1
EXHIBIT 4-1
[FORM OF NOTE]
Registered
No. ______
CUSIP 55268K____
If Indicated on the face hereof that this note is a global
security, unless and until it is exchanged in whole or in part for the
individual securities represented hereby, it may not be transferred except as a
whole by the depositary to a nominee OF THE depositary or by a nominee of the
depositary to the depositary or another nominee of the depositary or by the
depositary or any such nominee to a successor depositary or a nominee of such
successor depositary, unless this certificate is presented by an authorized
representative of the Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of the depository
Trust Company and any payment is made to Cede & Co. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
MCN ENERGY ENTERPRISES INC.
MEDIUM-TERM NOTES, SERIES C
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
.........................
If applicable, the "Total Amount of OID", "Yield to Maturity"
and "Initial Accrual Period OID" (computed under the
designated method) below will be completed solely for the
purposes of applying the Federal income tax original issue
discount ("OID") rules.
Floating Rate Note [ ] ______% Fixed Rate Note [ ]
Global Security: [ ] Yes [ ] No
Original Issue Date: Principal Amount:
Interest Accrual Date: Issue Price:
Interest Payment Dates:
Stated Maturity:
Optional Repayment
Date(s): Repayment Price(s):
Total Amount of OID:
Yield to Maturity:
Initial Accrual
Period OID:
1
2
Initial Redemption Date:
Initial Redemption Percentage:____%
Annual Redemption Percentage Reduction:____%
Other Provisions:
Only Applicable if this is a Floating Rate Note:
Initial Interest Rate: Spread (plus or minus):
Index Maturity: Spread Multiplier:
Base Rate: Maximum Interest Rate:
Interest Reset Period: Minimum Interest Rate:
Interest Reset Dates:
Interest Determination Dates:
Interest Payment Period:
Calculation Dates:
2
3
MCN ENERGY ENTERPRISES INC.(f/k/a MCN Investment Corporation),
a corporation duly organized and existing under the laws of Michigan (herein
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to or registered assigns, the principal sum of Dollars at
Stated Maturity as set forth above and to pay interest thereon as described
below.
The principal of (and premium, if any) and interest on this
Note are payable by the Company in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
NOTE SET FORTH BELOW, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been
executed by the Trustee under the Indenture by manual signature, this Note shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
MCN ENERGY ENTERPRISES INC.
By_________________________________
Attest:
__________________________________ [SEAL]
Secretary
Trustee's Certificate of
Authentication
This is one of the
Securities of the series
provided for under the
within-mentioned Indenture.
Bank One Trust Company, NA,
as Trustee
By: _____________________________
Authorized Signatory
3
4
1. This Note is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of September 1, 1995 (herein called the
"Indenture"), between the Company and Bank One Trust Company, NA (f/k/a NBD
Bank), as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. As provided in the
Indenture, the Securities may be issued in one or more series which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest, if any, at different rates, may be subject
to different redemption provisions, if any, may be subject to different sinking,
purchase or analogous funds, if any, may be subject to different covenants and
Events of Default and may otherwise vary as in the Indenture provided or
permitted. This Note is one of a series designated on the face hereof as
Medium-Term Notes, Series C (the "Notes"), limited to $620,000,000 in aggregate
principal amount. The Notes of this series may be issued at various times with
different maturity dates and different principal repayment provisions, may bear
interest at different rates, and may otherwise vary, all as provided in the
Indenture.
2. A. The regular record date (the "Regular Record Date") for a
Fixed Rate Note will be the fifteenth day, whether or not a Business Day, of the
calendar month immediately preceding the month in which the related Interest
Payment Date (as defined below) occurs and for a Floating Rate Note will be the
fifteenth day, whether or not a Business Day, immediately preceding the related
Interest Payment Date (as defined below) (unless otherwise shown on the face
hereof or specified in paragraph B below). Interest which is payable and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the person in whose name the Note is registered at the close of business on
the Regular Record Date for such Interest Payment Date; provided, however, that
interest payable on the Interest Payment Date occurring at Stated Maturity will
be to the person to whom principal shall be payable. "Maturity Date" means the
date on which the principal amount hereof becomes due and payable, whether at
Stated Maturity or earlier by declaration of acceleration, call for redemption,
repayment or otherwise. Notwithstanding the foregoing, any interest that is
payable but not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered owner hereof on such
Regular Record Date, and may be paid to the person in whose name such note is
registered on the close of business on a special record date (the "Special
Record Date") for the payment
4
5
of such Defaulted Interest to be fixed by the Trustee, notice whereof having
been given to the Holder of such Note not less than ten days prior to such
Special Record Date, or may be paid at any time and in any other lawful manner,
or as more fully provided in the Indenture. The term "Business Day" as used
herein shall mean any day other than a Saturday or Sunday, which is (i) not a
day on which banking institutions or trust companies in the City of New York are
authorized or required by law, regulation or executive order to close and (ii)
if such Note is a LIBOR Note (as defined below), a London Business Day. "London
Business Day" with respect to any Note means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market. In
connection with any calculations, all percentages resulting from any calculation
on Floating Rate Notes will be rounded, if necessary, to the nearest 1/100,000
of 1% (.0000001), with five one-millionths of a percentage point rounded
upwards, and all dollar amounts used in or resulting from such calculation on
Floating Rate Notes will be rounded to the nearest cent, with one-half cent
being rounded upwards.
