shares of Firm Securities.
The Company hereby agrees that, without the prior written
consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, the
Company will not offer, sell, contract to sell or otherwise dispose of any
shares of Common Stock of the Company or any securities (other than Common
Stock, no par value, of the Company (the "Common Stock")) convertible into or
exercisable or exchangeable for Common Stock of the Company other than the
Securities for a period of 180 days after the date of this Agreement; provided
that the Company may, during such period, (i) issue shares of Common Stock
pursuant to employee stock incentive plans existing or contemplated on the date
of the Prospectus, (ii) sell or dispose of Common Stock, or of other securities
of the Company which are convertible or redeemable into shares of Common Stock,
in each case reporting no more than ____% of the Common Stock to be outstanding
after this Offering, in connection with acquisitions, and (iii) sell or dispose
of Common Stock acquired on the open market in connection with acquisitions.
The Company is advised by the Representatives that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon as this Agreement has become effective. The Company is
further advised by the Representatives that the Securities are to be offered to
the public initially at $________ a share (the public offering price) and to
certain dealers selected by you at a price that represents a concession not in
excess of $___ a
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share under the public offering price, and that any Underwriter may allow, and
such dealers may allow, a concession, not in excess of $___ a share, to certain
other dealers.
2. Payment and Delivery: Payment for the Firm Securities shall be
made to the Company or its order by bank check or checks, as requested by the
Company, payable in New York Clearing House (next day) funds, at the offices of
[▇▇▇▇▇ & ▇▇▇▇▇ LLP,] _____________________, New York, New York, _____ (or such
other place or places of payment as shall be agreed upon by the Company and the
Underwriters in writing), upon the delivery of the Firm Securities at said
offices (or such other place or places of delivery as shall be agreed upon by
the Company and the Representatives in writing) to the Representatives for the
respective accounts of the Underwriters against receipt therefor signed by the
Representatives on behalf of themselves and as agent for the other
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
time on ____________, 1996 (or on such later business day as shall be agreed
upon by the Company and the Representatives in writing), unless postponed in
accordance with the provisions of Section 10 hereof. The day and time at which
payment and delivery for the Firm Securities are to be made is herein called
the "First Time of Purchase".
Payment for any Additional Securities shall also be made to the
Company or its order by bank check or checks, as requested by the Company,
payable in New York Clearing House funds, at the offices of [▇▇▇▇▇ & ▇▇▇▇▇
LLP,] __________________, New York, New York _____ (or such other place or
places of payment as shall be agreed upon by the Company and the
Representatives in writing), upon the delivery of the Additional Securities at
said offices (or such other place or places of delivery as shall be agreed upon
by the Company and the Representatives in writing) to the Representatives for
the respective accounts of the Underwriters against receipt therefor as
aforesaid at 10:00 A.M., New York time, on such date (which may be the same as
the First Time of Purchase but shall in no event be earlier than the First Time
of Purchase nor later than ten business days after the giving of the notice
hereinafter referred to) as shall be designated in a written notice to the
Company from the Representatives of their determination, on behalf of the
Underwriters, to purchase a number, specified in said notice, of shares of
Additional Securities, or on such other date, in any event not later than
________________, 1996, as shall be designated in writing by them. The day and
time at which payment and delivery for the Additional Securities are to be made
is hereinafter called the "Second Time of Purchase." The notice of the
determination to exercise the option to purchase Additional Securities and of
the Second Time of Purchase may be given at any time within 30 days after the
date of this Agreement.
Delivery of the Securities shall be made in definitive, fully
registered form in authorized denominations registered in such names as the
Representatives may request in writing to the Company not later than two full
business days prior to the First Time of Purchase or Second Time of Purchase,
as the case may be, or if no such request is received, in the names of the
respective Underwriters for the respective number of shares of Firm Securities,
set forth opposite the name of each Underwriter in Schedule II, and in the case
of Additional Securities, for the respective number of shares determined in
accordance with Section 1 hereof, in each case in denominations selected by the
Company.
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The Company agrees to make the Securities available for
inspection by the Underwriters at the offices of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation at least 24 hours prior to the First Time of Purchase,
or the Second Time of Purchase, as the case may be, in definitive, fully
registered form, and as requested pursuant to the preceding paragraph.
3. Conditions of Underwriters' Obligations: The several obligations
of the Underwriters hereunder are subject to the accuracy of the warranties and
representations on the part of the Company and to the following other
conditions:
(a) That all legal proceedings to be taken in connection with
the issue and sale of the Securities shall be reasonably satisfactory in
form and substance to ▇▇▇▇▇ & ▇▇▇▇▇ LLP, of Dallas, Texas, counsel to
the Underwriters.
