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EXHIBIT 5.1
MCN CORPORATION
(A MICHIGAN CORPORATION)
MCN FINANCING III
(A DELAWARE BUSINESS TRUST)
2,300,000 FELINE PRIDES(SM)
(STATED AMOUNT OF $50 PER FELINE PRIDES)
EACH CONSISTING OF
A PURCHASE CONTRACT OF MCN CORPORATION
REQUIRING THE PURCHASE ON MAY 16, 2000 (OR EARLIER)
OF A NUMBER OF SHARES OF COMMON STOCK OF MCN CORPORATION
EQUAL TO THE SETTLEMENT RATE
AND
A 7 1/4% TRUST ORIGINATED PREFERRED SECURITIES
OF MCN FINANCING III
UNDERWRITING AGREEMENT
March 19, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
As the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
MCN Corporation, a Michigan corporation, doing business as MCN Energy
Group Inc. (the "Company") and MCN Financing III, a
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(SM)"FELINE PRIDES", "Income PRIDES", "Trust Originated Preferred
Securities" and "TOPrS" are service marks of Merrill Lynch & Co. Inc.
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Delaware statutory business trust (the "Trust" and, together with the Company,
the "Offerors") confirm their agreement with the several underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Donaldson, Lufkin & Jenrette Securities
Corporation, Salomon Brothers Inc, Smith Barney Inc. and Ladenburg Thalmann &
Co. Inc., as representatives (in such capacity, collectively, the
"Representatives"), with respect to the sale to the Underwriters of FELINE
PRIDES(SM), each of which will initially consist of a unit (referred to as
Income PRIDES(SM)) with a Stated Amount of $50 comprised of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
purchase from the Company on May 16, 2000, a number of shares of common stock,
par value $.01 per share, of the Company (the "Common Stock") equal to the
Settlement Rate as set forth in the Purchase Contract Agreement (defined below)
and (ii) the Company will pay to the holder contract adjustment payments, and
(b) beneficial ownership of a 7 1/4% Trust Originated Preferred Security(SM)
(the "Preferred Security") of the Trust, having a liquidation amount of $50
(the "Initial Securities"). The Company and the Trust also propose to grant to
the Underwriters an option to purchase up to 345,000 additional Income PRIDES
(the "Option Securities" and together with the Initial Securities, the
"Securities") as described in Section 2(b) hereof. In accordance with the
terms of the Purchase Contract Agreement, dated as of March 25, 1997, between
the Company and The First National Bank of Chicago, as Purchase Contract Agent
(the "Purchase Contract Agent"), the Preferred Securities constituting a part
of the Securities will be pledged by the Purchase Contract Agent, on behalf of
the holders of the Securities, to The Chase Manhattan Bank, as Collateral
Agent, pursuant to the Pledge Agreement, dated as of March 25, 1997 (the
"Pledge Agreement"), among the Company, the Purchase Contract Agent and the
Collateral Agent, to secure the holders' obligation to purchase Common Stock
under the Purchase Contracts. The rights and obligations of a holder of
Securities in respect of Preferred Securities, subject to the pledge thereof,
and Purchase Contracts will be evidenced by Security Certificates (the
"Security Certificates") to be issued pursuant to the Purchase Contract
Agreement.
The Preferred Securities will by guaranteed by the Company with
respect to distributions and payments upon liquidation, redemption and
otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
Securities Guarantee Agreement, dated as of March 19, 1997 (the "Preferred
Securities Guarantee Agreement"), executed and delivered by the Company and
Wilmington Trust Company, as trustee (the "Guarantee Trustee"), for the benefit
for the holders from time to time of the Preferred Securities, and certain
back-up undertakings of the Company. The entire proceeds from the sale of the
Preferred Securities will be combined with the entire proceeds from the sale by
the Trust to
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the Company of its common securities (the "Common Securities" and, together
with the Preferred Securities, the "Trust Securities") guaranteed by the
Company with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement, dated as of March 25, 1997 (the "Common Securities
Guarantee Agreement" and, together with the Preferred Securities Guarantee
Agreement, the "Guarantee Agreements"), executed and delivered by the Company
for the benefit of the holders from time to time of the Common Securities, and
certain backup undertakings of the Company, and will be used by the Trust to
purchase the 7 1/4% Junior Subordinated Debentures due May 16, 2002 (the
"Junior Subordinated Debentures") of the Company. The Preferred Securities and
the Common Securities will be issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of March 19, 1997 (the
"Declaration"), among the Company, as Sponsor, Sebastian Coppola and Daniel L.
Schiffer (the "Regular Trustees"), Wilmington Trust Company, as institutional
trustee (the "Institutional Trustee") and Wilmington Trust Company (the
"Delaware Trustee" and, together with the Institutional Trustee and the Regular
Trustees, the "Trustees"), and the holders from time to time of undivided
beneficial interests in the assets of the Trust. The Junior Subordinated
Debentures will be issued pursuant to the Subordinated Debt Securities
Indenture, dated as of September 1, 1994 (the "Base Indenture"), between the
Company and NBD Bank, as Trustee (the "Debt Trustee"), as supplemented by the
First Supplemental Indenture, dated April 17, 1996, the Second Supplemental
Indenture, dated July 24, 1996 and the Third Supplemental Indenture, dated
March 19, 1997 (the Base Indenture, as supplemented and amended, being referred
to as the "Indenture"). Capitalized terms used herein without definition shall
be used as defined in the Prospectus.
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Offerors and the Representatives, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written communication
between the Offerors and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Securities will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company, and the Trust, MCN Financing II and MCN Financing IV
(collectively, the "MCN Trusts") have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-21175) and pre-
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effective amendment no. 1 thereto covering the registration of securities of
the Company and the MCN Trusts, including the Securities and the Purchase
Contracts and Preferred Securities included in and shares of Common Stock
underlying, the Securities, under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses, and
the offering thereof from time to time in accordance with Rule 415 of the rules
and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and the Company has filed such post-effective amendments thereto
as may be required prior to the execution of the Pricing Agreement. Such
registration statement, as so amended, has been declared effective by the
Commission. Such registration statement, as so amended, including the exhibits
and schedules thereto, if any, and the information, if any, deemed to be a part
thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the prospectus supplement relating to the offering of the
Securities, in the form first furnished to the Underwriters by the Company for
use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
the applicable Pricing Agreement; provided, further, that if the Offerors file
a registration statement with the Commission pursuant to Section 462(b) of the
1933 Act Regulations (the "Rule 462(b) Registration Statement"), then after
such filing, all references to "Registration Statement" shall be deemed to
include the Rule 462(b) Registration Statement; and provided, further, that if
the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "Prospectus" shall be deemed to include the final or preliminary
prospectus and the applicable term sheet or abbreviated term sheet (the "Term
Sheet"), as the case may be, in the form first furnished to the Underwriters by
the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all
references in this Underwriting Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to
refer to any prospectus used before the registration statement became effective
and any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of the applicable Pricing Agreement. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the
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electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered and the Declaration, the
Indenture and the Preferred Securities Guarantee Agreement have been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter as of the
date hereof and as of the date of the Pricing Agreement (such later date being
hereinafter referred to as the "Representation Date") that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) The Company and the MCN Trusts meet, and at the
respective times of the commencement and consummation of the offering of the
Securities will meet, the requirements for the use of Form S-3 under the 1933
Act. Each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act. At the respective times the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendments thereto (including the filing of the Company's most
recent Annual Report on Form 10-K with the Commission) became effective and at
each Representation Date, the Registration Statement, any Rule 462 Registration
Statement and any amendments or supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and
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regulations of the Commission under the 1939 Act (the "1939 Act Regulations")
and did not and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus and at the
Closing Time (as defined herein), the Prospectus and any amendments and
supplements thereto did not and will not include an 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. If the Offerors elect to rely upon Rule 434 of the 1933
Act Regulations, the Offerors will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to (A) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Offerors in writing by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or the Prospectus or (B) the part of the Registration Statement which
shall constitute the Statement of Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as so filed
in all material respects with the 1933 Act Regulations and, if applicable, each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with the offering of the Securities will, at the time of such
delivery, be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of the
time of any subsequent amendment, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading; and any additional documents
deemed to be incorporated by reference in the Registration Statement or the
Prospectus will, if and when such documents are filed with the Commission, or
when amended, as appropriate, comply in all material respects to the
requirements of the 1934 Act and the 1934 Act Regulations and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
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warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Offerors by an
Underwriter through Merrill Lynch expressly for use in the Registration
Statement or the Prospectus.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries as at the dates
indicated and the results of their operations for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The ratio
of earnings to fixed charges included in the Prospectus has been calculated in
compliance with Item 503(d) of Regulation S-K of the Commission. The selected
financial information and the summary financial data included in the Prospectus
present fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no
development which could reasonably be expected to result in a material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries, considered
as one enterprise (a "Material Adverse Effect"), whether or not arising in the
ordinary course of business, (B) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those arising in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries, considered as one enterprise, (C) except for regular
dividends on the Common Stock in amounts per share that are consistent with
past practice or the applicable charter document or supplement thereto,
respectively, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
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(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Michigan, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Agreement, the Pricing Agreement, the Purchase
Contract Agreement, the Pledge Agreement and the Guarantee Agreements. The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good standing would
not have a Material Adverse Effect.
