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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) NOVEMBER 17, 1995
MCN CORPORATION
(Exact name of registrant as specified in its charter)
MICHIGAN 1-10070 38-2820658
State of Incorporation (Comission 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 Investment Corporation of its Medium-Term Notes, Series A,
pursuant to the registration statement of the registrant and MCN Investment
Corporation on Form S-3, as amended, (No. 33-63311) filed with the Securities
and Exchange Commission under the Securities Act of 1933, as described in the
Prospectus Supplement dated November 17, 1995 to the Prospectus dated November
6, 1995, filed with the Securities and Exchange Commission pursuant to Rule
424(b)(2) under the Securities Act of 1933:
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------- -----------------------
<S> <C>
1-1 Form of Distribution Agreement
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MCN CORPORATION
By /s/ Sebastian Coppola
-----------------------------
Sebastian Coppola
Vice President and Treasurer
Date: November 17, 1995
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------ -----------------------
<S> <C>
1-1 Form of Distribution Agreement
</TABLE>
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EXHIBIT 1.1
MCN INVESTMENT CORPORATION
MEDIUM-TERM NOTES, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
ENTITLED TO THE BENEFIT OF A SUPPORT AGREEMENT BY
MCN CORPORATION
DISTRIBUTION AGREEMENT
November 17, 1995
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower, 10th Floor
World Financial Center
New York, New York 10281-1310
Smith Barney Inc.
390 Greenwich Street -- 4th Floor
New York, New York 10013
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005-1285
First Chicago Capital Markets, Inc.
One First National Plaza
Suite 0363
Chicago, Illinois 60670-0363
Ladies and Gentlemen:
MCN Investment Corporation (the "Company"), a Michigan corporation and
a wholly-owned subsidiary of MCN Corporation, a Michigan corporation ("MCN"),
confirms its agreement with each of you (individually, an "Agent" and
collectively, the "Agents") with respect to the issue and sale by the Company
of up to an aggregate principal amount of $200,000,000 of its Medium-Term
Notes, Series A, Due Nine Months or More from Date of Issue (the "Notes"). The
Notes will be issued from time to time by the Company under an Indenture dated
as of September 1, 1995 (the "Indenture") between the Company and NBD Bank, as
trustee. The Notes will mature nine months or more from the date of issue and
will bear interest at rates to be specified in a pricing supplement to the Note
Prospectus referred to below. It is
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understood, however, that the Company may from time to time authorize the
issuance of additional Notes and that such additional Notes may be sold to or
through the Agents pursuant to the terms of this Agreement, as though the
issuance of such Notes were authorized as of the date hereof. The Notes will
have the benefit of a Support Agreement dated as of September 1, 1995 (the
"Support Agreement") between the Company and MCN.
1. Solicitations as Agents; Purchases as Principal.
(a) Appointment. Subject to the terms and conditions stated herein,
the Company hereby agrees that the Notes will be sold to or through the Agents;
provided, however, that the Company reserves the right to sell and may accept
offers to purchase the Notes directly on its own behalf. In addition, the
Company may from time to time offer Notes for sale otherwise than through an
Agent; provided, however, that so long as this Agreement shall be in effect the
Company shall not solicit offers to purchase Notes through any agent without
amending this Agreement to appoint such agent as an additional Agent hereunder
on the same terms and conditions as provided herein for the Agents and without
giving the Agents prior notice of such appointment. The Company may accept
offers to purchase Notes through an agent other than an Agent, provided that
(i) the Company shall not have solicited such offers, (ii) the Company and such
agent shall have executed an agreement with respect to such purchases having
terms and conditions (including, without limitation, commission rates) with
respect to such purchases substantially the same as the terms and conditions
that would apply to such purchases under this Agreement if such agent was an
Agent (which may be accomplished by incorporating by reference in such
agreement the terms and conditions of this Agreement) and (iii) the Company
shall provide the Agents with a copy of such agreement promptly following the
execution thereof. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, each Agent
agrees, as an agent of the Company, to use its reasonable efforts to solicit
offers to purchase the Notes during each Offering Period (defined below) upon
the terms and conditions set forth in the Note Prospectus (defined below) as
then amended and supplemented. Each Agent may also purchase Notes from the
Company as principal for purposes of resale, as more fully described in
subsection (g) of this Section.
(b) Solicitation Period. Following the Commencement Date (defined
below), the Company shall notify each Agent from time to time as to the
commencement of a period during which the Notes may be offered and sold by such
Agent (each period, commencing with such a notification and ending at such time
as the authorization for offers and sales through such Agent shall have been
suspended by the Company or such Agent as provided hereunder, being herein
referred to as an "Offering Period").
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(c) Agent's Commission. The Company agrees to pay each Agent, as
consideration for soliciting the sale of the Notes, a commission in the form of
a discount, equal to the percentage of the principal amount of each Note sold
by the Company as a result of a solicitation made by an Agent as set forth on
Schedule I hereto.
(d) Solicitation of Offers. Each Agent is authorized to solicit
orders for the Notes only in denominations of $1,000 or any larger amount that
is an integral multiple of $1,000, at a purchase price equal to 100% of their
principal amount (unless otherwise specified in the applicable pricing
supplement). Each Agent shall communicate to the Company, orally, each
reasonable offer or indication of interest received by it to purchase Notes.
The Company shall have the sole right to accept offers to purchase the Notes
and may reject any such offer in whole or in part. Each Agent shall have the
right to reject, in its discretion reasonably exercised, any offer received by
it to purchase the Notes, without advising the Company, in whole or in part,
and any such rejection shall not be deemed a breach of its agreements contained
herein. In soliciting offers to purchase the Notes hereunder, each Agent is
acting solely as agent for the Company, and not as principal. Each Agent shall
make reasonable efforts to assist the Company in obtaining performance by each
purchaser whose offer to purchase Notes has been solicited by such Agent and
accepted by the Company, but such Agent shall not have any liability to the
Company in the event any such purchase is not consummated for any reason. Under
no circumstances will an Agent be obligated to purchase any Notes for its own
account. If the Company shall default in its obligations to deliver Notes to a
purchaser whose offer it has accepted, the Company shall (a) hold the Agents
harmless against any loss, claim or damage arising from or as a result of such
default by the Company and (b) notwithstanding such default, pay to the Agents
any commission to which they would be entitled in connection with such sale.
(e) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) shall be
agreed upon by the Company and the Agent and set forth in a pricing supplement
to be prepared in connection with each sale of the Notes. Each Agent and the
Company agree to perform the respective duties and obligations specifically
provided to be performed by it in the Administrative Procedures attached hereto
as Exhibit A (the "Procedures"). The Procedures may be amended only by written
agreement from time to time of the Company and the Agents.
(f) Delivery of Documents. The documents required to be delivered by
Section 4 of this Agreement shall be delivered at the offices of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., counsel for the Agents, 125 West 55th Street, New
York, N.Y. 10019-5389, on such date as may be mutually agreed to by the Company
and the
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Agents, which in no event shall be later than the time at which the Agents
commence solicitation of offers to purchase Notes hereunder (the "Commencement
Date").
(g) Purchases as Principal. Subject to the terms and conditions
stated herein, the Company agrees that, whenever the Company determines to sell
Notes directly to any of the Agents as principal for resale to others and such
Agent agrees to purchase Notes as principal, it will enter into a Terms
Agreement (defined below) relating to such sale in accordance with the
provisions of this Section 1(g). Each sale of Notes to any of the Agents as
principal shall be made in accordance with the terms of this Agreement and a
supplemental agreement which will provide for the sale of such Notes to, and
the purchase and reoffering thereof by, such Agent. Each such supplemental
agreement, whether oral (and confirmed in writing by such Agent to the Company,
which may be by facsimile transmission) or in writing is herein referred to as
a "Terms Agreement". Each such Terms Agreement, whether oral or in writing,
shall be with respect to such information (as applicable) as is specified in
Exhibit B hereto. Each Agent's commitment to purchase Notes pursuant to any
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall describe the Notes to be purchased by any of the Agents pursuant thereto,
specify the principal amount of such Notes, the price to be paid to the Company
for such Notes, the rate at which interest will be paid on the Notes, the date,
time and place of delivery of the Notes and payment therefor (the "Purchase
Date"), the method of payment and any modification of the requirements for the
delivery of the opinions of counsel, the certificates from the Company, and the
comfort letter from Deloitte & Touche LLP, pursuant to Section 4. Such Terms
Agreement shall also specify the period of time referred to in Section 3(k).
Delivery of the certificates for Notes sold to any of the Agents
pursuant to any Terms Agreement shall be made as agreed to between the Company
and such Agent as set forth in the Terms Agreement, no later than the Purchase
Date set forth in such Terms Agreement, against payment of funds to the Company
in the net amount due to the Company for such Notes by the method and in the
form set forth in the Terms Agreement.
Unless otherwise indicated in the applicable pricing supplement, any
Note sold to an Agent as principal shall be at a discount from the principal
amount of each such Note equivalent to the applicable commission set forth in
Schedule I hereto, and may be resold by such Agent to investors and other
purchasers from time to time in one or more transactions at varying prices
determined at the time of sale, or at a fixed public offering price, if so
agreed. In addition, such Agent may engage the services of any other broker or
dealer in connection with the
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resale of the Notes purchased by it as principal and may allow any portion of
the discount received in connection with such purchases from the Company to
such brokers or dealers.
(h) Other Activities of Agents. The Company acknowledges that nothing
in this Agreement shall prohibit any Agent from (i) acting as broker for the
sale of Notes by customers other than the Company, (ii) soliciting the sale of
Notes through the Agent as broker for the seller, soliciting the sale of Notes
to the Agent as principal and soliciting offers to buy Notes, (iii) purchasing
Notes, and (iv) offering and selling as principal for its own account Notes
which the Agent has purchased.
(i) Reliance. The Company and each Agent agree that any Notes
purchased by the Agents shall be purchased, and any Notes the placement of
which an Agent arranges shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
2. Representations and Warranties of the Company and MCN. Each of the
Company and MCN jointly and severally represents and warrants to, and agrees
with, each of the Agents that:
(a) Each of the Company and MCN meets the requirements for use of Form
S-3 under the Securities Act of 1933, as amended (the "Act") and have filed
with the Securities and Exchange Commission (the "Commission"), as
co-registrants, a registration statement on such form (File No. 33-63311) for
the registration under the Act of the Company's debt securities, including the
Notes, and the obligations pursuant to the Support Agreement which registration
statement was declared effective on November 6, 1995. The Company may from
time to time file with the Commission additional registration statements for
the registration of additional amounts of debt securities. At the time of the
offer and sale of any Note pursuant to this Agreement, such Note shall be
registered pursuant to an effective registration statement under the Act. Each
registration statement under which Notes are offered or sold pursuant to this
Agreement at the date hereof and at the date of such offer and sale meets and
will meet the requirements set forth in Rule 415(a)(1)(x) under the Act and
complies and will comply in all other material respects with said Rule.
"Registration Statement" shall mean, as of any date, each effective
registration statement relating to debt securities pursuant to which Notes are
or may then be offered or sold, including incorporated documents, exhibits and
financial statements, as amended at such date. "Prospectus" shall mean the
form of prospectus relating to debt securities contained in the Registration
Statement. The term "Preliminary Prospectus" as used herein means a prospectus
filed as part of any post-effective amendment to the Registration
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Statement prior to the effective date of such post-effective amendment, as
contemplated in Rule 430 under the Act. The Company has included and will
include in each such Registration Statement, or has filed or will file with the
Commission pursuant to the applicable paragraph of Rule 424(b) under the Act, a
supplement to the form of Prospectus included in each such Registration
Statement relating to the Notes and prior to any such filing will advise each
Agent of all further information (financial and other) with respect to the
Company to be set forth therein. The Prospectus so supplemented from time to
time is hereinafter called the "Note Prospectus". Any reference herein to the
Registration Statement, any Preliminary Prospectus, the Prospectus, or the Note
Prospectus, as amended and supplemented, shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 that were filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") on or before the effective date of the Registration
Statement, or the issue date of such Preliminary Prospectus, the Prospectus, or
the Note Prospectus, as the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus, the Prospectus, or the Note Prospectus
shall be deemed to refer to and include (i) the filing of any document under
the Exchange Act after the effective date of the Registration Statement or the
issue date of any Preliminary Prospectus, the Prospectus, or the Note
Prospectus, as the case may be, deemed to be incorporated therein by reference
and (ii) with respect to the Registration Statement, the filing of any
additional registration statement relating to debt securities if Notes are to
be offered or sold under such additional registration statement.
