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EXHIBIT 1-36
THE DETROIT EDISON COMPANY
REMARKETED SECURED NOTES
DISTRIBUTION AGREEMENT
[ ]
[AGENTS]
Ladies and Gentlemen:
The Detroit Edison Company, a Michigan corporation (the "Company"),
proposes to issue and sell up to $ aggregate principal amount of its
Remarketed Secured Notes (the "Notes") in one or more offerings on terms to be
determined at the time of sale. The Notes will be issued pursuant to a
collateral trust indenture, dated as of June 30, 1993, as amended and
supplemented from time to time (together, the "Indenture"), between the Company
and Bankers Trust Company, as trustee (the "Note Trustee"). Each issue of Notes
may vary as to aggregate principal amount, maturity date and any other variable
terms which the Indenture contemplates may be set forth in the Notes as issued
from time to time.
Payment of the principal of, premium, if any, and interest on each
series of Notes is to be secured by the pledge by the Company to the Note
Trustee of a general and refunding mortgage bond (each, a "Pledged Bond") to be
issued under the Mortgage and Deed of Trust, dated as of October 1, 1924,
between the Company and Bankers Trust Company, as trustee ("Mortgage Trustee"),
as amended and supplemented by various supplemental indentures including the
supplemental indenture creating each Pledged Bond (the "Mortgage").
Prior to each offering of the Notes the Company shall enter into a
terms agreement substantially in the form of Exhibit A hereto (the "Terms
Agreement"). From and after the date of the execution and delivery of the Terms
Agreement, this Agreement shall be deemed to incorporate the Terms Agreement. As
used herein, "you" and "your", unless the context otherwise requires, shall mean
such of the parties, if any, to whom this Agreement is addressed as are named in
the Terms Agreement or any additional parties specifically identified as agents
or underwriters in the Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (File No. 333- ) on Form S-3 relating to
the Notes and the offering thereof from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Act"), and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file
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such additional amendments thereto and such amended prospectuses as may
hereafter be required. Such registration statement (as amended, if applicable)
and the prospectus constituting a part thereof (including in each case the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act), as from time to time amended or supplemented pursuant to the
Act, are hereinafter referred to as the "Registration Statement" and the
"Prospectus", respectively; provided, however, that a supplement to the
Prospectus prepared pursuant to Section 3(a) hereof (a "Prospectus Supplement")
shall be deemed to have supplemented the Prospectus only with respect to the
offering of Notes to which it relates.
1. Representations and Warranties of the Company. The Company
represents and warrants to you as of the date hereof, and to each of you named
in the Terms Agreement as of the date thereof (such later date being hereinafter
referred to as the "Representation Date") as follows:
a. The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
b. (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement (including material
incorporated by reference therein), when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any 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, (iii) the
Registration Statement and the Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with
the Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Registration Statement and the Prospectus do
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to you furnished to the Company in writing by you expressly
for use therein or (B) to those parts of the Registration Statement
that constitute the Statement of Eligibility (the "Form T-1") under the
Trust Indenture Act of the Note Trustee or the Mortgage Trustee.
c. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Michigan,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
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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. Each of this Agreement and, on the applicable Representation Date,
the Terms Agreement has been duly authorized, executed and delivered by
the Company.
e. Each of the Indenture and the Mortgage has been duly qualified
under the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
f. The forms of Notes have been duly authorized and established in
conformity with the provisions of the Indenture and, when the Notes
have been executed and authenticated in accordance with the provisions
of the Indenture and delivered and duly paid for as contemplated
hereby, the Notes will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
g. The Pledged Bond has been duly authorized and established in
conformity with the provisions of the Mortgage and, when the Pledged
Bond has been executed and authenticated in accordance with the
provisions of the Mortgage and pledged to the Note Trustee as
contemplated by the Indenture, the Pledged Bond will be entitled to the
benefits of the Mortgage and will be a valid and binding obligation of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and the payments of
the principal of, premium, if any, and interest on the Notes to which a
Terms Agreement relates are secured by the related Pledged Bond.
h. The execution and delivery by the Company of this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, and the performance by the Company of its obligations
under this Agreement, the applicable Terms Agreement, the Notes, the
Indenture, the Pledged Bond and the Mortgage will not contravene any
provision of applicable law or the articles of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment,
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order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency not already obtained is required for the
performance by the Company of its obligations under this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, except such as may be required by the securities or
blue sky laws of the various states in connection with the offer and
sale of the Notes.