(b) That, at the First Time of Purchase and the Second Time of
Purchase, the Representatives shall be furnished with the following
opinions, dated the day of the First Time of Purchase or Second Time of
Purchase, as the case may be:
(1) Opinions of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, Esq., and
Messrs. Sidley & Austin, of Chicago, Illinois, counsel to the Company,
substantially to the effect set forth in Exhibits A and B to this
Agreement; and
(2) Opinion of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, of Dallas, Texas,
counsel to the Underwriters, substantially to the effect set forth in
Exhibit C to this Agreement.
(c) That, on each of the date hereof, the date of the First
Time of Purchase and the date of the Second Time of Purchase, the
Representatives shall have received a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP in
form and substance satisfactory to the Representatives, on and dated as
of such date, (i) confirming that they are independent public
accountants within the meaning of the Act and the applicable published
rules and regulations of the Commission thereunder, (ii) stating that in
their opinion the financial statements examined by them and included in
the Registration Statement, the unaudited pro forma statements of income
and the related notes thereto set forth or included in the Registration
Statement and the Prospectus with respect to the Company and the
unaudited pro forma balance sheet and the related notes thereto set
forth or included in the Registration Statement and the Prospectus with
respect to the Company, complied as to form in all material respects
with the applicable accounting requirements of the Commission, including
applicable published rules and regulations of the Commission, and (iii)
covering, as of a date not more than five business days prior to the
date of such letter, such other matters as the Representatives
reasonably request.
(d) That, between the date of the execution of this Agreement
and the First Time of Purchase or the Second Time of Purchase, as the
case may be, no material and adverse change shall have occurred in the
business, properties or financial condition of the Company and its
subsidiaries (as defined in Rule 405 under the Act, and hereafter called
the
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"Subsidiaries"), taken as a whole, which, in the judgment of the
Representatives, after reasonable inquiries on the part of the
Representatives, impairs the marketability of the Securities (other than
changes referred to in or contemplated by the Registration Statement or
Prospectus).
(e) That, prior to the First Time of Purchase and Second Time
of Purchase, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Act by the
Commission or proceedings therefor initiated or threatened.
(f) That, at the First Time of Purchase and Second Time of
Purchase, the Company shall have delivered to the Representatives a
certificate of an executive officer of the Company to the effect that,
to the best of his knowledge, information and belief there shall have
been no material adverse change in the business, properties or financial
condition of the Company and its Subsidiaries, taken as a whole, from
that set forth in the Registration Statement or Prospectus (other than
changes referred to in or contemplated by the Registration Statement or
Prospectus).
(g) That the Company shall have performed such of its
obligations under this Agreement as are to be performed at or before the
First Time of Purchase and Second Time of Purchase by the terms hereof.
(h) That any additional documents or agreements reasonably
requested by the Representatives or their counsel to permit the
Underwriters to perform their obligations or permit their counsel to
deliver opinions hereunder shall have been provided to them.
(i) That any filing of the Prospectus and any supplements
thereto required pursuant to Rule 424 under the Act have been made in
compliance with Rule 424 in the time periods provided by Rule 424, or at
such later time as may be acceptable to the Representatives.
(j) That the Securities, at the First Time of Purchase in the
case of the Firm Securities, and at the Second Time of Purchase in the
case of the Additional Securities, shall have been duly listed, subject
to notice of issuance, on the New York Stock Exchange.
4. Conditions of the Company's Obligations: The obligations of the
Company hereunder are subject to the satisfaction of the condition set forth in
Section 3(e).
5. Certain Covenants of the Company: In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) To use its best efforts to cause any post-effective
amendments to the Registration Statement to become effective as promptly
as possible. During the time when a Prospectus is required to be
delivered under the Act, the Company will comply so far as it is able
with all requirements imposed upon it by the Act and the rules and
regulations of the Commission to the extent necessary to permit the
continuance of sales of or dealings
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in the Securities in accordance with the provisions hereof and of the
Prospectus.
(b) To deliver to each of the Representatives a conformed copy
of the Registration Statement (including all exhibits thereto) and full
and complete sets of all comments of the Commission or its staff and all
responses thereto with respect to the Registration Statement and to
furnish to the Representatives, for each of the Underwriters, conformed
copies of the Registration Statement without exhibits.
(c) As soon as the Company is advised thereof, the Company
will advise the Representatives and confirm the advice in writing of:
(i) the effectiveness of any amendment to the Registration Statement,
(ii) any request made by the Commission for amendments to the
Registration Statement or Prospectus or for additional information with
respect thereto, (iii) the suspension of qualification of the Securities
for sale under Blue Sky or state securities laws, and (iv) the entry of
a stop order suspending the effectiveness of the Registration Statement
or of the initiation or threat of any proceedings for that purpose and,
if such a stop order should be entered by the Commission, to make every
reasonable effort to obtain the lifting or removal thereof.
