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EXHIBIT 5.2
MCN ENERGY GROUP INC.
(A MICHIGAN CORPORATION)
1,500,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
INTERNATIONAL PURCHASE AGREEMENT
June 24, 1997
MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
SMITH BARNEY INC.
As the Lead Managers of the several International
Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
MCN Energy Group Inc., a Michigan corporation (the "Company") confirms
its agreement with Merrill Lynch International and each of the other
international underwriters named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch International, Donaldson, Lufkin & Jenrette Securities Corporation, A.G.
Edwards & Sons, Inc., PaineWebber International (U.K.) Ltd., Salomon Brothers
International Limited
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and Smith Barney Inc. are acting as representatives (in such capacity,
collectively, the "Lead Managers"), with respect to the issue and sale by the
Company and the purchase by the International Managers, 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 International Managers,
acting severally and not jointly, of the option described in Section 2(b)
hereof to purchase all or any part of 225,000 additional shares of Common Stock
to cover over-allotments, if any. The aforesaid 1,500,000 shares of Common
Stock (the "Initial International Securities") to be purchased by the
International Managers and all or any part of the 225,000 shares of Common
Stock subject to the option described in Section 2(b) hereof (the
"International Option Securities") are hereinafter called, collectively, the
"International Securities".
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 several International Managers, shall enter
into an agreement substantially in the form of Exhibit A hereto (the
"International Pricing Agreement"). The International Pricing Agreement may
take the form of an exchange of any standard form of written communication
between the Company and the Lead Managers and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
International Securities will be governed by this Agreement, as supplemented by
the International Pricing Agreement. From and after the date of the execution
and delivery of the International Pricing Agreement, this Agreement shall be
deemed to incorporate the International Pricing Agreement.
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 7,000,000 shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
in the United States and Canada (the "U.S. Underwriters") for which 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
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representatives (the "U.S. Representatives") and the grant by the Company to
the U.S. Underwriters, acting severally and not jointly, of an option to
purchase all or any part of the 1,050,000 additional shares of Common Stock
solely to cover overallotments, if any (the "U.S. Option Securities" and,
together with the International Option Securities, the "Option Securities").
The Initial U.S. Securities and the U.S. Option Securities are hereinafter
called the "U.S. Securities". It is understood that the Company is not
obligated to sell, and the International Managers are not obligated to
purchase, any Initial International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters. 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
U.S. Underwriters, shall enter into an pricing agreement (the "U.S. Pricing
Agreement") specifying the applicable information as set forth in the U.S.
Purchase Agreement. From and after the date of the execution and delivery of
the U.S. Pricing Agreement, the offering of the U.S. Securities will be
governed by the U.S. Purchase Agreement, as supplemented by the U.S. Pricing
Agreement.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities
and the Initial U.S. Securities are hereinafter collectively called the
"Initial Securities", and the International Securities and the U.S. 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 & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to
make a public offering of the International Securities as soon as the Lead
Managers deem advisable after this 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 International 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 International 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 International Securities (the "Form
of International Prospectus Supplement") and one relating to the U.S.
Securities (the "Form of U.S. 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
International Prospectus Supplement and the final form of U.S. Prospectus
Supplement, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, and including
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the prospectus constituting a part of the Registration Statement, in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If the
Company elects to rely upon Rule 434 of the 1933 Act Regulations, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated June 3, 1997 and preliminary U.S.
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
International Pricing Agreement. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus, the International Prospectus Supplement, the U.S. 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
International Prospectus Supplement and Form of U.S. 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 International Prospectus
Supplement and Form of U.S. 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
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any document under the 1934 Act which is incorporated by 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 International Manager
as of the date hereof, as of the date of the International Pricing Agreement
and 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, an "International 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 International 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 International 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.
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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 representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International Manager
through the Lead Managers expressly for use in the Registration Statement or
the International 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 International
Managers 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 International 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.
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(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, 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.
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(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Michigan, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as described
in the Prospectuses and to enter into and perform its obligations under, or as
contemplated under, this Agreement, the International Pricing Agreement, the
U.S. Purchase Agreement and the U.S. 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
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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 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 International Pricing Agreement, the
U.S. Purchase Agreement and the U.S. 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 International Managers pursuant to this Agreement and
the U.S. Underwriters pursuant to the U.S. Purchase Agreement, respectively,
and, when issued and delivered by the Company against payment of the
consideration as provided in the International Pricing Agreement and the U.S.