B. If this is a Fixed Rate Note, the Company promises to pay
interest on the principal amount at the rate per annum shown on the face hereof
until the principal amount hereof is paid or duly made available for payment.
Unless otherwise provided on the face hereof, the Company will pay interest
semi-annually in arrears on March 1 and September 1 (each an "Interest Payment
Date"), commencing with the Interest Payment Date immediately following the
Original Issue Date shown on the face hereof and at the Maturity Date; provided,
however, that the first payment of interest on any Fixed Rate Note with an
Original Issue Date shown on the face hereof between a Regular Record Date and
an Interest Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date; provided, further, that any payment
required to be made on a date that is not a Business Day need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on such date, and no additional interest shall
accrue as a result of such delayed payment. Unless otherwise specified on the
face hereof the Regular Record Date with respect to Interest Payment Dates
occurring on March 1 and September 1 shall be the preceding February 15 and
August 15, respectively. Interest will accrue from and including the most recent
Interest Payment Date or, if no interest has been paid or duly provided for,
from and including the Original Issue Date on the face hereof, to, but excluding
the Interest Payment Date. The amount of such interest payable on any Interest
Payment Date shall be computed on the basis of a 360-day year of twelve 30-day
months.
C. If this is a Floating Rate Note, the Company promises to pay
interest on the principal amount at the rate per annum determined in accordance
with the provisions below under the heading "Determination of CD Rate",
"Determination of CMT
5
6
Rate", "Determination of Commercial Paper Rate", "Determination of Eleventh
District Cost of Funds Rate", "Determination of Federal Funds Rate",
"Determination of LIBOR", "Determination of Prime Rate" or "Determination of
Treasury Rate", depending upon whether the Base Rate specified above is CD Rate,
CMT Rate, Commercial Paper Rate, Eleventh District Cost of Funds Rate, Federal
Funds Rate, LIBOR, Prime Rate or Treasury Rate, respectively, and in accordance
with any applicable provisions on the face hereof under the heading "Other
Provisions", until the principal hereof is paid or duly made available for
payment. The Company will pay interest monthly, quarterly, semi-annually or
annually as specified on the face hereof under "Interest Payment Period",
commencing with the first Interest Payment Date specified on the face hereof
next succeeding the Original Issue Date, and at the Maturity Date; provided,
however, that the first payment of interest on any Floating Rate Note with an
Original Issue Date shown on the face hereof between a Regular Record Date and
an Interest Payment Date will be made on the Interest Payment Date following the
next succeeding Regular Record Date. Unless otherwise provided on the face
hereof and below, interest will be payable, in the case of Floating Rate Notes
that reset daily, weekly, or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified on the face hereof; in the case of Floating Rate Notes that reset
quarterly, on the third Wednesday of March, June, September and December of each
year; in the case of Floating Rate Notes that reset semiannually, on the third
Wednesday of each of two months of each year specified on the face hereof; and
in the case of Floating Rate Notes that reset annually, on the third Wednesday
of the one month of each year specified on the face hereof (each such day being
an "Interest Payment Date") and, in each case, on the Maturity Date. If any
Interest Payment Date for any Floating Rate Note (other than the Stated
Maturity) would otherwise be a day that is not a Business Day, such Interest
Payment Date will be postponed to the next succeeding day that is a Business
Day, except that in the case of a LIBOR Note, if such Business Day falls in the
next succeeding calendar month, such Interest Payment Date will be the
immediately preceding Business Day. If the Stated Maturity of a Floating Rate
Note falls on a day that is not a Business Day, the required payment of
principal, premium, if any, and/or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest shall
accrue on such payment for the period from and after the Stated Maturity to the
date of such payment on the next succeeding Business Day.
