4,300,000 Shares SEMCO Energy, Inc. Common Stock, par value $1.00 per share UNDERWRITING AGREEMENT
Exhibit
1.1
4,300,000
Shares
SEMCO
Energy, Inc.
Common
Stock, par value $1.00 per share
August
9,
2005
Credit
Suisse First Boston LLC
As
Representative of the Several Underwriters
Eleven
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Dear
Sirs:
1.
Introductory.
SEMCO
Energy, Inc., a Michigan corporation (“Company”),
proposes to issue and sell 4,300,000 shares (“Firm
Securities”)
of its
common stock, par value $1.00 per share (“Securities”)
and
also proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 645,000 additional shares
(“Optional
Securities”)
of its
Securities as set forth below. The Firm Securities and the Optional Securities
are herein collectively called the “Offered
Securities”.
The
Company hereby agrees with the several Underwriters named in Schedule A
hereto (“Underwriters”)
as
follows:
2.
Representations
and Warranties of the Company.
The
Company represents and warrants to, and agrees with, the several Underwriters
that:
(a)
A
registration statement on Form S-3 (No. 333-124005), including a
prospectus, relating to the Offered Securities has been filed with the
Securities and Exchange Commission (“Commission”)
and
has become effective. Such registration statement is hereinafter referred to
as
the “Registration
Statement”,
and
the prospectus included in such Registration Statement, as supplemented to
reflect the terms of offering of the Offered Securities, as first filed with
the
Commission pursuant to and in accordance with Rule 424(b) (“Rule 424(b)”)
under
the Securities Act of 1933 (“Act”),
including all material incorporated by reference therein, is hereinafter
referred to as the “Prospectus”.
No
document has been or will be prepared or distributed in reliance on Rule 434
under the Act.
The
Company meets the standards for the use of Form S-3 as those standards are
currently in effect and as in effect prior to October 21, 1992.
(b)
On
the effective date of the Registration Statement, such Registration Statement
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission (“Rules
and Regulations”)
and
did not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and on the date of this Agreement, the Registration
Statement conforms, and at the time of filing of the supplement to the
Prospectus pursuant to Rule 424(b)
as
contemplated by Section 2(a) to reflect the terms of offering of the
Offered Securities, the
Registration Statement and the Prospectus will conform, in all material respects
to the requirements of the Act and the Rules and Regulations, and neither of
such documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, except
that
the foregoing does not apply to statements in or omissions from the Registration
Statement or the Prospectus based upon written information furnished to the
Company by any Underwriter through the Representative, if any, specifically
for
use therein, it being understood and agreed that the only such information
is
that described as such in Section 7(b) hereof.
(c)
The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Michigan, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified to do business
as
a foreign corporation in good standing in all other jurisdictions in which
its
ownership or lease of property or the conduct of its business requires such
qualification.
(d)
Each
of Hotflame Gas, Inc., SEMCO Energy Ventures, Inc., SEMCO Gas Storage Company,
SEMCO Pipeline Company and Alaska Pipeline Company (each, a “Significant
Subsidiary”)
are
the only direct or indirect subsidiaries of the Company that singly or in the
aggregate are material to the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries taken
as
one enterprise from a financial point of view. Each Significant Subsidiary
has
been duly incorporated and is an existing corporation in good standing under
the
laws of the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus; and each Significant Subsidiary of the Company
is
duly qualified to do business as a foreign corporation in good standing in
all
other jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification; all of the issued and outstanding
capital stock of each Significant Subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each Significant Subsidiary owned by the Company, directly
or
through subsidiaries, is owned free from liens, encumbrances and
defects.
(e)
The
Offered Securities and all other outstanding shares of capital stock of the
Company have been duly authorized; all outstanding shares of capital stock
of
the Company are, and, when the Offered Securities have been delivered and paid
for in accordance with this Agreement on each Closing Date (as defined below),
such Offered Securities will have been, validly issued, fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights with
respect to the Offered Securities.
(f)
Except as disclosed in the Prospectus, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or any Underwriter for a brokerage commission,
finder’s fee or other like payment in connection with this
offering.
(g)
Except for the Registration Rights Agreement dated March 15, 2005 by and among
the Company and the purchasers named therein (the “Registration
Rights Agreement”),
there
are no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(h)
The
Offered Securities have been approved for listing on the New York Stock Exchange
subject to notice of issuance.
(i)
No
consent, approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale of
the
Offered Securities by the Company, except such as have been obtained and made
under the Act and such as may be required under state securities laws; provided,
however, that with respect to any requirement that the Regulatory Commission
of
Alaska (the “RCA”)
approve any change of control of a utility within its jurisdiction (as asserted
by the RCA’s General Order No. 6), this representation assumes that the actual
syndication of the Offered Securities by the Underwriters will not be materially
different from the written information provided by the Underwriters to the
Company prior to the execution of this Agreement concerning the proposed
syndication of the Offered Securities.
2
(j)
The
execution, delivery and performance of this Agreement, and the issuance and
sale
of the Offered Securities will not result in a breach or violation of any of
the
terms and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court, domestic
or
foreign, having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any agreement or instrument to which the Company
or any such subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any such subsidiary
is subject, or the charter or by-laws of the Company or any such subsidiary,
and
the Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement; provided, however, that
with respect to any requirement that the RCA approve any change of control
of a
utility within its jurisdiction (as asserted by the RCA’s General Order No. 6),
this representation assumes that the actual syndication of the Offered
Securities by the Underwriters will not be materially different from the written
information provided by the Underwriters to the Company prior to the execution
of this Agreement concerning the proposed syndication of the Offered
Securities.
