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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) JUNE 4, 1999
MICHIGAN CONSOLIDATED GAS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 1-7310 38-0478040
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) 965-2430
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Item 5. Other Events
The registrant is filing herewith the following in connection with its
offering of its 6.85% Senior Secured Insured Quarterly Notes due 2038 and its
6.85% Senior Notes due 2039 pursuant to the registration statement of the
registrant on Form S-3 (No. 333-56333) filed with the Securities and Exchange
Commission under the Securities Act of 1933.
Index to Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
- ------ -------
<S> <C>
1-1 Purchase Agreement dated June 4, 1999 with respect to the
6.85% Senior Secured Insured Quarterly Notes due 2038.
1-2 Purchase Agreement dated June 4, 1999 with respect to the
6.85% Senior Notes due 2039.
4-1 Second Supplemental Indenture dated as of June 9, 1999 to the
Senior Debt Securities Indenture dated as of June 1, 1998
between Michigan Consolidated Gas Company and Citibank, N.A.
23-1 Consent of PricewaterhouseCoopers LLP with respect to the
6.85% Senior Notes due 2039.
23-2 Consent of PricewaterhouseCoopers LLP with respect to the
6.85% Senior Secured Insured Quarterly Notes due 2038.
</TABLE>
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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.
Michigan Consolidate Gas Company
/s/ Harold Gardner
----------------------------------
Harold Gardner
Vice President
and Chief Accounting Officer
Date: June 14, 1999
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ------- --- -----------
1-1 Purchase Agreement dated June 4, 1999 with respect to the
6.85% Senior Secured Insured Quarterly Notes due 2038.
1-2 Purchase Agreement dated June 4, 1999 with respect to the
6.85% Senior Notes due 2039.
4-1 Second Supplemental Indenture dated as of June 9, 1999 to the
Senior Debt Securities Indenture dated as of June 1, 1998
between Michigan Consolidated Gas Company and Citibank, N.A.
23-1 Consent of PricewaterhouseCoopers LLP with respect to the
6.85% Senior Notes due 2039.
23-2 Consent of PricewaterhouseCoopers LLP with respect to the
6.85% Senior Secured Insured Quarterly Notes due 2038.
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EXHIBIT 1.1
MICHIGAN CONSOLIDATED GAS COMPANY
(A MICHIGAN CORPORATION)
DEBT SECURITIES
PURCHASE AGREEMENT
JUNE 4, 1999
Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131
Ladies and Gentlemen:
Michigan Consolidated Gas Company (the "COMPANY"), a Michigan
corporation, confirms its agreement (this "AGREEMENT") with Edward D. Jones &
Co., L.P. (the "UNDERWRITER"), with respect to the issue and sale by the Company
and the purchase by the Underwriter, acting severally and not jointly, of the
principal amount set forth in Schedule II of $55,000,000 aggregate principal
amount of the Company's 6.85% Senior Secured Insured Quarterly Notes due 2038
(the "SECURITIES"). The Securities will be issued by the Company under its
Indenture, dated as of June 1, 1998, as supplemented by the First Supplemental
Indenture, dated as of June 18, 1998 (the "BASE INDENTURE"), between the Company
and Citibank, N.A., as trustee (the "TRUSTEE"), and a second supplement to the
Base Indenture (the "SECOND SUPPLEMENTAL INDENTURE," and together with the Base
Indenture and any amendments or supplements thereto, the "INDENTURE") to be
entered into between the Company and the Trustee, which will be secured by the
concurrent issuance and delivery to the Trustee of the Company's First Mortgage
Bonds, Collateral Series C (the "COLLATERAL BONDS"), issued under and ratably
secured by the Indenture of Mortgage and Deed of Trust dated as of March 1, 1944
(the "ORIGINAL SECURED INDENTURE"), as supplemented and amended by thirty-five
indentures supplemental thereto, including specifically the Twenty-ninth
Supplemental Indenture, and the Thirty-fifth Supplemental Indenture creating the
series in which the Collateral Bonds are to be issued (the "THIRTY-FIFTH
SUPPLEMENTAL INDENTURE") (the Original Secured Indenture and all supplemental
indentures thereto being referred to collectively herein as the "SECURED
INDENTURE"), in a principal amount equal to that of and
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having other terms that mirror those of the Securities. The Company proposes to
sell to the Underwriter Securities of the designation, with the terms and the
aggregate principal amount specified in Schedule I hereto.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-56333) covering the
registration of debt securities of the Company, 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
this Agreement. Such registration statement, as so amended, has been declared
effective by the Commission. Such registration statement, as so amended,
including the exhibits and schedules thereto, if any, and the information, if
any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "RULE 430A INFORMATION") or Rule 434(d) of the 1933 Act
Regulations (the "RULE 434 INFORMATION"), is referred to herein as the
"REGISTRATION STATEMENT"; and the final prospectus and the prospectus supplement
relating to the offering of the Securities, are collectively referred to herein
as the "PROSPECTUS"; provided, however, that all references to the "Registration
Statement" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934
ACT"), prior to the execution of this Agreement; provided, further, that if the
Company files a registration statement with the Commission pursuant to Section
462(b) of the 1933 Act Regulations (the "RULE 462(B) REGISTRATION STATEMENT"),
then after such filing, all references to "Registration Statement" shall be
deemed to include the Rule 462(b) Registration Statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
the term "PROSPECTUS" shall refer to the final or preliminary prospectus and the
applicable term sheet (a "TERM SHEET") and all references in this Agreement to
the date of such Prospectus shall mean the date of the applicable Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of this
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
electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus) or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is
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incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is incorporated by reference in
the Registration Statement, such preliminary prospectus or the Prospectus, as
the case may be.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter that:
(i) No stop order suspending the effectiveness of the
Registration Statement or any Rule 464(b) Registration Statement has been issued
under the 1933 Act and no proceeding for that purpose has been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has
been complied with.
(ii) The Company meets the requirements for the use of Form
S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act. At the
respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the Commission) became
effective and as of the date hereof, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Trust Indenture Act of 1939, as amended (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.
Neither the Prospectus nor any amendments or supplements thereto, at the time
that the Prospectus or any such amendment or supplement was issued and at the
Closing Date, included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter through the
Underwriter expressly for use in the Registration Statement or the Prospectus.
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
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424 under the 1933 Act, complied when so filed in all material respects with the
1933 Act Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriter for use in connection with the offering of the
Securities will, at the time of such delivery, be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act, and the rules and
regulations of Commission thereunder (the "1934 ACT REGULATIONS"), and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was issued
and on the Closing Date, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates indicated
and the statements of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or incorporated by
reference in the Registration Statement and the 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.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and except as otherwise
stated therein, (A) there has been no material adverse change and no development
which could reasonably be expected to result in a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise (a "MATERIAL ADVERSE EFFECT"), whether or not arising in the ordinary
course of business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those arising in the ordinary
course of business, which are material with respect to the Company and its
subsidiaries, considered as one enterprise, (C) except for regular quarterly
dividends on the Company's common stock in amounts per
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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 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, singly or in the aggregate, 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, singly or in the
aggregate, have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and outstanding
shares of capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and all such
shares are owned by the Company, directly or through its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of the subsidiaries was
issued in violation of preemptive or other similar rights arising by operation
of law, under the charter or by-laws of any subsidiary or under any agreement to
which the Company or any subsidiary is a party, or otherwise.
(ix) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights arising by
operation of law, under the charter or by-laws of the Company, under any
agreement to which the Company or any of its subsidiaries is a party or
otherwise.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) The Securities have been duly authorized for issuance and
sale pursuant to this Agreement and at the Closing Date, will have been duly
executed by the Company and,
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when authenticated in the manner provided for in the Indenture and delivered by
the Company against payment of the purchase price therefor, will constitute
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms except to the extent that enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or 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"). The Securities
will be in the form contemplated by, and entitled to the benefits of, the
Indenture and conform in all material respects to the description thereof
contained in the Prospectus and will be in substantially the form filed or
incorporated by reference, as the case may be, as an exhibit to the Registration
Statement.
(xii) The Collateral Bonds have been duly authorized for
issuance and delivery to the Trustee, and at the Closing Date will have been
duly executed by the Company and, when authenticated in the manner provided for
in the Secured Indenture and delivered by the Company as security for the
Securities, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions. The
Collateral Bonds will be in the form contemplated by, and entitled to the
benefits of, the Secured Indenture and conform in all material respects to the
description thereof contained in the Prospectus and will be substantially in the
form filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement.
(xiii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and qualified under the 1939 Act and
constitutes a valid and legally binding instrument, enforceable against the
Company in accordance with its terms except to the extent that the enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture conforms in
all material respects to the description thereof contained in the Prospectus and
will be in substantially the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(xiv) The issuance and delivery by the Company of the
Collateral Bonds to the Trustee constitute a sale by the Company of the
Collateral Bonds to the Trustee as of the Closing Date, or, if not a sale, the
grant by the Company to the Trustee of a perfected security interest in the
Collateral Bonds for the benefit of the holders of the Securities.
(xv) The Secured Indenture constitutes a legally valid and
enforceable first mortgage lien, except as the same may be limited by the laws
of the State of Michigan (where all of the property covered thereby is located)
affecting the remedies for the enforcement of the security provided for therein,
which laws do not make inadequate the remedies necessary for the realization of
the benefits of such security, or as the same may be limited by the Bankruptcy
Exceptions, upon substantially all of the Company's properties and franchises,
now owned or hereafter acquired, free from all prior liens, charges or
encumbrances, except
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as set forth in subparagraph xxii below, and in the case of property hereafter
acquired, any thereof existing at the time of acquisition.
(xvi) None of the Company or any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, note, lease, loan
or credit agreement or any other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, or in violation of any applicable law, rule or regulation or any
judgment, order, writ or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties or assets, which
violation or default would, singly or in the aggregate, have a Material Adverse
Effect.
(xvii) The execution, delivery and performance by the Company
of this Agreement, the Indenture, the Securities, the Secured Indenture, the
Collateral Bonds and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby; and the consummation of the transactions
contemplated herein and therein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the issuance
and delivery of the Collateral Bonds, and the use of the proceeds from the sale
of the Securities as described in the Prospectus under the caption "Use of
Proceeds"); and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them may be bound (other than the
lien of the Indenture), or to which any property or assets of the Company or any
subsidiary thereof is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not, singly or in the aggregate,
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter of by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule or regulation, judgment,
order, writ or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective property, assets or operations.
(xviii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of
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its subsidiary's principal suppliers, manufacturers, customers or contractors
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xix) 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
disclosed therein), or which might reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect, or which might be reasonably
expected to materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated by this Agreement,
or the performance by the Company of its obligations hereunder; and the
aggregate of all pending legal or governmental proceedings to which the Company
or any subsidiary thereof is a party or of which any of their respective
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect.
(xx) There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto which have
not been so described and/or filed as required.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Company of its obligations hereunder, in connection
with (a) the offering, issuance or sale of the Securities under this Agreement,
(b) the issuance and delivery to the Trustee of the Collateral Bonds, or (c) the
consummation of the transactions contemplated by this Agreement and the
Indenture, except such as have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or foreign or state securities or blue
sky laws.
(xxii) The Company has good and marketable title to the
properties specifically described in and conveyed by the Secured Indenture
(except such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien of the
Secured Indenture, to permissible encumbrances, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the execution of
the Original Secured Indenture, to any liens existing thereon or purchase money
liens placed thereon at the time of such acquisition as permitted by the Secured
Indenture, and to certain other reservations, rights of grantors under revocable
permits, easements, licenses, zoning laws and ordinances and restrictions and
minor defects or irregularities of title which do not materially impair the use
of the property affected thereby in the operation of the business of the
Company; the Company and its subsidiaries have good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except the liens of the Secured Indenture and such
liens, encumbrances and defects as do not
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materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any 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 do not 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 and its subsidiaries are valid, subsisting and
enforceable easements with such exceptions as do not materially interfere with
the conduct of the business of the Company and its subsidiaries.
(xxiii) The Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals, consents, orders
and other operating rights (collectively, the "GOVERNMENTAL LICENSES") issued by
the Federal Energy Regulatory Commission, the State of Michigan, and all other
federal, state, local or foreign regulatory agencies or bodies, governmental
authorities or agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and to conduct the business now
operated by each of them; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except where
the failure to so comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect except when the failure of such Governmental Licenses to be in
full force and effect would not, singly or in the aggregate, have a Material
Adverse 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 and the Prospectus, there are no legal or governmental proceedings
pending or threatened that would result in a material modification, suspension
or revocation thereof.
(xxiv) The Company is a "public utility company" and a
"subsidiary company" of MCN Energy Group Inc. ("MCN"), a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935 (the
"1935 ACT"), and such "holding company" and the Company are presently exempt
from the provisions of the 1935 Act (except Section 9 thereof).
(xxv) Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) none of the Company or any of its subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance
or code, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "HAZARDOUS MATERIALS") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling
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of Hazardous Materials (collectively, the "ENVIRONMENTAL LAWS"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are in compliance with their
requirements, or (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries.
(xxvi) None of the Company or its subsidiaries is, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus, and
upon the issuance and delivery to the Trustee of the Collateral Bonds, none will
be, an "investment company" or an entity under the "control" of an "investment
company" as such terms are defined under the Investment Company Act of 1940, as
amended (the "1940 ACT").
(xxvii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder (collectively, the
"CUBA ACT") or is exempt therefrom.
(xxviii) None of the Company and its subsidiaries or any of
their respective directors, officers or controlling persons, has taken, directly
or indirectly, any action resulting in a violation of Regulation M under the
1934 Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(xxix) 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.
(xxx) The Company has authorized all necessary action to be
taken by it for the procurement of an irrevocable financial guarantee insurance
policy (the "Insurance Policy") issued by MBIA Insurance Corporation (the
"Insurer"), insuring the payment of principal and interest on the Securities,
when due.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as the case may be, to each Underwriter as to the
matters covered thereby.
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SECTION 2. Sale and Delivery to the Underwriter; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter, severally and not jointly,
agrees to purchase from the Company, at the price per security set forth in
Schedule I hereto, the respective principal amounts of the Securities set forth
opposite the name of the such Underwriter, plus any additional principal amount
of Securities which such Underwriter may become obligated to purchase pursuant
to the provisions of Section 10 hereof.
(b) Delivery of and payment 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
Underwriter and the Company, at 9:00 a.m. (Eastern time) on the third (fourth,
if pricing of the Securities occurs after 4:00 p.m. (Eastern time) on any given
day) business day after the date of execution of this Agreement (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Underwriter and the Company (such time and date of payment and delivery being
referred to herein as the "CLOSING DATE").
(c) The Collateral Bonds that will secure the obligations of the
Company in respect of the Securities will be issued and delivered to the Trustee
of the Collateral Bonds on the Closing Date.
(d) On the Closing Date the Company shall deliver the Securities to The
Depository Trust Company, on behalf of the Underwriter, for the account of the
Underwriter against payment to the Company by wire transfer of immediately
available funds to a bank account designated by the Company.
(e) Upon delivery, the Securities shall be in registered form and in
such denominations as set forth on Schedule I hereto. The certificates
representing the Securities shall be registered in the name of Cede & Co. and
shall be made available for inspection by the Underwriter in New York, New York
not later than 10:00 a.m. (Eastern time) on the business day prior to the
Closing Date.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Company
will cause the Prospectus, including as a part thereof a prospectus supplement
relating to the Securities and the Collateral Bonds, to be filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and will take
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus.
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(b) The Company, subject to Section 3(c), will comply with the
requirements of Rule 430A or Rule 434 of the 1933 Act Regulations, as
applicable, and will notify the Underwriter 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) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) The Company will give the Underwriter notice of their 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 Underwriter 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 Underwriter or counsel for
the Underwriter shall object.
(d) The Company has furnished or will deliver to the Underwriter and
counsel for the Underwriter, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Underwriter,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriter. The copies of the Registration Statement and each amendment thereto
furnished to the Underwriter 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. The
Prospectus and any amendments or supplements thereto furnished to the
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<PAGE> 13
Underwriter will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(f) The Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriter or for the
Company, to amend the Registration Statement or amend or supplement any
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 time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(c), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriter, without charge, such number of copies
of such amendment or supplement as the Underwriter may reasonably request.
(g) The Company will use its best efforts, in cooperation with the
Underwriter, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Underwriter may designate; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for so long as may
be required in connection with distribution of the Securities.
(h) The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its securityholders and
to deliver to the Underwriter as soon as practicable an earnings statement for
the purposes of, and to provide the benefits contemplated by, the last paragraph
of Section 11(a) of the 1933 Act.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(j) On the Closing Date, the Company will issue and deliver the
Collateral Bonds to the Trustee as security for the Securities as described in
the Prospectus under the caption "Description of the Senior Secured Insured
Quarterly Notes--Security; Release Date."
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<PAGE> 14
(k) 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 this 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.
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933
Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on the date of
this Agreement and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
(m) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) So long as any of the Securities are outstanding, to make generally
available and, upon request, furnish the Underwriter copies of all reports and
financial statements furnished by the Company to each securities exchange on
which securities issued by the Company may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the 1934 Act
of the 1934 Act Regulations.
(o) During a period of fifteen days from the date of the Prospectus,
the Company will not, without the prior written consent of the Underwriter,
directly or indirectly, issue, pledge, sell, offer to sell, grant any option for
the sale of or otherwise transfer or dispose of, any debt securities of the
Company which mature more than one year after the Closing Date and which are
substantially similar to the Securities, without the prior written consent of
the Underwriter, except for the offer by the Company of $55,000,000 aggregate
principal amount of its 6.85% Senior Notes due June 1, 2039.
(p) None of the Company, its subsidiaries or any of their respective
directors, officers or controlling persons, will take, directly or indirectly,
any action resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including,
without limitation, expenses related to the following, if incurred: (i) the
preparation, delivery, printing and filing
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<PAGE> 15
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto; (ii) the printing and delivery
to the Underwriter of this Agreement, the Indenture and any and such other
documents as may be required in connection with the offering, purchase, sale and
delivery of the Securities and the issuance and delivery of the Collateral
Bonds; (iii) the preparation, issuance and delivery of the certificates for the
Securities to the Underwriter, as well as the preparation, issuance and delivery
of the certificates for the Collateral Bonds to the Trustee, including any
costs, taxes and expenses incident to the issuance and delivery of the
Securities; (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents; (v) the qualification of the
Securities under securities laws in accordance with the provisions of Section
3(g), including filing fees and the fees and disbursements of counsel for the
Underwriter in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto; (vi) the printing and delivery
to the Underwriter of copies of each preliminary prospectus, any Term Sheet, the
Prospectus and any amendments or supplements thereto; (vii) the preparation,
printing and delivery to the Underwriter of copies of the Blue Sky Survey and
any supplement thereto; (viii) the fees and disbursements of the Trustee,
including the fees and disbursements of counsel to the Trustee; (ix) any fees
payable to the Commission; and (x) any fees payable in connection with the
rating of the Securities by rating agencies.
If this Agreement is terminated by the Underwriter in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriter 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 Underwriter.
SECTION 5. Conditions of Underwriter's Obligations. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained or in certificates of any officer of
the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and on the date hereof and on
the Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriter. A prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b) (or any required post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of Rule 430A), or, if the Company has elected to rely upon Rule
434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b).
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<PAGE> 16
(b) On the Closing Date the Underwriter shall have received:
(1) The favorable opinion, dated as of the Closing Date, of
Ronald E. Christian, Esq., Vice President, General Counsel and Secretary of the
Company, in form and substance satisfactory to counsel for the Underwriter,
together with signed or reproduced copies of such letter for the Underwriter, to
the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Michigan.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus and
to enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Effect.
(iv) 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; and none of the
outstanding shares of capital stock were issued in violation of
preemptive or other similar rights arising by operation of law, under
the charter or by-laws of the Company; under any agreement to which the
Company, or any of its subsidiaries is a party, or otherwise.
(v) The Securities are in the form contemplated
by the Indenture, have been duly and validly authorized by the Company
and, when executed by the Company and authenticated by the Trustee in
the manner provided for in the Indenture and delivered by the Company
against payment of the purchase price therefor, will constitute legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions. Each
holder of the Securities will be entitled to the benefits provided by
the Indenture; the form of certificate used to evidence the Securities
is in due and proper form and complies with the requirements of the
Indenture; and the Securities and the Indenture conform in all material
respects to the descriptions thereof contained in the Prospectus.
(vi) The Collateral Bonds are in the form
contemplated by the Secured Indenture, have been duly and validly
authorized by the Company and, when executed by the Company and
authenticated by the trustee under the Secured Indenture
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<PAGE> 17
in the manner provided for in the Secured Indenture, and issued and
delivered by the Company to the trustee as security for the Securities,
will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions. The form of certificate used to evidence the Collateral
Bonds is in due and proper form and complies with the requirements of
the Secured Indenture; and the Collateral Bonds and the Secured
Indenture conform in all material respects to the descriptions thereof
contained in the Prospectus.
(vii) The issuance and delivery by the Company
of the Collateral Bonds to the Trustee constitute a sale by the Company
of the Collateral Bonds to the Trustee as of the Closing Date, or, if
not a sale, the grant by the Company to the Trustee of a perfected
security interest in the Collateral Bonds for the benefit of the
holders of the Securities.