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted and as described in the Prospectus, and is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
Material Adverse Effect. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and non-assessable and all such shares are owned
by the Company, directly or through its subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity. None
of the outstanding shares of capital stock of the subsidiaries was issued in
violation of preemptive or other similar rights arising by operation of law,
under the charter or by-laws of any subsidiary or under any agreement to which
the Company or any subsidiary is a party, or otherwise.
(ix) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus; since the date indicated in the
Prospectus there has been no change in the consolidated capitalization of the
Company and its subsidiaries (other than changes in outstanding Common Stock
resulting from employee benefit plan or dividend reinvestment and stock
purchase plan transactions); and all of the issued and outstanding capital
stock of the Company has been duly authorized and validly issued, is fully paid
and non-assessable and conforms to the descriptions thereof contained in the
Prospectus.
(x) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Business Trust Act (the
"Delaware Act") with the power and
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authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the Preferred
Securities, the Common Securities and the Declaration; the Trust is duly
qualified to transact business as a foreign company and is in good standing in
each jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a Material Adverse
Effect on the Trust; the Trust is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; the Trust is and will,
under current law, be classified for United States federal income tax purposes
as a grantor trust and not as an association taxable as a corporation.
(xi) The Purchase Contract Agreement has been duly authorized
by the Company and, at the Closing Time, when validly executed and delivered by
the Company and assuming due authorization, execution and delivery of the
Purchase Contract Agreement by the Purchase Contract Agent, will constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity) (the "Bankruptcy Exceptions"), and will conform
in all material respects to the description thereof contained in the
Prospectus.
(xii) The Pledge Agreement has been duly authorized by the
Company and, at the Closing Time, when validly executed and delivered by the
Company and assuming due authorization, execution and delivery of the Pledge
Agreement by the Collateral Agent and the Purchase Contract Agent, will
constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and will
conform in all material respects to the description thereof contained in the
Prospectus.
(xiii) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor as described in the Registration Statement and Prospectus,
will be validly issued and will represent undivided beneficial interests in the
assets of the Trust and will conform in all material respects to the
description thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and at the
Closing Time all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
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(xiv) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Institutional Trustee and the Delaware
Trustee, the Declaration will, at the Closing Time, be a legal, valid and
binding obligation of the Company and the Regular Trustees, enforceable against
the Company and the Regular Trustees in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description
thereof contained in the Prospectus.
(xv) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by the
Company, and, in the case of the Preferred Securities Guarantee Agreement,
assuming due authorization, execution and delivery of the Preferred Securities
Guarantee by the Guarantee Trustee, will constitute a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantees and the Guarantee Agreements
will conform in all material respects to the description thereof contained in
the Prospectus.
(xvi) The Securities have been duly authorized for issuance
and sale to the Underwriters and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
non-assessable and will conform in all material respects to the description
thereof contained in the Prospectus; the issuance of the Securities is not
subject to preemptive or other similar rights.
(xvii) The shares of Common Stock to be issued and sold by
the Company pursuant to the Purchase Contract Agreement (the "Shares") and the
preferred share purchase rights (the "Rights") to be issued with the Shares
have been duly and validly authorized and reserved for issuance; such Shares,
when issued and delivered in accordance with the provisions of the Purchase
Contract Agreement and the Pledge Agreement, will be duly authorized, validly
issued and fully paid and non-assessable and will conform in all material
respects to the description thereof contained in the Prospectus; upon issuance
of the Shares, the Rights will be duly authorized and validly paid and will
conform in all material respects to the description thereof contained in the
Prospectus; and the issuance of such Shares will not be subject to preemptive
or other similar rights.
(xviii) The Indenture has been duly authorized and qualified
under the 1939 Act and, at the Closing Time, will have been duly executed and
delivered and will constitute a legal, valid and binding agreement of the
Company, enforceable against
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the Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture will conform
in all material respects to the description thereof contained in the
Prospectus.
(xix) The Junior Subordinated Debentures have been duly
authorized by the Company and, at the Closing Time, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered against payment therefor as described in the
Prospectus, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms except
to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will be in the form contemplated by, and entitled to the
benefits of, the Indenture and will conform in all material respects to the
description thereof contained in the Prospectus.
(xx) Each of the Regular Trustees of the Trust is an employee
of the Company and has been duly authorized by the Company to execute and
deliver the Declaration.
(xxi) Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, note, lease, loan or credit
agreement or any other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject, or in violation of any applicable law, rule or regulation or any
judgment, order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties or assets, which violation
or default would, singly or in the aggregate, have a Material Adverse Effect.
(xxii) The Trust is not in violation of the Declaration or
its certificate of trust filed with the State of Delaware on February 3, 1997
(the "Certificate of Trust"); none of the entry into the Purchase Contracts
underlying the Securities by the Company, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the Shares and Rights
and the sale of the Shares by the Company pursuant to the Purchase Contracts;
the execution, delivery and performance of this Agreement, the Pricing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Declaration, the Preferred Securities, the Common Securities,
the Indenture, the Junior Subordinated Debentures, the Guarantee Agreements and
the Guarantees, and the consummation of the transactions contemplated herein
and therein and compliance by the Offerors with its obligations hereunder and
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thereunder, did or will result in a breach of any of the terms or provisions
of, or constitute a default under or require the consent of any party under the
Certificate of Trust of the Trust or the Articles of Incorporation or by-laws
of the Company and its subsidiaries, any contract, indenture, mortgage, note,
lease, agreement or other instrument to which either the Trust, the Company or
any of its subsidiaries is a party or by which any of them may be bound, any
applicable law, rule or regulation or any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Trust, the Company or any of its subsidiaries or any of
their respective property or assets, or did or will result in the creation or
imposition of any lien on the properties or assets of the Trust, the Company or
any of its subsidiaries.
(xxiii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, manufacturers
or contractors which might be expected to result in a Material Adverse Effect.
(xxiv) There is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body, domestic
or foreign, now pending or to the knowledge of the Company threatened against
or affecting the Trust, the Company or any of its subsidiaries which is
required to be disclosed in the Registration Statement and the Prospectus
(other than as stated therein), or which might reasonably be expected to result
in a Material Adverse Effect, or which might be reasonably expected to
materially and adversely affect the assets, properties or operations thereof or
the consummation of this Agreement, the Pricing Agreement, the Purchase
Contracts, the Purchase Contract Agreement, the Pledge Agreement, the Guarantee
Agreements, the Indenture or the transactions contemplated herein or therein.
The aggregate of all pending legal or governmental proceedings to which the
Trust, the Company or any subsidiary thereof is a party or of which any of
their respective properties or operations is the subject which are not
described in the Registration Statement and the Prospectus, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.
(xxv) The Company and its subsidiaries have good and
marketable title to all material real and personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except such as
are described in the Registration Statement or the Prospectus or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and any material real property and buildings held under lease
by the Company and its subsidiaries
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are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not materially interfere with the use
made and proposed to be made of such property and buildings by the Company and
its subsidiaries; the pipeline, distribution main and underground gas storage
easements enjoyed by the Company or its subsidiaries are valid, subsisting and
enforceable easements with such exceptions as are not material and do not
materially interfere with the conduct of the business of the Company and its
subsidiaries; the Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals, consents and
orders of all governmental authorities or agencies which are necessary for the
ownership or lease of the material properties owned or leased by each of them
and for the operation of the business now operated by each of them with such
exceptions which, singly or in the aggregate, are not material and do not
materially interfere with the conduct of the business of the Company and its
subsidiaries, considered as one enterprise; all such licenses, franchises,
permits, certificates, orders, authorizations, approvals and consents are in
full force and effect and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company and its subsidiaries,
considered as one enterprise and, except as otherwise set forth in the
Registration Statement or the Prospectus, there are no legal or governmental
proceedings pending or threatened that would result in a material modification,
suspension or revocation thereof.
(xxvi) No authorization, approval, consent, order,
registration or qualification of or with any court or governmental authority or
agency is required for the entry into the Purchase Contracts underlying the
Securities, in connection with the issuance and sale of the Common Securities,
the offering of the Securities and the issuance and sale of the Shares by the
Company pursuant to such Purchase Contracts, except such as have been obtained
and made under the federal securities laws and such as may be required under
state or foreign securities or Blue Sky laws.
(xxvii) This Agreement and the Pricing Agreement have been
duly authorized, executed and delivered by each of the Offerors.
(xxviii) None of the Trust or the Company or any of its
subsidiaries is an "investment company" or under the "control" of an
"investment company" as such terms are defined under the Investment Company Act
of 1940, as amended (the "1940 Act").