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
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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 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 International Pricing Agreement, the U.S. Purchase Agreement and
the U.S. 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.
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(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 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
International Pricing Agreement, the U.S. Purchase Agreement and the U.S.
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 International
Pricing Agreement, the U.S. Purchase Agreement and the U.S. Pricing Agreement
or the consummation of the transactions contemplated by this Agreement, the
International Pricing Agreement, the U.S. Purchase Agreement and the U.S.
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
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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 (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
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subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(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 International Managers or to counsel for
the International Managers in connection with the offering of the Securities
shall be deemed a
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representation and warranty by the Company to each International Manager as to
the matters covered thereby.
SECTION 2. Sale and Delivery to the International Managers; 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 International Manager, and each International Manager,
severally and not jointly, agrees to purchase from the Company, at the price
per security set forth in the International Pricing Agreement, the number of
Initial International Securities set forth in Schedule A hereto opposite the
name of such International Manager, plus any additional number of Initial
International Securities which such International Manager 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 International Managers,
severally and not jointly, to purchase at their election up to an additional
225,000 shares of Common Stock at the price per share set forth in the
International Pricing Agreement, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
International Securities but not payable on the International Option
Securities. The option hereby granted will expire automatically at the close
of business on the 30th calendar day after the date of the International
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 International
Securities upon notice by the Global Coordinator to the Company setting forth
the number of International Option Securities as to which the several
International Managers are then exercising the option and the time and date of
payment and delivery for such International Option Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by the Global
Coordinator 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 the Global Coordinator and
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the Company. If the option is exercised as to all or any portion of the
International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of
Initial International Securities set forth in Schedule A opposite the name of
such International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Lead Managers 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 Global
Coordinator 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 International
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 Global Coordinator 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 International
Option Securities are purchased by the International Managers, payment of the
purchase price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Lead Managers and the Company, on each Date of
Delivery as specified in the notice from the Global Coordinator 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 Lead Managers for the respective accounts of the
International Managers of certificates for the International Securities to be
purchased by them. It is understood that each International Manager has
authorized the Lead Managers, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial
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International Securities and the International Option Securities, if any, which
it has agreed to purchase. Merrill Lynch International, individually and not
as representative of the International Managers, may (but shall not be
obligated to) make payment of the purchase price for the Initial International
Securities or the International Option Securities, if any, to be purchased by
any International Manager whose funds have not been received by the Closing
Time of the relevant of Date of Delivery, as the case may be, but such payment
shall not relieve such International Manager from its obligations hereunder.
(d) Certificates for the Initial International Securities and the
International Option Securities, if any, shall be in such denominations and
registered in such names as the Lead Managers 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 International Securities
and the International Option Securities, if any, will be made available for
examination and packaging by the Lead Managers 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 International Option Securities occurs
after the Closing Time, the Company will deliver to the International Managers
on the relevant Date of Delivery, and the obligations of the International
Managers to purchase the International 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
International Manager 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
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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 Lead Managers immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment to
the Registration Statement or the filing of any supplement or amendment to the
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 Lead Managers 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 Lead Managers 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 Lead Managers or counsel for the
International Managers shall object.
(d) The Company has furnished or will deliver to the Lead Managers
and counsel for the International Managers, without charge, signed copies of
the Registration Statement as originally filed and of each amendment thereto
(including exhibits filed
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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 Lead
Managers, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each of
the International Managers. The copies of the Registration Statement and each
amendment thereto furnished to the 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 International Manager, without
charge, as many copies of each preliminary prospectus as such International
Manager 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 International Manager, without charge, during the period when the
International Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the International Prospectus (as amended or
supplemented) as such International Manager may reasonably request. The
International Prospectus and any amendments or supplements thereto furnished to
the International Managers 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 U.S. 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 International Managers 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,
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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 International Managers, without charge,
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(g) The Company will use its best efforts, in cooperation with the
International Managers, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions (domestic
or foreign) as the Lead Managers 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
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immediately following the execution of the International 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.