The interest payable on a Floating Rate Note on each Interest Payment
Date will include accrued interest from and including the Original Issue Date or
from and including the last date in respect of which interest has been paid or
duly provided for, as the case may be, to but excluding such Interest Payment
Date or the Maturity Date, as the case may be. Such accrued interest will be
calculated by multiplying the principal amount of such Note by an accrued
interest factor. Such accrued
6
7
interest factor will be computed by adding the interest factor calculated for
each day in the period for which accrued interest is being calculated. Unless
otherwise specified on the face hereof, the interest factor (expressed as a
decimal calculated to seven decimal places without rounding) for each such day
is computed by dividing the interest rate in effect on such day by 360, if the
Base Rate is CD Rate, Commercial Paper Rate, Eleventh District Cost of Funds
Rate, LIBOR, Federal Funds Rate or Prime Rate, or by the actual number of days
in the year if the Base Rate is the CMT Rate or the Treasury Rate, as indicated
on the face hereof. For purposes of making the foregoing calculation, the
interest rate in effect on any Interest Reset Date will be the applicable rate
as reset on such date. The interest rate in effect from the Original Issue Date
to the first Interest Reset Date (the "Initial Interest Rate") will be
determined as if the Original Issue Date were an Interest Reset Date.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, shown on the face hereof. In addition, the interest rate hereon shall in
no event be higher than the maximum rate, if any, permitted by Michigan law, as
the same may be modified by United States law of general application. Commencing
with the first Interest Reset Date specified on the face hereof following the
Original Issue Date and thereafter upon each succeeding Interest Reset Date
specified on the face hereof, the rate at which interest on a Floating Rate Note
is payable shall be adjusted as specified on the face hereof under Interest
Reset Period; provided, however, that if any Interest Reset Date would otherwise
be a day that is not a Business Day, such Interest Reset Date shall be postponed
to the next day that is a Business Day, except that (i) if the Base Rate is
LIBOR and such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day or (ii) if
the Base Rate is Treasury Rate and the Interest Reset Date falls on a date which
is an auction date, the Interest Reset Date shall be the following day that is a
Business Day.
The interest rate applicable to each Interest Reset Period commencing
on the Interest Reset Date will be the rate determined as of the applicable
Interest Determination Date on or prior to the related Calculation Date (as
defined below). The "Interest Determination Date" with respect to the CD Rate,
CMT Rate, Commercial Paper Rate, Federal Funds Rate and Prime Rate will be the
second Business Day immediately preceding the applicable Interest Reset Date and
the Interest Determination Date with respect to LIBOR will be the second London
Business Day immediately preceding the applicable Interest Reset Date. With
respect to the Eleventh District Cost of Funds Rate, the Interest Determination
Date will be the last working day of the month immediately preceding each
Interest Reset Date on which the
7
8
Federal Home Loan Bank of San Francisco publishes the Index. With respect to the
Treasury Rate, the Interest Determination Date will be the day in the week in
which the applicable Interest Reset Date falls on which day direct obligations
of the United States ("Treasury Bills") of the Index Maturity specified on the
face hereof are normally auctioned. Treasury Bills are normally sold at an
auction held on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday; provided, however, that if an
auction is held on the Friday of the week preceding the applicable Interest
Reset Date, the Interest Determination Date will be such preceding Friday.
Unless otherwise provided on the face hereof, the "Calculation Date",
if applicable, pertaining to any Interest Determination Date will be the earlier
of (i) the tenth calendar day after such Interest Determination Date, or, if
such day is not a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest Payment Date or the
Maturity Date, as the case may be.
Subject to applicable provisions of law and except as specified herein,
on each Interest Reset Date the rate of interest shall be the rate determined in
accordance with the provisions of the applicable heading below.
Determination of CD Rate. If the Base Rate indicated on the face hereof is the
CD Rate, the interest rate shall equal the rate on the Interest Determination
Date specified on the face hereof for negotiable certificates of deposit having
the Index Maturity specified on the face hereof as published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication of the Board of Governors
of the Federal Reserve System ("H.15(519)") under the heading "CDs (Secondary
Market)" or, if not so published by 3:00 p.m., New York City time, on the
related Calculation Date, the rate on such Interest Determination Date for
negotiable certificates of deposit of the Index Maturity designated on the face
hereof as published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit." If such rate is not published by either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the CD Rate on such Interest Determination Date
will be calculated by the Calculation Agent and will be the arithmetic mean of
the secondary market rates as of 10:00 a.m., New York City time, on such
Interest Determination Date of three leading nonbank dealers in negotiable U.S.
dollar certificates of deposit in The City of New York (which may include any of
the Agents or their affiliates) selected by the
8
9
Calculation Agent for negotiable certificates of deposit of major United States
money market banks for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity designated on the face hereof in an
amount that is representative for a single transaction in that market at that
time. In each of the above cases, the rate shall be adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof.
