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EXHIBIT 5.1
MCN ENERGY GROUP INC.
(A MICHIGAN CORPORATION)
7,000,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
U.S. PURCHASE AGREEMENT
June 24, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
As the U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
MCN Energy Group Inc., a Michigan corporation (the "Company") confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other U.S. Underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, Donaldson, Lufkin
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& Jenrette Securities Corporation, A.G. Edwards & Sons, Inc., PaineWebber
Incorporated, Salomon Brothers Inc and Smith Barney Inc. are acting as
representatives (in such capacity, collectively, the "U.S. Representatives"),
with respect to the issue and sale by the Company and the purchase by the U.S.
Underwriters, acting severally and not jointly, of the respective numbers of
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock") set forth in said Schedule A, and with respect to the grant by the
Company to the U.S. Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of
1,050,000 additional shares of Common Stock to cover over-allotments, if any.
The aforesaid 7,000,000 shares of Common Stock (the "Initial U.S. Securities")
to be purchased by the U.S. Underwriters and all or any part of the 1,050,000
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "U.S. Option Securities") are hereinafter called, collectively, the "U.S.
Securities".
Prior to the purchase and public offering of the U.S. Securities by the
several U.S. Underwriters, the Company and the U.S. Representatives, acting on
behalf of the several U.S. Underwriters, shall enter into an agreement
substantially in the form of Exhibit A hereto (the "U.S. Pricing Agreement").
The U.S. Pricing Agreement may take the form of an exchange of any standard
form of written communication between the Company and the U.S. Representatives
and shall specify such applicable information as is indicated in Exhibit A
hereto. The offering of the U.S. Securities will be governed by this
Agreement, as supplemented by the U.S. Pricing Agreement. From and after the
date of the execution and delivery of the U.S. Pricing Agreement, this
Agreement shall be deemed to incorporate the U.S. Pricing Agreement.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 1,500,000 shares
of Common Stock (the "Initial International Securities") through arrangements
with certain underwriters outside the United States and Canada (the
"International Managers") for which Merrill Lynch International, Donaldson,
Lufkin & Jenrette Securities Corporation, A.G. Edwards & Sons, Inc.,
PaineWebber International (U.K.) Ltd., Salomon
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Brothers International Limited and Smith Barney Inc. are acting as lead managers
(the "Lead Managers") and the grant by the Company to the International
Managers, acting severally and not jointly, of an option purchase all or any
part of the 225,000 additional shares of Common Stock solely to cover
overallotments, if any (the "International Option Securities" and, together
with the U.S. Option Securities, the "Option Securities"). The Initial
International Securities and the International Option Securities are
hereinafter called the "International Securities". It is understood that the
Company is not obligated to sell, and the U.S. Underwriters are not obligated
to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers. Prior to the purchase and public offering of the International
Securities by the several International Managers, the Company and the Lead
Managers, acting on behalf of the International Managers, shall enter into an
pricing agreement (the "International Pricing Agreement") specifying the
applicable information as set forth in the International Purchase Agreement.
From and after the date of the execution and delivery of the International
Pricing Agreement, the offering of the International Securities will be
governed by the International Purchase Agreement, as supplemented by the
International Pricing Agreement.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch.
The Company understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after the U.S. Pricing Agreement has been executed and delivered.
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The Company, and MCN Financing II, MCN Financing III 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-effective amendment no. 1 thereto covering the registration
of securities of the Company and the MCN Trusts, including 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"; provided,however, that all references
to the "Registration Statement" 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 Company files 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. Two forms of prospectus supplement are to be
used in connection with the offering and sale of the Securities: one relating
to the U.S. Securities (the "Form of U.S. Prospectus Supplement") and one
relating to the International Securities (the "Form of International Prospectus
Supplement"). The form of International Prospectus Supplement is identical to
the Form of U.S. Prospectus Supplement, except for the front cover, inside
front cover and back cover pages and the information under the caption
"Underwriting." The final Form of U.S. Prospectus Supplement and the final
form of International Prospectus Supplement, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
1933 Act, and including the prospectus constituting a part of the
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Registration Statement, in the forms first furnished to the Underwriters for
use in connection with the offering of the Securities are herein called the
"U.S. Prospectus" and the "International Prospectus," respectively, and
collectively, the "Prospectuses." If the Company elects to rely upon Rule 434
of the 1933 Act Regulations, the terms "U.S. Prospectus" and "International
Prospectus" shall refer to the preliminary U.S. Prospectus dated June 3, 1997
and preliminary International Prospectus dated June 3, 1997, respectively, each
together with the applicable term sheet (a "Term Sheet") and all references in
this Agreement to the date of such Prospectuses shall mean the date of the
applicable 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 U.S. Pricing Agreement. For purposes of this Agreement,
all references to the Registration Statement, any preliminary prospectus, the
Prospectus, the U.S. Prospectus Supplement, the International Prospectus
Supplement or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the 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 (including the Form of U.S.
