EXHIBIT 4.12
EXECUTION COPY
GUARANTY
FOR
CMS ENERGY CORPORATION
THIS GUARANTY, dated as of July 12, 2002, is made by CMS Enterprises
Company, a Michigan corporation, CMS Gas Transmission Company, a Michigan
corporation, and CMS Generation Co., a Michigan corporation (each individually a
"GUARANTOR" and collectively, together with any additional Subsidiaries of the
Borrower that become a party to this Guaranty by executing a supplement hereto
in the form attached hereto as Annex I, the "GUARANTORS"), in favor of the
Lenders (the "LENDERS") parties to the Credit Agreements (as defined below) and
Citicorp USA, Inc. ("CUSA"), as Collateral Agent (the "COLLATERAL AGENT") for
the Lenders.
PRELIMINARY STATEMENTS
(1) Barclays Bank PLC, as Administrative Agent, the Collateral Agent
and the Lenders have entered into two Amended and Restated Credit Agreements,
each dated as of July 12, 2002, one (the "SHORT TERM CREDIT AGREEMENT") maturing
March 31, 2003 and the other (the "LONG TERM CREDIT AGREEMENT") maturing
December 15, 2003 (the Short Term Credit Agreement and the Long Term Credit
Agreement, as they may hereafter be amended or otherwise modified from time to
time, being referred to herein collectively as the "CREDIT AGREEMENTS", the
terms defined therein and not otherwise defined herein being used herein as
therein defined), with CMS Energy Corporation, a corporation organized and
existing under the laws of the State of Michigan (the "BORROWER"). The
Guarantors will derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreements.
(2) It is a condition precedent to the effectiveness of the Credit
Agreements that the Guarantors shall have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Extensions of Credit under the Credit Agreement, the
Guarantors hereby agrees as follows:
SECTION 1. Guaranty. Each of the Guarantors hereby unconditionally
guarantees, jointly with the other Guarantors and severally, the punctual
payment when due, whether at stated maturity, by acceleration or otherwise, of
all obligations of the Borrower now or hereafter existing under the Credit
Agreements and the Promissory Notes, whether for principal, interest, fees,
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expenses or otherwise (such obligations being the "OBLIGATIONS"), and agrees to
pay any and all expenses (including reasonable fees and expenses of counsel)
incurred by the Agents or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Guarantor's
liability shall extend to all amounts which constitute part of the Obligations
and would be owed by the Borrower to the Collateral Agent or the Lenders under
the Credit Agreements and the Promissory Notes but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
SECTION 2. Guaranty Absolute. Each of the Guarantors guarantee,
jointly with the other Guarantors and severally, that the Obligations will be
paid strictly in accordance with the terms of the Credit Agreements and the
Promissory Notes, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Collateral Agent or the Lenders with respect thereto against the Borrower. The
obligations of the Guarantors under this Guaranty are independent of the
Obligations, and a separate action or actions may be brought and prosecuted
against any or all of the Guarantors to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of each of the Guarantors
under this Guaranty shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of either or both of the
Credit Agreements, the Promissory Notes, any other Loan Document, or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or waiver
of or any consent to departure from either or both of the Credit Agreements, the
Promissory Notes, or any other Loan Document, including, without limitation, any
increase in the Obligations resulting from the extension of additional credit to
the Borrower or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Obligations;
(d) the existence of any claim, set-off, defense or other right which
any of the Guarantors may have at any time against the Collateral Agent, any
Lender or any other Person, whether in connection with this Guaranty, the
transactions contemplated in any of the other Loan Documents, or any unrelated
transaction;
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(e) any manner of application of collateral, or proceeds thereof, to
all or any of the Obligations, or any manner of sale or other disposition of any
collateral for all or any of the Obligations or any other assets of the Borrower
or any of its Subsidiaries;
(f) any change, restructuring or termination of the corporate
structure or existence of the Borrower or any of its Subsidiaries; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Collateral Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 3. Rights of Contribution with Respect to Obligations.
(a) To the extent that any payment is made on the Obligations by or
on behalf of any Guarantor or Grantor (each, an "Obligor") under or pursuant to
this Guaranty or any Pledge Agreement (an "Obligor Payment") which, taking into
account all other Obligor Payments then previously or concurrently made by any
other Obligor, exceeds the amount which otherwise would have been paid by or
attributable to such Obligor if each Obligor had paid the aggregate Obligations
satisfied by such Obligor Payment in the same proportion as such Obligor's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Obligor Payment) bore to the aggregate Allocable Amounts of each of the Obligors
as determined immediately prior to the making of such Obligor Payment, then,
following payment in full in cash of the Obligations and the termination or
expiration of all Commitments, such Obligor shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Obligor for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Obligor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Obligor shall be equal to the maximum amount of the claim which could then be
recovered from such Obligor with respect to the Obligations without rendering
such claim voidable or avoidable under Section 548 of Chapter 11 of the
Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act,
Uniform Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 3 is intended only to define the relative rights of
the
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Obligors, and nothing set forth in this Section 3 is intended to or shall impair
the obligations of the Obligors to pay any amounts as and when the same shall
become due and payable in accordance with the terms of this Guaranty or any
Pledge Agreement.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Guarantors and the
other Obligors to which such contribution and indemnification is owing.
