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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) OCTOBER 26, 1994
MCN CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-10070 38-2820658
State of Incorporation (Commission File (I.R.S. Employer
Number) Identification No.)
500 GRISWOLD STREET, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(313) 256-5500
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ITEM 5. OTHER EVENTS
The registrant is filing herewith the following in connection with the
offering by MCN Michigan Limited Partnership of its 9 3/8% Cumulative Preferred
Securities, Series A (the "Preferred Securities") (liquidation preference $25
per Preferred Security), pursuant to the registration statement of the
registrant and MCN Michigan Limited Partnership on Form S-3, as amended, (No.
33-55665) filed with the Securities and Exchange Commission under the
Securities Act of 1933, as described in the Prospectus Supplement to Prospectus
dated October 18, 1994 (the "Prospectus Supplement") dated October 26, 1994,
filed with the Securities and Exchange Commission pursuant to Rule 424(b)(5)
under the Securities Act of 1933:
4-1 Amended and Restated Limited Partnership Agreement of MCN
Michigan Limited Partnership
4-2 Action by the General Partner of MCN Michigan Limited
Partnership creating the 9 3/8% Cumulative Preferred
Securities, Series A, dated October 26, 1994
4-3 Form of Certificate Evidencing Preferred Partner Interest of
MCN Michigan Limited Partnership (included in Exhibit 4-2 as
Exhibit A).
4-4 MCN Corporation Board of Directors' Pricing Committee
resolution establishing the price, terms and conditions of
the Debt Securities
4-5 Terms and Conditions of Series A Subordinated Deferrable
Interest Debt Securities (included in Exhibit 4-4)
4-6 Form of MCN Corporation Series A Subordinated Deferrable
Interest Debt Security for $100,000,000 (included in
Exhibit 4-4)
4-7 Form of MCN Corporation Series A Subordinated Deferrable
Interest Debt Security for $1,100,000 (included in Exhibit 4-4)
4-8 Form of the Series A Subordinated Deferrable Interest Debt
Security to be issued in the event that MCN Michigan ceases
to be the sole holder (included in Exhibit 4-4)
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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 thereunto duly authorized.
MCN CORPORATION
By /s/ Patrick Zurlinden
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Patrick Zurlinden
Vice President, Controller
and Chief Accounting Officer
Date: November 4, 1994
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INDEX TO EXHIBITS
Exhibit
Number Exhibit
4-1 Amended and Restated Limited Partnership Agreement of MCN
Michigan Limited Partnership
4-2 Action by the General Partner of MCN Michigan Limited
Partnership creating the 9 3/8% Cumulative Preferred
Securities, Series A, dated October 26, 1994
4-3 Form of Certificate Evidencing Preferred Partner Interest of
MCN Michigan Limited Partnership (included in Exhibit 4-2 as
Exhibit A).
4-4 MCN Corporation Board of Directors' Pricing Committee
resolution establishing the price, terms and conditions of
the Debt Securities
4-5 Terms and Conditions of Series A Subordinated Deferrable
Interest Debt Securities (included in Exhibit 4-4)
4-6 Form of MCN Corporation Series A Subordinated Deferrable
Interest Debt Security for $100,000,000 (included in
Exhibit 4-4)
4-7 Form of MCN Corporation Series A Subordinated Deferrable
Interest Debt Security for $1,100,000 (included in Exhibit 4-4)
4-8 Form of the Series A Subordinated Deferrable Interest Debt
Security to be issued in the event that MCN Michigan ceases
to be the sole holder (included in Exhibit 4-4)
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EXHIBIT 4-1
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF MCN MICHIGAN LIMITED PARTNERSHIP
This AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT, dated as of October
26, 1994, of MCN Michigan Limited Partnership, a Michigan limited partnership
(the "Partnership"), is made by and among MCN Corporation, as General Partner,
MCN Finance Corporation, as the withdrawing Class A Limited Partner and Cede &
Co., as the nominee of The Depository Trust Company, as the initial Preferred
Partner of the Partnership in accordance with the provisions hereof.
WHEREAS, MCN Corporation and MCN Finance Corporation have heretofore formed
a limited partnership pursuant to the Michigan Act, by filing a Certificate of
Limited Partnership (as defined below) with the office of the Corporation and
Securities Bureau, Michigan Department of Commerce, on September 28, 1994, and
entering into a Limited Partnership Agreement of the Partnership dated as of
September 28, 1994 (the "Limited Partnership Agreement");
WHEREAS, the parties hereto desire to continue the Partnership as a limited
partnership under the Michigan Act and to amend and restate the Limited
Partnership Agreement in its entirety.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree to amend and restate the Limited Partnership Agreement in its entirety as
follows:
ARTICLE I - DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the
meaning set forth below (such meaning to be equally applicable to both singular
and plural forms of the terms so defined).
"ACTION" shall have the meaning set forth in Section 13.01(b).
"ADDITIONAL AMOUNTS" shall have the meaning set forth in Section 13.01(b)(x).
"AFFILIATE" shall mean, with respect to the Person to which it refers, a
Person that directly or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such subject Person.
"AGREEMENT" shall mean this Amended and Restated Limited Partnership
Agreement, as amended, modified, supplemented or restated from time to time,
including, without limitation, by any Action establishing a series of Preferred
Partner Interests.
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"BENEFICIAL OWNER" shall mean, with respect to a Book Entry Interest, a
Person who is the beneficial owner of such Book Entry Interest, as reflected on
the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"BOOK ENTRY INTERESTS" shall mean a beneficial interest in the Certificates,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 14.04.
"BUSINESS DAY" shall mean any day other than a day on which banking
institutions in The City of New York or the State of Michigan are authorized or
required by law to close.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 4.01.
"CERTIFICATE" shall mean a certificate substantially in the form attached to
any Action, evidencing a Preferred Partner Interest.
"CERTIFICATE OF LIMITED PARTNERSHIP" shall mean the Certificate of Limited
Partnership of the Partnership and any and all amendments thereto and
restatements thereof filed with the office of the Corporation and Securities
Bureau, Michigan Department of Commerce.
"CLASS A LIMITED PARTNER" shall mean MCN Finance Corporation, in its
capacity as a limited partner of the Partnership.
"CLEARING AGENCY" shall mean an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" shall mean a broker dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"CODE" shall mean the United States Internal Revenue Code of 1986 and
(unless the context requires otherwise) the rules and regulations promulgated
thereunder, as amended from time to time.
"COMMISSION" shall mean the Securities and Exchange Commission.
"COVERED PERSON" shall mean any Partner, Beneficial Owner or the Special
Representative, any Affiliate thereof or any
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officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner, the Special Representative or their
respective Affiliates, or any employee or agent of the Partnership or its
Affiliates.
"DEFINITIVE CERTIFICATE" shall have the meaning set forth in Section 14.04.
"DISSOLUTION TAX OPINION" shall have the meaning set forth in the
definition of "Tax Event."
"ECONOMIC RISK OF LOSS" shall mean the "economic risk of loss" that any
Partner is treated as bearing under Treasury Regulation Section 1.752-2 with
respect to any Partnership liability.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EVENT OF DEFAULT" shall mean an event of default under the Indenture.
"FISCAL YEAR" shall have the meaning set forth in Section 7.01.
"GENERAL PARTNER" shall mean MCN Corporation, in its capacity as general
partner of the Partnership, together with any successor thereto that becomes a
general partner of the Partnership pursuant to the terms of this Agreement.
"GUARANTEE" shall mean the Payment and Guarantee Agreement dated as of
October 26, 1994, as amended or supplemented from time to time, of MCN
Corporation and any additional Payment and Guarantee Agreements entered into by
MCN Corporation for the benefit of the Partners.
"INDEMNIFIED PERSON" shall mean the General Partner or the Special
Representative, any Affiliate thereof or any officers, directors, shareholders,
partners, members, employees, representatives or agents thereof, or any
employee or agent of the Partnership or its Affiliates.
"INDENTURE" shall mean the Indenture dated as of September 1, 1994, as
amended or supplemented from time to time, between MCN Corporation and NBD
Bank, N.A., as Trustee and any additional Indentures entered into by MCN
Corporation pursuant to which Subordinated Debentures of MCN Corporation are to
be issued.
"INTEREST" shall mean the entire partnership interest of a Partner in the
Partnership at any particular time, including the right of such Partner to any
and all benefits to which a Partner may be entitled as provided in this
Agreement, together
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with the obligations of such Partner to comply with all of the terms and
provisions of this Agreement.
"LIMITED PARTNERS" shall mean the Class A Limited Partner, if any, and the
Preferred Partners.
"LIQUIDATING DISTRIBUTIONS" shall mean distributions of Partnership property
made upon a liquidation and dissolution of the Partnership as provided in
Article XII.
"LIQUIDATING TRUSTEE" shall have the meaning set forth in Section 12.01.
"LIQUIDATION DISTRIBUTION" shall mean the liquidation preference of each
series of Preferred Partner Interests as set forth in the Action for such
series.
"LOSS ITEMS" shall mean, with respect to any fiscal period, items of gross
Partnership loss, deduction or expense for such period.
"MICHIGAN ACT" shall mean the Michigan Revised Uniform Limited Partnership
Act, Mich. Comp. Laws Ann. Section 449.1101, et seq., as amended from time to
time or any successor statute thereto.
"NET INCOME" or "NET LOSS" shall mean, with respect to any Fiscal Year, the
sum of the Partnership's (a) net gain or loss from the sale or exchange of the
Partnership's capital assets during such Fiscal Year, and (b) all other items
of income, gain, loss, deduction and expense for such Fiscal Year that are not
included in (a). Net Income or Net Loss shall be determined in accordance with
Federal tax accounting principles rather than generally accepted accounting
principles, except that a distribution in kind of Partnership property shall be
treated as a taxable disposition of such property for its fair market value
(taking into account Section 7701(g) of the Code) on the date of distribution.
For purposes of determining the Capital Accounts as set forth in Article IV,
"Net Income" and "Net Loss" shall be computed in the same manner as the
Partnership computes its income for Federal income tax purposes, except that
adjustments shall be made in accordance with Treasury Regulation Section
1.704-1(b) (2) (iv), which adjustments shall include any income which is exempt
from United States Federal income tax, all Partnership losses and all expenses
properly chargeable to the Partnership, whether deductible or non-deductible
and whether described in Section 705(a) (2) (B) of the Code, treated as so
described pursuant to Treasury Regulations Section 1.704-1(b) (2) (iv) (i), or
otherwise.
"1940 ACT" shall mean the Investment Company Act of 1940, as amended.
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"PARTNERS" shall mean the General Partner and the Limited Partners.
"PARTNERSHIP" shall mean MCN Michigan Limited Partnership, a limited
partnership formed under the laws of the State of Michigan.
"PERSON" shall mean any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative or association and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"PREFERRED PARTNER" shall mean a limited partner of the Partnership who
holds one or more Preferred Partner Interests.
"PREFERRED PARTNER INTERESTS" shall mean the Interests described in Article
XIII.
"PURCHASE PRICE" shall mean the amount paid for each Preferred Partner
Interest.
"REDEMPTION PRICE" shall have the meaning set forth in Section 13.01(b)(v).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SPECIAL REPRESENTATIVE" shall have the meaning set forth in Section
13.02(d).
"SUBORDINATED DEBENTURES" shall mean the Subordinated Debentures of MCN
Corporation issued under the Indenture.
"TAX EVENT" shall mean that the General Partner shall have received an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision
or regulatory determination on or after such date), there is more than an
insubstantial risk that (i) the Partnership is subject to federal income tax
with respect to interest received on any series of Subordinated Debentures;
(ii) interest payable to the Partnership on any series of Subordinated
Debentures will not be deductible by MCN Corporation for federal income tax
purposes; or (iii) the Partnership is subject to more
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than a de minimis amount of other taxes, duties or other governmental charges.
"TAX MATTERS PARTNER" shall have the meaning set forth in Section 7.05.
"TRANSFER" shall mean any transfer, sale, assignment, gift, pledge,
hypothecation or other disposition or encumbrance of an interest in the
Partnership.
"TREASURY REGULATIONS" shall mean the final and temporary income tax
regulations, as well as the procedural and administrative regulations,
promulgated by the United States Department of the Treasury under the Code, as
amended from time to time.
"TRUSTEE" shall mean NBD Bank, N.A. or any other trustee under the Indenture.
"UNDERWRITING AGREEMENT" shall mean the Purchase Agreement entered into on
October 26, 1994 among the Partnership, MCN Corporation and the underwriters
named therein with regard to the sale of Preferred Partner Interests and
related securities and any additional Underwriting Agreements entered into by
the Partnership and MCN Corporation with regard to the sale of additional
Preferred Partner Interests and related securities.
ARTICLE II - CONTINUATION; NAME; PURPOSES; TERM; DEFINITIONS
SECTION 2.01. FORMATION. The parties hereto hereby join together to
continue a limited partnership which shall exist under and be governed by the
Michigan Act. The Partnership shall make any and all filings or disclosures
required under the laws of Michigan or otherwise with respect to its
continuation as a limited partnership, its use of a fictitious name or
otherwise as may be required. The Partnership shall be a limited partnership
among the Partners solely for the purposes specified in Section 2.03 hereof,
and this Agreement shall not be deemed to create a partnership among the
Partners with respect to any activities whatsoever other than the activities
within the business purposes of the Partnership as specified in Section 2.03.
No Partner shall have any power to bind any other Partner with respect to any
matter except as specifically provided in this Agreement. No Partner shall be
responsible or liable for any indebtedness or obligation of any other Partner
incurred either before or after the execution of this Agreement. The assets of
the Partnership shall be owned by the Partnership as an entity, and no Partner
individually shall own any direct interest in the assets of the Partnership.
SECTION 2.02. NAME AND PLACE OF BUSINESS. The name of the Partnership is
"MCN Michigan Limited Partnership" The Partnership may operate under the name
of "MCN Michigan" and such name shall be used for no purposes other than those
set forth
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herein. The principal place of business of the Partnership shall be 500
Griswold Street, Detroit, Michigan 48226, or at such other place as may be
selected by the General Partner in its sole discretion.
SECTION 2.03. PURPOSES. The sole purpose of the Partnership is to issue
and sell securities representing beneficial interests in limited partner
interests and to use the proceeds of all sales of such securities to purchase
Subordinated Debentures issued by MCN Corporation pursuant to the Indenture and
to effect other similar arrangements permitted by this Agreement, and to engage
in any and all activities necessary, convenient, advisable or incidental
thereto. The Partnership shall not borrow money or issue debt or mortgage or
pledge any of its assets.
SECTION 2.04. TERM. The Partnership was formed on September 28, 1994 and
shall continue without dissolution through December 31, 2093, unless sooner
dissolved as provided in Article XI hereof.
SECTION 2.05. QUALIFICATION IN OTHER JURISDICTIONS. The General Partner
shall cause the Partnership to be qualified, formed or registered under assumed
or fictitious name statutes or similar laws in any jurisdiction in which the
Partnership transacts business. The General Partner shall execute, deliver and
file any certificates (and any amendments and/or restatements thereof)
necessary for the Partnership to qualify to do business in any jurisdiction in
which the Partnership may wish to conduct business.