(xxix) The Company is presently exempt from the provisions of
the Public Utility Holding Company Act of 1935 (except Section 9 thereof) which
would otherwise require it to register thereunder.
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(xxx) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, has taken, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities or the Common Stock.
(xxxi) No "forward looking statement" (as defined in Rule 175
under the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable basis
or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or
the Trust, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Offerors agree to sell to each Underwriter, and each Underwriter severally and
not jointly, agrees to purchase from the Offerors, at the price per security
set forth in the Pricing Agreement, the number of Initial Securities set forth
in Schedule A hereto opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule 430A
of the 1933 Act Regulations, the initial public offering price per Security and
the purchase price per Security to be paid by the several Underwriters for the
Securities have each been determined and set forth in the Pricing Agreement,
dated the date hereof, and any necessary amendments to the Registration
Statement and the Prospectus will be filed before the Registration Statement
becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of
the 1933 Act Regulations, the purchase price per Security to be paid by the
several Underwriters shall be an amount equal to the initial public offering
price per Security, less an amount per Security to be determined by agreement
between the Underwriters and the Offerors. The initial public offering price
per Security shall be a fixed price to be determined by agreement between the
Underwriters and the Offerors. The initial
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public offering price and the purchase price, when so determined, shall be set
forth in the Pricing Agreement. In the event that such prices have not been
agreed upon and the Pricing Agreement has not been executed and delivered by
all parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed to
by the Offerors and the Underwriters.
(b) In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Offerors hereby grant to the Underwriters, severally and not
jointly, the right to purchase at their election up to 345,000 Option
Securities at the price per share set forth in the Pricing Agreement. The
option hereby granted will expire automatically at the close of business on the
30th calendar day after (i) the later of the date the Registration Statement
and any Rule 462(b) Registration Statement becomes effective, if the Offerors
have elected not to rely upon Rule 430A under the 1933 Act Regulations, or (ii)
the Representation Date, if the Offerors have elected to rely upon Rule 430A
under the 1933 Act Regulations, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Securities upon
notice by the Underwriters to the Offerors setting forth the aggregate number
of additional Optional Securities to be purchased and the time and date of
delivery for the related Option Securities. Any such time and date of delivery
(a "Date of Delivery") shall be determined by the Underwriters but shall not be
later than seven full business days after the exercise of such option, nor in
any event before the Closing Time, unless otherwise agreed upon by the
Underwriters and the Offerors. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase from the Company the same percentage of the
total number of Option Securities as such Underwriter is purchasing of the
Initial Securities as set forth in Schedule A hereto (subject in each case to
such adjustments as the Representatives in their discretion shall make to
eliminate any fractional Option Securities).
(c) The Preferred Securities underlying the Securities will be
pledged with the Collateral Agent to secure the holders' obligations to
purchase Common Stock under the Purchase Contracts. Such pledge shall be
effected by the transfer to the Collateral Agent of the Preferred Securities to
be pledged at the Closing Time and appropriate Date of Delivery, if any, in
accordance with the Pledge Agreement.
(d) Delivery of certificates for the Initial Securities and the
Option Securities (if the option provided for in Section 2(b) hereof shall have
been exercised on or before the first business
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day prior to the Closing Time) shall be made at the offices of the Underwriters
in New York, against the delivery to the Collateral Agent of the Preferred
Securities relating to such Securities by such Underwriters or on their behalf,
and payment of the purchase price for such Securities shall be made at the
offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P, 125 West 55th Street, New
York, New York 10019 or at such other place as shall be agreed upon by the
Underwriters and the Offerors, at 10:00 a.m. (New York time) on the third
business day after the date the Registration Statement becomes effective (or,
if the Offerors have elected to rely upon Rule 430A, the third full business
day after execution of the Pricing Agreement (or, if pricing of the Securities
occurs after 4:30 p.m., Eastern time, on the fourth full business day
thereafter)), or such other time not later than ten business days after such
date as shall be agreed upon by the Underwriters and the Offerors (such time
and date of payment and delivery being referred to herein as the "Closing
Time"). Payment for the Securities purchased by the Underwriters shall be made
by wire transfer of immediately available funds, payable to the Company,
against delivery to the respective accounts of the Underwriters of the
Securities to be purchased by it. Delivery of, and payment for, the Securities
shall be made through the facilities of the Depository Trust Company. In
addition, if the Underwriters purchase any or all of the Option Securities,
payment of the purchase price and delivery of certificates for such Option
Securities shall be made at the offices of LeBoeuf, Lamb, Greene & MacRae,
L.L.P. set forth above, or at such other place as shall be agreed upon by the
Underwriters and the Offerors, on each Date of Delivery as specified in the
relevant notice from the Underwriters to the Offerors.
Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names
as the Underwriters may request in writing at least two full business days
before the Closing Time or any Date of Delivery, as the case may be. Merrill
Lynch, individually and not as representative of the Underwriters, may (but not
shall be obligated to) make payment of the purchase price for the Securities,
if any, to be purchased by any Underwriter whose funds have not been received
by the Closing Time, or the Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Initial Securities and the Option Securities, if any, will
be made available for examination by the Underwriters no later than 10:00 a.m.
(New York City time) on the last business day prior to the Closing Time or the
Date of Delivery, as the case may be.
(e) If settlement for the Option Securities occurs after the
Closing Time, the Offerors will deliver to the Underwriters on the relevant
Date of Delivery, and the obligations of the Underwriters to purchase the
Option Securities shall be
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conditioned upon the receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters
delivered at the Closing Time pursuant to Section 5(k) hereof.
SECTION 3. Covenants of the Offerors. The Offerors agree with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus, including as a part thereof a prospectus supplement
relating to the Securities to be filed with the Commission pursuant to Rule 424
of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made. Prior to the filing, the Offerors
will cooperate with the Underwriters in the preparation of such prospectus
supplement to assure that the Underwriters have no reasonable objection to the
form or content thereof when filed or mailed.
(b) The Offerors will comply with the requirements of Rule 430A of
the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as
applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (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,
(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 and (v) of the issuance by any state securities
commission or other regulatory authority of any order suspending the
qualification or the exemption from qualification of the Securities or the
Shares under state securities or Blue Sky laws or the initiation or threatening
of any proceeding for such purpose. The Offerors 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.
(c) The Offerors will give the Underwriters notice of its intention
to file or prepare any amendment to the Registration Statement (including any
post-effective amendment and any filing under Rule 462(b) of the 1933 Act
Regulations) any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise; will furnish the Underwriters with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision a
reasonable amount of time prior to such proposed filing or use, as the case may
be; and will not file any such Rule 462(b) Registration Statement,
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Term Sheet, amendment, supplement or revision to which the Underwriters or
counsel for the Underwriters shall object.
(d) The Company will deliver to Merrill Lynch and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to Merrill Lynch,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company will deliver to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Registration Statement and the Prospectus. If at any time
when the Prospectus is required by the 1933 Act or the 1934 Act to be delivered
in connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Offerors, to amend the Registration Statement in
order that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or
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amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Offerors will promptly prepare
and file with the Commission, subject to Section 3(c), such amendment or
supplement as may be necessary to correct such statement or omission or to make
the Registration Statement or the Prospectus comply with such requirements, and
the Offerors will furnish to the Underwriters, without charge, such number of
copies of such amendment or supplement as the Underwriters may reasonably
request.
(g) The Offerors will use their best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as Merrill Lynch may designate; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Offerors
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for so long as may be
required in connection with distribution of the Securities and the Shares.
(h) The Company will make generally available to its securityholders
as soon as practicable, but not later than 45 days (or 90 days, in the case of
a period that is also the Company's fiscal year) after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in
said Rule 158) of the Registration Statement.
(i) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(j) If, at the time that the Registration Statement became (or in the
case of a post-effective amendment becomes) effective, any information shall
have been omitted therefrom in reliance upon Rule 430A or Rule 434 of the 1933
Act Regulations, then immediately following the execution of the Pricing
Agreement, the Offerors will prepare, and file or transmit for filing with the
Commission in accordance with such Rule 430A or Rule 434 and Rule 424(b) of the
1933 Act Regulations, copies of an amended Prospectus, or Term Sheet, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted.
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(k) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern time
on the date of the Pricing Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(l) The Offerors, during the period when the Prospectus is required
to be delivered under the 1933 Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(m) The Offerors will use their best efforts to effect the listing of
the Income PRIDES and the Shares on the New York Stock Exchange and to cause
the Securities to be registered under the 1934 Act.
(n) During a period of 90 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the prior written
consent of Merrill Lynch, directly or indirectly, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, or enter into any
agreement to sell, any Securities, Purchase Contracts, Preferred Securities or
Common Stock or any security convertible into or exchangeable or exercisable
for Securities, Purchase Contracts, Preferred Securities, Common Stock or the
Junior Subordinated Debentures, or any equity securities substantially similar
to the Securities, Preferred Securities, Purchase Contracts or Common Stock or
any debt securities substantially similar to the Junior Subordinated
Debentures; provided, however, that such restriction shall not affect the
ability of the Offerors to take any such action (i) in connection with any
employee benefit, dividend reinvestment or stock purchase plan of the Company
or its subsidiaries or (ii) in connection with the offering of the Securities,
including the Preferred Securities, and the Junior Subordinated Debentures
issued pursuant to this Agreement.