(viii) Except as to property acquired
subsequent to the date of execution of the Thirty-fifth Supplemental
Indenture, the Company has good and marketable title to the property
specifically or generally described in the Secured Indenture (except
such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien
of the Secured Indenture, to permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
execution of the Original Secured Indenture, to any liens existing
thereon or purchase money liens placed thereon at the time of such
acquisition as permitted by the Secured Indenture, and to certain other
reservations, rights of grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company; the pipeline,
distribution main and underground gas storage easements enjoyed by the
Company and its subsidiaries are valid, subsisting and enforceable
easements with such exceptions as are not material and do not interfere
with the conduct of the business of the Company and its subsidiaries.
(ix) The Secured Indenture constitutes a
legally valid and enforceable first mortgage lien, except as the same
may be limited by the laws of the State of Michigan (where the property
covered thereby is located) affecting the remedies for the enforcement
of the security provided for therein, which laws do not, in the opinion
of such counsel, make inadequate the remedies necessary for the
realization of the benefits of such security, or as the same may be
limited by the Bankruptcy Exceptions, upon substantially all of the
Company's properties and franchises, now owned or hereafter acquired,
free from all prior liens, charges or encumbrances other than the lien
of the Secured Indenture, permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
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execution of the Original Secured Indenture, any liens existing thereof
or purchase money liens placed thereon at the time of such acquisition
as permitted by the grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company.
(x) All taxes and fees required to be paid by
the laws of the State of Michigan and jurisdictional subdivisions
thereof with respect to (A) the Secured Indenture and the issuance and
delivery of the Collateral Bonds and (B) the Indenture and the issuance
and delivery of the Securities, have been paid.
(xi) 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, individually or in the aggregate, have a Material Adverse Effect.
Except as otherwise disclosed in the Registration Statement and the
Prospectus, 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 and, to the best
of such counsel's knowledge, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of any subsidiary of the Company
was issued in violation of preemptive or other similar rights of any
securityholder of such subsidiary.
(xii) This Agreement has been duly authorized,
executed and delivered by the Company.
(xiii) The Registration Statement, including
any Rule 462(b) Registration Statement, has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement
has been issued under the 1933 Act and no proceedings therefor have
been initiated or, to the best knowledge of such counsel, threatened by
the Commission.
(xiv) The Registration Statement, including any
Rule 462(b) Registration Statement, the Rule 430A Information and the
Rule 434 Information, as
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applicable, the Prospectus, excluding the documents incorporated by
reference therein, and each amendment or supplement to the Registration
Statement and Prospectus, excluding the documents incorporated by
reference therein, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included
therein, as to which such counsel need express no opinion), complied as
to form in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations; the Indenture and the Statements of
Eligibility on Form T-1 with respect to the 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.
(xv) The documents incorporated by reference in
the Prospectus (other than the financial statements and supporting
schedules therein, as to which such counsel need express no opinion),
when they were filed with the Commission complied as to form in all
material respects with the requirements of the 1934 Act and the 1934
Act Regulations.
(xvi) The Company meets the registrant
requirements for use of Form S-3 under the 1933 Act Regulations.
(xvii) The Indenture has been duly and validly
authorized, executed and delivered by the Company and qualified under
the 1939 Act and, assuming due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by the Bankruptcy
Exceptions.
(xviii) The Secured Indenture has been duly and
validly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that the enforcement thereof may be limited by the
Bankruptcy Exceptions; the Secured Indenture has been duly qualified
under the 1939 Act.
(xix) The execution, delivery and performance
by the Company of this Agreement; the execution, delivery and
performance by the Company of the Indenture, the Securities, the
Secured Indenture, the Collateral Bonds and any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated hereby or
thereby; the consummation of the transactions contemplated herein and
therein and in the Registration Statement and Prospectus (including the
issuance and sale of the Securities, the issuance and delivery to the
Trustee of the Collateral Bonds, and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds"); and compliance by the Company with its obligations
hereunder
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<PAGE> 20
and thereunder do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default under or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary thereof pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to such counsel, to which the
Company or its subsidiaries is a party or by which any of them may be
bound, or to which any of the properties, assets or operations of the
Company or its subsidiaries is subject, except for such conflicts,
breaches, defaults, liens, charges or encumbrances that would not,
singly or in the aggregate, result in a Material Adverse Effect, nor
will such action result in any violation of the provisions of the
charter or by-laws of the Company or any if its subsidiaries, or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to such counsel, of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or any of their respective
properties, assets or operations.
(xx) To the best of such counsel's knowledge,
there is not any action, suit, proceeding, inquiry or investigation
pending or threatened before or by any court or governmental agency or
body, domestic or foreign, pending or 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 disclosed therein), or which might reasonably be expected to, singly
or in the aggregate, 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 the
transactions contemplated in this Agreement, the Indenture or the
Secured Indenture, or the performance by the Company of its obligations
hereunder and thereunder; and the aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party or to which any of their respective property or
assets is the subject which are not described in the Registration
Statement or the Prospectus, including ordinary routine litigation
incidental to the business of the Company or its subsidiaries, could
not reasonably be expected to, singly or in the aggregate, result in a
Material Adverse Effect.
(xxi) The information and statements in the
Prospectus under the captions "Summary of the Offer," "The Company,"
"Use of Proceeds," "Description of the First Mortgage Bonds,"
"Description of the Senior Debt Securities" and the "Description of the
Senior Secured Insured Quarterly Notes," to the extent that they
involve matters of law, summaries of legal matters, the Company's
charter and by-laws, legal documents or proceedings, or legal
conclusions, have been reviewed by such counsel and are correct in all
material respects.
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<PAGE> 21
(xxii) To the best of such counsel's knowledge,
there are no statutes or regulations that are required to be described
in the Prospectus that are not described as required.
(xxiii) To the best of such counsel's knowledge
and information, neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws and no default by the Company or
any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan or credit agreement, note, lease,
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties or assets are bound, except for violations and
defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xxiv) All descriptions in the Prospectus of
contracts and other documents to which the Company or any of its
subsidiaries is a party are accurate in all material respects. To the
best of such counsel's knowledge and information, there are no
franchises, contracts, indentures, mortgages, loan or credit
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or incorporated by
reference as exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and
the descriptions thereof or references thereto are correct in all
material respects. No default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in the Secured Indenture, any other contract, indenture,
mortgage, agreement, note, lease or other instrument so described,
referred to, filed or incorporated by reference.
(xxv) 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), and in
connection with the issuance and delivery to the Trustee of the
Collateral Bonds, have been taken; and no filing with, authorization,
approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign (other than under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as may be required under the securities or
blue sky laws of the various states, as to which such counsel need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of this Agreement or for the
offering, issuance and sale of the Securities, the issuance and
delivery of the Collateral Bonds, or the performance by the Company of
its obligations in this Agreement, the Secured Indenture, the Indenture
and the Securities.
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<PAGE> 22
(xxvi) The Company and its subsidiaries possess
all licenses, franchises, permits, certificates, authorizations,
approvals, consents, orders and other operating rights (collectively,
the "GOVERNMENTAL LICENSES") issued by the Federal Energy Regulatory
Commission; the State of Michigan, and all other federal, state, local
or foreign regulatory agencies or bodies, governmental authorities or
agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and for the operation of the
business carried on by each of them as described in the Registration
Statement and the Prospectus except where the failure to so comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all such licenses, franchises, permits, certificates, authorizations,
approvals, consents and orders are in full force and effect, except
when the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse
Effect; and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company or 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.
(xxvii) Each of the Company and its
subsidiaries has good and marketable title to all material real and
personal property owned by each of them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Registration Statement and the Prospectus or (b) do
not, singly or in the aggregate, 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 or any of its subsidiaries;
and any real property and buildings held under lease by the Company, or
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the conduct of the business of the Company or such
subsidiaries.
(xxviii) The Company is not an "investment
company" or an entity under the "control" of an "investment company" as
such terms are defined in the 1940 Act.
(xxix) MCN and the Company are presently exempt
from the provisions of the Public Utility Holding Company Act of 1935
(except Section 9 thereof) which would otherwise require either of them
to register thereunder.
Moreover, such counsel shall confirm that
nothing has come to such counsel's attention that would lead such
counsel to believe that the Registration Statement,
including any Rule 430A Information and Rule 434 Information (if
applicable)(except for financial statements and the notes thereto, the
financial schedules
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<PAGE> 23
and any other financial data included or incorporated by reference
therein, as to which such counsel need express no opinion), at the time
such Registration Statement became effective or at the date of this
Agreement, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or
any amendment or supplement thereto (except for financial statements
and the notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein, as to which such
counsel need express no opinion), at the time the Prospectus were
issued, at the time of any such amended or supplemented Prospectus were
issued or at the Closing Date, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Date, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriter, together
with signed or reproduced copies of such letter for the Underwriter, in form and
substance satisfactory to the Underwriter, with respect to such matters as the
Underwriter may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters. In giving such opinion, LeBoeuf, Lamb, Greene & MacRae,
L.L.P. may rely as to certain matters of Michigan law upon the opinion of Ronald
E. Christian, Esq., counsel for the Company, which shall be delivered in
accordance with Section 5(b)(1) hereof.
(c) On the Closing Date, the Underwriter 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, dated as of the
Closing Date, to the effect that (i) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Date,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied on or prior to the Closing Date, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(d) At the time of the execution of this Agreement, the Underwriter
shall have received from Deloitte & Touche LLP a letter dated such date in form
and substance satisfactory to the Underwriter, together with signed or
reproduced copies of such letter for the Underwriter, to the effect set forth
below and as to such other matters as the Underwriter may reasonably request,
that:
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<PAGE> 24
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial statements
and any financial statement schedules audited by them and included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented, comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated financial statements included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented,
for the periods specified in such letter, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of the Company
and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial
statements set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations as they apply to Form 10-Q or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements set forth in the Company's Annual Report
on Form 10-K for the most recent year ended incorporated by
reference in the Registration Statement and the Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus, as amended or
supplemented, do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements
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<PAGE> 25
included or incorporated by reference in the Prospectus, as
amended or supplemented, do not comply as to form in all
material respects with the applicable accounting requirements
of the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of this Agreement, there has been any
decrease or increase in the capital stock or any increase or
decrease in long-term debt including capital lease obligations
and current maturities (except for sinking fund and
installment requirements under their long-term debt
agreements, terms of the preferred securities of subsidiaries
and purchases in the open market in anticipation thereof) or
any increase in short-term debt, or any decrease in
consolidated common shareholders' equity of the Company and
its consolidated subsidiaries (other than periodic dividends
declared to shareholders), in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position of the Company and its
subsidiaries incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented,
except 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 unaudited condensed
consolidated financial statements or financial information are
available there were any decreases in consolidated operating
revenues, operating income, net income or earnings available
for Common Stock of the Company and its consolidated
subsidiaries, or any increases in any items specified by the
Underwriter, in each case as compared with the corresponding
period in the preceding year and with any other period of
corresponding length specified by the Underwriter, except in
each case for increases or decreases which the Prospectus, as
amended or supplemented, including financial information
incorporated by reference, discloses have occurred or may
occur or which are described in such letter; and
(F) the unaudited condensed consolidated financial
statements referred to in Clause (E) are not stated on a basis
substantially consistent with the audited consolidated
financial statements incorporated by reference in the
Registration Statement and the Prospectus, as amended or
supplemented.
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<PAGE> 26
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus, as amended or supplemented, and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) In addition to the limited procedures, reading of minutes,
inquiries and other procedures referred to in clause (iii) and (iv)
above, they have carried out certain other specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information which are derived from the general accounting and financial
records of the Company and its subsidiaries, 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 Underwriter,
and have compared certain of such amounts, percentages and financial
information with the accounting and financial records of the Company
and its subsidiaries and have found them to be in agreement; and
(vi) If applicable and agreed to by the parties to this
Agreement, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the selected financial data, pro forma financial information,
prospective financial statements, consolidating financial statements
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the Underwriter.
(e) On the Closing Date, the Underwriter shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Date, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(d) of this Section, except that the specified date referred to shall be a date
not more than three business days prior to the Closing Date.
(f) On the Closing Date, the Underwriter shall have received
satisfactory evidence that the Insurance Policy has been issued by the Insurer
and confirmation that the Securities shall be rated "Aaa" by Moody's Investors
Service Inc. and "AAA" by Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.; and the Company shall have delivered to the Underwriter a
letter, dated the Closing Date, from such rating agencies, in form satisfactory
to the Underwriter, confirming that the Securities have such ratings; and since
the date of this Agreement there shall not have occurred any decrease in the
ratings of any of the securities of the Company or of the Securities by any
"nationally recognized statistical rating organization"
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<PAGE> 27
(as defined for purposes of Rule 436(g) under the 1933 Act Regulations) and no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
securities of the Company or of the Securities.
(g) On the Closing Date, the Underwriter shall have received from Kutak
Rock, counsel to the Insurer, an opinion substantially in the form attached
hereto as Schedule III.
(h) On the Closing Date, the Underwriter shall have received a
certificate of an appropriate officer of the Insurer, dated as of the Closing
Date, to the effect that the information being presented in the Prospectus
Supplement is true and accurate in all material respects with respect to the
Insurer, that there is no pending litigation against the Insurer that would
materially affect the Insurer's ability to perform its obligations, and that all
necessary corporate action has been take with respect to the execution, delivery
and performance of the Insurance Policy, and that the execution and delivery of
the Insurance Policy do not conflict with the organizational documents of the
Insurer.
(i) On the Closing Date, counsel for the Underwriter shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions herein contained; and
all proceedings taken by the Company in connection with the issuance and sale of
the Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriter and counsel for the Underwriter.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, may be
terminated by the Underwriter by notice to the Company at any time on or prior
to the Closing Date, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or
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<PAGE> 28
alleged untrue statement of a material fact contained 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 Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees, expenses and disbursements of counsel chosen by
the Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Underwriter expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that such indemnity with respect to the preliminary prospectus shall
not inure to the benefit of the 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 which are the subject thereof
if such person did not receive 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 in any case where the
Company complied with its obligations under Sections 3(e) and 3(g) hereof and
any such untrue statement or omission or alleged untrue statement or omission of
a material fact contained in such preliminary prospectus (or any amendment or
supplement thereto) was corrected in the 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 and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or
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Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by the Underwriter, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 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
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settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriter on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter 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
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, 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 Company on the one hand and the Underwriter
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter 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 Underwriter 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.
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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 any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls 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 who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriter's
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the aggregate principal amount of Securities set forth opposite
their respective names in Schedule II to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any termination or cancellation of this Agreement or
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 Securities to the Underwriter.
SECTION 9. Termination of Agreement.
(a) The Underwriter may terminate this Agreement, by notice to the
Company at any time on or prior to the Closing Date, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change or any
development which could reasonably be expected to result in a prospective
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which is
such as to make it, in the judgment of the Underwriter, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company or any of its affiliates has been
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<PAGE> 32
suspended or limited by the Commission, the National Association of Securities
Dealers, Inc. ("NASD") or the New York Stock Exchange, or if trading generally
on either the American Stock Exchange, the New York Stock Exchange or in the
over-the-counter market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said exchanges or by such system or by order of
the Commission, NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal, New York or Michigan
authorities.
(b) The Underwriter may terminate this Agreement, by notice to the
Company at any time on or prior to the Closing Date, if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Prospectus, any change or any development which would materially
and adversely affect the Insurer's condition (financial or otherwise) or
operations or which would materially and adversely affect the Insurer's ability
to perform its obligations under the Insurance Policy.
(c) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided, further, that Sections 1, 6, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. 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
Underwriter shall be directed to Edward D. Jones & Co, L.P. at 12555 Manchester
Road, St. Louis, Missouri 63131 with a copy to LeBoeuf, Lamb, Greene & MacRae,
L.L.P., 125 West 55th Street, New York, New York 10019-5389, attention of
William S. Lamb, Esq.; notices to the Company shall be directed to it at
Michigan Consolidated Gas Company, 500 Griswold Street, Detroit, Michigan 48226,
attention of Ronald E. Christian, Esq., Vice President, General Counsel and
Secretary.
SECTION 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company, and the Underwriter and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal Underwriter, any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein or therein contained.
This 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 Underwriter, and said controlling persons
and officers and directors and their heirs and legal Underwriter, 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.
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<PAGE> 33
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 13. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
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<PAGE> 34
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 Underwriter and the Company in accordance with its terms.
Very truly yours,
MICHIGAN CONSOLIDATED GAS
COMPANY
By: /s/ Howard L. Dow, III
---------------------------------------------
Name: Howard L. Dow, III
Title: Senior Vice President, Treasurer and
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: EDWARD D. JONES & CO., L.P.
By: /s/ James A. Krekeler
------------------------------
Authorized Signatory
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<PAGE> 35
SCHEDULE I
UNDERWRITER: Edward D. Jones & Co, L.P.
PURCHASE PRICE AND DESCRIPTION OF THE SECURITIES:
TITLE: 6.85% Senior Secured Insured Quarterly Notes due 2038.
PRINCIPAL AMOUNT: $55,000,000
PURCHASE PRICE: 96.85% of the principal amount thereof.
INDENTURE: Indenture, dated as of June 1, 1998, between Michigan
Consolidated Gas Company and Citibank, N.A., as trustee.
DATE OF MATURITY: June 1, 2038
INTEREST RATE: 6.85%
INTEREST PAYMENT DATES: March 1, June 1, September 1 and December 1.
REDEMPTION PROVISIONS: As set forth in the Prospectus under the
caption headed "Description of the Senior
Secured Insured Quarterly Notes - Optional
Redemption."
AUTHORIZED DENOMINATIONS: $1,000 and integral multiples thereof.
OTHER PROVISIONS:
TIME AND DATE OF DELIVERY AND PAYMENT:
TIME: 9:00 A.M. (Eastern time)
DATE: June 9, 1999
LOCATION: LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019-5389
<PAGE> 36
PLACE OF DELIVERY AND PAYMENT:
DELIVERY: Edward D. Jones & Co., L.P.
c/o The Depository Trust Company
55 Water Street
New York, New York 10041
PAYMENT: Wire Transfer of same day funds.
-2-
<PAGE> 37
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
Name of Underwriter of the Securities
------------------- -----------------
<S> <C>
Edward D. Jones & Co., L.P................................................ $55,000,000
Total..................................................................... $55,000,000
===========
</TABLE>
<PAGE> 38
SCHEDULE III
FORM OF OPINION OF INSURER'S COUNSEL
The opinion of Insurer's counsel shall be to the effect that:
1. [Name of Insurer] (the "Corporation") is a stock insurance
corporation, duly incorporated and validly existing under the laws of [State],
and is licensed and authorized to issue the Insurance Policy under the laws of
[State].
2. The Insurance Policy has been duly executed and is a valid
and binding obligation of the Corporation enforceable in accordance with its
terms.
3. The Insurance Policy is not required to be registered under
the Securities Act.
4. The statements set forth under the caption "The Policy and
the Insurer" in the Prospectus Supplement dated June 4, 1999 insofar as such
statements constitute a description of the Insurance Policy, accurately
summarize the Insurance Policy.
-4-
<PAGE> 1
EXHIBIT 1.2
MICHIGAN CONSOLIDATED GAS COMPANY
(A MICHIGAN CORPORATION)
DEBT SECURITIES
PURCHASE AGREEMENT
JUNE 4, 1999
Merrill Lynch & Co.
Merrill Lynch Pierce, Fenner & Smith
Incorporated
A. G. Edwards & Sons, Inc.
c/o Merrill Lynch & Co.
World Financial Center - North Tower
New York, New York 10281-1327
Ladies and Gentlemen:
Michigan Consolidated Gas Company (the "COMPANY"), a Michigan
corporation, confirms its agreement (this "AGREEMENT") with Merrill Lynch & Co.,
Merrill Lynch Pierce, Fenner & Smith Incorporated ("MERRILL LYNCH") and A. G.