SECTION 2.06. ADMISSION OF PREFERRED PARTNERS. Without execution of this
Agreement, upon receipt by a Person of a Certificate and payment for the
Preferred Partner Interest being acquired by such Person, which shall be deemed
to constitute a request by such Person that the books and records of the
Partnership reflect its admission as a Preferred Partner, such Person shall
become bound by this Agreement upon the filing of the instrument contemplated
by Section 14.02 of this Agreement and shall be admitted to the Partnership as
a Preferred Partner upon the filing of the instrument contemplated by Section
14.02 of this Agreement and the filing of an amendment to the Certificate of
Limited Partnership as required by Section 449.1301 of the Michigan Act. The
Partnership and the General Partner shall comply with such procedures as
promptly as practicable.
SECTION 2.07. RECORDS. The name and mailing address of each Partner and
the amount contributed to the capital of the Partnership shall be listed on the
books and records of the Partnership. The Partnership shall keep such other
records as are required by the Michigan Act. The General Partner shall update
the books and records from time to time as necessary to accurately reflect the
information therein.
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SECTION 2.08. WITHDRAWAL OF CLASS A LIMITED PARTNER. Upon the admission of
at least one Preferred Partner as a limited partner of the Partnership, the
Class A Limited Partner shall be deemed to have withdrawn from the Partnership
as a limited partner of the Partnership, and upon such withdrawal, the Class A
Limited Partner shall have its capital contribution returned to it without any
interest or deduction and shall have no further interest in the Partnership.
ARTICLE III - CAPITAL CONTRIBUTIONS
SECTION 3.01. CAPITAL CONTRIBUTIONS. As of the date of this Agreement,
the General Partner has contributed the amount of $1.00 to the capital
of the Partnership and shall make any further contributions required to satisfy
its obligations under Section 3.04. Each Preferred Partner, or its predecessor
in interest, will contribute to the capital of the Partnership the amount of
the Purchase Price for the Preferred Partner Interests held by it.
SECTION 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS. No Partner shall be
required to make any additional contributions or advances to the Partnership
except as provided in Section 3.04 or by law. The General Partner may make
additional capital contributions in excess of the amounts required under this
Agreement at any time.
SECTION 3.03. NO INTEREST OR WITHDRAWALS. No interest shall accrue on any
capital contribution made by a Partner, and no Partner shall have the right to
withdraw or to be repaid any portions of its capital contributions so made,
except as specifically provided in this Agreement.
SECTION 3.04. MINIMUM CAPITAL CONTRIBUTION OF GENERAL PARTNER. Whenever
any Limited Partner makes a capital contribution, the General Partner shall
immediately make the capital contribution sufficient to cause the aggregate
capital contribution of the General Partner to equal at least 1% of the
aggregate capital contributed by all Partners for each series of Preferred
Partner Interests issued by the Partnership and the Partnership shall use each
such General Partner capital contribution to purchase Subordinated Debentures.
Any such additional contributions shall constitute additional capital
contributions made by the General Partner. In addition, all payments made by
the General Partner as required by Section 8.03(c) shall be treated as
additional capital contributions to the Partnership.
SECTION 3.05. PARTNERSHIP INTERESTS. Unless otherwise provided herein, the
percentage interests of the Partners shall be as determined in proportion to
the capital contributions of the Partners.
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SECTION 3.06. INTERESTS. Each Partner's respective Preferred Partner
Interests shall be set forth on the books and records of the Partnership. Each
Partner hereby agrees that its Interests shall for all purposes be personal
property. No Partner has an interest in specific Partnership property. The
Partnership shall not issue any additional interest in the Partnership after
the date hereof other than Interests to the General Partner or Preferred
Partner Interests.
ARTICLE IV - CAPITAL ACCOUNTS
SECTION 4.01. CAPITAL ACCOUNTS. There shall be established on the books of
the Partnership a capital account ("Capital Account") for each Partner that
shall consist of the initial capital contribution to the partnership made by
such Partner (or the Capital Account balance of such Partner's predecessor in
interest), increased by: (a) any additional capital contributions made by such
Partner, (b) the agreed value of any property subsequently contributed to the
capital of the Partnership by such Partner; and (c) Net Income allocated to any
Partner (or predecessor thereof). A Partner's Capital Account shall be
decreased by: (a) Net Loss allocated to any Partner (or predecessor thereof);
and (b) any distributions made to such Partner. In addition to and
notwithstanding the foregoing, Capital Accounts shall be otherwise adjusted in
accordance with the tax accounting principles set forth in Treasury Regulation
Section 1.704-1(b) (2) (iv).
SECTION 4.02. COMPLIANCE WITH TREASURY REGULATIONS. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section 704(b) of
the Code and Treasury Regulation Section 1.704-1(b) and shall be interpreted
and applied in a manner consistent with such regulations. In the event that
the General Partner shall determine that it is prudent to modify the manner in
which the Capital Accounts, or any debits or credits thereto, are determined in
order to comply with such regulations, the General Partner may make such
modification.
ARTICLE V - ALLOCATIONS
SECTION 5.01. NET INCOME AND NET LOSS. Net Income and Net Loss of the
Partnership shall be allocated in the following manner. First, all deductions
of the Partnership for which the General Partner has made a payment as required
by Section 8.03(c) shall be allocated to the General Partner. Then, for each
fiscal period, the remaining Net Income of the Partnership attributable to each
series of Preferred Partner Interests shall be allocated (i) first, to the
Preferred Partners, pro rata in proportion to the number of Preferred Partner
Interests held by each Preferred Partner and at the distribution rate specified
in the Action for each series of Preferred Partner Interests, in an amount
equal to
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the excess of (a) the distributions accrued on such Preferred Partner Interests
since their date of issuance through and including the close of the current
fiscal period (whether or not paid) over (b) the amount of profits allocated to
the Preferred Partners pursuant to this Section 5.01(i) in all prior fiscal
periods; and (ii) thereafter, to the General Partner. The foregoing
allocations shall be made separately with respect to each series of Preferred
Partner Interests. The Net Losses of the Partnership shall be allocated each
year to the General Partner. Notwithstanding anything to the contrary in this
Agreement, the General Partner shall be allocated at least one percent of all
items of income, gain, loss, deduction and credit of the Partnership.
SECTION 5.02. ALLOCATION RULES. For purposes of determining the profits,
losses or any other items allocable to any period, profits, losses and any such
other items shall be determined on a daily, monthly or other basis, as
determined by the General Partner in its sole and absolute discretion using any
method that is permissible under Section 706 of the Code and the Treasury
Regulations thereunder. The Partners are aware of the income tax consequences
of the allocations made by this Article V and hereby agree to be bound by the
provisions of this Article V in reporting their shares of Partnership income
and loss for income tax purposes.
SECTION 5.03. ADJUSTMENTS TO REFLECT CHANGES IN INTERESTS. Notwithstanding
the foregoing, with respect to any Fiscal Year during which any Partner's
percentage interest in the Partnership changes, whether by reason of the
admission of a Partner, the withdrawal of a Partner, a non-pro rata
contribution of capital to the Partnership or any other event described in
Section 706(d)(1) of the Code and the Treasury Regulations issued thereunder,
allocations of the items of income, gain, loss and deduction of the Partnership
shall be adjusted appropriately to take into account the varying interests of
the Partners during such Fiscal Year. The General Partner shall consult with
the Partnership's accountants and other tax advisors and shall select the
method of making such adjustments, which method shall be used consistently
thereafter.
SECTION 5.04. TAX ALLOCATIONS. For Federal, state and local income tax
purposes, Partnership income, gain, loss, deduction or credit (or any item
thereof) for each Fiscal Year shall be allocated to and among the Partners in
order to reflect the allocations made pursuant to the provisions of this
Article V for such Fiscal Year (other than allocations of items which are not
deductible or are excluded from taxable income), taking into account any
variation between the adjusted tax basis and book value of Partnership property
in accordance with the principles of Section 704(c) of the Code using the
traditional method with curative allocations as provided in Treasury Regulation
Section 1.704-3(c).
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SECTION 5.05. QUALIFIED INCOME OFFSET. Notwithstanding any other provision
hereof, if any Partner unexpectedly receives an adjustment, allocation or
distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (4),
(5), or (6) which creates or increases a deficit in the Capital Account of such
Partner (and, for this purpose, the existence of a deficit shall be determined
by reducing the Partner's Capital Account by the items described in Treasury
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6)), the next available
gross income of the Partnership shall be allocated to the Partners having such
deficit balances, in proportion to the deficit balances, until such deficit
balances are eliminated as quickly as possible. The provisions of this Section
5.05 are intended to constitute a "qualified income offset" within the meaning
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
and implemented as therein provided. The allocations pursuant to this Section
5.05 shall be made if and to the extent that a Limited Partner would have a
deficit Capital Account after all other allocations provided for in this
Article V have been made as if Section 5.05 were not in this Agreement.
SECTION 5.06. GROSS INCOME ALLOCATION. In the event any Limited Partner
has a deficit Capital Account at the end of any fiscal year which is in excess
of the sum of (i) the amount such Limited Partner is obligated to restore
pursuant to any provision of this Agreement, and (ii) the amount such Limited
Partner is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each
such Limited Partner shall be specially allocated items of Partnership income
and gain in the amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 5.06 shall be made if and to the extent
that such Limited Partner would have a deficit Capital Account in excess of
such sum after all other allocations provided for in this Article V have been
made as if Sections 5.05 and 5.06 were not in this Agreement.
SECTION 5.07. CURATIVE ALLOCATIONS. The allocations set forth in Sections
5.05 and 5.06 (the "Regulatory Allocations") are intended to comply with
certain requirements of the Treasury Regulations. It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations shall be
offset with special allocations of income, gain, loss or deduction pursuant to
this Section 5.07.
SECTION 5.08. CURATIVE AMENDMENTS. Notwithstanding any other provision of
this Agreement, the allocations under this Agreement shall effect an allocation
for Federal income tax purposes in a manner consistent with Section 704(b) of
the Code and the Treasury Regulations promulgated thereunder. If for any
reason the allocations contained in this Agreement shall conflict with the
Treasury Regulations promulgated under Section 704(b) of the Code, the General
Partner may amend these provisions if it
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believes that such an amendment is necessary to reflect allocations consistent
with such Treasury Regulations.
SECTION 5.09. TAXPAYER INFORMATION. Any Person who holds Preferred Partner
Interests as a nominee for another Person is required to furnish to the
Partnership (a) the name, address and taxpayer identification number of the
beneficial owner and the nominee; (b) information as to whether the beneficial
owner is (i) a Person that is not a United States Person, (ii) a foreign
government, an international organization or any wholly owned agency or
instrumentality of either of the foregoing, or (ii) a tax-exempt entity; (c)
the amount and description of Preferred Partner Interests held, acquired or
transferred for the beneficial owner; and (d) certain information including the
dates of acquisitions and transfers, means of acquisitions and transfers, and
acquisitions cost for purchases, as well as the amount of net proceeds from
sales.
ARTICLE VI - DISTRIBUTIONS
SECTION 6.01. DISTRIBUTIONS. Subject to the limitations of Section 6.02,
Preferred Partners shall receive periodic cash distributions, if any, in
accordance with the applicable terms of the Preferred Partner Interests as
provided in the Action pursuant to Section 13.01 for such series, as and when
declared by the General Partner. The cash distributions, if any, made pursuant
to the preceding sentence may include cash distributions in complete redemption
of any series of Preferred Partner Interests in accordance with the applicable
terms of such Preferred Partner Interests, as and when declared by the General
Partner. Subject to the rights of the holders of the Preferred Partner
Interests, the General Partner shall receive such cash distributions, if any,
as may be declared from time to time by the General Partner.
SECTION 6.02. CERTAIN DISTRIBUTIONS PROHIBITED. Notwithstanding anything
in this Agreement to the contrary, all Partnership distributions shall be
subject to the following limitations:
(a) No distribution shall be made to any Partner if, and to the extent
that, such distribution would not be permitted under Section 449.1607 of the
Michigan Act or other applicable law.
(b) No distribution shall be made to any Partner to the extent that such
distribution, if made, would create or increase a deficit balance in the
Capital Account of such Partner.
(c) Other than Liquidating Distributions, no distribution of Partnership
property shall be made in kind. Notwithstanding anything in the Michigan Act
or this Agreement to
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the contrary, in the event of a Liquidating Distribution, a Partner may be
compelled in accordance with Section 12.01 to accept a distribution of cash or
any other asset in kind from the Partnership even if the percentage of the
asset distributed to it exceeds a percentage of that asset which is equal to
the percentage in which such Partner shares in distributions from the
Partnership.
ARTICLE VII - ACCOUNTING MATTERS; BANKING
SECTION 7.01. FISCAL YEAR. The fiscal year ("Fiscal Year") of the
Partnership shall be the calendar year, or such other year as is required by
the Code.
SECTION 7.02. CERTAIN ACCOUNTING MATTERS. (a) At all times during the
existence of the Partnership, the General Partner shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Partnership. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The Partnership shall use the accrual method of accounting for United States
Federal income tax purposes. The books of account and the records of the
Partnership shall be examined by and reported upon as of the end of each Fiscal
Year by a firm of independent certified public accountants selected by the
General Partner.
(b) The General Partner shall cause to be prepared and delivered to each
of the Partners, within 90 days after the end of each Fiscal Year of the
Partnership, annual financial statements of the Partnership, including a
balance sheet of the Partnership as of the end of such Fiscal Year and the
related statements of income or loss and a statement indicating such Partner's
share of each item of Partnership income, gain, loss, deduction or credit for
such Fiscal Year for income tax purposes.
(c) Notwithstanding anything in this Agreement to the contrary, the
General Partner may, to the maximum extent permitted by applicable law, keep
confidential from the Partners for such period of time as the General Partner
deems reasonable any information which the General Partner reasonably believes
to be in the nature of trade secrets or other information the disclosure of
which the General Partner in good faith believes is not in the best interest of
the Partnership or could damage the Partnership or which the Partnership or a
third party is required by law or by an agreement to keep confidential.
(d) The General Partner may make, or revoke, in its sole and absolute
discretion, any elections for the Partnership that are permitted under tax or
other applicable laws, including elections under Section 704(c) of the Code,
provided that the
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General Partner shall not make any elections pursuant to Section 754 of the
Code.
SECTION 7.03. BANKING. The Partnership shall maintain one or more bank
accounts in the name and for the sole benefit of the Partnership. The sole
signatories for such accounts shall be designated by the General Partner.
Reserve cash, cash held pending the expenditure of funds for the business of
the Partnership or cash held pending a distribution to one or more of the
Partners may be invested in any manner at the sole and absolute discretion of
the General Partner.
SECTION 7.04. RIGHT TO RELY ON AUTHORITY OF GENERAL
PARTNER. No Person that is not a Partner, in dealing with the General Partner,
shall be required to determine such General Partner's authority to make any
commitment or engage in any undertaking on behalf of the Partnership, or to
determine any fact or circumstance bearing upon the existence of the authority
of the General Partner.
SECTION 7.05. TAXATION. The Partners intend that the Partnership shall be
taxed as a partnership for Federal and state income and single business tax
purposes and the Partners agree to take all action, including amendment of this
Agreement and execution of such other documents to qualify for and receive such
treatment.
SECTION 7.06. SURVIVAL OF TAX PROVISIONS. The provisions of this
Agreement relating to tax matters shall survive the termination of this
Agreement and the termination of any Partner's interest in the Partnership and
shall remain binding on that Partner for the period of time necessary to
resolve with any Federal, state and local tax authorities any tax matters
regarding the Partnership.