i. There has not been any material adverse change, or any development
involving a prospective material adverse change (in either case, not in
the ordinary course of business), in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
j. Other than as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference
as exhibits to the Registration Statement that are not described, filed
or incorporated as required.
k. Each of the Company and its 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 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.
l. Assuming that the Note Trustee holds the Pledged Bond as provided
in the Indenture, the Indenture creates a valid and perfected first
priority security interest in the Pledged Bond.
m. The Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all
of those properties, except pollution control facilities standing in
the names of certain municipalities which are being purchased by the
Company pursuant to installment sales contracts and the undivided
ownership interest of Michigan Public Power Agency in a portion of the
Belle River Power Plant, in each case as described in the Prospectus,
which constitute or on which there are erected its principal plants,
generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of
real estate)and
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improvements thereon, subject to the lien of the Mortgage and to minor
exceptions and minor defects, irregularities and deficiencies which, in
the opinion of the Company, do not materially impair the use of such
property for the purpose for which it is held by the Company, and the
Company has adequate rights to maintain and operate such of its
transmission and distribution facilities as are located on public or
other property not owned by the Company.
n. The Mortgage is a first lien (subject to no prior liens, charges,
encumbrances or security interests, except current taxes and
assessments not yet due and minor encumbrances which do not materially
impair the use of such property for the purpose for which it is held by
the Company) duly filed and recorded, on substantially all of the
Company's tangible properties and franchises (other than items
purchased for resale in the ordinary course of business) and (subject
to the necessity for particular filings and recordings in the case of
certain personal property such as railroad rolling stock) will
constitute a like lien on any such properties hereafter acquired by the
Company except that any such after-acquired property will be subject to
prior liens and encumbrances, if any, existing when acquired by the
Company, except that the Mortgage will not become a lien upon
after-acquired real property in a new county until it has been duly
filed and recorded and except that the Mortgage may not be effective as
to property acquired subsequent to the filing of a case with respect to
the Company under the Bankruptcy Code.
Any certificate signed by any director or officer of the Company and
delivered to you in connection with an offering of Notes or the sale of Notes
shall be deemed a representation and warranty by the Company to you as to the
matters covered thereby on the date of such certificate and at each
Representation Date subsequent thereto.
2. Solicitations as Agent; Purchases as Principal.
a. The Company may sell Notes directly to purchasers, in which case
you will act as agent of the Company and use your reasonable efforts to
solicit offers to purchase Notes, or the Company may sell Notes to you
as principal for resale to purchasers.
b. Your engagement as agent for the Company or your commitment to
purchase Notes as principal 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. The Terms Agreement shall specify whether the Notes subject
thereto are being sold by the Company through you as agent or to you as
principal, the principal amount of Notes to be sold through or
purchased by you pursuant thereto, as applicable, the commission to be
paid by the Company to you as agent (which shall be expressed as a
percentage of the principal amount of each Note sold by the Company as
a result of a solicitation made by you) or the price to be paid by you
to the Company for such Notes (which, if not so specified in the Terms
Agreement, shall be expressed as a discount of the public offering
price of such Notes), the time (such time being
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hereinafter referred to as a "Closing Time") and place of delivery of
and the manner of payment for such Notes, and such other provisions
(including further terms of such Notes) as may be mutually agreed upon.
3. Covenants of the Company. The Company covenants and agrees with
you, and with each of you participating in the sale or offering of Notes, as
follows:
a. Prospectus Supplements. Immediately following the execution of
each Terms Agreement, the Company will prepare a Prospectus Supplement
setting forth the principal amount of Notes covered thereby and their
terms not otherwise specified in the Prospectus, the names of such of
you as are participating in the offering and the commissions or
discounts received by you in connection with such offering, the initial
public offering price, the selling concession and reallowance, if any,
and such other information as you and the Company deem appropriate in
connection with the offering of the Notes. The Company will promptly
transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 of the rules and regulations under the Act.
b. Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus whether by
the filing of documents pursuant to the Exchange Act, the Act or
otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed a reasonable time in
advance of such proposed filing, and will not file any such amendment
or supplement in a form to which you shall reasonably object.
c. Notice of Certain Events. The Company will immediately notify you
(i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the receipt of any comments from the Commission with
respect to the Registration Statement or the Prospectus, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
d. Copies of the Registration Statement. The Company will provide to
you, without charge, as many signed and conformed copies of the
Registration Statement (as originally filed) and each amendment
thereto, including any post-effective amendment thereto (in each case
including financial statements and schedules and exhibits thereto and
documents incorporated by reference therein (including exhibits
incorporated therein by reference to the extent not previously
furnished to you)) as you may reasonably request.