Edwards & Sons, Inc. (collectively, the "UNDERWRITERS", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), with respect to the issue and sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of the principal amount set
forth in Schedule II of $55,000,000 aggregate principal amount of the Company's
6.85% Senior Notes due 2039 (the "SECURITIES"). The Securities will be issued by
the Company under its Indenture, dated as of June 1, 1998, as supplemented by
the First Supplemental Indenture, dated as of June 18, 1998 (the "BASE
INDENTURE"), between the Company and Citibank, N.A., as trustee (the "TRUSTEE"),
and a second supplement to the Base Indenture (the "SECOND SUPPLEMENTAL
INDENTURE," and together with the Base Indenture and any amendments or
supplements thereto, the "INDENTURE") to be entered into between the Company and
the Trustee, which will be secured by the concurrent issuance and delivery to
the Trustee of the Company's First Mortgage Bonds, Collateral Series D (the
"COLLATERAL BONDS"), issued under and ratably secured by the Indenture of
Mortgage and Deed of Trust
<PAGE> 2
dated as of March 1, 1944 (the "ORIGINAL SECURED INDENTURE"), as supplemented
and amended by thirty-five indentures supplemental thereto, including
specifically the Twenty-ninth Supplemental Indenture, and the Thirty-fifth
Supplemental Indenture creating the series in which the Collateral Bonds are to
be issued (the "THIRTY-FIFTH SUPPLEMENTAL INDENTURE") (the Original Secured
Indenture and all supplemental indentures thereto being referred to collectively
herein as the "SECURED INDENTURE"), in a principal amount equal to that of and
having other terms that mirror those of the Securities. The Company proposes to
sell to the Underwriters Securities of the designation, with the terms and the
aggregate principal amount specified in Schedule I hereto.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 (No. 333-56333) covering the
registration of debt securities of the Company, 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
this Agreement. Such registration statement, as so amended, has been declared
effective by the Commission. Such registration statement, as so amended,
including the exhibits and schedules thereto, if any, and the information, if
any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act
Regulations (the "RULE 430A INFORMATION") or Rule 434(d) of the 1933 Act
Regulations (the "RULE 434 INFORMATION"), is referred to herein as the
"REGISTRATION STATEMENT"; and the final prospectus and the prospectus supplement
relating to the offering of the Securities, are collectively referred to herein
as the "PROSPECTUS"; provided, however, that all references to the "Registration
Statement" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934
ACT"), prior to the execution of this Agreement; provided, further, that if the
Company files a registration statement with the Commission pursuant to Section
462(b) of the 1933 Act Regulations (the "RULE 462(B) REGISTRATION STATEMENT"),
then after such filing, all references to "Registration Statement" shall be
deemed to include the Rule 462(b) Registration Statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
the term "PROSPECTUS" shall refer to the final or preliminary prospectus and the
applicable term sheet (a "TERM SHEET") and all references in this Agreement to
the date of such Prospectus shall mean the date of the applicable Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of this
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
-2-
<PAGE> 3
electronically transmitted copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus) or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter that:
(i) No stop order suspending the effectiveness of the
Registration Statement or any Rule 464(b) Registration Statement has been issued
under the 1933 Act and no proceeding for that purpose has been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission,
and any request on the part of the Commission for additional information has
been complied with.
(ii) The Company meets the requirements for the use of Form
S-3 under the 1933 Act. Each of the Registration Statement and any Rule 462(b)
Registration Statement has become effective under the 1933 Act. At the
respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto (including the filing of the
Company's most recent Annual Report on Form 10-K with the Commission) became
effective and as of the date hereof, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the Trust Indenture Act of 1939, as amended (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.
Neither the Prospectus nor any amendments or supplements thereto, at the time
that the Prospectus or any such amendment or supplement was issued and at the
Closing Date, included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company elects to rely upon Rule 434 of the 1933
Act Regulations, the Company will comply with the requirements of Rule 434.
Notwithstanding the foregoing, the representations and warranties in this
subsection shall not
-3-
<PAGE> 4
apply to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement or the Prospectus.
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 each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection with the
offering of the Securities will, at the time of such delivery, be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement and the Prospectus, at the time they
were or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act, and the rules and
regulations of Commission thereunder (the "1934 ACT REGULATIONS"), and, when
read together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was issued
and on the Closing Date, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading.
(iv) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements of the Company included or
incorporated by reference in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates indicated
and the statements of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or incorporated by
reference in the Registration Statement and the 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.
(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
-4-
<PAGE> 5
to result in a material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise (a "MATERIAL ADVERSE EFFECT"),
whether or not arising in the ordinary course of business, (B) there have been
no transactions entered into by the Company or any of its subsidiaries, other
than those arising in the ordinary course of business, which are material with
respect to the Company and its subsidiaries, considered as one enterprise, (C)
except for regular quarterly 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 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, singly or in the aggregate, 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, singly or in the
aggregate, have a Material Adverse Effect. Except as otherwise stated in the
Registration Statement and the Prospectus, all of the issued and outstanding
shares of capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and all such
shares are owned by the Company, directly or through its subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. None of the outstanding shares of capital stock of the subsidiaries was
issued in violation of preemptive or other similar rights arising by operation
of law, under the charter or by-laws of any subsidiary or under any agreement to
which the Company or any subsidiary is a party, or otherwise.
(ix) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights arising by
operation of law, under the charter or by-laws of the
-5-
<PAGE> 6
Company, under any agreement to which the Company or any of its subsidiaries is
a party or otherwise.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(xi) The Securities have been duly authorized for issuance and
sale pursuant to this Agreement and at the Closing Date, will have been duly
executed by the Company and, when authenticated in the manner provided for in
the Indenture and delivered by the Company against payment of the purchase price
therefor, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or 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"). The Securities will be in the form contemplated by,
and entitled to the benefits of, the Indenture and conform in all material
respects to the description thereof contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may be,
as an exhibit to the Registration Statement.
(xii) The Collateral Bonds have been duly authorized for
issuance and delivery to the Trustee, and at the Closing Date will have been
duly executed by the Company and, when authenticated in the manner provided for
in the Secured Indenture and delivered by the Company as security for the
Securities, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms except to the
extent that enforcement thereof may be limited by the Bankruptcy Exceptions. The
Collateral Bonds will be in the form contemplated by, and entitled to the
benefits of, the Secured Indenture and conform in all material respects to the
description thereof contained in the Prospectus and will be substantially in the
form filed or incorporated by reference, as the case may be, as an exhibit to
the Registration Statement.
(xiii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and qualified under the 1939 Act and
constitutes a valid and legally binding instrument, enforceable against the
Company in accordance with its terms except to the extent that the enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture conforms in
all material respects to the description thereof contained in the Prospectus and
will be in substantially the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(xiv) The issuance and delivery by the Company of the
Collateral Bonds to the Trustee constitute a sale by the Company of the
Collateral Bonds to the Trustee as of the Closing Date, or, if not a sale, the
grant by the Company to the Trustee of a perfected security interest in the
Collateral Bonds for the benefit of the holders of the Securities.
-6-
<PAGE> 7
(xv) The Secured Indenture constitutes a legally valid and
enforceable first mortgage lien, except as the same may be limited by the laws
of the State of Michigan (where all of the property covered thereby is located)
affecting the remedies for the enforcement of the security provided for therein,
which laws do not make inadequate the remedies necessary for the realization of
the benefits of such security, or as the same may be limited by the Bankruptcy
Exceptions, upon substantially all of the Company's properties and franchises,
now owned or hereafter acquired, free from all prior liens, charges or
encumbrances, except as set forth in subparagraph xxii below, and in the case of
property hereafter acquired, any thereof existing at the time of acquisition.
(xvi) None of the Company or any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, note, lease, loan
or credit agreement or any other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, or in violation of any applicable law, rule or regulation or any
judgment, order, writ or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties or assets, which
violation or default would, singly or in the aggregate, have a Material Adverse
Effect.
(xvii) The execution, delivery and performance by the Company
of this Agreement, the Indenture, the Securities, the Secured Indenture, the
Collateral Bonds and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the transactions
contemplated hereby or thereby; and the consummation of the transactions
contemplated herein and therein and in the Registration Statement and the
Prospectus (including the issuance and sale of the Securities and the issuance
and delivery of the Collateral Bonds, and the use of the proceeds from the sale
of the Securities as described in the Prospectus under the caption "Use of
Proceeds"); and compliance by the Company with its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action and do
not and will not, whether with or without the giving of notice or passage of
time or both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them may be bound (other than the
lien of the Indenture), or to which any property or assets of the Company or any
subsidiary thereof is subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not, singly or in the aggregate,
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter of by-laws of the Company or any of
its subsidiaries or any applicable law, statute, rule or regulation, judgment,
order, writ or decree of any government, governmental instrumentality or court,
domestic or
-7-
<PAGE> 8
foreign, having jurisdiction over the Company or any of its subsidiaries or any
of their respective property, assets or operations.
(xviii) No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor disturbance by
the employees of any of its or any of its subsidiary's principal suppliers,
manufacturers, customers or contractors which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xix) 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
disclosed therein), or which might reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect, or which might be reasonably
expected to materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated by this Agreement,
or the performance by the Company of its obligations hereunder; and the
aggregate of all pending legal or governmental proceedings to which the Company
or any subsidiary thereof is a party or of which any of their respective
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine litigation
incidental to the business, could not reasonably be expected to, singly or in
the aggregate, result in a Material Adverse Effect.
(xx) There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto which have
not been so described and/or filed as required.
(xxi) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, is necessary or required
for the performance by the Company of its obligations hereunder, in connection
with (a) the offering, issuance or sale of the Securities under this Agreement,
(b) the issuance and delivery to the Trustee of the Collateral Bonds, or (c) the
consummation of the transactions contemplated by this Agreement and the
Indenture, except such as have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or foreign or state securities or blue
sky laws.
(xxii) The Company has good and marketable title to the
properties specifically described in and conveyed by the Secured Indenture
(except such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien of the
Secured Indenture, to permissible encumbrances, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the execution of
the Original Secured Indenture, to any liens existing thereon or purchase money
liens placed thereon at the time of such acquisition as permitted by the Secured
Indenture, and to certain other
-8-
<PAGE> 9
reservations, rights of grantors under revocable permits, easements, licenses,
zoning laws and ordinances and restrictions and minor defects or irregularities
of title which do not materially impair the use of the property affected thereby
in the operation of the business of the Company; the Company and its
subsidiaries have good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
the liens of the Secured Indenture and such liens, encumbrances and defects as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any 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 do not 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 and its subsidiaries are valid, subsisting and
enforceable easements with such exceptions as do not materially interfere with
the conduct of the business of the Company and its subsidiaries.
(xxiii) The Company and its subsidiaries possess all licenses,
franchises, permits, certificates, authorizations, approvals, consents, orders
and other operating rights (collectively, the "GOVERNMENTAL LICENSES") issued by
the Federal Energy Regulatory Commission, the State of Michigan, and all other
federal, state, local or foreign regulatory agencies or bodies, governmental
authorities or agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and to conduct the business now
operated by each of them; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except where
the failure to so comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect except when the failure of such Governmental Licenses to be in full force
and effect would not, singly or in the aggregate, have a Material Adverse 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 and
the Prospectus, there are no legal or governmental proceedings pending or
threatened that would result in a material modification, suspension or
revocation thereof.
(xxiv) The Company is a "public utility company" and a
"subsidiary company" of MCN Energy Group Inc. ("MCN"), a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935 (the
"1935 ACT"), and such "holding company" and the Company are presently exempt
from the provisions of the 1935 Act (except Section 9 thereof).
(xxv) Except as described in the Registration Statement and
except as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) none of the Company or any of its subsidiaries is in violation of
any federal, state, local or foreign statute, law, rule, regulation, ordinance
or code, including any judicial or administrative order, consent, decree
-9-
<PAGE> 10
or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "HAZARDOUS
MATERIALS") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
the "ENVIRONMENTAL LAWS"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are in compliance with their requirements, or (C) there
are no pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries.
(xxvi) None of the Company or its subsidiaries is, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus, and
upon the issuance and delivery to the Trustee of the Collateral Bonds, none will
be, an "investment company" or an entity under the "control" of an "investment
company" as such terms are defined under the Investment Company Act of 1940, as
amended (the "1940 ACT").
(xxvii) The Company has complied with, and is and will be in
compliance with, the provisions of that certain Florida act relating to
disclosure of doing business with Cuba, codified as Section 517.075 of the
Florida statutes, and the rules and regulations thereunder (collectively, the
"CUBA ACT") or is exempt therefrom.
(xxviii) None of the Company and its subsidiaries or any of
their respective directors, officers or controlling persons, has taken, directly
or indirectly, any action resulting in a violation of Regulation M under the
1934 Act, or designed to cause or result in, or that has constituted or that
reasonably might be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
(xxix) 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.
(xxx) The Company has authorized all necessary action to be
taken by it for the procurement of an irrevocable financial guarantee insurance
policy (the "Insurance Policy") issued by MBIA Insurance Corporation (the
"Insurer"), insuring the payment of principal and interest on the Securities,
when due.
(b) Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters in connection
with the offering of the
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<PAGE> 11
Securities shall be deemed a representation and warranty by the Company, as the
case may be, to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price per security set
forth in Schedule I hereto, the respective principal amounts of the Securities
set forth opposite the name of the such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Delivery of and payment 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 Company, at 9:00 a.m. (Eastern time) on the third (fourth,
if pricing of the Securities occurs after 4:00 p.m. (Eastern time) on any given
day) business day after the date of execution of this Agreement (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Underwriters and the Company (such time and date of payment and delivery being
referred to herein as the "CLOSING DATE").
(c) The Collateral Bonds that will secure the obligations of the
Company in respect of the Securities will be issued and delivered to the Trustee
of the Collateral Bonds on the Closing Date.
(d) On the Closing Date the Company shall deliver the Securities to
The Depository Trust Company, on behalf of the Underwriters, for the account of
each Underwriter against payment to the Company by wire transfer of immediately
available funds to a bank account designated by the Company. It is understood
that each Underwriter has authorized the Underwriters, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. 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 Securities to be purchased by any
Underwriter whose funds have not been received by the Closing Date, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(e) Upon delivery, the Securities shall be in registered form and in
such denominations as set forth on Schedule I hereto. The certificates
representing the Securities shall be registered in the name of Cede & Co. and
shall be made available for inspection by the Underwriters in New York, New York
not later than 10:00 a.m. (Eastern time) on the business day prior to the
Closing Date.
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<PAGE> 12
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Promptly following the execution of this Agreement, the Company
will cause the Prospectus, including as a part thereof a prospectus supplement
relating to the Securities and the Collateral Bonds, to be filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and will take
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus.
(b) The Company, subject to Section 3(c), will comply with the
requirements of Rule 430A or Rule 434 of the 1933 Act Regulations, 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) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for additional information and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or Prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(c) The Company will give the Underwriters notice of their 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 has furnished or will deliver to the Underwriters 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 the Underwriters,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters
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<PAGE> 13
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. 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 Company will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is required by
the 1933 Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of which
it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement any
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 time to amend the Registration Statement or
amend or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(c), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(g) The Company will use its 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 the Underwriters may designate; provided, however, that the Company
shall not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject. In each jurisdiction in which the Securities have been so qualified,
the Company will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for so long as may
be required in connection with distribution of the Securities.
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<PAGE> 14
(h) The Company will timely file such reports pursuant to the 1934 Act
as are necessary in order to make generally available to its securityholders and
to deliver to the Underwriters as soon as practicable an earnings statement for
the purposes of, and to provide the benefits contemplated by, the last paragraph
of Section 11(a) of the 1933 Act.
(i) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds."
(j) On the Closing Date, the Company will issue and deliver the
Collateral Bonds to the Trustee as security for the Securities as described in
the Prospectus under the caption "Description of the Senior Notes--Security;
Release Date."
(k) 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 this 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.
(l) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 of the 1933
Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on the date of
this Agreement and (ii) the time confirmations are sent or given, as specified
by Rule 462(b)(2).
(m) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
(n) So long as any of the Securities are outstanding, to make generally
available and, upon request, furnish the Underwriters copies of all reports and
financial statements furnished by the Company to each securities exchange on
which securities issued by the Company may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the 1934 Act
of the 1934 Act Regulations.
(o) During a period of fifteen days from the date of the Prospectus,
the Company will not, without the prior written consent of Merrill Lynch,
directly or indirectly, issue, pledge, sell, offer to sell, grant any option for
the sale of or otherwise transfer or dispose of, any debt securities of the
Company which mature more than one year after the Closing Date and which are
substantially similar to the Securities, without the prior written consent of
Merrill Lynch,
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<PAGE> 15
except for the offer by the Company of $55,000,000 aggregate principal amount of
its 6.85% Senior Secured Insured Quarterly Notes due June 1, 2038.
(p) None of the Company, its subsidiaries or any of their respective
directors, officers or controlling persons, will take, directly or indirectly,
any action resulting in a violation of Regulation M under the 1934 Act, or
designed to cause or result in, or that reasonably might be expected to
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
SECTION 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including,
without limitation, expenses related to the following, if incurred: (i) the
preparation, delivery, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto; (ii) the printing and delivery to the Underwriters of this
Agreement, the Indenture and any and such other documents as may be required in
connection with the offering, purchase, sale and delivery of the Securities and
the issuance and delivery of the Collateral Bonds; (iii) the preparation,
issuance and delivery of the certificates for the Securities to the
Underwriters, as well as the preparation, issuance and delivery of the
certificates for the Collateral Bonds to the Trustee, including any costs, taxes
and expenses incident to the issuance and delivery of the Securities; (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors
or agents; (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(g), including filing fees and the
fees and disbursements of counsel for the Underwriters in connection therewith
and in connection with the preparation of the Blue Sky Survey and any supplement
thereto; (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheet, the Prospectus and any amendments or
supplements thereto; (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto; (viii)
the fees and disbursements of the Trustee, including the fees and disbursements
of counsel to the Trustee; (ix) any fees payable to the Commission; and (x) any
fees payable in connection with the rating of the Securities by rating agencies.
If this Agreement is terminated by the Underwriters 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 several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company herein contained or in
certificates of any officer of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
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<PAGE> 16
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and on the date hereof and on
the Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing information
relating to the description of the Securities, the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b) (or any required post-effective amendment providing
such information shall have been filed and declared effective in accordance with
the requirements of Rule 430A), or, if the Company has elected to rely upon Rule
434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information
shall have been filed with the Commission in accordance with Rule 424(b).
(b) On the Closing Date the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Date, of
Ronald E. Christian, Esq., Vice President, General Counsel and Secretary of the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect that:
(i) The Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Michigan.
(ii) The Company has corporate power and
authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Prospectus and
to enter into and perform its obligations under this Agreement.
(iii) The Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not, individually or in the aggregate, result in a
Material Adverse Effect.
(iv) 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; and none of the
outstanding shares of capital stock were issued in violation of
preemptive or other similar rights arising by operation of law, under
the charter or by-laws of the Company; under any agreement to which the
Company, or any of its subsidiaries is a party, or otherwise.
(v) The Securities are in the form contemplated
by the Indenture, have been duly and validly authorized by the Company
and, when executed by the
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<PAGE> 17
Company and authenticated by the Trustee in the manner provided for in
the Indenture and delivered by the Company against payment of the
purchase price therefor, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions. Each holder of the
Securities will be entitled to the benefits provided by the Indenture;
the form of certificate used to evidence the Securities is in due and
proper form and complies with the requirements of the Indenture; and
the Securities and the Indenture conform in all material respects to
the descriptions thereof contained in the Prospectus.
(vi) The Collateral Bonds are in the form
contemplated by the Secured Indenture, have been duly and validly
authorized by the Company and, when executed by the Company and
authenticated by the trustee under the Secured Indenture in the manner
provided for in the Secured Indenture, and issued and delivered by the
Company to the trustee as security for the Securities, will constitute
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions. The form of certificate used to evidence the Collateral
Bonds is in due and proper form and complies with the requirements of
the Secured Indenture; and the Collateral Bonds and the Secured
Indenture conform in all material respects to the descriptions thereof
contained in the Prospectus.
(vii) The issuance and delivery by the Company
of the Collateral Bonds to the Trustee constitute a sale by the Company
of the Collateral Bonds to the Trustee as of the Closing Date, or, if
not a sale, the grant by the Company to the Trustee of a perfected
security interest in the Collateral Bonds for the benefit of the
holders of the Securities.
(viii) Except as to property acquired
subsequent to the date of execution of the Thirty-fifth Supplemental
Indenture, the Company has good and marketable title to the property
specifically or generally described in the Secured Indenture (except
such property as may have been disposed of or released from the lien
thereof in accordance with the terms thereof) subject only to the lien
of the Secured Indenture, to permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
execution of the Original Secured Indenture, to any liens existing
thereon or purchase money liens placed thereon at the time of such
acquisition as permitted by the Secured Indenture, and to certain other
reservations, rights of grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company; the pipeline,
distribution main and underground gas storage easements enjoyed by the
Company and its subsidiaries are valid, subsisting and enforceable
easements with such exceptions as are not material
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<PAGE> 18
and do not interfere with the conduct of the business of the Company
and its subsidiaries.
(ix) The Secured Indenture constitutes a
legally valid and enforceable first mortgage lien, except as the same
may be limited by the laws of the State of Michigan (where the property
covered thereby is located) affecting the remedies for the enforcement
of the security provided for therein, which laws do not, in the opinion
of such counsel, make inadequate the remedies necessary for the
realization of the benefits of such security, or as the same may be
limited by the Bankruptcy Exceptions, upon substantially all of the
Company's properties and franchises, now owned or hereafter acquired,
free from all prior liens, charges or encumbrances other than the lien
of the Secured Indenture, permitted liens, as defined in the Secured
Indenture, as to property acquired by the Company subsequent to the
execution of the Original Secured Indenture, any liens existing thereof
or purchase money liens placed thereon at the time of such acquisition
as permitted by the grantors under revocable permits, easements,
licenses, zoning laws and ordinances and restrictions and minor defects
or irregularities of title which do not, in the opinion of such
counsel, materially impair the use of the property affected thereby in
the operation of the business of the Company.
(x) All taxes and fees required to be paid by
the laws of the State of Michigan and jurisdictional subdivisions
thereof with respect to (A) the Secured Indenture and the issuance and
delivery of the Collateral Bonds and (B) the Indenture and the issuance
and delivery of the Securities, have been paid.
(xi) 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, individually or in the aggregate, have a Material Adverse Effect.