(o) During a period of three years from the Closing Time, to make
generally available to the Underwriters copies of all reports and other
communications (financial or other) mailed to stockholders, and to deliver to
the Underwriters promptly after they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed;
and shall furnish such additional information concerning the business and
financial condition of the Company as the Underwriters may from time to time
reasonably request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission).
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(p) The Company will reserve and keep available at all times, free
of preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy any obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary to
keep effective the Registration Statement with respect to the Shares.
(q) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, will take, directly or
indirectly, any action resulting in a violation of Regulation M under the 1934
Act, or designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or the Common
Stock.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, the
Pricing Agreement, the Purchase Contracts, the Purchase Contract Agreement and
the Pledge Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement and Prospectus as originally filed (including
financial statements and exhibits) and of each amendment thereto; (ii) the
printing and delivery to the Underwriters of this Agreement, the Pricing
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale and delivery of the
Securities; (iii) the preparation, issuance and delivery of the certificates
for the Securities and the Shares; (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including the
transfer agents and registrars), as well as fees and disbursements of the
Trustees, the Purchase Contract Agent, the Collateral Agent and any Depositary,
and their respective counsel (except as provided for in the Prospectus); (v)
the qualification of the Securities and the Shares under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any Legal
Investment Survey; (vi) the printing and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet and of the Prospectus
and any amendments or supplements thereto; (vii) the printing and delivery to
the Underwriters of copies of the Blue Sky Survey and any Legal Investment
Survey; (viii) any fees payable in connection with the rating of the Securities
by nationally recognized statistical rating organizations; (ix) the filing fees
incident to, and the fees and disbursements of counsel to the Underwriters in
connection with, the review, if any, by the National Association of Securities
Dealers, Inc. (the "NASD") of the terms of the sale of the Securities; (x) any
fees payable to
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the Commission; and (xi) the fees and expenses incurred in connection with the
listing of the Income PRIDES and the Shares on the New York Stock Exchange.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors herein contained or in certificates of any officer of the
Company or any subsidiary or the trustees of the Trust delivered pursuant to
the provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933 Act not
later than 5:30 p.m., New York City time, on the date hereof, and on the date
hereof and at the Closing Time and any Date of Delivery, no stop order
suspending the effectiveness of the Registration Statement or any part thereof
shall have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the satisfaction of
counsel to the Underwriters. A prospectus containing information relating to
the description of the Securities, the specific method of distribution and
similar matters shall have been filed with the Commission in accordance with
Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A), or, if
the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 Information shall have been filed with the
Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Daniel L. Schiffer, Esq., Senior Vice President, General Counsel and Secretary
of the Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws
of the State of Michigan.
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(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required.
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to employee benefit plan or
dividend reinvestment and stock purchase plan transactions), and the
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable.
(v) The Rights to be issued with the Shares
have been duly authorized and, upon issuance of such Shares, will be
validly issued and conform in all material respects to the description
thereof in the Prospectus.
(vi) Each subsidiary of the Company has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect; all of the issued
and outstanding capital stock of each such subsidiary of the Company
has been duly authorized and validly issued, is fully paid and
non-assessable and all such shares are owned by the Company, directly
or through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
(vii) The Trust is not required to be qualified
and in good standing as a foreign company in Michigan, except to the
extent that the failure to so qualify or be in good standing would not
have a Material Adverse Effect on the Trust; and the Trust is not a
party to or otherwise bound by any agreement other than those
described in the Prospectus.
(viii) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and is a legal,
valid and binding obligation of the Company, enforceable against the
Company and each of the Regular
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Trustees in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Declaration has
been duly qualified under the 1939 Act.
(ix) All legally required proceedings in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
Agreement (other than the filing of post-issuance reports, the non-
filing of which would not render the Securities invalid) have been
taken and all legally required orders, consents or other
authorizations or approvals of any other public boards or bodies in
connection with the authorization, issuance and validity of the
Securities and the sale of the Securities in accordance with this
Agreement (other than in connection with or in compliance with the
provisions of the securities or Blue Sky laws of any jurisdictions, as
to which no opinion need be expressed) have been obtained and are in
full force and effect.
(x) The Registration Statement is effective
under the 1933 Act and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act, and no proceedings therefor have been
initiated or threatened by the Commission.
(xi) The Registration Statement as of its
effective date and the Prospectus and each amendment or supplement
thereto as of its issue date (in each case, other than the financial
statements and the notes thereto, the financial schedules, and any
other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in
all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; and the Declaration, the Indenture, the
Preferred Securities Guarantee Agreement and the Statements of
Eligibility on Forms T-1 with respect to each of the Institutional
Trustee, the Debt Trustee, and the Guarantee Trustee filed with the
Commission as part of the Registration Statement complied as to form
in all respects with the requirements of the 1939 Act and the 1939 Act
Regulations.
(xii) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the time
they were filed or last amended (other than the financial statements
and the notes thereto, the financial schedules, and any other
financial data included or incorporated by reference therein, as to
which such counsel need express no belief), complied as to form in all
material respects with the requirements of the 1934 Act and the 1934
Act Regulations, as applicable; and such counsel has no reason to
believe that any of such documents, when such
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documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the 1933 Act, an untrue statement of a material fact,
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and, in the
case of other documents which were filed under the 1934 Act with the
Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein not
misleading.
(xiii) MCN and each of the MCN Trusts meet the
registrant requirements for use of Form S-3 under the 1933 Act
Regulations.
(xiv) The Securities have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in the
Pricing Agreement, will be validly issued and fully paid and
non-assessable; the Common Stock and the Securities are each
registered under the 1934 Act, and the Income PRIDES issuable at the
Closing Time and the Shares issuable by the Company pursuant to the
Purchase Contracts have been authorized for listing on the New York
Stock Exchange, upon official notice of issuance.
(xv) The Shares subject to the Purchase
Contract Agreement have been duly and validly authorized and reserved
for issuance and, when issued and delivered by the Company in
accordance with the provisions of the Purchase Contract Agreement, the
Purchase Contracts and the Pledge Agreement, will be fully paid and
non-assessable; the issuance of such Shares will not be subject to
preemptive or other similar rights arising by law or, to the best of
such counsel's knowledge, otherwise.
(xvi) The issuance of the Securities is not
subject to preemptive or other similar rights arising by law or, to
the best of such counsel's knowledge, otherwise.
(xvii) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equitable right.
(xviii) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by each of the
Company and the Trust.
(xix) The Purchase Contract Agreement has been
duly authorized by the Company and, assuming due authorization,
execution and delivery of the Purchase
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Contract Agreement by the Purchase Contract Agent, constitutes a
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xx) The Pledge Agreement has been duly
authorized by the Company and, assuming due authorization, execution
and delivery of the Pledge Agreement by the Collateral Agent and the
Purchase Contract Agent, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xxi) Each of the Guarantee Agreements has been
duly authorized, executed and delivered by the Company; the Preferred
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by Bankruptcy Exceptions; and the
Preferred Securities Guarantee Agreement and the Declaration have been
duly qualified under the 1939 Act.
(xxii) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution,
and delivery thereof by the Debt Trustee, is a legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; and the Indenture
has been duly qualified under the 1939 Act.
(xxiii) The Subordinated Debt Securities are in
the form contemplated by the Indenture, have been duly authorized,
executed and delivered by the Company and, when authenticated by the
Debt Trustee in the manner provided for in the Indenture and delivered
against payment therefor by the Trust, will constitute legal, valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xxiv) The entry into the Purchase Contracts
underlying the Securities; the issuance and sale of the Securities by
the Offerors; the issuance and sale of the Shares by the Company
pursuant to the Purchase Contracts; the execution, delivery and
performance by the Company of this Agreement, the Pricing Agreement,
the Purchase Contracts, the Purchase Contract Agreement, the Pledge
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Agreement, the Declaration, the Securities, the Common Securities, the
Indenture, the Junior Subordinated Debentures, the Guarantee
Agreements and the Guarantees; the consummation of the transactions
contemplated herein and therein; and the compliance by each of the
Offerors with their respective obligations hereunder and thereunder do
not and will not conflict with, result in a breach of, or constitute a
default under or require the consent of any party under the
Certificate of Trust of the Trust or the Articles of Incorporation or
by-laws of the Company or any of its subsidiaries, or any contract,
indenture, mortgage, agreement, note, lease or other instrument to
which the Trust, the Company or any of its subsidiaries is a party or
by which any of them may be bound, or any applicable law, rule or
regulation, or any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Trust, the Company or any of its subsidiaries or
any of their respective properties or assets or did or will in the
creation or imposition of any lien on the properties or assets of the
Trust, the Company or any of its subsidiaries.