(b) When the Registration Statement became effective, when any
amendment to the Registration Statement becomes effective (including the filing
of any document incorporated by reference in the Registration Statement), when
any supplement to the Prospectus (other than a supplement specifying the terms
of the debt securities other than the Notes) or the Note Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Act, on each day during
an Offering Period, and at the time of each delivery of Notes to (i) any
purchaser or his Agent whose offer to purchase such Notes was delivered to the
Company during an Offering Period and (ii) any Agent purchasing such Notes as
principal pursuant to a Terms Agreement (each such time referenced above being
referred to herein as a "Representation Date"):
(i) No stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceeding for such
purpose has been initiated or, to the knowledge of the Company or MCN,
threatened by the Commission;
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(ii) The Registration Statement and the Note Prospectus
comply, and any amendments or supplements thereto will comply, in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date in the case of the
Registration Statement and any amendment thereto and as of the
applicable filing date in the case of the Note Prospectus and any
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company or MCN by the Agents
expressly for use in the Registration Statement or Note Prospectus as
amended or supplemented to relate to a particular issuance of the
Notes;
(iii) The documents incorporated or deemed to be
incorporated by reference in the Registration Statement or the Note
Prospectus, or any amendment or supplement thereto, at the time they
were or hereafter are filed with the Commission or last amended, as
the case may be, complied and will comply in all material respects
with the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder, and none
of such documents contained or will contain an untrue statement of a
material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company or MCN by the Agents expressly for use in the Note
Prospectus as amended or supplemented to relate to a particular
issuance of the Notes;
(iv) The financial statements and any supporting schedules
of MCN and its subsidiaries included or incorporated by reference in
the Registration Statement and the Note Prospectus present fairly the
financial position of MCN and its subsidiaries as of the dates
indicated and the results of their operations for the periods
specified; and, except as otherwise stated therein, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis; and the
supporting schedules included in the Registration Statement present
fairly the information required to be stated therein;
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(v) Neither the Company, MCN nor any of their respective
subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the Note
Prospectus any material loss or any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise, otherwise than
as set forth in the Note Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and the
Note Prospectus, except as otherwise stated therein, (A) there has not
been any change in the capital stock or long-term debt including
capital lease obligations (other than changes resulting from sinking
fund and installment provisions under any long-term debt agreement
(scheduled payments on lease obligations) to which the Company, MCN or
any of their respective subsidiaries is a party, terms of the
preferred stock of MCN or Michigan Consolidated Gas Company
("MichCon"), terms of the preferred securities of MCN Michigan Limited
Partnership ("MCN Michigan") and purchases in the open market in
anticipation thereof or any other changes which changes are not, in
the aggregate, material) of the Company or any of its subsidiaries,
(B) there have been no transactions entered into by the Company, MCN
or any of their respective subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company or MCN and their respective subsidiaries considered as one
enterprise, (C) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise, (D) except for
regular quarterly dividends on common stock of MCN in amounts per
share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by MCN on
any class of its capital stock and (e) except for monthly dividends on
the 9 3/8% Cumulative Preferred Securities, Series A of MCN Michigan
in amounts per preferred security that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by MCN Michigan on any series of its preferred
securities;
(vi) Each of the Company and MCN has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement
and the Note Prospectus and to execute and deliver this Agreement and
to perform their obligations hereunder; and neither the Company nor
MCN owns or leases property or conducts any business so
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as to require qualification as a foreign corporation for the
transaction of business in any jurisdiction where it is not qualified
to transact business, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company or MCN and their respective subsidiaries considered as
one enterprise;
(vii) Each subsidiary of the Company and MCN has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and
the Note Prospectus, and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise; all of the
issued and outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company or MCN, as the case may be, directly or
through its subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity with the
exception of Saginaw Bay Pipeline Company whose stock is pledged under
a certain project financing agreement;
(viii) Each of the Company and MCN has an authorized
capitalization as set forth in the Note Prospectus, and all of the
issued shares of capital stock of the Company and MCN have been duly
and validly authorized and issued and are fully paid and non-
assessable;
(ix) Each of the Company, MCN and their respective
subsidiaries has good and marketable title to all material real and
personal property owned by each of them, in each case free and clear
of all liens, encumbrances and defects except such as are described in
the Note Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and
proposed to be made of such property by the Company, MCN or their
respective subsidiaries, respectively; and any real property and
buildings held under lease by the Company or MCN and their respective
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and
buildings by the
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Company, MCN or their respective subsidiaries, respectively; the
pipeline, distribution main and underground gas storage easements
enjoyed by the subsidiaries of Company and MCN, respectively, are
valid, subsisting and enforceable easements with such exceptions as
are not material and do not interfere with the conduct of the business
of the subsidiaries of Company or MCN, respectively; the Company, MCN
and their respective subsidiaries possess all licenses, franchises,
indeterminate permits, certificates, other permits, authorizations,
approvals, consents and orders of all governmental authorities or
agencies necessary for the ownership or lease of the properties owned
or leased by each of them and for the operation of the business
carried on by each of them with such exceptions and any burdensome
provisions which, singly or in the aggregate, are not material and do
not materially adversely affect the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company
or MCN and their respective subsidiaries considered as one enterprise;
all such licenses, franchises, indeterminate permits, certificates,
other permits, orders, authorizations, approvals and consents are in
full force and effect and except as otherwise set forth in the
Registration Statement and Note Prospectus, there are no legal or
governmental proceedings pending or threatened that would result in a
material modification, suspension or revocation thereof;
(x) The Notes have been duly and validly authorized for
issuance, offer and sale pursuant to this Agreement, and when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the consideration
therefor, will constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms and entitled to the
benefits provided by (i) the Support Agreement which will be
substantially in the form filed as an exhibit to the Registration
Statement and (ii) the Indenture; the Indenture has been duly and
validly authorized, executed and delivered by the Company and
qualified under the Trust Indenture Act and constitutes, and the
Support Agreement has been duly and validly authorized, executed and
delivered by each of MCN and the Company and constitutes, a valid and
legally binding instrument, enforceable against MCN or the Company, as
the case may be, in accordance with its terms; the Notes and Indenture
will be substantially in the form heretofore delivered to the Agents
and conform to the descriptions thereof in the Prospectus as
originally filed with the Commission and will conform to the
descriptions thereof in the Note Prospectus; the Support Agreement
conforms to the description thereof in the Prospectus as originally
filed and will conform to the descriptions thereof in the Note
Prospectus;
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(xi) None of the Company, MCN or any of their respective
subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound; the
issue and sale of the Notes, the compliance by the Company with all of
the provisions of the Notes, the execution, delivery and performance
by the Company and MCN of this Agreement, the execution, delivery and
performance by the Company of the Indenture, the execution, delivery
and performance by the Company and MCN of the Support Agreement, the
consummation of the transactions herein and therein contemplated, and
the compliance by the Company and MCN with their obligations hereunder
and thereunder have been duly authorized by all necessary corporate
action of the Company and MCN and will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or assets of
the Company or MCN or any of their respective subsidiaries pursuant to
the terms of, any statute, indenture, mortgage, deed of trust, loan
agreement, note, lease, or other agreement or instrument to which the
Company or MCN or any of their respective subsidiaries is a party or
by which the Company or MCN or any of their respective subsidiaries is
bound or to which any of the properties or assets of the Company or
MCN or any of their respective subsidiaries is subject, nor will such
action result in a violation of the provisions of the charter or
by-laws of the Company or MCN, the charter or by-laws of any of their
respective subsidiaries, or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
MCN or any of their respective subsidiaries or any of its or their
properties; and all consents, approvals, authorizations, orders,
registrations or qualifications of or with any court or any such
regulatory authority or other governmental body required for the
solicitation of offers to purchase the Notes, the issue and sale of
the Notes or the consummation of the other transactions contemplated
by this Agreement, the Support Agreement or the Indenture including
the registration under the Act of the Notes and the qualification of
the Indenture under the Trust Indenture Act have been, or will have
been prior to the Commencement Date, obtained and are, or will be at
the Commencement Date, in full force and effect, except such consents,
approvals, authorizations, orders, registrations or qualifications as
may be required under state securities or blue sky laws of any
jurisdiction in connection with the solicitation by the Agents of
offers to purchase the Notes from the Company and with purchases of
the Notes by the Agents as principal, as
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the case may be, in each case in the manner contemplated hereby;
(xii) This Agreement has been duly and validly authorized,
executed and delivered by each of the Company and MCN and, upon
execution and delivery by the Agents, will constitute a valid and
legally binding obligation of the Company and MCN enforceable against
the Company and MCN in accordance with its terms;
(xiii) MCN's obligations under the Support Agreement will
rank prior to the equity securities and subordinated indebtedness of
MCN and equal with all other unsecured and unsubordinated indebtedness
of MCN, whether now or hereafter outstanding;
(xiv) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or MCN, threatened,
against or affecting the Company or MCN or any of their respective
subsidiaries, which is required to be disclosed in the Registration
Statement or the Note Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company or MCN and their respective
subsidiaries considered as one enterprise, or which might materially
and adversely affect the properties or assets thereof or which might
materially and adversely affect the consummation of any transaction
contemplated by this Agreement; all pending legal or governmental
proceedings to which the Company or MCN or any of their respective
subsidiaries is a party or to which any of their respective properties
or assets is the subject which are not described in the Registration
Statement or the Note Prospectus, including ordinary routine
litigation incidental to the business of the Company or MCN or any of
their respective subsidiaries, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company or
MCN or any of their respective subsidiaries which are required to be
filed as exhibits to the Registration Statement, or to any documents
incorporated by reference therein, by the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, which have not been so filed;
(xv) No labor dispute with the employees of the Company or
MCN or any of their respective subsidiaries exists or, to the
knowledge of the Company or MCN is imminent; and neither the Company
or MCN is aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or
contractors which might be expected to result in any material adverse
change in the
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<PAGE> 13
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise;
(xvi) Deloitte & Touche LLP are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder;
(xvii) MCN is presently exempt from the provisions of the
Public Utility Holding Company Act of 1935 (the "1935 Act") (except
Section 9(a)(2) thereof) which would otherwise require it to register
thereunder;
(xviii) Immediately after the sale of the Notes by the
Company hereunder, the aggregate amount of the Notes which shall have
been issued and sold by the Company hereunder and of any debt
securities of the Company (other than the Notes) that shall have been
issued and sold pursuant to the Registration Statement will not exceed
the amount of debt securities registered under the Registration
Statement;
(xix) None of the Company, MCN or any of their respective
subsidiaries is an "investment company" or under the "control" of an
"investment company" as such terms are defined under the Investment
Company Act of 1940, as amended (the "1940 Act");
(xx) The Company and MCN are in compliance with all
provisions of Section 1 of the Laws of Florida, Chapter 92-198, An Act
Relating to Disclosure of Doing Business with Cuba; and
(xxi) The Notes, when issued, authenticated and delivered
pursuant to the provisions of this Agreement and the Indenture, will
be excluded or exempted under the provisions of the Commodity Exchange
Act.
(c) Any certificate signed by any director or officer of the
Company or MCN and delivered to any Agent or to counsel for the Agents in
connection with an offering of Notes through such Agent as agent, or the sale
of Notes to such Agent as principal shall be deemed a representation and
warranty by the Company or MCN, as the case may be, to such Agent as to the
matters covered thereby on the date of such certificate and at each
Representation Date subsequent thereto.
3. Covenants of the Company and MCN. Each of the Company and
MCN agrees with each Agent that:
(a) The Company or MCN will give each Agent advance notice of
its intention to file or prepare any additional registration statement with
respect to the registration of
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<PAGE> 14
additional Notes, any amendment to the Registration Statement, any amendment or
supplement to the Prospectus which would create a Note Prospectus, or any
amendment or supplement to the Note Prospectus (other than an amendment or
supplement providing solely for a change in the interest rate of the Notes and
other than a pricing supplement except with respect to the Agent which made or
presented the offer to purchase the applicable Note), whether by filing of
documents pursuant to the Act, the Exchange Act or otherwise, and will furnish
each Agent with copies thereof for its review a reasonable time in advance of
such proposed filing or preparation, as the case may be, and will not file any
such proposed amendment or supplement or other documents in a form to which any
Agent or counsel for the Agents shall reasonably object. Subject to the
foregoing sentence, the Company and MCN will promptly cause the Prospectus
together with each supplement thereto which would create a Note Prospectus, and
each Note Prospectus together with each supplement thereto, to be filed with
the Commission pursuant to Rule 424(b) under the Act.
(b) The Company and MCN will promptly advise the Agents (i)
when any amendment to the Registration Statement shall have become effective,
(ii) of the filing of any amendment or supplement to the Prospectus which
creates a Note Prospectus, including the filing of documents incorporated
therein by reference, (iii) of the filing of any amendment or supplement to the
Note Prospectus, including the filing of documents incorporated therein by
reference, (iv) of any request by the Commission for any amendment of the
Registration Statement or amendment or supplement to the Prospectus which would
create a Note Prospectus, or any amendment of or supplement to the Note
Prospectus, or for any additional information or any comments with respect
thereto, (v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or threatening
of any proceeding for such purpose and (vi) of the receipt by the Company or
MCN of any notification with respect to the suspension of the qualification of
the Notes for sale in any state or jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company and MCN will use
their best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. The Company will
inform you promptly, upon your request, of the aggregate offering price or
purchase price of debt securities registered under the Registration Statement
that remain unissued, and will promptly advise you to suspend solicitations of
orders to purchase Notes at any time when all securities registered under the
Registration Statement have been issued.
(c) If, at any time when a prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a result of
which the Registration Statement or the Note Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state a material
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<PAGE> 15
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it shall be necessary to
amend or supplement the Registration Statement or the Note Prospectus to comply
with the Act or the Exchange Act or the rules and regulations of the Commission
thereunder, the Company or MCN will immediately notify each Agent, such notice
to be confirmed in writing, and, if so notified by the Company or MCN, each
Agent shall forthwith suspend solicitation of offers to purchase Notes in the
Agents' capacities as agent and cease sales of any Notes any Agent may then own
as principal; the Company and MCN promptly will prepare and file with the
Commission, subject to subsections (a) and (b) of this Section 3, an amendment
or supplement to the Registration Statement or Note Prospectus which will
correct such statement or omission or an amendment which will effect such
compliance and will supply such amended or supplemented Note Prospectus to each
Agent in such quantities as such Agent may reasonably request. If such
amendment or supplement, and any documents, certificates and opinions furnished
to each Agent pursuant to Section 3(i) below in connection with the preparation
or filing of such amendment or supplement, are satisfactory in all respects to
each Agent, each Agent will, upon the filing of such amendment or supplement
with the Commission or effectiveness of an amendment to the Registration
Statement, resume its obligations to solicit offers to purchase Notes
hereunder.
(d) MCN will make generally available to its security holders
and deliver to each of the Agents as soon as practicable, but not later than 15
months after the end of a fiscal quarter of MCN during which any Notes are sold
through or purchased by any of the Agents, a consolidated earnings statement
(which need not be audited) of MCN and its subsidiaries for the 12-month period
within such 15 months, which earnings statements shall satisfy the provisions
of Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including Rule 158 under the Act).
(e) The Company and MCN will deliver to (i) each Agent and
counsel for the Agents as many signed and conformed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) as the Agents may reasonably
request and (ii) as many copies of the Note Prospectus (as amended or
supplemented) as the Agents may reasonably request so long as the Agents are
required to deliver a Note Prospectus in connection with sales or solicitations
of offers to purchase the Notes.
(f) The Company and MCN will prepare, with respect to any
Notes to be sold through or to the Agent pursuant to this Agreement, a pricing
supplement with respect to such Notes in a form previously approved by the
Agent and will file such pricing
-15-
<PAGE> 16
supplement pursuant to Rule 424(b) under the Act not later than the close of
business of the Commission on the fifth business day after the date on which
such pricing supplement is first used or such earlier time as such pricing
supplement may be required to be filed with the Commission.
