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EXHIBIT 10-19
GUARANTEE AGREEMENT
BETWEEN
MCN ENERGY GROUP INC.
AND
MCN ENERGY ENTERPRISES INC.
This Agreement, made this 13th day of March, 2001, by and between MCN
Energy Group Inc., a Michigan corporation ("Parent") and MCN Energy Enterprises
Inc., 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;
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. Payment Provision. If, during the term of this Agreement, Subsidiary
fails to make any scheduled payment of interest, principal or premium, if any,
on any Debt issued by it, Parent shall be obligated to the fullest extent
permitted by law to either make, or cause Subsidiary to make, the scheduled
payment immediately following notice of such failure.
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.
7. Rights of Lenders. Any Lender (defined below) shall have the right
to demand that Subsidiary enforce Subsidiary's rights under paragraphs 2, 3, 8
and 12 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 obtain payment of such
defaulted interest, principal or premiums, if any, owed to such Lender. 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.
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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 September 1, 1995
(the "Indenture"), between the Subsidiary and Bank One Trust Company N.A., as
successor to NBD Bank, 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 Energy Group Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
With a copy to:
MCN Energy Group Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telecopier No.: (000) 000-0000
If to Subsidiary:
MCN Energy Enterprises, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
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With a copy to:
MCN Energy Enterprises, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telecopier No.: (000) 000-0000
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 Agreement 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 nonexclusive 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.
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IN WITNESS WHEREOF, the parties hereto have set their hands and affixed their
corporate seals as of the date first above written.
MCN Energy Group Inc.
By: /s/ Xxxxxx X. Xxx III
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Name: Xxxxxx X. Xxx III
Title: Executive Vice President,
Treasurer and CFO
MCN Energy Enterprises
By: /s/ Xxxxxx X. Xxx III
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Name: Xxxxxx X. Xxx III
Title: Executive Vice President,
Treasurer and CFO
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