SECTION 7.07. TAX MATTERS PARTNER. The "tax matters partner," as defined
in Section 6231 of the Code, of the Partnership shall be the General Partner
(the "Tax Matters Partner"). The Tax Matters Partner shall receive no
compensation from the Partnership for its services in that capacity. The Tax
Matters Partner is authorized to employ such accountants, attorneys and agents
as it, in its sole and absolute discretion, deems necessary or appropriate.
Any Person who serves as Tax Matters Partner shall not be liable to the
Partnership or to any Partner for any action it takes or fails to take as Tax
Matters Partner with respect to any administrative or judicial proceeding
involving "partnership items" (as defined in Section 6231 of the Code) of the
Partnership.
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ARTICLE VIII - MANAGEMENT
SECTION 8.01. MANAGEMENT. (a) The General Partner shall have full and
exclusive authority with respect to all matters concerning the conduct of the
business and affairs of the Partnership, including (without limitation) the
power, without the consent of the Limited Partners, to make all decisions it
deems necessary, advisable, convenient or appropriate to accomplish the
purposes of the Partnership. The acts of the General Partner acting alone
shall serve to bind the Partnership and shall constitute the acts of the
Partners.
(b) The Limited Partners in their capacity as such shall not take part in
the management, operation or control of the business of the Partnership or
transact any business in the name of the Partnership. In addition, the Limited
Partners, in their capacity as such, shall not be agents of the Partnership and
shall not have the power to sign or bind the Partnership to any agreement or
document. The Limited Partners shall have the right to vote only with respect
to those matters specifically provided for in this Agreement or under the
Michigan Act. Notwithstanding anything herein to the contrary, the Preferred
Partners may exercise all rights provided to them, if any, under the Indenture
and the Guarantee.
(c) The General Partner is authorized and directed to use its best efforts
to conduct the affairs of, and to operate, the Partnership in such a way that
the Partnership would not be deemed to be an "investment company" required to
be registered under the 1940 Act or taxed as a corporation for Federal income
tax purposes and so that the Subordinated Debentures will be treated as
indebtedness of MCN Corporation for Federal income tax purposes. In this
connection, the General Partner is authorized to take any action not
inconsistent with applicable law, the Certificate of Limited Partnership or
this Agreement that does not materially adversely affect the interests of
holders of Preferred Partner Interests that the General Partner determines in
its sole and absolute discretion to be necessary, advisable or desirable for
such purposes.
SECTION 8.02 FIDUCIARY DUTY. (a) To the extent that, at law or in equity,
an Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to any other Covered Person, an
Indemnified Person acting under this Agreement shall not be liable to the
Partnership or to any other Covered Person for its good faith reliance on the
provisions of this Agreement or the advice of counsel selected by the
Indemnified Person in good faith. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
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(b) Unless otherwise expressly provided herein, (i) whenever a conflict of
interest exists or arises between Covered Persons, or (ii) whenever this
Agreement or any other agreement contemplated herein provides that an
Indemnified Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Partnership or any Partner, the Indemnified Person
shall resolve such conflict of interest, taking such action or providing such
terms, considering in each case the relative interest of each party (including
its own interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, the advice of counsel selected by the Indemnified Person in
good faith, and any applicable generally accepted accounting practices or
principles. In the absence of bad faith by the Indemnified Person, the
resolution, action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Agreement or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (i) in its "discretion" or under a grant of similar
authority or latitude, the Indemnified Person shall be entitled to consider
only such interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any interest of
or factors affecting the Partnership or any other Person, or (ii) in its "good
faith" or under another express standard, the Indemnified Person shall act
under such express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
SECTION 8.03. SPECIFIC OBLIGATIONS OF THE GENERAL PARTNER. The General
Partner hereby undertakes:
(a) to devote to the affairs of the Partnership so much of its time as
shall be necessary to carry on properly the Partnership's business and its
responsibilities hereunder;
(b) to cause the Partnership to do or refrain from doing such acts as
shall be required by Michigan law in order to preserve the valid existence of
the Partnership as a Michigan limited partnership and to preserve the limited
liability of the Limited Partners; and
(c) to pay directly all, and the Partnership shall not be obligated to
pay, directly or indirectly, any, of the costs and expenses of the Partnership
(including, without limitation, costs and expenses relating to the organization
of, and offering of limited partner interests in, the Partnership and costs and
expenses relating to the operation of the Partnership, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s),
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duplicating, travel and telephone and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Partnership assets).
SECTION 8.04. POWERS OF THE GENERAL PARTNER. The General Partner shall
have the right, power and authority, in the management of the business and
affairs of the Partnership, to do or cause to be done any and all acts deemed
by the General Partner to be necessary or appropriate to effectuate the
business, purposes and objectives of the Partnership. Without limiting the
generality of the foregoing, the General Partner shall have the power and
authority without any further act, approval or vote of any Partner to:
(a) issue Interests, including Preferred Partner Interests, and classes
and series thereof, in accordance with this Agreement;
(b) act as, or appoint another Person to act as, registrar and transfer
agent for the Preferred Partner Interests;
(c) establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including with respect
to allocations, distributions and voting rights and declare distributions and
make all other required payments on General Partner, Class A Limited Partner
and Preferred Partner Interests as the Partnership's paying agent;
(d) enter into and perform one or more Indentures and one or more
Underwriting Agreements and use the proceeds from the issuance of the Interests
and the General Partner's Interest to purchase the Subordinated Debentures, in
each case on behalf of the Partnership;
(e) bring and defend on behalf of the Partnership actions and proceedings
at law or in equity before any court or governmental, administrative or other
regulatory agency, body or commission or otherwise;
(f) employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(g) redeem each series of Preferred Partner Interests (which shall
constitute a return of capital and not a distribution of income) in accordance
with its terms and/or to the extent that the related series of Subordinated
Debentures is redeemed or reaches maturity; and
(h) execute all documents or instruments, perform all duties and powers
and do all things for and on behalf of the Partnership in all matters
necessary, convenient, advisable or incidental to the foregoing.
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The expression of any power or authority of the General Partner in this
Agreement shall not in any way limit or exclude any other power or authority
which is not specifically or expressly set forth in, or precluded by, this
Agreement.
SECTION 8.05. INDEPENDENT AFFAIRS. Any Partner or any Affiliate thereof
may engage in or possess an interest in any other business venture of whatever
nature and description, independently or with others, wherever located and
whether or not comparable to or in competition with the Partnership or the
General Partner, or any Affiliate thereof, and neither the Partnership nor any
of the Partners shall, by virtue of this Agreement, have any rights with
respect to, or interests in, such independent ventures or the income, profits
or losses derived therefrom. No Partner or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Partnership
even if such opportunity is of a character that, if presented to the
Partnership, could be taken by the Partnership, and any Partner or Affiliate
thereof shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
opportunity.
SECTION 8.06. MEETINGS OF THE PARTNERS. Meetings of the Partners of any
class or series or of all classes or series of the Partnership's Interests may
be called at any time by the Partners holding 10% in liquidation preference of
such class or series of Interests, or of all classes or series of Interests, as
the case may be, or as provided in any Action establishing a series of
Preferred Partner Interests. Except to the extent otherwise provided in any
such Action, the following provisions shall apply to meetings of Partners.
(a) Notice of any meeting shall be given to all Partners not less than
ten (10) business days nor more than sixty (60) days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever a
vote, consent or approval of Partners is permitted or required under this
Agreement, such vote, consent or approval may be given at a meeting of Partners
or by written consent.
(b) Each Partner may authorize any Person to act for it by proxy on all
matters in which a Partner is entitled to participate, including waiving notice
of any meeting, or voting or participating at a meeting. Every proxy must be
signed by the Partner or its attorney-in-fact. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
Partner executing it.
(c) Each meeting of Partners shall be conducted by the General Partner or
by such other Person that the General Partner may designate.
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(d) Subject to the provisions of this Section 8.06, the General Partner,
in its sole and absolute discretion, shall establish all other provisions
relating to meetings of Partners, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Partners,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote; provided, however, that unless the General Partner has established a
lower percentage, a majority of the Partners entitled to vote thereat shall
constitute a quorum at all meetings of the Partners.
SECTION 8.07. NET WORTH OF THE GENERAL PARTNER. By execution of this
Agreement, the General Partner represents and covenants that (a) as of the date
hereof and at all times during the existence of the Partnership it will
maintain a fair market value net worth of at least ten percent (10%) of the
total contributions less redemptions to the partnership, throughout the life of
the Partnership, in accordance with Rev. Proc. 89-12, 1989-1 C.B. 798, or such
other amount as may be required from time to time pursuant to any amendment,
modification or successor to Rev. Proc. 89-12 (such net worth being computed
excluding any interest in, or receivable due from, the Partnership and
including any income tax liabilities that would become due by the General
Partner upon disposition by the General Partner of all assets included in
determining such net worth), and (b) it will not make any voluntary
dispositions of assets which would reduce the net worth below the amount
described in (a).
SECTION 8.08. RESTRICTIONS ON GENERAL PARTNER. So long as any series of
Subordinated Debentures are held by the Partnership, the General Partner unless
so directed by the Special Representative, shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or executing any trust or power conferred on the Trustee with respect
to such series, (ii) waive any past default which is available under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all of a series of Subordinated Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Indenture, where such consent shall be required, without, in each case,
obtaining the prior approval of the Beneficial Owners of not less than 66 2/3%
of the aggregate stated liquidation preference of all series of Preferred
Partner Interests affected thereby, acting as a single class; provided,
however, that where a consent under the Indenture would require the consent of
each holder affected thereby, no such consent shall be given by the General
Partner without the prior consent of each Beneficial Owner of all series of
Preferred Partner Interests affected thereby. The General Partner shall not
revoke any action previously authorized or approved by a vote of any series of
Preferred Partner Interests. The General Partner shall notify all holders of
such Preferred Partner Interests of any notice of
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default received from the Trustee with respect to such series of Subordinated
Debentures. The General Partner shall not cause or permit the Partnership to
engage in any activity that is not consistent with the purposes of the
Partnership.
ARTICLE IX - LIABILITY AND INDEMNIFICATION
SECTION 9.01. PARTNERSHIP EXPENSES AND LIABILITIES.
(a) Except as provided in the Michigan Act, the General Partner shall
have the liabilities of a partner in a partnership without limited partners to
Persons other than the partnership and the other Partners.
(b) Except as otherwise expressly required by law, a Limited Partner, in
its capacity as such, shall have no liability in excess of (i) the amount of
its capital contributions to the Partnership, (ii) its share of any assets and
undistributed profits of the Partnership, and (iii) the amount of any
distributions wrongfully distributed to it.
SECTION 9.02. NO LIABILITY. Except as otherwise expressly provided in
Section 9.01(a) or by the Michigan Act, no Covered Person shall be liable to
the Partnership or to any other Partner for any act or omission performed or
omitted pursuant to the authority granted to it hereunder or by law, or from a
loss resulting from any mistake or error in judgment on its part or from the
negligence, dishonesty, fraud or bad faith of any employee, independent
contractor, broker or other agent of the Partnership, provided that such act or
omission, such mistake or error in judgment or the selection of such employee,
independent contractor, broker or other agent, as the case may be, did not
result from the willful misconduct, gross negligence or fraud of such Covered
Person. Any Covered Person shall be fully protected in relying in good faith
upon the records of the Partnership and upon such information, opinions,
reports or statements presented to the Partnership by any Person as to matters
the Covered Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Partnership, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which distributions to Partners might properly be paid.
SECTION 9.03. INDEMNIFICATION. To the fullest extent permitted by
applicable law, except as set forth in Section 8.03(c), an Indemnified Person
shall be entitled to indemnification from the Partnership for any loss, damage
or claim incurred by such Indemnified Person by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the scope of
authority conferred on such
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Indemnified Person by this Agreement, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of willful misconduct, gross negligence or
fraud with respect to such acts or omissions; provided, however, that any
indemnity under this Section 9.03 shall be provided out of and to the extent of
Partnership assets only, and except as otherwise provided by the Michigan Act,
no Covered Person shall have any personal liability on account thereof. To the
fullest extent permitted by applicable law, expenses (including legal fees)
incurred by an Indemnified Person in defending any claim, demand, action, suit
or proceeding shall, from time to time, be advanced by the Partnership prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Partnership of an undertaking by or on behalf of the Indemnified
Person to repay such amount if it shall be determined that the Indemnified
Person is not entitled to be indemnified as authorized in this Section 9.03.
ARTICLE X - WITHDRAWAL; TRANSFER RESTRICTIONS
SECTION 10.01. TRANSFER BY GENERAL PARTNER; ADMISSION OR SUBSTITUTED
GENERAL PARTNER. The General Partner may not Transfer its Interest (in whole
or in part) to any Person without the consent of all other Partners, provided
that the General Partner may, without the consent of any Partner, Transfer its
Interest to MCN Financial Corporation or any direct or indirect wholly owned
subsidiary of MCN Corporation; provided that after such Transfer, the
representation and covenant set forth in Section 8.07 remains true and correct.
Notwithstanding anything else herein, the General Partner may merge with or
into another Person, may permit another Person to merge with or into the
General Partner and may Transfer all or substantially all of its assets to
another Person if the General Partner is the survivor of such merger or the
Person into which the General Partner is merged or to which the General
Partner's assets are transferred is a Person organized under the laws of the
United States or any state thereof or the District of Columbia and the General
Partner shall have the right to admit the assignee or transferee of its
Interest which is permitted hereunder as a substituted or additional general
partner of the Partnership, without the consent of the Limited Partners. Any
such assignee or transferee of all or a part of the Interest of a General
Partner shall be deemed admitted to the partnership as a general partner of the
Partnership immediately prior to the effective date of such Transfer, and such
additional or successor General Partner is hereby authorized to and shall
continue the business of the Partnership without dissolution.
SECTION 10.02. WITHDRAWAL OF LIMITED PARTNERS. A Preferred Partner may not
withdraw from the Partnership prior to the dissolution and winding up of the
Partnership except upon the assignment of its Preferred Partner Interests
(including any
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redemption, repurchase, exchange or other acquisition by the partnership), as
the case may be, in accordance with the provisions of this Agreement. Any
Person who has been assigned one or more Interests shall provide the
Partnership with a completed Form W-8 or such other documents or information as
are requested by the Partnership for tax reporting purposes. A withdrawing
Preferred Partner shall not be entitled to receive any distribution and shall
not otherwise be entitled to receive the fair value of its Preferred Partner
Interest except as otherwise expressly provided in this Agreement.
ARTICLE XI - DISSOLUTION OF THE PARTNERSHIP
SECTION 11.01. NO DISSOLUTION. The Partnership shall not be dissolved by
the admission of Partners in accordance with the terms of this Agreement. The
death, withdrawal, incompetency, bankruptcy, dissolution or other cessation to
exist as a legal entity of a Limited Partner, or the occurrence of any other
event that terminates the Interest of a Limited Partner in the Partnership,
shall not in and of itself cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner, subject to the terms of this
Agreement, may, without any further act, vote or approval of any Partner, admit
any Person to the Partnership as an additional or substitute Limited Partner,
which admission shall be effective as of the date of the occurrence of such
event, and the business of the Partnership shall be continued without
dissolution.