(k)
This
Agreement has been duly authorized, executed and delivered by the
Company.
(l)
Except as disclosed in the Prospectus, the Company and its subsidiaries have
good and marketable title to all property (real and personal) owned by them
free
from liens, encumbrances and defects except such as do not materially and
adversely affect the value thereof or materially and adversely interfere with
the operation of the Company’s business; and any real or personal property held
under lease by the Company or its subsidiaries is held under valid and
enforceable leases, with such exceptions that are disclosed in the Prospectus
or
that do not materially and adversely interfere with the operation of the
Company’s business.
(m)
The
Company and its subsidiaries possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to
conduct the business now operated by them and have not received any notice
of
proceedings relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or any of
its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the condition (financial or other), business, properties or results
of
operations of the Company and its subsidiaries taken as a whole (“Material
Adverse Effect”).
(n)
No
labor dispute with the employees of the Company or any subsidiary exists or,
to
the knowledge of the Company, is imminent that might have a Material Adverse
Effect.
(o)
The
Company and its subsidiaries own, possess or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions, know-how,
patents, copyrights, confidential information and other intellectual property
(collectively, “intellectual property rights”)
necessary to conduct the business now operated by them, or presently employed
by
them, and have not received any notice of infringement of or conflict with
asserted rights of others with respect to any intellectual property rights
that,
if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(p)
Except as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries is in violation of any statute, any rule, regulation, decision
or
order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, “environmental
laws”),
owns
or operates any real property contaminated with any substance that is subject
to
any environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any
environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation which might lead to such a
claim.
(q)
There
are no actions, suits or proceedings pending or, to the Company’s knowledge,
threatened, to which the Company or any of its subsidiaries is a party, or
to
which any property of the Company or any of its subsidiaries is subject, except
as disclosed in the Prospectus or except any such action, suit or proceeding
that is not reasonably likely to result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect or is not reasonably
likely to materially and adversely affect the consummation of the transactions
contemplated hereby.
3
(r)
The
financial statements included in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and such financial statements have been prepared
in
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis.
(s)
Except as disclosed in the Prospectus, since the date of the latest audited
financial statements included in the Prospectus there has been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties
or
results of operations of the Company and its subsidiaries taken as a whole,
and,
except as disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on
any class of its capital stock.
(t)
The
Company is subject to the reporting requirements of either Section 13 or Section
15(d) of the Securities Exchange Act of 1934 (“Exchange
Act”)
and
files reports with the Commission on the Electronic Data Gathering, Analysis,
and Retrieval (XXXXX) system.
(u)
The
Company is not an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act of 1940 (the “Investment
Company Act”),
and
the Company is not and, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as described
in
the Prospectus, will not be an “investment company” as defined in the Investment
Company Act.
(v)
The
Company is not a “holding company” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, as such terms are defined by the Public Utility Holding
Company Act of 1935, as amended.
(w)
All
directors and officers (as defined under Section 16 of the Exchange Act) of
the
Company have executed and provided to the Underwriters a Lock-up Letter in
the
form of Exhibit
A
(each, a
“Lock-Up
Letter”).
3.
Purchase,
Sale and Delivery of Offered Securities.
On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
sell
to the Underwriters, and the Underwriters agree, severally and not jointly,
to
purchase from the Company, at a purchase price of $6.0672 per share, the
respective numbers of shares of Firm Securities set forth opposite the names
of
the Underwriters in Schedule A hereto. The Company shall not be obligated
to deliver any of the Firm Securities except upon payment for all the Firm
Securities to be purchased on the Closing Date (as defined below).
The
Company will deliver the Firm Securities to the Representative for the accounts
of the Underwriters, against payment of the purchase price in
Federal (same day) funds by official bank check or checks or wire transfer
to an
account at a bank acceptable to Credit Suisse First Boston LLC (“CSFB”)
drawn
to
the
order of the Company at the office of Proskauer Rose LLP, at 10:00 A.M., New
York time, on August 15, 2005, or at such other time not later than seven full
business days thereafter as CSFB and the Company determine, such time being
herein referred to as the “First
Closing Date”.
For
purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if
later
than the otherwise applicable settlement date) shall be the settlement date
for
payment of funds and delivery of securities for all the Firm Securities sold
pursuant to the offering. The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered
in
such names as CSFB requests and will be made available for inspection at the
above office of Proskauer Rose LLP at least 24 hours prior to the First
Closing Date.
4
In
addition, upon written notice from CSFB given to the Company from time to time
not more than 30 days subsequent to the date of the Prospectus, the Underwriters
may purchase all or less than all of the Optional Securities at the purchase
price per Security to be paid for the Firm Securities. The Company agrees to
sell to the Underwriters the number of shares of Optional Securities specified
in such notice and the Underwriters agree, severally and not jointly, to
purchase such Optional Securities. Such Optional Securities shall be purchased
for the account of each Underwriter in the same proportion as the number of
shares of Firm Securities set forth opposite such Underwriter’s name bears to
the total number of shares of Firm Securities (subject to adjustment by CSFB
to
eliminate fractions) and may be purchased by the Underwriters only for the
purpose of covering over-allotments made in connection with the sale of the
Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered.
The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may
be
surrendered and terminated at any time upon notice by CSFB to the
Company.