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e. Copies of the Prospectus. The Company will provide to you as many
copies of the Prospectus (as amended or supplemented) and Prospectus
Supplement as you may reasonably request so long as you are required to
deliver a Prospectus and Prospectus Supplement in connection with sales
or solicitations of offers to purchase Notes covered by a Terms
Agreement.
f. Revisions of Prospectus -- Material Changes. If any event occurs
as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to
amend or supplement the Registration Statement or the Prospectus to
comply with the Act, the Exchange Act or the Trust Indenture Act or the
respective rules or regulations of the Commission thereunder or any
other law, the Company will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement
or omission or effects such compliance.
g. Earning Statements. The Company, as soon as practicable, but not
later than 90 days after the close of the period covered thereby, will
make generally available to its security holders a consolidated earning
statement or statements of the Company and its subsidiaries (in form
complying with the provisions of Section 11(a) of the Act and Rule 158
promulgated thereunder) covering each twelve month period beginning not
later than the first day of the Company's fiscal quarter next following
the "effective date" (as defined in such Rule 158) of the Registration
Statement.
h. Blue Sky Qualifications. The Company will arrange for the
registration or qualification of the Notes for offering and sale and
the determination of their eligibility for investment under the
securities or blue sky laws of such jurisdictions as you may designate
and will continue such qualifications in effect for as long as may be
necessary for the distribution of the Notes, provided, however, that in
connection therewith the Company shall not be required to qualify to do
business as a foreign corporation or as a broker-dealer or to execute a
general consent to service of process in any jurisdiction. The Company
will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above
provided. The Company will promptly advise you of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of the Notes for sale in
any such state or jurisdiction or the initiating or threatening of any
proceeding for such purpose.
i. Stand-Off Agreement. During the period commencing on the date of
any Terms Agreement and ending at the Closing Time therefor, the
Company will not, without your prior written consent, directly or
indirectly, sell, offer to sell, contract to sell or otherwise dispose
of, or announce the offering of, any debt
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securities of the Company substantially similar to the Notes covered by
such Terms Agreement (other than the Notes that are to be sold pursuant
to the Terms Agreement and commercial paper in the ordinary course of
business), except as may otherwise be provided in such Terms Agreement.
j. Use of Proceeds. The Company will apply the net proceeds from the
sale of the Notes as set forth under "Use of Proceeds" in the
Prospectus.
4. Expenses. The Company will pay all reasonable costs and expenses
(it being understood that you have no obligation or liability with respect to
any costs or expenses hereunder deemed not to be reasonable) incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 8 hereof, including, but not limited to, all costs and
expenses incident to (i) the preparation, filing and printing or other
production of documents (including word processing and duplication) with respect
to such transactions, including any costs of printing the Registration Statement
and any amendment thereto and the Prospectus and Prospectus Supplement and any
amendment or supplement thereto, the Indenture, the Mortgage, the Form T-1's,
this Agreement, each Terms Agreement and such other agreements related to the
distribution of the Notes and any blue sky or legal investment memoranda (which
shall include the reasonable disbursements of your counsel relating thereto),
(ii) all arrangements relating to the delivery to you of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, accountants and any
other experts or advisors retained by the Company, (iv) preparation, printing,
issuance and delivery of certificates evidencing the Notes and each Pledged
Bond, (v) the qualification of the Notes and determination of their eligibility
for investment under state securities and blue sky laws, including filing fees
and fees and disbursements of your counsel, (vi) the fees and disbursements of
the Note Trustee and the Mortgage Trustee and their counsel, (vii) the filing
fees and expenses of the Commission relating to the Notes, (viii) any fees
charged by investment rating agencies for the rating of the Notes, and (ix) the
fees and expenses of any Depository (as defined in the Indenture) and any
nominees thereof in connection with the Notes.