(d) To deliver to the Underwriters, without charge, as soon as
practicable, and from time to time during such period of time (not
exceeding nine months) after the date of the Prospectus as they are
required by law to deliver a prospectus, as many copies of the
Prospectus (as supplemented or amended if the Company shall have made
any supplements or amendments thereto) as the Representatives may
reasonably request; and in case any Underwriter is required to deliver a
prospectus after the expiration of nine months after the date of the
Prospectus, to furnish to the Representatives, upon request, at the
expense of such Underwriter, a reasonable quantity of a supplemental
prospectus or of supplements to the Prospectus complying with Section
10(a)(3) of the Act.
(e) For such period of time (not exceeding nine months) after
the date of the Prospectus as the Underwriters are required by law to
deliver a prospectus in respect of the Securities, if any event shall
have occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it becomes necessary to amend or
supplement the Prospectus to comply with law, to forthwith prepare and
file with the Commission an appropriate amendment or supplement to the
Prospectus and deliver to the Underwriters, without charge, such number
of copies thereof as may be reasonably requested.
(f) To make generally available to the Company's security
holders, as soon as practicable, an "earning statement" (which need not
be audited by independent public accountants) covering a twelve-month
period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, which shall comply in
all material respects with and satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act.
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(g) To use its best efforts to qualify the Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to pay (or cause
to be paid), or reimburse (or cause to be reimbursed) the Underwriters
and their counsel for, reasonable filing fees and expenses in connection
therewith (including the reasonable fees and disbursements of counsel to
the Underwriters and filing fees and expenses paid and incurred prior to
the date hereof), provided, however, that the Company shall not be
required to qualify to do business as a foreign corporation or as a
securities dealer or to file a general consent to service of process or
to file annual reports or to comply with any other requirements deemed
by the Company to be unduly burdensome.
(h) To pay all expenses, fees and taxes (other than transfer
taxes on sales by the respective Underwriters) in connection with the
issuance and delivery of the Securities, except that the Company shall
be required to pay the fees and disbursements (other than disbursements
referred to in paragraph (g) of this Section 5) of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, of
Dallas, Texas, counsel to the Underwriters, only in the events provided
in paragraph (i) of this Section 5, the Underwriters hereby agreeing to
pay such fees and disbursements in any other event, and that except as
provided in Section (i), the Company shall not be responsible for any
out-of-pocket expenses of the Underwriters in connection with their
services hereunder.
(i) If the Underwriters shall not take up and pay for the Firm
Securities due to the failure of the Company to comply with any of the
conditions specified in Section 3 hereof, or, if this Agreement shall be
terminated in accordance with the provisions of Section 11 hereof prior
to the First Time of Purchase, to pay the reasonable fees and
disbursements of ▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to the Underwriters, and, if
the Underwriters shall not take up and pay for the Firm Securities due
to the failure of the Company to comply with any of the conditions
specified in Section 3 hereof, to reimburse the Underwriters for their
reasonable out-of-pocket expenses, in an aggregate amount not exceeding
a total of $3,000, incurred in connection with the financing
contemplated by this Agreement.
(j) Prior to the termination of the offering of the
Securities, not to file any amendment to the Registration Statement or
supplement to the Prospectus (including the Basic Prospectus) unless the
Company has furnished the Representatives and counsel to the
Underwriters with a copy for their review and comment a reasonable time
prior to filing and has reasonably considered any comments of the
Representatives, or any such amendment or supplement to which such
counsel shall reasonably object on legal grounds in writing, after
consultation with the Representatives.
(k) To furnish the Representatives with copies of all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act subsequent to the time the
Registration Statement becomes effective and prior to the termination of
the offering of the Securities.
(l) So long as may be required by law for the distribution of
the Securities by the Underwriters or by any dealers that participate in
the
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distribution thereof, the Company will comply with all requirements
under the Exchange Act relating to the timely filing with the Commission
of its reports pursuant to Section 13 of the Exchange Act and of its
proxy statements pursuant to Section 14 of the Exchange Act.
(m) To use its best efforts to cause the Securities to be
listed on the New York Stock Exchange, subject only to official notice
of issuance and evidence of satisfactory distribution on or prior to the
First Time of Purchase, in the case of the Firm Securities, and on or
prior to the Second Time of Purchase, in the case of the Additional
Securities.
(n) To pay all expenses in connection with any review of the
offering of the Securities by the National Association of Securities
Dealers, Inc.