(xxv) All conditions precedent provided for in
the Purchase Contract Agreement relating to the authentication and
delivery of the Security Certificates have been complied with and the
Company is duly entitled to the authentication and delivery of the
Security Certificates in accordance with the terms of the Purchase
Contract Agreement; the Security Certificates are in a form
contemplated by the Purchase Contract Agreement and comply with all
applicable statutory requirements and with the requirements of the New
York Stock Exchange.
(xxvi) To the best of such counsel's knowledge,
there are no actions, suits or proceedings before or by any court or
governmental agency or body, domestic or foreign, pending or
threatened which are required to be disclosed in the Registration
Statement or the Prospectus, other than those disclosed therein, and
all pending legal or governmental proceedings to which the Company or
any of its subsidiaries is a party or to which any of their property
is subject which are not described in the Registration Statement and
the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material.
(xxvii) The information in the Prospectus under
the captions "MCN Energy Group Inc.," "MCN Financing III," "Use of
Proceeds", "Capitalization," "Description of the FELINE PRIDES,"
"Description of the Purchase Contracts," "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement," "Description of
the Trust Preferred Securities," "Description of the Guarantee,"
"Description of the Junior
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Subordinated Debentures," "Effects of Obligations Under the Junior
Subordinated Debentures and the Guarantee," "The MCN Trusts,"
"Description of MCN Debt Securities," "Particular Terms of the
Subordinated Debt Securities," "Description of MCN Capital Stock,"
"Description of MCN Trust Preferred Securities," "Description of the
Preferred Securities Guarantees," "Effects of Obligations Under the
Subordinated Debt Securities and the Guarantee" and "Description of
Stock Purchase Contracts and Stock Units", to the extent that they
involve matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, has been reviewed by such counsel
and is correct in all material respects.
(xxviii) To the best of such counsel's knowledge
and information, there are no contracts, indentures, mortgages,
agreements, notes, leases or other instruments required to be
described or referred to or incorporated by reference in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to or incorporated by reference therein or
filed as exhibits thereto; the descriptions thereof or references
thereto are true and correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
agreement, note, lease or other instrument so described, referred to,
filed or incorporated by reference.
(xxix) No authorization, approval, consent,
order, registration or qualification of or with any court or federal
or state governmental authority or agency is required for the issuance
and sale of the Securities by the Offerors to the Underwriters or the
performance by the Trust and the Company of their respective
obligations in this Agreement, the Pricing Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Indenture, the Junior
Subordinated Debentures, the Preferred Securities Guarantee Agreement,
the Preferred Securities Guarantee, the Declaration and the Securities
except such as has been obtained and made under the federal securities
laws or such as may be required under state or foreign securities or
Blue Sky laws.
(xxx) The Company and its subsidiaries possess
all licenses, franchises, permits, certificates, authorizations,
approvals, consents and orders of all governmental authorities or
agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and for the operation of
the business carried on by each of them as described in the
Registration Statement and the Prospectus with such exceptions as are
not material and do not materially interfere with the conduct of
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the business of the Company and its subsidiaries, considered as one
enterprise; all such licenses, franchises, permits, certificates,
authorizations, approvals, consents and orders are in full force and
effect and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company and its
subsidiaries, considered as one enterprise and, except as otherwise
set forth in the Registration Statement or the Prospectus, there are
no legal or governmental proceedings pending or threatened that would
result in a material modification, suspension or revocation thereof.
(xxxi) None of the Trust or the Company or any of
its subsidiaries is an "investment company" or under the "control" of
an "investment company" as such terms are defined in the 1940 Act.
(xxxii) The Company is presently exempt from the
provisions of the Public Utility Holding Company Act of 1935 (except
Section 9 thereof) which would otherwise require it to register
thereunder.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements and the notes
thereto, the financial schedules and any other financial data included
or incorporated by reference therein, as to which counsel need express
no opinion), at the time it became effective or at the Representation
Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorporated by
reference therein, as to which counsel need express no opinion), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) or at the Closing
Time, included (or includes) an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
The foregoing opinions may be limited to the laws of Delaware,
Michigan and the federal law of the United States. In giving such opinion,
such counsel may rely, as to matters of
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Delaware law, upon the opinion of Skadden, Arps, Slate, Meagher & Flom, special
Delaware counsel to the Offerors, in which case the opinion shall state that
such counsel believes that you and such counsel are entitled to so rely.
(2) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Offerors, in
form and substance satisfactory to counsel for the Underwriters and subject to
the qualifications and assumptions stated therein, to the effect that:
(i) The Registration Statement, including any
Rule 462(b) Registration Statement, is effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings therefor
initiated, to the best of such counsel's knowledge, or threatened by
the Commission.
(ii) The Registration Statement, including any
Rule 462(b) Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements
and the notes thereto, the financial schedules and any other financial
data included or incorporated by reference therein, or the exhibits to
the Registration Statement, including any Form T-1, as to which no
opinion need be rendered), as of their respective effective or issue
dates, or when amended, as appropriate, complied as to form in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(iii) The statements in the Prospectus under the
captions "MCN Financing III," "Description of the FELINE PRIDES,"
"Description of the Purchase Contracts," "Certain Provisions of the
Purchase Contract Agreement and the Pledge Agreement," "Description of
the Trust Preferred Securities," "Description of the Guarantee,"
"Description of the Junior Subordinated Debentures," "Effect of
Obligations Under the Junior Subordinated Debentures and the
Guarantee," "The MCN Trusts," "Description of MCN Debt Securities"
(except under the second and third paragraphs under the subsection
"Book-Entry Debt Securities"), "Particular Terms of the Subordinated
Debt Securities," "Description of the MCN Trust Preferred Securities,"
"Effect of Obligations under the Subordinated Debt Securities and the
Guarantee" and "Description of Stock Purchase Contracts and Stock
Purchase Units", to the extent that they involve matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects.
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(iv) Assuming that the Purchase Contract
Agreement, the Purchase Contracts underlying the Securities being
delivered at the Closing Time and at any Date of Delivery, and the
Pledge Agreement have been duly authorized, executed and delivered by
the Company under Michigan law, and subject to the enforceability of
the choice of law provisions thereof, each is a valid and legally
binding agreement of the Company enforceable against the Company in
accordance with its terms, except as may be limited by the Bankruptcy
Exceptions; provided, however, that based on a review of applicable
case law, upon the occurrence of a Termination Event, Section
365(e)(2) of the Bankruptcy Code (11 U.S.C. Section Section 101-1330,
as amended) should not substantively limit the provisions of Sections
3.15 and 5.8 of the Purchase Contract Agreement and Section 4.3 of the
Pledge Agreement that require termination of the Purchase Contracts
and release of the Collateral Agent's security interest in the
Preferred Securities or the Treasury Securities; provided, however,
that procedural restrictions respecting relief from the automatic stay
under Section 362 of the Code may affect the timing of the exercise of
such rights and remedies.
(v) When the Securities are issued in
accordance with the terms of the Purchase Contract Agreement and
delivered against payment therefor, the Securities will entitle the
holders thereof to the rights specified in the Purchase Contract
Agreement.
(vi) For purposes of the opinions expressed
therein, such counsel has assumed that (1) the Pledge Agreement has
been duly authorized, executed and delivered by the Purchase Contract
Agent on behalf of each of the holders of the Securities from time to
time, (2) the Purchase Contract Agent is duly incorporated and validly
existing under the laws of the state of its incorporation, (3) the
Purchase Contract Agent and each of the holders of the Securities has
full power, authority and legal right (including, without limitation,
any legal right dependent upon there being no necessary governmental
approvals or filings and no conflict with laws, governing documents or
contracts) to make and perform its obligations under the Pledge
Agreement, (4) the Pledge Agreement is the legal, valid, binding and
enforceable obligation of the Purchase Contract Agent on behalf of
each of the holders of the Securities from time to time, and (5) the
Purchase Contract Agent and each holder of Securities has sufficient
rights in the Preferred Securities or the Treasury Securities, as the
case may be, for the security interest of the Collateral Agent for the
benefit of the Company to attach.
For purposes of such counsel's opinion: (i) "UCC" means the
Uniform Commercial Code as in effect on the date
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thereof in the State of New York; (ii) "Federal Book-Entry Regulations" means
the United States Department of Treasury regulations governing the transfer and
pledge of marketable Treasury Securities maintained in the form of entries in
the records of the Federal Reserve Banks and set forth in 61 Fed. Reg. 43,626
(1996) (to be codified at 31 C.F.R. Part 357), including the 1994 Official Text
of the Uniform Commercial Code, Revised Article 8, Investment Securities (with
Conforming and Miscellaneous Amendments to Articles 1, 3, 4, 5, 9 and 10)
adopted by the American Law Institute and National Conference of Commissioners
On Uniform State Laws and approved by the American Bar Association on February
14, 1995, which is incorporated by reference pursuant to 61 Fed. Reg. 43,626
(1996) (to be codified at 31 C.F.R. Section 357.2; (iii) "Securities
Intermediary" means The Chase Manhattan Bank acting solely in its capacity as a
"securities intermediary" as defined in the Federal Book-Entry Regulations;
(iv) "Security Entitlements" means "security entitlements" as defined in the
Federal Book-Entry Regulations; and (v) "Collateral Account" means account
number MB9198919 maintained by the Securities Intermediary in the name "The
First National Bank of Chicago as Purchase Contract Agent on behalf of the
holders of certain securities of MCN Corporation, subject to the security
interest of The Chase Manhattan Bank as Collateral Agent for the benefit of MCN
Corporation as pledgee" pursuant to the Pledge Agreement, dated as of March 25,
1997, among the Securities Intermediary, the Purchase Contract Agent and the
Company (the "Pledge Agreement") and (vi) "Financial Intermediary" means The
Chase Manhattan Bank acting solely in its capacity as a "financial
intermediary" as defined in Section 8-313(4) of the UCC.
