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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 24, 1996
MCN CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-10070 38-2820658
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 256-5500
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ITEM 5. OTHER EVENTS
The registrant is filing herewith the following in connection with the
offering by MCN Financing I of 3,200,000 8-5/8% Trust Originated Preferred
Securities ("Preferred Securities") pursuant to the registration statement of
the registrant and MCN Financing I, among others, on Form S-3 (No. 333-01521)
filed with the Securities and Exchange Commission under the Securities Act of
1933.
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
1.1 Underwriting Agreement dated July 24, 1996 with respect to
the Preferred Securities.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom, special
counsel to MCN, regarding the validity of the
Preferred Securities.
5.2 Opinion of Daniel L. Schiffer, Senior Vice-President,
General Counsel and Secretary of MCN, regarding the
validity of the Preferred Securities.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCN CORPORATION
By /s/ Sebastian Coppola
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Sebastian Coppola
Vice President and Treasurer
Date: July 25, 1996
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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1.1 Underwriting Agreement dated July 24, 1996.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom.
5.2 Opinion of Daniel L. Schiffer.
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EXHIBIT 1.1
3,200,000 PREFERRED SECURITIES
MCN FINANCING I
(A DELAWARE TRUST)
8 5/8% TRUST ORIGINATED PREFERRED SECURITIES (SM) ("TOPrS(SM)")
(LIQUIDATION AMOUNT OF $25.00 PER PREFERRED SECURITY)
UNDERWRITING AGREEMENT
July 24, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
ROBERT W. BAIRD & CO. INCORPORATED
A.G. EDWARDS & SONS, INC.
FIRST OF MICHIGAN CORPORATION
LADENBURG, THALMANN & CO. INC.
PAINEWEBBER INCORPORATED
As the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
MCN Financing I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the
State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12
Del. C. Sections 3801 et seq.), and MCN Corporation, a Michigan
corporation (the "Company" and, together with the Trust, the
"Offerors"), confirm their agreement (the "Agreement") with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Robert W. Baird & Co. Incorporated, A.G. Edwards
& Sons, Inc., First of Michigan Corporation, Ladenburg, Thalmann &
Co., Inc. and PaineWebber Incorporated, as representatives (in such
capacity, collectively,
______________________
(SM) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co. Inc.
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the "Representatives") of the several Underwriters named in Schedule
A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in
Section 10 hereof), with respect to the sale by the Trust and the
purchase by the Underwriters, acting severally and not jointly, of
the respective number of 8 5/8% Trust Originated Preferred Securities
(liquidation amount of $25 per preferred security) of the Trust
("Preferred Securities") set forth in said Schedule A, except as may
otherwise be provided in the Pricing Agreement, as hereinafter
defined. The Preferred Securities will be guaranteed by the Company
with respect to distributions and payments upon liquidation,
redemption and otherwise (the "Preferred Securities Guarantee")
pursuant to the Preferred Securities Guarantee Agreement (the
"Preferred Securities Guarantee Agreement"), dated as of July 26,
1996, between the Company and Wilmington Trust Company, as trustee
(the "Guarantee Trustee"), and in certain circumstances described in
the Prospectus, the Trust will distribute Subordinated Debt
Securities (as defined herein) to holders of Preferred Securities.
The 3,200,000 Preferred Securities to be purchased by the
Underwriters, together with the related Preferred Securities
Guarantee and the Subordinated Debt Securities are collectively
referred to herein as the "Securities".
Prior to the purchase and public offering of the Preferred
Securities by the several Underwriters, the Offerors and the
Representatives, acting on behalf of the several Underwriters, shall
enter into an agreement substantially in the form of Exhibit A hereto
(the "Pricing Agreement"). The Pricing Agreement may take the form
of an exchange of any standard form of written telecommunication
between the Offerors and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The
offering of the Preferred Securities will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after
the date of the execution and delivery of the Pricing Agreement, this
Agreement shall be deemed to incorporate the Pricing Agreement.
The Company, and the Trust and MCN Financing II (collectively,
the "MCN Trusts") have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(No. 333-01521) and pre-effective amendment nos. 1 and 2 thereto
covering the registration of securities of the Company and the MCN
Trusts, including the Securities, under the Securities Act of 1933,
as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and the
Company has filed such post-effective amendments thereto as may be
required prior to the execution of the Pricing Agreement. Such
registration statement, as so amended, has been declared effective by
the Commission. Such registration statement, as so amended,
including the
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exhibits and schedules thereto, if any, and the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein
as the "Registration Statement"; and the final prospectus and the
prospectus supplement relating to the offering of the Securities, in
the form first furnished to the Underwriters by the Company for use
in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall
be deemed to include all documents incorporated therein by reference
pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the execution of the applicable Pricing
Agreement; provided, further, that if the Offerors file a
registration statement with the Commission pursuant to Section 462(b)
of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then after such filing, all references to "Registration
Statement" shall be deemed to include the Rule 462(b) Registration
Statement; and provided, further, that if the Offerors elect to rely
upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall be deemed to include the final or preliminary
prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the form first furnished
to the Underwriters by the Company in reliance upon Rule 434 of the
1933 Act Regulations, and all references in this Purchase Agreement
to the date of the Prospectus shall mean the date of the Term Sheet.
A "preliminary prospectus" shall be deemed to refer to any prospectus
used before the registration statement became effective and any
prospectus that omitted, as applicable, the Rule 430A Information,
the Rule 434 Information or other information to be included upon
pricing in a form of prospectus filed with the Commission pursuant to
Rule 424(b) of the 1933 Act Regulations, that was used after such
effectiveness and prior to the execution and delivery of the
applicable Pricing Agreement. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus,
the Prospectus or any Term Sheet or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with
the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or
"stated" in the Registration Statement, any preliminary prospectus or
the Prospectus (or other references of like import) shall be deemed
to mean and include all such financial statements and schedules and
other information which is incorporated by reference in the
Registration Statement, any preliminary prospectus or the Prospectus,
as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any
preliminary prospectus or the
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Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a
public offering of the Securities as soon as the Representatives deem
advisable after the Pricing Agreement has been executed and delivered
and the Declaration (as defined herein), the Indenture (as defined
herein), and the Preferred Securities Guarantee Agreement have been
qualified under the Trust Indenture Act of 1939, as amended (the
"1939 Act"). The entire proceeds from the sale of the Preferred
Securities will be combined with the entire proceeds from the sale by
the Trust to the Company of its common securities (the "Common
Securities," and together with the Preferred Securities, the "Trust
Securities"), as guaranteed by the Company, to the extent set forth
in the Prospectus, with respect to distributions and payments upon
liquidation and redemption (the "Common Securities Guarantee" and
together with the Preferred Securities Guarantee, the "Guarantees")
pursuant to the Common Securities Guarantee Agreement (the "Common
Securities Guarantee Agreement" and, together with the Preferred
Securities Guarantee Agreement, the "Guarantee Agreements"), dated as
of July 26, 1996, between the Company and the Guarantee Trustee, as
Trustee, and will be used by the Trust to purchase $82,474,250 of 8
5/8% subordinated deferrable interest debt securities (the
"Subordinated Debt Securities") issued by the Company. The Preferred
Securities and the Common Securities will be issued pursuant to the
amended and restated declaration of trust of the Trust, dated as of
July 24, 1996 (the "Declaration"), among the Company, as Sponsor,
Sebastian Coppola and Daniel L. Schiffer (the "Regular Trustees"),
Wilmington Trust Company, as institutional trustee (the
"Institutional Trustee"), and Wilmington Trust Company (the "Delaware
Trustee," and, together with the Institutional Trustee and the
Regular Trustees, the "Trustees"), and the holders from time to time
of undivided beneficial interests in the assets of the Trust. The
Subordinated Debt Securities will be issued pursuant to an indenture,
dated as of September 1, 1994 (as supplemented by the First
Supplemental Indenture dated as of April 17, 1996, the "Base
Indenture"), between the Company and NBD Bank as trustee (the "Debt
Trustee"), and a second supplement to the Base Indenture, dated as of
July 24, 1996 (the "Second Supplemental Indenture," and together with
the Base Indenture and any other amendments or supplements thereto,
the "Indenture"), between the Company and the Debt Trustee.
SECTION 1. Representations and Warranties.
(a) The Offerors represent and warrant to each Underwriter as
of the date hereof and as of the date of the Pricing Agreement (such
later date being hereinafter referred to as the "Representation
Date") that:
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(i) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Offerors,
threatened by the Commission.
(ii) The Company and the MCN Trusts meet, and at the
respective times of the commencement and consummation of the Offering
of the Securities will meet, the requirements for the use of Form S-3
under the 1933 Act. Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the 1933
Act. At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission) became effective and at each
Representation Date, the Registration Statement, any Rule 462
Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the
1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations") and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus and
at the Closing Time, the Prospectus and any amendments and
supplements thereto did not and will not include an untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the
Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, the
Offerors will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in
this subsection shall not apply to (A) statements in or omissions
from the Registration Statement or the Prospectus made in reliance
upon and in conformity with information furnished to the Offerors in
writing by any Underwriter through Merrill Lynch expressly for use in
the Registration Statement or the Prospectus or (B) that part of the
Registration Statement which shall constitute the Statement of
Eligibility (Form T-1) under the 1939 Act.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and, if applicable, each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
the offering of 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.