Each
time
for the delivery of and payment for the Optional Securities, being herein
referred to as an “Optional
Closing Date”,
which
may be the First Closing Date (the First Closing Date and each Optional Closing
Date, if any, being sometimes referred to as a “Closing
Date”),
shall
be determined by CSFB but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver the Optional Securities being purchased on each Optional Closing
Date to the Representative for the accounts of the several Underwriters, against
payment of the purchase price therefor in Federal (same day) funds by official
bank check or checks or wire transfer to an account at a bank acceptable to
CSFB
drawn to the order of the Company, at the office of Proskauer Rose LLP.
The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered
in
such names as CSFB requests upon reasonable notice prior to such Optional
Closing Date and will be made available for inspection at the above office
at a
reasonable time in advance of such Optional Closing Date.
4.
Offering
by Underwriters.
It is
understood that the several Underwriters propose to offer the Offered Securities
for sale to the public as set forth in the Prospectus.
5.
Certain
Agreements of the Company.
The
Company agrees with the several Underwriters that it will furnish to counsel
for
the Underwriters, one copy of the registration statement relating to the Offered
Securities, including all exhibits, in the form it became effective and of
all
amendments thereto (but, in all cases, only with respect to any such documents
that are not electronically available through the Commission’s XXXXX filing
system) and that, in connection with the offering of the Offered
Securities:
(a) The
Company will file the supplement to the Prospectus that reflects the terms
of
offering of the Offered Securities with the Commission pursuant to and in
accordance with subparagraph (1) or (2) (as consented to by CSFB, which consent
shall not be unreasonably withheld) of Rule 424(b) not later than the second
business day following the execution and delivery of this Agreement (or, if
applicable and if consented to by CSFB, which consent shall not be unreasonably
withheld, subparagraph (4) or (5)). The Company will advise CSFB promptly
of any such filing pursuant to Rule 424(b).
(b) The
Company will advise CSFB promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and will not effect such amendment
or
supplementation without CSFB’s consent; which consent shall not be unreasonably
withheld, and the Company will also advise CSFB promptly of the filing of any
such amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any part
thereof and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible its lifting, if issued.
(c) If,
at any time when a prospectus relating to the Offered Securities is required
to
be delivered under the Act in connection with sales by any Underwriter or
dealer, any event occurs as a result of which the Prospectus as then amended
or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will promptly notify CSFB of such event and will promptly prepare and
file with the Commission, at its own expense, an amendment or supplement which
will correct such statement or omission or an amendment which will effect such
compliance. Neither CSFB’s consent to, nor the Underwriters’ delivery of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6.
5
(d) As
soon as practicable, but not later than the Availability Date (as defined
below), the Company will make generally available to its securityholders an
earnings statement covering a period of at least 12 months beginning after
the
effective date of the Registration Statement that will satisfy the provisions
of
Section 11(a) of the Act. For the purpose of the preceding sentence,
“Availability
Date”
means
the date by which the Company is required to file its Form 10-Q with the
Commission after the end of the fourth fiscal quarter following the fiscal
quarter that includes such effective date, except that, if such fourth fiscal
quarter is the last quarter of the Company’s fiscal year, “Availability
Date”
means
the date by which the Company is required to file its Form 10-K for that fiscal
year with the Commission.
(e) The
Company will furnish to the Representative copies of the Registration Statement,
including all exhibits, any related preliminary prospectus, any related
preliminary prospectus supplement, and the Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as CSFB requests. The Company will pay the expenses of printing
and
distributing to the Underwriters all such documents.
(f) The
Company will furnish such information as may be required and otherwise cooperate
in qualifying the Offered Securities for offer and sale under the securities
or
blue sky laws of such states or other jurisdictions as CSFB designates and
will
continue such qualifications in effect so long as required for the distribution;
provided, however, that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the laws
of
any such jurisdiction (except service of process with respect to the offering
and sale of the Offered Securities). The Company shall promptly advise the
Representative of the receipt by the Company of any notification with respect
to
the suspension of the qualification of the Offered Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
(g) The
Company will pay all expenses incident to the performance of its obligations
under this Agreement, for any filing fees and other expenses (including fees
and
disbursements of counsel) incurred in connection with qualification of the
Offered Securities for sale under the laws of such jurisdictions as CSFB
designates and the printing of memoranda relating thereto, for any filing fee
incident to a review by NASD, Inc. of the Offered Securities, for any travel
expenses of the Company’s officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of the Offered Securities,
including the cost of any aircraft chartered in connection with attending or
hosting such meetings,
and for
expenses incurred in distributing the Prospectus, any preliminary prospectuses,
any preliminary prospectus supplements or any other amendments or supplements
to
the Prospectus to the Underwriters.