SECTION 11.02. EVENTS CAUSING DISSOLUTION. The Partnership shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) the expiration of the term of the Partnership, as provided in Section
2.04 hereof;
(b) the withdrawal, removal or bankruptcy of the General Partner or
Transfer (other than a grant of a security interest) by the General Partner of
its entire Interest in the Partnership when the assignee is not admitted to the
Partnership as an additional or successor General Partner in accordance with
Section 10.01 hereof, or the occurrence of any other event that results in the
General Partner ceasing to be a general partner of the Partnership under the
Michigan Act, provided, the Partnership shall not be dissolved and required to
be wound up in connection with any of the events specified in this clause (b)
if (i) at the time of the occurrence of such event there is at least one
remaining general partner of the Partnership who is hereby authorized to,
agrees to and does carry on the business of the Partnership, or (ii) within
ninety (90) days after the occurrence of such event, a majority in Interest of
the remaining Partners (or such greater percentage in Interest as is required
by the Michigan Act) agree in writing to continue the business of the
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Partnership and to the appointment, effective as of the date of such event, if
required, of one or more additional general partners of the Partnership;
(c) the entry of a decree of judicial dissolution under the Michigan Act;
(d) the election of the General Partner upon the occurrence of a Tax
Event or any event specified in an Action as an event permitting the
dissolution of the Partnership; or
(e) the written consent of the General Partner and all of the Preferred
Partners.
SECTION 11.03. NOTICE OF DISSOLUTION. Upon the dissolution of the
Partnership, the General Partner shall promptly notify the Partners of such
dissolution.
ARTICLE XII - LIQUIDATION OF PARTNERSHIP INTERESTS
SECTION 12.01. LIQUIDATION. Upon dissolution of the partnership, the
General Partner, or, in the event that the dissolution is caused by an event
described in Section 11.02(b) and there is no other General Partner, a Person
or Persons who may be approved by Beneficial Owners holding not less than a
majority in liquidation preference of the Preferred Partner Interests as
liquidating trustee the "Liquidating Trustee", shall immediately commence to
wind up the Partnership's affairs; provided, however, that a reasonable time
shall be allowed for the orderly liquidation of the assets of the Partnership
and the satisfaction of liabilities to creditors so as to enable the Partners
to minimize the normal losses attendant upon a liquidation. The Preferred
Partners shall continue to share profits and losses during liquidation in the
same proportions, as specified in Articles V and VI hereof, as before
liquidation. The proceeds of liquidation shall be distributed, as realized, in
the following order and priority:
(a) to creditors of the Partnership, including Preferred Partners and
Beneficial Owners who are creditors, to the extent otherwise permitted by law,
in satisfaction of the liabilities of the Partnership (whether by payment or
the making of reasonable provision for payment thereof), other than liabilities
for which reasonable provision for payment has been made and liabilities for
distributions to Partners;
(b) to the holders of Preferred Partner Interests of each series then
outstanding in accordance with the terms of the Action or Actions for such
Series (and if such distribution shall not be made in cash, the holders of
Preferred Partner Interests of each series shall receive the corresponding
series of Subordinated Debentures held by the Partnership and purchased
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with the proceeds of each such series of Preferred Partner Interests); and
(c) to all Partners in accordance with their respective positive Capital
Account balances, after giving effect to all contributions, distributions and
allocations for all periods.
Any General Partner with a negative balance in its Capital Account upon the
winding up of the Partnership shall make a capital contribution in cash to the
Partnership to eliminate that negative balance before the later of (i) the end
of the taxable year during which such liquidation occurs or (ii) 90 days after
the date of such liquidation.
SECTION 12.02. TERMINATION. The Partnership shall terminate when all of
the assets of the Partnership have been distributed in the manner provided for
in this Article XII, and the Certificate of Limited Partnership shall have been
cancelled in the manner required by the Michigan Act.
SECTION 12.03. DUTY OF CARE. The General Partner or the Liquidating
Trustee, as the case may be, shall not be liable to the Partnership or any
Partner for any loss attributable to any act or omission of the General Partner
taken in good faith in connection with the liquidation of the Partnership and
distribution of its assets in belief that such course of conduct was in the
best interest of the Partnership. The General Partner or the Liquidating
Trustee, as the case may be, may consult with counsel and accountants with
respect to liquidating the partnership and distributing its assets and shall be
justified in acting or omitting to act in accordance with the written opinion
of such counsel or accountants, provided they shall have been selected with
reasonable care.
SECTION 12.04. NO LIABILITY FOR RETURN OF CAPITAL. The General Partner and
its respective officers, directors, members, shareholders, employees,
representatives, agents, partners and Affiliates shall not be personally liable
for the return of the contributions of any Partner to the Partnership. No
Limited Partner shall be obligated to restore to the Partnership any amount
with respect to a negative Capital Account.
ARTICLE XIII - PREFERRED PARTNER INTERESTS
SECTION 13.01. PREFERRED PARTNER INTERESTS.
(a) The aggregate number of Preferred Partner Interests which the
Partnership shall have authority to issue is unlimited. Each series of
Preferred Partner Interests shall rank equally and all Preferred Partner
Interests shall rank senior to all other Interests in respect of the right to
receive distributions and the right to receive payments out of the assets
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of the Partnership upon voluntary or involuntary dissolution and winding up of
the Partnership. The issuance of any Interests ranking senior to the Preferred
Partner Interests shall be deemed to materially adversely affect the rights of
the Preferred Partner Interests under this Agreement.
(b) The General Partner on behalf of the Partnership is authorized to issue
Preferred Partner Interests, in one or more series, having such designations,
rights, privileges, restrictions, and other terms and provisions, whether in
regard to distributions, return of capital or otherwise, as may from time to
time be established in a written action or actions (each, an "Action") of the
General Partner providing for the issue of such series. In connection with the
foregoing, the General Partner is expressly authorized, prior to issuance, to
set forth in an Action or Actions providing for the issue of such series, the
following to the extent consistent with this Agreement:
(i) The distinctive designation of such series which shall distinguish it
from other series;
(ii) The number of Preferred Partner Interests included in such series,
which number may be increased or decreased from time to time unless otherwise
provided by the General Partner in creating the series;
(iii) The distribution rate (or method of determining such rate) for
Preferred Partner Interests of such series and the date or dates upon which
such distributions shall be payable;
(iv) Whether distributions on Preferred Partner Interests of such series
shall be cumulative, and, in the case of Preferred Partner Interests of any
series having cumulative distribution rights, the date or dates or method of
determining the date or dates from which distributions on Preferred Partner
Interests of such series shall be cumulative;
(v) The amount or amounts which shall be paid out of the assets of the
Partnership to the holders of such series of Preferred Partner Interests upon
voluntary or involuntary liquidation, dissolution, winding up or termination
of the Partnership;
(vi) The price or prices at which (the "Redemption Price"), the period or
periods within which and the terms and conditions upon which the Preferred
Partner Interests of such series may be redeemed or purchased, in whole or in
part, at the option of the Partnership or the General Partner;
(vii) The obligation, if any, of the Partnership to purchase or redeem
Preferred Partner Interests of such
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series pursuant to a sinking fund or otherwise and the price or prices at
which, the period or periods within which and the terms and conditions upon
which the Preferred Partner Interests of such series shall be purchased or
redeemed, in whole or in part, pursuant to such obligation;
(viii) The period or periods within which and the terms and conditions,
if any, including the price or prices or the rate or rates of conversion or
exchange and the terms and conditions of any adjustments thereof, upon which
the Preferred Partner Interests of such series shall be convertible or
exchangeable at the option of the Preferred Partner, or the Partnership, into
any other Interests or securities or other property or cash or into any other
series of Preferred Partner Interests;
(ix) The voting rights, if any, of the Preferred Partner Interests of
such series in addition to those required by law or set forth herein, and any
requirement for the approval by the holders of Preferred Partner Interests,
or of the Preferred Partner Interests of one or more series, or of both, as a
condition to specified Action or amendments to this Agreement;
(x) The additional amounts, if any, which the Partnership will pay as a
distribution as necessary in order that the net amounts received by the
Preferred Partners who hold such series of Preferred Partner Interests after
withholding or deduction of certain taxes, duties, assessments or
governmental charges will equal the amount which would have been receivable
in respect of such Preferred Partner Interests in the absence of such
withholding or deduction ("Additional Amounts"); and
(xi) Any other relative rights, powers, preferences, privileges,
limitations or restrictions of the Preferred Partner Interests of the series
consistent with this Agreement and with applicable law.
In connection with the foregoing and without limiting the generality
thereof, the General Partner is hereby expressly authorized, without the vote
or approval of any other Partner, to take any Action to create under the
provisions of this Agreement a series of Preferred Partner Interests that was
not previously outstanding. Without the vote or approval of any other Partner,
the General Partner may execute, swear to, acknowledge, deliver, file and
record whatever documents may be required in connection with the issue from
time to time of Preferred Partner Interests in one or more series as shall be
necessary, convenient or desirable to reflect the issue of such series. The
General Partner shall do all things it deems to be appropriate or necessary to
comply with the Michigan Act and is authorized and directed to do all things it
deems to be necessary or permissible in connection with any future issuance,
including compliance with
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any statute, rule, regulation or guideline of any Federal, state or other
governmental agency or any securities exchange.
Any Action or Actions taken by the General Partner pursuant to the
provisions of this paragraph (b) shall be deemed an amendment and supplement to
and part of this Agreement.
(c) Except as otherwise provided in this Agreement or in any Action in
respect of any series of the Preferred Partner Interests and as otherwise
required by law, all rights to the management and control of the Partnership
shall be vested exclusively in the General Partner.
(d) No Preferred Partner or Beneficial Owner shall be entitled as a matter
of right to subscribe for or purchase, or have any preemptive right with
respect to, any part of any new or additional issue of Interests of any class
or series whatsoever, or of securities convertible into any Interests of any
class or series whatsoever, whether now or hereafter authorized and whether
issued for cash or other consideration or by way of distribution. Any Person
acquiring Preferred Partner Interests shall be admitted to the partnership as a
Preferred Partner upon compliance with Section 2.06.
SECTION 13.02. TERMS OF ALL PREFERRED PARTNER INTERESTS. Notwithstanding
anything else in any Action to the contrary, all Preferred Partner Interests of
the Partnership shall have the following voting rights, preferences,
participating, optional and other special rights and the qualifications,
limitations or restrictions of, and other matters relating to, the Preferred
Partner Interests as set forth below in this Section 13.02.
(a) Distributions.
(i) The Preferred Partners shall be entitled to receive, when, as and if
declared by the General Partner out of funds held by the Partnership to the
extent that the Partnership has cash on hand sufficient to permit such
payments and funds legally available therefor, cumulative cash distributions
at a rate per annum established by the General Partner, calculated on the
basis of a 360-day year consisting of twelve (12) months of thirty (30) days
each, and for any period shorter than a full monthly distribution period,
distributions will be computed on the basis of the actual number of days
elapsed in such period, and payable in United States dollars monthly in
arrears on the last day of each calendar month of each year. In the event
that any date on which distributions are payable on the Preferred Partner
Interests is not a Business Day, then payment of the distribution payable on
such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding
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calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. Such distributions will accrue and be cumulative from the original
date of issue whether or not they have been declared and whether or not there
are profits, surplus or other funds of the Partnership legally available for
the payment of distributions, or whether they are deferred.
(ii) If distributions have not been paid in full on any series of
Preferred Partner Interests, the Partnership may not:
(A) pay or declare and set aside for payment any distributions on any
other series of Preferred Partner Interests, unless the amount of any
distributions paid on any Preferred Partner Interests is paid on all
Preferred Partner Interests then outstanding on a pro rata basis, on the
date such distributions are paid, so that
(1) (x) the aggregate amount of distributions paid on such series of
Preferred Partner Interests bears to (y) the aggregate amount of
distributions paid on all such Preferred Partner Interests outstanding
the same ratio as
(2) (x) the aggregate of all accumulated arrears of unpaid
distributions in respect of such series of Preferred Partner Interests
bears to (y) the aggregate of all accumulated arrears of unpaid
distributions in respect of such Preferred Partner Interests
outstanding;
(B) pay any distribution on any Interest of any General Partner; or
(C) redeem, purchase or otherwise acquire any other Preferred Partner
Interests or any Interest of any General Partner;
until, in each case, such time as all accumulated and unpaid distributions
on all series of Preferred Partner Interests shall have been paid in full
for all distribution periods terminating on or prior to, in the case of
clauses (A) and (B), such payment and, in the case of clause (C), the date
of such redemption, purchase or acquisition.
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(b) Redemption.
(i) By their acceptance of Preferred Partner Interests, holders of
Preferred Partner Interests shall be deemed to have acknowledged and
agreed that, with respect to any series of Preferred Partner Interests the
proceeds of the sale of which will be used by the Partnership to purchase
Subordinated Debentures that may be redeemed by MCN Corporation in its
discretion at any time (under certain circumstances), MCN Corporation
shall have all rights under the Indenture to redeem such Subordinated
Debentures and may redeem such Subordinated Debentures in its discretion,
notwithstanding the fact that redemption of such Subordinated Debentures
will require the Partnership to redeem Preferred Partner Interests of such
series.
(ii) Notice of any redemption (a "Notice of Redemption") of the
Preferred Partner Interests will be given by the Partnership by mail or
delivery to each record holder of Preferred Partner Interests to be
redeemed not fewer than thirty (30) nor more than sixty (60) days prior to
the date fixed for redemption thereof. For purposes of the calculation of
the date of redemption and the dates on which notices are given pursuant
to this paragraph (b)(i), a Notice of Redemption shall be deemed to be
given on the day such notice is first mailed by first-class mail, postage
prepaid, or on the date it was delivered in person, receipt acknowledged
to the holders of such Preferred Partner Interests. Each Notice of
Redemption shall be addressed to the record holders of the Preferred
Partner Interests at the address of the holder appearing in the books and
records of the Partnership. No defect in the Notice of Redemption or in
the mailing or delivery thereof or publication of its contents shall
affect the validity of the redemption proceedings.
(iii) The Partnership may not redeem fewer than all Preferred Partner
Interests of any given series unless all accrued and unpaid dividends on
such series have been paid on all Preferred Partner Interests of such
series for all dividend periods terminating on or prior to the date of
redemption. Subject to applicable law, MCN Corporation or its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Partner Interests by tender, in the open market or by private
agreement. If a partial
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redemption of outstanding Preferred Partner Interests would result in a
delisting of a series of Preferred Partner Interests from any national
securities exchange on which the series of Preferred Partner Interests is
then listed, the Partnership may then only redeem the series of Preferred
Partner Interests in whole.
(iv) If Notice of Redemption shall have been given and payment shall
have been made by the Partnership to the record holders of the Preferred
Partner Interests, then immediately prior to the close of business on the
date of such payment, all rights of the Beneficial Owners or record
holders of such Preferred Partner Interests so called for redemption will
cease, except the right of the holders of such securities to receive the
Redemption Price, but without interest on such Redemption Price. In the
event that any date fixed for redemption of Preferred Partner Interests is
not a Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Preferred Partner
Interests is improperly withheld or refused and not made either by the
Partnership or by MCN Corporation pursuant to the Guarantee, dividends on
such Preferred Partner Interests will continue to accrue at the then
applicable rate, from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
(c) Liquidation Distribution. If, upon any voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Partnership, the
Liquidation Distribution on any series of Preferred Partner Interests can be
paid only in part because the Partnership has insufficient assets available to
pay in full the aggregate Liquidation Distribution on all Preferred Partner
Interests, then the amounts payable directly by the Partnership on such series
of Preferred Partner Interests and on all other series of Preferred Partner
Interests shall be paid on a pro rata basis, so that
(i) the aggregate amount paid in respect of the Liquidation
Distribution bears to the aggregate amount paid as liquidation
distributions
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on all other Preferred Partner Interests the same ratio as
(ii) the aggregate Liquidation Distribution bears to the aggregate
maximum liquidation distributions on the other series of Preferred Partner
Interests.