(g) The Company and MCN will use their best efforts to
arrange for the qualification of the Notes for sale under the laws of such
jurisdictions as the Agents may designate (provided, however, that neither the
Company nor MCN shall be obligated to qualify as a foreign corporation in, or
to execute or file any general consent to service of process under the laws of
any jurisdiction), will maintain such qualifications in effect so long as
required for the distribution of the Notes and will arrange for the
determination of the legality of the Notes for purchase by institutional
investors.
(h) In the event that the Company exercises its right to sell
Notes directly on its own behalf, such sales shall be made in compliance with
Federal and state securities laws, including those relating to broker-dealer
and salesperson registration.
(i) The Company and MCN shall furnish to each Agent such
documents, certificates of officers of the Company or MCN, and opinions of
counsel for the Company or MCN, relating to the business, operations and
affairs of the Company or MCN, the Registration Statement and the Note
Prospectus, any amendments or supplements thereto, the Indenture, the Notes,
this Agreement, the Support Agreement, the Procedures and the performance by
the Company, MCN and the Agents of their respective obligations hereunder and
thereunder as any of the Agents may from time to time prior to the termination
of this Agreement reasonably request.
(j) The Company and MCN, during the period when the Note
Prospectus is required to be delivered under the Act, will file all documents
required to be filed with the Commission pursuant to Section 13, 14 or 15 of
the Exchange Act within the time periods required by the Exchange Act and the
rules and regulations of the Commission thereunder.
(k) During the period, if any, specified in the Terms
Agreement, the Company will not offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company, other than the Notes, without
the prior written consent of the Agents.
(l) On or prior to the date on which there shall be released
to the general public interim financial statement information related to MCN
with respect to each of the first three quarters of any fiscal year or
preliminary financial statement information with respect to any fiscal year,
the Company and MCN shall furnish such information to the Agents,
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<PAGE> 17
confirmed in writing, and shall cause the Note Prospectus to be amended or
supplemented to include or incorporate by reference financial information with
respect thereto and corresponding information for the comparable period of the
preceding fiscal year, as well as such other information and explanations as
shall be necessary for an understanding thereof or as shall be required by the
Act or the Exchange Act and the rules and regulations of the Commission
thereunder.
(m) On or prior to the date on which there shall be released
to the general public financial information included in or derived from the
audited financial statements of MCN for the preceding fiscal year, the Company
and MCN shall cause the Registration Statement and the Note Prospectus to be
amended, whether by the filing of documents pursuant to the Exchange Act, the
Act or otherwise, to include or incorporate by reference such audited financial
statements and the report or reports, and consent or consents to such inclusion
or incorporation by reference, of the independent accountants with respect
thereto, as well as such other information and explanations as shall be
necessary for an understanding of such financial statements or as shall be
required by the Act or the Exchange Act and the rules and regulations of the
Commission thereunder.
(n) The Company will use the net proceeds received by it
from the sale of the Notes in the manner specified in the Note Prospectus under
the caption "Use of Proceeds".
4. Conditions to the Obligations of the Agents. The
obligations of each Agent to solicit offers to purchase the Notes as agent of
the Company and to purchase Notes as principal shall be subject to the accuracy
of the representations and warranties on the part of the Company and MCN
contained herein and to the accuracy of the statements of the Company and MCN
made in any certificates pursuant to the provisions hereof, to the performance
by the Company and MCN of their respective obligations hereunder and to the
following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that purpose
shall then be pending before or, threatened by the Commission.
(b) Each Agent shall have received the opinion of Daniel L.
Schiffer, Esq., Senior Vice President, General Counsel and Secretary for MCN,
and Vice President, General Counsel and Secretary of the Company, dated the
Commencement Date, in form and substance satisfactory to the Agents and their
counsel, to the effect that:
(i) each of the Company and MCN has been duly incorporated
and is validly existing as a corporation in
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<PAGE> 18
good standing under the laws of the State of Michigan, with corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and
the Note Prospectus and to execute and deliver this Agreement and to
perform its obligations hereunder; and neither the Company nor MCN
owns or leases property or conducts any business so as to require
qualification as a foreign corporation for the transaction of business
in any jurisdiction where it is not qualified to transact business,
except where the failure to so qualify would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company or MCN
and their respective subsidiaries considered as one enterprise;
(ii) Each subsidiary of the Company and MCN has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and
the Note Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse
effect on the condition, financial or otherwise, or on the earnings,
business affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise; all of the
issued and outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and, to the best of such counsel's knowledge is owned by the Company
or MCN, as the case may be, directly or through its subsidiaries, free
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity with the exception of Saginaw Bay
Pipeline Company whose stock is pledged under a certain project
finance agreement;
(iii) None of the Company, MCN nor any of their respective
subsidiaries is in violation of its charter or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound; the
issue and sale of the Notes, the compliance by the Company with all of
the provisions of the Notes, the execution, delivery and performance
by the Company and MCN of this Agreement, the execution, delivery and
performance by the Company of the Indenture, the execution, delivery
and performance by the Company and MCN of the Support Agreement,
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<PAGE> 19
the consummation of the transactions herein and therein contemplated,
and the compliance by the Company and MCN with their obligations
hereunder and thereunder have been duly authorized by all necessary
corporate action of the Company and MCN and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any of the property or assets
of the Company or MCN or any of their respective subsidiaries pursuant
to the terms of, any statute, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which the
Company or MCN or any of their respective subsidiaries is a party or
by which the Company or MCN or any of their respective subsidiaries is
bound or to which any of the property or assets of the Company or MCN
or any of their respective subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or MCN, the charter or by-laws of any of their
respective subsidiaries, or any order, rule or regulation known to
such counsel of any court or governmental agency or body having
jurisdiction over the Company or MCN or any of their respective
subsidiaries or any of its or their properties; and all consents,
approvals, authorizations, orders, registrations or qualifications of
or with any court or any such regulatory authority or other
governmental body required for the solicitation of offers to purchase
the Notes, the issue and sale of the Notes or the consummation of the
other transactions contemplated by this Agreement, the Support
Agreement or the Indenture, including the registration under the Act
of the Notes and the qualification of the Indenture under the Trust
Indenture Act have been obtained and are in full force and effect,
except such consents, approvals, authorizations, orders, registrations
or qualifications as may be required under state securities or blue
sky laws or any jurisdiction in connection with the solicitation by
the Agents of offers to purchase the Notes from the Company and with
purchases of the Notes by the Agents as principal, as the case may be,
in each case in the manner contemplated hereby;
(iv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated
by reference as exhibits thereto; the descriptions thereof or
references thereto are correct, and no default exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other
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<PAGE> 20
instrument so described, referred to, filed or incorporated by
reference;
(v) The Company, MCN and their respective subsidiaries
possess all licenses, franchises, indeterminate permits, certificates,
other permits, authorizations, approvals, consents and orders of all
governmental authorities or agencies necessary for the ownership or
lease of the properties owned or leased by each of them and for the
operation of the business carried on by each of them with such
exceptions and any burdensome provisions which, singly or in the
aggregate, are not material and do not materially adversely affect the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company or MCN and their respective
subsidiaries considered as one enterprise; all such licenses,
franchises, indeterminate permits, certificates, other permits,
orders, authorizations, approvals and consents are in full force and
effect and except as otherwise set forth in the Registration Statement
and the Note Prospectus, there are no legal or governmental
proceedings pending or threatened that would result in a material
modification, suspension or revocation thereof;
(vi) There is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now
pending, or, to such counsel's knowledge, threatened, against or
affecting the Company or MCN or any of their respective subsidiaries,
which is required to be disclosed in the Registration Statement or the
Note Prospectus (other than as disclosed therein), or which might
result in any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company or MCN and their respective subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of any transaction contemplated by this
Agreement; all pending legal or governmental proceedings to which the
Company or MCN or any of their respective subsidiaries is a party or
to which any of their respective property or assets is the subject
which are not described in the Registration Statement or the Note
Prospectus, including ordinary routine litigation incidental to the
business of the Company or MCN or any of their respective
subsidiaries, are, considered in the aggregate, not material; and
there are no contracts or documents of the Company or MCN or any of
their respective subsidiaries which are required to be filed as
exhibits to the Registration Statement, or to any documents
incorporated by reference therein, by the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, which have not been so filed;
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<PAGE> 21
(vii) Each of the Company and MCN has an authorized capitalization
as set forth in the Note Prospectus and all of the issued shares of
capital stock of the Company and MCN have been duly and validly
authorized and issued and are fully paid and nonassessable;
(viii) Each of the Company, MCN and their respective subsidiaries
has good and marketable title to all material real and personal
property owned by each of them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Note Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made or proposed
to be made of such property by the Company, MCN or their respective
subsidiaries, respectively; and any real property and buildings held
under lease by the Company, MCN and their respective subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company,
MCN or their respective subsidiaries, respectively;
(ix) The information in the Note Prospectus under "Use of
Proceeds", "Description of the Offered Notes", "MCN Corporation", "MCN
Investment Corporation", "Description of Debt Securities" and "Support
Agreement", to the extent that they constitute matters of law,
summaries of legal matters, documents or proceedings, or legal
conclusions, has been reviewed by such counsel and is correct in all
material respects; such counsel has no reason to believe that, as of
the effective date of the Registration Statement, either the
Registration Statement or the Note Prospectus (or, as of its date, any
amendment or supplement thereto made by the Company or MCN prior to
the date of such opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as
of the date of such opinion, either the Registration Statement or the
Note Prospectus (or any such amendment or supplement thereto) contains
an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading;
(x) The Registration Statement is effective under the Act and
no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act or, proceedings therefor
instituted or, to the best of such counsel's knowledge, threatened by
the Commission; the Registration Statement and the Note Prospectus and
any further amendments and supplements thereto prior to the date of
such opinion (other than financial statements and related schedules
and other financial or statistical data included or incorporated by
reference therein, as to which such
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<PAGE> 22
counsel need express no opinion), comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder;
(xi) The documents incorporated by reference in the Note
Prospectus at the time they were filed with the Commission or amended
(other than the financial statements and related schedules and other
financial or statistical data included or incorporated by reference
therein, as to which such counsel need express no opinion), complied
as to form in all material respects with the requirements of the Act
and the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder; and such counsel has no reason to believe
that any of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of the
Registration Statement, an untrue statement of a material fact, or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and, in the
case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein not misleading;
(xii) The Indenture has been duly and validly authorized, executed
and delivered by the Company and qualified under the Trust Indenture
Act and constitutes a valid and legally binding instrument,
enforceable in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization or
other similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles;
(xiii) All taxes and fees required to be paid by the laws of the
State of Michigan and jurisdictional subdivisions thereof with respect
to the execution of the Indenture and the issuance of the Notes have
been paid;
(xiv) The Notes, in the form(s) certified by the Company as of
the date hereof, have been duly and validly authorized for issuance,
offer and sale pursuant to this Agreement, and when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the consideration
therefor, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general
applicability relating to or affecting creditors' rights or by general
equity principles, and each holder of Notes will be entitled to the
benefits provided by the
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<PAGE> 23
Support Agreement and the Indenture; and the Notes, the Indenture and
the Support Agreement conform to the descriptions thereof in the Note
Prospectus;
(xv) Each of this Agreement and the Support Agreement has been
duly and validly authorized, executed and delivered by each of the
Company and MCN;
(xvi) The Notes, in the form(s) certified by the Company as of the
date hereof, when issued, authenticated and delivered pursuant to the
provisions of this Agreement and the Indenture, will be excluded or
exempted from the provisions of the Commodity Exchange Act, assuming
the accuracy of any certifications of factual matters furnished by the
Agents or the Company in connection with the issuance thereof;
(xvii) MCN is presently exempt from the provisions of the 1935 Act
(except Section 9(a)(2) thereof) which would otherwise require it to
register thereunder;
(xviii) None of the Company, MCN or any of their respective
subsidiaries is an "investment company" or under the "control" of an
"investment company" as such terms are defined under the 1940 Act; and
(xix) The Company and MCN are in compliance with all provisions
of Section 1 of the Laws of Florida, Chapter 92-198, An Act Relating
to Disclosure of Doing Business with Cuba.
(c) Each Agent shall have received from LeBoeuf, Lamb, Greene
& MacRae, L.L.P., counsel for the Agents, an opinion, dated the Commencement
Date, with respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Note Prospectus and other related matters as any of
the Agents may reasonably require, and the Company and MCN shall have furnished
to such counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(d) In giving their opinions required by subsections (b) and
(c), respectively, of this Section, Daniel L. Schiffer, Esq. and LeBoeuf, Lamb,
Greene & MacRae, L.L.P. shall each additionally state that nothing has come to
their attention that would lead them to believe that the Registration Statement
(other than the financial statements and related schedules and other financial
or statistical data included or incorporated by reference therein, as to which
counsel need express no opinion), at the time it became effective or at the
Commencement Date, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Note Prospectus (other than the
financial statements and related
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<PAGE> 24
schedules and other financial or statistical data included or incorporated by
reference therein, as to which counsel need express no opinion), at the
Commencement Date, or if such opinion is being delivered in connection with the
purchase of Notes by the Agent as principal pursuant to Section 1(g) hereof at
the date of any Terms Agreement and at the Purchase Date with respect thereto,
as the case may be, included (or includes) an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. In giving their opinion, LeBoeuf, Lamb, Greene & MacRae,
L.L.P. may rely as to matters of Michigan law upon the opinion of Daniel L.
Schiffer, Esq. which opinion shall be in form and substance satisfactory to
counsel for the Agents.
(e) At the Commencement Date, there shall not have been,
since the respective dates as of which information is given in the Registration
Statement and the Note Prospectus, as amended and supplemented, or since the
date of any agreement by any Agent to purchase Notes as principal, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company or MCN and their
respective subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Company and MCN shall have each
furnished to you a certificate of its Chairman of the Board, President or a
Vice President, and by its chief financial or accounting officer, dated the
Commencement Date, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties contained in this
Agreement are true and correct with the same force and effect as though
expressly made at and as of the Commencement Date, (iii) the Company and MCN,
respectively, have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Commencement Date
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or, to his or her knowledge, threatened by the Commission.