(h) For
the period specified below (the “Lock-Up
Period”),
the
Company will not offer, sell, contract to sell, pledge or otherwise dispose
of,
directly or indirectly, any additional shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer, sale,
pledge or disposition, without the prior written consent of CSFB, except (i)
issuances of Securities pursuant to the conversion or exchange of convertible
or
exchangeable securities or the exercise of warrants or options, in each case
outstanding on the date hereof, (ii) issuances of Securities or grants of
employee stock options pursuant to the terms of a plan in effect on the date
hereof, including the Company’s 401(k) Plan, the 2004 Stock Award and Incentive
Plan, the Direct Stock Purchase and Dividend Reinvestment Plan, the Deferred
Compensation and Stock Purchase Plan for Non-Employee Directors and the Employee
Stock Gift Program, and (iii) issuances of Securities pursuant to the exercise
of such employee stock options. In addition, without the prior written consent
of CSFB, the Company will not file with the Commission, or publicly disclose
the
intention to make any such filing of, a registration statement under the Act,
other than (x) registration statements on Form S-8, (y) registration statements
in connection with the Registration Rights Agreement and (z) registration
statements on Form S-4 or registration statements related to offerings in which
the stated use of proceeds is the acquisition of another business or
substantially all of the assets of another business. The
initial Lock-Up Period will commence on the date hereof and will continue and
include the date 90 days after the date hereof or such earlier date that CSFB
consents to in writing; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period,
the
Company releases earnings results or material news or a material event relating
to the Company occurs or (2) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during
the
16-day period beginning on the last day of the initial Lock-Up Period, then
in
each case the Lock-Up Period will be extended until the expiration of the 18-day
period beginning on the date of release of the earnings results or the
occurrence of the material news or material event, as applicable, unless CSFB
waives, in writing, such extension; provided, however, that if after any
announcement described in clause (2) of this sentence, the Company announces
that it will not release earnings results during the 16-day period beginning
on
the last day of the initial Lock-Up Period, the Lock-Up Period shall expire
at
the later of the initial Lock-Up Period end date and the end of any extension
of
the Lock-Up Period pursuant to clause (1) of this sentence. The Company will
provide CSFB with notice of any announcement described in this paragraph that
gives rise to an extension of the Lock-Up Period.
6
6.
Conditions
of the Obligations of the Underwriters.
The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Closing Date and the Optional Securities to be purchased
on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and
to
the following additional conditions precedent:
(a) The
Representative shall have received a letter, dated the date of delivery thereof,
of PricewaterhouseCoopers LLP confirming that they are an independent registered
public accounting firm with respect to the Company within the meaning of the
Act
and the applicable Rules and Regulations and the applicable rules and
regulations adopted under the Act by the Public Company Accounting Oversight
Board (the “PCAOB”)
and
stating to the effect that:
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(i)
in their opinion the consolidated financial statements and schedule
audited by them and incorporated by reference in the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
Rules and Regulations;
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(ii) they
have performed the procedures specified by the PCAOB for a review
of
interim financial information as described in Statement of Auditing
Standards No. 100, Interim Financial Information, on the unaudited
condensed consolidated financial statements as of and for the three,
six
and 12 month periods ended March 31, 2005 and the three and six month
periods ended June 30, 2005 included in the Company’s quarterly reports on
Form 10-Q for the quarters ended March 31, 2005 and June 30, 2005,
incorporated by reference in the Registration Statement;
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(iii)
on the basis of the review referred to in clause (ii) above,
a
reading of the latest available interim financial statements of the
Company, inquiries of certain officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
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(A) the
unaudited condensed consolidated balance sheets and the unaudited condensed
consolidated statements of income, of comprehensive income and of cash flows
included in the Company’s quarterly reports on Form 10-Q for the quarters ended
March 31, 2005 and June 30, 2005, incorporated by reference in the Registration
Statement (the “Unaudited
Condensed Consolidated Financial Statements”),
do
not comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the related
rules and regulations adopted by the SEC or any material modifications should
be
made to the Unaudited Condensed Consolidated Financial Statements for them
to be
in conformity with generally accepted accounting principles; or
7
(B)
at
the date of the latest available balance sheet read by such accountants, or
at a
subsequent specified date not more than three business days prior to the date
of
this Agreement, there was any change in the capital stock, or any increase
in
consolidated short-term debt, or any increase in consolidated long-term debt,
as
compared with amounts shown in the June 30, 2005 unaudited consolidated balance
sheet incorporated by reference in the Registration Statement; and
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(iv)
they have compared specified dollar amounts (or percentages derived
from
such dollar amounts) and other financial information contained in
the
Registration Statement (in each case to the extent that such dollar
amounts, percentages and other financial information are derived
from the
general accounting records of the Company and its subsidiaries subject
to
the internal controls of the Company’s accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records
and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such
letter.
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All
financial statements and schedules included in material incorporated
by
reference into the Prospectus shall be deemed included in the Registration
Statement for purposes of this
subsection.
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(b) The
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. No stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representative, shall
be
contemplated by the Commission.
(c) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development or event involving a prospective
change,
in the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as one enterprise which,
in
the judgment of a majority in interest of the Underwriters including the
Representative, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and payment
for
the Offered Securities; (ii) any downgrading in the rating of any debt
securities or preferred stock of the Company by any “nationally recognized
statistical rating organization” (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred stock
of
the Company (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating) or
any
announcement that the Company has been placed on negative outlook; (iii)
any change in U.S. or international financial, political or economic conditions
or currency exchange rates or exchange controls as would, in the judgment of
a
majority in interest of the Underwriters including the Representative, be likely
to prejudice materially the success of the proposed issue, sale or distribution
of the Offered Securities, whether in the primary market or in respect of
dealings in the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange,
or
any setting of minimum prices for trading on such exchange; (v) or any
suspension of trading of any securities of the Company on any exchange or in
the
over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal or New York authorities; (vii) any major disruption of settlements
of
securities or clearance services in the United States or (viii) any
attack
on, outbreak or escalation of hostilities or act of terrorism involving the
United States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters including the Representative, the effect of any
such attack, outbreak, escalation, act, declaration, calamity or emergency
makes
it impractical or inadvisable to proceed with completion of the public offering
or the sale of and payment for the Offered Securities.