If any Liquidation Distribution shall not be made in cash, the holders of
Preferred Partner Interests of each series shall receive the corresponding
series of Subordinated Debentures held by the Partnership and purchased with
the proceeds of each such series of Preferred Partner Interests in accordance
with the preceding sentence.
(d) Voting Rights. The Limited Partners shall not have any right to vote
on matters concerning the Partnership except as specifically set forth in this
Agreement, in the Guarantee or as otherwise required by law. If (i) the
Partnership fails to pay dividends in full on any series of Preferred Partner
Interests for eighteen (18) consecutive monthly dividend periods; (ii) an Event
of Default (as defined in the Indenture) occurs and is continuing on any series
of Subordinated Debentures; or (iii) MCN Corporation is in default on any of
its payment or other obligations under the Guarantee, then the holders of the
Preferred Partner Interests of such series, together with the holders of any
other series of Preferred Partner Interests having the right to vote for the
appointment of a special representative of the Partnership and the Limited
Partners (a "Special Representative") in such event, acting as a single class,
will be entitled by the majority vote of such holders to appoint a Special
Representative and, if an Event of Default occurs, the Special Representative
shall be authorized to enforce the Partnership's creditor rights under the
Subordinated Debentures of such series, to enforce the rights of the holders of
the Preferred Partner Interests of such series under the Guarantee and to
enforce the rights of the holders of the Preferred Partner Interests of such
series to receive dividends on the Preferred Partner Interests of such series.
The Special Representative shall not be admitted as a partner in the
Partnership or otherwise be deemed to be a partner in the Partnership and shall
have no liability for the debts, obligations or liabilities of the Partnership.
For purposes of determining whether the Partnership has failed to pay dividends
in full for 18 consecutive monthly dividend periods, dividends shall be deemed
to remain in arrears, notwithstanding any payments in respect thereof, until
full cumulative dividends have been or contemporaneously are paid with respect
to all monthly dividend periods terminating on or prior to the date of payment
of such full cumulative dividends. Not later than 30 days after such right to
appoint a Special Representative arises, the General Partner will convene a
meeting for the purpose of appointing a Special Representative. If the General
Partner fails to convene such meeting within such 30-day period, the
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holders of not less than 10% of the aggregate liquidation preference of the
outstanding Preferred Partner Interests will be entitled to convene such
meeting. The provisions of this Agreement relating to the convening and
conduct of the meetings of Partners will apply with respect to any such
meeting. Any Special Representative so appointed shall cease to be a Special
Representative of the Partnership and the Limited Partners if the Partnership
(or MCN Corporation pursuant to the Guarantee) shall have paid in full all
accrued and unpaid dividends on the Preferred Partner Interests or such default
or breach, as the case may be, shall have been cured and MCN Corporation, in
its capacity as the General Partner, shall continue the business of the
Partnership without dissolution. Notwithstanding the appointment of any such
Special Representative, MCN Corporation shall continue as General Partner and
shall retain all rights under the Indenture, including the right to extend the
interest payment period as provided therein.
In furtherance of the foregoing, and without limiting the powers of any
Special Representative so appointed and for the avoidance of any doubt
concerning the powers of the special Representative, if an Event of Default
occurs and is continuing, any Special Representative, in its own name and as
trustee of an express trust, may institute a proceeding, including, without
limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce the Partnership's creditor rights
directly against MCN Corporation or any other obligor in connection with such
obligations to the same extent as the Partnership and on behalf of the
Partnership, and may pursue such proceeding to judgment or final decree, and
enforce the same against MCN Corporation or any other obligor in connection
with such obligations and collect, out of the property, wherever situated, of
MCN Corporation or any such other obligor upon such obligations, the monies
adjudged or decreed to be payable in the manner provided by law.
If any proposed amendment of this Agreement provides for, or the General
Partner otherwise proposes to effect (pursuant to an Action or otherwise), (i)
any action which would materially adversely affect the powers, preferences or
special rights of any series of Preferred Partner Interests, or (ii) the
dissolution, winding-up or termination of the Partnership, other than (x) in
connection with the distribution of Subordinated Debentures upon the occurrence
of a Tax Event or (y) as described in Section 13.02(e), then the holders of
outstanding Preferred Partner Interests will be entitled to vote on such
amendment or proposal of the General Partner (but not on any other amendment or
proposal) as a class with all other holders of Preferred Partner Interests
similarly affected, and such amendment or proposal shall not be effective
except with the approval of the holders of 66 2/3% or more of the aggregate
liquidation preference of the outstanding Preferred Partner Interests having a
right to vote on the matter; provided, however, that no such approval shall be
required if the dissolution, winding-up or termination
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of the Partnership is proposed or initiated upon the initiation of proceedings,
or after proceedings have been initiated, for the dissolution, winding-up,
liquidation or termination of MCN Corporation. Except as otherwise provided
under Section 11.02 or the Michigan Act, the Partnership will be dissolved and
wound up only with the consent of the holders of all outstanding Preferred
Partner Interests.
The rights attached to any series of Preferred Partner Interests will be
deemed not to be adversely affected by the creation or issue of, and no vote
will be required for the creation of, any additional series of Preferred
Partner Interests ranking pari passu with the Preferred Partner Interests of
such series with regard to participation in the profits and dividends or in the
assets of the Partnership.
So long as any Subordinated Debentures are held by the Partnership, the
General Partner shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or executing any trust
or power conferred on the Trustee with respect to such series, (ii) waive any
past default which is waivable under Section 513 of the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
Subordinated Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of at least 66 2/3% in liquidation preference of all series of
Preferred Partner Interests affected thereby, acting as a single class;
provided, however, that where a consent under the Indenture would require the
consent of each holder affected thereby, no such consent shall be given by the
General Partner without the prior consent of each holder of all series of
Preferred Partner Interests affected thereby. The General Partner shall not
revoke any action previously authorized or approved by a vote of any series of
Preferred Partner Interests. The General Partner shall notify all holders of
Preferred Partner Interests of any particular series of any notice of default
received from the Trustee with respect to the Subordinated Debentures purchased
with the proceeds of the sale of that series of Preferred Partner Interests.
Any required approval of Preferred Partner Interests may be given at a
separate meeting of such holders convened for such purpose, at a meeting of all
of the Partners or pursuant to written consent. The Partnership will cause a
notice of any meeting at which holders of any Preferred Partner Interests are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be mailed to each holder of Preferred Partner
Interests. Each such notice will include a statement setting forth (a) the
date of such meeting or the date by which such action is to be taken, (b) a
description of any resolution proposed for adoption at such meeting on which
such holders are entitled to vote or of such matter upon which
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written consent is sought, and (c) instructions for the delivery of proxies or
consents.
No vote or consent of the holders of the Preferred Partner Interests will be
required for the Partnership to redeem and cancel the Preferred Partner
Interests in accordance with this Agreement.
Notwithstanding that holders of Preferred Partner Interests are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Partner Interests that are owned by MCN Corporation or any entity
owned more than 20% by MCN Corporation, either directly or indirectly, shall
not be entitled to vote or consent and shall, for the purposes of such vote or
consent, be treated as if they were not outstanding.
(e) Mergers. The Partnership shall not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body,
except as described below. The Partnership may, to the extent permitted under
the Michigan Act and other applicable law, without the consent of the holders
of any series of Preferred Partner Interests, consolidate, amalgamate, merge
with or into, or be replaced by a limited partnership, limited liability
corporation or a trust organized as such under the laws of any state of the
United States of America or the District of Columbia; provided, that (i) such
successor entity either (x) expressly assumes all of the obligations of the
Partnership under all series of Preferred Partner Interests or (y) substitutes
for the Preferred Partner Interests then outstanding other securities having
substantially the same terms as such Preferred Partner Interests (the
"Successor Securities") so long as the Successor Securities rank, with respect
to participation in the profits and dividends or in the assets of the successor
entity, at least as high as such Preferred Partner Interests rank with respect
to participation in the profits and dividends or in the assets of the
Partnership, (ii) MCN Corporation expressly acknowledges such successor entity
as the holder of the Subordinated Debentures, (iii) any series of Preferred
Partner Interests or any Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which any series of Preferred
Partner Interests are then listed, (iv) such merger, consolidation,
amalgamation or replacement does not cause any series of Preferred Partner
Interests (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the
powers, preferences and other special rights of the holders of any series of
Preferred Partner Interests (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity) (and minor variations among
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States' limited partnership statutes shall be deemed not to affect the powers,
preferences and other special rights of such holders in any material respect),
(vi) such successor entity has a purpose substantially identical to that of the
Partnership, (vii) such merger, consolidation, amalgamation or replacement will
not effect the limited liability of any Preferred Partner and (viii) prior to
such merger, consolidation, amalgamation or replacement, MCN Corporation has
received an opinion of nationally recognized independent counsel to the
Partnership experienced in such matters to the effect that (x) such successor
entity will be treated as a partnership for federal income tax purposes, (y)
following such merger, consolidation, amalgamation or replacement, MCN
Corporation and such successor entity will be in compliance with the 1940 Act
without registering thereunder as an investment company and (z) such merger,
consolidation, amalgamation or replacement will not adversely affect the
limited liability of the holders of any series of Preferred Partner Interests.
(f) Subordination. Each Preferred Partner agrees (i) to the
subordination provisions applicable to the Subordinated Debentures, as set
forth in Article Fourteen of the Indenture, and (ii) to the subordination
provisions of the Guarantee set forth in Section 3.03 thereof.
ARTICLE XIV - TRANSFERS
SECTION 14.01. TRANSFERS OF PREFERRED PARTNER INTERESTS. Preferred Partner
Interests may be freely transferred by a Preferred Partner. No Interest shall
be transferred, in whole or in part, except in accordance with the terms and
conditions set forth in this Agreement. Any transfer or purported transfer of
any Interest not made in accordance with this Agreement shall be null and void.
SECTION 14.02. TRANSFER OF CERTIFICATES. The General Partner shall provide
for the registration of Certificates. Upon surrender for registration of
transfer of any Certificate, the General Partner shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer and agreement to be bound by
the terms of this Agreement in form satisfactory to the General Partner duly
executed by the Preferred Partner or his attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be cancelled by
the General Partner. A transferee of a Certificate shall provide the
Partnership with a completed Form W-8 or such other documents or information as
are requested by the Partnership for tax reporting purposes and thereafter
shall be admitted to the Partnership as a Preferred Partner and shall be
entitled to the rights and subject to the obligations of a Preferred Partner
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hereunder upon the receipt by such transferee of a Certificate. The transferor
of a Certificate shall cease to be a limited partner of the Partnership at the
time that the transferee of the Certificate is admitted to the Partnership as a
Preferred Partner in accordance with Section 2.06 and this Section 14.02.
SECTION 14.03. PERSONS DEEMED PREFERRED PARTNERS. The partnership may
treat the Person in whose name any Certificate shall be registered on the books
and records of the Partnership as the Preferred Partner and the sole holder of
such Certificate for purposes of receiving distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claims to or interest in such Certificate on the part of any
other Person, whether or not the Partnership shall have actual or other notice
thereof.
SECTION 14.04. BOOK ENTRY INTERESTS. The Certificates, on original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing the Book Entry Interests to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the
partnership. Such Certificates shall initially be registered on the books and
records of the Partnership in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interests in such Certificate,
except as provided in Section 14.06. Unless and until definitive, fully
registered Certificates (the "Definitive Certificates") have been issued to the
Beneficial Owners pursuant to Section 14.06:
(a) The provisions of this Section shall be in full force and effect;
(b) The Partnership and the General Partner shall be entitled to deal
with the Clearing Agency for all purposes of this Agreement (including the
payment of distributions on the Certificates and receiving approvals, votes or
consents hereunder) as the Preferred Partner and the sole holder of the
Certificates and, except as otherwise contemplated herein, shall have no
obligations to the Beneficial Owners;
(c) The rights of the Beneficial Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. Unless or until the Definitive Certificates are
issued pursuant to Section 14.06, the initial Clearing Agency will make book
entry transfers among the Clearing Agency Participants and receive and transmit
payments of distributions on the Certificates to such Clearing Agency
Participants;
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(d) To the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control; and
(e) Whenever this Agreement requires or permits actions to be taken based
upon approvals, votes or consents of a percentage of the Preferred Partners,
the Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from the Beneficial
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interests in the
Certificates and has delivered such instructions to the General Partner.
SECTION 14.05. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Preferred Partners is required under this Agreement,
unless and until Definitive Certificates shall have been issued pursuant to
Section 14.06, the General Partner shall give all such notices and
communications specified herein to be given to the Preferred Partners to the
Clearing Agency, and shall have no obligations to the Beneficial Owners.
SECTION 14.06. SUCCESSOR CLEARING AGENCY; DEFINITIVE CERTIFICATES. If any
Clearing Agency (including the initial Clearing Agency) shall cease to be
qualified under the Exchange Act or shall otherwise cease to act as depositary
for the Preferred Partner Interests, the General Partner may, in its
discretion, appoint a successor Clearing Agency to act in such capacity. If
(i) the Clearing Agency elects to discontinue its services as securities
depository and gives reasonable notice to the Partnership and no successor is
appointed, or (ii) the partnership elects to terminate the book entry system
through the Clearing Agency, then the Definitive Certificates shall be prepared
by the partnership. Upon surrender of the typewritten Certificate or
Certificates representing the Book Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause the
Definitive Certificates to be delivered to the Beneficial Owners in accordance
with the instructions of the Clearing Agency. The General Partner shall not be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Any Person
receiving a Definitive Certificate in accordance with this Article XIV shall be
admitted to the Partnership as a Preferred Partner upon receipt of such
Definitive Certificate and compliance with the procedures set forth in Section
2.06. The Clearing Agency or the nominee of the Clearing Agency, as the case
may be, shall cease to be a Limited Partner of the Partnership under this
Section 14.06 at the time that at least one additional Person is admitted to
the Partnership as a Preferred Partner in accordance with this Section 14.06.
The Definitive Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the General
Partner, as evidenced
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by its execution thereof. If Definitive Certificates are issued, the General
Partner will appoint a registrar, transfer agent and paying agent for the
Preferred Partner Interests. Registration of transfers of Preferred Partner
Interests will be effected without charge by or on behalf of the Partnership,
but upon payment of any tax or other governmental charges which may be imposed
in relation to it. The Partnership will not be required to register or cause
to be registered the transfer of Preferred Partner Interests after such
Preferred Partner Interests have been called for redemption.