(A) The "transfer" of the Preferred Securities together
with the Pledge Agreement will be effective to create in favor of the
Collateral Agent for the benefit of the Company a valid and perfected security
interest in the Preferred Securities to secure the obligations of the holders
under the Purchase Contracts. Transfer of the Preferred Securities will occur
upon the latest of (a) the delivery of the Preferred Securities to the
Financial Intermediary indorsed to the Financial Intermediary or in blank, (b)
the sending of a confirmation by the Financial Intermediary of the purchase by
the Collateral Agent for the benefit of the Company of such Preferred
Securities and (c) the identification by book-entry of the Preferred Securities
to the Collateral Account.
(B) Such counsel notes that although the Federal
Book-Entry Regulations contain express provisions identifying the law governing
perfection and priority of security interests in security entitlements, they do
not contain express provisions identifying the law governing validity and
attachment of such security interests. Such counsel further notes that the
parties have chosen the laws of the State of New York to govern the Pledge
Agreement and that the UCC does not contain any provisions
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with respect to the creation of a security interest in collateral constituting
a "security entitlement." The UCC, however, does contain provisions for
creation of a security interest in collateral constituting either a "general
intangible" or a "security" (each as defined in the UCC). If and to the extent
(i) the Federal Book-entry Regulations do not preempt the choice of New York
law with respect to the validity and attachment of the security interest in the
Treasury Security Entitlements (as defined herein), (ii) under New York law a
security interest in a "security entitlement" with respect to a book-entry
security issued by the U.S. Treasury would be created in the same manner as a
security interest in a "general intangible" (as defined in the UCC), such
counsel is of the opinion that the provisions of the Pledge Agreement are
effective to create a valid security interest in favor of the Company, to
secure the obligations of the holders of the Growth PRIDES under the Purchase
Contracts comprising a part of such Growth PRIDES, in each such holder's rights
in all "security entitlements" with respect to book- entry securities issued by
the United States Treasury and credited to the Collateral Account (such
security entitlements, the "Treasury Security Entitlements"). Alternatively,
if and to the extent (i) the Federal Book-Entry Regulations do not preempt the
choice of New York law with respect to the validity and attachment of the
security interest in the Treasury Security Entitlements, and (ii) under New
York law a security interest in a "security entitlement" with respect to a
book-entry security issued by the U.S. Treasury would be created in the same
manner as a security interest in a "security" (as defined in the UCC), such
counsel is of the opinion that the provisions of the Pledge Agreement together
with the "transfer" (within the meaning of Section 8-313 of the UCC) of the
Treasury Security Entitlements to the Collateral Agent will be effective to
create a valid security interest in favor of the Collateral Agent for the
benefit of the Company, to secure the obligations of the holders of the Growth
PRIDES under the Purchase Contracts, in such holders' rights in all Treasury
Security Entitlements. Assuming that the Securities Intermediary satisfies the
requirements of Section 8-313(d)(iii) of the UCC (as to which such counsel
expresses no opinion), "transfer" of the Treasury Securities Entitlements will
occur upon the later to occur of (1) the sending of a confirmation by the
Securities Intermediary to the Collateral Agent for the benefit of the Company
of the purchase by the Collateral Agent of the Treasury Securities Entitlements
and (2) the identification by book-entry by the Securities Intermediary of the
Treasury Securities Entitlements as belonging to the Collateral Agent for the
benefit of the Company.
(C) Upon the execution and delivery of the Pledge
Agreement and the establishment of the Collateral Account in accordance with
the terms of the Pledge Agreement, the security interest of the Company in the
Treasury Securities Entitlements will be perfected under the Federal Book-Entry
Regulations.
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(vii) Assuming the Preferred Securities
Guarantee Agreement has been duly authorized, executed and delivered
by the Company under Michigan law, it is a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(viii) Assuming the Indenture has been duly
authorized, executed and delivered by the Company under Michigan law
and, assuming due authorization, execution, and delivery thereof by
the Debt Trustee, it is a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Indenture, Declaration and Preferred
Securities Agreement have been duly qualified under the 1939 Act.
(ix) The Securities, the Common Securities, the
Junior Subordinated Debentures, each of the Guarantees, the
Declaration and each of the Guarantee Agreements conform in all
material respects to the description thereof contained in the
Prospectus.
(x) No authorization, approval, consent,
order, registration or qualification of or with any court or federal
or New York state governmental authority or agency is required for the
entry into the Purchase Contracts underlying the Securities, the
issuance and sale of the Securities by the Offerors to the
Underwriters, or the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts, or the performance by the Company
and the Trust of their respective obligations under this Agreement,
the Pricing Agreement, the Purchase Contracts, the Purchase Contract
Agreement, the Pledge Agreement, the Indenture, the Junior
Subordinated Debentures, the Preferred Securities Guarantee Agreement,
the Preferred Securities Guarantee, the Declaration and the
Securities, except such as has been obtained and made under the
federal securities laws or such as may be required under state or
foreign securities or Blue Sky laws.
(xi) The issuance and sale of the Securities do
not contravene the Commodity Exchange Act or the regulations of the
Commodity Futures Trading Commission.
Moreover, such counsel shall confirm that nothing has come to such
counsel's attention that would lead such counsel to believe that the
Registration Statement, including any information provided pursuant to
Rule 430A or Rule 434 (except for financial statements and the notes
thereto, the financial schedules, and any other financial data
included
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or incorporated by reference therein, as to which counsel need express
no opinion), at the time it became effective or at the Representation
Date, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(except for financial statements and the notes thereto, the financial
schedules, and any other financial data included or incorporated by
reference therein, as to which counsel need express no opinion), at
the Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Underwriters by the Company
for use in connection with the offering of the Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the time it
is first provided to the Underwriters for such use) or at the Closing
Time, included (or includes) an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(3) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom (Delaware), special Delaware counsel to
the Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly created and is
validly existing in good standing as a business trust under the
Delaware Act, and has the business trust power and authority to
conduct its business as described in the Registration Statement and
the Prospectus.
(ii) Assuming that the Declaration has been
duly authorized, executed and delivered by the Company, and assuming
the due authorization, execution and delivery of the Declaration by
Wilmington Trust Company and the Regular Trustees, the Declaration
constitutes a legal, valid and binding obligation of the Company and
is enforceable against the Company in accordance with its terms,
except that to the extent enforceability thereof may be limited by the
Bankruptcy Exceptions.
(iii) Under the Delaware Act and the
Declaration, the Trust has the power and authority to (i) execute and
deliver, and to perform its obligations under, this Agreement and the
Pricing Agreement and (ii) issue, and perform its obligations under,
the Trust Securities.
(iv) The execution and delivery by the Trust of
this Agreement and the Pricing Agreement, and the performance by the
Trust of its obligations hereunder and
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under the Pricing Agreement, have been duly authorized by all
necessary action on the part of the Trust.
(v) The Preferred Securities have been duly
authorized by the Declaration and, when executed by the trust and the
Institutional Trustee in accordance with the Declaration and delivered
against payment therefor in accordance with the terms of this
Agreement, will be validly issued and, subject to qualifications
hereinafter expressed in subparagraph (vi), fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust; the holders of the Preferred Securities, as beneficial owners
of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
said counsel may note that the holders of the Preferred Securities may
be obligated to make payments as set forth in the Declaration.
(vi) The Common Securities have been duly
authorized by the Declaration and, when issued, executed and
authenticated in accordance with the terms of the Declaration, and
delivered and paid for as set forth in the Registration Statement,
will be validly issued, undivided beneficial interests in the assets
of the Trust.
(vii) Under the Delaware Act and the
Declaration, the issuance of the Trust Securities is not subject to
preemptive or other similar rights.
(viii) None of the execution and delivery by the
Trust of, or the performance by the Trust of its obligations under,
this Agreement, the issuance and sale of the Preferred Securities by
the Trust in accordance with the terms of this Agreement and the
Pricing Agreement, or the consummation of the other transactions
contemplated thereby, will contravene any provisions of applicable
Delaware law or administrative regulations or the Certificate of Trust
or the Declaration.
(ix) This Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by the Trust.