5. Conditions of Obligations. Your obligation pursuant to any Terms
Agreement to solicit offers to purchase the Notes covered thereby as agent of
the Company, the obligations of any purchasers of such Notes sold through you as
agent, or your obligation to purchase such Notes as principal will be subject to
the accuracy of the representations and warranties on the part of the Company
herein contained and to the accuracy of the statements of the Company's officers
made in any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all its covenants and agreements
herein contained and to the following additional conditions precedent:
a. At the applicable Closing Time no stop order suspending the
effectiveness of the Registration Statement shall be in effect under
the Act or proceedings therefor initiated or threatened by the
Commission.
b. At the applicable Closing Time you shall have received:
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(1) The favorable opinion, dated as of the applicable Closing Time, of
Xxxxxxxxxxx X. Xxxx, Esq., Vice President and General Counsel for the
Company, in form and substance satisfactory to you, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Michigan, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(ii) the Company 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 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 consolidated subsidiaries, taken
as a whole;
(iii) each of this Agreement and the applicable Terms Agreement
has been duly authorized, executed and delivered by the Company;
(iv) each of the Indenture and the Mortgage has been duly
qualified under the Trust Indenture Act and has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(v) the forms of Notes covered by the applicable Terms
Agreement have been duly authorized and established in conformity with
the provisions of the Indenture and, when such Notes are executed by
the Company and authenticated by the Note Trustee in accordance with
the provisions of the Indenture and delivered to and duly paid for as
contemplated hereby, such Notes will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vi) the Pledged Bond relating to the Notes covered by the
applicable Terms Agreement has been duly authorized and established in
conformity with
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the provisions of the Mortgage and, when such Pledged Bond is executed
by the Company and authenticated by the Mortgage Trustee in accordance
with the provisions of the Mortgage and pledged to the Note Trustee as
contemplated by the Indenture, such Pledged Bond will be secured by the
lien of and entitled to the benefits of Mortgage and will be a valid
and binding obligation of the Company, enforceable in accordance with
its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; and the payments of the principal of, premium, if any,
and interest on the Notes covered by the applicable Terms Agreement are
secured by such Pledged Bond;
(vii) the execution and delivery by the Company of this Agreement,
the applicable Terms Agreement, the Notes, the Indenture, the Pledged
Bond and the Mortgage, and the performance by the Company of its
obligations under this Agreement, the applicable Terms Agreement, the
Notes, the Indenture, the Pledged Bond and the Mortgage will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or, to the best of such
counsel's knowledge after due inquiry, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its consolidated subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge after due inquiry,
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency not already obtained is required for the
performance by the Company of its obligations under this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, except such as may be required by the securities or
blue sky laws of the various states in connection with the offer and
sale of the Notes;
(viii) the statements set forth under the headings and
(except insofar
as such statements specify the amount of bonds which could be issued)
in the Prospectus and in the Prospectus
Supplement, insofar as such statements purport to summarize certain
provisions of the Indenture, the Notes, the Mortgage and the Pledged
Bond, provide a fair summary of such provisions and the information
with respect thereto required under the Act; and the statements set
forth under the heading "Regulatory Matters" in the Prospectus, insofar
as such statements constitute a summary of legal matters, documents or
proceedings referred to therein provide a fair summary of such legal
matters, documents and proceedings and the information with respect
thereto required under the Act;
(ix) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that are required to
be described in the Registration
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Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus, or to
be filed or incorporated by reference as exhibits to such Registration
Statement that are not described, filed or incorporated by reference as
required;
(x) the Registration Statement has been declared effective under
the Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
and such counsel is of the opinion that (1) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and schedules included
therein as to which such counsel need not express any opinion),
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and (2) each part of the Registration Statement and
Prospectus (except for financial statements and schedules indicated
therein as to which such counsel need not express any opinion, and
except for those parts of the Registration Statement that constitute
the Forms T-1, as to the requirements of Form T-1), comply as to form
in all material respects with the Act and the applicable rules and
regulations of the Commission thereunder;
(xi) assuming that the Note Trustee holds the Pledged Bond
relating to Notes covered by the applicable Terms Agreement as provided
in the Indenture, the Indenture creates a valid and perfected first
priority security interest in such Pledged Bond;
(xii) the Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all
of those properties, except pollution control facilities standing in
the names of certain municipalities which are being purchased by the
Company pursuant to installment sales contracts and the undivided
ownership interest of Michigan Public Power Agency in a portion of the
Belle River Power Plant, in each case as described in the Prospectus,
which constitute or on which there are erected its principal plants,
generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of
real estate) and improvements thereon, subject to the lien of the
Mortgage and to minor exceptions and minor defects, irregularities and
deficiencies which, in the opinion of the Company, do not materially
impair the use of such property for the purpose for which it is held by
the Company, and the Company has adequate rights to maintain and
operate such of its transmission and distribution facilities as are
located on public or other property owned by the Company; and
(xiii) the Mortgage is a first lien (subject to no prior liens,
charges, encumbrances or security interests, except current taxes and
assessments not yet due and minor encumbrances which, in such counsel's
opinion, do not materially impair the use of such property for the
purpose for which it is held by the
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Company), duly filed and recorded, on substantially all of the
Company's tangible properties and franchises (other than items
purchased for resale in the ordinary course of business) and (subject
to the necessity for particular filings and recordings in the case of
certain personal property such as railroad rolling stock) will
constitute a like lien on any such properties hereafter acquired by the
Company except that any such after-acquired property will be subject to
prior liens and encumbrances, if any, existing when acquired by the
Company, except that the Mortgage will not become a lien upon
after-acquired real property in a new county until it has been duly
filed and recorded and except that the Mortgage may not be effective as
to property acquired subsequent to the filing of a case with respect to
the Company under the Bankruptcy Code.