Prospectus Supplement and Form of International Prospectus Supplement) or the
Prospectuses (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 (including the Form of U.S. Prospectus Supplement and Form of
International Prospectus Supplement) or the Prospectuses, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement, any preliminary prospectus or the Prospectuses shall be
deemed to mean and include the filing of any document under the 1934 Act which
is incorporated by
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reference in the Registration Statement, such preliminary prospectus or the
Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each U.S. Underwriter as of the
date hereof, as of the date of the U.S. Pricing Agreement, as of the Closing
Time referred to in Section 2(c) hereof and, if applicable, as of each Date of
Delivery referred to in Section 2(b) hereof (in each case, a "Representation
Date"), as follows:
(i) No stop order suspending the effectiveness of the Registration
Statement or any Rule 464(b) Registration Statement has been issued under the
1933 Act and no proceeding for that purpose has been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission.
(ii) The Company meets 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 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. Neither the Prospectuses nor any amendments or supplements
thereto, at the time that the Prospectuses or any such amendment or supplement
was issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will 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 Company
elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will
comply with the requirements of Rule 434. Notwithstanding the foregoing, the
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representations warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement or the U.S. Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by any U.S. Underwriter through Merrill Lynch expressly for use in the
Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses 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 when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectuses 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 and the Prospectuses, at the time they
were or hereafter are filed 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, when
read together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses were
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), 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, in the light of the
circumstances under which they were or are made, not misleading.
(iv) The accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the Registration
Statement and the Prospectuses 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 Prospectuses, together with the
related schedules and notes,
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present fairly the financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the statements of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries 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 Prospectuses present fairly in accordance with GAAP the
information required to be stated therein. The ratio of earnings to fixed
charges included in the Prospectuses 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 Prospectuses 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.
(vi) Since the respective dates as of which information is given in the
Registration Statement and the Prospectuses, 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.
(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
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as presently conducted and as described in the Prospectuses and to enter into
and perform its obligations under, or as contemplated under, this Agreement,
the U.S. Pricing Agreement, the International Purchase Agreement and the
International Pricing Agreement. 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 Prospectuses, 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
Prospectuses, all of the issued and outstanding shares of capital stock of each
subsidiary of the Company have 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. 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 Company has authorized, issued and outstanding capital as set
forth in the Prospectuses; since the date indicated in the Prospectuses 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). The shares of issued and outstanding capital stock of the
Company have been duly
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authorized and validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in violation of
the preemptive or other similar rights arising by operation of law, under the
charter or by-laws of the Company, under any agreement to which the Company or
any of its subsidiaries is a party or otherwise.
(x) This Agreement, the U.S. Pricing Agreement, the International
Purchase Agreement and the International Pricing Agreement have been duly
authorized, executed and delivered by the Company.
(xi) The Securities and the preferred share purchase rights (the
"Rights") to be issued with the Securities have been duly authorized for
issuance and sale to the U.S. Underwriters pursuant to this Agreement and the
International Managers pursuant to the International Purchase Agreement,
respectively, and, when issued and delivered by the Company against payment of
the consideration as provided in the U.S. Pricing Agreement and the
International Pricing Agreement, respectively, will be validly issued, fully
paid and non-assessable; the Common Stock and the Rights conform to all
statements relating thereto contained in the Prospectuses and such description
conforms to the rights set forth in the instruments defining the same; no
holder of the Securities will be subject to personal liability by reason of
being such a holder; and the issuance of the Securities is not subject to
preemptive or other similar rights arising by operation of law, under the
charter or by-laws of the Company, under any agreement to which the Company or
any of its subsidiaries is a party or otherwise.