(d) The
Representative shall have received an opinion, dated such Closing Date, of
Xxxxxxxx Xxxxxxx LLP, counsel for the Company, to the effect that:
8
(i)
The
Registration Statement has become effective under the Act, the Prospectus was
filed with the Commission pursuant to the subparagraph of Rule 424(b) specified
in such opinion on the date specified therein, and, to the best of the knowledge
of such counsel, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Act,
and
the Registration Statement and the Prospectus, and any amendment or supplement
thereto, as of their respective effective or issue dates, complied as to form
in
all material respects with the requirements of the Act and the Rules and
Regulations;
(ii)
This
Agreement has been duly authorized, executed and delivered by the
Company;
(iii)
The
Company is not and, after giving effect to the offering and sale of the Offered
Securities and the application of the proceeds thereof as described in the
Prospectus, will not be an “investment company” as defined in the Investment
Company Act;
(iv)
The
Company is not a “holding company” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a "holding company,” as such terms are defined by the Public Utility Holding
Company Act of 1935, as amended;
(v)
The
execution, delivery and performance of this Agreement and the issuance and
sale
of the Offered Securities will not conflict with or constitute a breach under
the Company’s Amended and Restated Credit Agreement, dated as of June 25, 2004,
as amended, Indenture, dated May 15, 2003, governing its 7-3/4% Senior Notes
due
2013, Indenture, dated May 21, 2003, governing its 7-1/8% Senior Notes due
2013,
or any other document governing the Company’s outstanding indebtedness as of the
date hereof; and
(vi)
The
outstanding shares of capital stock of the Company conform to the description
thereof contained in the Prospectus.
Xxxxxxxx
Xxxxxxx LLP shall also provide negative assurance that such counsel have no
reason to believe that any part of the Registration Statement or any amendment
thereto, as of its effective date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement thereto, as
of
its issue date or as of such Closing Date, contained any untrue statement of
a
material fact or omitted to state any 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 as to the financial statements or other financial data contained in
the
Registration Statement or the Prospectus and that, with respect to statistical
statements in the Registration Statement and any amendment thereto, such counsel
has relied solely on the officers of the Company.
(e)
The
Representative shall have received an opinion, dated such Closing Date, of
Xxxxxx Xxxxxxx PLLC, counsel for the Company, to the effect that:
(i)
The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Michigan, with corporate power and
authority to own its properties and conduct its business as described in the
Registration Statement or any amendment thereto;
(ii)
All
of the Significant Subsidiaries incorporated in the State of Michigan (the
“Michigan Subsidiaries”)
have
been duly incorporated and are existing corporations in good standing under
the
laws of the State of Michigan, with corporate power and authority to own their
properties and conduct their businesses as described in the Registration
Statement or any amendment thereto;
9
(iii)
The
Offered Securities delivered on such Closing Date have been duly authorized
and,
when issued and paid for in accordance with the Underwriting Agreement described
in the Prospectus, will be validly issued, fully paid and nonassessable; the
Offered Securities conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive rights with
respect to the Securities pursuant to applicable Michigan law or the Company’s
charter and bylaws;
(iv)
The
execution, delivery and performance of this Agreement and the issuance and
sale
of the Offered Securities will not result in a breach or violation of any of
the
terms and provisions of, or constitute a default under, any Michigan statute,
any rule, regulation or order of any governmental agency or body of the State
of
Michigan or any court of the State of Michigan having jurisdiction over the
Company or any Michigan Subsidiary of the Company or any of their properties
(provided that such counsel need not express any opinion as to any such rule,
regulation or order of the Michigan Public Service Commission (“MPSC”)
or the
City Commission of Battle Creek, Michigan (“CCBC”))
or
the charter or by-laws of the Company or any such Michigan Subsidiary, and
the
Company has full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement; and
(v)
No
consent, approval, authorization or order of, or filing with, any governmental
agency or body of the State of Michigan (provided that such counsel need not
express any opinion as to any such rule regulation or order of the MPSC or
CCBC)
or any court of the State of Michigan is required for the consummation of the
transactions contemplated by this Agreement in connection with the issuance
or
sale of the Offered Securities by the Company, except such as may be required
under state securities laws.
(f)
The
Representative shall have received an opinion, dated such Closing Date, of
Xxxx
Xxxxxxxxxxx, Deputy General Counsel for the Company, to the effect
that:
(i)
Except for the Registration Rights Agreement, there are no contracts, agreements
or understandings known to such counsel between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act, other than with respect to securities eligible
to
be registered on Form S-8;
(ii) The
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification;
(iii)
Alaska Pipeline Company, a subsidiary of the Company, has been duly incorporated
and is an existing corporation in good standing under the laws of the State
of
Alaska, with corporate power and authority to own its properties and conduct
its
business as described in the Prospectus (in reliance on an opinion of Ashburn
& Xxxxx, P.C., Alaskan counsel to the Company, attached as an appendix to
such opinion and satisfactory to counsel to the Underwriters);
(iv)
The
capital stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects;
(v)
No
stockholder of the Company has any preemptive right with respect to the
Securities pursuant to any
agreement or instrument to which the Company or any of its subsidiaries is
a
party or by which the Company or any such subsidiary is bound or to which any
of
the properties of the Company or any such subsidiary is subject;
10
(vi)
There are no actions, suits or proceedings pending or, to such counsel’s
knowledge, threatened, to which the Company or any of its subsidiaries is a
party, or to which any property of the Company or any of its subsidiaries is
subject, except as disclosed in the Prospectus or except any such action, suit
or proceeding that would not result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect or would materially
and adversely affect the consummation of the transactions contemplated
hereby;
(vii)
The
execution, delivery and performance of this Agreement and the issuance and
sale
of the Offered Securities will not result in a breach or violation of any of