(x) No authorization, approval, consent,
order, registration or qualification of or with any Delaware state
governmental authority or agency is required for the entry into the
Purchase Contracts underlying the Securities, the issuance and sale of
the Securities -by the Offerors to the Underwriters, or the issuance
and sale of the Shares by the Company pursuant to such Purchase
Contracts, or the performance by the Company and the Trust of their
respective obligations under this Agreement, the Pricing Agreement,
the
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Purchase Contracts, the Purchase Contract Agreement, the Pledge
Agreement, the Indenture, the Junior Subordinated Debentures, the
Preferred Securities Guarantee Agreement, the Preferred Securities
Guarantee, the Declaration and the Securities, except such as has
been obtained and made under the federal securities laws or such as
may be required under state or foreign securities or Blue Sky laws.
(4) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, counsel to Wilmington Trust Company, as
Institutional Trustee under the Declaration, and Guarantee Trustee under the
Preferred Securities Guarantee Agreement, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) Wilmington Trust Company is a Delaware
banking corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the State of Delaware
with all necessary power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of the
Declaration and the Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance by
the Institutional Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the Preferred
Securities Guarantee Agreement have been duly authorized by all
necessary corporation action on the part of the Institutional Trustee
and the Guarantee Trustee, respectively. The Declaration and the
Preferred Securities Guarantee Agreement have been duly executed and
delivered by the Institutional Trustee and the Guarantee Trustee,
respectively, and constitute the legal, valid and binding obligations
of the Institutional Trustee and the Guarantee Trustee, respectively,
enforceable against the Institutional Trustee and the Guarantee
Trustee, respectively, in accordance with their terms, except to the
extent enforcement thereof may be limited by the Bankruptcy
Exceptions.
(iii) The execution, delivery and performance of
the Declaration and the Preferred Securities Guarantee Agreement by
the Institutional Trustee and the Guarantee Trustee, respectively, do
not conflict with or constitute a breach of the Articles of
Organization or Bylaws of the Institutional Trustee and the Guarantee
Trustee, respectively.
(iv) No consent, approval or authorization of,
or registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance by
the Institutional Trustee and the Guarantee
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Trustee of the Declaration and the Preferred Securities Guarantee
Agreement.
(5) The favorable opinion, dated as of the Closing Time, of
Ungaretti & Harris, counsel to The First National Bank of Chicago, as Purchase
Contract Agent, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The First National Bank of Chicago is duly
incorporated and is validly existing as a banking corporation with
trust powers under the laws of the United States with all necessary
power and authority to execute, deliver and perform its obligations
under the Purchase Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by
the Purchase Contract Agent of the Purchase Contract Agreement and the
Pledge Agreement, and the authentication and delivery of the
Securities have been duly authorized by all necessary corporate action
on the part of the Purchase Contract Agent. The Purchase Contract
Agreement and the Pledge Agreement have been duly executed and
delivered by the Purchase Contract Agent, and constitute the legal,
valid and binding obligations of the Purchase Contract Agent,
enforceable against the Purchase Contract Agent in accordance with its
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions.
(iii) the execution, delivery and performance of the
Purchase Contract Agreement and the Pledge Agreement by the Purchase
Contract Agent does not conflict with or constitute a breach of the
charter or by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Illinois or federal governmental
authority or agency is required for the execution, delivery or
performance by the Purchase Contract Agent of the Purchase Contract
Agreement and the Pledge Agreement.
(6) The opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
special tax counsel to the Offerors, generally to the effect that based upon
current law and the assumptions stated or referred to therein, under current
U.S. federal income tax law: (i) the Trust will be classified as a grantor
trust and not as an association taxable as a corporation; (ii) the Junior
Subordinated Debentures will be classified as indebtedness of the Company, and
(iii) The discussion set forth in the Prospectus under the headings "Risk
Factors - Proposed Tax Legislation" and "Certain Federal Income Tax
Consequences" is a fair and accurate summary of the matters addressed therein.
The opinion expressed
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pursuant to clause (iii) may be conditioned on, among other things, the initial
and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and the Trust and other documents deemed necessary for such opinion.
(7) The favorable opinion, dated as of then Closing Time, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, in form
and substance satisfactory to the Underwriters, with respect to the
incorporation and legal existence of the Company, the issuance and sale of the
Securities, the Purchase Contract Agreement, the Pledge Agreement, the
Indenture, the Preferred Securities Guarantee Agreement, this Agreement, the
Pricing Agreement, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters. In giving its opinion, LeBoeuf,
Lamb, Greene & MacRae, L.L.P. may rely as to certain matters of Michigan and
Delaware law upon the opinions of Daniel L. Schiffer, Esq. and Skadden, Arps,
Slate, Meagher & Flom LLP, special Delaware counsel for the Offerors, which
shall be delivered in accordance with Section 5(b)(1) and 5(b)(3) hereof.
(8) The favorable opinions, dated as of the Closing Time, of
(i) LeBoeuf, Lamb, Greene & MacRae, L.L.P., special Connecticut and
Pennsylvania counsel for the Underwriters, and (ii) Dickinson, Wright, Moon,
Van Dusen & Freeman, special Michigan counsel for the Underwriters, in form and
substance satisfactory to the Underwriters, with respect to the applicability
of the "bucket shop" laws of such states.
(c) Between the date of this Agreement and prior to the Closing Time,
no material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries, considered as one enterprise,
whether or not in the ordinary course of business.
(d) At the Closing Time, the Representatives shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of the Closing
Time, to the effect that (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries considered
as one enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct as
though expressly made at and as of the Closing Time, (iii) the Company and the
Trust have complied with all agreements and satisfied all
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conditions on their part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been initiated or threatened by the Commission.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a letter dated
such date in form and substance satisfactory to the Representatives, to the
effect set forth below and as to such other matters as the Representatives may
reasonably request, that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the 1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial
statements and any financial statement schedules audited by them and
included or incorporated by reference in the Registration Statement
and the Prospectus as amended or supplemented comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated financial statements included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus as amended or supplemented
for the periods specified in such letter, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of the Company
and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated
financial statements set forth in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented do not comply as to form in all material respects
with the applicable accounting requirements of the 1934 Act
and the 1934
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Act Regulations as they apply to Form 10-Q or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements set forth in the Company's Annual Report
on Form 10-K for the most recent year ended incorporated by
reference in the Registration Statement and the Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus as amended or
supplemented do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements included or incorporated by reference in
the Prospectus as amended or supplemented do not comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of delivery of such letter, there has
been any decrease or increase in the common stock (except for
any increases in connection with any employee benefit,
dividend reinvestment or stock purchase plan of the Company)
or any increase or decrease in redeemable cumulative preferred
securities or long-term debt including capital lease
obligations and current maturities (except for sinking fund
and installment requirements under their long-term debt
agreements, terms of the preferred securities of subsidiaries
and purchases in the open market in anticipation thereof) or
any increase in short-term debt, or any decrease in
consolidated common shareholders' equity of the Company and
its consolidated subsidiaries (other than periodic dividends
declared to shareholders and any decreases pursuant to the
terms of the preferred redeemable increased dividend equity
securities of the Company), in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position of the Company and its
subsidiaries incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented,
except
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in each case for increases or decreases which the Prospectus
as amended or supplemented, including financial information
incorporated by reference, discloses have occurred or may
occur or which are described in such letter; and
(E) for the period from the date of the latest
consolidated financial statements included or incorporated by
reference in the Prospectus as amended or supplemented to the
end of the latest period for which unaudited condensed
consolidated financial statements or financial information are
available there were any decreases in consolidated operating
revenues, operating income, net income or earnings available
for Common Stock of the Company and its consolidated
subsidiaries, or any increases in any items specified by the
Representatives, in each case as compared with the
corresponding period in the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus as amended or supplemented,
including financial information incorporated by reference,
discloses have occurred or may occur or which are described in
such letter; and
(F) the unaudited condensed consolidated
financial statements referred to in Clause (E) are not stated
on a basis substantially consistent with the audited
consolidated financial statements incorporated by reference in
the Registration Statement and the Prospectus as amended or
supplemented.
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
the Company for the five most recent fiscal years included in the
Prospectus as amended or supplemented and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) In addition to the limited procedures, reading of
minutes, inquiries and other procedures referred to in clause (iii)
and (iv) above, they have carried out certain other specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus as amended or supplemented and the
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Registration Statement, in the Company's Annual Report on Form 10-K
for the latest year ended and in the Company's Quarterly Reports on
Form 10-Q since the latest Annual Report on Form 10-K and which are
specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be
in agreement; and
(vi) If applicable and agreed to by the parties, they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the selected financial
data, pro forma financial information, prospective financial
statements, consolidating financial statements and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in
their reports thereon, copies of which have been furnished to the
Representatives.
(f) At the Closing Time, the Representatives shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time, and at each Date of Delivery, if any,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions herein contained;
and all proceedings taken by the Offerors in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriters and counsel for the Underwriters.