(f) At the Commencement Date, each Agent shall have received
from Deloitte & Touche LLP a letter dated the Commencement Date in form and
substance satisfactory to each Agent, to the effect set forth below and as to
such other matters as the Agents may reasonably request, that:
(i) They are independent certified public accountants with
respect to the Company and MCN and their respective subsidiaries
within the meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the consolidated financial statements,
consolidating financial statements and any supplementary financial
information and schedules audited
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<PAGE> 25
(and, if applicable, prospective financial statements and/or pro forma
financial information examined) by them and included or incorporated
by reference in the Registration Statement or the Note Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations thereunder; and if applicable,
they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the
consolidated interim financial statements, selected financial data,
pro forma financial information, prospective financial statements,
consolidating financial statements and/or condensed financial
statements derived from audited financial statements of MCN for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the Agents;
(iii) (A) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of MCN for the five most recent fiscal years and (B) the
unaudited consolidating financial statements with respect to the
results of operations, financial position and cash flows of the
Company, MichCon, and MCN and certain other subsidiaries (the
"Designated Companies") for the three most recent fiscal years with
respect to the income statement and cash flows and the two most recent
fiscal years with respect to the balance sheet, in each case, included
in the Note Prospectus and included or incorporated by reference in
MCN's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement and
eliminations where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or
incorporated by reference in MCN's Annual Reports on Form 10-K for
such fiscal years;
(iv) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
including a reading of the unaudited consolidated financial
statements, consolidating financial statements and other information
referred to below, a reading of the latest available unaudited interim
consolidated financial statements of MCN and its subsidiaries and the
unaudited consolidating financial statements of the Designated
Companies, inspection of the minute books of MCN and its subsidiaries
since the audited consolidated financial statements set forth in MCN's
Annual Report on Form 10-K for the most recent year, inquiries of
officials of MCN and its subsidiaries responsible for financial and
accounting matters and such other inquiries
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and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) The unaudited consolidated financial statements
and the unaudited consolidating financial statements of the
Designated Companies set forth in MCN's Quarterly Reports on
Form 10-Q incorporated by reference in the Registration
Statement and the Note Prospectus as amended or supplemented
do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as they
apply to Form 10-Q and the published rules and regulations
thereunder or are not presented in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements set forth in MCN's Annual Report on Form
10-K for the most recent year ended incorporated by reference
in the Registration Statement and the Note Prospectus as
amended or supplemented;
(B) any other unaudited income statement data and
balance sheet items included in the Note Prospectus do not
agree with the corresponding items in the unaudited
consolidated financial statements or the unaudited
consolidating financial statements of the Designated Companies
from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements or
the audited consolidating financial statements of the
Designated Companies included or incorporated by reference in
the Registration Statement and the Note Prospectus as amended
or supplemented;
(C) any unaudited pro forma consolidated condensed
financial statements or any unaudited pro forma consolidating
financial statements included or incorporated by reference in
the Note Prospectus as amended or supplemented do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments or
eliminations have not been properly applied to the historical
amounts in the compilation of those statements;
(D) as of a specified date not more than five days
prior to the date of delivery of such letter, there have been
any changes in the capital stock or long-term debt including
capital lease obligations (except for sinking fund and
installment requirements
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<PAGE> 27
under their long-term debt agreements, terms of the preferred
stock of MCN and MichCon, terms of the preferred securities of
MCN Michigan and purchases in the open market in anticipation
thereof) or any increase in short-term debt, or any decrease
in consolidated common shareholder's equity (other than
periodic dividends declared to stockholders) of MCN and its
consolidated subsidiaries, in each case as compared with the
corresponding amounts shown in the latest consolidated
statement of financial position incorporated by reference in
the Registration Statement and the Note Prospectus as amended
or supplemented, except in all instances for changes,
increases or decreases which the Note Prospectus as amended or
supplemented, including financial information incorporated by
reference, discloses have occurred or may occur or which are
described in such letter;
(E) for the period from the date of the latest
consolidated financial statements or consolidating financial
statements included or incorporated by reference in the Note
Prospectus to the end of the latest period for which
consolidated financial statements or consolidating financial
statements are available there were any decreases in
consolidated operating revenues, operating income, net income
or earnings available for common stock of MCN and its
consolidated subsidiaries, or any increases in any items
specified by the Agents, in each case as compared with the
corresponding period in the preceding year and with any other
period of corresponding length specified by the Agents, except
in each case for increases or decreases which the Note
Prospectus as amended or supplemented, including financial
information incorporated by reference, discloses have occurred
or may occur or which are described in such letter; and
(F) The unaudited consolidated financial statements
or consolidating financial statements referred to in Clause
(E) are not stated on a basis substantially consistent with
the audited consolidated financial statements or consolidating
financial statements, as the case may be, incorporated by
reference in the Registration Statement and the Note
Prospectus as amended or supplemented.
(v) In addition to the limited procedures, inspection of
minute books, inquiries and other procedures referred to in clause
(iii) and (iv) above, they have carried out certain other specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information which are derived from the
general
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<PAGE> 28
accounting records of MCN and its subsidiaries, which appear in the
Note Prospectus as amended or supplemented and the Registration
Statement, in MCN's Annual Report on Form 10-K for the latest year
ended and in MCN's Quarterly Reports on Form 10-Q since the latest
Annual Report on Form 10-K and which are specified by the Agents, and
have compared certain of such amounts, percentages and financial
information with the accounting records of MCN and its subsidiaries
and have found them to be in agreement.
(g) Other than as set forth or contemplated in the
Registration Statement and the Note Prospectus as amended or supplemented (i)
neither the Company, MCN nor any of their respective subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement and the Note Prospectus
as amended or supplemented any material loss or interference with its business;
and (ii) since the respective dates as of which information is given in the
Registration Statement and the Note Prospectus as amended or supplemented there
shall not have been any change in the capital stock or long-term debt including
capital lease obligations (other than changes resulting from sinking fund and
installment provisions under any long-term debt agreement (scheduled payments
on lease obligations) to which the Company, MCN or any of their respective
subsidiaries is a party, terms of the preferred stock of MCN or MichCon, terms
of the preferred securities of MCN Michigan and purchases in the open market in
anticipation thereof) or any change, or any development involving a prospective
change, in or affecting the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or MCN and
their respective subsidiaries, the effect of which in any such case described
in clause (i) or (ii) of this subsection (g) is in the judgment of the Agents
so material and adverse as to make it impracticable or inadvisable to commence
or continue the offering of the Notes as contemplated by the Registration
Statement or the Note Prospectus.
(h) Subsequent to the date of this Agreement (1) no
downgrading shall have occurred in the rating accorded the debt securities of
the Company or MCN by any "nationally recognized securities rating
organization" as that term is defined by the Commission for the purposes of
Rule 436(g) of Regulation C, or (2) no review of the rating assigned to any
debt securities of the Company or MCN with a view to possible downgrading or
with negative implications for the Company or MCN, as the case may be, shall
have been announced.
(i) The Company and MCN shall have furnished to the Agents
and counsel for the Agents, such further information, certificates and
documents as the Agents may reasonably request from time to time; and all
proceedings taken by the Company in connection with the issuance and sale of
Notes as herein
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<PAGE> 29
contemplated shall be satisfactory in form and substance to the Agents and
counsel for the Agents.
If any of the conditions specified in this Section 4 shall not
have been fulfilled when and as provided in this Agreement (or, at the option
of the Agent, any applicable Terms Agreement by the Agent to purchase Notes as
principal), or if any of the opinions or certificates mentioned above or
elsewhere in this Agreement (or any applicable Terms Agreement) shall not be in
all material respects reasonably satisfactory in form and substance to an Agent
and its counsel, this Agreement (or any applicable Terms Agreement) with
respect to such Agent, and all obligations of such Agent hereunder or
thereunder, as the case may be, may be terminated by such Agent by notice to
the Company and MCN at any time and any such termination shall be without
liability of any party to any other party, except that the covenant regarding
provision of an earnings statement set forth in Section 3(d) hereof, the
provisions concerning payment of expenses under Section 10 hereof, the
indemnity and contribution agreement set forth in Sections 8 and 9 hereof, the
provisions concerning the representations and indemnities to survive set forth
in Section 12 hereof, the provisions relating to governing law set forth in
Section 16 and the provisions relating to successors set forth in Section 14
hereof shall remain in full force and effect.
5. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through the Agent as agent shall be made by the Company
to the Agent for the account of any purchaser only against payment therefor in
immediately available funds. In the event that a purchaser shall fail either
to accept delivery of or to make payment for a Note on the date fixed for
settlement, the Agent shall promptly notify the Company and deliver the Note to
the Company, and, if the Agent has theretofore paid the Company for such Note,
the Company will promptly return such funds to the Agent. If such failure
occurred for any reason other than default by the Agent in the performance of
its obligations hereunder, the Company will reimburse the Agent for its loss of
the use of the funds for the period such funds were credited to the Company's
account.
6. Additional Covenants of the Company and MCN. Each of the
Company and MCN covenants and agrees with each Agent that:
(a) Each acceptance by it of an offer for the purchase of
Notes (whether to the Agent as principal or through the Agent as agent), and
each delivery of Notes to the Agent (whether to the Agent as principal or
through the Agent as agent), shall be deemed to be an affirmation that the
representations and warranties of the Company and MCN contained in this
Agreement and in any certificate theretofore delivered to the Agent pursuant
hereto are true and correct at the time of such acceptance or sale, as the case
may be, and an undertaking that such
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<PAGE> 30
representations and warranties will be true and correct at the time of delivery
to the purchaser or its agent, or to the Agent, of the Note or Notes relating
to such acceptance or sale, as the case may be, as though made at and as of
each such time (and it is understood that such representations and warranties
shall relate to the Registration Statement and Note Prospectus as amended and
supplemented to each such time).
(b) Each time that (i) the Registration Statement or the Note
Prospectus is amended (which for the purposes of this Section 6 shall include
the filing by the Company OR MCN of materials incorporated by reference in the
Registration Statement or the Note Prospectus) or supplemented (other than by
an amendment or supplement relating to any offering of securities other than
the Notes or providing solely for the terms of any Notes or for a change deemed
immaterial in the reasonable opinion of the Agents), (ii) the Prospectus is
supplemented to create a Note Prospectus, (iii) (if required in connection with
the purchase of the Notes by the Agent as principal) the Company sells Notes to
an Agent as principal or (iv) if the Company issues and sells Notes in a form
not previously certified to the Agents by the Company, the Company and MCN will
each deliver or cause to be delivered forthwith to each Agent a certificate
signed by its Chairman of the Board, President or a Vice President, and by its
chief financial or accounting officer, dated the date of the effectiveness of
such amendment, the date of filing of such supplement or materials, or the date
of such sale, as the case may be, in form and substance satisfactory to each
Agent, to the effect that the statements contained in the certificate referred
to in Section 4(e) that was last furnished to each Agent (either pursuant to
Section 4(e) or pursuant to this Section 6(b)) are true and correct at the time
of the effectiveness of such amendment (which for the purposes of this
Agreement in the case of the filing of materials incorporated by reference
shall be the date of the filing of such materials), the filing of such
supplement or the date of sale, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement, as amended at the time of effectiveness of such
amendment, and to the Prospectus or the Note Prospectus (as the case may be),
as amended and supplemented at the date of such certificate) or, in lieu of
such certificate, a certificate of the same tenor as the certificate referred
to in Section 4(e) but modified, as necessary, to relate to the Registration
Statement, as amended at the time of the effectiveness of such amendment, and
to the Prospectus or the Note Prospectus (as the case may be), as amended and
supplemented at the date of delivery of such certificate.
(c) Each time that (i) the Registration Statement or the Note
Prospectus is amended or supplemented (which for the purposes of this Section 6
shall include the filing by the Company or MCN of materials incorporated by
reference in the
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<PAGE> 31
Registration Statement or the Note Prospectus) or supplemented (other than by
an amendment or supplement relating to any offering of securities other than
the Notes or providing solely for the terms of any Notes or for a change deemed
immaterial in the reasonable opinion of the Agents), (ii) the Prospectus is
supplemented to create a Note Prospectus, (iii) (if required in connection with
the purchase of the Notes by the Agent as principal) the Company sells Notes to
an Agent as principal, or (iv) if the Company issues and sells Notes in a form
not previously certified to the Agents by the Company, the Company and MCN
shall furnish to or cause to be furnished forthwith to each Agent a written
opinion of Daniel L. Schiffer, Esq., Senior Vice President, General Counsel and
Secretary of MCN, and Vice President, General Counsel and Secretary of the
Company to the effect set forth in Sections 4(b) but modified as necessary to
relate to the Registration Statement and the Note Prospectus as amended and
supplemented to the time of delivery of such opinion. Any such opinion shall
be dated the date of the effectiveness of such amendment, the date of filing of
such supplement or materials or the date of such sale, as the case may be, in
form and substance satisfactory to each Agent. In lieu of such opinion, such
counsel may furnish to each Agent a letter to the effect that each Agent may
rely on such counsel's last opinion to the same extent as though it were dated
the date of such letter authorizing reliance on such last opinion (except that
statements in such last opinion will be deemed to relate to the Registration
Statement, as amended at the time of the effectiveness of such amendment, and
to the Prospectus or the Note Prospectus (as the case may be), as amended and
supplemented at the date of delivery of such letter).
(d) Each time that (i) the Registration Statement or the Note
Prospectus is amended or supplemented to set forth additional financial
information or there is filed with the Commission any document incorporated by
reference into the Note Prospectus which contains additional financial
information or (ii) (if required in connection with the purchase of the Notes
by the Agent as principal) the Company sells Notes to an Agent as principal,
the Company and MCN shall cause Deloitte & Touche LLP, its independent
auditors, forthwith to furnish each Agent with a letter, dated the date of the
effectiveness of such amendment, the date of filing of such supplement or
document or the date of such sale, as the case may be, in form and substance
satisfactory to each Agent, of the same tenor as the portions of the letter
referred to in subsections (i), (ii) and (iii) of Section 4(f), but modified to
relate to the Registration Statement and Note Prospectus, as amended and
supplemented to the date of such letter, and of the same tenor as the portions
of the letter referred to in subsections (iv) and (v) of Section 4(f), with
such changes as may be necessary to reflect changes in the financial statements
and other information derived from the accounting records of the Company.