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(iii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement or the
Prospectus, at the time they were or hereafter are filed or last
amended, as the case may be, with the Commission, complied and will
comply in all material respects with the requirements of the 1934
Act, and the rules and regulations of Commission thereunder (the
"1934 Act Regulations"), and at the time of filing or as of the time
of any subsequent amendment, did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were or are made, not misleading;
and any additional documents deemed to be incorporated by reference
in the Registration Statement or the Prospectus will, if and when
such documents are filed with the Commission, or when amended, as
appropriate, comply in all material respects to the requirements of
the 1934 Act and the 1934 Act Regulations and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Merrill Lynch expressly for
use in the Registration Statement or the Prospectus.
(iv) The accountants who certified the financial
statements and supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the
Prospectus, together with the related schedules and notes, as well as
those financial statements, schedules and notes of any other entity
included therein, present fairly the financial position of the
Company and its consolidated subsidiaries, or such other entity, as
the case may be, as at the dates indicated and the results of their
operations for the periods specified. Such financial statements have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly in accordance with GAAP the information
required to be stated therein. The ratio of earnings to fixed
charges included in the Prospectus has been calculated in compliance
with Item 503(d) of Regulation S-K of the Commission. The selected
financial information and the summary financial data included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited
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financial statements included in the Registration Statement and the
Prospectus.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as
otherwise stated therein, (A) there has been no material adverse
change and no development which could reasonably be expected to
result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise (a
"Material Adverse Effect"), whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into
by the Company or any of its subsidiaries, other than the sale by the
Company of its subsidiary, the Genix Group, Inc. and 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 Company's Common
Stock in amounts per share that are consistent with past practice or
the applicable charter document or supplement thereto, respectively,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(vii) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Michigan, with corporate power and authority to own,
lease and operate its properties and to conduct its business as
presently conducted and as described in the Prospectus and to enter
into and perform its obligations under, or as contemplated under,
this Agreement, the Pricing Agreement and the Guarantee Agreements.
The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not have a
Material Adverse Effect.
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospectus,
all of the issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and all
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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 bylaws of any subsidiary or under any agreement
to which the Company or any subsidiary is a party, or otherwise.
(ix) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus; since the date
indicated in the Prospectus there has been no change in the
consolidated capitalization of the Company and its subsidiaries
(other than changes in outstanding Common Stock resulting from
employee benefit plan or dividend reinvestment and stock purchase
plan transactions); and all of the issued and outstanding capital
stock of the Company has been duly authorized and validly issued, is
fully paid and non-assessable and conforms to the descriptions
thereof contained in the Prospectus and the Registration Statement.
(x) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act
with the power and authority to own property and to conduct its
business as described in the Registration Statement and Prospectus
and to enter into and perform its obligations under this Agreement,
the Pricing Agreement, the Preferred Securities, the Common
Securities and the Declaration; the Trust is duly qualified to
transact business as a foreign company and is in good standing in
each jurisdiction in which such qualification is necessary, except
where the failure to so qualify or be in good standing would not have
a Material Adverse Effect on the Trust; the Trust is not a party to
or otherwise bound by any agreement other than those described in the
Prospectus; the Trust is and will, under current law, be classified
for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation.
(xi) The Common Securities have been duly authorized by
the Declaration and, when issued and delivered by the Trust to the
Company against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued and will represent
undivided beneficial interests in the assets of the Trust and will
conform in all material respects to the description thereof contained
in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights; and at the Closing
Time all of the issued and outstanding Common Securities of the Trust
will be directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
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(xii) This Agreement and the Pricing Agreement have been
duly authorized, executed and delivered by each of the Offerors.
(xiii) The Declaration has been duly authorized by the
Company and, at the Closing Time, will have been duly executed and
delivered by the Company and the Trustees, and assuming due
authorization, execution and delivery of the Declaration by the
Institutional Trustee and the Delaware Trustee, the Declaration will,
at the Closing Time, be a valid and binding obligation of the Company
and the Regular Trustees, enforceable against the Company and the
Regular Trustees in accordance with its terms, except to the extent
that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in
equity) (the "Bankruptcy Exceptions") and will conform in all
material respects to the description thereof contained in the
Prospectus.
(xiv) Each of the Guarantee Agreements has been duly
authorized by the Company and, when validly executed and delivered by
the Company, and, in the case of the Preferred Securities Guarantee
Agreement, assuming due authorization, execution and delivery of the
Preferred Securities Guarantee by the Guarantee Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions,
and each of the Guarantees and the Guarantee Agreements will conform
in all material respects to the description thereof contained in the
Prospectus.
(xv) The Preferred Securities have been duly authorized
for issuance and sale to the Underwriters and, when issued and
delivered against payment therefor as provided herein, will be
validly issued and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform in all material
respects to the description thereof contained in the Prospectus; the
issuance of the Preferred Securities is not subject to preemptive or
other similar rights.
(xvi) The Indenture has been duly authorized and qualified
under the 1939 Act and, at the Closing Time, will have been duly
executed and delivered and will constitute a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture
will conform in all material respects to the description thereof
contained in the Prospectus.
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(xvii) The Subordinated Debt Securities have been duly
authorized by the Company and, at the Closing Time, will have been
duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered against payment therefor
as described in the Prospectus, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and will be in
the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the
description thereof in the Prospectus.
(xviii) Each of the Regular Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company
to execute and deliver the Declaration.
(xix) 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,
loan agreement, note, lease or any other 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 property or assets of
the Company or any of its subsidiaries is subject, or in violation of
any applicable law, administrative regulation or administrative or
court order or decree, which violation or default would, singly or in
the aggregate, have a Material Adverse Effect.
(xx) The Trust is not in violation of the Declaration or
its certificate of trust filed with the State of Delaware on March 6,
1996 (the "Certificate of Trust"); none of the execution, delivery
and performance of this Agreement, the Pricing Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements
and the Guarantees and the consummation of the transactions
contemplated herein and therein and compliance by the Offerors with
their respective obligations hereunder and thereunder did or will
result in a breach of any of the terms or provisions of, or
constitute a default under or require the consent of any party under
the Certificate of Trust of the Trust or the Articles of
Incorporation or by-laws of the Company and its subsidiaries, any
contract, indenture, mortgage, note, lease, agreement or other
instrument to which either the Trust, the Company or any of its
subsidiaries is a party or by which any of them may be bound, any
applicable law, rule or regulation or any judgment, order or decree
of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Trust, the Company or any of
its subsidiaries or any of their respective properties or assets, or
did or will result in the creation or imposition of any lien on the
properties or assets of the Trust, the Company or any of its
subsidiaries.
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(xxi) No labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors which might be expected to
result in any 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.
(xxii) 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 Prospectus (other than as stated therein), or which
might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely
affect the assets, properties or operations thereof or the
consummation of this Agreement, the Pricing Agreement, the Guarantee
Agreements, the Indenture or the transactions contemplated herein or
therein. The aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary thereof is a party
or of which any of their respective assets, properties or operations
is the subject which are not described in the Registration Statement
and the Prospectus, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(xxiii) The Company and its subsidiaries have good and
marketable title to all material real and personal property owned by
them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Registration Statement or
the Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any material real property and buildings held under
lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are
not material and do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company and
its subsidiaries; the pipeline, distribution main and underground gas
storage easements enjoyed by the Company or its subsidiaries are
valid, subsisting and enforceable easements with such exceptions as
are not material and do not materially interfere with the conduct of
the business of the Company and its subsidiaries; the Company and its
subsidiaries possess all licenses, franchises, permits, certificates,
authorizations, approvals, consents and orders of all governmental
authorities or agencies which are necessary for the ownership or
lease of the material properties owned or leased by each of them and
for the operation of the business now
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operated by each of them with such exceptions which, singly or in the
aggregate, are not material and do not materially interfere with the
conduct of the business of the Company and its subsidiaries,
considered as one enterprise; all such licenses, franchises, permits,
certificates, orders, authorizations, approvals and consents are in
full force and effect and contain no unduly burdensome provisions
that would interfere with the conduct of the business of the Company
and its subsidiaries, considered as one enterprise and, except as
otherwise set forth in the Registration Statement or the Prospectus,
there are no legal or governmental proceedings pending or threatened
that would result in a material modification, suspension or
revocation thereof.
(xxiv) No authorization, approval, consent, order,
registration or qualification of or with any court or governmental
authority or agency is required in connection with the issuance and
sale of the Common Securities or the offering of the Preferred
Securities, the Subordinated Debt Securities or the Guarantees
hereunder, except such as have been obtained and made under the
federal securities laws and such as may be required under state or
foreign securities or Blue Sky laws.