(xii) 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, deed of trust, 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, writ or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any of
its
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subsidiaries or any of their respective properties or assets, which violation or
default would, singly or in the aggregate, have a Material Adverse Effect.
(xiii) The execution, delivery and performance of this Agreement, the
U.S. Pricing Agreement, the International Purchase Agreement and the
International Pricing Agreement and the consummation of the transactions
contemplated herein and therein and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectuses under the caption "Use
of Proceeds") and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its subsidiaries pursuant to
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or 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
property or assets of the Company or any subsidiary thereof is subject, nor
will such action result in any violation of the provisions of the charter of
by-laws of the Company or any of its subsidiaries or any applicable law,
statute, rule or regulation, judgment, order, writ 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
property, assets or operations.
(xiv) 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 or any of its subsidiary's principal suppliers,
manufacturers, customers or contractors which, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(xv) 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
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the Company, threatened against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Registration Statement
and the Prospectuses (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 the transactions contemplated by
this Agreement, the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement or the performance by the
Company of its obligations hereunder and thereunder; the aggregate of all
pending legal or governmental proceedings to which 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 Prospectuses, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xvi) There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectuses or the documents
incorporated by reference therein or to be filed as exhibits thereto which have
not been so described and/or filed as required.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the International Pricing Agreement or the
consummation of the transactions contemplated by this Agreement, the U.S.
Pricing Agreement, the International Purchase Agreement and the International
Pricing Agreement, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or foreign or state
securities or blue sky laws.
(xviii) The Company and its subsidiaries have good and marketable title
to all real property owned by them and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except
such as
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(a) are described in the Registration Statement and the Prospectuses or (b) do
not, singly or in the aggregate, materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties are in full force and effect, and neither the Company nor any of its
subsidiaries has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease; 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.
(xix) The Company and its subsidiaries possess all licenses,
franchises, permits, certificates, approvals, consents, orders and other
authorizations (collectively, the "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary for the ownership or lease of the material properties owned or leased
by each of them and to conduct the business now operated by each of them; the
Company and its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure to so comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
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(xx) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectuses will not be, an "investment company"
or an entity under the "control" of an "investment company" as such terms are
defined under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) 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.
(xxii) The Company has complied with, and is and will be in compliance
with, the provisions of that certain Florida act relating to disclosure of
doing business with Cuba, codified as Section 517.075 of the Florida statutes,
and the rules and regulations thereunder (collectively, the "Cuba Act") or is
exempt therefrom.
(xxiii) 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.
(xxiv) No "forward looking statement" (as defined in Rule 175 under the
1933 Act) contained in the Registration Statement, any preliminary prospectus
or the Prospectuses 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 any
subsidiary and delivered to the U.S. Underwriters or to counsel for the U.S.
Underwriters in connection with the offering of the Securities shall be deemed
a representation and warranty by the Company to each U.S. Underwriter as to
the matters covered thereby.
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SECTION 2. Sale and Delivery to the U.S. Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
sell to each U.S. Underwriter, and each U.S. Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price per security set
forth in the U.S. Pricing Agreement, the number of Initial U.S. Securities set
forth in Schedule A hereto opposite the name of such U.S. Underwriter, plus
any additional number of Initial U.S. Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the U.S. Underwriters, severally and not jointly, to
purchase at their election up to an additional 1,050,000 shares of Common Stock
at the price per share set forth in the U.S. Pricing Agreement, less an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire automatically at the close
of business on the 30th calendar day after the date of the U.S. Pricing
Agreement 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 U.S. Securities upon notice by the
U.S. Representatives to the Company setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the U.S. Representatives but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, unless otherwise agreed upon by Merrill Lynch and the Company.