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<PAGE> 32
7. Right of Agent Who Agreed to Purchase as Principal to
Refuse to Purchase. The Company and MCN agree that any Agent who has agreed to
purchase and pay for any Note as principal, shall have the right to refuse to
purchase such Note if, at the date of delivery of such Note, either (a) any
condition set forth in Section 4 shall not be satisfied or (b) subsequent to
the agreement to purchase such Note, any change, or any development involving a
prospective change, in or affecting the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company or MCN
and their respective subsidiaries, in each case, considered as one enterprise,
shall have occurred the effect of which is, in the judgment of such Agent, so
material and adverse as to make it impractical or inadvisable to proceed with
the delivery of such Note. Notwithstanding the foregoing, under no
circumstances shall any such Agent have any duty or obligation to exercise the
judgment permitted to be exercised under this Section 7.
8. Indemnification. (a) The Company and MCN jointly and
severally agree to indemnify and hold harmless each Agent and each person, if
any, who controls such Agent within the meaning of Section 15 of the Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, Prospectus or
Note Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; unless such
untrue statement or omission or such alleged untrue statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company or to MCN by the Agents expressly
for use in the Registration Statement (or any amendment thereto) or
any Preliminary Prospectus, Prospectus or Note Prospectus (or any
amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such
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<PAGE> 33
settlement is effected with the written consent of the Company and
MCN; and
(iii) against any and all expense whatsoever, as incurred
(including, the fees and disbursements of counsel chosen by the
Agents), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
(b) Each Agent severally agrees to indemnify and hold
harmless the Company, MCN, their directors, each of their officers who signed
the Registration Statement, and each person, if any, who controls the Company
or MCN within the meaning of Section 15 of the Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus, Prospectus or Note Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company or to MCN by the Agents expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus, Prospectus
or Note Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of any such action. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable to or insufficient to hold
harmless the indemnified parties although applicable in accordance with its
terms, the Company and MCN, on the one hand, and the Agents, on the other
hand, shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by said indemnity agreement incurred
by the Company and MCN, on the one
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<PAGE> 34
hand, and one or more of the Agents, on the other hand, as incurred, in such
proportion so that each Agent is responsible for that portion represented by
the percentage that the total commissions and underwriting discounts
received by such Agent to the date of such liability, and the Company and MCN
are responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section, each person, if
any, who controls an Agent within the meaning of Section 15 of the Act shall
have the same rights to contribution as such Agent, and each director of the
Company, each officer of the Company who signed the Registration Statement,
each director of MCN, each officer of MCN who signed the Registration
Statement, and each person, if any, who controls the Company or MCN within the
meaning of Section 15 of the Act shall have the same rights to contribution as
the Company.
10. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, the
Company and MCN will pay all costs and expenses incident to the performance of
its obligations under this Agreement, including, without limiting the
generality of the foregoing:
(a) The preparation, printing and filing of the Registration
Statement (including all exhibits thereto) and any amendments and supplements
thereto, and any Preliminary Prospectus, Prospectus or Note Prospectus, and any
amendments or supplements thereto;
(b) The preparation, filing and reproduction of this
Agreement;
(c) The preparation, printing, issuance and delivery of the
Notes, including fees and expenses relating to the use of book-entry notes;
(d) The fees and disbursements of the Company's and MCN's
accountants and counsel, of the Trustee and its counsel, and of any Calculation
Agent;
(e) The reasonable fees and disbursements of counsel to the
Agents incurred heretofore or hereafter in connection with the offering,
purchase and sale of the Notes;
(f) The qualification of the Notes under state securities
laws, including filing fees and the reasonable fees and disbursements of
counsel for the Agents in connection therewith and in connection with the
preparation of any Blue Sky Survey and any Legal Investment Survey;
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<PAGE> 35
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Note Prospectus and any amendments or supplements thereto,
and the delivery by the Agents of the Note Prospectus and any amendments or
supplements thereto in connection with solicitation or confirmations of sales
of the Notes;
(h) The preparation, printing, reproducing and delivery to
the Agents of copies of the Indenture relating to the Notes;
(i) Any fees charged by rating agencies for the rating of the
Notes;
(j) The fees and expenses incurred in connection with the
listing of the Notes on any securities exchange;
(k) The fees and expenses, if any, incurred with respect to
any filing with the National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the
Agents incurred with the approval of the Company;
(m) The cost of providing any CUSIP or other identification
numbers for the Notes; and
(n) The fees and expenses of any Depositary and any nominees
thereof in connection with the Notes.
11. Termination. (a) This Agreement (excluding any Terms
Agreement hereunder by an Agent to purchase Notes as principal) may be
terminated for any reason, at any time either by the Company or by such Agent
upon the giving of thirty days' written notice of such termination to such
Agent or the Company, as the case may be.
(b) Each Terms Agreement shall be subject to termination in
the absolute discretion of the Agent purchasing thereunder, immediately upon
notice given to the Company and MCN prior to the close of business on the
Purchase Date relating thereto (i) if there has been, since the date of the
Terms Agreement or since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company or MCN and their respective subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there shall have occurred any material adverse change in the financial
markets in the United States or any outbreak or escalation of hostilities or
other national or international calamity or crisis the effect of which is such
as
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<PAGE> 36
to make it, in the judgment of such Agent, impracticable to market the Notes or
to enforce contracts for the sale of the Notes, or (iii) if trading in the
Common Stock of MCN has been suspended by the Commission, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or Michigan authorities or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company or
MCN as of the date of any applicable principal purchase shall have been lowered
since that date or if any such rating agency shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any debt securities of the Company or MCN, or (v) if there shall have
come to the Agent's attention any facts that would cause the Agent to believe
that the Note Prospectus, at the time it was required to be delivered to a
purchaser of Notes, included an untrue statement or a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time of such delivery, not
misleading.
(c) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except that (i) each Agent shall be entitled to any commission earned in
accordance with Section 1(c) hereof, (ii) if at the time of termination (A) any
Agent shall own any Notes purchased by it as principal with the intention of
reselling them or (B) an offer to purchase any of the Notes has been accepted
by the Company but the time of delivery to the purchaser or his agent of the
Note or Notes relating thereto has not occurred, the covenants set forth in
Sections 3 and 6 hereof shall remain in effect until such Notes are so resold
or delivered, as the case may be, and (iii) the covenant set forth in Section
3(d) hereof, the provisions of Sections 8, 9, 10, 12, 14 and 16 hereof shall
remain in full force and effect.
12. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
certificates of officers of the Company and MCN set forth in or made pursuant
hereto or thereto will remain in full force and effect, regardless of any
investigation made by or on behalf of any Agent or the Company or MCN or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for any of the Notes.
13. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Agents, will be mailed,
delivered, telecopied or telegraphed and confirmed to it at the address
specified in Schedule II hereto,
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or, if sent to the Company or MCN, will be mailed, delivered or telegraphed and
confirmed to it, at 500 Griswold Street, Detroit, Michigan 48226, attention of
the Secretary with a copy to the Treasurer.
14. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns and the officers and directors and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder. The term "successors and assigns" as used in this Agreement shall
not include any purchaser, as such purchaser, of any of the Notes from the
Agents.
15. Counterparts. This Agreement may be executed in
counterparts all of which, taken together, shall constitute a single agreement
among the parties to such counterparts.
16. Governing Law; Forum. This Agreement will be governed by
and construed in accordance with the laws of the State of New York. Any suit,
action or proceeding brought by the Company against any Agent in connection
with or arising under this Agreement shall be brought solely in the state or
federal court of appropriate jurisdiction located in the Borough of Manhattan,
The City of New York.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and each Agent.
Very truly yours,
MCN INVESTMENT CORPORATION
By:______________________________
Name:
Title:
MCN CORPORATION
By:______________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: _________________________
Name:
Title:
SMITH BARNEY INC.
By: ______________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
By: _______________________________
Name:
Title:
FIRST CHICAGO CAPITAL MARKETS, INC.
By: _______________________________
Name:
Title:
-38-
<PAGE> 39
SCHEDULE I
MCN INVESTMENT CORPORATION
Medium-Term Notes, Series A
Commission Schedule
<TABLE>
<CAPTION>
Maturity Ranges Commission Rate
- --------------- ---------------
<S> <C>
More than 9 months to less than 1 year .125%
1 year to less than 18 months .150
18 months to less than 2 years .200
2 years to less than 3 years .250
3 years to less than 4 years .350
4 years to less than 5 years .450
5 years to less than 6 years .500
6 years to less than 7 years .550
7 years to less than 8 years .600
8 years to less than 9 years .600
9 years to less than 10 years .600
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
Beyond 30 years To be negotiated
</TABLE>
<PAGE> 40
SCHEDULE II
ADDRESS FOR NOTICES TO AGENTS
Notices to Merrill Lynch & Co. shall be directed to it at:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center, North Tower
10th Floor
New York, New York 10281-1310
Attn: MTN Product Management
Telephone: (212) 449-7476
Telecopy: (212) 449-2234
Notices to Smith Barney Inc. shall be directed to it at:
Smith Barney Inc.
390 Greenwich Street -- 4th Floor
New York, New York 10013
Attn: MTN Product Management/Origination -- Mark R. Meyer
Telephone: (212) 723-5123
Telecopy: (212) 723-8854
Notices to Donaldson, Lufkin & Jenrette Securities Corporation shall be
directed to it at:
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005-1285
Attn: Syndicate Department
Telephone: (212) 504-4807
Telecopy: (212) 504-4298
Notices to First Chicago Capital Markets, Inc. shall be directed to it at:
First Chicago Capital Markets, Inc.
153 West 51st Street
New York, New York 10019
Attn: Linda A. Dawson
Telephone: (212) 373-1319
Telecopy: (212) 373-1391
<PAGE> 41
EXHIBIT A
MCN INVESTMENT CORPORATION
ADMINISTRATIVE PROCEDURES
MEDIUM-TERM NOTES, SERIES A
NOVEMBER 17, 1995
Medium-Term Notes, Series A, Due Nine Months or More from Date of Issue
(the "Notes") are to be offered on a continuing basis by MCN Investment
Corporation, a Michigan corporation (the "Company"), to or through Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Smith Barney
Inc., Donaldson, Lufkin & Jenrette Securities Corporation and First Chicago
Capital Markets, Inc. (each an "Agent" and, collectively, the "Agents"),
pursuant to a Distribution Agreement dated November 17, 1995 (the "Distribution
Agreement") between the Company, MCN Corporation ("MCN") and the Agents. The
Distribution Agreement provides both for the sale of Notes by the Company to
one or more of the Agents as principal for resale to investors and other
purchasers and for the sale of Notes by the Company directly to investors (as
may from time to time be agreed to by the Company and the related Agent or
Agents) in which case the Agents will act as agents of the Company in
soliciting Note purchases. The Notes will have the benefit of a Support
Agreement dated as of September 1, 1995 between the Company and MCN.
Unless otherwise agreed by the related Agent or Agents and the Company,
Notes will be purchased by the related Agent or Agents as principal. Such
purchases will be made in accordance with terms agreed upon by the related
Agent or Agents and the Company (which terms shall be agreed upon orally, with
written confirmation prepared by the related Agent or Agents and mailed to the
Company). If agreed upon by any Agent or Agents and the Company, such Agent or
Agents, acting solely as agent or agents for the Company and not as principal,
will use reasonable efforts to solicit offers to purchase the Notes. Only
those provisions in these Administrative Procedures that are applicable to the
particular role that an Agent will perform shall apply.
The Notes will be issued as a series of securities pursuant to an
Indenture, dated as of September 1, 1995 (the "Indenture"), between the Company
and NBD Bank, as trustee, with respect to the Notes (the "Trustee"). In
accordance with the provisions of the Indenture, NBD Bank has been duly
appointed by the Company as Transfer Agent and Paying Agent, in each case with
respect to the Notes.
<PAGE> 42
A Registration Statement (the "Registration Statement", which term
shall include any additional registration statements or amendments thereto
filed in connection with the Notes as provided in the Distribution Agreement)
with respect to the Notes has been filed with the Securities and Exchange
Commission (the "Commission"). The most recent base Prospectus included in the
Registration Statement, as supplemented with respect to the Notes, is herein
referred to as the "Prospectus". The most recent supplement to the Prospectus
setting forth the purchase price, interest rate, maturity date and other terms
of the Notes (as applicable) is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book- Entry Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the investor or other purchaser thereof or a
person designated by such investor or other purchaser. Owners of beneficial
interests in Notes issued in book-entry form will be entitled to physical
delivery of Notes in certificated form equal in principal amount to their
respective beneficial interests only upon certain limited circumstances
described in the Prospectus.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book- entry form will be
issued in accordance with the procedures set forth in Part II hereof and Notes
issued in certificated form will be issued in accordance with the procedures
set forth in Part III hereof. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Indenture or
the Notes, as the case may be.
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<PAGE> 43
PART I: PROCEDURES OF GENERAL
APPLICABILITY
<TABLE>
<S> <C>
Date of
Issuance/Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also bear
an original issue date (the "Original Issue Date"). The
Original Issue Date shall remain the same for all Notes
subsequently issued upon transfer, exchange or substitution
of an original Note regardless of their dates of
authentication.
Maturities: Each Note will mature on a date selected by the investor or
other purchaser and agreed to by the Company, or selected
by the Company and agreed to by the investor or other
purchaser from nine months or more from its Original Issue
Date.
Registration: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued only in fully registered
form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued in denominations of $1,000
or any integral multiple of $1,000 in excess thereof.
Base Rates applicable
to Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes (except for certain
Original Issue Discount Notes) will bear interest at a rate
or rates determined by reference to the CD Rate ("CD Rate
Notes"), the Commercial Paper Rate ("Commercial Paper Rate
Notes"), LIBOR ("LIBOR Notes"), the Prime Rate ("Prime Rate
Notes"), the Federal Funds Rate ("Federal Funds Rate
Notes"), the Treasury Rate ("Treasury Rate Notes"), or such
other interest
</TABLE>
-3-
<PAGE> 44
<TABLE>
<S> <C>
rate basis or formula as may be set forth in applicable Pricing
Supplement, or by reference to two or more such rates, as
adjusted by the Spread and/or Spread Multiplier, if any,
applicable to such Floating Rate Notes.
Redemption/Repayment: The Notes will be subject to repayment at the option of the
Holders thereof in accordance with the terms of the Notes
on their respective Repayment Dates, if any. Repayment
Dates, if any, will be fixed at the time of sale and set
forth in the applicable Pricing Supplement and in the
applicable Note. If no Repayment Dates are indicated with
respect to a Note, such Note will not be repayable at the
option of the Holder prior to its Stated Maturity.