Except as otherwise disclosed in the Registration Statement and the
Prospectus, 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 and, to the best
of such counsel's knowledge, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity. None of the
outstanding shares of capital stock of any subsidiary of the Company
was issued in violation of preemptive or other similar rights of any
securityholder of such subsidiary.
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<PAGE> 19
(xii) This Agreement has been duly authorized,
executed and delivered by the Company.
(xiii) The Registration Statement, including
any Rule 462(b) Registration Statement, has been declared effective
under the 1933 Act; any required filing of the Prospectus pursuant to
Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement or any Rule 462(b) Registration Statement
has been issued under the 1933 Act and no proceedings therefor have
been initiated or, to the best knowledge of such counsel, threatened by
the Commission.
(xiv) The Registration Statement, including any
Rule 462(b) Registration Statement, the Rule 430A Information and the
Rule 434 Information, as applicable, the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein, as to which such counsel need
express no opinion), complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations; the
Indenture and the Statements of Eligibility on Form T-1 with respect to
the 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.
(xv) The documents incorporated by reference in
the Prospectus (other than the financial statements and supporting
schedules therein, as to which such counsel need express no opinion),
when they were filed with the Commission complied as to form in all
material respects with the requirements of the 1934 Act and the 1934
Act Regulations.
(xvi) The Company meets the registrant
requirements for use of Form S-3 under the 1933 Act Regulations.
(xvii) The Indenture has been duly and validly
authorized, executed and delivered by the Company and qualified under
the 1939 Act and, assuming due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and legally
binding obligation of the Company, enforceable in accordance with its
terms, except as the enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xviii) The Secured Indenture has been duly and
validly authorized, executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except to
the extent that the enforcement thereof may be limited by the
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<PAGE> 20
Bankruptcy Exceptions; the Secured Indenture has been duly qualified
under the 1939 Act.
(xix) The execution, delivery and performance
by the Company of this Agreement; the execution, delivery and
performance by the Company of the Indenture, the Securities, the
Secured Indenture, the Collateral Bonds and any other agreement or
instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated hereby or
thereby; the consummation of the transactions contemplated herein and
therein and in the Registration Statement and Prospectus (including the
issuance and sale of the Securities, the issuance and delivery to the
Trustee of the Collateral Bonds, and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds"); and compliance by the Company with its obligations
hereunder and thereunder do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary thereof pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to such
counsel, to which the Company or its subsidiaries is a party or by
which any of them may be bound, or to which any of the properties,
assets or operations of the Company or its subsidiaries is subject,
except for such conflicts, breaches, defaults, liens, charges or
encumbrances that would not, singly or in the aggregate, result in a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or any if
its subsidiaries, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to such counsel, of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or any
of their respective properties, assets or operations.
(xx) To the best of such counsel's knowledge,
there is not any action, suit, proceeding, inquiry or investigation
pending or threatened before or by any court or governmental agency or
body, domestic or foreign, pending or 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 disclosed therein), or which might reasonably be expected to, singly
or in the aggregate, 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 the
transactions contemplated in this Agreement, the Indenture or the
Secured Indenture, or the performance by the Company of its obligations
hereunder and thereunder; and the aggregate of all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party or to which any of their respective property or
assets is the subject which are not described in the Registration
Statement or the Prospectus, including ordinary routine litigation
incidental to the business of the Company or its
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<PAGE> 21
subsidiaries, could not reasonably be expected to, singly or in the
aggregate, result in a Material Adverse Effect.
(xxi) The information and statements in the
Prospectus under the captions "Summary of the Offer," "The Company,"
"Use of Proceeds," "Description of the First Mortgage Bonds,"
"Description of the Senior Debt Securities" and the "Description of the
Senior Notes," to the extent that they involve matters of law,
summaries of legal matters, the Company's charter and by-laws, legal
documents or proceedings, or legal conclusions, have been reviewed by
such counsel and are correct in all material respects.
(xxii) To the best of such counsel's knowledge,
there are no statutes or regulations that are required to be described
in the Prospectus that are not described as required.
(xxiii) To the best of such counsel's knowledge
and information, neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws and no default by the Company or
any subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan or credit agreement, note, lease,
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties or assets are bound, except for violations and
defaults that would not, singly or in the aggregate, result in a
Material Adverse Effect.
(xxiv) All descriptions in the Prospectus of
contracts and other documents to which the Company or any of its
subsidiaries is a party are accurate in all material respects. To the
best of such counsel's knowledge and information, there are no
franchises, contracts, indentures, mortgages, loan or credit
agreements, notes, leases or other instruments required to be described
or referred to in the Registration Statement or incorporated by
reference as exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto, and
the descriptions thereof or references thereto are correct in all
material respects. No default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in the Secured Indenture, any other contract, indenture,
mortgage, agreement, note, lease or other instrument so described,
referred to, filed or incorporated by reference.
(xxv) 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), and in
connection with the issuance and delivery to the Trustee of the
Collateral Bonds, have been taken; and no
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<PAGE> 22
filing with, authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act
and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states,
as to which such counsel need express no opinion) is necessary or
required in connection with the due authorization, execution and
delivery of this Agreement or for the offering, issuance and sale of
the Securities, the issuance and delivery of the Collateral Bonds, or
the performance by the Company of its obligations in this Agreement,
the Secured Indenture, the Indenture and the Securities.
(xxvi) The Company and its subsidiaries possess
all licenses, franchises, permits, certificates, authorizations,
approvals, consents, orders and other operating rights (collectively,
the "GOVERNMENTAL LICENSES") issued by the Federal Energy Regulatory
Commission; the State of Michigan, and all other federal, state, local
or foreign regulatory agencies or bodies, governmental authorities or
agencies necessary for the ownership or lease of the material
properties owned or leased by each of them and for the operation of the
business carried on by each of them as described in the Registration
Statement and the Prospectus except where the failure to so comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all such licenses, franchises, permits, certificates, authorizations,
approvals, consents and orders are in full force and effect, except
when the failure of such Governmental Licenses to be in full force and
effect would not, singly or in the aggregate, have a Material Adverse
Effect; and contain no unduly burdensome provisions that would
interfere with the conduct of the business of the Company or 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.
(xxvii) Each of the Company and its
subsidiaries has good and marketable title to all material real and
personal property owned by each of them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind except such as (a) are
described in the Registration Statement and the Prospectus or (b) do
not, singly or in the aggregate, 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 or any of its subsidiaries;
and any real property and buildings held under lease by the Company, or
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the conduct of the business of the Company or such
subsidiaries.
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<PAGE> 23
(xxviii) The Company is not an "investment
company" or an entity under the "control" of an "investment company" as
such terms are defined in the 1940 Act.
(xxix) MCN and the Company are presently exempt
from the provisions of the Public Utility Holding Company Act of 1935
(except Section 9 thereof) which would otherwise require either of them
to register thereunder.
Moreover, such counsel shall confirm that nothing has
come to such counsel's attention that would lead such counsel to
believe that the Registration Statement, including any Rule 430A
Information and Rule 434 Information (if applicable)(except for
financial statements and the notes thereto, the financial schedules and
any other financial data included or incorporated by reference therein,
as to which such counsel need express no opinion), at the time such
Registration Statement became effective or at the date of this
Agreement, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or
any amendment or supplement thereto (except for financial statements
and the notes thereto, the financial schedules, and any other financial
data included or incorporated by reference therein, as to which such
counsel need express no opinion), at the time the Prospectus were
issued, at the time of any such amended or supplemented Prospectus were
issued or at the Closing Date, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(2) The favorable opinion, dated as of the Closing Date, of
LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the Underwriters, in
form and substance satisfactory to the Underwriters, with respect to such
matters as the Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In giving such opinion, LeBoeuf, Lamb,
Greene & MacRae, L.L.P. may rely as to certain matters of Michigan law upon the
opinion of Ronald E. Christian, Esq., counsel for the Company, which shall be
delivered in accordance with Section 5(b)(1) hereof.
(c) On the Closing Date, the Underwriters 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, dated as of the
Closing Date, to the effect that (i) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Date,
(iii) the Company has complied with all
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<PAGE> 24
agreements and satisfied all conditions on its part to be performed or satisfied
on or prior to the Closing Date, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or threatened by the Commission.
(d) At the time of the execution of this Agreement, the Underwriters
shall have received from Deloitte & Touche LLP a letter dated such date in form
and substance satisfactory to the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth below and as to such other matters as the Underwriters may
reasonably request, that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
1933 Act and the 1933 Act Regulations;
(ii) In their opinion, the consolidated financial statements
and any financial statement schedules audited by them and included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented, comply as to form in all
material respects with the applicable accounting requirements of the
1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
condensed consolidated financial statements included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Registration Statement and the Prospectus, as amended or supplemented,
for the periods specified in such letter, a reading of the latest
available unaudited interim consolidated financial statements of the
Company and its subsidiaries, a reading of the minutes of the Company
and its subsidiaries since the audited consolidated financial
statements set forth in the Company's Annual Report on Form 10-K for
the most recent year, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated financial
statements set forth in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented do not
comply as to form in all material respects with the applicable
accounting requirements of the 1934 Act and the 1934 Act
Regulations as they apply to Form 10-Q or any material
modifications should be made for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
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<PAGE> 25
financial statements set forth in the Company's Annual Report
on Form 10-K for the most recent year ended incorporated by
reference in the Registration Statement and the Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus, as amended or
supplemented, do not agree with the corresponding items in the
unaudited consolidated financial statements from which such
data and items were derived;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements included or incorporated by reference in
the Prospectus, as amended or supplemented, do not comply as
to form in all material respects with the applicable
accounting requirements of the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations or
the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of this Agreement, there has been any
decrease or increase in the capital stock or any increase or
decrease in long-term debt including capital lease obligations
and current maturities (except for sinking fund and
installment requirements under their long-term debt
agreements, terms of the preferred securities of subsidiaries
and purchases in the open market in anticipation thereof) or
any increase in short-term debt, or any decrease in
consolidated common shareholders' equity of the Company and
its consolidated subsidiaries (other than periodic dividends
declared to shareholders), in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position of the Company and its
subsidiaries incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented,
except 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 unaudited condensed
consolidated financial statements or financial information are
available there were any decreases in consolidated operating
revenues, operating income, net income or earnings available
for Common Stock of the Company and its consolidated
subsidiaries, or any increases in any items specified by the
Underwriters, in each case as compared with the corresponding
period in the preceding year and with any other period of
corresponding length specified by
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<PAGE> 26
the Underwriters, except in each case for increases or
decreases which the Prospectus, as amended or supplemented,
including financial information incorporated by reference,
discloses have occurred or may occur or which are described in
such letter; and
(F) the unaudited condensed consolidated financial
statements referred to in Clause (E) are not stated on a basis
substantially consistent with the audited consolidated
financial statements incorporated by reference in the
Registration Statement and the Prospectus, as amended or
supplemented.
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus, as amended or supplemented, and included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in the Company's Annual Reports on Form 10-K
for such fiscal years;
(v) In addition to the limited procedures, reading of minutes,
inquiries and other procedures referred to in clause (iii) and (iv)
above, they have carried out certain other specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information which are derived from the general accounting and financial
records of the Company and its subsidiaries, 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 Underwriters,
and have compared certain of such amounts, percentages and financial
information with the accounting and financial records of the Company
and its subsidiaries and have found them to be in agreement; and
(vi) If applicable and agreed to by the parties to this
Agreement, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the selected financial data, pro forma financial information,
prospective financial statements, consolidating financial statements
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been furnished
to the Underwriters.
(e) On the Closing Date, the Underwriters shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Date, to the effect that
they reaffirm the statements made
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<PAGE> 27
in the letter furnished pursuant to subsection (d) of this Section, except that
the specified date referred to shall be a date not more than three business days
prior to the Closing Date.
(f) On the Closing Date, the Underwriters shall have received
satisfactory evidence that the Insurance Policy has been issued by the Insurer
and confirmation that the Securities shall be rated "Aaa" by Moody's Investors
Service Inc. and "AAA" by Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.; and the Company shall have delivered to the Underwriters a
letter, dated the Closing Date, from such rating agencies, in form satisfactory
to the Underwriters, confirming that the Securities have such ratings; and since
the date of this Agreement there shall not have occurred any decrease in the
ratings of any of the securities of the Company or of the Securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the 1933 Act Regulations) and no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the securities of the Company or of
the Securities.
(g) On the Closing Date, the Underwriters shall have received from
Kutak Rock, counsel to the Insurer, an opinion substantially in the form
attached hereto as Schedule III.
(h) On the Closing Date, the Underwriters shall have received a
certificate of an appropriate officer of the Insurer, dated as of the Closing
Date, to the effect that the information being presented in the Prospectus
Supplement is true and accurate in all material respects with respect to the
Insurer, that there is no pending litigation against the Insurer that would
materially affect the Insurer's ability to perform its obligations, and that all
necessary corporate action has been take with respect to the execution, delivery
and performance of the Insurance Policy, and that the execution and delivery of
the Insurance Policy do not conflict with the organizational documents of the
Insurer.
(i) On the Closing Date, 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, 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.
If any condition specified in this Section 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 on or prior
to the Closing Date, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
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<PAGE> 28
SECTION 6. Indemnification.
(a) The Company agrees to 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 or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or
the 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 Company; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees, expenses and disbursements of counsel chosen by
Merrill Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this foregoing indemnity agreement shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that such indemnity with respect to the preliminary prospectus shall
not inure to the benefit of the Underwriters (or any person controlling such
Underwriters) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities
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<PAGE> 29
which are the subject thereof if such person did not receive 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 in any case where the Company complied with its obligations under
Sections 3(e) and 3(g) hereof and any such untrue statement or omission or
alleged untrue statement or omission of a material fact contained in such
preliminary prospectus (or any amendment or supplement thereto) was corrected in
the 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 and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise
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or consent (i) includes an unconditional release of each indemnified party from
all liability arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company 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 the Company 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
pursuant to this Agreement (before deducting expenses) received by the Company
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 Company 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 Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
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<PAGE> 31
The Company 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 any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls 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 who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the aggregate principal amount of Securities set forth opposite
their respective names in Schedule II to this Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any termination or cancellation of this Agreement or
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 Securities to the Underwriters.
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<PAGE> 32
SECTION 9. Termination of Agreement.
(a) The Underwriters may terminate this Agreement, by notice to the
Company at any time on or prior to the Closing Date, if (i) there has been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change or any
development which could reasonably be expected to result in a prospective
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation of hostilities or other calamity or crisis, or any
change or development involving a prospective change in national or
international political, financial or economic conditions the effect of which is
such as to make it, in the judgment of the Underwriters, impracticable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Company or any of its affiliates has been
suspended or limited by the Commission, the National Association of Securities
Dealers, Inc. ("NASD") or the New York Stock Exchange, or if trading generally
on either the American Stock Exchange, the New York Stock Exchange or in the
over-the-counter market has been suspended or limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices for securities
have been required, by either of said exchanges or by such system or by order of
the Commission, NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal, New York or Michigan
authorities.
(b) The Underwriters may terminate this Agreement, by notice to the
Company at any time on or prior to the Closing Date, if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Prospectus, any change or any development which would materially
and adversely affect the Insurer's condition (financial or otherwise) or
operations or which would materially and adversely affect the Insurer's ability
to perform its obligations under the Insurance Policy.
(c) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4, and provided, further, that Sections 1, 6, 7 and 8 shall
survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Date to purchase the Securities
which it or they are obligated to purchase under this Agreement (the "DEFAULTED
SECURITIES"), the Underwriters 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, the Underwriters shall not have completed such arrangements
within
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<PAGE> 33
such 24-hour period, then this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Underwriters or the Company shall have the right
to postpone the Closing Date 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. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch & Co. at World Financial Center
- - North Tower, New York, New York 10281-1327 with a copy to LeBoeuf, Lamb,
Greene & MacRae, L.L.P., 125 West 55th Street, New York, New York 10019-5389,
attention of William S. Lamb, Esq.; notices to the Company shall be directed to
it at Michigan Consolidated Gas Company, 500 Griswold Street, Detroit, Michigan
48226, attention of Ronald E. Christian, Esq., Vice President, General Counsel
and Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company, and the Underwriters and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal Underwriters, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein or therein
contained. This 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 Underwriters, and said
controlling persons and officers and directors and their heirs and legal
Underwriters, 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 SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. SPECIFIED TIMES OF DAY REFER
TO NEW YORK CITY TIME UNLESS OTHERWISE INDICATED.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
-33-
<PAGE> 34
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,
MICHIGAN CONSOLIDATED GAS
COMPANY
By: /s/ Howard L. Dow, III
---------------------------------------------
Name: Howard L. Dow, III
Title: Senior Vice President, Treasurer and
Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
By: MERRILL LYNCH & CO.
By: /s/ Anthony Leness
-----------------------------
Authorized Signatory
-34-
<PAGE> 35
SCHEDULE I
UNDERWRITERS: Merrill Lynch & Co,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
A.G. Edwards & Sons, Inc.
PURCHASE PRICE AND DESCRIPTION OF THE SECURITIES:
TITLE: 6.85% Senior Notes due 2039.
PRINCIPAL AMOUNT: $55,000,000
PURCHASE PRICE: 96.85% of the principal amount thereof.
INDENTURE: Indenture, dated as of June 1, 1998, between Michigan
Consolidated Gas Company and Citibank, N.A., as trustee.
DATE OF MATURITY: June 1, 2039
INTEREST RATE: 6.85%
INTEREST PAYMENT DATES: March 1, June 1, September 1 and December 1.
REDEMPTION PROVISIONS: As set forth in the Prospectus under the
caption headed "Description of the Senior
Notes - Optional Redemption."
AUTHORIZED DENOMINATIONS: $25 and integral multiples thereof.
OTHER PROVISIONS:
TIME AND DATE OF DELIVERY AND PAYMENT:
TIME: 9:00 A.M. (Eastern time)
DATE: June 9, 1999
LOCATION: LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019-5389
<PAGE> 36
PLACE OF DELIVERY AND PAYMENT:
DELIVERY: Merrill Lynch & Co.
c/o The Depository Trust Company
55 Water Street
New York, New York 10041
PAYMENT: Wire Transfer of same day funds.
-2-
<PAGE> 37
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
Name of Underwriter of the Securities
------------------- -----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................ $30,000,000
A.G. Edwards & Sons, Inc................................................. $25,000,000
-----------
Total..................................................................... $55,000,000
===========
</TABLE>
-3-
<PAGE> 38
SCHEDULE III
FORM OF OPINION OF INSURER'S COUNSEL
The opinion of Insurer's counsel shall be to the effect that:
1. [Name of Insurer] (the "Corporation") is a stock insurance
corporation, duly incorporated and validly existing under the laws of [State],
and is licensed and authorized to issue the Insurance Policy under the laws of
[State].
2. The Insurance Policy has been duly executed and is a valid
and binding obligation of the Corporation enforceable in accordance with its
terms.
3. The Insurance Policy is not required to be registered under
the Securities Act.
4. The statements set forth under the caption "The Policy and
the Insurer" in the Prospectus Supplement dated June 4, 1999 insofar as such
statements constitute a description of the Insurance Policy, accurately
summarize the Insurance Policy.
-4-
<PAGE> 1
EXHIBIT 4.1
================================================================================
SECOND SUPPLEMENTAL INDENTURE
FROM
MICHIGAN CONSOLIDATED GAS COMPANY
TO
CITIBANK, N.A.
TRUSTEE
-------------
Dated as of June 9, 1999
SUPPLEMENTAL TO INDENTURE
Dated as of June 1, 1998
Senior Debt Securities
================================================================================
<PAGE> 2
3 This SECOND SUPPLEMENTAL INDENTURE is made as of the 9th day of June, by and
between MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and
existing under the laws of the State of Michigan (the "Company"), and CITIBANK,
N.A., a national banking association incorporated and existing under and by
virtue of the laws of the United States of America, as trustee (the "Trustee").
RECITALS OF THE COMPANY:
WITNESSETH: that
The Company has heretofore executed and delivered its Indenture
(hereinafter referred to as the "Indenture"), made as of June 1, 1998, as
supplemented by a First Supplemental Indenture dated as of June 18, 1998; and
Section 3.1 of the Indenture provides that Securities shall be issued
in series and that a Board Resolution and an Officer's Certificate shall specify
the terms of each issue of Securities; and
The Company desires to establish a series of Securities to be
designated "Senior Secured Insured Quarterly Notes due 2038" (the "Senior
Secured Insured Quarterly Notes") and a series of Securities to be designated
"Senior Notes, due 2039" (the "Senior Notes") (together, the "Securities"); and
Section 10.1 of the Indenture provides that the Company and the Trustee
may enter into indentures supplemental thereto for the purposes, among others,
of establishing the form of Securities or establishing or reflecting any terms
of any Security and adding to the covenants of the Company; and
The execution and delivery of this Second Supplemental Indenture
(herein, this "Supplemental Indenture") has been duly authorized by a Board
Resolution;
NOW, THEREFORE, this Supplemental Indenture;
WITNESSETH, that, in order to set forth the terms and conditions upon
which Securities are, and are to be, authenticated, issued and delivered, and in
consideration of the sum of one dollar duly paid to it by the Trustee at the
execution of this Supplemental Indenture, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective Holders from time to time of the
Securities as follows:
<PAGE> 3
ARTICLE I
RELATION TO INDENTURE; DEFINITIONS
SECTION 1.1
This Supplemental Indenture constitutes an integral part of the
Indenture.