If the option is exercised as to all or any portion of the U.S. Option
Securities, each of the U.S. Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of U.S. Option Securities
then being purchased which the number of Initial U.S. Securities set forth in
Schedule A opposite the name of such U.S.
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Underwriter bears to the total number of Initial U.S. Securities, subject in
each case to such adjustments as the U.S. Representatives in their discretion
shall make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Initial 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 U.S. Representatives and the
Company, at 9:00 a.m. (Eastern time) on the third (fourth, if pricing of the
Securities occurs after 4:30 p.m. (Eastern time) on any given day) business day
after the date of execution of the U.S. Pricing Agreement (unless postponed in
accordance with the provisions of Section 10), or such other time not later
than ten business days after such date as shall be agreed upon by the U.S.
Representatives and the Company (such time and date of payment and delivery
being referred to herein as the "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
U.S. Representatives and the Company, on each Date of Delivery as specified in
the notice from the U.S. Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery
to the U.S. Representatives for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Securities to be purchased by them.
It is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Securities or the U.S. Option Securities, if any, to be purchased by any U.S.
Underwriter whose funds have not been received by the Closing Time of the
relevant of Date of Delivery,
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as the case may be, but such payment shall not relieve such U.S. Underwriter
from its obligations hereunder.
(d) Certificates for the Initial U.S. Securities and the U.S. Option
Securities, if any, shall be in such denominations and registered in such names
as the U.S. Representatives may request in writing at least one full business
day before the Closing Time or the relevant Date of Delivery, as the case may
be. The certificates for the Initial U.S. Securities and the U.S. Option
Securities, if any, will be made available for examination and packaging by the
U.S. Representatives no later than 10:00 a.m. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as the case may
be.
(e) If settlement for the U.S. Option Securities occurs after the Closing
Time, the Company will deliver to the U.S. Underwriters on the relevant Date of
Delivery, and the obligations of the U.S. Underwriters to purchase the U.S.
Option Securities shall be 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(i)
hereof.
SECTION 3. Covenants of the Company. The Company covenants with each U.S.
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Company will
cause the Prospectuses, including as a part thereof a prospectus supplement
relating to the Securities, to be filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations and will take steps as it deems necessary
to ascertain promptly whether the form of prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus.
(b) The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434 of the 1933 Act Regulations, as
applicable, and will notify the U.S. Representatives 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
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amendment to the Prospectuses, (ii) of 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 Prospectuses or
for additional information and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus or
Prospectuses, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(c) The Company will give the U.S. Representatives 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 Prospectuses, whether pursuant to the 1933 Act, the 1934
Act or otherwise; will furnish the U.S. Representatives 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,
Term Sheet, amendment, supplement or revision to which the U.S. Representatives
or counsel for the U.S. Underwriters shall object.
(d) The Company has furnished or will deliver to the U.S. Representatives
and counsel for the U.S. 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 the U.S. Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to
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the U.S. 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 U.S. Underwriter, without charge,
as many copies of each preliminary prospectus as such U.S. 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 U.S.
Underwriter, without charge, during the period when the U.S. Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request. The U.S. Prospectus and any amendments or
supplements thereto furnished to the U.S. 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 Company 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, the International Purchase Agreement and in the Prospectuses. If at
any time when a 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 U.S. Underwriters or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the Prospectuses
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
time to amend the Registration Statement or amend or supplement any Prospectus
in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company 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
Prospectuses comply with such requirements, and the Company will furnish to the
U.S. Underwriters, without charge, such number of
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copies of such amendment or supplement as the U.S. Underwriters may reasonably
request.
(g) The Company will use its best efforts, in cooperation with the U.S.
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the U.S. Representatives may designate; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities in
any jurisdiction in which it is not so qualified or to 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 Company 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.
(h) The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as
soon as practicable an earnings statement for the purposes of, and to provide
the benefits contemplated by, the last paragraph of Section 11(a) of the 1933
Act.
(i) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectuses 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 U.S. Pricing
Agreement, the Company 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 Company elects to rely upon Rule 462(b), the Company 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
U.S. Pricing Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(l) The Company, during the period when the Prospectuses are required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
(m) The Company will use its best efforts to effect the listing of the
Securities on the New York Stock Exchange.