The Notes will be subject to redemption by the Company on
and after their respective Redemption Dates, if any.
Redemption Dates, if any, will be fixed at the time of sale
and set forth in the applicable Pricing Supplement and in
the applicable Note. If no Redemption Dates are indicated
with respect to a Note, such Note will not be redeemable
prior to its Stated Maturity.
Calculation of
Interest: In case of Fixed Rate Notes, interest (including payments
for partial periods) will be calculated and paid on the
basis of a 360-day year of twelve 30-day months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Base Rate or Rates
in either case plus or minus the applicable Spread, if any,
and/or multiplied by the applicable Spread Multiplier, if
any.
</TABLE>
-4-
<PAGE> 45
<TABLE>
<S> <C>
Unless otherwise provided in the applicable Pricing
Supplement, interest on each Floating Rate Note will be
calculated by multiplying its face amount by an accrued
interest factor. Such accrued interest factor is computed
by adding the interest factor calculated for each day in
the period for which accrued interest is being calculated.
Unless otherwise specified in the applicable Pricing
Supplement, the interest factor for each such day is
computed by dividing the interest rate applicable to such
day by 360 in the case of CD Rate Notes, Commercial Paper
Rate Notes, Federal Funds Rate Notes, LIBOR Notes or Prime
Rate Notes, or by the actual number of days in the year in
the case of Treasury Rate Notes. Unless otherwise
specified in an applicable Pricing Supplement, the interest
factor for Notes for which the interest rate is calculated
with reference to two or more Base Rates will be calculated
in each period in the same manner as if only the lowest of
the applicable Base Rates applied.
Interest: General. Each Note will bear interest in accordance with
its terms. Unless otherwise provided in an applicable
Pricing Supplement, interest on each Note will accrue from
the Original Issue Date of such Note for the first interest
period and from the most recent Interest Payment Date to
which interest has been paid for all subsequent interest
periods. Each payment of interest will include interest
accrued through the day preceding, as the case may be, the
Interest Payment Date (provided that in the case of
Floating Rate Notes which reset daily or weekly, unless
otherwise specified on the applicable Note,
</TABLE>
-5-
<PAGE> 46
<TABLE>
<S> <C>
interest payments will include interest accrued from and
including the date of issue or from but excluding the last
Record Date to which interest has been paid, as the case may
be, through and including the Record Date next preceding the
related Interest Payment Date), the Stated Maturity, any
Redemption Date or any Repayment Date (each Stated
Maturity, Redemption Date or Repayment Date is referred to
herein as "Maturity"). Interest payable at Maturity will
be payable to the Person to whom the principal of such Note
is payable. If an Interest Payment Date with respect to
any Fixed Rate Note falls on a day that is not a Business
Day, the payment of interest required to be made on such
Interest Payment Date need not be made on such day, but may
be made on the next succeeding Business Day with the same
force and effect as if made on such Interest Payment Date
and no interest shall accrue on such payment for the period
from and after such Interest Payment Date. If an Interest
Payment Date (other than at Maturity) with respect to any
Floating Rate Note would otherwise fall on a day that is
not a Business Day, such Interest Payment Date will be the
following day that is a Business Day, except that in the
case of a LIBOR Note (or a Note for which LIBOR is an
applicable Base Rate), if such day falls in the next
succeeding calendar month, such Interest Payment Date will
be the preceding day that is a Business Day. If the date
of Maturity of a Note is not a Business Day, the payment of
principal and interest due on such day shall be made on the
next succeeding Business Day and no interest shall accrue
on such payment for the period from and after such
Maturity. For additional special provisions
</TABLE>
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<PAGE> 47
<TABLE>
<S> <C>
relating to Floating Rate Notes, see the Prospectus and
the applicable Pricing Supplement.
Record Dates. Unless otherwise indicated in an applicable
Pricing Supplement, the Record Date with respect to any
Interest Payment Date for a Floating Rate Note shall be the
date 15 calendar days (whether or not a Business Day)
preceding such Interest Payment Date. Unless otherwise
indicated in an applicable Pricing Supplement, the Record
Date with respect to any Interest Payment Date for a Fixed
Rate Note will be the close of business on January 15 next
preceding a February 1 Interest Payment Date or July 15
next preceding an August 1 Interest Payment Date.
Interest Payment Dates. Interest payments will be made on
each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue Date;
provided, however, the first payment of interest on any
Note originally issued between a Record Date and an
Interest Payment Date will occur on the Interest Payment
Date following the next Record Date.
Fixed Rate Notes. Unless otherwise provided in an
applicable Fixed Rate Note, interest payments on Fixed Rate
Notes will be made semiannually on February 1 and August 1
of each year and at Maturity.
Floating Rate Notes. Interest payments on Floating Rate
Notes will be made as specified in the related Floating
Rate Note and Pricing Supplement.
</TABLE>
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<PAGE> 48
<TABLE>
<S> <C>
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the Company, such Agent
acting solely as agent for the Company and not as principal
will solicit purchases of the Notes. Each Agent will
communicate to the Company, orally or in writing, each
reasonable offer to purchase Notes solicited by such Agent
on an agency basis, other than those offers rejected by
such Agent. Each Agent has the right, in its discretion
reasonably exercised, to reject any proposed purchase of
Notes, as a whole or in part, and any such rejection is not
deemed a breach of the Agent's agreement contained in the
Distribution Agreement. The Company has the sole right to
accept or reject any proposed purchase of the Notes, in
whole or in part, and any such rejection is not deemed a
breach of the Company's agreement contained in the
Distribution Agreement. Each Agent has agreed to make
reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes
has been solicited by such Agent and accepted by the
Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the Company,
the Company will promptly prepare a Pricing Supplement
reflecting the terms of such Note and will arrange to file
it with the Commission in accordance with Rule 424 under
the Securities Act of 1933, as amended. Information to be
included in the Pricing Supplement shall include:
1. the name of the Company;
2. the title of the securities, including series
designation, if any;
</TABLE>
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<PAGE> 49
<TABLE>
<S> <C>
3. the date of the Pricing Supplement and the dates
of the Prospectus and Prospectus Supplement to
which the Pricing Supplement relates;
4. the name of the Offering Agent (as hereinafter
defined);
5. whether such Notes are being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as
agent for the Company;
6. with respect to Notes sold to the Offering Agent
as principal, whether such Notes will be resold by
the Offering Agent to investors and other
purchasers (i) at a fixed public offering price of
a specified percentage of their Principal Amount,
(ii) at varying prices related to prevailing
market prices at the time of resale to be
determined by the Offering Agent or (iii) at 100%
of their Principal Amount;
7. with respect to Notes sold to an investor or other
purchaser through the Offering Agent acting as
agent for the Company, whether such Notes will be
sold at (i) 100% of their Principal Amount or
(ii) at a specified percentage of their Principal
Amount;
8. the Offering Agent's commission or underwriting
discount;
9. net proceeds to the Company;
10. the Principal Amount, Original Issue Date, Stated
Maturity, Initial Redemption Date, if any,
Initial Redemption Percentage, if any, Annual
</TABLE>
-9-
<PAGE> 50
<TABLE>
<S> <C>
Redemption Percentage Reduction, if any,
and Optional Repayment Date or Dates, if
any, and, in the case of Fixed Rate Notes,
the Interest Rate, the Interest Payment
Date or Dates (if other than February 1
and August 1 of each year) and the Record
Date or Dates (if other than January 15
and July 15 of each year), and, in the
case of Floating Rate Notes, the Base Rate
or Rates, the Index Maturity (if
applicable), the Initial Interest Rate,
the Maximum Interest Rate, if any, the
Minimum Interest Rate, if any, the
Interest Payment Date or Dates, the Record
Date or Dates, the Interest Reset Date or
Dates, the Spread and/or Spread
Multiplier, if any, and the Calculation
Agent;
11. the information with respect to the terms of the
Notes set forth below (whether or not the
applicable Note is a Book-Entry Note or a
Certificated Note) under "Procedures for Notes
Issued in Book-Entry Form -- Settlement
Procedures", Part A, items 1, 2, 6, 7 and 8; and
12. any other provisions of the Notes material to
investors or other purchasers of the Notes not
otherwise specified in the Prospectus or Pricing
Supplement.
One copy of such filed document will be sent by telecopy,
or overnight, express or special delivery (for delivery as
soon as practicable following the sale, but in no event
later than 11:00 a.m. on the Business Day following the
applicable sale date) to the Agent which made or presented
the offer to purchase the applicable Note (in
</TABLE>
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<PAGE> 51
<TABLE>
<S> <C>
such capacity, the "Offering Agent") and the Trustee at the
following applicable address: if to Merrill Lynch & Co. via
overnight, express or special delivery packages only, to:
Tritech Services, 40 Colonial Drive, Piscataway, New Jersey
08854, Attention: Prospectus Operations/Nachman Kimerling,
telephone: (908) 885-2768, telecopier: (908) 885-2774/
2775/2776; if to Merrill Lynch & Co. via all other types of
deliveries, to: Tritech Services, #4 Corporate Place,
Corporate Park 287, Piscataway, New Jersey 08854,
Attention: Prospectus Operations/Nachman Kimerling,
telephone: (908) 885-6526, telecopier: (908) 878-9815; if
to Smith Barney Inc., to: 390 Greenwich Street -- 4th
Floor, New York, New York 10013, Attention: MTN Product
Management/Origination -- Mark R. Meyer, telephone: (212)
723-5123, telecopier: (212) 723-8854; if to Donaldson,
Lufkin & Jenrette Securities Corporation, to:
140 Broadway, New York, New York 10005-1285, Attention:
Syndicate Department, telephone: (212) 504-4807,
telecopier: (212) 504-4298; if to First Chicago Capital
Markets, Inc., to: Operations Manager, Medium-Term Notes,
First Chicago Capital Markets, Inc., One First National
Plaza, Mail Suite 0307, Chicago, Illinois 60670, Attention:
Cherie McKnight, telephone: (312) 732-9633; and if to the
Trustee, to: NBD Bank, 611 Woodward Avenue, Detroit,
Michigan 48226, Attention: Joseph Weidenbach, telephone:
(313) 225-2211, telecopier: (313) 225-3420. For record
keeping purposes, one copy of each Pricing Supplement, as
so filed, shall also be mailed or telecopied to Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, World
</TABLE>
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<PAGE> 52
<TABLE>
<S> <C>
Financial Center, North Tower, 10th Floor, New York,
New York, 10281-1310, Attention: MTN Product Management,
telephone: (212) 449-7476, telecopier: (212) 449-2234.
One copy of each such Pricing Supplement shall also be
mailed or telecopied to the Agents' counsel at LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street,
New York, New York 10019-5389, Attention: William
S. Lamb, Esq., telephone: (212) 424-8170, telecopier:
(212) 424-8500.
Outdated Pricing Supplements, and the supplemented
Prospectuses to which they are attached (other than those
retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the Company
in payment for a Note and the authentication and delivery
of such Note shall, with respect to such Note, constitute
"settlement". Offers accepted by the Company will be
settled in three Business Days, unless the purchaser and
the Company agree to settlement on another day to the
extent permitted by Rule 15c6-1 under the Securities
Exchange Act of 1934 (the "Exchange Act"), pursuant to the
timetable for settlement set forth in Parts II and III
hereof under "Settlement Procedures" with respect to Book-
Entry Notes and Certificated Notes, respectively (each such
date fixed for settlement is hereinafter referred to as a
"Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the time
set forth under the applicable "Settlement Procedures
Timetable", such offer shall not be settled until the
Business Day following the completion of settlement
procedures A and B or such later date as the
</TABLE>
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<PAGE> 53
<TABLE>
<S> <C>
purchaser and the Company shall agree to the extent
permitted by Rule 15c6-1 the Exchange Act.
The foregoing settlement procedures may be modified, with
respect to any purchase of Notes by an Agent as principal,
if so agreed by the Company and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the interest
rate or any other variable term on any Notes being sold by
the Company, the Company will promptly advise the Agents
and the Trustee by facsimile transmission and the Agents
will forthwith suspend solicitation of offers to purchase
such Notes. The Agents will telephone the Company with
recommendations as to the changed interest rates or other
variable terms. At such time as the Company advises the
Agents and the Trustee by facsimile transmission of the new
interest rates or other variable terms, the Agents may
resume solicitation of offers to purchase such Notes.
Until such time only "indications of interest" may be
recorded. Immediately after acceptance by the Company of
an offer to purchase Notes at a new interest rate or new
variable term, the Company, the Offering Agent and the
Trustee shall follow the procedures set forth under the
applicable "Settlement Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend solicitation
of offers to purchase Notes at any time. Upon receipt of
such instructions, the Agents will forthwith suspend
solicitation of offers to purchase
</TABLE>
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<PAGE> 54
<TABLE>
<S> <C>
from the Company until such time as the Company has
advised them that solicitation of offers to purchase
may be resumed. If the Company decides to amend or supplement
the Registration Statement or the Prospectus (other than to
establish or change interest rates, maturities, prices or other
similar variable terms with respect to the Notes), it will promptly
advise the Agents and will furnish the Agents and their
counsel with copies of the proposed amendment or
supplement. One copy of such filed document, along with a
copy of the cover letter sent to the Commission, will be
delivered or mailed to the Agents, their counsel and the
Trustee at the following respective addresses: to Merrill
Lynch & Co. at MTN Product Management, Merrill Lynch & Co.,
Merrill Lynch World Headquarters, North Tower, World
Financial Center, 10th Floor, New York, New York 10281-
1310, telephone: (212) 449-7476, telecopier: (212) 449-
2234; to Smith Barney Inc., at 390 Greenwich Street -- 4th
Floor, New York, New York 10013, Attention: MTN Product
Management/Origination -- Mark R. Meyer, telephone: (212)
723-5123, telecopier: (212) 723-8854; to Donaldson, Lufkin
& Jenrette Securities Corporation at 140 Broadway, New
York, New York 10005-1285, Attention: Syndicate Department,
telephone: (212) 504-4807, telecopier: (212) 504-4298; to
First Chicago Capital Markets, Inc., at Operations Manager,
Medium-Term Notes, First Chicago Capital Markets, Inc., One
First National Plaza, Mail Suite 0307, Chicago, Illinois
60670, Attention: Cherie McKnight, telephone: (312) 732-
9633; and the Trustee at NBD Bank, 611 Woodward Avenue,
Detroit, Michigan 48226, Attention: Joseph Weidenbach,
telephone: (313) 225-2211, telecopier: (313) 225-3420. For
record keeping purposes, one
</TABLE>
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<PAGE> 55
<TABLE>
<S> <C>
copy of each such document, as so filed, shall also be
mailed or telecopied to the Agents' counsel at LeBoeuf,
Lamb, Greene & MacRae, L.L.P., 125 West 55th Street,
New York, New York 10019-5389, Attention:
William S. Lamb, Esq., telephone: (212) 424-8170,
telecopier: (212) 424-8500.