(h) At the Closing Time, the Securities shall be rated in one of the
four highest rating categories for preferred stock ("Investment Grade") by any
nationally recognized statistical rating agency, and the Offerors shall have
delivered to the Representatives a letter, dated the Closing Time, from such
nationally recognized statistical rating agency, or other evidence satisfactory
to the Representatives, confirming that the Securities have Investment Grade
ratings; and there shall not have occurred any decrease in the ratings of any
of the securities of the Company or of the Securities by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act Regulations) and such organization shall not have
publicly announced that it has under surveillance or review, with possible
negative implications, its
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rating of any of the debt securities of the Company or of the Securities.
(i) At the Closing Time, the Income PRIDES and the Shares shall have
been approved for listing on the New York Stock Exchange upon notice of
issuance.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(k) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Offerors contained herein and the
statements in any certificates furnished by the Offerors hereunder shall be
true and correct as of, and as if made on, each Date of Delivery, and at the
relevant Date of Delivery, the Underwriters shall have received:
(1) A certificate, dated such Date of Delivery, of the
President or a Vice-President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company and a certificate
of a Regular Trustee of the Trust confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof is true
and correct as of, and as if made on, such Date of Delivery.
(2) The favorable opinion of Daniel L. Schiffer, Esq., Senior
Vice President, General Counsel and Secretary for the Company, in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel and special tax counsel for the Offerors, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Sections 5(b)(2) and
5(b)(6) hereof.
(4) The favorable opinion of Skadden, Arps, Slate, Meagher &
Flom, special Delaware counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to the same
effect as the opinion required by Section 5(b)(3) hereof.
(5) The favorable opinion of Richards, Layton & Finger,
counsel to Wilmington Trust Company, in form and substance
satisfactory to counsel for the Underwriters,
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dated such Date of Delivery, relating to the Option Securities and
otherwise to the same effect as the opinion required by Section
5(b)(4) hereof.
(6) The favorable opinion of Ungaretti & Harris, counsel to
The First National Bank of Chicago, as Purchase Contract Agent, in
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Section 5(b)(5) hereof.
(7) The favorable opinion of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b)(7) hereof.
(8) A letter from Deloitte & Touche LLP in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Underwriters pursuant to Section 5(d) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(i)(e) shall be a date not more than five days prior to such Date of
Delivery.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time at or prior
to the Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information
deemed to be part thereof, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, provided, that (subject to Section 6(d) below)
any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense
whatsoever, as incurred (including, the fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that the foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Offerors by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto). The foregoing indemnity with respect to any untrue
statement contained in or omission from a preliminary prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities that are the subject thereof
if such person was not sent or given a copy of the Prospectus (or the
Prospectus as amended or supplemented) (in each case exclusive of the documents
from which information is incorporated by reference) at or prior to the written
confirmation of the sale of such Securities to such person and the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, the Trust and each of its
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Trustees who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to be a
part thereof, if applicable, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Offerors by such Underwriter through
Merrill Lynch expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which
it may have otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by Merrill Lynch, and, in the case of
parties indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Offerors. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation investigation, proceeding or claim 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 any indemnified party.
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(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Offerors on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) 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 Offerors on the one hand,
and the Underwriters, on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of such
Securities (before deducting expenses) received by the Offerors and the total
underwriting discount received by the Underwriters, in each case as set forth
on the cover of the Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet bear to the aggregate initial public offering price
of such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, 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 Offerors or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the 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 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company and each Trustee
of the Trust who signed the Registration Statement, and each person, if any,
who controls the Company and the Trust within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Offerors. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
or aggregate principal amount, as the case may be, of Preferred Securities set
forth opposite their respective names in Schedule A to this Agreement, and not
joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers
of the Company or trustees of the Trust submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or
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on behalf of the Company, and shall survive delivery of and payment for the
Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to
the Company at any time at or prior to the Closing Time, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Registration Statement, any material adverse change
or any development which could reasonably be expected to result in a
prospective material adverse change, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of the Underwriters, impracticable to
market the Securities or to enforce contracts for the sale of the Securities,
or (iii) if trading in the Common Stock or any other security of the Company
has been suspended or limited by the Commission, NASD or the New York Stock
Exchange, or if trading generally on either the American Stock Exchange, the
New York Stock Exchange or in the over-the-counter market has been suspended or
limited, 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 such system or by order of the Commission, NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Michigan authorities.
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without liability of any
party to any other party except as provided in Section 4, and provided,
further, that Sections 1, 6 and 7 shall survive such termination and remain in
full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time, as the case may be, to
purchase the Initial Securities which it or they are obligated to purchase
under this Agreement and the Pricing Agreement (the "Defaulted Securities"),
Merrill Lynch shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Underwriters, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, Merrill
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Lynch shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number or aggregate principal amount, as the case
may be, of Defaulted Securities does not exceed 10% of the total number or
aggregate principal amount, as the case may be, of Initial Securities, the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case
may be, of Defaulted Securities exceeds 10% of the total number or aggregate
principal amount, as the case may be, of the Initial Securities to be purchased
on such date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Merrill Lynch or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to c/o Merrill Lynch at Merrill Lynch World
Headquarters, World Financial Center, North Tower, New York, New York 10281,
Attention of Anthony V. Leness, Managing Director, with a copy to LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York
10019-5389, Attention: William S. Lamb, Esq.; notices to the Company shall be
directed to it at MCN Energy Group Inc., 500 Griswold Street, Detroit, Michigan
48226, Attention of Daniel L. Schiffer, Senior Vice President, General Counsel
and Secretary.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Offerors and the
Underwriters and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right,
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52
remedy or claim under or in respect of this Agreement or the Pricing Agreement
or any provision herein or therein contained. This Agreement and the Pricing
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and legal representatives, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS OTHERWISE
INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
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53
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, shall become a binding
agreement among the Company, the Trust and the several Underwriters in
accordance with its terms.
Very truly yours,
MCN CORPORATION
By: /s/ Sebastian Coppola
-----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President
and Treasurer
MCN FINANCING III
By: /s/ Sebastian Coppola
-----------------------------------
Title: Regular Trustee
By: /s/ Daniel L. Schiffer
-----------------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Anthony V. Leness
---------------------------------------
Authorized Signatory: Anthony V. Leness
Managing Director
Investment Banking Group
For themselves and as the Representatives of the
several Underwriters named in Schedule A hereto.
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54
SCHEDULE A
Name of Underwriter Number of Shares
------------------- ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . . 325,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000
Ladenburg Thalmann & Co. Inc. . . . . . . . . . . . . . . . . . . . . . 325,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . . . . 150,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 150,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 150,000
Robert W. Baird & Co. Incorporated . . . . . . . . . . . . . . . . . . . 75,000
First of Michigan Corporation . . . . . . . . . . . . . . . . . . . . . . 75,000
Roney & Co., LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,300,000
=========
55
EXHIBIT A
MCN CORPORATION
(A MICHIGAN CORPORATION)
MCN FINANCING III
(A DELAWARE BUSINESS TRUST)
2,300,000 FELINE PRIDES(SM)
(STATED AMOUNT OF $50 PER SECURITY)
EACH CONSISTING OF
A PURCHASE CONTRACT OF MCN CORPORATION
REQUIRING THE PURCHASE ON MAY 16, 2000 (OR EARLIER)
OF A NUMBER OF SHARES OF COMMON STOCK OF MCN CORPORATION
EQUAL TO THE SETTLEMENT RATE
AND
A 7 1/4% TRUST ORIGINATED PREFERRED SECURITIES
OF MCN FINANCING III
PRICING AGREEMENT
March 19, 1997
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as representatives of the
several Underwriters named in the within-
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated March
19, 1997 (the "Underwriting Agreement"), relating to the purchase by the
several Underwriters named in Schedule A thereto for whom Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation, Salomon Brothers Inc, Smith Barney Inc. and
Ladenburg Thalmann & Co. Inc. are acting as representatives (the
"Representatives"), of the above FELINE PRIDES (the "Securities") of MCN
Corporation, doing business as MCN Energy Group Inc. (the "Company"), and MCN
Financing III (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the
Company and the Trust agree with each Underwriter as follows:
- -------------------------
(SM)"FELINE PRIDES" is a service mark of Merrill Lynch & Co. Inc.
56
1. The initial public offering price per security for the
Securities, determined as provided in said Section 2, shall be $50.00.
2. The purchase price per security for the Securities to be
paid by the several Underwriters shall be $48.50, being an amount
equal to the initial public offering price set forth above less $1.50
per security.
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 the Underwriters and the Company and the Trust in accordance
with its terms.
Very truly yours,
MCN CORPORATION
By:
-----------------------------------
Name:
Title:
MCN FINANCING III
By:
-----------------------------------
Title: Regular Trustee
By:
-----------------------------------
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
SMITH BARNEY INC.
LADENBURG THALMANN & CO. INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
--------------------------------------
Authorized Signatory:
For themselves and as the Representatives of the several Underwriters named in
the Purchase Agreement.
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