(2) The favorable opinion, dated as of the applicable Closing Time, of
Xxxxx & Xxxx LLP, your counsel, with respect to matters set forth in
subparagraphs (i), (iii) through (vi), inclusive and (viii) and (x)
(insofar as such subparagraph relates to the effectiveness of the
Registration Statement) of subsection (b)(1) of this Section. In
rendering such opinion, Xxxxx & Wood LLP may rely, as to matters of
Michigan law, upon the opinion of Xxxxxxxxxxx X. Xxxx, Esq.
(3) In giving their opinions required by subsections (b)(1) and
(b)(2), respectively, of this Section, Xxxxxxxxxxx X. Xxxx, Esq. and
Xxxxx & Xxxx LLP shall each additionally state that nothing has come to
their attention that leads them to believe that the Registration
Statement, at the time the Registration Statement became effective, or
if an amendment to the Registration Statement or an annual report on
Form 10-K has been filed by the Company with the Commission subsequent
to the effectiveness of the Registration Statement, then at the time of
the most recent such filing, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus, as amended or supplemented at the Closing Time,
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial
data included in the Registration Statement or Prospectus). In
addition, with respect to the opinion contained in clause (x) of
subsection (b)(1), Xxxxxxxxxxx X. Xxxx, Esq., may state that his
opinion and belief are based upon his participation, or the
participation of someone under his supervision, in the preparation of
the Registration Statement and Prospectus and any amendments or
supplements thereto and documents incorporated therein by reference and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
c. At the time of the execution of this Agreement and at the
applicable Closing Time you shall have received from a
letter in form and substance satisfactory to you, to the effect that:
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(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion the audited consolidated financial
statements and schedules included in the Registration Statement and the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act and the
related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated financial statements of the Company and its
subsidiaries made available by the Company, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments
set forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and committees thereof of the
Company and each of its subsidiaries, and inquiries of certain
officials of the Company and its subsidiaries who have responsibility
for financial and accounting matters, nothing came to their attention
that caused them to believe that:
(A) the interim unaudited consolidated financial statements
of the Company and its subsidiaries included in the Registration
Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements
included in the Registration Statement and the Prospectus;
(B) at a specific date not more than five days prior to the
date of such letter, there were any changes in the capital stock
or long-term debt of the Company and its subsidiaries or any
decreases in stockholders' equity of the Company and its
subsidiaries, in each case compared with amounts shown on the most
recent unaudited consolidated balance sheet incorporated by
reference in the Registration Statement, or for the period from a
specified date not more than five days prior to the date of such
letter there were any decreases, as compared with the
corresponding period in the preceding years, in sales or net
revenues of the Company and its consolidated subsidiaries, except
in all instances for changes, decreases or increases as is set
forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries which are
included in the Registration Statement and the Prospectus and the
Prospectus Supplement and which are specified by you and
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have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of
the Company and its subsidiaries identified in such letter.
d. At the applicable Closing Time the Company shall have furnished to
you a certificate of the Company, signed by an executive officer of the
Company, dated such date, to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Prospectus, the Prospectus Supplement and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date of such certificate with the same effect as if made on the
date of such certificate and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the date of such certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of the Company's
knowledge, threatened; and
(iii) since the date of the applicable Terms Agreement, there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
(in any such case, not in the ordinary course of business) of the
Company and its subsidiaries, except as set forth in or contemplated by
the Prospectus.
e. At the applicable Closing Time you shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company for the purpose of enabling them
to pass upon the issuance and sale of the Notes as herein contemplated
and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations or warranties or the
fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Notes and the related Pledged Bond as herein contemplated
shall be satisfactory in form and substance to you.