(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 International 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
International, 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 U.S. 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 International Managers copies of all reports and
other communications (financial or other)
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mailed to stockholders, and to deliver to the International Managers 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 International Managers may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission).
(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 International 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 International 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 International Managers and the U.S. Underwriters;
(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 International Managers in
connection therewith and in connection
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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 with the listing of the Securities on the New
York Stock Exchange.
If this Agreement is terminated by the Lead Managers in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the International Managers 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 International Managers.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers 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
International Managers. 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
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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 Lead Managers shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Daniel L. Schiffer, Esq., Senior Vice President, General Counsel and Secretary
of the Company, in form and substance satisfactory to counsel for the Lead
Managers, together with signed or reproduced copies of such letter for each of
the other International Managers, 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 International
Pricing Agreement, the U.S. Purchase Agreement and the U.S. 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
International Purchase Agreement and the U.S. 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
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violation of preemptive or other similar rights of any securityholder
of the Company.
(v) The Securities to be purchased by the
International Managers and the U.S. Underwriters have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and the U.S. Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
U.S. Purchase Agreement, respectively, against payment of the
consideration set forth in the International Pricing Agreement and the
U.S. 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
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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 violation of preemptive or other similar rights of any
securityholder of such subsidiary.
(ix) This Agreement, the International Pricing
Agreement, the U.S. Purchase Agreement and the U.S. 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
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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.
(xiv) The execution, delivery and performance by
the Company of this Agreement, the International Pricing Agreement,
the U.S. Purchase Agreement and the U.S. 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
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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
International Pricing Agreement, the U.S. Purchase Agreement and the
U.S. 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
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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 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
International Pricing Agreement, the U.S. Purchase Agreement and the
U.S. 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 International Pricing Agreement, the U.S.
Purchase Agreement and the U.S. 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.
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(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.
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
International 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 International Managers,
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 Lead Managers shall have received a
certificate of the President or a Vice-President of
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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 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 Lead Managers
shall have received from Deloitte & Touche LLP a letter dated such date in form
and substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International Managers,
to the effect set forth below and as to such other matters as the Lead Managers
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
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32
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 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
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material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five
days prior to the date of 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
-33-
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were any decreases in consolidated operating revenues,
operating income, net income or earnings available for Common
Stock of the Company and its consolidated subsidiaries, or any
increases in any items specified by the Lead Managers, in each
case as compared with the corresponding period in the
preceding year and with any other period of corresponding
length specified by the Lead Managers, 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
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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 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 Lead Managers 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 International Managers
of the Initial International Securities under this Agreement, the U.S.
Underwriters shall have purchased the Initial U.S. Securities under the U.S.
Purchase Agreement.
(h) At the Closing Time, and at each Date of Delivery, if any,
counsel for the International Managers 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
-35-
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contemplated shall be satisfactory in form and substance to the Lead Managers
and counsel for the International Managers.
(i) In the event that the International Managers exercise their
option provided in Section 2(b) hereof to purchase all or any portion of the
International 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 Lead Managers 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 International Managers,
dated such Date of Delivery, relating to the International 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 International Managers, dated such Date of
Delivery, relating to the International 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 Lead Managers and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished
to the Lead Managers 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.
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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 International Option Securities on a Date
of Delivery which is after the Closing Time, the obligations of the several
International Managers to purchase the relevant Option Securities, may be
terminated by the Lead Managers 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 jointly and severally indemnify and hold
harmless each International Manager and each person, if any, who controls any
International Manager 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
-37-
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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
(iii) against any and all expense whatsoever, as
incurred (including, the fees, expenses and disbursements of counsel
chosen by Merrill Lynch International), 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 International Manager through Merrill Lynch International
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 International 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 International Managers (or any person controlling such International
Managers) 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 International Prospectus (or the
International 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 International 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
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39
in the International Prospectus (or the International Prospectus as amended or
supplemented).
(b) Each International Manager 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, 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 International Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such International Manager
through Merrill Lynch International expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
International 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 International, 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
-39-
40
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent
of the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
(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 International Underwriters on the other hand
from the offering of the International Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by
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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 International Managers 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
International Managers on the other hand in connection with the offering of the
International 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 International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate initial public offering price of such
International Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers 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 International Managers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the International Managers 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 International Managers 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
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42
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 International
Manager 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
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
International Manager 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
International Manager, 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 International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International 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 International 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 International Manager or controlling
person, or by or on behalf of the Company, and shall survive delivery of and
payment for the Securities to the International Managers.