the
terms and provisions of, or constitute a default under, any statute, any rule,
regulation or order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or any of their
properties (including, without limitation, the MPSC, CBCC and the RCA);
provided, however, that with respect to any requirement that the RCA approve
any
change of control of a utility within its jurisdiction (as asserted by the
RCA’s
General Order No. 6), this opinion assumes that the actual syndication of the
Offered Securities by the Underwriters will not be materially different from
the
written information provided by the Underwriters to the Company prior to the
execution of this Agreement concerning the proposed syndication of the Offered
Securities;
(viii)
No
consent, approval, authorization or order of, or filing with, any governmental
agency or body (including, without limitation, the MPSC, CBCC and RCA) or any
court is required for the consummation of the transactions contemplated by
this
Agreement in connection with the issuance or sale of the Offered Securities
by
the Company, except such as have been obtained and made under the Act and such
as may be required under state securities laws; provided, however, that with
respect to any requirement that the RCA approve any change of control of a
utility within its jurisdiction (as asserted by the RCA’s General Order No. 6),
this opinion assumes that the actual syndication of the Offered Securities
by
the Underwriters will not be materially different from the written information
provided by the Underwriters to the Company prior to the execution of this
Agreement concerning the proposed syndication of the Offered
Securities;
(ix)
The
execution, delivery and performance of this Agreement and the issuance and
sale
of the Offered Securities will not result in a breach or violation of any of
the
terms and provisions of, or constitute a default under, any agreement or
instrument to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the properties
of
the Company or any such subsidiary is subject; and
(x)
the
descriptions in the Registration Statement and Prospectus of statutes, legal
and
governmental proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such counsel does
not
know of any legal or governmental proceedings required to be described in the
Registration Statement or the Prospectus that are not described as required
or
of any contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration Statement
or
the Prospectus.
(g)
The
Representative shall have received from Proskauer Rose LLP, counsel for the
Underwriters, such opinion or opinions, dated such Closing Date, with respect
to
the incorporation of the Company, the validity of the Offered Securities
delivered on such Closing Date, the Registration Statement, the Prospectus
and
other related matters as the Representative may require, and the Company shall
have furnished to such counsel such documents as they request for the purpose
of
enabling them to pass upon such matters. In rendering such opinion, Proskauer
Rose LLP may rely as to the incorporation of the Company and all other matters
governed by Michigan law upon the opinions of Xxxxxx Xxxxxxx PLLC and Xxxx
Xxxxxxxxxxx referred to above.
11
(h)
The
Representative shall have received (i) a certificate, dated such Closing Date,
of the President or any Vice President and a principal financial or accounting
officer of the Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct; the Company
has complied with all agreements and satisfied all conditions on its part to
be
performed or satisfied hereunder at or prior to such Closing Date; no stop
order
suspending the effectiveness of the Registration Statement or of any part
thereof has been issued and no proceedings for that purpose have been instituted
or are contemplated by the Commission; and, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties
or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in the Prospectus or as described in such certificate;
and
(ii) a certificate, dated such Closing Date, of the President or any Vice
President and a principal financial or accounting officer of the Company in
which such officers shall state that (1) residential, commercial and total
volumes of gas sold (MMcf), (2) volumes of gas transported and (3) total volumes
delivered, conform to the amounts contained in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2004, as amended.
(i) The
Representative shall have received, on or prior to the date of this Agreement,
Lock-Up Letters from each of the directors and officers (as defined under
Section 16 of the Exchange Act) of the Company.
(j) The
Representative shall have received a letter, dated such Closing Date, of
PricewaterhouseCoopers LLP which meets the requirements of subsection (a) of
this Section, except that the specified date referred to in such subsection
will
be a date not more than three days prior to such Closing Date for the purposes
of this subsection.
(k) The
Representative shall have received a certificate, dated such Closing Date,
executed by the Secretary of the Company, certifying such matters as CSFB may
reasonably request.
The
Company will furnish the Representative with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CSFB may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder,
whether in respect of an Optional Closing Date or otherwise.
7.
Indemnification
and Contribution.
(a) The
Company will indemnify and hold harmless each Underwriter, its partners,
members, directors, officers, affiliates and each person, if any, who controls
such Underwriter within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending
any
such loss, claim, damage, liability or action as such expenses are incurred;
provided that the foregoing indemnity agreement, insofar as it relates to any
preliminary prospectus, shall not inure to the benefit of any Underwriter (or
to
the benefit of any person who controls such Underwriter) on account of any
losses, claims, damages or liabilities arising out of the sale of any of the
Offered Securities by such Underwriter to any person if it shall be established
that a copy of the Prospectus, excluding any documents incorporated by reference
(as supplemented or amended, if the Company shall have made any supplements
or
amendments that have been furnished to the Representative), shall not have
been
sent or given by or on behalf of such Underwriter to such person at or prior
to
the written confirmation of the sale to such person in any case where such
delivery is required by the Act and the Company satisfied its obligations
pursuant to Section 5(e) hereof, if the misstatement or omission leading to
such
loss, claim, damage or liability was corrected in the Prospectus (excluding
any
documents incorporated by reference) as amended or supplemented, and such
correction would have cured the defect giving rise to such loss, claim, damage
or liability; and provided further, however, that the Company will not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through the Representative, if any, specifically for use therein,
it
being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (b)
below.