(n) During a period of 90 days from the date of the Prospectuses, the
Company will not, without the prior written consent of Merrill Lynch, directly
or indirectly, issue, pledge, sell, offer to sell, grant any option for the sale
of or otherwise transfer or dispose of, any share of Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
except for (a) the Securities to be sold hereunder or under the International
Purchase Agreement, (b) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of
the Company and its subsidiaries and (c) any shares of Common Stock issued
pursuant to dividend reinvestment and stock purchase plans of the Company.
(o) During a period of three years from the Closing Time, to make generally
available to the U.S. Underwriters copies of all reports and other
communications (financial or other) mailed to stockholders, and to deliver to
the U.S. 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 U.S. 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
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its subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission).
(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.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement and the
U.S. Pricing Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto; (ii) the printing and delivery
to the Underwriters of this Agreement, the U.S. Pricing Agreement, any
Agreement among Underwriters, any Intersyndicate Agreement 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 to the Underwriters, including any stock or
other transfer taxes or any stamp or other duties payable upon the sale of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Managers; (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or
agents; (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the U.S. Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto; (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus, any Term Sheet and of the Prospectuses
and any amendments or supplements thereto; (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto; (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) any fees payable to the Commission; and (x)
the fees and expenses incurred in connection
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with the listing of the Securities on the New York Stock Exchange.
If this Agreement is terminated by the U.S. Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the U.S. 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 U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
of the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained or in
certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act 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 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 U.S. 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) (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).
(b) At the Closing Time the U.S. Representatives shall have received:
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(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 U.S.
Underwriters, together with signed or reproduced copies of such letter for each
of the other U.S. 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.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement, the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement.
(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, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses (except for subsequent
issuances, if any, pursuant to the U.S. Purchase Agreement and the
International Purchase Agreement or pursuant to employee benefit plan or
dividend reinvestment and stock purchase plan transactions); the shares
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; and
none of the outstanding shares of capital stock were issued in violation
of preemptive or other similar rights of any securityholder of the
Company.
(v) The Securities to be purchased by the U.S. Underwriters and the
International Managers have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and the International
Purchase
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Agreement, respectively, and, when issued and delivered by the Company
pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the U.S.
Pricing Agreement and the International Pricing Agreement, will be
validly issued and fully paid and non-assessable. The form of
certificate used to evidence the Securities is in due and proper form and
complies with the applicable statutory requirements, with any applicable
requirements of the charter or by-laws of the Company, and with the
requirements of the New York Stock Exchange.
(vi) 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.
(vii) The Rights to be issued with the Securities have been duly
authorized and, upon the issuance of the Securities, will be validly
issued and conform in all material respects to the description thereof in
the Prospectuses.
(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 Prospectuses, 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 disclosed in the Registration Statement and the Prospectuses,
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. None of the
outstanding shares of capital stock of any subsidiary of the Company was
issued in
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violation of preemptive or other similar rights of any securityholder of
such subsidiary.
(ix) This Agreement, the U.S. Pricing Agreement, the International
Purchase Agreement and the International Pricing Agreement have been duly
authorized, executed and delivered by the Company.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the prospectuses pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and, to the best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
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, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectuses, excluding the documents
incorporated by reference therein, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein, as to which such counsel need express no opinion),
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(xii) The documents incorporated by reference in the Prospectuses
(other than the financial statements and supporting schedules therein, as
to which such counsel need express no opinion), when they were filed with
the Commission complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations.
(xiii) The Company meets the registrant requirements for use of
Form S-3 under the 1933 Act Regulations.
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(xiv) The execution, delivery and performance by the Company of this
Agreement, the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement and the consummation of
the transactions contemplated herein and therein and in the Registration
Statement and Prospectus and compliance by the Company with its
obligations hereunder and thereunder do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any subsidiary thereof pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to
which any of the properties, assets or operations of the Company or any
of its subsidiaries is subject, except for such conflicts, breaches,
defaults, liens, charges or encumbrances that would not result in a
Material Adverse Effect, nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary
thereof, or any applicable law, statute, rule, regulation, judgment,
order, writ 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, assets or
operations.