If the dealers selected as aforesaid by the Calculation Agent are not quoting
rates as mentioned in this sentence, the CD Rate determined as of such Interest
Determination Date will be the CD Rate in effect on such Interest Determination
Date.
Determination of CMT Rate. If an Interest Rate Basis for this Note is specified
on the face hereof as the CMT Rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT
Telerate Page is 7051, or any other page as may replace such page on such
service, the rate on such CMT Rate Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, or any other page as may replace such page
on such service, the weekly or monthly average, as specified on the face hereof,
for the week or month, as applicable, ended immediately preceding the week or
month, as applicable, in which such CMT Rate Interest Determination Date falls.
If such rate is no longer displayed on the relevant page or is not so displayed
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index as published in
H.15(519). If such rate is no longer published or is not so published by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate on
such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for such CMT Rate Interest
Determination Date as may then be published by either the Board of Governors of
the Federal Reserve System or the United States Department of the Treasury that
the Calculation Agent determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in H.15(519). If such
information is not so provided by 3:00 P.M., New York City time, on the related
Calculation Date, then such CMT Rate on the CMT Rate Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity,
based on the arithmetic mean of the secondary market offered rates as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date reported, according
9
10
to their written records, by three leading primary United States government
securities dealers (each, a "Reference Dealer") in The City of New York selected
by the Calculation Agent (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United Stated ("Treasury Notes") with an original
maturity of approximately the Designated CMT Maturity Index and a remaining term
to maturity of not less than such Designated CMT Maturity Index and a remaining
term to maturity of not less than such Designated CMT Maturity Index minus one
year. If the Calculation Agent is unable to obtain three such Treasury Note
quotations, the CMT Rate on such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offered rates as of approximately 3:30
P.M., New York City time , on such CMT Rate Interest Determination Date of three
Reference Dealers in The City of New York (from five such Reference Dealers
selected by the Calculation Agent and eliminating th highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)),for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closet to the Designated CMT
Maturity Index and in an amount of at least U.S. $100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above, then
the CMT Rate will be calculated by the Calculation Agent based on the arithmetic
mean of the offered rates obtained and neither the highest nor the lowest of
such quotes will be eliminated; provided, however, that if fewer than three
Reference Dealers selected by the Calculation Agent are quoting as mentioned
herein, the CMT Rate determined as of such CMT Rate Interest Determination Date
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent will obtain from five
Reference Dealers quotations for the Treasury Note with the shorter remaining
term to maturity. In each of the above cases, the rate shall be adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof.
"Designated CMT Telerate Page" means the display on Bridge Telerate,
Inc. (or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service) for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519) or, if no such
page is specified on the face hereof, page 7052.
10
11
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30
years) specified on the face hereof with respect to which the CMT Rate will be
calculated or, if no such maturity is specified on the face hereof, 2 years.
Determination of Commercial Paper Rate. If the Base Rate indicated on the face
hereof is the Commercial Paper Rate, the interest rate shall equal the Money
Market Yield (as defined below) on the Interest Determination Date specified on
the face hereof of the rate for commercial paper having the Index Maturity
specified on the face hereof, as such rate shall be published in H.15(519) under
the heading "Commercial Paper-Nonfinancial." In the event that such rate is not
published by 3:00 p.m., New York City time, on the related Calculation Date,
then the Commercial Paper Rate will be the Money Market Yield on such Interest
Determination Date of the rate for commercial paper of the Index Maturity
specified on the face hereof as published in H.15 Daily Update, or other
recognized electronic source used for the purpose of displaying the applicable
rate, under the caption "Commercial Paper-Nonfinancial." If by 3:00 p.m., New
York City time, on the related Calculation Date such rate is not yet published
in either H.15(519) or Composite Quotations, then the Commercial Paper Rate on
such Interest Determination Date will be calculated by the Calculation Agent and
will be the Money Market Yield of the arithmetic mean of the offered rates, at
approximately 11:00 a.m., New York City time, on such Interest Determination
Date of three leading dealers of commercial paper in The City of New York (which
may include any of the Agents or their affiliates) selected by the Calculation
Agent for commercial paper having the Index Maturity designated on the face
hereof placed for industrial issuers whose bonds are rated "AA", or the
equivalent, from a nationally recognized statistical rating organization. In
each of the above cases, the rate shall be adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face hereof.