(e) The rights of the indemnifying Obligors against other Obligors
with respect to any payments on the Obligations shall be exercisable upon the
full payment of the Obligations in cash and the termination or expiry of the
Commitments.
SECTION 4. Waiver. Each of the Guarantors hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Guaranty and any requirement that the Collateral Agent or
any Lender protect, secure, perfect or insure any security interest or lien or
any property subject thereto or exhaust any right or take any action against the
Borrower or any other Person or any collateral.
SECTION 5. Subrogation; Subordination of Intercompany Indebtedness.
(a) Subrogation. Notwithstanding any payment or payments made by any
Guarantor hereunder, or any setoff or application of funds of any Guarantor by
the Collateral Agent or any Lender, each Guarantor hereby irrevocably waives any
and all rights of subrogation to the rights of the Collateral Agent and the
Lenders against the Borrower and any and all rights of reimbursement,
assignment, indemnification or implied contract or any similar rights against
the Borrower or against any endorser or other guarantor of all or any part of
the Obligations until the Lenders' claims with respect to the Obligations have
been paid in full and the Commitments terminated. If, notwithstanding the
foregoing, any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by such Guarantor in trust for the
Collateral Agent and the Lenders, segregated from other funds of such Guarantor,
and shall, forthwith upon receipt by such Guarantor, be turned over to the
Collateral Agent in the exact form received by such Guarantor (duly endorsed by
such Guarantor to the Collateral Agent), to be applied against the Obligations,
whether matured or unmatured, under the Short Term Credit Agreement and, after
the Short Term Credit Agreement has been repaid in full, to the Obligations,
whether matured or unmatured, under the Long Term Credit Agreement.
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(b) Subordination of Intercompany Indebtedness. Each Guarantor agrees
that any and all claims of any Guarantor against the Borrower or any other
Obligor with respect to any "Intercompany Indebtedness" (as hereinafter
defined), any endorser, obligor or any other guarantor of all or any part of the
Obligations, or against any of its properties shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all
Obligations and the obligation of Enterprises under the Enterprises Credit
Agreement. If all or any part of the assets of any Obligor, or the proceeds
thereof, are subject to any distribution, division or application to the
creditors of such Obligor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any such Obligor is dissolved or if
substantially all of the assets of any such Obligor are sold, then, and in any
such event (such events being herein referred to as an "Insolvency Event"), any
payment or distribution of any kind or character, either in cash, securities or
other property, which shall be payable or deliverable upon or with respect to
any indebtedness of any Obligor to any other Obligor ("Intercompany
Indebtedness") shall be paid or delivered directly to the Collateral Agent for
application to the obligations, whether matured or unmatured, of Enterprises
under the Enterprises Credit Agreement, and, after the Enterprises Credit
Agreement shall have been fully paid and satisfied in cash, to the Obligations,
whether matured or unmatured, under the Short Term Credit Agreement, and, after
the Short Term Credit Agreement has been repaid in full, to the Obligations,
whether matured or unmatured, under the Long Term Credit Agreement. Should any
payment, distribution, security or instrument or proceeds thereof be received by
any Obligor upon or with respect to the Intercompany Indebtedness after any
Insolvency Event and prior to the satisfaction of all of the Obligations and the
termination or expiration of all Commitments of the Lenders, such Obligor shall
receive and hold the same in trust, as trustee, for the benefit of the Lenders
and shall forthwith deliver the same to the Collateral Agent, for the benefit of
the Lenders, in precisely the form received (except for the endorsement or
assignment of the Obligor where necessary), for application to the obligations,
whether matured or unmatured, of Enterprises under the Enterprises Credit
Agreement, and, after the Enterprises Credit Agreement shall have been fully
paid and satisfied in cash, to the Obligations, whether matured or unmatured,
under the Short Term Credit Agreement, and, after the Short Term Credit
Agreement has been repaid in full, to the Obligations, whether matured or
unmatured, under the Long Term Credit Agreement, and, until so delivered, the
same shall be held in trust by such Obligor as the property of the Lenders.
SECTION 6. Representations and Warranties. Each Guarantor hereby
represents and warrants as follows:
(a) Such Guarantor is a corporation duly organized, validly existing
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and in good standing under the laws of the state of its incorporation and is
duly qualified to do business in, and is in good standing in, all other
jurisdictions where the nature of its business or the nature of property owned
or used by it makes such qualification necessary.