(xxv) None of the Trust or the Company or any of its
subsidiaries is an "investment company" or under the "control" of an
"investment company" as such terms are defined under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xxvi) 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.
(xxvii) The Company is in compliance with all provisions
of Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating
to Disclosure of Doing Business with Cuba.
(xxviii) No "forward looking statement" (as defined in
Rule 175 under the 1933 Act) contained in the Registration Statement,
any preliminary prospectus or the Prospectus was made or reaffirmed
without a reasonable basis or was disclosed other than in good faith.
(b) Any certificate signed by any officer of the Company or a
Trustee of the Trust and delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and
warranty by the Company or the Trust, as the case may be, to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein
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<PAGE> 13
set forth, the Trust agrees to sell to each Underwriter, and each
Underwriter, severally and not jointly, agrees to purchase from the
Trust, at the price per security set forth in the Pricing Agreement,
the number of Preferred Securities set forth in Schedule A hereto
opposite the name of such Underwriter, plus any additional number of
Preferred Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(1) If the Offerors have elected not to rely upon Rule
430A of the 1933 Act Regulations, the initial public offering price
per Security and the purchase price per Security to be paid by the
several Underwriters for the Securities have each been determined and
set forth in the Pricing Agreement, dated the date hereof, and any
necessary amendments to the Registration Statement and the Prospectus
will be filed before the Registration Statement becomes effective.
(2) If the Offerors have elected to rely upon Rule 430A of
the 1933 Act Regulations, the purchase price per Security to be paid
by the several Underwriters shall be an amount equal to the initial
public offering price per Preferred Security, less an amount per
Preferred Security to be determined by agreement between the
Underwriters and the Offerors. The initial public offering price per
Preferred Security shall be a fixed price to be determined by
agreement between the Underwriters and the Offerors. The initial
public offering price and the purchase price, when so determined,
shall be set forth in the Pricing Agreement. In the event that such
prices have not been agreed upon and the Pricing Agreement has not
been executed and delivered by all parties thereto by the close of
business on the fourth business day following the date of this
Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, unless otherwise agreed to
by the Offerors and the Underwriters.
(b) Delivery of certificates for the Securities shall be made
at the offices of the Underwriters in New York, and payment of the
purchase price for the Securities shall be made at the offices of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New
York, New York 10019 or at such other place as shall be agreed upon
by the Underwriters and the Offerors, at 10:00 a.m. (New York time)
on the third business day after the date the Registration Statement
becomes effective (or, if the Offerors have elected to rely upon Rule
430A, the third full business day after execution of the Pricing
Agreement (or, if pricing of the Securities occurs after 4:30 p.m.
Eastern time, on the fourth full business day thereafter)), or such
other time not later than ten business days after such date as shall
be agreed upon by the Underwriters and the Offerors (such time and
date of payment and delivery being herein called the "Closing Time").
Payment for the Preferred Securities purchased by the Underwriters
shall be made to the Trust by wire transfer of
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<PAGE> 14
immediately available funds, payable to the Trust, against delivery
to the respective accounts of the Underwriters of certificates for
the Preferred Securities to be purchased by it. Certificates for the
Preferred Securities shall be in such denominations and registered
in such names as the Underwriters may request in writing at least two
full business days before the Closing Time. Merrill Lynch,
individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the
Preferred Securities, if any, to be purchased by any Underwriter
whose funds have not been received by the Closing Time, but such
payment shall not relieve such Underwriter from its obligations
hereunder. The certificates for the Preferred Securities will be
made available for examination and packaging by the Underwriters no
later than 10:00 a.m. (New York City time) on the last business day
prior to the Closing Time.
SECTION 3. Covenants of the Offerors. The Offerors agree with
each Underwriter as follows:
(a) Promptly following the execution of this Agreement, the
Offerors will cause the Prospectus, including as a part thereof a
prospectus supplement relating to the Securities to be filed with the
Commission pursuant to Rule 424 of the 1933 Act Regulations and the
Offerors will promptly advise the Underwriters when such filing has
been made. Prior to the filing, the Offerors will cooperate with the
Underwriters in the preparation of such prospectus supplement to
assure that the Underwriters have no reasonable objection to the form
or content thereof when filed or mailed.
(b) The Offerors, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434
of the 1933 Act Regulations if and as applicable, and will notify the
Underwriters immediately, and confirm the notice in writing, (i) of
the effectiveness of any post-effective amendment to the Registration
Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose and (v) of the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification
or the exemption from qualification of the Securities or the Shares
under state securities or Blue Sky laws or the initiation or
threatening of any proceeding for such purpose. The Offerors will
make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
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<PAGE> 15
(c) The Company will give the Underwriters notice of its
intention to file or prepare any amendment to the Registration
Statement (including any post-effective amendment and any filing
under Rule 462(b) of the 1933 Act Regulations) any Term Sheet or any
amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to
the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise; will furnish the Underwriters with copies of any such Rule
462(b) Registration Statement, Term Sheet, amendment, supplement or
revision a reasonable amount of time prior to such proposed filing or
use, as the case may be; and will not file any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision
to which the Underwriters or counsel for the Underwriters shall
object.
(d) The Company will deliver to Merrill Lynch and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference
therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates
of experts and will also deliver to Merrill Lynch, without charge, a
conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the
Underwriters. If applicable, the copies of the Registration
Statement and each amendment thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) The Company will deliver to each Underwriter, without
charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each Underwriter, without charge, during
the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request.
If applicable, the Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to
permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Registration Statement and
the Prospectus. If at any time when the Prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in
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<PAGE> 16
the opinion of counsel for the Underwriters or for the Offerors, to
amend the Registration Statement in order that the Registration
Statement will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend
or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it
is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply
with the requirements of the 1933 Act or the 1933 Act Regulations,
the Offerors will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Offerors will furnish to the Underwriters,
without charge, such number of copies of such amendment or supplement
as the Underwriters may reasonably request.
(g) The Offerors will use their best efforts, in cooperation
with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as Merrill Lynch may designate;
provided, however, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so
qualified or subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
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 and the Shares.
(h) The Company will make generally available to its
securityholders as soon as practicable, but not later than 45 days
(or 90 days, in the case of a period that is also the Company's
fiscal year) after the close of the period covered thereby, an
earnings statement of the Company (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement.
(i) The Trust will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
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<PAGE> 17
(j) If, at the time that the Registration Statement became (or
in the case of a post-effective amendment becomes) effective, any
information shall have been omitted therefrom in reliance upon Rule
430A or Rule 434 of the 1933 Act Regulations, then immediately
following the execution of the Pricing Agreement, the 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 Offerors elect to rely upon Rule 462(b), the Offerors
shall both file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) and pay the applicable fees
in accordance with Rule 111 of the 1933 Act Regulations by the
earlier of (i) 10:00 p.m. Eastern time on the date of the Pricing
Agreement and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(l) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14
or 15 of the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
(m) The Offerors will use its best efforts to effect the
listing of the Preferred Securities (including the Preferred
Securities Guarantee with respect thereto) on the New York Stock
Exchange and to cause the Securities to be registered under the 1934
Act. If the Preferred Securities are exchanged for Subordinated Debt
Securities, the Company will use its best efforts to effect the
listing of the Subordinated Debt Securities on the exchange on which
the Preferred Securities were then listed and to cause the
Subordinated Debt Securities to be registered under the 1934 Act.
(n) During a period of 30 days from the date of the Pricing
Agreement, neither the Trust nor the Company will, without the prior
written consent of the Underwriters, directly or indirectly, sell,
offer to sell, grant any option for the sale of, or otherwise dispose
of, or enter into any agreement to sell, any Preferred Securities,
any security convertible into or exchangeable or exercisable for
Preferred Securities, or the Subordinated Debt Securities or any debt
securities substantially similar to the Subordinated Debt Securities
or any equity securities substantially similar to the Preferred
Securities (except the Subordinated Debt Securities and the Preferred
Securities issued pursuant to this Agreement).
(o) During a period of three years from the Closing Time, to
make generally available to the Underwriters copies of all reports
and other communications (financial or other) mailed to
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<PAGE> 18
stockholders, and to deliver to the Underwriters promptly after they
are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed;
and shall furnish such additional information concerning the business
and financial condition of the Company as the Underwriters may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission).