If any condition in this Section shall not have been fulfilled when and
as provided in this Agreement, the applicable Terms Agreement may be terminated
by such of you as may be named in such Terms Agreement by notice to the Company
at or prior to the applicable Closing Time and any such termination shall be
without liability of any party to any other party, except as provided in Section
4 hereof.
6. Indemnification and Contribution.
a. The Company agrees to indemnify each of you and hold harmless each
of you and each person, if any, who controls you within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal
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or other expenses reasonably incurred by you or any such controlling
person in connection with investigating or defending any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or in any
amendment thereof or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by 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
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
you furnished to the Company in writing by you expressly for use
therein.
b. Each of you severally agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to
you, but only with reference to information relating to you furnished
to the Company in writing by you expressly for use in the Registration
Statement or the Prospectus or any amendments or supplements thereto.
c. In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to one local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of
parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be
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a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
d. In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 6 is unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
on the other from each offering of Notes or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party
on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof). The relative benefits
received by the Company on the one hand and you on the other shall be
deemed to be in the same proportion as the total proceeds from the
offering appearing in the applicable Prospectus Supplement (net of
underwriting discount or agent's commissions but before deducting
expenses) received by the Company bear to the total underwriting
discounts or commissions appearing in such Prospectus Supplement
received by you. The relative fault of the parties 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
or you, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and
any other equitable considerations appropriate in the circumstances.
Each of the Company and you agrees that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first
sentence of this paragraph (d). No person guilty of
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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
paragraph (d), each director, officer, employee and agent of you and
each person, if any, who controls you within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights
to contribution as you, 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 or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Company.
7. Representations, Warranties, Agreements and Indemnities to Survive
Delivery. The respective representations, warranties, agreements, indemnities
and other statements of the Company, its respective officers and you set forth
in this Agreement or the applicable Terms Agreement, or in certificates of
officers of the Company submitted pursuant hereto or thereto, shall remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of either of the Company, any of its officers or directors, you, any of your
directors, officers, employees or agents or any controlling person referred to
in Section 6 hereof, and (ii) each delivery of and payment for the Notes.
8. Termination. (a) This Agreement may be terminated for any reason
at any time by either the Company or the parties to whom this Agreement is
addressed upon the giving of thirty days' written notice of such termination to
the other party hereto. Such of you as may be named in a Terms Agreement may
terminate such Terms Agreement, immediately upon notice to the Company, at any
time prior to the applicable Closing Time (i) if there has been, since the date
of such Terms Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change (in either case not
in the ordinary course of business), in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or (ii) if there shall have occurred any material adverse
change in the financial markets or any outbreak or escalation of hostilities or
other calamity or crisis the effect of which on the financial markets is such as
to make it, in the reasonable judgment of such of you as are named in such Terms
Agreement, impracticable to market the Notes or enforce contracts for the sale
of the Notes, or (iii) if trading in any securities of the Company has been
suspended by the Commission or a national securities exchange, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
shall have 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 shall have been declared by 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 such Terms Agreement shall have been lowered since that date or if
any such rating agency shall have publicly announced since that date that it has
placed any debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, or (v) if there shall have come to the attention
of such of you as are named in such Terms Agreement any facts that would cause
you to believe that the Prospectus or any amendment or supplement thereto, at
the time it was required to be delivered to a purchaser of Notes, contained an
untrue statement of a material fact
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or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time of such
delivery, not misleading.
(b) In the event of any such termination, no party will have any
liability to any other party hereto, except as provided in Section 4, and
provided, further, that Section 6 hereof shall survive such termination.