12
(b)
Each
Underwriter will severally and not jointly indemnify and hold harmless the
Company, its directors and officers and each person, if any who controls the
Company within the meaning of Section 15 of the Act, against any losses, claims,
damages or liabilities to which the Company may become subject, under the Act
or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out of
or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was
made in reliance upon and in conformity with written information furnished
to
the Company by such Underwriter through the Representative, if any, specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action as such expenses are incurred, it
being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished
on
behalf of each Underwriter: (i) the marketing names of each Underwriter
appearing on the cover page, and (ii) (1) the legal names of each Underwriter,
(2) the concession and reallowance figures and (3) the stabilizing transactions,
over-allotment transactions, syndicate covering transactions and penalty bids
information, appearing in the first, fourth and tenth paragraphs under the
caption “Underwriting,” respectively.
(c)
Promptly after receipt by an indemnified party under this Section of notice
of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under subsection
(a) or (b) above, notify the indemnifying party of the commencement thereof;
but
the failure to notify the indemnifying party shall not relieve it from any
liability that it may have under subsection (a) or (b) above except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that
the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a)
or
(b) above. In case any such action is brought against any indemnified party
and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party
to such indemnified party of its election so to assume the defense thereof,
the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action 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 (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission
of,
fault, culpability or a failure to act by or on behalf of an indemnified
party.
13
(d)
If
the indemnification provided for in this Section is unavailable or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities 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 bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to
in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it
and
distributed to the public were offered to the public exceeds the amount of
any
damages which such Underwriter has otherwise been required to pay by reason
of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not
guilty of such fraudulent misrepresentation. The Underwriters’ obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e)
The
obligations of the Company under this Section shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company
who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8.
Default
of Underwriters.
If any
Underwriter or Underwriters default in their obligations to purchase Offered
Securities hereunder on either the First Closing Date or any Optional Closing
Date and the aggregate number of shares of Offered Securities that such
defaulting Underwriter or Underwriters agreed but failed to purchase does not
exceed 10% of the total number of shares of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date, the Representative
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but
if
no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory
to
CSFB and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or
the
Company, except as provided in Section 9 (provided that if such default occurs
with respect to Optional Securities after the First Closing Date, this Agreement
will not terminate as to the Firm Securities or any Optional Securities
purchased prior to such termination). As used in this Agreement, the term
“Underwriter” includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for
its default.
9.
Survival
of Certain Representations and Obligations.
The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement
is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant
to
Section 5 and the respective obligations of the Company and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities
have
been purchased hereunder the representations and warranties in Section 2 and
all
obligations under Section 5 shall also remain in effect. If the purchase of
the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section
8
or the occurrence of any event specified in clause (iii), (iv), (vi), (vii)
or
(viii) of Section 6(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered
Securities.
14
10.
Notices.
All
communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to the Representative,
c/o Credit Suisse First Boston LLC, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, Attention: IBD Legal, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 0000 Xxxxx Xxxxxx,
Xxxxx
X, Xxxx Xxxxx, XX 00000, Attention: Xxxxx Xxxxx, Esq.; provided, however, that
any notice to an Underwriter pursuant to Section 7 will be mailed, delivered
or
telegraphed and confirmed to such Underwriter.
11.
Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and controlling
persons referred to in Section 7, and no other person will have any
right
or obligation hereunder.
12.
Representation
of Underwriters.
The
Representative will act for the several Underwriters in connection with this
financing, and any action under this Agreement taken by the Representative
will
be binding upon all the Underwriters.
13.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all such counterparts shall together constitute
one and the same Agreement.
14. Absence
of Fiduciary Relationship. The
Company
acknowledges and agrees that:
(a) The
Representative has been retained solely to act as underwriters in connection
with the sale of the Company’s securities and that no fiduciary, advisory or
agency relationship between the Company and the Representative has been created
in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Representative has advised or is advising the
Company on other matters;
(b) the
price
of the securities set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Representative
and
the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by
this
Agreement;
(c) it
has
been advised that the Representative and its affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of
the
Company and that the Representative has no obligation to disclose such interests
and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; and
(d) it
waives, to the fullest extent permitted by law, any claims it may have against
the Representative for breach of fiduciary duty or alleged breach of fiduciary
duty and agrees that the Representative shall have no liability (whether direct
or indirect) to the Company in respect of such a fiduciary duty claim or to
any
person asserting a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
15.
Applicable Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York, without regard to principles of conflicts of
laws.
The
Company hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit
or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
15
16.
Each
Underwriter represents and warrants to, and agrees with, the Company
that:
(a)
the
Offered Securities are being issued and sold outside the Republic of France
and
that, in connection with its initial distribution, it has not offered or sold
and will not offer or sell, directly or indirectly, any of the Offered
Securities to the public in the Republic of France, and that it has not
distributed and will not distribute or cause to be distributed to the public
in
the Republic of France the Prospectus or any other offering material relating
to
the Offered Securities, and that such offers, sales and distributions have
been
and will be made in the Republic of France only to qualified investors
(investisseurs qualifiés) in accordance with Article L.411-2 of the Monetary and
Financial Code and decrét no. 98-880 dated 1st October, 1998; and
(b)
(i)
it has not offered or sold, and will not offer or sell, the Offered Securities
to any investors in Switzerland other than on a non-public basis; (ii) the
Prospectus does not constitute a prospectus within the meaning of Article 652a
and Art. 1156 of the Swiss Code of Obligations (Schweizerisches
Obligationenrect);
and
(iii) neither the offering of the Offered Securities nor the Offered Securities
has been or will be approved by any Swiss regulatory authority.
16
If
the
foregoing is in accordance with your understanding of our agreement, kindly
sign
and return to the Company one of the counterparts hereof, whereupon it will
become a binding agreement between the Company and the several Underwriters
in
accordance with its terms.