If the dealers selected as aforesaid are not quoting rates described in this
sentence, the Commercial Paper Rate will be the Commercial Paper Rate in effect
on such Interest Determination Date.
"Money Market Yield" means yield (expressed as a percentage) calculated
in accordance with the following formula:
Money Market Yield = D x 360 x 100
------------------
360 - (D x M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
11
12
Determination of Eleventh District Cost of Funds Rate. If the Base Rate for this
Note is indicated on the face hereof as Eleventh District Cost of Funds Rate,
the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "11th District" on the display on Bridge Telerate,
Inc. (or any successor service) on page 7058 or any other page as may replace
such page on such service ("Telerate Page 7058") as of 11:00 A.M., San Francisco
time, on such Eleventh District Cost of Funds Rate Interest Determination Date.
If such rate does not appear on Telerate Page 7058 on such Eleventh District
Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost
of Funds Rate on such Eleventh District Cost of Funds Rate Interest
Determination Date shall be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District ("FHLB")that
was most recently announced (the"Index") by the FHLB of San Francisco as such
cost of funds for the calendar month immediately preceding such Eleventh
District Cost of Funds Rate Interest Determination Date. In each of the above
cases, the rate shall be adjusted by the addition or subtraction of the Spread,
if any, specified on the face hereof, or by multiplication by the Spread
Multiplier, if any, specified on the face hereof. If the FHLB of San Francisco
fails to announce the Index on or prior to such Eleventh District Cost of Funds
Rate Interest Determination Date for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date, the
Eleventh District Cost of Funds Rate determined as of such Eleventh District
Cost of Funds Rate Interest Determination Date will be the Eleventh District
Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate
Interest Determination Date.
Determination of Federal Funds Rate. If the Base Rate indicated on the face
hereof is the Federal Funds Rate, the interest rate shall equal the rate on the
Interest Determination Date specified on the face hereof for federal funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
so published by 3:00 p.m., New York City time, on the related Calculation Date,
the rate on such Interest Determination Date as published in H.15 Daily Update,
or other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption "Federal Funds (Effective)." If by 3:00 p.m.,
New York City time, on the related Calculation Date such rate is not published
in either H.15(519) or Composite Quotations, then the Federal Funds Rate on such
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight United
12
13
States dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York (which may include any of the Agents or
their affiliates) selected by the Calculation Agent prior to 9:00 a.m., New York
City time, on such Interest Determination Date. In each of the above cases, the
rate shall be adjusted by the addition or subtraction of the Spread, if any,
specified on the face hereof, or by multiplication by the Spread Multiplier, if
any, specified on the face hereof. If the brokers selected as aforesaid by the
Calculation Agent are not quoting as mentioned in this sentence, the Federal
Funds Rate determined as of such Interest Determination Date will be the Federal
Funds Rate in effect on such Interest Determination Date.
Determination of LIBOR. If the Base Rate indicated on the face hereof is LIBOR,
the interest rate with respect to the Interest Determination Date specified on
the face hereof shall be determined in accordance with the following provisions:
(i) With respect to an Interest Determination Date, LIBOR will be
either: (a) if "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the specified Designated LIBOR
Page by its terms provides for only a single rate, in which case such single
rate shall be used) for deposits in U.S. dollars having the Index Maturity
specified on the face hereof, commencing on the second London Business Day
immediately following such Interest Determination Date, which appear on the
Reuters Screen LIBO Page as of 11:00 a.m., London time, on such Interest
Determination Date, if at least two such rates appear (unless, as aforesaid,
only a single rate is required) on the Reuters Screen LIBO Page ("LIBOR
Reuters"), or (b) if "LIBOR Telerate" is specified on the face hereof or if
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified as the method for
calculating LIBOR, the rate for deposits in U.S. dollars having the Index
Maturity designated on the face hereof, commencing on the second London
Business Day immediately following such Interest Determination Date, that
appears on the Telerate Page 3750 as of 11:00 a.m., London time, on such
Interest Determination Date ("LIBOR Telerate").