SECTION 4. Payment of Expenses. The Company will pay all
expenses incident to the performance of its obligations under this
Agreement and the Pricing Agreement, including, without limitation,
expenses related to the following, if incurred: (i) the preparation,
delivery, printing and filing of the Registration Statement and
Prospectus as originally filed (including financial statements and
exhibits) and of each amendment thereto, (ii) the printing and
delivery to the Underwriters of this Agreement, the Pricing
Agreement, any Agreement among Underwriters and such other documents
as may be required in connection with offering, purchase, sale and
delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Preferred Securities, (iv) the
fees and disbursements of the Company's counsel, accountants and
other advisors or agents (including the transfer agents and
registrars) as well as fees and disbursements of the Trustees and any
Depositary, and their respective counsel, (v) the qualification of
the Securities and the Shares under securities laws in accordance
with the provisions of Section 3(f), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky
Survey and any Legal Investment Survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement
as originally filed and of each amendment thereto, of each
preliminary prospectus, any Term Sheet and of the Prospectus and any
amendments or supplements thereto, (vii) the printing and delivery to
the Underwriters of copies of the Blue Sky Survey and any Legal
Investment Survey, (viii) any fees payable in connection with the
rating of the Preferred Securities by nationally recognized
statistical rating organizations; (ix) the filing fees incident to,
and the fees and disbursements of counsel to the Underwriters in
connection with, the review, if any, by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Preferred Securities; (x) any fees payable to the Commission; and
(xi) the fees and expenses incurred in connection with the listing of
the Preferred Securities and, if applicable, the Subordinated Debt
Securities on the New York Stock Exchange.
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<PAGE> 19
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and
disbursements of LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for
the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase and pay for the Preferred
Securities pursuant to this Agreement are subject to the accuracy of
the representations and warranties of the Offerors herein contained
or in certificates of any officer of the Company or any subsidiary or
the trustees of the Trust delivered pursuant to the provisions
hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933
Act not later than 5:30 p.m., New York City time, on the date hereof,
and on the date hereof and at the Closing Time, no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have
been complied with to the satisfaction of counsel to the
Underwriters. A prospectus containing information relating to the
description of the Securities, the specific method of distribution
and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable
(or any required post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A), or, if the Company has elected to rely
upon Rule 434 of the 1933 Act Regulations, a Term Sheet including the
Rule 434 Information shall have been filed with the Commission in
accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time,
of Daniel L. Schiffer, Esq., Senior Vice President, General Counsel
and Secretary of the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Michigan.
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<PAGE> 20
(ii) The Company has corporate power and authority
to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the
Prospectus.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required.
(iv) The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to employee benefit
plan or dividend reinvestment and stock purchase plan
transactions), and the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable.
(v) 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 Registration
Statement and the Prospectus, and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect; all of the
issued and outstanding capital stock of each such subsidiary of
the Company has been duly authorized and validly issued, is
fully paid and non-assessable and all such shares are owned by
the Company, directly or through its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(vi) The Trust is not required to be qualified and
in good standing as a foreign company in Michigan, except to the
extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Trust; and the
Trust is not a party to or otherwise bound by any agreement
other than those described in the Prospectus.
(vii) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and is a
valid and binding obligation of the Company, enforceable against
the Company and each of the Regular Trustees in accordance with
its terms, except as enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Declaration has been duly
qualified under the 1939 Act.
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<PAGE> 21
(viii) All legally required proceedings in connection
with the authorization, issuance and validity of the Securities
and the sale of the Securities in accordance with this Agreement
(other than the filing of post-issuance reports, the non-filing
of which would not render the Securities invalid) have been
taken and all legally required orders, consents or other
authorizations or approvals of any other public boards or bodies
in connection with the authorization, issuance and validity of
the Securities and the sale of the Securities in accordance with
this Agreement (other than in connection with or in compliance
with the provisions of the securities or Blue Sky laws of any
jurisdictions, as to which no opinion need be expressed) have
been obtained and are in full force and effect.
(ix) The Registration Statement is effective under
the 1933 Act and, to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act, and no proceedings therefor
have been initiated or threatened by the Commission.
(x) The Registration Statement as of its effective
date and the Prospectus and each amendment or supplement thereto
as of its issue date (in each case, other than the financial
statements and the notes thereto, the financial schedules, and
any other financial data included or incorporated by reference
therein, as to which such counsel need express no belief),
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations; and
the Declaration, the Indenture, the Preferred Securities
Guarantee Agreement and the Statements of Eligibility on Forms
T-1 with respect to each of the Institutional Trustee, the Debt
Trustee, and the Guarantee Trustee filed with the Commission as
part of the Registration Statement complied as to form in all
material respects with the requirements of the 1939 Act and the
1939 Act Regulations.
(xi) Each of the documents incorporated by
reference in the Registration Statement or the Prospectus at the
time they were filed or last amended (other than the financial
statements and the notes thereto, the financial schedules, and
any other financial or statistical data included or incorporated
by reference therein, as to which such counsel need express no
belief) complied as to form in all material respects with the
requirements of the 1934 Act, and the 1934 Act Regulations, as
applicable; and such counsel has no reason to believe that any
of such documents, when such documents became effective or were
so filed, as the case may be, contained, in the case of a
registration statement which became effective under the 1933
Act, an untrue statement of a material fact, or omitted to state
a
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<PAGE> 22
material fact required to be stated therein or necessary to make
the statements therein not misleading, and, in the case of other
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein not misleading.
(xii) MCN and each of the MCN Trusts meet the
registrant requirements for use of Form S-3 under the 1933 Act
Regulations.
(xiii) The Common Securities, the Preferred
Securities, the Subordinated Debt Securities, each of the
Guarantees, the Declaration, the Indenture and each of the
Guarantee Agreements conform in all material respects to the
descriptions thereof contained in the Prospectus.
(xiv) The information in the Prospectus under the
captions "MCN Corporation", "MCN Financing I", "Risk Factors",
"Use of Proceeds", "Capitalization", "Description of the
Preferred Securities", "Description of the Guarantee",
"Description of the Junior Subordinated Debentures" and "Effect
of Obligations under the Junior Subordinated Debentures and the
Guarantee", to the extent that they involve matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in
all material respects.
(xv) All of the issued and outstanding Common
Securities of the Trust are directly owned by the Company free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right.
(xvi) This Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by each of the
Trust and the Company.
(xvii) Each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company; the Preferred
Securities Guarantee Agreement, assuming it is duly authorized,
executed, and delivered by the Guarantee Trustee, constitutes a
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by Bankruptcy
Exceptions; and the Preferred Securities Guarantee Agreement has
been duly qualified under the 1939 Act.
(xviii) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization,
execution, and delivery thereof by the Debt Trustee, is a valid
and binding obligation of the Company, enforceable
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<PAGE> 23
against the Company in accordance with its terms, except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Indenture has been duly qualified under the
1939 Act.
(xix) The Subordinated Debt Securities are in the
form contemplated by the Indenture, have been duly authorized,
executed and delivered by the Company and, when authenticated by
the Debt Trustee in the manner provided for in the Indenture and
delivered against payment therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may
be limited by the Bankruptcy Exceptions.
(xx) The execution, delivery and performance of
this Agreement, the Pricing Agreement, the Declaration, the
Preferred Securities, the Common Securities, the Indenture, the
Subordinated Debt Securities, the Guarantee Agreements, and the
Guarantees; the consummation of the transactions contemplated
herein and therein, and the compliance by each of the Offerors
with their respective obligations hereunder and thereunder do
not and will not conflict with, result in a breach of, or
constitute a default under or require the consent of any party
under the Certificate of Trust of the Trust or the Articles of
Incorporation or by-laws of the Company and its subsidiaries, or
any contract, indenture, mortgage, agreement, note, lease or
other instrument to which the Trust, the Company or any of its
subsidiaries is a party or by which any of them may be bound, or
any applicable law, rule or regulation, or any judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Trust,
the Company or any of its subsidiaries or any of their
respective properties or assets or did or will result in the
creation or imposition of any lien on the properties or assets
of the Trust, the Company or any of its subsidiaries.
(xxi) To the best of such counsel's knowledge, there
are no actions, suits or proceedings before or by any court or
governmental agency or body, domestic or foreign, pending or
threatened which are required to be disclosed in the
Registration Statement or the Prospectus, other than those
disclosed therein, and all pending legal or governmental
proceedings to which the Company or any of its subsidiaries is a
party or to which any of their property is subject which are not
described in the Registration Statement or the Prospectus,
including ordinary routine litigation incidental to the
business, are, considered in the aggregate, not material.
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<PAGE> 24
(xxii) To the best of such counsel's knowledge and
information, there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to or incorporated by reference in the
Registration Statement or to be filed as exhibits thereto other
than those described or referred to or incorporated by reference
therein or filed as exhibits thereto; the descriptions thereof
or references thereto are true and correct, and no default
exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument so described, referred to, filed or
incorporated by reference.
(xxiii) No authorization, approval, consent, order,
registration or qualification of or with any court or federal or
state governmental authority or agency is required for the
issuance and sale of the Preferred Securities by the Trust to
the Underwriters or the performance by the Trust and the Company
of their respective obligations in this Agreement, the Pricing
Agreement, the Indenture, the Junior Subordinated Debentures,
the Guarantee Agreements, the Guarantees, the Declaration and
the Preferred Securities except such as has been obtained and
made under the federal securities laws or such as may be
required under state or foreign securities or Blue Sky laws.