9. Default. If one or more of you named in a Terms Agreement shall
fail at the applicable Closing Time to purchase the Notes which you are
obligated to purchase thereunder (the "Unpurchased Notes"), then you shall have
the right, within 36 hours thereafter, to make arrangements for one or more of
such of you as have not defaulted, or any other underwriters, to purchase all,
but not less than all, of the Unpurchased Notes in such amounts as may be agreed
upon and upon the terms set forth herein and in the applicable Terms Agreement.
If, however, during such 36 hours you shall not have completed such arrangements
for the purchase of all of the Unpurchased Notes, then:
a. if the aggregate principal amount of Unpurchased Notes does not
exceed 10% of the aggregate principal amount of the Notes to be
purchased pursuant to such Terms Agreement, such of you named in such
Terms Agreement who have not defaulted shall be obligated to purchase
the full amount thereof in the proportions that your respective
underwriting obligations under such Terms Agreement bear to the
underwriting obligations of all of you named in such Terms Agreement,
or
b. if the aggregate principal amount of Unpurchased Notes exceeds 10%
of the aggregate principal amount of the Notes to be purchased pursuant
to such Terms Agreement, such Terms Agreement shall terminate, without
any liability on the part of any of you who have not defaulted or the
Company.
No action taken pursuant to this Section shall relieve any of you who
have defaulted from liability in respect of any default of such of you who have
defaulted under this Agreement and the applicable Terms Agreement.
In the event of a default by any of you as set forth in this Section,
either you or the Company shall have the right to postpone the applicable
Closing Time for a period not exceeding seven days in order that any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements may be effected.
10. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and effective only on receipt, and shall be mailed
or delivered to the Company at: The Detroit Edison Company, 0000 Xxxxxx Xxxxxx,
000 X.X.X., Xxxxxxx, Xxxxxxxx 00000, attention: Corporate Secretary;
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, or to such other person and place as may be specified in the
applicable Terms Agreement. Any notice given hereunder may be made by
telecopier, telephone or telegraph, but if so made shall be subsequently
confirmed in writing.
11. Successors. This Agreement shall inure to the benefit of and shall
be binding upon you, the Company and any of you who becomes a party to any Terms
Agreement and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement or a Terms Agreement is intended or
shall be construed to give any other person, firm or corporation, any legal or
equitable right, remedy or claim under or in respect of this Agreement or such
Terms Agreement, or any provision herein or therein contained, this Agreement
and any Terms Agreement and all conditions and provisions hereof and thereof
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person, firm or corporation, except that
(i) the indemnities of the Company contained in Section 6 of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of such of you as are named in the applicable Terms Agreement and any person or
persons who control you within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of such of you as are named in a
Terms Agreement contained in Section 6 of this Agreement shall also be for the
benefit of the directors of the Company, the directors and officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Notes from you shall be deemed a successor
because of such purchase.
12. APPLICABLE LAW. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. Counterparts. This Agreement and each Terms Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
THE DETROIT EDISON COMPANY
By: ________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
[ ]
By: _____________________________
Authorized Signatory
[ ]
By: ______________________________
Authorized Signatory
[ ]
By: ______________________________
Authorized Signatory
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Exhibit A
THE DETROIT EDISON COMPANY
$__________________
REMARKETED SECURED NOTES
TERMS AGREEMENT
Dated: , 19
TO: The Detroit Edison Company
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Distribution Agreement dated , 19 .
Registration Statement No. 333-
Agent or Principal
Transaction: [Agent] [Principal]
Title of Notes:
Principal Amount: $______________
Denominations: $______________
Initial Interest Rate:
Initial Interest Rate
Adjustment Date:
Initial Interest Rate
Payment Date(s):
Date of Maturity:
[Agent's Commission: ______% per Note.]
[Public Offering Price: ______%, plus accrued interest, if any, from
__________,19__.
Purchase Price: _____%, plus accrued interest, if any, from
____________, 19__ (payable in [same day][next day]
funds)]
Current ratings:
Closing date and location:
Additional [Agents]
[co-managers], if any:
[Each Underwriter severally agrees, subject to the terms and provisions of the
above-referenced Distribution Agreement, which is incorporated herein in its
entirety and made a part hereof, to purchase the principal amount of Notes set
forth opposite its name.
A-1
22
Name Principal Amount of Notes
------------------------
Total . . ]
================================
[AGENT(S)]
[Managing Agents]
By
---------------------------------
[Acting on behalf of themselves
and the other named Agents]
Accepted:
THE DETROIT EDISON COMPANY
By
------------------------
A-2