SECTION 1.2
For all purposes of this Supplemental Indenture:
(a) Capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned to such terms in the Indenture;
(b) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture; and
(c) The terms "hereof," "herein," "hereby," "hereto," "hereunder," and
"herewith" refer to this Supplemental Indenture.
ARTICLE II
THE SECURITIES
There shall be hereby established two series of Securities, known as
and entitled "Senior Secured Insured Quarterly Notes due 2038" and "Senior Notes
due 2039." The aggregate principal amount of the Senior Secured Insured
Quarterly Notes shall be limited to Fifty-Five Million Dollars ($55,000,000) and
the aggregate principal amount of the Senior Notes shall be limited to
Fifty-Five Million Dollars ($55,000,000). Such Securities shall be initially
authenticated and delivered from time to time upon delivery to the Trustee of
the documents required by Section 3.1 of the Indenture, including, among other
things, a Board Resolution and an Officer's Certificate specifying, with respect
to each issue of the Senior Secured Insured Quarterly Notes and the Senior
Notes, the form of Securities for each of the Senior Secured Insured Quarterly
Notes and the Senior Notes substantially in the forms of Securities attached
hereto as Appendix I and Appendix II with such changes therein as may be
authorized by a Board Resolution and an Officer's Certificate as may be required
by law and which shall not be inconsistent with the terms and provisions of the
Indenture or this Supplemental Indenture. The terms of such forms of Securities
are incorporated by reference herein.
<PAGE> 4
ARTICLE III
TRANSFER OF COLLATERAL BONDS
The Company hereby issues, delivers and transfers to the Trustee (A) in
connection with the issuance of the Senior Secured Insured Quarterly Notes,
Fifty-Five Million Dollars ($55,000,000) aggregate principal amount of a related
issue of Collateral Bonds of the Company designated "First Mortgage Bonds,
Collateral Series C" and (B) in connection with the issuance of the Senior
Notes, Fifty-Five Million Dollars ($55,000,000) aggregate principal amount of a
related issue of Collateral Bonds of the Company designated "First Mortgage
Bonds, Collateral Series D" (each, a "Related Issue," as to the respective
series of Securities it secures, together, the "Collateral Bonds"), each of
which has been fully registered in the name of the Trustee in such capacity, to
be held in trust for the benefit of the Holders from time to time of the Related
Issue of Securities and, if such transfer does not constitute a sale of the
Collateral Bonds to the Trustee, the Company hereby grants a perfected security
interest in the Collateral Bonds for the benefit of such Holders, in each case
as security for any and all obligations of the Company under the Indenture, this
Supplemental Indenture and the Related Issue of Securities, including but not
limited to (1) the full and prompt payment of the interest on, principal of, and
premium, if any, on the Securities when and as the same shall become due and
payable in accordance with the terms and provisions of the Indenture and this
Supplemental Indenture and the Related Issue of Securities, either at the stated
maturity thereof, upon acceleration of the maturity thereof or upon redemption,
and (2) the full and prompt payment of any interest on the Securities when and
as the same shall become due and payable in accordance with the terms and
provisions of the Indenture and this Supplemental Indenture or the Related Issue
of Securities. The Trustee shall enforce all of its rights under the First
Mortgage Indenture as a holder of the Related Issue of Collateral Bonds
transferred to it as provided in this Article III for the benefit of the Insurer
and the Holders of the Related Issue of Securities and the proceeds of the
enforcement of such rights shall be applied by the Trustee to satisfy the
Company's obligations under the Indenture, this Supplemental Indenture, and the
Related Issue of Securities.
The Company shall make payments of the principal of, and premium or
interest on, the Collateral Bonds to the Trustee, which payments shall be
applied by the Trustee to satisfaction of all obligations then due on the
Related Issue of Securities.
The Collateral Bonds shall not be sold or transferred by the Trustee
until the earlier of the Release Date or the prior retirement of the Securities
through redemption, repurchase or otherwise. The "Release Date" shall be the
date that all First Mortgage Bonds of the Company issued and outstanding under
the First Mortgage Indenture, other than the Collateral Bonds (as defined in the
Senior Indenture) have been retired (at, before or after the maturity thereof)
through payment, redemption or otherwise provided that no Default or Event of
Default has occurred and, at such time, is continuing under the Indenture.
<PAGE> 5
Copies of the forms of Collateral Bonds are attached hereto as Appendix
III and IV, respectively, and their terms are hereby incorporated by reference
herein.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1
The Trustee has accepted the amendment of the Indenture effected by
this Supplemental Indenture and agrees to execute the trust created by the
Indenture as hereby amended, but only upon the terms and conditions set forth in
the Indenture, including the terms and provisions defining and limiting the
liabilities and responsibilities of the Trustee, and without limiting the
generality of the foregoing, the Trustee shall not be responsible in any manner
whatsoever for or with respect of any of the recitals or statements contained
herein, all of which recitals or statements are made solely by the Company, or
for or with respect to (a) the validity or sufficiency of this Supplemental
Indenture or any of the terms or provisions hereof, (b) the proper authorization
hereof by the Company by corporate action or otherwise, and (c) the due
execution hereof by the Company.
SECTION 4.2
This Supplemental Indenture shall be construed in connection with and
as a part of the Indenture.
SECTION 4.3
(a) If any provision of this Supplemental Indenture conflicts with
another provision of the Indenture required to be included in indentures
qualified under the Trust Indenture Act of 1939, as amended (as enacted prior to
the date of this Supplemental Indenture), by any of the provisions of Section
310 to 317, inclusive, of said act, such required provision shall control.
(b) In case any one or more of the provisions contained in this
Supplemental Indenture or in the Securities issued hereunder should be invalid,
illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected, impaired, prejudiced or disturbed thereby.
SECTION 4.4
Whenever in this Supplemental Indenture either of the parties hereto is
named or referred to, such name or reference shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements
contained in this Supplemental Indenture by
<PAGE> 6
or on behalf of the Company or by or on behalf of the Trustee shall bind and
inure to the benefit of the respective successors and assigns of such parties,
whether so expressed or not.
SECTION 4.5
(a) This Supplemental Indenture may be simultaneously executed in
several counterparts, and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.
(b) The descriptive headings of the several Articles of this
Supplemental Indenture were formulated, used and inserted in this Supplemental
Indenture for convenience only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.
<PAGE> 7
IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has
caused this Supplemental Indenture to be executed by its Chairman, Chief
Executive Officer, President, Vice Chairman or a Vice President, or any other
officer selected by the Board of Directors, and its corporate seal to be
hereunto affixed, duly attested by its Secretary or an Assistant Secretary, and
CITIBANK, N.A., as Trustee as aforesaid, has caused this Supplemental Indenture
to be executed by one of its authorized signatories, as of June 9, 1999.
MICHIGAN CONSOLIDATED GAS
COMPANY
By: /s/ Harold Gardner
-------------------------------------
Name: Harold Gardner
Title: Vice President and Chief Accounting
Officer
ATTEST:
/s/ Ronald E. Christian
- -----------------------------
Secretary
CITIBANK, N.A., as Trustee
By: /s/ R. Duma
-------------------------------------
Name: R. Duma
Title: Senior Trust Officer
ATTEST:
/s/ Nancy Forte
- -----------------------------
Authorized Officer
<PAGE> 8
Annex I
$55,000,000
THIS NOTE IS IN GLOBAL FORM WITHIN THE MEANING OF THE SENIOR INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR A NOTE IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY.
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
MICHIGAN CONSOLIDATED GAS COMPANY
6.85% Senior Secured Insured Quarterly Notes
due 2038
Principal Amount: $55,000,000
Authorized Denomination: $1,000
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: June 9, 1999
Stated Maturity: June 1, 2038
Interest Payment Dates: March 1, June 1, September 1 and December 1
Interest Rate: 6.85% per annum
<PAGE> 9
MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and
existing under the laws of the State of Michigan (the "Company", which term
includes any successor corporation under the Senior Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns, at the office or agency of the Company in The City of New
York, New York, the principal sum of FIFTY-FIVE MILLION DOLLARS ($55,000,000) on
June 1, 2038 (the "Stated Maturity Date"), in the coin or currency of the United
States, and to pay interest thereon from the Original Issue Date shown above, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly in arrears on each Interest Payment Date as
specified above, commencing on September 1, 1999 and on the Stated Maturity at
the rate per annum shown above (the "Interest Rate") until the principal hereof
is paid or made available for payment and on any overdue principal and on any
overdue installment of interest. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date (other than an Interest Payment
Date that is the Stated Maturity or a Redemption Date) will, as provided in the
Senior Indenture, be paid to the Person in whose name this 6.85% Senior Secured
Insured Quarterly Note Due 2038 is registered on the Regular Record Date as
specified above next preceding such Interest Payment Date; provided that any
interest payable at Stated Maturity or on a Redemption Date will be paid to the
Person to whom principal is payable. Except as otherwise provided in the Senior
Indenture, any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Senior Secured Insured Quarterly
Note is registered at the close of business on a Special Record Date for the
payment of such defaulted Interest to be fixed by the Senior Trustee, notice
whereof shall be given to Holders of securities of this series not less than 10
days prior to such special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange,
if any, on which the securities of this series shall be listed, and upon such
notice as may be required by any such exchange, all as more fully provided in
the Senior Indenture.
Payments of interest on this Senior Secured Insured Quarterly Note will
include interest accrued to but excluding the respective Interest Payment Dates.
Interest payments for this Senior Secured Insured Quarterly Note shall be
computed and paid on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on this Senior Secured Insured
Quarterly Note is not a business Day, then payment of the interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or payment in respect of any such delay) with the same
force and effect as if made on the date the payment was originally payable.
"Business Day" means a day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in New York, New York are authorized or obligated by
law or executive order to remain closed or (iii) a day on which the Corporate
Trust Office is closed for business.
Payment of principal of, premium, if any, and interest on the
securities of this series shall be made in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payments of principal of, premium, if any, and
interest on securities of this series represented by a Global Security shall be
made by wire
<PAGE> 10
transfer of immediately available funds to the Holder of such Global Security,
provided that, in the case of payments of principal and premium, if any, such
Global Security is first surrendered to the Paying Agent (as defined in the
Senior Indenture). If any of the securities of this series are not longer
represented by a Global Security, (i) payments of principal, premium, if any,
and interest due at the Stated Maturity or earlier redemption of such Securities
shall be made at the office of the Paying Agent upon surrender of such
Securities to the Paying Agent, and (ii) payments of interest shall be made, at
the option of the Company, subject to such surrender where applicable, (A) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (B) by wire transfer at such place and to
such account at a banking institution in the United States as may be designated
in writing to the Trustee at least sixteen (16) days prior to the date for
payment by the Person entitled thereto.
UNTIL THE RELEASE DATE (AS DEFINED ON THE REVERSE HEREOF), THIS SENIOR
SECURED INSURED QUARTERLY NOTE SHALL BE SECURED BY FIRST MORTGAGE BONDS (THE
"FIRST MORTGAGE BONDS") ISSUED AND DELIVERED BY THE COMPANY TO THE SENIOR
TRUSTEE (AS DEFINED ON THE REVERSE HEREOF) UNDER THE COMPANY'S TWENTY-NINTH
SUPPLEMENTAL INDENTURE DATED AS OF JULY 15, 1989, PROVIDING FOR THE RESTATEMENT
OF THE INDENTURE OF MORTGAGE AND DEED OF TRUST DATED AS OF MARCH 1, 1994 BETWEEN
THE COMPANY AND CITIBANK, N.A. (THE "MORTGAGE TRUSTEE") AND ROBERT T. KIRCHNER
(THE"INDIVIDUAL TRUSTEE"), AS SUPPLEMENTED BY THE THIRTY-FIFTH SUPPLEMENTAL
INDENTURE (AS SO SUPPLEMENTED, THE "MORTGAGE INDENTURE"). ON THE RELEASE DATE,
THE SENIOR SECURED INSURED QUARTERLY NOTES SHALL CEASE TO BE SECURED BY SUCH
FIRST MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, EITHER (i) SHALL BECOME
UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (ii) SHALL BE SECURED BY FIRST
MORTGAGE BONDS UNDER A SECURED MORTGAGE INDENTURE OTHER THAN THE MORTGAGE
INDENTURE.
Reference is made to the further provisions of this Senior Secured
Insured Quarterly Note set forth on the reverse hereof. Such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Senior Secured Insured Quarterly Note shall not be valid or become
obligatory for any purpose until the certificate of authentication hereon shall
have been manually signed by the Senior Trustee under the Senior Indenture
referred to on the reverse hereof.
<PAGE> 11
IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this
instrument to be duly executed under its corporate seal.
Dated: June 9, 1999
MICHIGAN CONSOLIDATED GAS COMPANY
By:
--------------------------------
Title:
Attest:
By:
-------------------------------
Title:
CERTIFICATION OF AUTHENTICATION
Dated: June 9, 1999
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
CITIBANK, N.A., as Trustee
By:
---------------------------------
Authorized Signatory
<PAGE> 12
MICHIGAN CONSOLIDATED GAS COMPANY
6.85% Senior Secured Insured Quarterly Notes
due 2038
(c) Senior Indenture. (1) This Senior Secured Insured Quarterly Note is
one of the duly authorized issue of securities of the Company (hereinafter
called the "Notes") of the series hereinafter specified, all issued or to be
issued under and pursuant to an Indenture, dated as of June 1, 1998, as
supplemented by the First Supplemental Indenture, dated as of June 18, 1998 and
the Second Supplemental Indenture dated as of June 9, 1999, between the Company
and the Trustee (as so supplemented, the "Senior Indenture"), duly executed and
delivered by the Company to Citibank, N.A., as Trustee (herein called the
"Senior Trustee," which term includes any successor trustee under the Senior
Indenture), to which Senior Indenture reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Senior Trustee, the Company and the Holders of the Notes. The
Notes may be issued in one or more series, which different series may be issued
in various aggregate principal amounts, may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption
provisions (if any) and may be subject to different sinking, purchase or
analogous funds (if any) and may otherwise vary as provided in the Indenture.
This Note is one of the series designated as the 6.85% Senior Secured Insured
Quarterly Notes (the "Senior Secured Insured Quarterly Notes") of the Company,
which series is limited in aggregate principal amount to $55,000,000.
(2) Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal and,
to the extent lawful, on overdue installments of interest at the rate per annum
borne by this Note. For purposes hereof, the term "Business Day" means any day
other than a Saturday or Sunday or a day on which banking institutions in The
City of New York are required or authorized to close.
(c) The Company shall make payment of any principal or interest due
on the Notes to the Trustee by the close of business on the second day next
preceding the date on which such payment is due to the Holders of the Senior
Secured Insured Quarter Notes.
(d) The following defined terms used herein shall, unless the
context otherwise requires, have the meanings specified below. Capitalized terms
used herein for which no definition is provided herein shall have the meanings
set forth in the Indenture.
"Insurance Paying Agent" means State Street Bank and Trust Company,
N.A., New York, New York, or any successor thereto, as the Fiscal Agent under
the Policy.
"Insurer" means MBIA Insurance Corporation, a New York-domiciled
stock insurance corporation.
<PAGE> 13
"Policy" means the financial guaranty insurance policy issued by
the insurer with respect to regularly scheduled payments due for principal of
and interest on the Senior Secured Insured Quarterly Notes as provided in such
policy.
(d) Transfer. No service charge will be made for any transfer or
exchange of Senior Secured Insured Quarterly Notes, but payment will be required
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith.
The Company shall not be required (a) to issue, transfer or exchange
any Senior Secured Insured Quarterly Notes except to the Insurer during a period
beginning at the opening of business fifteen (15) days before the day of the
mailing of a notice pursuant to Section 12.4 of the Indenture identifying the
serial numbers of the Senior Secured Insured Quarterly Notes to be called for
redemption, and ending at the close of business on the day of the mailing, or
(b) to transfer or exchange any Senior Secured Insured Quarterly Notes
theretofore selected for redemption in whole or in part, except the unredeemed
portion of any Note redeemed in part.
(e) Redemption at the Company's Option. The Senior Secured Insured
Quarterly Notes shall be subject to redemption at the option of the Company, in
whole or in part, without premium or penalty, at any time or from time to time
on or after June 1, 2004 at a Redemption Price equal to 100% of the principal
amount to be redeemed plus accrued but unpaid interest to the Redemption Date.
In the event of redemption of the Senior Secured Insured Quarterly
Notes in part only, a new Senior Secured Insured Quarterly Note or Notes for the
unredeemed portion will be issued in the name or names of the Holders thereof
upon the surrender thereof.
The Senior Secured Insured Quarterly Notes will not have a sinking
fund.
Notice of redemption shall be given as provided in Section 12.4 of the
Indenture.
Any redemption of less than all of the Senior Secured Insured Quarterly
Notes shall, with respect to the principal thereof, be divisible by $1,000.
(f) Redemption at the Holder's Option. For purposes of this provision a
"Beneficial Owner" means the Person who has the right to sell, transfer or
otherwise dispose of an interest in Senior Secured Insured Quarterly Notes and
the right to receive the proceeds therefrom, as well as the interest and
principal payable to the Holder thereof. In general, a determination of
beneficial ownership in the Senior Secured Insured Quarterly Notes will be
determined by the Company, in its sole discretion, which determinations shall be
final and binding on all parties.
Unless the Senior Secured Insured Quarterly Notes have been declared
due and payable prior to their maturity by reason of an Event of Default, the
personal representative or other Person authorized to represent the estate of
the deceased Beneficial Owner or from a surviving joint tenant(s) or tenant(s)
by the entirety (each, a "Representative") of a deceased Beneficial
<PAGE> 14
Owner has the right to request redemption prior to Stated Maturity of all or
part of such interest, expressed in integral multiples of $1,000 principal
amount, in the Senior Secured Insured Quarterly Notes, and the Company will
redeem the same subject to the limitations that the Company will not be
obligated to redeem, during the period from the Original Issue Date through and
including June 1, 2000 (the "Initial Period"), and during any twelve-month
period which ends on and includes each June 1, thereafter (each such
twelve-month period being hereinafter referred to as a "Subsequent Period"), (i)
on behalf of a deceased Beneficial Owner any interest principal amount of
$25,000 or (ii) interests in the Senior Secured Insured Quarterly Notes in an
aggregate principal amount exceeding $1,650,000. A request for redemption may
initiated by the Representative of a deceased Beneficial Owner at any time and
in any principal amount in integral multiples of $1,000. Representatives of
deceased Beneficial Owners must make arrangements with the Participant through
whom such interest is owned in order that timely presentation of redemption
requests can be made by the Participant to the Senior Trustee. If the Company,
although not obligated to do so, chooses to redeem interests of any deceased
Beneficial Owner in the Senior Secured Insured Quarterly Notes in the Initial
Period or any Subsequent Period in excess of the $25,000 limitation, such
redemption, to the extent that it exceeds the $25,000 limitation for any
deceased Beneficial Owner, shall not be included in the computation of the
$1,650,000 limitation for such initial Period or such Subsequent Period, as the
case may be, or for any succeeding Subsequent Period. Any Senior Secured Insured
Note (or portion thereof) tendered pursuant to the redemption request may be
withdrawn by a written request by the Representative received by the Senior
Trustee at least 10 days prior to its repayment.
Subject to the $25,000 and $1,650,000 limitations, the Company will,
after the death of any Beneficial Owner, redeem the interest of such Beneficial
Owner in the Senior Secured Insured Quarterly Notes within 60 days following
receipt by the Senior Trustee of a redemption request. The Senior Trustee will
notify the Company promptly after receipt of any redemption request and the
Company will provide all funds necessary for such redemption prior to the date
of redemption to the Paying Agent. If redemption requests exceed the aggregate
principal amount of interests in Senior Secured Insured Quarterly Notes required
to be redeemed during the Initial Period or during any Subsequent Period, then
such excess redemption requests will be applied in the order received by the
Senior Trustee to successive Subsequent Periods, regardless of the number of
Subsequent Periods required to redeem such interests. All redemption requests
will be redeemed in the order in which trustee receives the redemption request.
To obtain repayment pursuant to a redemption request, the Representative must
provide to the Participant (i) a written request for repayment signed by the
Representative, and such signature must be guaranteed by a member firm of a
registered national securities exchange or of the NASD or a commercial bank or
trust company having an office or correspondent in the United States, (ii)
appropriate evidence satisfactory to the Company and the Senior Trustee that (A)
the Representative has authority to act on behalf of the deceased Beneficial
Owner, (B) the death of such Beneficial Owner has occurred and (C) the deceased
was the owner of a beneficial interest in such Senior Secured Insured Quarterly
Note at the time of death, (iii) if applicable, a properly executed assigned or
endorsed, and (iv) if the beneficial interest in such Senior Secured Insured
Quarterly Note is held by a nominee of the deceased Beneficial Owner, a
certificate satisfactory to the Senior Trustee from such nominee attesting to
the deceased's ownership of a beneficial interest in such Senior
<PAGE> 15
Secured Insured Quarterly Note. The Participant will provide these documents to
the Senior Trustee. All questions as to the eligibility or validity of any
exercise of redemption on behalf of a deceased Beneficial Owner will be
determined by the Company, in its sole discretion, which determinations will be
final and binding on all parties.