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SECTION 9. Termination of Agreement.
(a) The Lead Managers 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 International Prospectus, any material adverse
change or any development which could reasonably be expected to result in a
prospective material adverse change, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which
is such as to make it, in the judgment of the Lead Managers, 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 International 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 International Managers. If
one or more of the International Managers shall fail at the Closing Time or a
Date of Delivery to purchase the
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Securities which it or they are obligated to purchase under this Agreement and
the International Pricing Agreement (the "Defaulted Securities"), the Lead
Managers shall have the right, within 24 hours thereafter, to make arrangements
for one or more of the non-defaulting International Managers, or any other
underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Lead Managers 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 International Securities to be purchased on such date, each of
the non-defaulting International Managers 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 International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of International 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 International Managers 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
International Manager.
No action taken pursuant to this Section 10 shall relieve any
defaulting International Manager 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 International Managers to purchase and the Company to sell
the relevant International Option Securities, as the case may be, either the
Lead Managers 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
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any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Managers 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
International Managers shall be directed to the Lead Managers at: Merrill Lynch
International, Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, England,
attention of Equity Capital Markets, 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 International Pricing
Agreement shall each inure to the benefit of and be binding upon the Company
and the International Managers and their respective successors. Nothing
expressed or mentioned in this Agreement or the International Pricing Agreement
is intended or shall be construed to give any person, firm or corporation,
other than the International Managers 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
International Pricing Agreement or any provision herein or therein contained.
This Agreement and the International 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 International
Manager 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
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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 International Managers 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 INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
SMITH BARNEY INC.
By: MERRILL LYNCH INTERNATIONAL
By: /s/ Anthony V. Leness
--------------------------------------
Authorized Signatory:
For themselves and as the Lead Managers of the
several International Managers named in Schedule A hereto.
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SCHEDULE A
Name of International Manager Number of
----------------------------- Initial
International
Securities
-------------
Merrill Lynch International . . . . . . . . . . . . . . . . . 250,000
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . 250,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . 250,000
PaineWebber International (U.K.) Ltd. . . . . . . . . . . . . 250,000
Salomon Brothers International Limited . . . . . . . . . . . 250,000
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . 250,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . 1,500,000
=========
49
EXHIBIT A
1,500,000 SHARES
MCN ENERGY GROUP INC.
(A MICHIGAN CORPORATION)
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
PRICING AGREEMENT
June 24, 1997
MERRILL LYNCH INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
SMITH BARNEY INC.
As the Lead Managers of the several International Managers
named in the within-mentioned International Purchase Agreement
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Reference is made to the International Purchase Agreement,
dated June 24, 1997 (the "International Purchase Agreement"), relating to the
purchase by the several International Managers named in Schedule A thereto for
whom Merrill Lynch International, Donaldson, Lufkin & Jenrette Securities
Corporation, A.G. Edwards & Sons, Inc., PaineWebber International (U.K.) Ltd.,
Salomon Brothers International Limited and Smith Barney Inc. are acting as
representatives (in such capacity, the "Lead Managers"), of the shares of
common stock, par value $.01 per share, of MCN Energy Group Inc. (the
"Company"). Capitalized terms used which are not defined herein shall have the
meanings assigned to such terms in the International Purchase Agreement.
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Pursuant to Section 2 of the International Purchase Agreement,
the Company agrees with each International Manager 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 International
Securities to be paid by the several International Managers 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 International Option Securities purchased upon the
exercise of the over-allotment option described in Section 2(b) of the
International 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 International Securities but not payable on
the International 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 International Managers 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 INTERNATIONAL
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
SALOMON BROTHERS INTERNATIONAL LIMITED
SMITH BARNEY INC.
By: MERRILL LYNCH INTERNATIONAL
By: /s/ Anthony V. Leness
---------------------------------------
Authorized Signatory:
For themselves and as the Lead Managers of the
several International Managers named in the International
Purchase Agreement.
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