(xxiv) 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 Prospectus 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, and consents
are in full force and effect and contain no unduly burdensome
provisions that would interfere with the conduct of the business
of the Company and its subsidiaries, considered as one
enterprise and, except as otherwise set forth in the
Registration Statement or the Prospectus, there are no legal or
governmental proceedings pending or threatened that would result
in a material modification, suspension or revocation thereof.
(xxv) None of the Trust or the Company or any of its
subsidiaries is an "investment company" or under the "control"
of an "investment company" as such terms are defined in the 1940
Act.
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(xxvi) 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.
(xxvii) The Company is in compliance with all
provisions of Section 1 of the Laws of Florida, Chapter 92- 198,
An Act Relating to Disclosure of Doing Business with Cuba.
Moreover, such counsel shall confirm that nothing has come to
such counsel's attention that would lead such counsel to believe
that the Registration Statement, including any information
provided pursuant to Rule 430A or Rule 434 (except for financial
statements and related schedules and other financial data
included or incorporated by reference therein, as to which
counsel need express no opinion), at the time it became
effective or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except
for financial statements and related schedules and other
financial data included or incorporated by reference therein, as
to which counsel need express no opinion), at the Representation
Date (unless the term "Prospectus" refers to a prospectus which
has been provided to the Underwriters by the Company for use in
connection with the offering of the Preferred Securities which
differs from the Prospectus on file at the Commission at the
time the Registration Statement became effective, in which case
at the time it is first provided to the Underwriters for such
use) or at Closing Time, included (or includes) an untrue
statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.
The foregoing opinions may be limited to the laws of
Delaware, Michigan and the federal law of the United States. In
giving such opinion, such counsel may rely, as to matters of Delaware
Law, upon the opinion of Skadden, Arps, Slate, Meagher & Flom,
special Delaware counsel to the Offerors, in which case the opinion
shall state that such counsel believes that you and such counsel are
entitled to so rely.
(2) The favorable opinion, dated as of Closing Time, of
Skadden, Arps, Slate, Meagher & Flom, special counsel to the
Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Registration Statement, including any Rule
462(b) Registration Statement, is effective under the 1933 Act;
any required filing of the Prospectus pursuant to
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Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement has been issued
under the 1933 Act or proceedings therefor initiated, to the
best of such counsel's knowledge, or threatened by the
Commission.
(ii) The Registration Statement, including any Rule
462(b) Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial
statements and supporting schedules and other financial data
included or incorporated by reference therein, or the exhibits
to the Registration Statement, including any Form T-1, as to
which no opinion need be rendered), as of their respective
effective or issue dates, or when amended, as appropriate,
complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations of
the Commission thereunder.
(iii) The statements in the Prospectus under the
captions "MCN Financing I", "Description of the Preferred
Securities" (except under the subsection "Book-Entry Only
Issuance-The Depository Trust Company"), "Description of the
Guarantee", "Description of the Junior Subordinated Debentures",
"Effect of Obligations Under the Junior Subordinated Debentures
and the Guarantee", "Description of MCN Debt Securities" (except
under the second and third paragraphs under the subsection
"Book-Entry Debt Securities"), "Particular Terms of the
Subordinated Debt Securities", "Description of MCN Trust
Preferred Securities" and "Description of the Preferred
Securities Guarantees", to the extent that they involve matters
of law, summaries of legal matters, documents or proceedings, or
legal conclusions, has been reviewed by such counsel and is
correct in all material respects.
(iv) Assuming the Preferred Securities Guarantee
Agreement has been duly authorized, executed and delivered by
the Company under Michigan law, and it is a valid and binding
agreement of the Company.
(v) This Agreement and the Pricing Agreement have
been duly authorized, executed and delivered by the Trust.
(vi) The Common Securities, the Preferred
Securities, the Subordinated Debt Securities, each of the
Guarantees and the Declaration and each of the Guarantee
Agreements conform in all material respects to the descriptions
thereof contained in the Prospectus.
(vii) No authorization, approval, consent, order,
registration or qualification of or with any court or
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federal or New York or Delaware state governmental authority or
agency is required for the issuance and sale of the Preferred
Securities by the Trust to the Underwriters or the performance
by the Trust and the Company of their respective obligations in
this Agreement, the Pricing Agreement, the Indenture, the Junior
Subordinated Debentures, the Preferred Securities Guarantee
Agreement, the Preferred Securities Guarantee, the Declaration
and the Preferred Securities except such as has been obtained
and made under the federal securities laws or such as may be
required under state or foreign securities or Blue Sky laws.
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 (except for financial statements
and related schedules and other financial or statistical data
included or incorporated by reference therein, as to which
counsel need express no opinion), at the time it became
effective or at the Representation Date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except
for financial statements and related schedules and other
financial data included or incorporated by reference therein, as
to which counsel need express no opinion), at the Representation
Date (unless the term "Prospectus" refers to a prospectus which
has been provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs
from the Prospectus on file at the Commission at the time the
Registration Statement became effective, in which case at the
time it is first provided to the Underwriters for such use) or
at Closing Time, included (or includes) an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(3) The favorable opinion, dated as of Closing Time, of
Skadden, Arps, Slate, Meagher & Flom, special Delaware counsel to the
Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware
Act, and has the business trust power and authority to conduct
its business as described in the Registration Statement and the
Prospectus.
(ii) Assuming that the Declaration has been duly
authorized, executed and delivered by the Company, and assuming
the due authorization, execution and delivery of the Declaration
by The Wilmington Trust Company and the Regular Trustees, the
Declaration constitutes a valid and
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binding obligation of the Company and is enforceable against the
Company in accordance with its terms, except that to the extent
enforceability thereof may be limited by the Bankruptcy
Exceptions.
(iii) Under the Delaware Act and the Declaration,
the Trust has the power and authority to (i) execute and
deliver, and to perform its obligations under, this Agreement
and the Pricing Agreement and (ii) issue, and perform its
obligations under, the Trust Securities.
(iv) The execution and delivery by the Trust of
this Agreement and the Pricing Agreement, and the performance by
the Trust of its obligations hereunder and under the Pricing
Agreement, have been duly authorized by all necessary action on
the part of the Trust.
(v) The Preferred Securities have been duly
authorized by the Declaration and, when executed by the trust
and the Institutional Trustee in accordance with the Declaration
and delivered against payment therefore in accordance with the
terms of this Agreement, will be validly issued and, subject to
qualifications hereinafter expressed in this paragraph (vi),
fully paid and nonassessable undivided beneficial interests in
the assets of the Trust; the holders of the Preferred
Securities, as beneficial owners of the Trust, will be entitled
to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware; said
counsel may note that the holders of the Preferred Securities
may be obligated to make payments as set forth in the
Declaration.
(vi) The Common Securities have been duly
authorized by the Declaration and, when issued, executed and
authenticated in accordance with the terms of the Declaration,
and delivered and paid for as set forth in the Registration
Statement, will be validly issued, undivided beneficial
interests in the assets of the Trust.
(vii) Under the Delaware Act and the Declaration,
the issuance of the Trust Securities is not subject to
preemptive or other similar rights.
(viii) None of the execution and delivery by the
Trust of, or the performance by the Trust of its obligations
under, the Underwriting Agreement, the issuance and sale of the
Preferred Securities by the Trust in accordance with the terms
of the Underwriting Agreement and the Pricing Agreement, the
execution, delivery and performance by the Trust of this
Agreement and the Pricing Agreement and the consummation of the
other transactions contemplated thereby,
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will contravene any provisions of applicable Delaware law or
administrative regulations or the Certificate of Trust or the
Declaration.
(4) The favorable opinion, dated as of Closing Time, of
Richards, Layton & Finger, counsel to Wilmington Trust Company, as
Institutional Trustee under the Declaration, and Guarantee Trustee
under the Preferred Securities Guarantee Agreements, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(i) Wilmington Trust Company is a Delaware banking
corporation with trust powers, duly organized, validly existing
and in good standing under the laws of the State of Delaware
with all necessary power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of
the Declaration and the Preferred Securities Guarantee
Agreement.
(ii) The execution, delivery and performance by the
Institutional Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the
Preferred Securities Guarantee Agreement have been duly
authorized by all necessary corporation action on the part of
the Institutional Trustee and the Guarantee Trustee,
respectively. The Declaration and the Preferred Securities
Guarantee Agreement have been duly executed and delivered by the
Institutional Trustee and the Guarantee Trustee, respectively,
and constitute the legal, valid and binding obligations of the
Institutional Trustee and the Guarantee Trustee, respectively,
enforceable against the Institutional Trustee and the Guarantee
Trustee, respectively, in accordance with their terms, except to
the extent the enforcement thereof may be limited by the
Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Preferred Securities Guarantee Agreement by
the Institutional Trustee and the Guarantee Trustee,
respectively, do not conflict with or constitute a breach of the
Articles of Organization or Bylaws of the Institutional Trustee
and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance
by the Institutional Trustee and the Guarantee Trustee of the
Declaration and the Preferred Securities Guarantee Agreement.