For purposes of this provision an interest in Senior Secured Insured
Quarterly Notes held in tenancy by the entirety, joint tenancy or by tenants in
common will be deemed to be held by a single Beneficial Owner and the death of a
tenant by the entirety, joint tenant or tenant in common will be deemed the
death of a Beneficial Owner. The death of a Person who, during his lifetime, was
entitled to subsequently all of the rights of a Beneficial Owner of an interest
in the Senior Secured Insured Quarterly Notes will be deemed the death of the
Beneficial Owner, regardless of the recordation of such interest on the records
of the Participant, if such rights can be established to the satisfaction of the
Participant and the Company.
In the case of any redemption request which is presented pursuant to
this provision and which has not been fulfilled at the time of the Company gives
notice of its election to partially redeem Senior Secured Insured Quarterly
Notes as described in item 3 above, such interest or portion thereof shall not
be subject to redemption pursuant to such item 3 subject to redemption pursuant
to this provision.
(g) Special Insurance Provisions.
(1) Supplemental Indentures. The consent of the Insurer shall
be required with respect to any indenture or indentures supplemental to the
Indenture requiring the consent of the Holders of the Senior Secured Insured
Quarterly Notes pursuant to Section 10.2 of the Senior Indenture.
(2) Events of Default and Remedies. Subject to Section 1.7 of
the Senior Indenture and to the Trust Indenture Act, including, without
limitation, Sections 316(a)(1) and 317(a) thereof, if an Event of Default with
respect to the Senior Secured Insured Quarterly Notes occurs and is continuing,
the Insurer shall be entitled to control and direct the enforcement of all
rights and remedies granted to the Holders of the Senior Secured Insured
Quarterly Notes or the Senior Trustee for the benefit of the Holders of the
Senior Secured Insured Quarterly Notes under the Senior Indenture, including,
without limitation, (i) the right to accelerate the principal of the Senior
Secured Insured Quarterly Notes as provided in Section 6.2 of the Indenture, and
(ii) the right to annul any such declaration of acceleration, and the Insurer
shall also be entitled to approve any waiver of an Event of Default with respect
to the Senior Secured Insured Quarterly Notes, the obligation of the Senior
Trustee to comply with any direction to be subject to compliance with the
conditions set forth in Sections 7.3(e) of the Senior Indenture (as if
references in those Sections to Holders were references to the Insurer) and the
protections provided to the Senior Trustee by Sections 315(d)(3) of the Trust
Indenture Act shall be applicable with respect to any direction from the Insurer
given pursuant thereto (as if references in said Section to Holders were
references to the Insurer).
<PAGE> 16
(3) Insurance Policy Payment Procedures. (a) If, as of the
close of business on the second day next preceding any date on which payment of
principal or interest is due, the Senior Trustee does not have sufficient funds
for any payment of principal or interest on the due date or if the Senior
Trustee has notice that any Holder has been required to disgorge payments of
principal or interest on the Senior Secured Insured Quarterly Notes to a trustee
in bankruptcy or creditors or others pursuant to a final judgement by a court of
competent jurisdiction that such payment constitutes an avoidable preference to
such Holder within the meaning of any applicable bankruptcy laws, then the
Senior Trustee shall notify the Insurer or its designee of such fact by
telephone or telegraph notice, confirmed in writing by registered or certified
mail.
(b) The Senior Trustee is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for Holders of the
Senior Secured Insured Quarterly Notes as follows:
(i) If and to the extent there is a deficiency in
amounts required to pay interest on the Senior Secured Insured
Quarterly Notes, the Senior Trustee shall (x) execute and
deliver to the Insurance Paying Agent, in form satisfactory to
the Insurance Paying Agent, an instrument appointing the
Insurer as agent for such Holders in any legal proceeding
related to the payment of such interest and an assignment to
the Insurer of the claims for interest to which such
deficiency relates and which are paid by the Insurer, (y)
receive as designee of the respective Holders (and not as
Senior Trustee) in accordance with the tenor of the Policy
payment from the Insurance Paying Agent with respect to the
claims for interest to assigned, and (z) disburse the same to
such respective Holders; and
(ii) If and to the extent of a deficiency in amounts
required to pay principal of the Senior Secured Insured
Quarterly Notes, the Senior Trustee shall (x) execute and
deliver to the Insurance Paying Agent in form satisfactory to
the Insurance Paying Agent an instrument appointing the
Insurer as agent for such Holders in any legal proceeding
relating to the payment of such principal and an assignment to
the Insurer of any of the Senior Secured Insured Quarterly
Notes surrendered to the Insurance Paying Agent to the extent
of the principal amount thereof as has not previously been
paid or for which moneys are not held by the Senior Trustee
and available for such payment (but such assignment shall be
delivered only if payment from the Insurance Payment Agent is
received), (y) receive as designee of the respective Holders
(and not as Trustee) in accordance with the tenor of the
Policy payment therefor from the Insurance Paying Agent, and
(z) disburse the same to such Holders.
(c) Payments with respect to claims for interest on and
principal of Senior Secured Insured Quarterly Notes disbursed by the Senior
Trustee from proceeds of the Policy shall not be considered to discharge the
obligation of the Company with respect to such Senior Secured Insured Quarterly
Notes, and the Insurer shall become the owner of such Senior Secured Insured
<PAGE> 17
Quarterly Notes and claims for the interest thereon in accordance with the tenor
of the assignment made to it under the provisions of this subsection or
otherwise.
(d) Irrespective of whether any such assignment is executed
and delivered, the Company and the Senior Trustee hereby agree for the benefit
of the Insurer that,
(i) They recognize that to the extent the Insurer
makes payments, directly or indirectly (as by paying through
the Senior Trustee), on account of principal of or interest on
the Senior Secured Insured Quarterly Notes, the Insurer will
be subrogated to the rights of such Holders to receive the
amount of such principal and interest from the Company, with
respect thereon as provided and solely from the sources stated
in the Senior Indenture and the Senior Secured Insured
Quarterly Notes; and
(ii) They will accordingly pay to the Insurer the
amount of such principal and interest (including principal and
interest recovered under subparagraph (ii) of the first
paragraph of the Policy, which principal and interest shall be
deemed past due and not to have been paid), with interest
thereon as provided in the Senior Indenture and the Senior
Secured Insured Quarterly Note, but only from the sources and
in the manner provided herein for the payment of principal of
and interest on the Senior Secured Insured Quarterly Notes of
Holders, and will otherwise treat the Insurer as the owner of
such rights to the extent of the amount of such principal and
interest.
(4) Application of Term "Outstanding" to Senior Secured
Insured Quarterly Notes. In the event that the principal and/or interest due on
the Senior Secured Insured Quarterly Notes shall be paid by the Insurer pursuant
to the Policy, the Senior Secured Insured Quarterly Notes shall remain
Outstanding for all purposes of the Senior Indenture, not be considered defeased
or otherwise satisfied and not be considered paid by the Company, and the Senior
Indenture and all covenants, agreements and other obligations of the Company to
the Holders of Senior Secured Insured Quarterly Notes shall continue to exist
and such covenants, agreements and other obligations shall run to the benefit of
the Insurer, and the Insurer shall be subrogated to the rights of such Holders
to the extent of such payment.
(5) Insurer as Third Party Beneficiary. To the extent that the
Senior Indenture confers upon or gives or grants to the Insurer any right,
remedy or claim under or by reason of the Senior Indenture, the Insurer is
hereby explicitly recognized as being a third-party beneficiary hereunder and
may enforce any such right, remedy or claim conferred, given or granted
hereunder.
(6) Notices. Any notice that is required to be given to a
Holder of the Senior Secured Insured Quarterly Note or to the Senior Trustee
pursuant to the Senior Indenture shall also be provided to the Insurer. All
notices required to be given to the Insurer under the Senior
<PAGE> 18
Indenture shall be in writing and shall be sent by registered or certified mail
addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York
10504, Attention: IPM-PCF.
(7) These Special Insurance Provisions shall apply
notwithstanding anything in the Senior Indenture to the contrary, but only so
long as the Policy shall be in full force and effect and the Insurer is not in
default thereunder.
(8) Amendments or Supplements. The Senior Trustee, in
determining whether any amendments or supplements to the Senior Indenture may be
made without the consent of the Holders, or in determining whether any action
should be taken, shall consider the effect of such action on the rights of the
Holders as if the Policy were not in effect.
(h) Security; Release Date. Prior to the Release Date (as hereinafter
defined), the Senior Secured Insured Quarterly Notes shall be secured by First
Mortgage Bonds designated as Collateral Bonds, Series C (the "Collateral
Bonds"), delivered by the Company to the Senior Trustee for the benefit of the
Holders of the Senior Secured Insured Quarterly Notes. Prior to the Release
Date, the Company shall make payments of the principal of, and premium, if any,
and or interest on, the Collateral Bonds to the Senior Trustee, which payments
shall be applied by the Senior Trustee to satisfaction of all obligations then
due on the Senior Secured Insured Quarterly Notes. Reference is made to the
Mortgage Indenture and the Senior Indenture for a description of the rights of
the Senior Trustee as holder of the Collateral Bonds, the property mortgaged and
pledged under the Mortgage Indenture and the rights of the Company and of the
Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage
Trustee and the terms and conditions upon which the Collateral Bonds are secured
and the circumstances under which additional First Mortgage Bonds mays issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN
COLLATERAL BONDS) ISSUED UNDER THE MORTGAGE INDENTURE HAVE BEEN RETIRED THROUGH
PAYMENT, REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE MATURITY THEREOF (THE
"RELEASE DATE"), THE COLLATERAL BONDS SHALL CEASE TO SECURE THE SENIOR SECURED
INSURED QUARTERLY NOTES IN ANY MANNER PROVIDED THAT NO DEFAULT OR EVENT OR
DEFAULT HAS OCCURRED AND AT SUCH TIME IS CONTINUING UNDER THE SENIOR INDENTURE.
IN CERTAIN CIRCUMSTANCES PRIOR TO THE RELEASE DATE AS PROVIDED IN THE SENIOR
INDENTURE, THE COMPANY IS PERMITTED TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF
A SERIES OF COLLATERAL BONDS HELD BY THE TRUSTEE, BUT IN NO EVENT PRIOR TO THE
RELEASE DATE TO AN AMOUNT LESS THAN THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT
OF THE SERIES OF SENIOR SECURED INSURED QUARTERLY NOTES INITIALLY ISSUED
CONTEMPORANEOUSLY WITH SUCH COLLATERAL BONDS.
(i) Effect of Event of Default. In case an Event of Default with
respect to the Senior Secured Insured Quarterly Notes shall occur and be
continuing, the unpaid principal of the Senior
<PAGE> 19
Secured Insured Quarterly Notes may be declared due and payable, in the manner,
with the effect and subject to the conditions provided in the Senior Indenture.
(j) Amendments and Waivers. The Senior Indenture may be modified by the
Company and the Senior Trustee without consent of any Holder with respect to
certain matters as described in the Indenture. In addition, the Senior Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Senior Secured Insured Quarterly Note of each series to be
affected under the Senior Indenture at any time by the Company and the Senior
Trustee with the consent of the Holders of a majority in principal amount of the
Senior Insured Quarterly Notes at the time Outstanding of each series to be
affected. The Senior Indenture also contains provisions permitting the Holders
of a majority in principal amount of the Senior Secured Insured Quarterly Note
of each series at the time Outstanding, on behalf of the Holders of all Senior
Secured Insured Quarterly Notes of such series, to waive compliance by the
Company with certain provisions of the Senior Indenture and certain past
defaults under the Senor Indenture and their consequences. Any such consent or
waiver by the Holder of this Senior Secured Insured Quarterly Note shall bind
such Holder and all future Holders of this Senior Secured Insured Quarterly Note
and of any note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Senior Secured Insured Quarterly Note.
(k) Obligations of Company. No reference herein to the Senior Indenture
and no provision of this Senior Secured Insured Quarterly Note or of the Senior
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and any premium, if any, and interest
on this Note at the time, place, and rate and in the coin or currency herein
prescribed.
(l) Denominations, Transfer and Exchange. (1) The Senior Secured
Insured Quarterly Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Senior Indenture and subject to certain limitations therein set forth, Senior
Secured Insured Quarterly Notes of this Series are exchangeable for a like
aggregate principal amount of Senior Secured Insured Quarterly Notes of this
series of a different authorized denomination, as requested by the Holder
surrendering the same.
(2) As provided in the Senior Indenture and subject to certain
limitations therein set forth, the transfer of this Senior Secured Insured
Quarterly Note is registrable in the Security Register, upon surrender of this
Senior Secured Insured Quarterly Note for registration of transfer at the office
or agency of the Company in any place where the principal of (and premium, if
any) and interest on this Senior Secured Insured Quarterly Note are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Senior Secured Insured Quarterly Notes of
<PAGE> 20
this series, and of like tenor, of authorized denominations and for the same
maturity and aggregate principal amount, shall be issued to the designated
transferee or transferees.
(3) No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Senior Secured Insured Quarterly Note for
registration of transfer, the Company, the Senior Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Senior Secured
Insured Quarterly Note is registered as the owner hereof for all purposes,
whether or not this Senior Secured Insured Quarterly Note be overdue, and
neither the Company, the Senior Trustee nor any such agent shall be affected by
notice to the contrary.
(m) No Liability of Certain Persons. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under this Senior Secured Insured Quarterly Note or
the Senior Indenture or for any claim based on, in respect of or by reason of,
such obligations or their creation. Each Holder, by accepting a Senior Secured
Insured Quarterly Note, waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Senior Secured
Insured Quarterly Note.
(n) Governing Law. The Senior Indenture and this Senior Secured Insured
Quarterly Note shall for all purposes be governed by, and construed in
accordance with, the internal laws of the State of New York.
STATEMENT OF INSURANCE
The Insurer has issued a financial guarantee insurance policy (the
"Policy") containing the following provisions, such policy being on file at
Citibank, N.A., New York, New York:
The Insurer, in consideration of the payment of the premium and subject
to the terms of the policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Issuer to
Citibank, N.A., or its successor (the "Paying Agent"), of an amount equal to (i)
the principal of (either at the stated maturity or by any advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due
but shall not be so paid (except that in the event of any acceleration of the
due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
hereby shall be made in such amounts and at such times as such payments of
principal would have been due had there not been any such acceleration); and
(ii) the reimbursement of any such payment which is subsequently recovered from
any owner pursuant to a final judgment by a court of competent jurisdiction that
such payment constitutes an avoidable preference to such owner within the
<PAGE> 21
meaning of any applicable bankruptcy law. The amounts referred to in clauses (i)
and (ii) of the preceding sentence shall be referred to herein collectively as
the "Insured Amounts." "Obligations" shall mean:
$55,000,000
Michigan Consolidated Gas Company 6.85%
Senior Secured Insured Quarterly Notes Due June 2038.
Upon receipt of telephonic or telegraphic notice, such notice
subsequently confirmed in writing by registered or certified mail, or upon
receipt of written notice by registered or certified mail, by the Insurer from
the Paying Agent or any owner of an Obligation the payment of an Insured Amount
for which is then due, that such required payment has not been made, the Insurer
on the due date of such payment or within one business day after receipt of
notice of such nonpayment, whichever is later, will make a deposit of funds, in
an account with State Street Bank and Trust Company, N.A., in New York, New
York, or its successor, sufficient for the payment of any such Insured Amounts
which are then due. Upon presentment and surrender of such Obligations or
presentment of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the assignment of the
Insured Amounts due on the Obligations as are paid by the Insurer, and
appropriate instruments to effect the appointment of the Insurer as agent for
such owners of the Obligations in any legal proceeding related to payment of
Insured Amounts on the Obligations, such instruments being in a form
satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and
Trust Company, N.A. shall disburse to such owners or the Paying Agent payment of
the Insured Amounts due on such Obligations, less any amount held by the Paying
Agent for the payment of such Insured Amounts and legally available therefor.
The policy does not insure against loss of any prepayment premium which may at
any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Issuer,
or any designee of the Issuer for such purpose. The term owner shall not include
the Issuer or any party hose agreement with the Issuer constitutes the
underlying security for the Obligations.
An service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is non-cancelable for any reason. The premium on this
policy is not refundable for any reason including te payment prior to maturity
of the Obligations.
This policy is not covered by the Property/Casualty Insurance Security
Fund specified in Article 76 of the New York Insurance Law.
<PAGE> 22
-------------------------------------------
THE FOLLOWING ABBREVIATIONS SHALL BE CONSTRUED AS THOUGH THE
WORDS SET FORTH BELOW OPPOSITE EACH ABBREVIATION WERE WRITTEN OUT
IN FULL WHERE SUCH ABBREVIATION APPEARS:
TEN COM -- as tenants in common (Name) CUST (Name) UNIF -- (Name) as
Custodian
TEN ENT -- as tenants by the entirety GIFT MIN ACT (state) for (name) under
the (State)
JF TEN -- as joint tenants with Uniform Gifts to
right of survivorship Minor Act
and not as tenants
in common
ADDITIONAL ABBREVIATION MAY ALSO BE USED THOUGH NOT IN THE ABOVE
LIST.
-------------------------------------------
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: Your Signature:
-------------- ----------------------------
(Sign exactly as your name
appears on the other
side of this Note)
Signature Guarantee:
------------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Transfer Agent,
which requirements will include membership or participation
in STAMP or such other "signature guarantee program" as may
be determined by the Transfer Agent in addition to, or in
substitution for, STAMP, all in accordance with the Exchange
Act.)
Social Security Number or Taxpayer Identification
Number:
------------------------------------------
<PAGE> 23
Annex II
$55,000,000
THIS NOTE IS IN GLOBAL FORM WITHIN THE MEANING OF THE SENIOR INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR A NOTE IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
MICHIGAN CONSOLIDATED GAS COMPANY
6.85% Senior Notes
due 2039
Principal Amount: $55,000,000
Authorized Denomination: $25
Regular Record Date: close of business on the 15th calendar day prior to the
relevant Interest Payment Date
Original Issue Date: June 9, 1999
Stated Maturity: June 1, 2039
Interest Payment Dates: March 1, June 1, September 1 and December 1
Interest Rate: 6.85% per annum
<PAGE> 24
MICHIGAN CONSOLIDATED GAS COMPANY, a corporation duly organized and
existing under the laws of the State of Michigan (the "Company", which term
includes any successor corporation under the Senior Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co. or
registered assigns, at the office or agency of the Company in The City of New
York, New York, the principal sum of FIFTY-FIVE MILLION DOLLARS ($55,000,000) on
June 1, 2039 (the "Stated Maturity Date"), in the coin or currency of the United
States, and to pay interest thereon from the Original Issue Date shown above, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly in arrears on each Interest Payment Date as
specified above, commencing on September 1, 1999 and on the Stated Maturity at
the rate per annum shown above (the "Interest Rate") until the principal hereof
is paid or made available for payment and on any overdue principal and on any
overdue installment of interest. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date (other than an Interest Payment
Date that is the Stated Maturity or a Redemption Date) will, as provided in the
Senior Indenture, be paid to the Person in whose name this 6.85% Senior Note Due
2039 is registered on the Regular Record Date as specified above next preceding
such Interest Payment Date; provided that any interest payable at Stated
Maturity or on a Redemption Date will be paid to the Person to whom principal is
payable. Except as otherwise provided in the Indenture, any such interest not so
punctually paid or duly provided for will forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Senior Note is registered at the close of business on a Special Record
Date for the payment of such defaulted Interest to be fixed by the Senior
Trustee, notice whereof shall be given to Holders of securities of this series
not less than 10 days prior to such special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the securities of this series shall be
listed, and upon such notice as may be required by any such exchange, all as
more fully provided in the Senior Indenture.
Payments of interest on this Senior Note will include interest accrued to
but excluding the respective Interest Payment Dates. Interest payments for this
Senior Note shall be computed and paid on the basis of a 360-day year of twelve
30-day months. In the event that any date on which interest is payable on this
Senior Note is not a business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or payment in respect of any such delay) with the same force and
effect as if made on the date the payment was originally payable. "Business Day"
means a day other than (i) a Saturday or a Sunday, (ii) a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office is closed for business.
Payment of principal of, premium, if any, and interest on the securities of
this series shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. Payments of principal of, premium, if any, and interest on
securities of this series represented by a Global Security shall be made by wire
transfer of immediately available funds to the Holder of such Global Security,
provided that, in the case of payments of principal and premium, if any, such
Global Security is first surrendered to the Paying
<PAGE> 25
Agent (as defined in the Senior Indenture). If any of the Securities of this
series are not longer represented by a Global Security, (i) payments of
principal, premium, if any, and interest due at the Stated Maturity or earlier
redemption of such Securities shall be made at the office of the Paying Agent
upon surrender of such Securities to the Paying Agent, and (ii) payments of
interest shall be made, at the option of the Company, subject to such surrender
where applicable, (A) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (B) by wire
transfer at such place and to such account at a banking institution in the
United States as may be designated in writing to the Trustee at least sixteen
(16) days prior to the date for payment by the Person entitled thereto.