(ii) With respect to an Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as the case may be, on the
designated LIBOR page as specified above, LIBOR will be determined on the
basis of the rates at which deposits in U.S. dollars having the Index
Maturity designated on the face hereof are at approximately 11:00 a.m.,
London time, on such Interest Determination Date by four reference major
banks ("Reference Banks") in the London interbank market selected by the
Calculation Agent to prime banks in the London interbank market commencing
on the second London Business Day immediately following such Interest
Determination Date and in a principal amount that is representative for a
single
13
14
transaction in such market at such time. The Calculation Agent will request
the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR
for such Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR for such
Interest Determination Date will be the arithmetic mean of the rates quoted
at approximately 11:00 a.m., New York City time, on such Interest
Determination Date by three major banks (which may include the Agents) in
The City of New York selected by Calculation Agent for loans in U.S. dollars
to leading European banks having the specified Index Maturity designated on
the face hereof and in a principal amount that is representative for a
single transaction in such market at such time; provided, however, that if
the banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR determined as of such Interest
Determination Date will be LIBOR in effect on such Interest Determination
Date.
In each of the above cases, the rate shall be adjusted by the addition or
subtraction of the Spread, if any, specified on the face hereof, or by
multiplication by the Spread Multiplier, if any, specified on the face
hereof.
Unless otherwise indicated on the face hereof, "Reuters Screen LIBO Page"
means the display designated as Page "LIBO" on the Reuters Monitor Money
Rate Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London interbank rates of major
banks). "Telerate Page 3750" means the display designated as page "3750" on
the Bridge Telerate Inc. (or such other page as may replace the 3750 page on
that service or such other service or service as may be nominated by the
British Bankers' Association for the purpose of displaying London interbank
rates for U.S. dollar deposits).
Determination of Prime Rate. If the Base Rate, indicated on the face hereof is
the Prime Rate, the interest rate shall equal the rate on the Interest
Determination Date specified on the face hereof as published in H.15(519) under
the heading "Bank Prime Loan." If such rate is not published prior to 3:00 p.m.,
New York time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by at least four
banks that appear on the Reuters Screen USPRIME1 Page (as defined below) as such
bank's prime rate or base lending rate as in effect for such Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
USPRIME1 Page for such Interest Determination Date, the Prime Rate shall be the
arithmetic mean of the prime rates or base lending rates quoted on the basis of
the actual number of days in the year divided by a 360-day year as of the close
of business on such Interest
14
15
Determination Date by four major money center banks in The City of New York
selected by the Calculation Agent. If fewer than two such rates appear on the
Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the
Calculation Agent on the basis of the rates furnished in The City of New York by
three substituted banks or trust companies organized and doing business under
the laws of the United States, or any State thereof, having total equity capital
of at least $500 million and being subject to supervision or examination by
Federal or State authority, selected by the Calculation Agent to provide such
rate or rates. In each of the above cases, the rate shall be adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof. If the banks or trust companies selected as aforesaid are not quoting as
mentioned in the second preceding sentence, the Prime Rate determined as of such
Interest Determination Date will be the Prime Rate in effect on such Interest
Determination Date.
"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as may
replace the USPRIME1 page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks).
Determination of Treasury Rate. If the Base Rate indicated on the face hereof is
the Treasury Rate, the interest rate shall equal the rate on the Interest
Determination Date specified on the face hereof applicable to the most recent
auction of direct obligations of the United States ("Treasury Bills") having the
Index Maturity specified on the face hereof, as such rate shall be published in
H.15(519) under the heading "Treasury Bills -- auction average (investment)" or,
in the event that such rate is not published by 3:00 p.m., New York City time,
on the related Calculation Date, the auction average rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
Treasury. In the event that the results of the auction of Treasury Bills having
the Index Maturity designated on the face hereof are not published or reported
as provided above by 3:00 p.m., New York City time, on such Calculation Date, or
if no such auction is held in a particular week, then the Treasury Rate will be
calculated by the Calculation Agent and will be a yield to maturity (expressed
as a bond equivalent on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis) of the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 p.m., New York City time, on such Interest
Determination Date, of three leading primary United States government securities
dealers (which may include any of the Agents or their affiliates) selected by
such Calculation Agent for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified on the
15
16
face hereof. In each of the above cases, the rate shall be adjusted by the
addition or subtraction of the Spread, if any, specified on the face hereof, or
by multiplication by the Spread Multiplier, if any, specified on the face
hereof. If the dealers selected as aforesaid by the Calculation Agent are not
quoting bid rates as described in this sentence, then the Treasury Rate
determined as of such Interest Determination Date will be the Treasury Rate in
effect on such Interest Determination Date.
3. Unless otherwise specified on the face hereof, Bank One Trust
Company, NA, shall be the Calculation Agent. The Calculation Agent shall
calculate the interest rate in accordance with the foregoing and will confirm in
writing such calculation to the Trustee and any Paying Agent. Neither the
Trustee nor any Paying Agent shall be responsible for any such calculation. At
the request of the Holder hereof the Calculation Agent will provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate which will become effective as of the next Interest Reset Date.