6. Representations and Warranties of the Company: The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Registration Statement has become effective under the
Act; a true and correct copy of the Registration Statement in the form
in which it became effective has been delivered to each of the
Representatives and to the Representatives for each of the Underwriters
(except that copies delivered for the Underwriters excluded exhibits to
such Registration Statement); any filing of the Prospectus and any
supplements thereto required pursuant to Rule 424(b) have been or will
be made in the manner required by Rule 424(b) and within the time period
required by Section 3(j) hereof; no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purposes are pending before or, to the knowledge of
the Company, threatened by the Commission. On the effective date of the
Registration Statement, the Registration Statement and the Basic
Prospectus complied, or were deemed to have complied, and on its
respective issue date, each preliminary prospectus filed pursuant to
Rule 424(b) complied, and the Basic Prospectus complied, and on its
issue date, the Prospectus will comply, or will be deemed to comply, in
all material respects with the applicable provisions of the Act and the
published rules and regulations of the Commission; none of the
Registration Statement on its effective date, the Basic Prospectus on
its issue date, or any other preliminary prospectus, on its issue date,
contained any 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 the Prospectus, as of its issue
date and, as amended or supplemented, if applicable, as of the First
Time of Purchase and Second Time of Purchase, will not contain any
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, except that
the Company makes no warranty or representation to any Underwriter with
respect to any statements or omissions made therein in reliance upon and
in conformity with information furnished in writing to the Company by,
or through the Representatives on behalf of, any Underwriter expressly
for use therein.
(b) The documents incorporated by reference in the
Registration Statement, any preliminary prospectus, the Basic Prospectus
and the Prospectus, when they were filed (or, if an amendment with
respect to any
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such document was filed, when such amendment was filed) with the
Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the Commission
promulgated thereunder, and any further documents so filed and
incorporated by reference will, when they are filed with the Commission,
conform in all material respects to the requirements of the Exchange Act
and the rules and regulations of the Commission promulgated thereunder;
none of such documents, when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and no such further document, when it is filed,
will contain an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
are made, not misleading.
(c) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Michigan and has all requisite authority to own or lease its
properties and conduct its business as described in the Prospectus and
to consummate the transactions contemplated hereby, and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business as described in the
Prospectus or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified
or be in good standing would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole. Each significant
subsidiary (as defined in Rule 405 under the Act, and hereinafter called
a "Significant Subsidiary") of the Company has been duly organized and
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has all requisite authority to
own or lease its properties and conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business as
described in the Prospectus or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
(d) The pro forma consolidated balance sheets and consolidated
and statements of income and the related notes thereto set forth or
included or incorporated by reference in the Registration Statement and
the Prospectus with respect to the Company have been prepared in
accordance with the applicable requirements of Regulation S-X
promulgated under the Exchange Act, have been compiled on the pro forma
basis described therein and, in the opinion of the Company, the
assumptions used in the preparations thereof were reasonable at the time
made and the adjustments used therein are based upon good faith
estimates and assumptions believed by the Company to be reasonable at
the time made.
(e) The shares of Common Stock of the Company outstanding
prior to the issuance of the Securities have been duly authorized and
are validly issued, fully paid and non-assessable.
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(f) The Company's Articles of Incorporation and all amendments
thereto to date have been duly authorized and all necessary corporate
and shareholder action and all necessary filings pursuant to the laws of
the State of Michigan in connection therewith have been taken, obtained
or made.
(g) The Securities have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Securities will not be subject to any preemptive or similar rights.
(h) The capital stock of the Company conforms in all material
respects to the description thereof in the Prospectus.
(i) Each of the Company and its Significant Subsidiaries has
all necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole.
(j) No order, license, consent, authorization or approval of,
or exemption by, or the giving of notice to, or the registration with
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, and no filing,
recording, publication or registration in any public office or any other
place, was or is now required to be obtained by the Company to authorize
its execution or delivery of, or the performance of its obligations
under, this Agreement or the Securities, except such as have been
obtained or may be required under state securities or Blue Sky laws or
as referred to in the Basic Prospectus. Each of the Company and its
Significant Subsidiaries has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the manner
described in the Basic Prospectus, except to the extent that the failure
to obtain or file would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
(k) Neither the execution or delivery by the Company of, nor
the performance by the Company of its obligations under, this Agreement
did or will conflict with, result in a breach of any of the terms or
provisions of, or constitute a default or require the consent of any
party under the Company's Articles of Incorporation or by-laws, any
material agreement or instrument to which it is a party, any existing
applicable law, rule or regulation or any judgment, order or decree of
any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its properties
or assets, or did or will result in the creation or imposition of any
lien on the Company's properties or assets.