UNTIL THE RELEASE DATE (AS DEFINED ON THE REVERSE HEREOF), THIS SENIOR NOTE
SHALL BE SECURED BY FIRST MORTGAGE BONDS (THE "FIRST MORTGAGE BONDS") ISSUED AND
DELIVERED BY THE COMPANY TO THE SENIOR TRUSTEE (AS DEFINED ON THE REVERSE
HEREOF) UNDER THE COMPANY'S TWENTY-NINTH SUPPLEMENTAL INDENTURE DATED AS OF JULY
15, 1989, PROVIDING FOR THE RESTATEMENT OF THE INDENTURE OF MORTGAGE AND DEED OF
TRUST DATED AS OF MARCH 1, 1994 BETWEEN THE COMPANY AND CITIBANK, N.A. (THE
"MORTGAGE TRUSTEE") AND ROBERT T. KIRCHNER (THE "INDIVIDUAL TRUSTEE"), AS
SUPPLEMENTED BY THE THIRTY-FIFTH SUPPLEMENTAL INDENTURE (AS SO SUPPLEMENTED, THE
"MORTGAGE INDENTURE"). ON THE RELEASE DATE, THE SENIOR NOTES SHALL CEASE TO BE
SECURED BY SUCH FIRST MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, EITHER (i)
SHALL BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (ii) SHALL BE
SECURED BY FIRST MORTGAGE BONDS UNDER A SECURED MORTGAGE INDENTURE OTHER THAN
THE MORTGAGE INDENTURE.
Reference is made to the further provisions of this Senior Note set forth
on the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
This Senior Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Senior Trustee under the Senior Indenture referred to on the reverse
hereof.
<PAGE> 26
IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused this
instrument to be duly executed under its corporate seal.
Dated: June 9, 1999
MICHIGAN CONSOLIDATED GAS COMPANY
By:
----------------------------------
Title:
------------------------
Attest:
By:
--------------------------------
Title:
CERTIFICATION OF AUTHENTICATION
Dated: June 9, 1999
This is one of the Securities of the series designated therein referred
to in the within-mentioned Senior Indenture.
CITIBANK, N.A., as Trustee
By:
------------------------------------
Authorized Signatory
<PAGE> 27
MICHIGAN CONSOLIDATED GAS COMPANY
6.85% Senior Notes
due 2039
(o) Senior Indenture. (1) This Senior Note is one of the duly authorized
issue of securities of the Company (hereinafter called the "Notes") of the
series hereinafter specified, all issued or to be issued under and pursuant to
an Indenture, dated as of June 1, 1998, as supplemented by the first
supplemental Indenture, dated as of June 18, 1998 and the Second Supplemental
Indenture dated as of June 9, 1999, between the Company and the Trustee (as so
supplemented, the "Senior Indenture"), duly executed and delivered by the
Company to Citibank, N.A., as Trustee (herein called the "Senior Trustee," which
term includes any successor trustee under the Senior Indenture), to which Senior
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Senior Trustee,
the Company and the Holders of the Notes. The Notes may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times , may bear interest, if any, at different
rates, may be subject to different redemption provisions (if any) and may be
subject to different sinking, purchase or analogous funds (if any) and may
otherwise vary as provided in the Indenture. This Note is one of the series
designated as the 6.85% Senior Notes (the "Senior Notes") of the Company, which
series is limited in aggregate principal amount to $55,000,000.
(2) Interest shall be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue principal and, to the
extent lawful, on overdue installments of interest at the rate per annum borne
by this Note. For purposes hereof, the term "Business Day" means any day other
than a Saturday or Sunday or a day on which banking institutions in The City of
New York are required or authorized to close.
(3) The Company shall make payment of any principal or interest due on
the Notes to the Trustee by the close of business on the second day next
preceding the date on which such payment is due to the Holders of the Senior
Notes.
(4) The following defined terms used herein shall, unless the context
otherwise requires, have the meanings specified below. Capitalized terms used
herein for which no definition is provided herein shall have the meanings set
forth in the Indenture.
"Insurance Paying Agent" means State Street Bank and Trust Company,
N.A., New York, New York, or any successor thereto, as the Fiscal Agent under
the Policy.
"Insurer" means MBIA Insurance Corporation, a New York-domiciled stock
insurance corporation.
<PAGE> 28
"Policy" means the financial guaranty insurance policy issued by the
insurer with respect to regularly scheduled payments due for principal of and
interest on the Senior Notes as provided in such policy.
(p) Transfer. No service charge will be made for any transfer or exchange
of Senior Notes, but payment will be required of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
The Company shall not be required (a) to issue, transfer or exchange any
Senior Notes except to the Insurer during a period beginning at the opening of
business fifteen (15) days before the day of the mailing of a notice pursuant to
Section 12.4 of the Indenture identifying the serial numbers of the Senior Notes
to be called for redemption, and ending at the close of business on the day of
the mailing, or (b) to transfer or exchange any Senior Notes theretofore
selected for redemption in whole or in part, except the unredeemed portion of
any Note redeemed in part.
(q) Redemption at the Company's Option. The Senior Notes shall be subject
to redemption at the option of the Company, in whole or in part, without premium
or penalty, at any time or from time to time on or after June 1, 2004 at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest to the Redemption Date.
In the event of redemption of the Senior Notes in part only, a new Senior
Note or Notes for the unredeemed portion will be issued in the name or names of
the Holders thereof upon the surrender thereof.
The Senior Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 12.4 of the
Indenture.
Any redemption of less than all of the Senior Notes shall, with respect to
the principal thereof, be divisible by $25.
(r) Special Insurance Provisions.
(1) Supplemental Indentures. The consent of the Insurer shall be
required with respect to any indenture or indentures supplemental to the Senior
Indenture requiring the consent of the Holders of the Senior Notes pursuant to
Section 10.2 of the Indenture.
(2) Events of Default and Remedies. Subject to Section 1.7 of the
Indenture and to the Trust Indenture Act, including, without limitation,
Sections 316(a)(1) and 317(a) thereof, if an Event of Default with respect to
the Senior Notes occurs and is continuing, the Insurer shall be entitled to
control and direct the enforcement of all rights and remedies granted to the
Holders of the Senior Notes or the Senior Trustee for the benefit of the Holders
of the Senior Notes under the Senior Indenture, including, without limitation,
(i) the right to accelerate the principal of the Senior Notes as provided in
Section 6.2 of the Senior Indenture, and (ii) the right to annul any
<PAGE> 29
such declaration of acceleration, and the Insurer shall also be entitled to
approve any waiver of an Event of Default with respect to the Senior Notes, the
obligation of the Senior Trustee to comply with any direction to be subject to
compliance with the conditions set forth in Sections 7.3(e) of the Senior
Indenture (as if references in those Sections to Holders were references to the
Insurer) and the protections provided to the Trustee by Sections 315(d)(3) of
the Trust Indenture Act shall be applicable with respect to any direction from
the Insurer given pursuant thereto (as if references in said Section to Holders
were references to the Insurer).
(3) Insurance Policy Payment Procedures. (a) If, as of the close of
business on the second day next preceding any date on which payment of principal
or interest is due, the Trustee does not have sufficient funds for any payment
of principal or interest on the due date or if the Senior Trustee has notice
that any Holder has been required to disgorge payments of principal or interest
on the Senior Notes to a trustee in bankruptcy or creditors or others pursuant
to a final judgement by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Holder within the meaning of any
applicable bankruptcy laws, then the Senior Trustee shall notify the Insurer or
its designee of such fact by telephone or telegraph notice, confirmed in writing
by registered or certified mail.
(b) The Trustee is hereby irrevocably designated, appointed, directed
and authorized to act as attorney-in-fact for Holders of the Senior Notes as
follows:
1. If and to the extent there is a deficiency in amounts required
to pay interest on the Senior Notes, the Senior Trustee shall (x)
execute and deliver to the Insurance Paying Agent, in form satisfactory
to the Insurance Paying Agent, an instrument appointing the Insurer as
agent for such Holders in any legal proceeding related to the payment
of such interest and an assignment to the Insurer of the claims for
interest to which such deficiency relates and which are paid by the
Insurer, (y) receive as designee of the respective Holders (and not as
Senior Trustee) in accordance with the tenor of the Policy payment from
the Insurance Paying Agent with respect to the claims for interest to
assigned, and (z) disburse the same to such respective Holders; and
2. If and to the extent of a deficiency in amounts required to pay
principal of the Senior Notes, the Senior Trustee shall (x) execute and
deliver to the Insurance Paying Agent in form satisfactory to the
Insurance Paying Agent an instrument appointing the Insurer as agent
for such Holders in any legal proceeding relating to the payment of
such principal and an assignment to the Insurer of any of the Senior
Notes surrendered to the Insurance Paying Agent to the extent of the
principal amount thereof as has not previously been paid or for which
moneys are not held by the Senior Trustee and available for such
payment (but such assignment shall be delivered only if payment from
the Insurance Payment Agent is received), (y) receive as designee of
the respective Holders (and not as Trustee) in accordance with the
tenor of the Policy payment therefor from the Insurance Paying Agent,
and (z) disburse the same to such Holders.
<PAGE> 30
(c) Payments with respect to claims for interest on and principal of
Senior Notes disbursed by the Senior Trustee from proceeds of the Policy shall
not be considered to discharge the obligation of the Company with respect to
such Senior Notes, and the Insurer shall become the owner of such Senior Notes
and claims for the interest thereon in accordance with the tenor of the
assignment made to it under the provisions of this subsection or otherwise.
(d) Irrespective of whether any such assignment is executed and
delivered, the Company and the Senior Trustee hereby agree for the benefit of
the Insurer that,
1. They recognize that to the extent the Insurer makes payments,
directly or indirectly (as by paying through the Senior Trustee), on
account of principal of or interest on the Senior Notes, the Insurer
will be subrogated to the rights of such Holders to receive the amount
of such principal and interest from the Company, with respect thereon
as provided and solely from the sources stated in the Senior Indenture
and the Senior Notes; and
2. They will accordingly pay to the Insurer the amount of such
principal and interest (including principal and interest recovered
under subparagraph (ii) of the first paragraph of the Policy, which
principal and interest shall be deemed past due and not to have been
paid), with interest thereon as provided in the Senior Indenture and
the Senior Note, but only from the sources and in the manner provided
herein for the payment of principal of and interest on the Senior Notes
of Holders, and will otherwise treat the Insurer as the owner of such
rights to the extent of the amount of such principal and interest.
(4) Application of Term "Outstanding" to Senior Notes. In the event
that the principal and/or interest due on the Senior Notes shall be paid by the
Insurer pursuant to the Policy, the Senior Notes shall remain Outstanding for
all purposes of the Senior Indenture, not be considered defeased or otherwise
satisfied and not be considered paid by the Company, and the Senior Indenture
and all covenants, agreements and other obligations of the Company to the
Holders of Senior Notes shall continue to exist and such covenants, agreements
and other obligations shall run to the benefit of the Insurer, and the Insurer
shall be subrogated to the rights of such Holders to the extent of such payment.
(5) Insurer as Third Party Beneficiary. To the extent that the Senior
Indenture confers upon or gives or grants to the Insurer any right, remedy or
claim under or by reason of the Senior Indenture, the Insurer is hereby
explicitly recognized as being a third-party beneficiary hereunder and may
enforce any such right, remedy or claim conferred, given or granted hereunder.
(6) Notices. Any notice that is required to be given to a Holder of the
Senior Note or to the Trustee pursuant to the Senior Indenture shall also be
provided to the Insurer. All notices required to be given to the Insurer under
the Senior Indenture shall be in writing and shall be sent by registered or
certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk,
New York 10504, Attention: IPM-DCF.
<PAGE> 31
(7) These Special Insurance Provisions shall apply notwithstanding
anything in the Senior Indenture to the contrary, but only so long as the Policy
shall be in full force and effect and the Insurer is not in default thereunder.
(8) Amendments or Supplements. The Senior Trustee, in determining
whether any amendments or supplements to the Senior Indenture may be made
without the consent of the Holders, or in determining whether any action should
be taken, shall consider the effect of such action on the rights of the Holders
as if the Policy were not in effect.
(s) Security; Release Date. Prior to the Release Date (as hereinafter
defined), the Senior Notes shall be secured by First Mortgage Bonds designated
as Collateral Bonds, Series D (the "Collateral Bonds"), delivered by the Company
to the Senior Trustee for the benefit of the Holders of the Senior Notes. Prior
to the Release Date, the Company shall make payments of the principal of, and
premium, if any, and or interest on, the Collateral Bonds to the Senior Trustee,
which payments shall be applied by the Senior Trustee to satisfaction of all
obligations then due on the Senior Notes. Reference is made to the Mortgage
Indenture and the Senior Indenture for a description of the rights of the Senior
Trustee as holder of the Collateral Bonds, the property mortgaged and pledged
under the Mortgage Indenture and the rights of the Company and of the Mortgage
Trustee in respect thereof, the duties and immunities of the Mortgage Trustee
and the terms and conditions upon which the Collateral Bonds are secured and the
circumstances under which additional First Mortgage Bonds mays issued.
FROM AND AFTER SUCH TIME AS ALL FIRST MORTGAGE BONDS (OTHER THAN COLLATERAL
BONDS) ISSUED UNDER THE MORTGAGE INDENTURE HAVE BEEN RETIRED THROUGH PAYMENT,
REDEMPTION OR OTHERWISE AT, BEFORE OR AFTER THE MATURITY THEREOF (THE "RELEASE
DATE"), THE COLLATERAL BONDS SHALL CEASE TO SECURE THE SENIOR NOTES IN ANY
MANNER PROVIDED THAT NO DEFAULT OR EVENT OR DEFAULT HAS OCCURRED AND AT SUCH
TIME IS CONTINUING UNDER THE SENIOR INDENTURE. IN CERTAIN CIRCUMSTANCES PRIOR TO
THE RELEASE DATE AS PROVIDED IN THE SENIOR INDENTURE, THE COMPANY IS PERMITTED
TO REDUCE THE AGGREGATE PRINCIPAL AMOUNT OF A SERIES OF COLLATERAL BONDS HELD BY
THE TRUSTEE, BUT IN NO EVENT PRIOR TO THE RELEASE DATE TO AN AMOUNT LESS THAN
THE AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF THE SERIES OF SENIOR NOTES
INITIALLY ISSUED CONTEMPORANEOUSLY WITH SUCH COLLATERAL BONDS.
(t) Effect of Event of Default. In case an Event of Default with respect to
the Senior Notes shall occur and be continuing, the unpaid principal of the
Senior Notes may be declared due and payable, in the manner, with the effect and
subject to the conditions provided in the Senior Indenture.
(u) Amendments and Waivers. The Senior Indenture may be modified by the
Company and the Senior Trustee without consent of any Holder with respect to
certain matters as described in
<PAGE> 32
the Indenture. In addition, the Senior Indenture permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of the Company and the rights of the Holders of the
Senior Note of each series to be affected under the Senior Indenture at any time
by the Company and the Senior Trustee with the consent of the Holders of a
majority in principal amount of the Senior Notes at the time Outstanding of each
series to be affected. The Senior Indenture also contains provisions permitting
the Holders of a majority in principal amount of the Senior Note of each series
at the time Outstanding, on behalf of the Holders of all Senior Notes of such
series, to waive compliance by the Company with certain provisions of the Senior
Indenture and certain past defaults under the Senor Indenture and their
consequences. Any such consent or waiver by the Holder of this Senior Note shall
bind such Holder and all future Holders of this Senior Note and of any note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Senior Note.
(v) Obligations of Company. No reference herein to the Senior Indenture and
no provision of this Senior Note or of the Senior Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and any premium, if any, and interest on this Note at the
time, place, and rate and in the coin or currency herein prescribed.
(w) Denominations, Transfer and Exchange. (1) The Senior Notes are issuable
only in registered form without coupons in denominations of $25 and any integral
multiple thereof. As provided in the Senior Indenture and subject to certain
limitations therein set forth, Senior Notes of this Series are exchangeable for
a like aggregate principal amount of Senior Notes of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
(2) As provided in the Senior Indenture and subject to certain
limitations therein set forth, the transfer of this Senior Note is registrable
in the Security Register, upon surrender of this Senior Note for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest on this Senior Note are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Senior Notes of this series, and of like tenor, of authorized
denominations and for the same maturity and aggregate principal amount, shall be
issued to the designated transferee or transferees.
(3) No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Senior Note for registration of transfer, the
Company, the Senior Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Senior Note is registered as the owner
hereof for all purposes, whether or not this Senior Note be overdue, and neither
the Company, the Senior Trustee nor any such agent shall be affected by notice
to the contrary.
<PAGE> 33
(x) No Liability of Certain Persons. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under this Senior Note or the Senior Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder, by accepting a Senior Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of this Senior Note.
(y) Governing Law. The Senior Indenture and this Senior Note shall for all
purposes be governed by, and construed in accordance with, the internal laws of
the State of New York.
<PAGE> 34
STATEMENT OF INSURANCE
The Insurer has issued a financial guaranty insurance policy (the "Policy")
containing the following provisions, such policy being on file at Citibank, N.A.
in New York, New York:
The Insurer, in consideration of the payment of the premium and subject to
the terms of the policy, hereby unconditionally and irrevocably guarantees to
any owner, as hereinafter defined, of the following described obligations, the
full and complete payment required to be made by or on behalf of the Issuer to
Citibank, N.A. or its successor (the "Paying Agent"), of an amount equal to (i)
the principal of (either at the stated maturity or by any advancement of
maturity pursuant to a mandatory sinking fund payment) and interest on, the
Obligations (as that term is defined below) as such payments shall become due
but shall not be so paid (except that in the event of any acceleration of the
due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of
maturity pursuant to a mandatory sinking fund payment, the payments guaranteed
hereby shall be made in such amounts and at such times as such payments of
principal would have been due had there not been any such acceleration); and
(ii) the reimbursement of any such payment which is subsequently recovered from
any owner pursuant to a final judgment by a court of competent jurisdiction that
such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses (i)
and (ii) of the preceding sentence shall be referred to herein collectively as
the "Insured Amounts." "Obligations" shall mean:
$55,000,000
Michigan Consolidated Gas Company
6.85% Senior Notes Due 2039.
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of written
notice by registered or certified mail, by the Insurer from the Paying Agent or
any owner of an Obligation the payment of an Insured Amount for which is then
due, that such required payment has not been made, the Insurer on the due date
of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with
State Street Bank and Trust Company, N.A., in New York, New York, or its
successor, sufficient for the payment of any such Insured Amounts which are then
due. Upon presentment and surrender of such Obligations or presentment of such
other proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate instruments to
effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts on the
Obligations, such instruments being in a form satisfactory to State Street Bank
and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners or the Paying Agent payment of the Insured Amounts due
on such Obligations, less any amount held by the Paying Agent for the payment of
<PAGE> 35
such Insured Amounts and legally available therefor. The policy does not insure
against loss of any prepayment premium which may at any time be payable with
respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Issuer,
or any designee of the Issuer for such purpose. The term owner shall not include
the Issuer or any party hose agreement with the Issuer constitutes the
underlying security for the Obligations.
An service of process on the Insurer may be made to the Insurer at its
offices located at 113 King Street, Armonk, New York 10504 and such service of
process shall be valid and binding.
This policy is non-cancelable for any reason. The premium on this policy is
not refundable for any reason including te payment prior to maturity of the
Obligations.
This policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law.
<PAGE> 36
-------------------------------------------
THE FOLLOWING ABBREVIATIONS SHALL BE CONSTRUED AS THOUGH THE
WORDS SET FORTH BELOW OPPOSITE EACH ABBREVIATION WERE WRITTEN OUT
IN FULL WHERE SUCH ABBREVIATION APPEARS:
TEN COM -- as tenants in common (Name) CUST (Name) UNIF -- (Name) as
Custodian
TEN ENT -- as tenants by the entirety GIFT MIN ACT (state) for (name) under
the (State)
JF TEN -- as joint tenants with Uniform Gifts to
right of survivorship Minor Act
and not as tenants
in common
ADDITIONAL ABBREVIATION MAY ALSO BE USED THOUGH NOT IN THE ABOVE
LIST.
-------------------------------------------
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
---------------------------------------------------------
agent to transfer this Note on the books of the Company. the agent may
substitute another to act for him.
Dated: Your Signature:
-------------- ----------------------------
(Sign exactly as your name
appears on the other
side of this Note)
Signature Guarantee:
------------------------------------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Transfer Agent,
which requirements will include membership or participation
in STAMP or such other "signature guarantee program" as may
be determined by the Transfer Agent in addition to, or in
substitution for, STAMP, all in accordance with the Exchange
Act.)
