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EXHIBIT 4-2
SUPPORT AGREEMENT
BETWEEN
MCN CORPORATION
AND
MCN INVESTMENT CORPORATION
This Agreement, made the ____ day of ____, 1995, by and between MCN
Corporation, a Michigan corporation ("Parent") and MCN Investment Corporation,
a Michigan corporation ("Subsidiary").
WITNESSETH:
WHEREAS, Parent is the owner of 100% of the outstanding common stock of
Subsidiary;
WHEREAS, Subsidiary intends to make borrowings from, and issue debt
securities or other obligations to, parties other than Parent ("Debt"), from
time to time, so that Subsidiary will be in a position to provide financing for
itself;
WHEREAS, Parent and Subsidiary desire to take certain actions to
enhance and maintain the financial condition of Subsidiary as hereinafter set
forth in order to enable Subsidiary to issue such Debt on more advantageous and
reasonable terms;
WHEREAS, third party creditors will rely upon this Agreement in making
loans or extending credit to Subsidiary; and
NOW, THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Execution and Delivery of this Agreement. Parent and
Subsidiary represent that the execution and delivery of this Agreement has been
duly authorized by Parent and Subsidiary and this Agreement will constitute the
legal, valid and binding obligations of the parties thereto in accordance with
its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
2. Stock ownership. Parent owns and, at all times during the term
of this Agreement shall continue to own, all of the voting stock of Subsidiary.
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3. Net Worth. Parent agrees that it shall cause Subsidiary to
have at all times a positive net worth (net assets less intangible assets, if
any), as determined in accordance with generally accepted accounting
principles.
4. Liquidity Provision. If, during the term of this Agreement,
Subsidiary is unable to make timely payment of interest, principal or premium,
if any, on any Debt issued by it, Parent promptly shall provide to Subsidiary,
at its request or the request of any Lender (as hereinafter defined), such
funds (in the form of cash or liquid assets) as equity or if Parent and
Subsidiary shall agree as a loan. If such funds are advanced to Subsidiary as
a loan, such loan shall be on such terms and conditions, including maturity and
rate of interest, as Parent and Subsidiary shall agree. Notwithstanding the
foregoing, any such loan shall be subordinated in all respects to any and all
Debt of Subsidiary, whether or not such Debt is outstanding at the time of such
loan.
5. Waivers. Parent hereby waives any failure or delay on the part
of Subsidiary in asserting or enforcing any of its rights or in making any
claims or demands hereunder. Subsidiary or any Lender may at any time,
without Parent's consent, without notice to Parent and without affecting or
impairing Subsidiary's or such Lender's rights or Parent's obligations
hereunder, do any of the following with respect to any Debt: (a) make changes,
modifications, amendments or alterations, by operation of law or otherwise, (b)
grant renewals and extensions of time, for payment or otherwise, (c) accept
new or additional documents, instruments or agreements relating to or in
substitution of said Debt, or (d) otherwise handle the enforcement of their
respective rights and remedies in accordance with their business judgment.
6. Termination; Amendment. This Agreement may be amended or
terminated at any time by written amendment or agreement signed by both
parties; provided, however, that:
(a) no modification of or amendment to the provisions of
paragraphs 2, 3, 4, 5, 7 and 8 of this Agreement may be made unless all Lenders
(as defined below) consent in advance and in writing to such modification or
amendment;
(b) no modification of or amendment to this Agreement may
be made in a manner that adversely affects the rights of Lenders unless (i)
such modification or amendment occurs after all Debt theretofore issued by
Subsidiary shall have been paid in full or (ii) all affected Lenders consent in
advance and in writing to such modification or amendment; and
(c) this Agreement may be terminated only after all Debt
issued by Subsidiary shall have been paid in full.
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7. Rights of Lenders. Any Lender (defined below) shall have the
right to demand that Subsidiary enforce Subsidiary's rights under paragraphs 2,
3, 4, 8 and 12 of this Agreement, and, if Subsidiary fails or refuses to take
timely action to enforce its rights under paragraphs 2, 3 or 4 of this
Agreement or if Subsidiary defaults in the timely payment of interest, principal
or premium, if any, on any Debt owed to Lender when due, such Lender may
proceed directly against Parent to enforce Subsidiary's rights under paragraphs
2, 3, 4, 8 and 12 of this Agreement or to obtain payment of such defaulted
interest, principal or premiums, if any, owed to such Lender. However, in no
event may any Lender, on default by Parent or Subsidiary or upon failure to
comply with this Agreement by Parent or Subsidiary, have recourse to or against
the stock or assets of Michigan Consolidated Gas Company (the "MichCon") or any
interest of Parent or Subsidiary therein. Despite this limitation, funds
available to the Parent to satisfy any obligation under this Agreement will
include dividends paid by MichCon. The term "Lender", as used in this
Agreement, shall mean any person, firm, corporation or other entity to
which Subsidiary is indebted for money borrowed or to which Subsidiary
otherwise owes any Debt or which is acting as trustee or authorized
representative on behalf of such person, firm, corporation or other entity.
8. Indenture of Subsidiary. Parent agrees that it will:
(a) not take any action (or refrain from taking any action)
to the extent that such action or inaction would cause a default in the
performance or breach of any term or provision of the Indenture dated as of
______, 1995 (the "Indenture"), between the Subsidiary and NBD Bank, N.A., as
trustee, or any Debt outstanding under the Indenture; and
(b) comply with all covenants and other provisions of the
Indenture applicable to it as if it were a party to the Indenture.
9. Notices. Any notice, instruction, request, consent, demand or
other communication required or contemplated by this Agreement shall be in
writing, shall be given or made or communicated by United States first class
mail, telex, facsimile transmission or hand delivery, addressed as follows:
If to Parent: MCN Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: [ ]
If to Subsidiary: MCN Investment Corporation
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: [ ]
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10. Successors. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and is also intended for
the benefit of the holders from time to time of the Debt and, notwithstanding
that such holders are not parties hereto, each such holder shall be entitled to
the full benefits of this Agreement and to enforce the covenants and agreements
contained herein. This Agremeent is not intended for the benefit of any
person other than holders of Debt, and except as may be expressly provided
herein shall not confer or be deemed to confer upon any other such person any
benefits, rights or remedies hereunder.
11. Governing Law. This Agreement shall be governed by the laws of
the State of Michigan.
12. Remedies. The parties to this Agreement acknowledge and agree
that breach of any of the covenants of Parent set forth herein may not be
compensable by payment of money damages and, therefore, that the covenants of
Parent set forth herein may be enforced in equity by a decree requiring
specific performance. Such remedies shall be cumulative and non-exclusive and
shall be in addition to any other rights and remedies Subsidiary or any other
person seeking enforcement of this Agreement may have under this Agreement.
IN WITNESS WHEREOF, the parties hereto have set their hands and affixed
their corporate seals as of the last day and year above written.
(SEAL) MCN Corporation
Attest:_________________________ By:_________________________
Assistant Secretary Name:
Title:
(SEAL) MCN Investment Corporation
Attest:__________________________ By:__________________________
Assistant Secretary Name:
Title:
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