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(l) Except as disclosed in the Basic Prospectus, there is no
action, suit, proceeding, inquiry or investigation (at law or in equity
or otherwise) pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary by any governmental authority that
(i) questions the validity, enforceability or performance of this
Agreement or the Securities or (ii) if determined adversely, is likely
to have a material adverse effect on the business or financial condition
of the Company and its Subsidiaries, taken as a whole, or materially
adversely affect the ability of the Company to perform its obligations
hereunder or the consummation of the transactions contemplated by this
Agreement.
(m) There has not been any material and adverse change in the
business, properties or financial condition of the Company and its
Subsidiaries, taken as a whole, from that set forth in the Registration
Statement (other than changes referred to in or contemplated by the
Registration Statement or the Basic Prospectus).
(n) Except as set forth in the Basic Prospectus, no event or
condition exists that constitutes, or with the giving of notice or lapse
of time or both would constitute, a default or any breach or failure to
perform by the Company or any of its Significant Subsidiaries in any
material respect under any indenture, mortgage, loan agreement, lease or
other material agreement or instrument to which the Company or any of
its Significant Subsidiaries is a party or by which it or any of its
Significant Subsidiaries, or any of their respective properties, may be
bound.
7. Representation and Warranties of Underwriters: Each Underwriter
warrants and represents that the information, if any, furnished in writing to
the Company through the Representatives expressly for use in the Registration
Statement and Prospectus is correct in all material respects as to such
Underwriter. Each Underwriter, in addition to other information furnished to
the Company for use in the Registration Statement and Prospectus, herewith
furnishes to the Company for use in the Registration Statement and Prospectus,
the information stated herein with regard to the public offering, if any, by
such Underwriter and represents and warrants that such information is correct
in all material respects as to such Underwriter.
8. Indemnification:
(a) The Company agrees, to the extent permitted by law, to
indemnify and hold harmless each of the Underwriters and each person, if
any, who controls any such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act or otherwise, and to
reimburse the Underwriters and such controlling person or persons, if
any, for any legal or other expenses incurred by them in connection with
defending any action, suit or proceeding (including governmental
investigations) as provided in Section 8(b) hereof, insofar as such
losses, claims, damages, liabilities or actions, suits or proceedings
(including governmental investigations) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any
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preliminary prospectus as of its issue date (if used prior to the date
of the Basic Prospectus), the Basic Prospectus (if used prior to the
date of the Prospectus), the Prospectus, or, if the Prospectus shall be
amended or supplemented, in the Prospectus as so amended or supplemented
(if such Prospectus or such Prospectus as amended or supplemented is
used after the period of time referred to in Section 5(e) hereof, it
shall contain or be used with such amendments or supplements as the
Company deems necessary to comply with Section 10(a) of the Act), or
arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or actions arise out of or are
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission which was made in such preliminary
prospectus, Basic Prospectus, Registration Statement or Prospectus, or
in the Prospectus as so amended or supplemented, in reliance upon and in
conformity with information furnished in writing to the Company by, or
through the Representatives on behalf of, any Underwriter expressly for
use therein, and except that this indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter)
on account of any losses, claims, damages, liabilities or actions, suits
or proceedings arising from the sale of the Securities to any person if
a copy of the Prospectus, as the same may then be supplemented or
amended (excluding, however, any document then incorporated or deemed
incorporated therein by reference), was not sent or given by or on
behalf of such Underwriter to such person (i) with or prior to the
written confirmation of sale involved or (ii) as soon as available after
such written confirmation, relating to an event occurring prior to the
payment for and delivery to such person of the Securities involved in
such sale, and the omission or alleged omission or untrue statement or
alleged untrue statement was corrected in the Prospectus as supplemented
or amended at such time.
The Company's indemnity agreement contained in this
Section 8(a), and the covenants, representations and warranties of the
Company contained in this Agreement, shall remain in full force and
effect regardless of any investigation made by or on behalf of any
person, and shall survive the delivery of and payment for the Securities
hereunder, and the indemnity agreement contained in this Section 8 shall
survive any termination of this Agreement. The liabilities of the
Company in this Section 8(a) are in addition to any other liabilities of
the Company under this Agreement or otherwise.
(b) Each Underwriter agrees, severally and not jointly, to the
extent permitted by law, to indemnify, hold harmless and reimburse the
Company, its directors and such of its officers as shall have signed the
Registration Statement, each other Underwriter and each person, if any,
who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, to
the same extent and upon the same terms as the indemnity agreement of
the Company set forth in Section 8(a) hereof, but only with respect to
alleged untrue statements or omissions made in the Registration
Statement, the Basic Prospectus or in the Prospectus, as amended or
supplemented, (if applicable) in reliance upon and in conformity with
information furnished in writing to the Company by such Underwriter
expressly for use therein.