Social Security Number or Taxpayer Identification
Number:
------------------------------------------
<PAGE> 37
ANNEX III
No. Principal Amount
$55,000,000
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS, COLLATERAL SERIES C
being a series of
FIRST MORTGAGE BONDS
ORIGINAL ISSUE DATE: June 9, 1999 MATURITY DATE: June 1, 2038
THE FIRST MORTGAGE BONDS, COLLATERAL SERIES C (HEREINAFTER, "COLLATERAL BONDS"),
REPRESENTED BY THIS CERTIFICATE ARE BEING ISSUED AND DELIVERED BY THE COMPANY TO
CITIBANK, N.A., AS TRUSTEE (IN SUCH CAPACITY, THE "SENIOR TRUSTEE") UNDER AN
INDENTURE, DATED AS OF JUNE 1, 1998 BETWEEN THE COMPANY AND THE SENIOR TRUSTEE,
AS SUPPLEMENTED BY THE FIRST SUPPLEMENTAL INDENTURE THERETO DATED AS OF JUNE 18,
1998 AND THE SECOND SUPPLEMENTAL INDENTURE THRETO DATED AS OF JUNE 9, 1999 (AS
SO SUPPLEMENTED, THE "SENIOR INDENTURE"). THE COLLATERAL BONDS ARE TO BE HELD IN
TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF $55,000,000 AGGREGATE
PRINCIPAL AMOUNT OF 6.85% SENIOR SECURED INSURED QUARTERLY NOTES DUE 2038 (THE
"RELATED NOTES") ISSUED PURSUANT TO THE SENIOR INDENTURE.
THE COLLATERAL BONDS MAY NOT BE SOLD OR OTHERWISE TRANSFERRED (EXCEPT TO A
SUCCESSOR TRUSTEE) UNTIL THE EARLIER OF THE RELEASE DATE (AS DEFINED BELOW) OR
THE PRIOR RETIREMENT OF THE RELATED NOTES THROUGH REDEMPTION, REPURCHASE OR
OTHERWISE.
THE INTEREST RATE ON THE COLLATERAL BONDS SHALL AT ALL TIMES BE IDENTICAL TO
THAT OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN, THE RELATED NOTES,
A FORM OF WHICH IS ANNEXED HERETO AS ANNEX I.
THE INTEREST PAYMENT DATES IN RESPECT OF THE COLLATERAL BONDS SHALL AT ALL TIMES
BE IDENTICAL TO THOSE OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN,
THE RELATED NOTES.
THE COMPANY SHALL MAKE PAYMENTS OF THE PRINCIPAL OF, AND PREMIUM, IF ANY, AND
INTEREST ON, THE COLLATERAL BONDS, TO THE SENIOR TRUSTEE, WHICH PAYMENTS SHALL
BE APPLIED BY THE SENIOR TRUSTEE TO THE SATISFACTION OF OBLIGATIONS ON THE
RELATED NOTES.
<PAGE> 38
THE MATURITY DATE SPECIFIED ABOVE IS ALSO THE MATURITY DATE OF THE RELATED
NOTES.
MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises to pay
to CITIBANK, N.A., as trustee for the benefit of the holders of the Related
Notes, or registered assigns (in such capacity, the "Senior Trustee"), the sum
of FIFTY-FIVE MILLION DOLLARS ($55,000,000).
The Maturity Date specified above, at the corporate trust office of the
Mortgage Trustee hereinafter named in the Borough of Manhattan, The City of New
York, New York, or at the principal office of any successor in trust, in lawful
money of the United States of America, and to pay interest thereon at the
Interest Rate(s) from time to time specified in or determined pursuant to the
Related Notes, in like lawful money payable at the office or agency of the
Company in the Borough of Manhattan, The City of New York, New York on such
interest payment date(s) and on the Maturity Date (each an "Interest Payment
Date") as provided in the Related Notes, from the Original Issue Date specified
above or from the most recent Interest Payment Date to which interest has been
paid, commencing on the Interest Payment Date next succeeding the Original Issue
Date until the Company's obligation with respect to the payment of such
principal sum shall be discharged provided in the Secured Indenture hereinafter
mentioned and the Senior Indenture. If the date of the Collateral Bonds
presented by this certificate is after a Record Date (as defined below) with
respect to any Interest Payment Date and prior to the Interest Payment Date,
then payment of interest shall commence on the second Interest Payment Date
succeeding the date. If the Company shall default in the payment of interest due
on any Interest Payment Date, then interest shall be payable from the next
preceding Interest Payment Date to which interest has been paid, or, if no such
interest has been paid on the Collateral Bonds represented by this certificate,
from the Original Issue Date. So long as there is no existing default in the
payment of interest, the person in whose name the Collateral Bonds represented
by this certificate were registered at the close of business on the relevant
Record Date with respect to an Interest Payment Date shall be entitled to
receive the interest payable on such Interest Payment Date, except that if the
Company shall default in the payment of interest due on such Interest Payment
Date, such defaulted interest shall be paid to the person in whose name the
Collateral Bonds presented by this Certificate are registered on the Record Date
for the Interest Payment Date fixed by the Company for the payment of such
defaulted interest, provided that in no case shall such Record Date be less than
ten days after notice thereof shall have been mailed to all registered holders
of Collateral Bonds. The term "Record Date" as used herein with respect to any
Interest Payment Date shall mean the last Business Day which is more than ten
calendar days prior to such Interest Payment Date.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are required or authorized
to close.
The bonds represented by this certificate, of the series hereinafter
specified, are bonds of the Company (herein called the "bonds") known as its
"First Mortgage Bonds", issued and to be
<PAGE> 39
issued in one or more series under, and all equally and ratably secured by, an
Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed
by the Company to City Bank Farmers Trust Company (now known as Citibank, N.A.,
successor trustee, as "Mortgage Trustee") Ralph E. Morton (Robert T. Kirchner,
successor individual trustee and, together with Citibank, N.A., the "Secured
Trustees") as restated in Part II of the Twenty-ninth Supplemental Indenture
dated as of July 15, 1989, which became effective on April 1, 1994, to which
indenture and all indentures supplemental thereto executed on and after July 15,
1989 reference is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security, the terms and conditions upon
which the bonds are, and are to be, issued and secured, and the rights of the
holders of the bonds of the Secured Trustees in respect of such security (which
indenture and all indentures supplemental thereto, including the Thirty-fifth
Supplemental Indenture dated as of June 18, 1998, are hereinafter collectively
called the "Secured Indenture"). As provided in the Secured Indenture, the bonds
may be for various principal sums and are issuable in series which may mature at
different times, may bear interest at different rates and may otherwise vary as
therein provided. The bonds represented by this certificate are part of a Series
designated "Collateral Bonds," herein called Collateral Bonds, created by the
Thirty-fifth Supplemental Indenture dated as of June 18, 1998, as provided for
in the Secured Indenture.
With the consent of the Company and to the extent permitted by and as
provided in the Secured Indenture and the Senior Indenture, the rights and
obligations of the Company and/or the rights of the holders of the Collateral
Bonds of the thirty-second Series and/or the terms and provisions of the Secured
Indenture may be modified or altered by such affirmative vote or votes of the
holders of the Related Notes then outstanding as are specified in the Senior
Indenture.
The Collateral Bonds shall be redeemed if and to the extent Related
Notes are redeemed, as provided in the Senior Indenture with respect to the
Related Notes and in the Related Notes.
In case an event of default as defined in the Secured Indenture or the
Senior Indenture shall occur, the principal of the Collateral Bonds may become
or be declared due and payable in the manner, with the effect, and subject to
the conditions provided in the Secured Indenture and the Senior Indenture.
The Senior Trustee has agreed pursuant to the Senior Indenture to hold
the Collateral Bonds as collateral for the benefit of the holders of the Related
Notes under all circumstances and not to transfer (except to a successor
trustee) such Collateral Bonds until the earlier of the Release Date or the
prior retirement of the Related Notes through redemption, purchase or otherwise.
"Release Date" means the date on which all First Mortgage Bonds of the Company
issued and outstanding under the Secured Indenture, other than the Collateral
Bonds (as defined in the Senior Indenture), have been retired (at, before or
after the maturity hereof) through payment, redemption or otherwise provided
that no default or event of default has occurred and is continuing under the
Senior Indenture. On the Release Date, the Senior Trustee shall deliver to the
Company for cancellation all Collateral Bonds, and the Company shall cause the
Senior Trustee to provide notice to all holders of Related Notes of the
occurrence of the Release Date.
<PAGE> 40
As a result, on the Release Date, the Collateral Bonds shall cease to secure the
Related Notes. Following the Release Date, the Company shall cause the Secured
Indenture to be closed, and the Company shall issue any additional Collateral
Bonds to be issued thereunder. From and after the Release Date, the Company's
obligations in respect of the Collateral Bonds shall be satisfied and
discharged.
No recourse shall be had for the payment of the principal of, or the
interest on, the Collateral Bonds, or for any claim based hereon or otherwise in
respect of the Collateral Bonds or the Secured Indenture, Senior Indenture or
any Indenture supplemental to either thereof, or against any incorporator,
stockholder, director or officer, past, present or future, the Company, as such,
or any predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether by virtue of
any constitution, state or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability, whether at common law, in equity,
by any constitution, statute or otherwise, of incorporators, stockholders,
directors or officers being waived and released by the owner hereof and every
owner of any Related Note by the acceptance of the Collateral Bonds or such
Related Note, as the case may be, and as part of the consideration for the issue
thereof, and being likewise waived and released pursuant to the Secured
Indenture and the Senior Indenture.
The Collateral Bonds shall not be valid or become obligatory for any
purpose unless and until the certificate of authentication hereon shall have
been manually executed by the Mortgage Trustee or its successor in trust under
the Secured Indenture.
<PAGE> 41
IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused
this bond to be executed under its name with the signature of its Chairman,
President, Vice Chairman or a Vice-President, or any other officer selected by
the Board of Directors under its corporate seal, which may be a facsimile,
attested with the signature of its Secretary or one of its Assistant Secretary.
Dated: June 9, 1999
MICHIGAN CONSOLIDATED GAS COMPANY
By:
--------------------------------
Title:
Attest:
By:
---------------------------
Title:
<PAGE> 42
CERTIFICATE OF AUTHENTICATION
This is one of the bonds of the series designated therein, described in
the within--mentioned Indenture and Thirty-fifth Supplemental Indenture.
Dated: June 9, 1999
CITIBANK, N.A., as Trustee
By:
------------------------------
Authorized Signatory
<PAGE> 43
ANNEX IV
No. Principal Amount
$55,000,000
MICHIGAN CONSOLIDATED GAS COMPANY
FIRST MORTGAGE BONDS, COLLATERAL SERIES D
being a series of
FIRST MORTGAGE BONDS
ORIGINAL ISSUE DATE: June 9, 1999 MATURITY DATE: June 1, 2039
THE FIRST MORTGAGE BONDS, COLLATERAL SERIES D (HEREINAFTER, "COLLATERAL BONDS"),
REPRESENTED BY THIS CERTIFICATE ARE BEING ISSUED AND DELIVERED BY THE COMPANY TO
CITIBANK, N.A., AS TRUSTEE (IN SUCH CAPACITY, THE "SENIOR TRUSTEE") UNDER AN
INDENTURE, DATED AS OF JUNE 1, 1998 BETWEEN THE COMPANY AND THE SENIOR TRUSTEE,
AS SUPPLEMENTED BY THE FIRST SUPPLEMENTAL INDENTURE THERETO DATED AS OF JUNE 18,
1998 AND THE SECOND SUPPLEMENTAL INDENTURE THRETO DATED AS OF JUNE 9, 1999 (AS
SO SUPPLEMENTED, THE "SENIOR INDENTURE"). THE COLLATERAL BONDS ARE TO BE HELD IN
TRUST AS COLLATERAL FOR THE BENEFIT OF THE HOLDERS OF $55,000,000 AGGREGATE
PRINCIPAL AMOUNT OF 6.85% SENIOR NOTES DUE 2039 (THE "RELATED NOTES") ISSUED
PURSUANT TO THE SENIOR INDENTURE.
THE COLLATERAL BONDS MAY NOT BE SOLD OR OTHERWISE TRANSFERRED (EXCEPT TO A
SUCCESSOR TRUSTEE) UNTIL THE EARLIER OF THE RELEASE DATE (AS DEFINED BELOW) OR
THE PRIOR RETIREMENT OF THE RELATED NOTES THROUGH REDEMPTION, REPURCHASE OR
OTHERWISE.
THE INTEREST RATE ON THE COLLATERAL BONDS SHALL AT ALL TIMES BE IDENTICAL TO
THAT OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN, THE RELATED NOTES,
A FORM OF WHICH IS ANNEXED HERETO AS ANNEX I.
THE INTEREST PAYMENT DATES IN RESPECT OF THE COLLATERAL BONDS SHALL AT ALL TIMES
BE IDENTICAL TO THOSE OF, AND SHALL BE ESTABLISHED IN THE MANNER SET FORTH IN,
THE RELATED NOTES.
THE COMPANY SHALL MAKE PAYMENTS OF THE PRINCIPAL OF, AND PREMIUM, IF ANY, AND
INTEREST ON, THE COLLATERAL BONDS, TO THE SENIOR TRUSTEE, WHICH PAYMENTS SHALL
BE APPLIED BY THE SENIOR TRUSTEE TO THE SATISFACTION OF OBLIGATIONS ON THE
RELATED NOTES.
<PAGE> 44
THE MATURITY DATE SPECIFIED ABOVE IS ALSO THE MATURITY DATE OF THE RELATED
NOTES.
MICHIGAN CONSOLIDATED GAS COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises to pay
to CITIBANK, N.A., as trustee for the benefit of the holders of the Related
Notes, or registered assigns (in such capacity, the "Senior Trustee"), the sum
of FIFTY-FIVE MILLION DOLLARS ($55,000,000).
The Maturity Date specified above, at the corporate trust office of the
Mortgage Trustee hereinafter named in the Borough of Manhattan, The City of New
York, New York, or at the principal office of any successor in trust, in lawful
money of the United States of America, and to pay interest thereon at the
Interest Rate(s) from time to time specified in or determined pursuant to the
Related Notes, in like lawful money payable at the office or agency of the
Company in the Borough of Manhattan, The City of New York, New York on such
interest payment date(s) and on the Maturity Date (each an "Interest Payment
Date") as provided in the Related Notes, from the Original Issue Date specified
above or from the most recent Interest Payment Date to which interest has been
paid, commencing on the Interest Payment Date next succeeding the Original Issue
Date until the Company's obligation with respect to the payment of such
principal sum shall be discharged provided in the Secured Indenture hereinafter
mentioned and the Senior Indenture. If the date of the Collateral Bonds
presented by this certificate is after a Record Date (as defined below) with
respect to any Interest Payment Date and prior to the Interest Payment Date,
then payment of interest shall commence on the second Interest Payment Date
succeeding the date. If the Company shall default in the payment of interest due
on any Interest Payment Date, then interest shall be payable from the next
preceding Interest Payment Date to which interest has been paid, or, if no such
interest has been paid on the Collateral Bonds represented by this certificate,
from the Original Issue Date. So long as there is no existing default in the
payment of interest, the person in whose name the Collateral Bonds represented
by this certificate were registered at the close of business on the relevant
Record Date with respect to an Interest Payment Date shall be entitled to
receive the interest payable on such Interest Payment Date, except that if the
Company shall default in the payment of interest due on such Interest Payment
Date, such defaulted interest shall be paid to the person in whose name the
Collateral Bonds presented by this Certificate are registered on the Record Date
for the Interest Payment Date fixed by the Company for the payment of such
defaulted interest, provided that in no case shall such Record Date be less than
ten days after notice thereof shall have been mailed to all registered holders
of Collateral Bonds. The term "Record Date" as used herein with respect to any
Interest Payment Date shall mean the last Business Day which is more than ten
calendar days prior to such Interest Payment Date.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York are required or authorized
to close.
The bonds represented by this certificate, of the series hereinafter
specified, are bonds of the Company (herein called the "bonds") known as its
"First Mortgage Bonds", issued and to be
<PAGE> 45
issued in one or more series under, and all equally and ratably secured by, an
Indenture of Mortgage and Deed of Trust dated as of March 1, 1944, duly executed
by the Company to City Bank Farmers Trust Company (now known as Citibank, N.A.,
successor trustee, as "Mortgage Trustee") Ralph E. Morton (Robert T. Kirchner,
successor individual trustee and, together with Citibank, N.A., the "Secured
Trustees") as restated in Part II of the Twenty-ninth Supplemental Indenture
dated as of July 15, 1989, which became effective on April 1, 1994, to which
indenture and all indentures supplemental thereto executed on and after July 15,
1989 reference is hereby made for a description of the property mortgaged and
pledged, the nature and extent of the security, the terms and conditions upon
which the bonds are, and are to be, issued and secured, and the rights of the
holders of the bonds of the Secured Trustees in respect of such security (which
indenture and all indentures supplemental thereto, including the Thirty-fifth
Supplemental Indenture dated as of June 18, 1998, are hereinafter collectively
called the "Secured Indenture"). As provided in the Secured Indenture, the bonds
may be for various principal sums and are issuable in series which may mature at
different times, may bear interest at different rates and may otherwise vary as
therein provided. The bonds represented by this certificate are part of a Series
designated "Collateral Bonds," herein called Collateral Bonds, created by the
Thirty-fifth Supplemental Indenture dated as of June 18, 1998, as provided for
in the Secured Indenture.
With the consent of the Company and to the extent permitted by and as
provided in the Secured Indenture and the Senior Indenture, the rights and
obligations of the Company and/or the rights of the holders of the Collateral
Bonds of the thirty-second Series and/or the terms and provisions of the Secured
Indenture may be modified or altered by such affirmative vote or votes of the
holders of the Related Notes then outstanding as are specified in the Senior
Indenture.
The Collateral Bonds shall be redeemed if and to the extent Related
Notes are redeemed, as provided in the Senior Indenture with respect to the
Related Notes and in the Related Notes.
In case an event of default as defined in the Secured Indenture or the
Senior Indenture shall occur, the principal of the Collateral Bonds may become
or be declared due and payable in the manner, with the effect, and subject to
the conditions provided in the Secured Indenture and the Senior Indenture.
The Senior Trustee has agreed pursuant to the Senior Indenture to hold
the Collateral Bonds as collateral for the benefit of the holders of the Related
Notes under all circumstances and not to transfer (except to a successor
trustee) such Collateral Bonds until the earlier of the Release Date or the
prior retirement of the Related Notes through redemption, purchase or otherwise.
"Release Date" means the date on which all First Mortgage Bonds of the Company
issued and outstanding under the Secured Indenture, other than the Collateral
Bonds (as defined in the Senior Indenture), have been retired (at, before or
after the maturity hereof) through payment, redemption or otherwise provided
that no default or event of default has occurred and is continuing under the
Senior Indenture. On the Release Date, the Senior Trustee shall deliver to the
Company for cancellation all Collateral Bonds, and the Company shall cause the
Senior Trustee to provide notice to all holders of Related Notes of the
occurrence of the Release Date.
<PAGE> 46
As a result, on the Release Date, the Collateral Bonds shall cease to secure the
Related Notes. Following the Release Date, the Company shall cause the Secured
Indenture to be closed, and the Company shall issue any additional Collateral
Bonds to be issued thereunder. From and after the Release Date, the Company's
obligations in respect of the Collateral Bonds shall be satisfied and
discharged.
No recourse shall be had for the payment of the principal of, or the
interest on, the Collateral Bonds, or for any claim based hereon or otherwise in
respect of the Collateral Bonds or the Secured Indenture, Senior Indenture or
any Indenture supplemental to either thereof, or against any incorporator,
stockholder, director or officer, past, present or future, the Company, as such,
or any predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether by virtue of
any constitution, state or rule of law, or by the enforcement of any assessment
or penalty or otherwise, all such liability, whether at common law, in equity,
by any constitution, statute or otherwise, of incorporators, stockholders,
directors or officers being waived and released by the owner hereof and every
owner of any Related Note by the acceptance of the Collateral Bonds or such
Related Note, as the case may be, and as part of the consideration for the issue
thereof, and being likewise waived and released pursuant to the Secured
Indenture and the Senior Indenture.
The Collateral Bonds shall not be valid or become obligatory for any
purpose unless and until the certificate of authentication hereon shall have
been manually executed by the Mortgage Trustee or its successor in trust under
the Secured Indenture.
<PAGE> 47
IN WITNESS WHEREOF, MICHIGAN CONSOLIDATED GAS COMPANY has caused
this bond to be executed under its name with the signature of its Chairman,
President, Vice Chairman or a Vice-President, or any other officer selected by
the Board of Directors under its corporate seal, which may be a facsimile,
attested with the signature of its Secretary or one of its Assistant Secretary.
Dated: June 9, 1999
MICHIGAN CONSOLIDATED GAS COMPANY
By:
--------------------------------
Title:
Attest:
By:
----------------------------
Title:
<PAGE> 48
CERTIFICATE OF AUTHENTICATION
This is one of the bonds of the series designated therein, described in
the within--mentioned Indenture and Thirty-fifth Supplemental Indenture.
Dated: June 9, 1999
CITIBANK, N.A., as Trustee
By:
---------------------------------
Authorized Signatory
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus Supplement of
Michigan Consolidated Gas Company relating to 6.85% Senior Notes due 2039, of
our report dated February 2, 1999, on our audits of the consolidated financial
statements of MBIA Insurance Corporation and Subsidiaries as of December 31,
1998 and 1997 and for each of the three years in the period ended December 31,
1998. We also consent to the reference to our Firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 4, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Prospectus Supplement of
Michigan Consolidated Gas Company relating to 6.85% Senior Secured Insured
Quarterly Notes due 2038, of our report dated February 2, 1999, on our audits
of the consolidated financial statements of MBIA Insurance Corporation and
Subsidiaries as of December 31, 1998 and 1997 and for each of the three years
in the period ended December 31, 1998. We also consent to the reference to our
Firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
June 4, 1999