In the event that at the time the solicitation of offers to
purchase from the Company is suspended (other than to
establish or change interest rates, maturities, prices or
other similar variable terms with respect to the Notes)
there shall be any offers to purchase Notes that have been
accepted by the Company which have not been settled, the
Company will promptly advise the Agents and the Trustee
whether such offers may be settled and whether copies of
the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be delivered
in connection with the settlement of such offers. The
Company will have the sole responsibility for such decision
and for any arrangements which may be made in the event
that the Company determines that such offers may not be
settled or that copies of such Prospectus may not be so
delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and applicable Pricing
Supplement must accompany or precede the earlier of (a) the
written confirmation of a sale sent to an investor or other
purchaser or its agent and (b) the delivery of Notes to an
investor or other purchaser or its agent.
Authenticity of
Signatures: The Agents will have no obligations or liability to the
Company or the
</TABLE>
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<PAGE> 56
<TABLE>
<S> <C>
Trustee in respect of the authenticity of the signature
of any officer, employee or agent of the Company or the
Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with an adequate supply
of all documents incorporated by reference in the
Registration Statement.
Business Day: As used herein, "Business Day" means, unless otherwise
specified in the applicable Pricing Supplement, any day
other than a Saturday or Sunday which is not a day on which
banking institutions or trust companies in The City of New
York are authorized or required by law or regulation or
executive order to close and, with respect to Notes as to
which LIBOR is an applicable Interest Rate Basis, is also a
London Business Day. As used herein, "London Business Day"
means any day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market.
</TABLE>
PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry form
for eligibility in the book-entry system maintained by DTC, the Trustee will
perform the custodial, document control and administrative functions described
below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC, dated November 17,
1995, and a Certificate Agreement, dated March 28, 1990, between the Trustee and
DTC, as amended (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
<TABLE>
<S> <C>
Issuance: All Fixed Rate Notes issued in book-entry form having the
same Original Issue Date, Interest Rate, Day Count
Convention, redemption and/or repayment terms, if any, and
Stated Maturity (collectively, the
</TABLE>
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<TABLE>
<S> <C>
"Fixed Rate Terms") will be represented initially by a single
global security in fully registered form without coupons
(each, a "Book-Entry Note"); and all Floating Rate Notes
issued in book-entry form having the same Original Issue Date,
formula for the calculation of interest, and specifying the
Base Rate, which may be the CD Rate, the Commercial Paper Rate,
the Funds Rate, LIBOR, the Prime Rate or the Treasury
Rate or any other interest rate basis or formula set forth
by the Company, Initial Interest Rate, Index Maturity,
Spread and/or Spread Multiplier, if any, Minimum Interest
Rate, if any, Maximum Interest Rate, if any, redemption
and/or repayment terms, if any, and Stated Maturity
(collectively, "Floating Rate Terms") will be represented
initially by a single Book-Entry Note.
Each Book-Entry Note will be dated and issued as of the
date of its authentication by the Trustee. The date from
which interest will begin to accrue with respect to each
Book-Entry Note will be (a) with respect to an original
Book-Entry Note (or any portion thereof), its Original
Issue Date and (b) with respect to any Book-Entry Note (or
portion thereof) issued subsequently upon exchange of a
Book-Entry Note or in lieu of a destroyed, lost or stolen
Book-Entry Note, the most recent Interest Payment Date to
which interest has been paid or duly provided for on the
predecessor Book-Entry Note or Notes (or if no such payment
or provision has been made, the Original Issue Date of the
predecessor Book-Entry Note or Notes), regardless of the
date of authentication of such subsequently issued Book-
Entry Note. No Book-Entry Note shall represent any Note
issued in certificated form.
</TABLE>
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<TABLE>
<S> <C>
For other variable terms with respect to the Fixed Rate
Notes and Floating Rate Notes, see the Prospectus and the
applicable Pricing Supplement.
Except as provided in the Prospectus, no owner of a
beneficial interest in a Book-Entry Note shall be entitled
to receive any Note issued in certificated form with
respect to such beneficial interest.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau")
for the reservation of one series of CUSIP numbers, which
series consists of approximately 900 CUSIP numbers which
have been reserved for and relating to Book-Entry Notes and
the Company has delivered to each of the Trustee and DTC
such list of such CUSIP numbers. The Company will assign
CUSIP numbers to Book-Entry Notes as described below under
Settlement Procedure B. DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Company
has assigned to Book-Entry Notes. The Trustee will notify
the Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Book-Entry Notes, and,
if it deems necessary, the Company will reserve and obtain
additional CUSIP numbers for assignment to Book-Entry
Notes. Upon obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional numbers to
the Trustee and DTC. Book-Entry Notes having an aggregate
principal amount in excess of $150,000,000 and otherwise
required to be represented by the same Global Certificate
will instead be represented by two or more Global
</TABLE>
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<TABLE>
<S> <C>
Certificates which shall all be assigned the same CUSIP
number.
Registration: Unless otherwise specified by DTC, each Book-Entry Note
will be registered in the name of Cede & Co., as nominee
for DTC, on the register maintained by the Trustee under
the Indenture. The beneficial owner of a Note issued in
book-entry form (i.e., an owner of a beneficial interest in
a Book-Entry Note) (or one or more indirect participants in
DTC designated by such owner) will designate one or more
participants in DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as agent for
such beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry
form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Note
issued in book-entry form in the account of such
Participants. The ownership interest of such beneficial
owner in such Note issued in book-entry form will be
recorded through the records of such Participants or
through the separate records of such Participants and one
or more indirect participants in DTC.
Transfers: Transfers of beneficial ownership interests in a Book-Entry
Note will be accomplished by book entries made by DTC and,
in turn, by Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such Book-Entry
Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau
at any time a written notice specifying (a) the CUSIP
numbers of two or more Book-Entry Notes outstanding
</TABLE>
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<TABLE>
<S> <C>
on such date that represent Book-Entry Notes having the same
Fixed Rate Terms or Floating Rate Terms, as the case may be
(other than Original Issue Dates), and for which interest
has been paid to the same date; (b) a date, occurring at
least 30 days after such written notice is delivered and at
least 30 days before the next Interest Payment Date for the
related Notes issued in book-entry form, on which such
Book-Entry Notes shall be exchanged for a single
replacement Book-Entry Note; and (c) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Book-Entry Note. Upon receipt of such a
notice, DTC will send to its Participants (including the
Trustee) a written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to the
CUSIP Service Bureau written notice setting forth such
exchange date and the new CUSIP number and stating that, as
of such exchange date, the CUSIP numbers of the Book-Entry
Notes to be exchanged will no longer be valid. On the
specified exchange date, the Trustee will exchange such
Book-Entry Notes for a single Book-Entry Note bearing the
new CUSIP number and the CUSIP numbers of the exchanged
Book-Entry Notes will, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the Book-
Entry Notes to be exchanged exceed $150,000,000 in
aggregate principal amount, one replacement Book-Entry Note
will be authenticated and issued to represent each
$150,000,000 of principal amount of the exchanged Book-
Entry Notes and an additional Book-Entry Note or Notes will
be authenticated and issued to represent any remaining
principal
</TABLE>
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<TABLE>
<S> <C>
amount of such Book-Entry Notes (See "Denominations" below).
Denominations: Notes issued in book-entry form will be issued in
denominations of $1,000 and integral multiples of $1,000 in
excess thereof. Book-Entry Notes will be denominated in
principal amounts not in excess of $150,000,000. If one or
more Notes issued in book-entry form having an aggregate
principal amount in excess of $150,000,000 would, but for
the preceding sentence, be represented by a single Book-
Entry Note, then one Book-Entry Note will be issued to
represent each $150,000,000 principal amount of such Note
or Notes issued in book-entry form and an additional Book-
Entry Note or Notes will be issued to represent any
remaining principal amount of such Note or Notes issued in
book-entry form. In such a case, each of the Book-Entry
Notes representing such Note or Notes issued in book-entry
form shall be assigned the same CUSIP number.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Record
Date, the Trustee will deliver to the Company and DTC a
written notice specifying by CUSIP number the amount of
interest to be paid on each Book-Entry Note on the
following Interest Payment Date (other than an Interest
Payment Date coinciding with Maturity) and the total of
such amounts. DTC will confirm the amount payable on each
Book-Entry Note on such Interest Payment Date by reference
to the daily bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date, the Company
will pay to the Trustee in immediately available funds an
amount sufficient to pay the interest then due and owing,
and upon receipt of such funds from the
</TABLE>
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<TABLE>
<S> <C>
Company, the Company, Trustee in turn will pay to DTC, such
total amount of interest due (other than at Maturity), at
the times and in the manner set forth below under "Manner of
Payment".
Notice of Interest Payments and Record Dates. Promptly
after each Interest Determination Date for Floating Rate
Notes issued in book-entry form, the Trustee will notify
each of Moody's Investors Services, Inc. and Standard &
Poor's Corporation of the interest rates determined on such
Interest Determination Date.
Payments at Maturity. On or about the first Business Day
of each month, the Trustee will deliver to the Company and
DTC a written list of principal, interest and premium, if
any, to be paid on each Book-Entry Note maturing either at
Stated Maturity, on a Redemption Date in, or for which an
Option to Elect Repayment has been received with respect
to, the following month. The Trustee, the Company and DTC
will confirm the amounts of such principal, premium, if
any, and interest payments with respect to a Book-Entry
Note on or about the fifth Business Day preceding the
Maturity of such Book-Entry Note. At such Maturity, the
Company will pay to the Trustee in immediately available
funds an amount sufficient to make such Maturity payment,
and upon receipt of such funds the Trustee in turn will pay
to DTC, the principal amount of such Note, together with
interest and premium, if any, due at such Maturity, at the
times and in the manner set forth below under "Manner of
Payment". Promptly after payment to DTC of the principal,
interest and premium, if any, due at the Maturity of such
Book-Entry Note, the Trustee will cancel such Book-Entry
Note and
</TABLE>
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<TABLE>
<S> <C>
deliver it to the Company with an appropriate debit advice.
On the first Business Day of each month, the Trustee will
deliver to the Company a written statement indicating the
total principal amount of outstanding Book-Entry Notes as of
the close of business on the immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Book-Entry Notes on
any Interest Payment Date or at Maturity shall be paid by
the Company to the Trustee in funds available for use by
the Trustee no later than 1:00 p.m., New York City time, on
such date. The Company will make such payment on such
Book-Entry Notes to an account specified by the Trustee.
Upon receipt of such funds, the Trustee will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by
DTC, each payment of interest, principal and premium, if
any, due on a Book-Entry Note on such date. Thereafter on
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants
in whose names such Notes are recorded in the book-entry
system maintained by DTC. Neither the Company nor the
Trustee shall have any responsibility or liability for the
payment by DTC of the principal of, premium, if any, or
interest on, the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any
</TABLE>
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<TABLE>
<S> <C>
interest payment on a Note will be determined and withheld
by the Participant, indirect participant in DTC or other
Person responsible for forwarding payments and materials
directly to the beneficial owner of such Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in book-
entry form purchased by each Agent, as principal, or sold
by each Agent, as agent of the Company, will be as follows:
A. The Offering Agent will advise the Company by
telephone, confirmed by facsimile, of the
following Settlement information:
1. Principal Amount of the Note.
2. (a) Fixed Rate Notes:
(i) Interest Rate;
and
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Base Rate or Rates;
(ii) Initial Interest Rate;
(iii) Spread and/or Spread
Multiplier, if any;
(iv) Interest Reset Date or
Dates;
(v) Interest Reset Period;
</TABLE>
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<TABLE>
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(vi) Interest Payment Dates;
(vii) Record Dates;
(viii) Index Maturity;
(ix) Maximum and Minimum
Interest Rates, if any;
and
(x) Calculation Agent.
3. Price to public, if any, of the Note (or
whether the Note is being offered at
varying prices relating to prevailing
market prices at time of resale as
determined by the Offering Agent).
4. Sale Date.
5. Settlement Date (Original Issue Date).
6. Stated Maturity.
7. Redemption provisions, if any, including:
Initial Redemption Date, Initial
Redemption Percentage and Annual
Redemption Percentage Reduction.
8. Optional Repayment Date(s), if any.
9. Net proceeds to the Company.
10. The Offering Agent's commission or
underwriting discount.
11. Whether such Notes are being sold to the
Offering Agent as principal or to an
investor or other
</TABLE>
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<TABLE>
<S> <C>
purchaser through the Offering Agent acting
as agent for the Company.
12. Whether such Note is being issued with
Original Issue Discount and the terms
thereof.
13. Such other information specified with
respect to the Notes (whether by Addendum
or otherwise).
B. The Company will assign a CUSIP number to the
Book-Entry Note representing such Note and then
advise the Trustee by facsimile transmission or
other electronic transmission of the above
settlement information received from the Offering
Agent, such CUSIP number and the name of the
Offering Agent.
C. The Trustee will communicate to DTC and the
Offering Agent through DTC's Participant Terminal
System, a pending deposit message specifying the
following settlement information:
1. The information set forth in the
Settlement Procedure A.
2. Identification numbers of the participant
accounts maintained by DTC on behalf of
the Trustee and the Offering Agent.
3. Identification of the Book-Entry Note as a
Fixed Rate Book-Entry Note or Floating
Rate Book-Entry Note.
4. Initial Interest Payment Date for such
Note, number of days by which
</TABLE>
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such date succeeds the related Record Date for
DTC purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the date
five calendar days preceding the Interest
Payment Date) and, if then calculable, the
amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Book-Entry Note
representing such Note.
6. Whether such Book-Entry Note represents
any other Notes issued or to be issued in
book-entry form.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard &
Poor's Corporation, which will use the information
in the message to include certain terms of the
related Book-Entry Note in the appropriate daily
bond report published by Standard & Poor's
Corporation.