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The indemnity agreement on the part of each Underwriter
contained in this Section 8(b) and the representations and warranties of
such Underwriter contained in this Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Company or any other person, and shall survive the delivery of and
payment for the Securities hereunder, and the indemnity agreement
contained in this Section 8(b) shall survive any termination of this
Agreement. The liabilities of each Underwriter in Section 8(b) are in
addition to any other liabilities of such Underwriter under this
Agreement or otherwise.
(c) If a claim is made or an action, suit or proceeding
(including governmental investigations) is commenced or threatened
against any person as to which indemnity may be sought under Section
8(a) or 8(b), such person (the "Indemnified Person") shall notify the
person against whom such indemnity may be sought (the "Indemnifying
Person") promptly after any assertion of such claim threatening to
institute an action, suit or proceeding or if such an action, suit or
proceeding is commenced against such Indemnified Person, promptly after
such Indemnified Person shall have been served with a summons or other
first legal process, giving information as to the nature and basis of
the claim. Failure to so notify the Indemnifying Person shall not,
however, relieve the Indemnifying Person from any liability which it may
have on account of the indemnity under Section 8(a) or 8(b) if the
Indemnifying Person has not been prejudiced in any material respect by
such failure. The Indemnifying Person shall assume the defense of any
such litigation or proceeding, including the employment of counsel and
the payment of all expenses. Such counsel shall be designated in
writing by the Representatives in the case of parties indemnified
pursuant to Section 8(b) and by the Company in the case of parties
indemnified pursuant to Section 8(a). Any Indemnified Person shall have
the right to participate in such litigation or proceeding and to retain
its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include (x) the
Indemnifying Person and (y) the Indemnified Person and, in the written
opinion of counsel to such Indemnified Person, representation of both
parties by the same counsel would be inappropriate due to actual or
likely conflicts of interest between them, in either of which cases the
reasonable fees and expenses of counsel (including disbursements) for
such Indemnified Person shall be reimbursed by the Indemnifying Person
to the Indemnified Person. If there is a conflict as described in
clause (ii) above, and the Indemnified Persons have participated in the
litigation or proceeding utilizing separate counsel whose fees and
expenses have been reimbursed by the Indemnifying Person and the
Indemnified Persons, or any of them, are found to be solely liable, such
Indemnified Persons shall repay to the Indemnifying Person such fees and
expenses of such separate counsel as the Indemnifying Person shall have
reimbursed. It is understood that the Indemnifying Person shall not, in
connection with any litigation or proceeding or related litigation or
proceedings in the same jurisdiction as to which the Indemnified Persons
are entitled to such separate representation, be liable under this
Agreement for the reasonable fees and out-of-pocket expenses of more
than one separate firm (together with not
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more than one appropriate local counsel) for all such Indemnified
Persons. Subject to the next paragraph, all such fees and expenses
shall be reimbursed by payment to the Indemnified Persons of such
reasonable fees and expenses of counsel promptly after payment thereof
by the Indemnified Persons.
In furtherance of the requirement above that fees and
expenses of any separate counsel for the Indemnified Persons shall be
reasonable, the Representatives and the Company agree that the Indemnifying
Person's obligations to pay such fees and expenses shall be conditioned upon
the following:
(1) in case separate counsel is proposed to be retained
by the Indemnified Persons pursuant to clause (ii) of the preceding
paragraph, the Indemnified Persons shall in good faith fully consult
with the Indemnifying Person in advance as to the selection of such
counsel; and
(2) reimbursable fees and expenses of such separate
counsel shall be detailed and supported in a manner reasonably
acceptable to the Indemnifying Person (but nothing herein shall be
deemed to require the furnishing to the Indemnifying Person of any
information, including without limitation, computer print-outs of
lawyers' daily time entries, to the extent that, in the judgment of such
counsel, furnishing such information might reasonably be expected to
result in a waiver of any attorney-client privilege); and
(3) the Company and the Representatives shall cooperate
in monitoring and controlling the fees and expenses of separate counsel
for Indemnified Persons for which the Indemnifying Person is liable
hereunder, and the Indemnified Person shall use every reasonable effort
to cause such separate counsel to minimize the duplication of activities
as between themselves and counsel to the Indemnifying Person.
The Indemnifying Person shall not be liable for any
settlement of any litigation or proceeding effected without the written consent
of the Indemnifying Person, but if settled with such consent or if there be a
final judgment for the plaintiff, the Indemnifying Person agrees, subject to
the provisions of this Section 8, to indemnify the Indemnified Person from and
against any loss, damage, liability or expenses by reason of such settlement or
judgment. The Indemnifying Person shall not, without the prior written consent
of the Indemnified Persons, effect any settlement of any pending or threatened
litigation, proceeding or claim in respect of which indemnity has been properly
sought by the Indemnified Persons hereunder, unless such settlement includes an
unconditional release by the claimant of all Indemnified Persons from all
liability with respect to claims which are the subject matter of such
litigation, proceeding or claim.