(5) The opinion of Skadden, Arps, Slate, Meagher & Flom,
special tax counsel to the Offerors, generally to the
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effect that the discussion set forth in the Prospectus under the
heading "United States Federal Income Taxation" is a fair and
accurate summary of the matters addressed therein, based upon current
law and the assumptions stated or referred to therein. Such opinion
may be conditioned on, among other things, the initial and continuing
accuracy of the facts, financial and other information, covenants and
representations set forth in certificates of officers of the Company
and the Trust and other documents deemed necessary for such opinion.
(6) The favorable opinion, dated as of Closing Time, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters,
in form and substance satisfactory to the Underwriters with respect
to the incorporation and legal existence of the Company, the
Preferred Securities, the Indenture, the Preferred Securities
Guarantee Agreement, this Agreement, the Pricing Agreement, the
Registration Statement, the Prospectus and other related matters as
the Representatives may require. In giving its opinion, LeBoeuf,
Lamb, Greene & MacRae, L.L.P. may rely as to certain matters of
Michigan and Delaware law upon the opinions of Daniel L. Schiffer,
Esq., and Skadden, Arps, Slate, Meagher & Flom, special Delaware
counsel for the Offerors, which shall be delivered in accordance with
Section 5(b)(1) and 5(b)(3) hereto.
(c) Between the date of this Agreement and prior to the Closing
Time, no material adverse change shall have occurred in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Trust or the Company and its
subsidiaries considered as one enterprise, whether or not in the
ordinary course of business.
(d) At Closing Time, the Representatives shall have received a
certificate of the President or a Vice-President of the Company and
of the Chief Financial Officer or Chief Accounting Officer of the
Company and a certificate of a Regular Trustee of the Trust, and
dated as of Closing Time, to the effect that (i) there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Trust
or the Company and its subsidiaries considered as one enterprise,
whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and
correct as though expressly made at and as of Closing Time, (iii) the
Trust and the Company have complied with all agreements and satisfied
all conditions on their part to be performed or satisfied at or prior
to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the Commission.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from Deloitte & Touche LLP a
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letter dated such date in form and substance satisfactory to the
Representatives, to the effect set forth below and as to such other
matters as the Representatives may reasonably request, that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning
of the 1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial
statements and any supplementary financial information and
schedules audited (and, if applicable, prospective financial
statements and/or pro forma financial information examined) by
them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting
requirements of the 1933 Act and the 1934 Act and the related
published rules and regulations thereunder; and if applicable,
they have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the
consolidated interim financial statements, selected financial
data, pro forma financial information, prospective financial
statements, consolidating financial statements and/or condensed
financial statements derived from audited financial statements
of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
furnished to the Representatives;
(iii) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years
included in the Prospectus 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;
(iv) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing
standards, including a reading of the unaudited consolidated
financial statements and other information referred to below, a
reading of the latest available unaudited interim consolidated
financial statements of the Company and its subsidiaries,
inspection of the minute books 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
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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 consolidated financial statements
set forth in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Registration Statement and
the Prospectus as amended or supplemented do not comply as
to form in all material respects with the applicable
accounting requirements of the 1934 Act as they apply to
Form 10-Q and the 1934 Act Regulations or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of
the audited consolidated financial statements set forth in
the Company's Annual Report on Form 10-K for the most
recent year ended incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated
by reference in the Registration Statement and the
Prospectus as amended or supplemented;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma
consolidating financial statements included or incorporated
by reference in the Prospectus as amended or supplemented
do not comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of delivery of such letter, there has
been any decrease or increase in the common stock (except
for any increases in connection with any employee benefit,
dividend reinvestment or stock purchase plan of the
Company) or any increase or decrease in redeemable
cumulative preferred securities or long-term debt including
capital lease obligations (except for sinking fund and
installment requirements under their long-term debt
agreement, terms of the
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preferred securities of MCN Michigan Limited Partnership 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 incorporated by reference in the Registration Statement
and the Prospectus as amended or supplemented, except in each
case for increases or decreases which the Prospectus as amended
or supplemented, including financial information incorporated by
reference, discloses have occurred or may occur or which are
described in such letter;
(E) for the period from the date of the latest
consolidated financial statements included or incorporated
by reference in the Prospectus as amended or supplemented to the
end of the latest period for which consolidated financial
statements are available there were any decreases in
consolidated operating revenues, operating income, net income or
earnings available for Common Stock of the Company and its
consolidated subsidiaries, or any increases in any items
specified by the Representatives, in each case as compared with
the corresponding period in the preceding year and with any
other period of corresponding length specified by the
Representatives, except in each case for increases or decreases
which the Prospectus as amended or supplemented, including
financial information incorporated by reference, discloses have
occurred or may occur or which are described in such letter;
and
(F) the unaudited consolidated financial statements
referred to in Clause (E) are not stated on a basis
substantially consistent with the audited consolidated financial
statements incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented.
(v) In addition to the limited procedures, inspection of
minute books, inquiries and other procedures referred to in
clause (iii) and (iv) above, they have carried out certain other
specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information which are
derived from the general accounting records of the Company and
its subsidiaries,
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which appear in the Prospectus as amended or supplemented and
the Registration Statement, in the Company's Annual Report on
Form 10-K for the latest year ended and in the Company's
Quarterly Reports on Form 10-Q since the latest Annual Report on
Form 10-K and which are specified by the Representatives, and
have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
(f) At the Closing Time, the Representatives shall have
received from Deloitte & Touche LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except
that the specified date referred to shall be a date not more than
five days prior to the Closing Time.
(g) At Closing Time, counsel for the Underwriters shall have
been furnished with such documents and opinions as they may require
for the purpose of enabling them to pass upon the issuance and sale
of the Securities as herein contemplated and related proceedings, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions herein
contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and
counsel for the Underwriters.
(h) At Closing Time, the Preferred Securities shall be rated in
one of the four highest rating categories for long term debt
("Investment Grade") by any nationally recognized statistical rating
agency, and the Trust shall have delivered to the Representatives a
letter, dated the Closing Time, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Representatives, confirming that the Preferred Securities have
Investment Grade ratings; and there shall not have occurred any
decrease in the ratings of any of the debt securities of the Company
or of the Preferred Securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act Regulations) and such organization shall
not have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the debt
securities of the Company or of the Preferred Securities.
(i) At Closing Time, the Preferred Securities shall have been
approved for listing on the New York Stock Exchange upon notice of
issuance.
(j) The NASD shall not have raised any objection with respect
to the fairness and reasonableness of the underwriting terms and
arrangements.
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If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company at any time
at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in
Section 4.
SECTION 6. Indemnification.
(a) The Offerors agree to jointly and severally indemnify and
hold harmless each Underwriter and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the 1933 Act as
follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged
untrue statement or omission, provided that (subject to Section
6(d) below) any such settlement is effected with the written
consent of the Offerors; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by
Merrill Lynch), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
(i) or (ii) above;
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provided, however, that the foregoing indemnity agreement shall not
apply to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Offerors by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto), including the Rule 430(A) Information and
the Rule 434 Information deemed to be a part thereof, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any
untrue statement contained in or omission from a preliminary
prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting
any such loss, liability, claim, damage or expense purchased any of
the Securities that are the subject thereof if such person was not
sent or given a copy of the Prospectus (or the Prospectus as amended
or supplemented) (in each case exclusive of the documents from which
information is incorporated by reference) at or prior to the written
confirmation of the sale of such Securities to such person and the
untrue statement contained in or omission from such preliminary
prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented).
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed
the Registration Statement, the Trust and each of its Trustees who
signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule
430(A) Information and the Rule 434 Information deemed to be a part
thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Offerors
by such Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case
of parties indemnified pursuant to Section 6(a)
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above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be
selected by the Offerors. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however,
that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified
party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not
the indemnified parties are actual or potential parties thereto),
unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability
arising out of such litigation investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified
party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for
in Section 6 hereof is for any reason unavailable to or insufficient
to hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount of
such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offerors
on the one hand, and the Underwriters, on the other hand, from the
offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law,
in
-37-
<PAGE> 38
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Offerors on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions which resulted
in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations.
The relative benefits received by Offerors on the one hand, and
the Underwriters, on the other hand, in connection with the offering
of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the
offering of such Securities (before deducting expenses) received by
the Offerors and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet bear to the aggregate initial public offering price of
such Securities as set forth on such cover.
The relative fault of the Offerors, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Offerors or by
the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement
or omission.
The Offerors and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission.