(xv) To the best of such counsel's knowledge, there is no action,
suit, proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, pending or threatened,
against or affecting the Company or any subsidiary thereof which is
required to be disclosed in the Registration Statement and the
Prospectuses (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the assets,
properties or operations thereof of the consummation of the transactions
contemplated in this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the International
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Pricing Agreement or the performance by the Company of its obligations
hereunder and thereunder.
(xvi) The information in the Prospectuses under the captions "MCN
Energy Group Inc.," "Use of Proceeds", "Certain United States Tax
Consequences to Non-United States Holders," "Capitalization," and
"Description of MCN Capital Stock",to the extent that they involve
matters of law, summaries of legal matters, the Company's charter and
by-laws or legal proceedings, or legal conclusions, has been reviewed by
such counsel and is correct in all material respects.
(xvii) To the best of such counsel's knowledge and information,
neither the Company or any subsidiary thereof is in violation of its
charter or by-laws and no default by the Company or any subsidiary
thereof exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan or credit agreement, note, lease, or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them or any of their respective
properties or assets are bound, except for violations and defaults that
would not result in a Material Adverse Effect.
(xviii) All descriptions in the Prospectuses of contracts and other
documents to which the Company or its subsidiaries are a party are
accurate in all material respects. To the best of such counsel's
knowledge and information, there are no franchises, contracts,
indentures, mortgages, loan or credit agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or incorporated by reference as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(xix) No filing with, authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act
and the
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1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as to which
such counsel need express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of this
Agreement, the U.S. Pricing Agreement, the International Purchase
Agreement and the International Pricing Agreement or for the offering,
issuance and sale of the Securities or the performance by the Company of
its obligations in this Agreement, the U.S. Pricing Agreement, the
International Purchase Agreement and the International Pricing Agreement.
(xx) 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 Prospectuses with such
exceptions as 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,
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.
(xxi) The Company is not an "investment company" or an entity under
the "control" of an "investment company" as such terms are defined in the
1940 Act.
(xxii) 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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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 Rule 430A Information and Rule 434
Information (if applicable)(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 such Registration Statement became effective or at
the date of the U.S. Pricing Agreement, 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 Prospectuses or any amendment or supplement thereto (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 the
Prospectuses were issued, at the time of any such amended or supplemented
Prospectuses were issued 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.
(2) The favorable opinion, dated as of then Closing Time, of LeBoeuf,
Lamb, Greene & MacRae, L.L.P., counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (v), (vi), (ix), (x),
(xi) and the last paragraph of Section 5(b)(1). In giving such opinion,
LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely as to certain matters of
Michigan law upon the opinion of Daniel L. Schiffer, Esq., counsel for the
Company, which shall be delivered in accordance with Section 5(b)(1) hereof.
(c) At the Closing Time, the U.S. 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 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 Company
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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 with the same force and effect as though
expressly made at and as of the Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the 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.
(d) At the time of the execution of this Agreement, the U.S. Representatives
shall have received from Deloitte & Touche LLP a letter dated such date in form
and substance satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters, to
the effect set forth below and as to such other matters as the U.S.
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
Prospectuses 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
Prospectuses 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
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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
Prospectuses 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 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 Prospectuses as
amended or supplemented;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectuses 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
Prospectuses 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
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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 this Agreement, 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 Prospectuses as amended or
supplemented, except in each case for increases or decreases which
the Prospectuses 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
Prospectuses 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
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by the U.S. 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 U.S.
Representatives, except in each case for increases or decreases
which the Prospectuses 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
Prospectuses 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
Prospectuses 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 and financial
records of the Company and its subsidiaries, which appear in the
Prospectuses as amended or supplemented and the Registration Statement,
in the Company's Annual Report on Form 10-K for the latest year ended and
in the Company's Quarterly Reports on Form 10-Q since the latest Annual
Report on Form 10-K and which are specified by the U.S. Representatives,
and have compared certain of such
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amounts, percentages and financial information with the accounting and
financial 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 U.S. Representatives.
(e) At the Closing Time, the U.S. 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 (d) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(f) At the Closing Time the Securities shall have been approved for
listing on the New York Stock Exchange, subject only to official notice of
issuance.