D. The Trustee will complete and authenticate the
Book-Entry Note representing such Note.
E. DTC will credit such Note to the participant
account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Trustee's participant account and credit such Note
to the participant
</TABLE>
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<TABLE>
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account of the Offering Agent maintained by DTC and
(ii) to debit the settlement account of the Offering
Agent and credit the settlement account of the Trustee
maintained by DTC, in an amount equal to the price of
such Note less such Offering Agent's discount or
underwriting commission, as applicable. Any entry of
such a deliver order shall be deemed to constitute a
representation and warranty by the Trustee to DTC that
(i) the Book-Entry Note representing such Note has been
issued and authenticated and (ii) the Trustee is holding
such Book-Entry Note pursuant to the Certificate Agreement.
G. In the case of Notes sold through the Offering
Agent, as agent, the Offering Agent will enter an
SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such
Note to the Offering Agent's participant account
and credit such Note to the participant account of
the Participants maintained by DTC and (ii) to
debit the settlement accounts of such Participants
and credit the settlement account of the Offering
Agent maintained by DTC in an amount equal to the
initial public offering price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating
procedures in effect on the Settlement Date.
I. Upon receipt, the Trustee will pay the Company, by
wire
</TABLE>
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<S> <C>
transfer of immediately available funds to an
account specified by the Company to the Trustee
from time to time, in the amount transferred to
the Trustee in accordance with Settlement
Procedure F.
J. The Trustee will send a copy of the Book-Entry
Note by first class mail to the Company together
with a statement setting forth the principal
amount of Notes Outstanding as of the related
Settlement Date after giving effect to such
transaction and all other offers to purchase Notes
of which the Company has advised the Trustee but
which have not yet been settled.
K. If the Note was sold through the Offering Agent,
as agent, the Offering Agent will confirm the
purchase of such Note to the investor or other
purchaser either by transmitting to the
Participant with respect to such Note a
confirmation order through DTC's Participant
Terminal System or by mailing a written
confirmation to such investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company for
settlement on the first Business Day after the sale date,
Settlement Procedures "A" through "K" set forth above shall
be completed as soon as possible but not later than the
respective times (New York City time) set forth below:
</TABLE>
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<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
---------- ----
<S> <C> <C>
A 11:00 a.m. on the sale date
B As soon as practicable following the sale,
but in no event later than 12:00 noon on
the sale date
C As soon as practicable following the sale,
but in no event later than 2:00 p.m. on
the sale date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement Date
H 4:45 p.m. on Settlement Date
I-J 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day after
the sale date, Settlement Procedures A, B, and C may, if
necessary, be completed at any time prior to the specified
times on the first Business Day after such sale date.
Settlement Procedure H is subject to extension in
accordance with any extension of Fedwire closing deadlines
and in the other events specified in the SDFS operating
procedures in effect on the Settlement Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 2:00 p.m., New York
City time, on the Business Day immediately preceding the
scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an
</TABLE>
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<TABLE>
<S> <C>
SDFS deliver order with respect to a Book-Entry Note issued
in book-entry form pursuant to Settlement Procedure F, the
Trustee may deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable a withdrawal message instructing
DTC to debit such Note to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal
message, provided that such participant account contains a
principal amount of the Book-Entry Note representing such
Note that is at least equal to the principal amount to be
debited. If withdrawal messages are processed with respect
to all the Notes represented by a Book-Entry Note, the
Trustee will mark such Book-Entry Note "canceled", make
appropriate entries in its records and send certification
of destruction of such canceled Book-Entry Note to the
Company. The CUSIP number assigned to such Book-Entry Note
shall, in accordance with CUSIP Service Bureau procedures,
be canceled and not immediately reassigned. If withdrawal
messages are processed with respect to a portion of the
Notes represented by a Book-Entry Note, the Trustee will
exchange such Book-Entry Note for two Book-Entry Notes, one
of which shall represent the Book-Entry Notes for which
withdrawal messages are processed and shall be canceled
immediately after issuance, and the other of which shall
represent the other Notes previously represented by the
surrendered Book-Entry Note and shall bear the CUSIP number
of the surrendered Book-Entry Note.
In the case of any Note sold through the Offering Agent, as
agent, if the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such Note
by the
</TABLE>
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<S> <C>
beneficial investor or other purchaser thereof (or a
person, including an indirect participant in DTC, acting on
behalf of such investor or other purchaser), such
Participants and, in turn, the related Offering Agent may
enter SDFS deliver orders through DTC's Participant
Terminal System reversing the orders entered pursuant to
Settlement Procedures F and G, respectively. Thereafter,
the Trustee will deliver the withdrawal message and take
the related actions described in the preceding paragraph.
If such failure shall have occurred for any reason other
than default by the applicable Offering Agent to perform
its obligations hereunder or under the Distribution
Agreement, the Company will reimburse such Offering Agent
for its loss of the use of funds during the period when the
funds were credited to the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any actions
in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect
to a Note that was to have been represented by a Book-Entry
Note also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedure D, for the
authentication and issuance of a Book-Entry Note
representing such remaining Notes and will make appropriate
entries in its records.
</TABLE>
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PART III: PROCEDURES FOR NOTES ISSUED
IN CERTIFICATED FORM
<TABLE>
<S> <C>
Denominations: The Certificated Notes will be issued in denominations of
$1,000 and integral multiples of $1,000 in excess thereof.
Payments of Principal Upon presentment and delivery of the Certificated Note, the
and Interest: Trustee upon receipt of immediately available funds from
the Company will pay the principal amount of each
Certificated Note at Maturity and the final installment of
interest in immediately available funds. All interest
payments on a Certificated Note, other than interest due at
Maturity, will be made at the Corporate Trust Office of the
Trustee or, at the option of the Company, may be made by
mailed to the address of the person entitled thereto
as such address shall appear in the Security Register or by
wire transfer of immediately available funds if appropriate
wire transfer instructions have been received in writing by
the Trustee not less than 15 days prior to the applicable
Interest Payment Date.
The Trustee will provide monthly to the Company a list of
the principal, premium, if any, and interest to be paid on
Certificated Notes maturing in the next succeeding month.
The Trustee will be responsible for withholding taxes on
interest paid as required by applicable law, but shall be
relieved from any such responsibility if it acts in good
faith and in reliance upon an opinion of counsel.
Certificated Notes presented to the Trustee at Maturity for
payment will be canceled by the Trustee. All canceled
Certificated Notes held by the Trustee shall be
</TABLE>
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<TABLE>
<S> <C>
destroyed, and the Trustee shall furnish to the Company a
certificate with respect to such destruction.
Settlement
Procedures: Settlement Procedures with regard to each Certificated Note
purchased by any Agent, as principal, or through any Agent,
as agent, shall be as follows:
A. The Offering Agent will advise the Company by
telephone of the following Settlement information
with regard to each Note:
1. Exact name in which the Certificated
Note(s) is to be registered (the
"Registered Owner").
2. Exact address or addresses of the
Registered Owner for delivery, notices and
payments of principal and interest.
3. Taxpayer identification number of the
Registered Owner.
4. Principal Amount of the Certificated Note.
5. Denomination of the Certificated Note.
6. (a) Fixed Rate Notes:
(i) Interest Rate; and
(ii) Interest Payment Dates.
(b) Floating Rate Notes:
(i) Base Rate or Rates;
</TABLE>
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<S> <C>
(ii) Initial Interest Rate;
(iii) Spread and/or Spread
Multiplier, if any;
(iv) Interest Reset Date or
Dates;
(v) Interest Reset Period;
(vi) Interest Payment Dates;
(vii) Record Dates;
(viii) Index Maturity;
(ix) Maximum and Minimum
Interest Rates, if any;
and
(x) Calculation Agent.
7. Price to public of the Certificated Note
(or whether the Note is being offered at
varying prices relating to prevailing
market prices at time of resale as
determined by the Offering Agent).
8. Sale Date.
9. Settlement Date (Original Issue Date).
10. Stated Maturity.
11. Net proceeds to the Company.
12. The Offering Agent's commission or
underwriting discount.
</TABLE>
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<TABLE>
<S> <C>
13. Whether such Notes are being sold to the
Offering Agent as principal or to an
investor or other purchaser through the
Offering Agent acting as agent for the
Company.
14. Redemption provisions, if any, including:
Initial Redemption Date, Initial
Redemption Percentage and Annual
Redemption Percentage Reduction.
15. Optional Repayment Date(s), if any.
16. Whether such Note is being issued with
Original Issue Discount and the terms
thereof.
17. Such other information specified with
respect to the Notes (whether by Addendum
or otherwise).
B. After receiving such settlement information from
the Offering Agent, the Company will advise the
Trustee of the above settlement information by
facsimile transmission confirmed by telephone. The
Company will prepare a Pricing Supplement to the
Prospectus and deliver copies to the Agent and
will cause the Trustee to issue, authenticate and
deliver Notes.
C. The Trustee will complete the Certificated Note in
the form approved by the Company, the Offering
Agent and the Trustee, and will make three copies
thereof (herein called "Stub 1", "Stub 2" and
"Stub 3"):
</TABLE>
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<TABLE>
<S> <C>
1. Certificated Note with the Offering
Agent's confirmation, if traded on a
principal basis, or the Offering Agent's
customer confirmation, if traded on an
agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each sale, the Trustee will
deliver the Certificated Notes and Stub 2 thereof
to the Offering Agent at the following applicable
address: if to Merrill Lynch & Co., to Merrill
Lynch Money Market Clearance, 55 Water Street,
Concourse Level, N.S.C.C. Window, New York, New
York 10041, Attention: Al Mitchell, telephone:
(212) 558-2405, telecopier: (212) 558-2457; if to
Smith Barney Inc., to 390 Greenwich Street -- 3rd
Floor, New York, New York 10013, Attention:
Syndicate Operations -- James Steiner, telephone:
(212) 723-5427, telecopier: (212) 723-8832; if to
Donaldson, Lufkin & Jenrette Securities
Corporation, to Chemical Bank, Four New York
Plaza, First Floor Receiving Window for the Account of
Donaldson, Lufkin & Jenrette, New York, New York,
Contact Person: Carrie Labarbera, telephone:
(212) 504-3195; and if to First Chicago Capital
Markets, Inc., to Bankers Trust, 16 Wall Street, 5th
Floor, Window 51, New York, New York 10015, Attention:
Jim Murray, telephone: (212) 618-2370. The Trustee
will keep Stub 1. The Offering Agent will acknowledge
receipt of the Certificated Note
</TABLE>
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<TABLE>
<S> <C>
through a broker's receipt and will keep
Stub 2. Delivery of the Certificated Note will be
made only against such acknowledgment of receipt.
Upon determination that the Certificated Note has
been authorized, delivered and completed as
aforementioned, the Offering Agent will wire the
net proceeds of the Certificated Note after
deduction of its applicable commission to the
Company pursuant to standard wire instructions
given by the Company.
E. In the case of Notes sold through the Offering
Agent, as agent, the Offering Agent will deliver
the Certificated Note (with confirmations), as
well as a copy of the Prospectus and any
applicable Pricing Supplement or Supplements
received from the Trustee to the purchaser against
payment in immediately available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement For offers to purchase Certificated Notes accepted by the
Procedures Company, Settlement Procedures "A" through "F" set forth
Timetable: above shall be completed as soon as possible but not later
than the respective times (New York City time) set forth
below:
SETTLEMENT
PROCEDURE TIME
--------- ----
A 11:00 a.m. on the sale date
B 3:00 p.m. on Business Day prior to Settlement
Date
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
</TABLE>
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<TABLE>
<S> <C>
Failure to Settle: In the case of Notes sold through the Offering Agent, as
agent, if an investor or other purchaser of a Certificated
Note from the Company shall either fail to accept delivery
of or make payment for a Certificated Note on the date
fixed for settlement, the Offering Agent will forthwith
notify the Trustee and the Company by telephone, confirmed
in writing, and return the Certificated Note to the
Trustee.
The Trustee, upon receipt of the Certificated Note from the
Offering Agent, will immediately advise the Company and the
Company will promptly arrange to credit the account of the
Offering Agent in an amount of immediately available funds
equal to the amount previously paid to the Company by such
Offering Agent in settlement for the Certificated Note.
Such credits will be made on the Settlement Date if
possible, and in any event not later than the Business Day
following the Settlement Date; provided that the Company
has received notice on the same day. If such failure shall
have occurred for any reason other than failure by such
Offering Agent to perform its obligations hereunder or
under the Distribution Agreement, the Company will
reimburse such Offering Agent for its loss of the use of
funds during the period when the funds were credited to the
account of the Company. Immediately upon receipt of the
Certificated Note in respect of which the failure occurred,
the Trustee will cancel and destroy the Certificated Note,
make appropriate entries in its records to reflect the fact
that the Note was never issued, and accordingly notify in
writing the Company.
</TABLE>
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EXHIBIT B
MCN INVESTMENT CORPORATION
Medium-Term Notes, Series A
Due Nine Months or more from Date of Issue
TERMS AGREEMENT
___________, 199_
MCN Investment Corporation
150 W. Jefferson Avenue, Suite 1800
Detroit, Michigan 48226
Attention:
Subject in all respects to the terms and conditions of the Distribution
Agreement dated November 17, 1995 (the "Agreement"), among you and MCN
Investment Corporation (the "Company") and MCN Corporation, the undersigned
agrees to purchase the following Medium-Term Notes, Series A of the Company:
Aggregate Principal Amount:
Interest Rate:
Interest Reset Period:
Maximum or Minimum Interest Rates:
Spread and/or Spread Multiplier:
Date of Maturity:
Interest Payment Dates:
Record Dates:
Redemption/Repayment:
Price to Public:
Purchase Price: % of Principal Amount [plus accrued
interest from ______, 199_]
Purchase Date and Time:
Other Provisions:
Place for Delivery of Notes and Payment Therefor:
<PAGE> 81
Form:
Method of Payment:
Modification, if any, in the requirements to deliver the documents specified in
Section 6 of the Agreement:
Period during which additional debt securities of the Company may not be sold
pursuant to Section 3(k) of the Agreement:
[ ]
By: _______________________
Accepted:
MCN INVESTMENT CORPORATION
By: _____________________________
Name:
Title:
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