9. Contribution: If the indemnification provided for in Section 8
above is unavailable to or insufficient to hold harmless an Indemnified Person
under such Section in respect of any losses, claims, damages or liabilities (or
actions, suits or proceedings (including governmental investigations) in
respect thereof) referred to therein, then each Indemnifying Person under
Section 8 shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (or actions
in respect thereof)
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15
in such proportion as is appropriate to reflect the relative benefits received
by the Indemnifying Person on the one hand and the Indemnified Person on the
other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law, then each Indemnifying Person shall contribute to such amount paid or
payable by such Indemnified Person in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of each
Indemnifying Person, if any, on the one hand and the Indemnified Person on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental investigations) in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the total underwriting
discounts and commission received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus, bear to the aggregate
public offering price of the Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro forma allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 9. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages or liabilities (or actions, suits or proceedings
(including governmental proceedings) in respect thereof) referred to above in
this Section 9 shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Person in connection with investigating
or defending any such action, suits or proceedings (including governmental
proceedings) or claim, provided that the provisions of Section 8 have been
complied with (in all material respects) in respect of any separate counsel for
such Indemnified Person. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount greater than the excess
of (i) the total price at which the Securities underwritten by it and
distributed to the public were offered to the public over (ii) the amount of
any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this Section 9 to contribute are several in proportion to their respective
underwriting obligations and not joint.
The agreement with respect to contribution contained in
Section 9 hereof shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter, and shall
survive delivery of and payment for the Securities hereunder and any
termination of this Agreement.
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10. Substitution of Underwriters: If any Underwriter under this
agreement shall fail or refuse (otherwise than for some reason sufficient to
justify in accordance with the terms hereof, the termination of its obligations
hereunder) to purchase the Securities which it had agreed to purchase on the
First Time of Purchase or Second Time of Purchase, the Representatives shall
immediately notify the Company and the Representatives and the other
Underwriters may, within 36 hours of the giving of such notice, determine to
purchase, or to procure one or more other members of the National Association
of Securities Dealers, Inc. ("NASD") (or, if not members of the NASD, who are
foreign banks, dealers or institutions not registered under the Securities
Exchange Act and who agree in making sales to comply with the NASD's Rules of
Fair Practice), satisfactory to the Company, to purchase, upon the terms herein
set forth, the number of shares of Securities which the defaulting Underwriter
had agreed to purchase. If any non-defaulting Underwriter or Underwriters
shall determine to exercise such right, the Representatives shall give written
notice to the Company of such determination within 36 hours after the Company
shall have received notice of any such default, and thereupon the First Time of
Purchase or Second Time of Purchase, as the case may be, shall be postponed for
such period, not exceeding three business days, as the Company shall determine.
If in the event of such a default, the Representatives shall fail to give such
notice, or shall within such 36-hour period give written notice to the Company
that no other Underwriter or Underwriters, or others, will exercise such right,
then this Agreement may be terminated by the Company, upon like notice given to
the Representatives within a further period of 36 hours. If in such case the
Company shall not elect to terminate this Agreement, it shall have the right,
irrespective of such default:
(a) to require such non-defaulting Underwriters to purchase
and pay for the respective number of shares which they had severally
agreed to purchase hereunder, as hereinabove provided, and, in addition,
the number of shares of Securities which the defaulting Underwriter
shall have so failed to purchase up to a number of shares thereof equal
to one-ninth (1/9) of the respective number of shares of Securities
which such non-defaulting Underwriters have otherwise agreed to purchase
hereunder; and/or
(b) to procure one or more other members of the NASD (or, if
not members of the NASD, who are foreign banks, dealers or institutions
not registered under the Exchange Act and who agree in making sales to
comply with the NASD's Rules of Fair Practice), to purchase, upon the
terms herein set forth, the number of shares of Securities which such
defaulting Underwriter had agreed to purchase, or that portion thereof
which the remaining Underwriters shall not be obligated to purchase
pursuant to the foregoing clause (a).
In the event the Company shall exercise its rights under
clause (a) and/or (b) above, the Company shall give written notice thereof to
the Representatives within such further period of 36 hours, and thereupon the
First Time of Purchase or the Second Time of Purchase shall be postponed for
such period, not exceeding five business days, as the Company shall determine.
In the event the Company shall be entitled to but shall not elect to exercise
its rights under clause (a) and/or (b), the Company shall be deemed to have
elected to terminate this Agreement.
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Any action taken by the Company under this Section 10
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement. Termination by the Company
under this Section 10 shall be without any liability on the part of the Company
or any non-defaulting Underwriter.