ARTICLE XV - GENERAL
SECTION 15.01. POWER OF ATTORNEY. (a) The Class A Limited Partner and
each Preferred Partner constitutes and appoints the General Partner and the
Liquidating Trustee as its true and lawful representative and attorney-in-fact,
in its name, place and stead, to make, execute, sign, acknowledge and deliver
or file (i) all instruments, documents and certificates which may from time to
time be required by any law to effectuate, implement and continue the valid and
subsisting existence of the partnership, (ii) all instruments, documents and
certificates that may be required to effectuate the dissolution and termination
of the Partnership in accordance with the provisions hereof and Michigan law,
(iii) all other amendments of this Agreement or the Certificate of Limited
Partnership and other filings contemplated by this Agreement including, without
limitation, amendments reflecting any transfer of the Interest of the General
Partner permitted under Section 10.01 of this Agreement, or the return, in
whole or in part, of the contribution of any Partner, or the addition,
substitution or increased contribution of any Partner, or any action of the
Partners duly taken pursuant to this Agreement whether or not such Partner
voted in favor of or otherwise approved such action, and (iv) any other
instrument, certificate or document required from time to time to admit a
Partner, to effect its substitution as a Partner, to effect the substitution of
the Partner's assignee as a Partner or to reflect any action of the Partners
provided for in this Agreement.
(b) The powers of attorney granted herein (i) shall be deemed to be
coupled with an interest, shall be irrevocable and shall survive the death,
insanity, incompetency or incapacity (or, in the case of a Partner that is a
corporation, association, partnership, limited liability company or trust,
shall survive the merger, dissolution or other termination of existence) of the
Partner and (ii) shall survive the assignment by the Partner of the whole or
any portion of his Interest, except that where the assignee of the whole or any
portion thereof has furnished a power of attorney, this power of attorney shall
survive such assignment for the sole purpose of enabling the General Partner
and the Liquidating Trustee to execute, acknowledge and file any instrument
necessary to effect
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<PAGE> 39
any permitted substitution of the assignee for the assignor as a Partner and
shall thereafter terminate. In the event that the appointment conferred in
this Section 15.01 would not constitute a legal and valid appointment by any
Partner under the laws of the jurisdiction in which such Partner is
incorporated, established or resident, upon the request of the General Partner
or the Liquidating Trustee, such Partner shall deliver to the General Partner
or the Liquidating Trustee a properly authenticated and duly executed document
constituting a legal and valid power of attorney under the laws of the
appropriate jurisdiction covering the matters set forth in this Section 15.01.
(c) The General Partner may require a power of attorney to be executed by
a transferee of a Partner as a condition of its admission as a substitute
Partner.
SECTION 15.02. WAIVER OF PARTITION. Each Partner hereby irrevocably waives
any and all rights that it may have to maintain an action for partition of any
of the Partnership's property or assets.
SECTION 15.03. NOTICES. Any notice permitted or required to be given
hereunder shall be in writing and shall be deemed given (i) on the day the
notice is first mailed to a Partner by first class mail, postage prepaid, or
(ii) on the date it was delivered in person to a Partner, receipt acknowledged,
at its address appearing on the books and records of the Partnership. Another
address may be designated by a Partner by such Partner giving notice of its new
address as provided in this Section 15.03.
SECTION 15.04. ENTIRE AGREEMENT. This Agreement, including the exhibits
annexed hereto and incorporated by reference herein and the Action of the
General Partner made contemporaneously herewith and any subsequent Actions of
the General Partner contain the entire agreement of the parties hereto and
supersedes all prior agreements and understandings, oral or otherwise, among
the parties hereto with respect to the matters contained herein.
SECTION 15.05. WAIVERS. Except as otherwise expressly provided herein, no
purported waiver by any party of any breach by another party of any of his
obligations, agreements or covenants hereunder, or any part thereof, shall be
effective unless made in a writing executed by the party or parties sought to
be bound thereby, and no failure to pursue or elect any remedy with respect to
any default under or breach of any provision of this Agreement, or any part
hereof, shall be deemed to be a waiver of any other subsequent similar or
different default or breach, or any election of remedies available in
connection therewith, nor shall the acceptance or receipt by any party of any
money or other consideration due him under this Agreement, with or without
knowledge of any breach hereunder, constitute a
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<PAGE> 40
waiver of any provision of this Agreement with respect to such or any other
breach.
SECTION 15.06. HEADINGS. The section headings herein contained have been
inserted only as a matter of convenience of reference and in no way define,
limit or describe the scope or intent of any provisions of this Agreement nor
in any way affect any such provisions.
SECTION 15.07. SEPARABILITY. Each provision of this Agreement shall be
considered to be separable, and if, for any reason, any such provision or
provisions, or any part thereof, is determined to be invalid and contrary to
any existing or future applicable law, such invalidity shall not impair the
operation of, or affect, those portions of this Agreement which are valid, and
this Agreement shall be construed and enforced in all respects as if such
invalid or unenforceable provision or provisions had been omitted.
SECTION 15.08. CONTRACT CONSTRUCTION. Whenever the content of this
Agreement permits, the masculine gender shall include the feminine and neuter
genders, and reference to singular or plural shall be interchangeable with the
other. References in this Agreement to particular sections of the Code or to
provisions of the Michigan Act shall be deemed to refer to such sections or
provisions as they may be amended after the date of this Agreement.
SECTION 15.09. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and each of such counterparts for all purposes shall be deemed to
be an original, but all of such counterparts, when taken together, shall
constitute but one and the same instrument, binding upon all parties hereto,
notwithstanding that all of such parties may not have executed the same
counterpart.
SECTION 15.10. BENEFIT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, the Preferred Partners and Beneficial Owners
and their respective successors and assigns, but shall not be deemed for the
benefit of creditors or any other Persons, nor shall it be deemed to permit any
assignment by a Partner of any of its rights or obligations hereunder except as
contemplated herein. Any person, including a Preferred Partner and any
Beneficial Owner, who accepts an interest in the Partnership by such acceptance
accedes to this Agreement.
SECTION 15.11. FURTHER ACTIONS. Each of the Partners hereby agrees that it
shall hereafter execute and deliver such further instruments and do such
further acts and things as may be required or useful to carry out the intent
and purposes of this Agreement and as are not inconsistent with the terms
hereof.
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<PAGE> 41
SECTION 15.12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Michigan,
without regard to conflicts of laws.
SECTION 15.13. AMENDMENTS. Except as otherwise expressly provided herein
or as otherwise required by law, this Agreement or any Action may only be
amended by a written instrument executed by the General Partner provided,
however, that any amendment which would adversely affect the powers,
preferences or special rights of any series of Preferred Partner Interests may
be effected only as permitted by the terms of such series of Preferred Partner
Interests.
SECTION 15.14. RIGHTS TO DISTRIBUTIONS. So long as Certificates remain in
book entry form, a Clearing Agency Participant that is an assignee of a limited
partner interest will be assigned and have the rights to distributions from any
Clearing Agency which is a Preferred Partner under this Agreement that the
assignee has as a Clearing Agency Participant with the Clearing Agency under
the agreements and standard procedures in effect between them.
SECTION 15.15. VOTING RIGHTS. Each Clearing Agency in whose name a
Certificate is registered agrees (a) to exercise its voting and other rights
that, under the Michigan Act, are rights other than rights to distributions at
the direction of the Clearing Agency Participants and (b) to use its agreements
and standard procedures with Clearing Agency Participants in determining how
such rights are to be communicated and exercised by Clearing Agency
Participants.
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<PAGE> 42
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
GENERAL PARTNER:
MCN CORPORATION
/s/ Daniel L. Schiffer
---------------------------
Name: Daniel L. Schiffer
Title: Vice President, General
Counsel and Secretary
CLASS A LIMITED PARTNER,
solely to reflect its
withdrawal from the
Partnership:
MCN FINANCE CORPORATION
/s/ Alfred R. Glancy III
----------------------------
Name: Alfred R. Glancy III
Title: Chairman and President
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<PAGE> 1
EXHIBIT 4-2
ACTION BY THE GENERAL PARTNER OF MCN MICHIGAN
LIMITED PARTNERSHIP CREATING THE 9 3/8% CUMULATIVE
PREFERRED SECURITIES, SERIES A
Dated October 26, 1994
Pursuant to Section 13.01 of the Amended and Restated Limited Partnership
Agreement of MCN Michigan Limited Partnership dated as of October 26, 1994 (as
amended from time to time, the "Partnership Agreement"), MCN Corporation as
general partner (the "General Partner") of MCN Michigan Limited Partnership
(the "Partnership"), desiring to state the designations, rights, privileges,
restrictions, preferences, voting rights and other terms and conditions of a
new series of Preferred Partner Interests, hereby authorizes and establishes
such new series of Preferred Partner Interests according to the following terms
and conditions (each capitalized term used but not defined herein shall have
the meaning set forth in the Partnership Agreement):
1. Designation. 4,000,000 interests with an aggregate liquidation
preference of $100,000,000 of the Preferred Partner Interests of the
Partnership, liquidation preference $25 per Preferred Partner Interest, are
hereby designated as "9 3/8% Cumulative Preferred Securities, Series A
(liquidation preference $25 per Preferred Security)" (hereinafter the "Series A
Preferred Securities").
2. Dividends. (a) Dividends on the Series A Preferred Securities will be
fixed at a rate per annum of 9 3/8% of the stated liquidation preference of
$25.00 per Series A Preferred Security. Dividends in arrears for more than one
month will bear interest thereon at the rate per annum of 9 3/8% thereof. The
term "Dividends" as used herein includes any such interest payable unless
otherwise stated. The amount of Dividends payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
(b) Dividends on the Series A Preferred Securities will be cumulative,
will accrue from November 2, 1994 and will be payable monthly in arrears, on
the last day of each calendar month of each year, commencing November 30, 1994,
when, as and if available and determined to be so payable by the General
Partner, except as otherwise described below.
(c) Dividends on the Series A Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Partnership at
the close of business on the relevant record dates, which, as long as the
Series A Preferred Securities remain in book-entry-only form, will be one
Business Day prior to the relevant payment dates. Subject to any applicable
laws and regulations and the provisions of the Partnership Agreement, each such
payment will made to the Depositary (as such term is defined in section 8) for
the Series A Preferred Securities for distribution in accordance with its rules
and customary practices. In the event the Series A Preferred Securities shall
not continue to remain in book-entry-
<PAGE> 2
only form, the General Partner shall have the right to select relevant
record dates which shall be more than one Business Day prior to the relevant
payment dates. In the event that any date on which Dividends are payable on
the Series A Preferred Securities is not a Business Day, then payment of the
Dividend payable on such date will be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(d) Dividends on the Series A Preferred Securities shall be paid on the
dates payable to the extent that the Partnership has (i) funds legally
available for the payment of such Dividends and (ii) cash on hand sufficient to
permit such payment. Dividends on the Series A Preferred Securities will be
deferred if and for so long as MCN Corporation defers payments to the
Partnership on the Series A Subordinated Debentures (as defined below), and in
the event of any such deferral, the Partnership shall give notice to the
holders of the Series A Preferred Securities of the deferral period selected by
MCN Corporation. If Dividends are deferred, the deferred Dividends shall
continue to accrue and shall be paid to holders of record of the Series A
Preferred Securities as they appear on the records of the Partnership on the
record date next following such deferral period.
3. Redemption & Sinking Fund Obligations. (a) The Series A Preferred
Securities are subject to redemption at the option of the Partnership, in whole
or in part, from time to time, on or after November 30, 1999 at a redemption
price of $25.00 per Series A Preferred Security plus accrued and unpaid
dividends to the date fixed for redemption (the "Redemption Price"). In the
event that fewer than all of the Series A Preferred Securities are to be
redeemed, the Series A Preferred Securities to be redeemed shall be selected in
accordance with the rules and customary practices of the Depositary, so long as
the Series A Preferred Securities are held by a depositary, and thereafter by
lot.
(b) Upon redemption or payment at maturity of the Series A Subordinated
Deferrable Interest Debt Securities (the "Series A Subordinated Debt
Securities") issued by MCN Corporation pursuant to the Indenture, which Series
A Subordinated Debt Securities were purchased by the Partnership from MCN
Corporation with the proceeds from the issuance and sale of the Series A
Preferred Securities and the related capital contribution of the General
Partner, the proceeds from such redemption or payment of the Series A
Subordinated Debt Securities shall be applied to redeem the Series A Preferred
Securities at the Redemption Price.
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<PAGE> 3
(c) If a Tax Event (as defined below) shall occur and be continuing, the
Series A Preferred Securities will be subject to redemption as described in
Section 4, below. "Tax Event" means that the General Partner shall have
received an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that,
as a result of (i) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein or
(ii) any amendment to or change in an interpretation or application of such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after
such date), there is more than an insubstantial risk that (x) the Partnership
is subject to federal income tax with respect to interest received on the
Series A Subordinated Debt Securities, (y) interest payable to the Partnership
on the Series A Subordinated Debt Securities will not be deductible by MCN
Corporation for federal income tax purposes or (z) the Partnership is subject
to more than a de minimis amount of other taxes, duties or other governmental
charges.
(d) If the Partnership gives a notice of redemption in respect of Series
A Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York time, on the redemption date, the Partnership will irrevocably deposit
with the Depositary funds sufficient to pay the applicable Redemption Price and
will give the Depositary irrevocable instructions and authority to pay the
Redemption Price to the holders of the Series A Preferred Securities.
(e) The Series A Preferred Securities are not subject to any sinking fund
obligations.
4. Tax Event Redemption or Distribution. If a Tax Event shall occur and be
continuing, the General Partner may elect to dissolve the Partnership and cause
Series A Subordinated Debt Securities with an aggregate principal amount equal
to the aggregate stated liquidation preference of, with an interest rate
identical to the dividend rate of, and accrued and unpaid interest equal to
accrued and unpaid Dividends (whether or not declared) on, the Series A
Preferred Securities, to be distributed to the holders of the Series A
Preferred Securities in liquidation of such holders' interests in the
Partnership, within 90 days following the occurrence of such Tax Event;
provided, however, that as a condition of such dissolution and distribution,
the General Partner and the Partnership shall have received an opinion of
nationally recognized independent tax counsel experienced in such matters (a
"No Recognition Opinion") to the effect that the holders of the Series A
Preferred Securities will not recognize any gain or loss for federal income tax
purposes as a result of such dissolution and distribution of
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<PAGE> 4
Series A Subordinated Debt Securities; provided, further, that, if at the time
there is available to the General Partner the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar reasonable
measure, which has no adverse effect on the Partnership, MCN Corporation or the
holders of the Series A Preferred Securities, the General Partner will pursue
such measure in lieu of dissolution. Furthermore, if the General Partner (i)
has received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that MCN Corporation would be
precluded from deducting the interest on the Series A Subordinated Debt
Securities for federal income tax purposes even if the Series A Subordinated
Debt Securities were distributed to the holders of Series A Preferred
Securities in liquidation of such holders' interests in the Partnership as
described above or (ii) after its receipt of a Dissolution Tax Opinion, the
General Partner shall have been informed by such tax counsel that a No
Recognition Opinion cannot be delivered to the General Partner and the
Partnership, the General Partner shall have the right, upon not less than 30
nor more than 60 days notice to redeem the Series A Preferred Securities, in
whole (and not in part), for cash at the Redemption Price within 90 days
following the occurrence of such Tax Event; provided, however, that, if at the
time there is available to the General Partner the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some ministerial action,
such as filing a form or making an election, or pursuing some other similar
reasonable measure, which has no adverse effect on the Partnership, MCN
Corporation or the holders or Beneficial Owners of the Series A Preferred
Securities, the General Partner will pursue such measure in lieu of redemption.