(g) Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers shall
have purchased the Initial International Securities under the International
Purchase Agreement.
(h) At the Closing Time, and at each Date of Delivery, if any, counsel
for the U.S. 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, 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 Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.
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(i) In the event that the U.S. Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the U.S.
Option Securities, the representations and warranties of the Company contained
herein and the statements in any certificates furnished by the Company
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 U.S. Representatives 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 confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof is true and
correct as of 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 U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(1) hereof.
(3) The favorable opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.,
counsel for the U.S. Underwriters, dated such Date of Delivery, relating
to the U.S. Option Securities to be purchase on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)(2)
hereof.
(4) A letter from Deloitte & Touche LLP in form and substance
satisfactory to the U.S. Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
the U.S. Representatives pursuant to Section 5(d) hereof, except that the
"specified date" on the letter furnished pursuant to this paragraph shall
be a date not more than five days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement, or, in the case of any
condition to the purchase of U.S.
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Options Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
Securities, may be terminated by the U.S. Representatives by notice to the
Company at any time at or prior to the Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each U.S. Underwriter
and each person, if any, who controls any U.S. Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 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, 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
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(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 Company; and
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(iii) against any and all expense whatsoever, as incurred
(including, the fees, expenses 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 this 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
Company by any U.S. 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, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto);
provided, further, that such indemnity with respect to the preliminary
prospectus shall not inure to the benefit of the U.S. Underwriters (or any
person controlling such U.S. Underwriters) from whom the person asserting any
such loss, liability, claim, damage or expense purchased any of the Securities
which are the subject thereof if such person did not receive a copy of the U.S.
Prospectus (or the U.S. 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 U.S. Securities to
such person in any case where the Company complied with its obligations under
Sections 3(c) and 3(g) hereof and any such untrue statement or omission or
alleged untrue statement or omission of a material fact contained in such
preliminary prospectus (or any amendment or supplement thereto) was corrected
in the U.S. Prospectus (or the U.S. Prospectus as amended or supplemented).
(b) Each U.S. Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss,
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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, if applicable, or any
preliminary prospectus or the U.S. Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such U.S. Underwriter through Merrill Lynch expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the U.S. 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 Company. 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
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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.
(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 Company on the one
hand and the U.S. Underwriters on the other hand from the offering of the U.S.
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 Company on the one hand and the U.S.
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 the Company on the one hand and the U.S.
Underwriters on the other hand in connection
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with the offering of the U.S. 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 U.S. Securities pursuant to this Agreement (before
deducting expenses) received by the Company and the total underwriting discount
received by the U.S. Underwriters, in each case as set forth on the cover of
the U.S. Prospectus, or, if Rule 434 is used, the corresponding location on the
Term Sheet, bear to the aggregate initial public offering price of such U.S.
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the U.S.
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 Company or by the U.S. Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the U.S. 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 U.S. 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 U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by
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reason of any 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 a U.S.
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 U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. 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 U.S. Pricing Agreement, or contained in certificates of officers of the
Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any U.S. Underwriter or controlling person, or by or on behalf
of the Company, and shall survive delivery of and payment for the Securities to
the U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) The U.S. 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 U.S. Prospectus, any material adverse change or any
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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 U.S.
Representatives, 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,
National Association of Securities Dealers, Inc. 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 U.S. 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, 7 and 8 shall survive such termination and remain
in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one
or more of the U.S. Underwriters shall fail at the Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement and the U.S. Pricing Agreement (the "Defaulted
Securities"), the U.S. Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting U.S.
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
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upon the terms herein set forth; if, however, the U.S. Representatives shall
not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. 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 U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
U.S. Securities to be purchased on such date, this Agreement, or with respect
to any Date of Delivery which occurs after the Closing Time, the obligations of
the U.S. Underwriters to purchase and of the Company to sell the Option
Securities to be purchase and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting U.S. 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 or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
U.S. Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone the Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or the Prospectuses
or in any other documents or arrangements. As used herein, the term "U.S.
Underwriter" includes any person substituted for an U.S. Underwriter under this
Section 10.
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 U.S.