-38-
<PAGE> 39
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company,
each officer of the Company and each Trustee of the Trust who signed
the Registration Statement, and each person, if any, who controls the
Company and the Trust within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Offerors. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case
may be, of Preferred Securities set forth opposite their respective
names in Schedule A to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements
contained in this Agreement and the Pricing Agreement, or contained
in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall
survive delivery of and payment for the Preferred Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice
to the Company at any time at or prior to Closing Time, if (i) there
has been, since the date of this Agreement or since the respective
dates as of which information is given in the Registration Statement,
any material adverse change or any development which could reasonably
be expected to result in a prospective material adverse change,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business, or (ii) there has occurred any material adverse change in
the financial markets in the United States or, if the Preferred
Securities or any related underlying Securities include Debt
Securities denominated or payable in, or indexed to, one or more
foreign or composite currencies, in the international financial
markets or any outbreak of hostilities or escalation of hostilities
or other calamity or crisis, or any change or development involving a
prospective change in national or international political, financial
or economic conditions the effect of which is such as to make it, in
the judgment of the Underwriters, impracticable to market the
Preferred Securities or
-39-
<PAGE> 40
to enforce contracts for the sale of the Preferred Securities,
or (iii) trading in securities of the Company has been suspended or
limited by the Commission, NASD or the New York Stock Exchange, or if
trading generally on either the American Stock Exchange, the New York
Stock Exchange or in the over-the-counter market has been suspended
or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by
either of said exchanges or by such system or by order of the
Commission, NASD or any other governmental authority, or (iv) a
banking moratorium has been declared by either Federal, New York or
Michigan authorities or, if the Preferred Securities or any related
Underlying Securities include Debt Securities denominated or payable
in, or indexed to, one or more foreign or composite currencies, by
the relevant authorities in the related foreign country or countries.
(b) If this Agreement and the Pricing Agreement are terminated
pursuant to this Section 9, such termination shall be without
liability of any party to any other party except as provided in
Section 4, and provided, further, that Sections 1, 6 and 7 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one
or more of the Underwriters shall fail at the Closing Time, as the
case may be, to purchase the Securities which it or they are
obligated to purchase under this Agreement and the Pricing Agreement
(the "Defaulted Securities"), then Merrill Lynch shall have the
right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities
in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the
case may be, of Defaulted Securities does not exceed 10% of the total
number or aggregate principal amount, as the case may be, of
Preferred Securities, the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the
case may be, of Defaulted Securities exceeds 10% of the total number
or aggregate principal amount, as the case may be, of Preferred
Securities to be purchased on such date pursuant to this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
-40-
<PAGE> 41
No action taken pursuant to this Section 10 shall relieve
any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either Merrill Lynch or the Company
shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements.
SECTION 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to
Merrill Lynch at Merrill Lynch World Headquarters, World Financial
Center, North Tower, New York, New York 10281, Attention of Anthony
V. Leness, Managing Director, with a copy to LeBoeuf, Lamb, Greene &
MacRae, L.L.P., 125 West 55th Street, New York, New York 10019-5389,
Attention: William S. Lamb, Esq.; notices to the Company shall be
directed to it at MCN Corporation, 500 Griswold Street, Detroit,
Michigan 48226, Attention of Daniel L. Schiffer, Senior Vice
President, General Counsel and Secretary.
SECTION 12. Parties. This Agreement and the Pricing Agreement
shall each inure to the benefit of and be binding upon the Offerors
and the Underwriters and their respective successors. Nothing
expressed or mentioned in this Agreement or the Pricing Agreement is
intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Offerors and their
respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or the Pricing Agreement or any
provision herein or therein contained. This Agreement and the
Pricing Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors and legal
representatives, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE
PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER TO
NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
-41-
<PAGE> 42
SECTION 14. Effect of Headings. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to the Company
a counterpart hereof, whereupon this instrument, along with all
counterparts, shall become a binding agreement among the Underwriters
and the Company in accordance with its terms.
Very truly yours,
MCN CORPORATION
By:________________________________
Name:
Title:
MCN FINANCING I
By:________________________________
Title: Regular Trustee
By:________________________________
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
ROBERT W. BAIRD & CO INCORPORATED
A.G. EDWARDS & SONS, INC.
FIRST OF MICHIGAN CORPORATION
LADENBURG, THALMANN & CO. INC.
PAINEWEBBER INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory:
For themselves and as the Representatives of the
several Underwriters named in Schedule A hereto.
-42-
<PAGE> 43
SCHEDULE A
<TABLE>
<CAPTION>
Name of Underwriter Number of Shares
------------------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . 487,000
Robert W. Baird & Co Incorporated . . . . . 486,600
A.G. Edwards & Sons, Inc. . . . . . . . . . 486,600
First of Michigan Corporation . . . . . . . 486,600
Ladenburg, Thalmann & Co. Inc. . . . . . . 486,600
PaineWebber Incorporated . . . . . . . . . 486,600
Cowen & Company . . . . . . . . . . . . . . 40,000
Dain Bosworth Incorporated . . . . . . . . 40,000
EVEREN Securities, Inc. . . . . . . . . . . 40,000
Lehman Brothers Inc. . . . . . . . . . . . 40,000
The Ohio Company . . . . . . . . . . . . . 40,000
Prudential Securities Incorporated . . . . 40,000
Roney & Co., LLC. . . . . . . . . . . . . . 40,000
------
Total . . . . . . . . . . . . . . . . 3,200,000
=========
</TABLE>
<PAGE> 44
EXHIBIT A
3,200,000 Preferred Securities
MCN FINANCING I
(a Delaware business trust)
8 5/8% Trust Originated Preferred Securities(sm) ("TOPrS(sm)")
(Liquidation Amount of $25 Per Security)
PRICING AGREEMENT
MERRILL LYNCH & CO. July 24, 1996
Merrill Lynch, Pierce, Fenner
& Smith Incorporated as
Representative of the several
Underwriters named in the within-
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated July 24,
1996 (the "Underwriting Agreement"), relating to the purchase by the
several Underwriters named in Schedule A thereto, for whom Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Robert W. Baird & Co. Incorporated, A.G. Edwards & Sons, Inc., First
of Michigan Corporation, Ladenburg, Thalmann & Co. Inc. and
PaineWebber Incorporated are acting as representatives (the
"Representatives"), of the above 8 5/8% Trust Originated Preferred
Securities (the "Preferred Securities"), of MCN Financing I, a
Delaware business trust (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the Trust
and MCN Corporation (the "Company"), a Michigan corporation, agree
with each Underwriter as follows:
1. The initial public offering price per security for the
Preferred Securities, determined as provided in said Section 2, shall
be $25.00.
2. The purchase price per security for the Preferred Securities
to be paid by the several Underwriters shall be $25.00, being an
amount equal to the initial public offering price set forth above.
3. The compensation per Preferred Security to be paid by the
Company to the several Underwriters in respect of their commitments
hereunder shall be $.7875; provided, however, that the compensation
per Preferred Security for sales of 10,000 or more Preferred
Securities to a single purchaser shall be $.50.
______________________
(sm) "Trust Originated Preferred Securities" and "TOPrS" are service
marks of Merrill Lynch & Co. Inc.
<PAGE> 45
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to the Trust a counterpart
hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement between the Underwriters and the Trust and
the Company in accordance with its terms.
Very truly yours,
MCN CORPORATION
By: _______________________________
Name:
Title:
MCN FINANCING I
By: _______________________________
Title: Regular Trustee
By: _______________________________
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
ROBERT W. BAIRD & CO. INCORPORATED
A.G. EDWARDS & SONS, INC.
FIRST OF MICHIGAN CORPORATION
LADENBURG, THALMANN & CO. INC.
PAINEWEBBER INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________________
Authorized Signatory:
For themselves and as the Representatives of the
several Underwriters named in the Underwriting Agreement.
- 2 -
<PAGE> 1
EXHIBIT 5.1
[SKADDEN, ARPS, SLATE, MEAGHER, & FLOM LETTERHEAD]
July 24, 1996
MCN Corporation
MCN Financing I
c/o MCN Corporation
500 Griswold Street
Detroit, Michigan 48226
Ladies and Gentlemen:
We have acted as special counsel to (1) MCN Financing I (the "Trust"), a
statutory business trust formed under the Business Trust Act of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Sec. 3801, et
seq.) (the "Delaware Trust Act"), and (2) MCN Corporation, a corporation
organized under the laws of the State of Michigan, ("MCN," and together with
the Trust, the "Registrants"), in connection with the preparation of a
Registration Statement on Form S-3 (No. 333-01521) filed with the Securities
and Exchange Commission (the "Commission") on March 7, 1996 under the
Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto filed
with the Commission on April 10, 1996 and Amendment No. 2 thereto filed with
the Commission on April 19, 1996 (such Registration Statement, as so amended,
being hereinafter referred to as the "Registration Statement"), in connection
with the public offering of 3,200,000 of the Trust's 8 5/8% trust preferred
securities (liquidation amount of $25 per trust preferred security) (the
"Preferred Securities") and certain other securities.
The Preferred Securities are being issued pursuant to the Amended and
Restated Declaration of Trust, dated as of July 24, 1996 (the "Declaration"),
among MCN, as sponsor, Wilmington Trust Company, as the institutional trustee
(in such capacity, the "Institutional Trustee") and as Delaware trustee, and
Daniel L. Schiffer and Sebastian Coppola, as regular trustees (together, the
"Regular Trustees").