After the date fixed for any distribution of Series A Subordinated Debt
Securities, upon dissolution of the Partnership, (i) the Series A Preferred
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee, as the record holder of the Series A Preferred Securities, will
receive a registered global certificate or certificates representing the Series
A Subordinated Debt Securities to be delivered upon such distribution and (iii)
any certificates representing Series A Preferred Securities not held by the
Depositary or its nominee will be deemed to represent Series A Subordinated
Debt Securities having an aggregate principal amount equal to the aggregate
stated liquidation preference of, with an interest rate identical to the
dividend rate of, and accrued and unpaid interest equal to accrued and unpaid
dividends (whether or not declared) on, such Series A Preferred Securities
until such certificates are presented to MCN Corporation or its agent for
transfer or reissuance.
5. Liquidation Distribution. In the event of any voluntary or involuntary
liquidation, dissolution, winding-up or
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<PAGE> 5
termination of the Partnership, the holders of the Series A Preferred
Securities at the time will be entitled to receive out of the assets of the
Partnership available for distribution to Partners after satisfaction of
liabilities of creditors as required by the Partnership Act, before any
distribution of assets is made to the General Partner, but together with the
holders of every other series of Preferred Partner Interests outstanding, an
amount equal to, in the case of holders of Series A Preferred Securities, the
aggregate of the stated liquidation preference of $25 per Series A Preferred
Security and accrued and unpaid Dividends thereon to the date of payment (the
"Liquidation Distribution"), unless, in connection with such liquidation,
dissolution, winding-up or termination, Series A Subordinated Debt Securities
in an aggregate principal amount equal to the Liquidation Distribution have
been distributed on a pro rata basis to the holders of Series A Preferred
Securities.
6. Voting Rights. The holders of the Series A Preferred Partner Interests
shall have no voting rights except as provided in the Partnership Agreement.
7. Subordination. The holders of Series A Preferred Securities are deemed,
by acceptance of such Interests, to have (i) agreed that the Series A
Subordinate Debentures issued pursuant to the Indenture are subordinate and
junior in right of payment to all Senior Indebtedness (as such term is defined
in the Indenture) of MCN Corporation as and to the extent provided in the
Indenture and (ii) agreed that the Guarantee relating to the Series A Preferred
Securities is subordinate and junior in right of payment to all other
liabilities of MCN Corporation.
8. Depositary. The Series A Preferred Securities shall be held initially
by The Depository Trust Company ("DTC") and made available to investors only in
book entry form, in accordance with the rules applicable to DTC on file with
the Securities and Exchange Commission, as such rules are in effect from time
to time. The General Partner may appoint a successor depositary in accordance
with the provisions of the Partnership Agreement (DTC and any successor
depositary being hereinafter referred to as the "Depositary") and thereafter
the Series A Preferred Securities shall be held by any such Depositary and
shall be made available to investors only in accordance with rules of such
Depositary. The rules of the Depositary shall be applicable to any matter set
forth therein in respect of the Series A Preferred Securities. The Partnership
may withdraw the Series A Preferred Securities from the custody of the
Depositary, in which case the Partnership shall provide physical certificates
or shall adopt an amendment to this Action providing alternative arrangements
applicable to the Series A Preferred Securities. If Definitive Certificates
are delivered, the Partnership and the General Partner shall comply with such
procedures as promptly as practicable.
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<PAGE> 6
IN WITNESS WHEREOF, the General Partner has executed this Action as of the
day and year first above written.
MCN CORPORATION
By: /s/ Sebastian Coppola
----------------------
Name: Sebastian Coppola
Title: Vice President and Treasurer
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<PAGE> 7
Exhibit A
Certificate Evidencing Preferred Partner Interests
of
MCN Michigan Limited Partnership
9 3/8% Cumulative Preferred Securities,
Series A (liquidation preference
$25 per Preferred Security)
MCN Michigan Limited Partnership, a Michigan limited partnership (the
"Partnership"), hereby certifies that Cede & Co. (the "Holder") is the
registered owner of 4,000,000 fully paid Preferred Partner Interests of the
Partnership designated the 9 3/8% Cumulative Preferred Securities, Series A
(liquidation preference $25 per Preferred Security) (the "Series A Preferred
Partner Interests") representing Preferred limited partner interests in the
Partnership transferable on the books and records of the Partnership, in person
or by a duly authorized attorney, upon surrender of this Certificate duly
endorsed and in proper form for transfer. The powers, preferences and special
rights and limitations of the Series A Preferred Partner Interests are set
forth in, and this Certificate and the Series A Preferred Partner Interests
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Limited Partnership Agreement dated
as of October 26, 1994 of the Partnership as the same may, from time to time,
be amended (the "Partnership Agreement") authorizing the issuance of the Series
A Preferred Partner Interests and determining, along with any actions of the
General Partner of the Partnership as authorized under the Partnership
Agreement, the preferred, deferred and other special rights and restrictions,
regarding distributions, voting, redemption and otherwise and other matters
relating to the Series A Preferred Partner Interests. The Partnership will
furnish a copy of the Partnership Agreement to the Holder without charge upon
written request to the Partnership at its principal place of business or
registered office. Capitalized terms used herein but not defined shall have
the meaning given them in the Partnership Agreement. The Holder is entitled to
the benefits of the Payment and Guarantee Agreement of MCN Corporation, dated
as of October 26, 1994 relating to the Preferred Partner Interests (the
"Guarantee") and of the Indenture between MCN Corporation and NBD Bank, N.A.,
as Trustee, dated as of September 1, 1994 (the "Indenture"), under and pursuant
to which the related series of
A-1
<PAGE> 8
Subordinated Debentures are issued and outstanding, in either case to the
extent provided therein. The Holder is further entitled to enforce such rights
of the Partnership under the Indenture to the extent provided therein and in
the Partnership Agreement. The Partnership will furnish a copy of the
Guarantee and Indenture to the Holder without charge upon written request to
the Partnership at its principal place of business or registered office.
The Holder, by accepting this Certificate, is deemed to have (i) agreed that
the Subordinated Debentures issued pursuant to the Indenture are subordinate
and junior in right of payment to all Senior Indebtedness (as such term is
defined in the Indenture) of MCN Corporation as and to the extent provided in
the Indenture and (ii) agreed that the Guarantee is subordinate and junior in
right of payment to all other liabilities of MCN Corporation. Upon receipt of
this Certificate and compliance with Section 2.06 of the Partnership Agreement,
the Holder shall be admitted to the Partnership as a Preferred Partner, shall
be bound by the Partnership Agreement and shall be entitled to the benefits
thereunder.
IN WITNESS WHEREOF, the Partnership has executed this Certificate this ____
day of ________________, 1994.
MCN MICHIGAN
Limited Partnership
By: MCN Corporation,
its General Partner
By:_________________________
Name:
Title:
A-2
<PAGE> 1
EXHIBIT 4-4
MCN CORPORATION
(A MICHIGAN CORPORATION)
PRICING COMMITTEE
SECRETARY'S CERTIFICATE
The undersigned, Secretary of MCN Corporation, a Michigan corporation,
hereby certifies that the following is a true and correct copy of a resolution
duly adopted by the Pricing Committee of MCN Corporation on October 26, 1994,
and such resolution has not been modified, amended or rescinded and remains in
full force and effect on the date hereof.
RESOLVED, that debt securities (the "Securities") shall be
issued pursuant to the resolutions of the Board of Directors dated
July 28, 1994 with the following price, terms and conditions as set
forth on Attachment A.
IN WITNESS WHEREOF, I have hereunto affixed my signature this 28th day
of October, 1994.
/s/ Daniel L. Schiffer
------------------------------
Daniel L. Schiffer, Secretary
<PAGE> 2
Attachment A
TERMS AND CONDITIONS OF
SERIES A SUBORDINATED DEFERRABLE INTEREST DEBT SECURITIES
1. Indenture: The securities will be issued under
the Indenture dated as of
September 1, 1994 (the "Indenture")
between the Corporation and NBD
Bank, N.A., providing for the
issuance of Subordinated Debt
Securities, and capitalized terms
used but not defined herein are used
as defined in the Indenture.
2. Title: Series A Subordinated Deferrable
Interest Debt Securities ("Series
A Debt Securities").
3. Aggregate Principal Limited to $101,100,000 aggregate
Amount: principal amount.
4. Maturity Date: November 30, 2024
5. Date of Initial Issuance: November 2, 1994
6. Interest: Interest on the Series A Debt
Securities will be fixed at a rate
per annum of 9 3/8%. Interest in
arrears for more than one month will
bear interest thereon at the rate
per annum of 9 3/8% thereof. The
term "Interest" as used herein
includes any such interest payable
unless otherwise stated. Interest
on the Series A Debt Securities will
be cumulative, will accrue from
November 2, 1994 and will be payable
monthly in arrears, on the last day
of each calendar month of each year
(each, an "Interest Payment Date"),
commencing November 30, 1994, to the
holders of Series A Debt Securities
as they appear on the books and
records of the Corporation at the
close of business on the relevant
record dates, which, as long as the
Series A Debt Securities remain in
book-entry-only form, will be one
Business Day prior to the relevant
payment dates. In the event the
Series A Debt Securities shall
not continue to remain in
book-entry-only form, the
Corporation shall have the right to
select relevant record dates which
shall be more than one Business Day
prior to the relevant payment dates.
In the
<PAGE> 3
event that any date on which
Interest is payable on the Series A
Debt Securities is not a Business
Day, then payment of Interest
payable on such date will be made on
the next succeeding day which is a
Business Day (and without any
interest or other payment in respect
of any such delay) except that, if
such Business Day is in the next
succeeding calendar year, such
payment shall be made on the
immediately preceding Business Day,
in each case with the same force and
effect as if made on such date.
7. Additional Interest: If at any time MCN Michigan Limited
Partnership ("MCN Michigan")
shall be required to pay any interest
on dividends in arrears in respect
of the 9 3/8% Cumulative Preferred
Securities, Series A ("Series A
Preferred Securities"), the proceeds
of the offering of which MCN
Michigan used to purchase Series A
Debt Securities, pursuant to the
terms of such Series A Preferred
Securities, then the Corporation
will pay as interest to MCN Michigan
as the holder of Series A Debt
Securities ("Additional Interest")
an amount equal to such interest on
dividends in arrears. In addition,
if MCN Michigan would be required to
pay any taxes, duties, assessments
or governmental charges of whatever
nature (other than withholding
taxes) imposed by the United States,
or any taxing authority, then, in
any such case, the Corporation also
will pay as Additional Interest such
amounts as shall be required so that
the net amounts received and
retained by MCN Michigan after
paying any such taxes, duties,
assessments or other governmental
charges will be not less than the
amounts MCN Michigan would have
received had no such taxes, duties,
assessments or other governmental
charges been imposed.
8. Option to Extend Interest The Corporation shall have the right
Payment Period: at any time and, from time to
time, during the term of the Series
A Debt Securities to extend the
interest payment period to a period
not exceeding 60 consecutive months
(the "Extension Period"), at the
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<PAGE> 4
end of which Extension Period the
Corporation shall pay all interest
then accrued and unpaid (including
any Additional Interest) (together
with interest thereon at the rate
specified for the Series A Debt
Securities to the extent permitted
by applicable law); provided, that,
during any such Extension Period,
the Corporation shall not declare or
pay any dividend on, or redeem,
purchase, acquire or make a
liquidation payment with respect to
any of its capital stock until
deferred interest on the Series A
Debt Securities is paid in full.
Prior to the termination of any such
Extension Period, the Corporation
may further extend the interest
payment period, provided that such
Extension Period together with all
such previous and further extensions
thereof may not exceed 60
consecutive months. Upon the
termination of any Extension Period
and the payment of all amounts then
due, the Corporation may select a
new Extension Period, subject to the
above requirements. No interest
during an Extension Period shall be
due and payable but interest shall
accrue and shall be payable on the
Interest Payment Date next following
such Extension Period to the holders
of record on the record date next
preceding such Interest Payment
Date. If MCN Michigan shall be the
sole holder of the Series A Debt
Securities, the Corporation shall
give MCN Michigan notice of its
selection of such Extension Period
one Business Day prior to the
earlier of (i) the date the
dividends on the Series A Preferred
Securities are payable or (ii) the
date MCN Michigan is required to
give notice to the New York Stock
Exchange or other applicable
self-regulatory organization or to
holders of the Series A Preferred
Securities of the record date or the
date such dividend is payable, but
in any event not less than one
Business Day prior to such record
date. If MCN Michigan shall not be
the sole holder of the Series A Debt
Securities, the Corporation shall
give the holders of the Series A
Debt Securities notice of its
selection of such Extension Period
-3-
<PAGE> 5
ten Business Days prior to the
earlier of (i) the next Interest
Payment date or (ii) the date the
Corporation is required to give
notice to the New York Stock
Exchange or other applicable self-
regulatory organization or to
holders of the Series A Debt
Securities or of the record or
payment date of such related
interest payment, but in any event
not less than two Business Days
prior to such record date.
9. Mandatory Prepayment: If MCN Michigan redeems Series A
Preferred Securities in accordance
with the terms thereof, the Series A
Debt Securities will become due and
payable in a principal amount equal
to the aggregate stated liquidation
preference of the Series A Preferred
Securities so redeemed, together
with any accrued and unpaid
interest, including Additional
Interest, if any, to the date fixed
for redemption.
10. Optional Redemption: If there shall be no Series A
Preferred Securities outstanding, the
Series A Debt Securities will be
redeemable at the option of the
Corporation, in whole or in part, at
any time on or after November 30,
1999, upon not less than 30 nor more
than 60 days' notice at a redemption
price equal to 100% of the principal
amount to be redeemed plus any
accrued and unpaid interest,
including any Additional Interest,
to the date fixed for redemption.
11. Sinking Fund Obligations: The Series A Debt Securities are not
subject to any sinking fund
obligations.
12. Form of Security: The form of Security for the Series
A Debt Securities to be issued
to MCN Michigan if MCN Michigan is
the sole holder of Series A Debt
Securities is attached hereto as
Exhibit A. The form of Security for
the Series A Debt Securities if MCN
Michigan is not the sole holder of
Series A Debt Securities is attached
hereto as Exhibit B.
-4-
<PAGE> 6
13. Global Security; Common If Series A Debt Securities are
Depositary; Discontinuance: distributed to holders of Series A
Preferred Securities, the Series A
Debt Securities will be issuable
in whole or in part in the form of
Global Securities, as described
in the Prospectus Supplement dated
October 18, 1994, of the Corporation
relating to the Series A Debt
Securities, a copy of which is
attached hereto as Exhibit C and is
subject to completion. The
Depository Trust Company ("DTC")
shall be the Common Depositary for
the Series A Debt Securities. The
Corporation may appoint a successor
depositary as Common Depositary if
DTC is unwilling or unable to
continue as such. A Global Security
shall be exchangeable for Series A
Debt Securities registered in the
names of persons other than the
Common Depositary or its nominee
only if (i) the Common Depositary
notifies the Corporation that it is
unwilling or unable to continue as a
depositary for such Global Security
and no successor depositary shall
have been appointed, or if any time
the Common Depositary ceases to be a
clearing agency registered under the
Exchange Act at a time when the
Common Depositary is required to be
so registered to act as such
depositary and no successor
depositary shall have been
appointed, (ii) the Corporation in
its sole discretion determines that
such Global Security shall be so
exchangeable or (iii) there shall
have occurred an Event of Default
with respect to such Series A Debt
Securities.