In the computation of any period of 36 hours referred to
in this Section 10, there shall be excluded a period of 24 hours in respect of
each Saturday, Sunday or legal holiday which would otherwise be included in
such period of time.
11. Termination of Agreement: This Agreement may be terminated at any
time prior to the First Time of Purchase, and the option referred to in Section
1 hereof, if exercised, may be canceled at any time prior to the Second Time of
Purchase, by the Representatives, if prior to such time (i) trading generally
in securities on the New York Stock Exchange shall have been suspended by the
Commission or the New York Stock Exchange, or there shall have been established
by the Commission or the New York Stock Exchange or by any federal or state
agency or by the decision of any court any general limitation on prices for
such trading or any general restrictions on the distribution of securities,
(ii) a general moratorium on commercial banking activities in New York shall
have been declared by federal or New York State authorities or (iii) there
shall have occurred any outbreak or material escalation of hostilities or any
material adverse disruption in financial markets or any calamity or crisis, the
effect of which on the financial markets of the United States is such as to
impair, in the Representatives' reasonable judgment, after having made due
inquiry, the marketability of the Securities.
If the Representatives elect to terminate this Agreement,
as provided in this Section 11, the Representatives will promptly notify the
Company and each other Underwriter by telephone or telecopy, confirmed by
letter. If this Agreement shall not be carried out by any Underwriter for any
reason permitted hereunder, or if the sale of the Securities to the
Underwriters as herein contemplated shall not be carried out because the
Company is not able to comply with the terms hereof, the Company shall not be
under any obligation under this Agreement and shall not be liable to any
Underwriter or to any member of any selling group for the loss of anticipated
profits from the transactions contemplated by this Agreement and the
Underwriters shall be under no liability to the Company nor be under any
liability under this Agreement to one another.
Notwithstanding the foregoing, the provisions of Sections
5(g), 5(i), 8 and 9 shall survive any termination of this Agreement.
12. Notices: All notices hereunder shall, unless otherwise expressly
provided, be in writing and be delivered at or mailed to the following
addresses or be sent by telecopy as follows: if to the Underwriters or the
Representatives, to the Representatives at the address or number, as
appropriate, designated in Schedule I hereto, and, if to the Company, to (i)
CMS NOMECO Oil & Gas Co., Attention: Vice President, Secretary and Treasurer,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and (ii) CMS Energy
Corporation, Attention: Senior Vice President - Finance, Fairlane Plaza South,
Suite 1100, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy:
313-436-9548).
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13. Parties in Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Company (including the
directors thereof and such of the officers thereof as shall have signed the
Registration Statement), and the controlling persons, if any, referred to in
Section 8 hereof, and their respective successors, assigns, executors and
administrators, and, except as expressly otherwise provided in Section 10
hereof, no other person shall acquire or have any right under or by virtue of
this Agreement.
14. Definition of Certain Terms: The term "Underwriters", as used
herein, shall be deemed to mean the several persons, firms or corporations,
named in Schedule II hereto (including the Representatives herein mentioned, if
so named), and the term "Representatives", as used herein, shall be deemed to
mean the representative or representatives designated by, or in the manner
authorized by, the Underwriters in Schedule I hereto. All obligations of the
Underwriters hereunder are several and not joint. If there shall be only one
person, firm or corporation named in Schedule I and Schedule II hereto, the
term "Underwriters" and the term "Representatives", as used herein, shall mean
such person, firm or corporation. If the firm or firms listed in Schedule I
hereto are the same as the firm or firms listed in Schedule II hereto, then the
terms "Underwriters" and "Representatives", as used herein, shall each be
deemed to refer to such firm or firms. The term "successors" as used in this
Agreement shall not include any purchaser, as such purchaser, of any of the
Securities from any of the respective Underwriters.
15. Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
16. Counterparts: This Agreement may be executed by any one or more
of the parties hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
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If the foregoing is in accordance with your understanding,
please sign and return to us counterparts hereof, and upon the acceptance
hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement between each of the Underwriters and the Company.
Very truly yours,
CMS NOMECO OIL & GAS CO.
By:_________________________
Accepted:_________________, 1995
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Salomon Brothers Inc.
As Representatives
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
By:__________________________________
20
Schedule I
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
Salomon Brothers Inc.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
Telecopy:
21
Schedule II
Number of Firm Shares
Underwriter To Be Purchased
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation . . . . . . . . . . . . . . . . . . . . . ______________
Bear, ▇▇▇▇▇▇▇ & Co. Inc. . . . . . . . . . . . . . . . . . . . . . ______________
Salomon Brothers Inc. . . . . . . . . . . . . . . . . . . . . . . . ______________
Total . . . . . . . . . . . . . .
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