4. Unless indicated on the face hereof that this Note is a Global
Security, payments of interest (other than interest payable at the Maturity
Date) will be made by mailing a check to the Holder at the address of the Holder
appearing on the Securities Register on the applicable Record Date or by wire
transfer of immediately available funds, but only if appropriate payment
instructions have been received in writing by the Company's Paying Agent in the
City of Detroit not less that 15 days prior to the applicable Interest Payment
Date. Unless indicated on the face hereof that this Note is a Global Security,
principal and any premium and interest payable at the Maturity Date will be paid
in immediately available funds upon surrender of such Note at the office of a
Paying Agent in the City of Detroit or at such other office or agency as the
Company may designate. If indicated on the face hereof that this Note is a
Global Security, the principal hereof and any premium and interest due on any
Interest Payment Date or at the Maturity Date will be made available to the
Trustee on such date. As soon as possible thereafter, the Trustee will make such
payments to the Depositary in immediately available funds in accordance with
existing arrangements between the Trustee and the Depositary.
5. Unless otherwise specified on the face hereof, the Notes will not
be subject to any sinking fund. The Notes will be redeemable at the option of
the Company prior to the Stated Maturity only if an Initial Redemption Date is
specified on the face hereof. If so specified, the Notes will be subject to
redemption at the option of the Company on any date on and after the applicable
Initial Redemption Date in whole or from time to time in part in increments of
$1,000 or the minimum denomination specified on the face hereof (provided that
any remaining principal amount thereof shall be at least $1,000 or such minimum
16
17
denomination), at the applicable Redemption Price (as defined below) on notice
given not more than 45 nor less than 30 days prior to the date of redemption and
in accordance with the provisions of the Indenture. "Redemption Price", with
respect to an Note, means an amount equal to the sum of (i) the Initial
Redemption Percentage specified on the face hereof (as adjusted by the Annual
Redemption Percentage Reduction, if applicable) multiplied by the unpaid
principal amount of the portion to be redeemed plus (ii) accrued interest to the
date of redemption. The Initial Redemption Percentage, if any, applicable to a
Note shall decline at each anniversary of the Initial Redemption Date by an
amount equal to the applicable Annual Redemption Percentage Reduction, if any,
until the Redemption Price is equal to 100% of the unpaid principal amount
thereof or the portion thereof to be redeemed.
6. If so specified on the face hereof, the Notes will be repayable by
the Company in whole or in part at the option of the Holders thereof on their
respective Optional Repayment Dates specified on the face hereof. If no Optional
Repayment Date is specified with respect to a Note, such Note will not be
repayable at the option of the Holder thereof prior to Stated Maturity. Any
repayment in part will be in increments of $1,000 or the minimum denomination
specified on the face hereof (provided that any remaining principal amount
thereof shall be at least $1,000 or such minimum denomination). Unless otherwise
specified on the face hereof, the repayment price for any Note to be repaid
means an amount equal to the sum of (i) 100% of the unpaid principal amount
thereof or the portion thereof plus (ii) accrued interest to the date of
repayment. For any Note to be repaid, such Note must be received, together with
the form thereon entitled "Option to Elect Repayment" duly completed, by the
Trustee at its Corporate Trust Office (or such other address of which the
Company shall from time to time notify the Holders) not more than 60 nor less
than 30 days prior to the date of repayment. Exercise of such repayment option
by the Holder will be irrevocable.
If indicated on the face hereof that this Note is a Global
Security, the option for repayment may be exercised by the applicable
Participant that has an account with the Depositary, on behalf of the Holder of
any beneficial interest in this Note, by delivering a written notice
substantially similar to the above mentioned form to the Trustee at its
Corporate Trust Office (or such other address of which the Company shall from
time to time notify the Holders), not more than 60 nor less than 30 days prior
to the date of repayment. A notice of election from the applicable Participants
on behalf of the Holder of any beneficial interest in this Note, to exercise its
option to have such Note repaid must be received by the Trustee by 5:00 p.m.,
New York City time, on the last day for giving such notice. In order to ensure
that notice is received by the Trustee on a particular day, the Holder of any
beneficial interest in this Note, must so direct the applicable
17
18
Participant before such Participant's deadline for accepting instructions for
that day. Different firms may have different deadlines for accepting
instructions from their customers. Accordingly, the Holder of any beneficial
interest in this Note should consult the Participant through which it owns its
interest therein for the respective deadlines for such Participant. All notices
shall be executed by a duly authorized officer of such Participant (with
signature guaranteed) and shall be irrevocable. In addition, the Holder of any
beneficial interest in this Note, shall effect delivery at the time such notice
of election is given to the Depositary by causing the applicable Participant to
transfer such Holder's interest in this Note on the Depositary's records, to the
Trustee.