Underwriters shall be
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directed to the U.S. Representatives at North Tower, World Financial Center, New
York, New York 10281-1202, 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 of 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, Esq., Senior
Vice President, General Counsel and Secretary.
SECTION 12. Parties. This Agreement and the U.S. Pricing Agreement shall
each inure to the benefit of and be binding upon the Company and the U.S.
Underwriters and their respective successors. Nothing expressed or mentioned
in this Agreement or the U.S. Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the U.S.
Underwriters and the Company 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, remedy
or claim under or in respect of this Agreement or the U.S. Pricing Agreement or
any provision herein or therein contained. This Agreement and the U.S. 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 U.S. Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE U.S. 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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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 between the U.S. Underwriters and the Company in accordance with its
terms.
Very truly yours,
MCN ENERGY GROUP INC.
By:/s/ Sebastian Coppola
----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President and
Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Anthony V. Leness
---------------------------
Authorized Signatory:
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For themselves and as the U.S. Representatives of the several U.S. Underwriters
named in Schedule A hereto.
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SCHEDULE A
Name of U.S. Underwriter Number of
----------------------- Initial U.S.
Securities
----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ........................ 750,000
Donaldson, Lufkin & Jenrette
Securities Corporation .................. 750,000
A.G. Edwards & Sons, Inc..................... 750,000
PaineWebber Incorporated .................... 750,000
Salomon Brothers Inc......................... 750,000
Smith Barney Inc............................. 750,000
Credit Suisse First Boston Corporation ...... 320,000
Goldman, Sachs & Co.......................... 320,000
Morgan Stanley & Co. Incorporated ........... 320,000
Robert W. Baird & Co. Incorporated .......... 164,000
First of Michigan Corporation ............... 164,000
Edward D. Jones & Co., L.P................... 164,000
Ladenburg Thalmann & Co. Inc................. 164,000
Roney & Co., LLC ............................ 164,000
Advest, Inc.................................. 80,000
Cowen & Company ............................. 80,000
Dain Bosworth Incorporated .................. 80,000
Dominick & Dominick, Incorporated ........... 80,000
Interstate/Johnson Lane Corporation ......... 80,000
Janney Montgomery Scott Inc. ................ 80,000
Legg Mason Wood Walker, Incorporated ........ 80,000
McDonald & Company Securities, Inc........... 80,000
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The Ohio Company ............................ 80,000
---------
Total................................ 7,000,000
=========
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EXHIBIT A
7,000,000 SHARES
MCN ENERGY GROUP INC.
(A MICHIGAN CORPORATION)
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
PRICING AGREEMENT
June 24, 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
As the U.S. Representatives of the several U.S. Underwriters
named in the within-mentioned U.S. Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Reference is made to the U.S. Purchase Agreement, dated June 24, 1997
(the "U.S. Purchase Agreement"), relating to the purchase by the several U.S.
Underwriters named in Schedule A thereto for whom Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette
Securities Corporation, A.G. Edwards & Sons, Inc., PaineWebber Incorporated,
Salomon Brothers Inc and Smith Barney Inc. are acting as representatives (the
"U.S. Representatives"), of the shares of common stock, par value $.01 per
share, of MCN Energy Group Inc. (the "Company"). Capitalized terms used which
are not
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defined herein shall have the meanings assigned to such terms in the U.S.
Purchase Agreement.
Pursuant to Section 2 of the U.S. Purchase Agreement, the Company
agrees with each U.S. Underwriter as follows:
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $29.125.
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $28.295, being an amount equal
to the initial public offering price set forth above less $.83 per share;
provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) of the U.S. Purchase Agreement shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company
and payable on the Initial U.S. Securities but not payable on the U.S.
Option Securities.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the U.S. Underwriters and the Company in accordance with its
terms.
Very truly yours,
MCN ENERGY GROUP INC.
By:/s/ Sebastian Coppola
----------------------------------
Name: Sebastian Coppola
Title: Senior Vice President and
Treasurer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Anthony V. Leness
--------------------------------------
Authorized Signatory:
For themselves and as the U.S. Representatives of the
several U.S. Underwriters named in the U.S. Purchase Agreement.
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