14. Denominations; Exchange In the event that Series A Debt
and Transfer: Securities are issued in
certificated form, such Series A
Debt Securities will be issued in
denominations of $25.00 and integral
multiples thereof, and the transfer
of Series A Debt Securities will be
registrable and Series A Debt
Securities will be exchangeable for
Series A Debt Securities of other
denominations of a like aggregate
principal amount at the corporate
trust office of the Trustee in
Detroit, Michigan.
-5-
<PAGE> 7
15. Place of Payment: Principal and interest on the Series
A Debt Securities shall be
payable at the corporate trust
offices of the Trustee in Detroit,
Michigan. If Series A Debt
Securities are issued in
certificated form, payment of
interest may be made at the option
of the Corporation by check mailed
to the address of the persons
entitled thereto.
16. Set-off: Notwithstanding anything to the
contrary in the Indenture, the
Corporation shall have the right to
set-off any payment it is otherwise
required to make thereunder with and
to the extent the Corporation has
theretofore made, or is concurrently
on the date of such payment making,
a payment under the Payment and
Guarantee Agreement dated as of
October 26, 1994, by the Corporation
in favor of MCN Michigan.
-6-
<PAGE> 8
Form of Security. EXHIBIT A(1)
MCN CORPORATION
SERIES A SUBORDINATED DEFERRABLE INTEREST
DEBT SECURITY
No. R-1 $100,000,000
MCN CORPORATION, a corporation duly organized and existing under the laws of
Michigan (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to MCN MICHIGAN LIMITED PARTNERSHIP, or registered
assigns, the principal sum of One Hundred Million Dollars on November 30, 2024
and to pay interest thereon from November 2, 1994 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
monthly on the last day of each calendar month of each year (each, an "Interest
Payment Date"), commencing November 30, 1994, at the rate of 9 3/8% per annum,
until the principal hereof is paid or made available for payment and interest
in arrears for more than one month will bear interest (to the extent that the
payment of such interest shall be legally enforceable) at the rate of 9 3/8%
per annum.
On the date of original issuance of this Security, the Company is a general
partner of MCN Michigan Limited Partnership, a limited partnership formed under
the laws of the State of Michigan ("MCN Michigan"). On such date, MCN Michigan
issued its 9 3/8% Cumulative Preferred Securities, Series A (the "Preferred
Securities"). If at any time (i) MCN Michigan shall be required to pay any
interest on dividends in arrears in respect of the Preferred Securities, then
the Company will pay as interest to MCN Michigan, as the holder of this
Security, an amount equal to such interest on dividends in arrears or (ii) MCN
Michigan would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any taxing authority, then, in any such case, the
Company also will pay such amounts as shall be required so that the net amounts
received and retained by MCN Michigan, after paying any such taxes, duties,
assessments or other governmental charges will not be less than the amounts MCN
Michigan would have received had no such taxes, duties, assessments or other
governmental charges been imposed. Any amounts the Company is required to pay
to MCN Michigan pursuant to the foregoing clause (i) or (ii) are referred to in
this Security as "Additional Interest." In the event that Securities
("Exchange Securities") are issued to the holders of the
<PAGE> 9
Preferred Securities in accordance with the terms of the Preferred Securities
this Security shall be cancelled, with no payment by the Company to MCN
Michigan, concurrently with the issuance of all Exchange Securities that the
Company is required to issue. If any Additional Interest is due to MCN
Michigan immediately prior to such cancellation, the Additional Interest shall
become payable to the Holders of the Exchange Securities on a pro rata basis.
The Company shall have the right at any time and, from time to time, to
extend the interest payment period to a period not exceeding 60 consecutive
months (the "Extension Period"), at the end of which Extension Period the
Company shall pay all interest then accrued and unpaid (including any
Additional Interest) (together with interest thereon to the extent permitted by
law); provided that, during any such Extension Period, the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock until deferred
interest on the Securities is paid in full. Prior to the termination of any
such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 60 consecutive months. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may select a new Extension Period, subject to the foregoing
requirements. No interest during an Extension Period shall be due and payable.
The Company shall give notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date the dividends on the
Preferred Securities are payable or (ii) the date MCN Michigan is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to Holders of the Preferred Securities or of the record or
payment date or the date such dividend is payable, but in any event not less
than one Business Day prior to such record date.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of September 1, 1994 (herein called the
"Indenture"), between the Company and NBD Bank, N.A., as Trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $100,000,000.
-2-
<PAGE> 10
If MCN Michigan redeems Preferred Securities in accordance with the terms
thereof, this Security will become due and payable in a principal amount equal
to the aggregate stated liquidation preference of the Preferred Securities so
redeemed, together with any accrued and unpaid interest, including Additional
Interest, if any, to the date fixed for redemption.
Notwithstanding anything to the contrary in the Indenture or this Security,
the Company shall have the right to set-off any payment it is otherwise
required to make thereunder or hereunder with and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Payment and Guarantee Agreement, dated as of October 26,
1994, by the Company in favor of MCN Michigan.
This Security is a general unsecured obligation of the Company and will be
subordinate in right of payment to all existing and future Senior Indebtedness
of the Company.
The Indenture may be modified by the Company and the Trustee without consent
of any Holder with respect to certain matters as described in the Indenture.
In addition, the 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 Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall bind such Holder and all future Holders of this
Security and of any Security 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 Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under this Security
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations
-3-
<PAGE> 11
or their creation. Each Holder, by accepting a Security, waives and releases
all such liability. The waiver and release are part of the consideration for
the issuance of this Security.
All capitalized terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
MCN CORPORATION
By ________________________________
Attest:
____________________________ [SEAL]
Trustee's Certificate of Authentication.
Dated: November 2, 1994
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
NBD BANK, N.A.
As Trustee
By ________________________________
Authorized Signatory
-4-
<PAGE> 12
Form of Security. EXHIBIT A(2)
MCN CORPORATION
SERIES A SUBORDINATED DEFERRABLE INTEREST
DEBT SECURITY
No. R-2 $1,100,000
MCN CORPORATION, a corporation duly organized and existing under the laws of
Michigan (herein called the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for value received,
hereby promises to pay to MCN MICHIGAN LIMITED PARTNERSHIP, or registered
assigns, the principal sum of One Million and One Hundred Thousand Dollars on
November 30, 2024 and to pay interest thereon from November 2, 1994 or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, monthly on the last day of each calendar month of each year
(each, an "Interest Payment Date"), commencing November 30, 1994, at the rate
of 9 3/8% per annum, until the principal hereof is paid or made available for
payment and interest in arrears for more than one month will bear interest (to
the extent that the payment of such interest shall be legally enforceable) at
the rate of 9 3/8% per annum.
On the date of original issuance of this Security, the Company is a general
partner of MCN Michigan Limited Partnership, a limited partnership formed under
the laws of the State of Michigan ("MCN Michigan"). On such date, MCN Michigan
issued its 9 3/8% Cumulative Preferred Securities, Series A (the "Preferred
Securities"). If at any time (i) MCN Michigan shall be required to pay any
interest on dividends in arrears in respect of the Preferred Securities, then
the Company will pay as interest to MCN Michigan, as the holder of this
Security, an amount equal to such interest on dividends in arrears or (ii) MCN
Michigan would be required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any taxing authority, then, in any such case, the
Company also will pay such amounts as shall be required so that the net amounts
received and retained by MCN Michigan, after paying any such taxes, duties,
assessments or other governmental charges will not be less than the amounts MCN
Michigan would have received had no such taxes, duties, assessments or other
governmental charges been imposed. Any amounts the Company is required to pay
to MCN Michigan pursuant to the foregoing clause (i) or (ii) are referred to in
this Security as "Additional Interest." In the event that Securities
("Exchange Securities") are issued to the holders of the
<PAGE> 13
Preferred Securities in accordance with the terms of the Preferred Securities
this Security shall be cancelled, with no payment by the Company to MCN
Michigan, concurrently with the issuance of all Exchange Securities that the
Company is required to issue. If any Additional Interest is due to MCN
Michigan immediately prior to such cancellation, the Additional Interest shall
become payable to the Holders of the Exchange Securities on a pro rata basis.
The Company shall have the right at any time and, from time to time, to
extend the interest payment period to a period not exceeding 60 consecutive
months (the "Extension Period"), at the end of which Extension Period the
Company shall pay all interest then accrued and unpaid (including any
Additional Interest) (together with interest thereon to the extent permitted by
law); provided that, during any such Extension Period, the Company shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to any of its capital stock until deferred
interest on the Securities is paid in full. Prior to the termination of any
such Extension Period, the Company may further extend the interest payment
period, provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 60 consecutive months. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Company may select a new Extension Period, subject to the foregoing
requirements. No interest during an Extension Period shall be due and payable.
The Company shall give notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date the dividends on the
Preferred Securities are payable or (ii) the date MCN Michigan is required to
give notice to the New York Stock Exchange or other applicable self-regulatory
organization or to Holders of the Preferred Securities or of the record or
payment date or the date such dividend is payable, but in any event not less
than one Business Day prior to such record date.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of September 1, 1994 (herein called the
"Indenture"), between the Company and NBD Bank, N.A., as Trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $1,100,000.
-2-
<PAGE> 14
If MCN Michigan redeems Preferred Securities in accordance with the terms
thereof, this Security will become due and payable in a principal amount equal
to the aggregate stated liquidation preference of the Preferred Securities so
redeemed, together with any accrued and unpaid interest, including Additional
Interest, if any, to the date fixed for redemption.
Notwithstanding anything to the contrary in the Indenture or this Security,
the Company shall have the right to set-off any payment it is otherwise
required to make thereunder or hereunder with and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Payment and Guarantee Agreement, dated as of October 26,
1994, by the Company in favor of MCN Michigan.
This Security is a general unsecured obligation of the Company and will be
subordinate in right of payment to all existing and future Senior Indebtedness
of the Company.
The Indenture may be modified by the Company and the Trustee without consent
of any Holder with respect to certain matters as described in the Indenture.
In addition, the 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 Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall bind such Holder and all future Holders of this
Security and of any Security 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 Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under this Security
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations
-3-
<PAGE> 15
or their creation. Each Holder, by accepting a Security, waives and releases
all such liability. The waiver and release are part of the consideration for
the issuance of this Security.
All capitalized terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
MCN CORPORATION
By ________________________________
Attest:
________________________________ [SEAL]
Trustee's Certificate of Authentication.
Dated: November 2, 1994
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
NBD BANK, N.A.
As Trustee
By ________________________________
Authorized Signatory
-4-
<PAGE> 16
Form of Face of Security. EXHIBIT B
MCN CORPORATION
SERIES A SUBORDINATED DEFERRABLE INTEREST
DEBT SECURITY
No. $
MCN CORPORATION, a corporation duly organized and existing under the laws of
Michigan (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________________, or registered
assigns, the principal sum of ________________________ Dollars on November 30,
2024, and to pay interest thereon from November 2, 1994 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
monthly on the last day of each calendar month of each year (each, an "Interest
Payment Date"), commencing November 30, 1994, at the rate of 9 3/8% per annum,
until the principal hereof is paid or made available for payment and interest
in arrears for more than one month will bear interest (to the extent that the
payment of such interest shall be legally enforceable) at the rate of 9 3/8%
per annum. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which date shall be determined as follows: (i) if the Securities are
available in book-entry-form only, the Regular Record Date shall be one
Business Day prior to the Interest Payment Date or (ii) if the Securities are
made available in the form of definitive certificates registered in the name of
the Holder and recorded in a security register maintained by the Company or its
designated agent, the Company shall have the right to select Regular Record
Dates which shall be more than one Business Day prior to the corresponding
Interest Payment Dates, in which case the Company shall provide Holders of the
Securities with the information necessary to determine the Regular Record
Dates. 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 Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
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
<PAGE> 17
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
The Company shall have the right at any time and, from time to time, to
extend the interest payment period to a period not exceeding 60 consecutive
months (the "Extension Period"), at the end of which Extension Period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon to the extent permitted by law); provided that, during any such
Extension Period, the Company shall not declare or pay any dividend on, or
redeem, purchase, acquire or make a liquidation payment with respect to any of
its capital stock until deferred interest on the Securities is paid in full.
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
60 consecutive months. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may select a new Extension Period,
subject to the foregoing requirements. No interest during an Extension Period
shall be due and payable but interest shall be payable on the Interest Payment
Date next following such Extension Period to the Holders of record on the
Regular Record Date next preceding such Interest Payment Date. The Company
shall give the Holders of Securities notice of its selection of such Extension
Period ten Business Days prior to the earlier of (i) the next Interest Payment
Date or (ii) the date the Company is required to give notice to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders
of the Securities or of the record or payment date of such related interest
payment, but in any event not less than two Business Days prior to such record
date.
Payment of the principal of and interest on this Security will be made at
the office or agency of the Company maintained for that purpose in Detroit,
Michigan, in Dollars; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any
-2-
<PAGE> 18
benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
MCN CORPORATION
By ______________________________
Attest:
______________________________ [SEAL]
Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of September 1, 1994 (herein called the
"Indenture"), between the Company and NBD Bank, N.A., as Trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $__________.
The Securities of this series are subject to redemption upon not less than
30 nor more than 60 days' notice by first class mail, in whole or in part, at
any time on or after November 30, 1999, at a Redemption Price equal to 100% of
the principal amount, with accrued and unpaid interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
-3-
<PAGE> 19
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
This Security is a general unsecured obligation of the Company and will be
subordinate in right of payment to all existing and future Senior Indebtedness
of the Company.
The Indenture may be modified by the Company and the Trustee without consent
of any Holder with respect to certain matters as described in the Indenture.
In addition, the 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 Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall bind such Holder and all future Holders of this
Security and of any Security 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 Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
[If issued in certificated form -- As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registrable in the Security Register, upon surrender of this Security 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 Security 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 Securities of this series, of authorized denominations and for the
same Stated Maturity and aggregate principal amount, will be issued to the
designated transferee or transferees.]
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<PAGE> 20
[If issued in certificated form -- The Securities of this series are
issuable only in registered form without coupons in denominations of $25.00 and
any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
of a different authorized denomination, as requested by the Holder surrendering
the same.
[If issued in certificated form -- 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.]
[If issued in certificated form -- Prior to due presentment of this Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.]
The Indenture imposes certain limitations on the ability of the Company to,
among other things, merge or consolidate with any other Person or sell, assign,
transfer or lease all or substantially all of its properties or assets. All
such covenants and limitations are subject to a number of important
qualifications and exceptions. The Company must report periodically to the
Trustee on compliance with the covenants in the Indenture.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under this Security
or the Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder, by accepting a Security, waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Security.
[If applicable, insert -- Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures ("CUSIP"), the Company
has caused CUSIP numbers to be printed on the Securities of this series as a
convenience to the Holders of the Securities of this series. No representation
is made as to the correctness or accuracy of such numbers as printed on the
Securities of this series and reliance may be placed only on the other
identification numbers printed hereon.]
All capitalized terms used in this Security without definition which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
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<PAGE> 21
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security 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 Security 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 Security)
Signature Guaranty: ____________________________________
[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:__________________________________________
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<PAGE> 22
Form of Trustee's Certificate of Authentication.
Dated: ________________
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
NBD BANK, N.A.
As Trustee
By ________________________________
Authorized Signatory
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<PAGE> 23
EXHIBIT C
The final Prospectus Supplement, dated October 26, 1994, was filed
with the Securities and Exchange Commission under Rule 424(b)(5) on
October 27, 1994.