Very
truly yours,
| SEMCO Energy, Inc. | ||
| |
|
|
| By: | /s/ XXXXX X. XXXXX | |
|
|
||
|
Name:
Xxxxx X. Xxxxx
Title:
Senior Vice President & General
Counsel
|
||
The
foregoing Underwriting Agreement is hereby confirmed
and
accepted as of the date first above written.
Credit
Suisse First Boston LLC
Acting
on
behalf of itself and as the Representative of
the
several Underwriters
| By: /s/ XXXXXXX X. XXXXX | |||
|
|
|||
|
Name:
Xxxxxxx X. Xxxxx
Title: Managing Director |
SCHEDULE
A
|
Underwriter
|
Number
of
Firm
Securities
|
|
|
Credit
Suisse First Boston LLC
|
3,332,500
|
|
|
Natexis
Bleichroeder Inc.
|
645,000
|
|
|
X.X.
Xxxxxxx & Sons, Inc.
|
322,500
|
|
|
|
||
|
Total
|
4,300,000
|
|
EXHIBIT
A
FORM
OF LOCK-UP LETTER
[Insert
date]
SEMCO
Energy, Inc.
0000
Xxxxx Xxxxxx, Xxxxx X
Xxxx
Xxxxx, XX 00000
Credit
Suisse First Boston LLC
As
Representative of the Several Underwriters
Eleven
Xxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Dear
Sirs:
As
an
inducement to the Underwriters to execute the Underwriting Agreement, pursuant
to which an offering will be made of shares of common
stock, par value $1.00 per share
(the
“Securities”)
of
SEMCO Energy, Inc., and any successor (by merger or otherwise) thereto, (the
“Company”),
the
undersigned hereby agrees that during the period specified in the following
paragraph (the “Lock-Up
Period”),
the
undersigned will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any Securities or securities convertible into or
exchangeable or exercisable for any Securities, enter into a transaction which
would have the same effect, or enter into any swap, hedge or other arrangement
that transfers, in whole or in part, any of the economic consequences of
ownership of the Securities, whether any such aforementioned transaction is
to
be settled by delivery of the Securities or such other securities, in cash
or
otherwise, or publicly disclose the intention to make any such offer, sale,
pledge or disposition, or to enter into any such transaction, swap, hedge or
other arrangement, without, in each case, the prior written consent of Credit
Suisse First Boston LLC (“CSFB”).
In
addition, the undersigned agrees that, without the prior written consent of
CSFB, it will not, during the Lock-Up Period, make any demand for or exercise
any right with respect to, the registration of any Securities or any security
convertible into or exercisable or exchangeable for the Securities.
The
initial Lock-Up Period will commence on the date of this Lock-Up Agreement
and
continue and include the date 90 days after the public offering date set forth
on the final prospectus used to sell the Securities (the “Public
Offering Date”)
pursuant to the Underwriting Agreement, to which you are or expect to become
parties; provided, however, that if (1) during the last 17 days of the initial
Lock-Up Period, the Company releases earnings results or material news or a
material event relating to the Company occurs or (2) prior to the expiration
of
the initial Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the initial
Lock-Up Period, then in each case the Lock-Up Period will be extended until
the
expiration of the 18-day period beginning on the date of release of the earnings
results or the occurrence of the material news or material event, as applicable,
unless CSFB waives, in writing, such extension; provided, however, that if
after
any announcement described in clause (2) of this sentence, the Company announces
that it will not release earnings results during the 16-day period beginning
on
the last day of the initial Lock-Up Period, the Lock-Up Period shall expire
at
the later of the initial Lock-Up Period end date and the end of any extension
of
the Lock-Up Period pursuant to clause (1) of this sentence.
The
undersigned hereby acknowledges and agrees that written notice of any extension
of the Lock-Up Period pursuant to the previous paragraph will be delivered
by
CSFB to the Company (in accordance with Section 10 of the Underwriting
Agreement) and that any such notice properly delivered will be deemed to have
been given to, and received by, the undersigned. The undersigned further agrees
that, prior to engaging in any transaction or taking any other action that
is
prohibited by the terms of this Lock-Up Agreement during the period from the
date of this Lock-Up Agreement to an including the 34th
day
following the expiration of the initial Lock-Up Period, it will give notice
thereof to the Company and will not consummate such transaction or take any
such
action unless it has received written confirmation from the Company that the
Lock-Up Period (as may have been extended pursuant to the previous paragraph)
has expired.
Any
Securities received upon exercise of options granted to the undersigned will
also be subject to this Agreement. Any Securities acquired by the undersigned
in
the open market will not be subject to this Agreement. A transfer of Securities
to a family member or trust may be made, provided the transferee agrees to
be
bound in writing by the terms of this Agreement prior to such transfer and
no
filing by any party (donor, donee, transferor or transferee) under the
Securities Exchange Act of 1934 shall be required or shall be voluntarily made
in connection with such transfer (other than a filing on a Form 5 made after
the
expiration of the Lock-Up Period). Any sale or surrender to the Company of
any
of the undersigned’s stock options or any Securities underlying the
undersigned’s stock options may be made in order to pay the exercise price or
taxes associated with the exercise of options.
In
furtherance of the foregoing, the Company and its transfer agent and registrar
are hereby authorized to decline to make any transfer of Securities if such
transfer would constitute a violation or breach of this Agreement
This
Agreement shall be binding on the undersigned and the successors, heirs,
personal representatives and assigns of the undersigned. This Agreement shall
lapse and become null and void if the Public Offering Date shall not have
occurred on or before August 31, 2005. This
agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York.
|
Very
truly yours,
....................................................
[Name
of officer or director]
|