7. If an Event of Default with respect to the Notes shall occur and
be continuing, the principal of all of the Notes may be declared due and payable
in the manner and with the effect provided in the Indenture. If the principal of
any Original Issue Discount Note is declared to be due and payable as described
in the Indenture, the amount of principal due and payable with respect to such
Note shall be limited to the sum of the aggregate stated principal amount of
such Note multiplied by the Issue Price (expressed as a percentage of the
aggregate principal amount) indicated on the face hereof plus the original issue
discount accrued from the Original Issue Date indicated on the face hereof to
the date of declaration, which accrual shall be calculated using the "interest
method" (computed in accordance with generally accepted accounting principles)
in effect on the date of declaration. An Original Issue Discount Note is a Note
that has a stated redemption price at its maturity that exceeds its Issue Price
by an amount equal to or greater than a de minimis amount (0.25% of the stated
redemption price at maturity multiplied by the number of complete years to the
Stated Maturity for such Note) and any other Note designated by the Company as
issued with original discount.
8. The Indenture may be modified by the Company and the Trustee
without consent of any Holder with respect to certain matters as described in
the Indenture. In addition, the Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and MCN Energy Group Inc. ("MCN") and the rights of
the Holders of the Securities of each series to be affected under the Indenture
at any time by the Company, MCN and the Trustee with the consent of the Holders
of a majority in principal amount of the Securities at the time Outstanding of
each series to be affected. The Indenture also contains provisions permitting
the Holders of a majority in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company or MCN with certain provisions of the
Indenture and certain past defaults under the Indenture and
18
19
their consequences. Any such consent or waiver by the Holder of this Note shall
bind such Holder and all future Holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
9. No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
10. The Notes of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of a different authorized denomination, as requested by the
Holder surrendering the same.
11. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note is registrable in the Security
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Company in any place where the principal of (and premium, if
any) and interest on this Note are payable, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of authorized
denominations and for the same maturity and aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Note is registered as the owner hereof for all purposes, whether
or not this Note be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
12. Unless otherwise defined herein, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
19
20
13. The Indenture and this Note shall for all purposes be governed by,
and construed in accordance with, the laws of the State of New York.
14. If indicated on the face hereof that this Note is a Global
Security, no holder of any beneficial interest in this Note held on its behalf
by a Depositary or a nominee of such Depositary shall have any rights under the
Indenture with respect to such Global Security, and such Depositary or nominee
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall impair, as between a
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary as holder of
any Security.
15. If not indicated on the face hereof that this Note is a Global
Security, this Note is exchangeable for a like aggregate principal amount of
Notes of a different authorized denomination, as requested by the Holder
surrendering the same, as provided in the Indenture and subject to certain
limitations therein set forth. If indicated on the face hereof that this Note is
a Global Security, it is exchangeable in whole but not in part, for Notes
registered in the names of Persons other than the Depositary or its nominee or
in the name of a successor to the depositary or a nominee of such successor
depositary only if (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for this Note or if at any time such
Depositary shall no longer be eligible or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
and, in either case, a successor depositary is not appointed by the Company, or
(ii) the Company in its discretion at any time determines not to have all of the
Notes represented by one or more Global Security or Securities. If this Note is
exchangeable pursuant to the preceding sentence, it shall be exchangeable for
Notes of like tenor and terms in definitive form in aggregate principal amount
equal to the principal amount of the Global Security. Subject to the foregoing,
if this Note is a Global Security it is not exchangeable, except for a Note or
Notes of the same aggregate denominations to be registered in the name of such
depositary or its nominee or in the name of a successor to the Depositary or a
nominee of such successor depositary.
20
21
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
________________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: _______________ Your Signature:_________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature Guaranty: ____________________________________________________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Transfer Agent, which
requirements will include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Transfer Agent in addition
to, or in substitution for, STAMP, all in
accordance with the Exchange Act.)
Social Security Number or Taxpayer Identification
Number:__________________________________________
1
22
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Note (or portion hereof specified below) pursuant to its
terms at a price equal to the applicable Repayment Price thereof together with
interest to the Optional Repayment Date, to the undersigned at _________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the Holder elects to have repaid
___________________; and specify the denomination or denominations (which shall
be in authorized denominations) of the Notes to be issued to the Holder for the
portion of the within Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid):
__________________.
2