<PAGE> 2
MCN Corporation
MCN Financing I
July 24, 1996
Page 2
This opinion is being delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) the certificate of trust of the Trust, dated March 6, 1996
(the "Certificate of Trust"), as filed with the Secretary of State of the State
of Delaware; (iii) the Declaration (including the designation of the terms of
the Preferred Securities annexed thereto); (iv) the form of the Preferred
Securities and a specimen certificate thereof; (v) a certificate of the
Secretary of State of the State of Delaware as to the creation and good
standing of the Trust; and (vi) the Underwriting Agreement, dated July 24, 1996
(the "Underwriting Agreement"), among MCN and the several Underwriters named in
Schedule A thereto. We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such other records of MCN and the
Trust and such agreements, certificates or receipts of public officials,
certificates of officers or representatives of MCN and the Trust, and such
other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Trust, we have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such
parties of such documents and that such documents constitute valid and binding
obligations of such parties. As to any facts material to the opinions
expressed herein which were not independently established or verified, we have
relied upon oral or written statements and representations of officers and
other representatives of MCN and others.
<PAGE> 3
MCN Corporation
MCN Financing I
July 24, 1996
Page 3
Members of our firm are admitted to the Bar in the State of Delaware and we
do not express any opinion as to the laws of any other jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that the
Preferred Securities have been duly authorized by the Declaration and, subject
to the qualification set forth below, when issued, executed and authenticated
in accordance with the terms of the Declaration and delivered and paid for in
accordance with the terms of the Underwriting Agreement, will be validly
issued, fully paid and non-assessable undivided beneficial interests in the
assets of the Trust; and the holders of the Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We bring to your attention, however, that the
holders of Preferred Securities may be obligated, pursuant to the Declaration,
to (i) provide indemnity and/or security in connection with and pay taxes or
governmental charges arising from transfers of Preferred Securities and the
issuance of replacement Preferred Securities, and (ii) provide security and
indemnity in connection with requests of or directions to the Institutional
Trustee to exercise its rights and powers under the Declaration.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to a Current Report on Form 8-K of MCN. In giving this consent, we do
not thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission promulgated thereunder. This opinion is expressed as of the date
hereof unless otherwise expressly stated, and we disclaim any undertaking to
advise you of any subsequent changes in the facts stated or assumed herein or
in applicable law.
Very truly yours
/s/ Skadden, Arps, Slate, Meagher & Flom
<PAGE> 1
EXHIBIT 5.2
MCN Corporation
500 Griswold Street
Detroit, Michigan 48226
July 24, 1996
MCN Corporation
MCN Financing I
c/o MCN Corporation
500 Griswold Street
Detroit, Michigan 48226
Ladies and Gentlemen:
I am General Counsel, Senior Vice President and Secretary of MCN
Corporation ("MCN"), a corporation organized under the laws of the State of
Michigan, and have acted in such capacity in connection with the preparation of
a Registration Statement on Form S-3 (No. 333-01521) filed by MCN Financing I
(the "Trust") and MCN Financing II, (together with the Trust, the "MCN
Trusts"), each a statutory business trust formed under the Business Trust Act
of the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del.
C. Sec. 3801, et seq.) (the "Delaware Trust Act"), and MCN (together with the
MCN Trusts, the "Registrants"), with the Securities and Exchange Commission
(the "Commission") on March 7, 1996 under the Securities Act of 1933, as
amended (the "Act"), Amendment No. 1 thereto filed with the Commission on April
10, 1996 and Amendment No. 2 thereto filed with the Commission on April 19,
1996 and (such Registration Statement, as so amended, being hereinafter
referred to as the "Registration Statement"), in connection with the public
offering of 3,200,000 of the Trust's 8 5/8% trust preferred securities
(liquidation amount of $25 per trust preferred security) (the "Preferred
Securities") and certain other securities.
The Preferred Securities are being issued pursuant to the Amended and
Restated Declaration of Trust, dated as of July 24, 1996 (the "Declaration"),
among MCN, as sponsor, The Wilmington Trust Company, as the institutional
trustee (in such capacity, the "Institutional Trustee") and as Delaware trustee
and Daniel L. Schiffer and Sebastian Coppola, as regular trustees (together,
the "Regular Trustees").
<PAGE> 2
MCN Corporation
MCN Financing I
July 24, 1996
Page 2
The Preferred Securities are guaranteed by MCN with respect to distributions
and payments upon liquidation and redemption pursuant to and to the extent set
forth in the Preferred Securities Guarantee Agreement, dated as of July 26,
1996 (the "Preferred Securities Guarantee Agreement"), between MCN and The
Wilmington Trust Company, as guarantee trustee (in such capacity, the
"Guarantee Trustee").
In connection with the issuance of the Preferred Securities, the Trust is
also issuing 98,970 of its common securities (liquidation amount of $25 per
common security)(the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities"), representing common undivided beneficial
interests in the assets of the Trust. The Common Securities are also
guaranteed by MCN with respect to distributions and payments upon liquidation
and redemption pursuant to and to the extent set forth in the Common Securities
Guarantee Agreement, dated as of July 26, 1996, (the "Common Securities
Guarantee Agreement"), executed by MCN.
The entire proceeds from the sale of the Trust Securities are to be used by
the Trust to purchase $82,474,250 principal amount of 8 5/8% junior
subordinated debentures (the "Junior Subordinated Debentures") being issued by
MCN. The Junior Subordinated Debentures are being issued pursuant to an
indenture, dated as of September 1, 1994 between MCN and NBD Bank (as
supplemented by a First Supplemental Indenture, dated April 17, 1996, as so
supplemented the "Base Indenture"), as indenture trustee (in such capacity, the
"Trustee"), as supplemented by a Second Supplemental Indenture, dated as of
July 24, 1996 (such Base Indenture, as so supplemented, being hereinafter
referred to as the "Indenture").
This opinion is being delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of (i) the Registration
Statement; (ii) the Base Prospectus, dated April 22, 1996 (the "Base
Prospectus"),
<PAGE> 3
MCN Corporation
MCN Financing I
July 24, 1996
Page 3
and the Prospectus Supplement, dated July 24, 1996 (the "Prospectus
Supplement"), relating to the Preferred Securities, the Preferred Securities
Guarantee Agreement and the Junior Subordinated Debenture, in the form filed
with the Commission pursuant to Rule 424(b) under the General Rules and
Regulations ("Rules and Regulations") under the Act (such Base Prospectus, as
so supplemented by the Prospectus Supplement, being herein referred to as the
"Prospectus"); (iii) the certificate of trust of the Trust, dated March 6, 1996
(the "Certificate of Trust"), as filed with the Secretary of State of the State
of Delaware; (iv) the Declaration (including the designations of the terms of
the Preferred Securities and the Common Securities annexed thereto); (v) the
form of the Preferred Securities and a specimen certificate thereof; (vi) the
Preferred Securities Guarantee Agreement; (vii) the Indenture; (viii) the form
of the Junior Subordinated Debenture and a specimen certificate thereof; and
(ix) the Underwriting Agreement, dated July 24, 1996 (the "Underwriting
Agreement"), among MCN and the several Underwriters named in Schedule A thereto
(collectively, the "Underwriters"). I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of such other records of
MCN and the Trust and such agreements, certificates or receipts of public
officials, certificates of officers or representatives of MCN and the Trust,
and such other documents, certificates and records as I have deemed necessary
or appropriate as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural persons,
the genuineness of all signatures, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. In making my examination of documents executed by
parties other than the Trust and MCN, I have assumed that such parties had the
power, corporate or other, to enter into and perform all obligations thereunder
and have also assumed the due authorization by all requisite action, corporate
or other, and execution and delivery by such parties of such documents and that
such documents constitute valid and binding obligations of such parties. As to
any facts material to the opinions expressed herein which were not
independently established or verified, I have relied upon oral or written
statements and representations of officers and other representatives of MCN,
the Trust, the Delaware Trustee, the Regular Trustees and others.
<PAGE> 4
MCN Corporation
MCN Financing I
July 24, 1996
Page 4
I am admitted to the Bar in the State of Michigan, and I do not express any
opinion as to the laws of any other jurisdiction other than the laws of the
United States of America.
Based upon and subject to the foregoing, I am of the opinion that: the
Declaration and the Preferred Securities Guarantee Agreement have each been
duly authorized by requisite corporate action on the part of MCN, and duly
executed and delivered by MCN, and the Declaration is a valid and binding
agreement of MCN and the Preferred Securities Guarantee Agreement is a valid
and binding agreement of MCN, in each case enforceable against MCN, except as
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting creditors' rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
in equity).
I hereby consent to the filing of this opinion with the Commission as an
exhibit to a Current Report on Form 8-K of the Registrants. In giving this
consent, I do not thereby admit that I am within the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the Commission promulgated thereunder. This opinion is expressed as of the
date hereof unless otherwise expressly stated, and I disclaim any undertaking
to advise you of any subsequent changes in the facts stated or assumed herein
or in the applicable law.
Very truly yours,
/s/ Daniel L. Schiffer