(b) The execution, delivery and performance by such Guarantor of this
Guaranty (i) are within such Guarantor's powers, (ii) have been duly authorized
by all necessary corporate or other organizational action or proceedings and
(iii) do not and will not (A) require any consent or approval of the
stockholders (or other applicable holder of equity) of such Guarantor (other
than such consents and approvals which have been obtained and are in full force
and effect), (B) violate any provision of the charter or by-laws (or other
comparable constitutive documents) of such Guarantor or of law, (C) violate any
legal restriction binding on or affecting such Guarantor, (D) result in a breach
of, or constitute a default under, any indenture or loan or credit agreement or
any other agreement, lease or instrument to which such Guarantor is a party or
by which it or its properties may be bound or affected, or (E) result in or
require the creation of any Lien (other than pursuant to the Loan Documents).
(c) This Guaranty constitutes the legal, valid and binding obligation
of such Guarantor enforceable against such Guarantor in accordance with its
terms; subject to the qualification, however, that the enforcement of the rights
and remedies herein is subject to bankruptcy and other similar laws of general
application affecting rights and remedies of creditors and the application of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by such Guarantor of this Guaranty.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by any Guarantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Collateral Agent and, in the case of amendments, the Guarantors, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given, provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders, (a)
limit the liability of any Guarantor hereunder, (b) postpone any date fixed for
payment hereunder, or (c) change the number of Lenders required to take any
action hereunder.
SECTION 8. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including facsimile
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communication) and mailed, telecopied or delivered, if to the Guarantors, to CMS
Enterprises Company at Fairlane Plaza South, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel, and if to the Collateral
Agent or any Lender, at its address specified in the Credit Agreements, or, as
to any party, at such other address as shall be designated by such party in a
written notice to each other party. All such notices and other communications
shall, when mailed, telegraphed, telecopied, telexed or cabled, be effective
five days after when deposited in the mails, or when telecopied or delivered.
SECTION 9. No Waiver; Remedies. No failure on the part of the
Collateral Agent or any Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 10. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default under either of the Credit Agreements and
(ii) the making of the request or the granting of the consent specified by
Section 9.02 of either of the Credit Agreements to authorize the Collateral
Agent to declare the Promissory Notes due and payable pursuant to the provisions
of said Section 9.02 under either of the Credit Agreements, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
applicable Guarantor against any and all of the obligations of such Guarantor
now or hereafter existing under this Guaranty, whether or not such Lender shall
have made any demand under this Guaranty and although such obligations may be
contingent and unmatured. Each Lender agrees to notify promptly such Guarantor
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 10 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
SECTION 11. Continuing Guaranty; Assignments under Credit Agreements.
This Guaranty is a continuing guaranty and shall (i) remain in full force and
effect until the later of (x) the payment in full of the Obligations and all
other amounts payable under this Guaranty and (y) the expiration or termination
of the Commitments, (ii) be binding upon the Guarantor, its successors and
assigns, and (iii) inure to the benefit of, and be enforceable by, the
Collateral Agent, the Lenders and their respective successors, transferees and
assigns. Notwithstanding the foregoing, if all or substantially all of the
assets of any
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Guarantor or 100% of the stock of any Guarantor is sold in a transaction
permitted under the Credit Agreements, such Guarantor shall automatically be
released from its obligations under this Guaranty. Without limiting the
generality of the foregoing clause (iii), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under either of the
Credit Agreements (including, without limitation, all or any portion of its
Commitment, the Loans owing to it and any Promissory Note held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise subject,
however, to the provisions of Sections 10.04 and 11.07 of the applicable Credit
Agreement.
SECTION 12. Waiver of Jury Trial. EACH OF THE GUARANTORS AND THE
COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY
OR ANY OTHER LOAN DOCUMENT, OR ANY OTHER INSTRUMENT OR DOCUMENT DELIVERED
HEREUNDER OR THEREUNDER.
SECTION 13. Governing Law; Submission to Jurisdiction. THIS GUARANTY
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS OF THE STATE
OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES). EACH
OF THE GUARANTORS AND THE COLLATERAL AGENT (I) IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK
CITY IN ANY ACTION ARISING OUT OF ANY LOAN DOCUMENT, (II) AGREES THAT ALL CLAIMS
IN SUCH ACTION MAY BE DECIDED IN SUCH COURT, (III) WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM AND (IV) CONSENTS
TO THE SERVICE OF PROCESS BY MAIL. A FINAL JUDGMENT IN ANY SUCH ACTION SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY
LAW OR AFFECT ITS RIGHT TO BRING ANY ACTION IN ANY OTHER COURT. EACH GUARANTOR
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
COLLATERAL AGENT MAY COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
CMS ENTERPRISES COMPANY
By /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Title: Executive Vice President
Chief Financial Officer &
Chief Administrative Officer
CMS GAS TRANSMISSION COMPANY
By /s/ Xxxxx Isles
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Xxxxx Isles
Title: Vice President and Controller
CMS GENERATION CO.
By /s/ Xxxxxxx X. XxxXxxxxx
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Xxxxxxx X. XxxXxxxxx
Title: Vice President and Secretary
ANNEX I
to
GUARANTY
Reference is hereby made to the Guaranty (the "Guaranty") made as of
July ___, 2002 by and among CMS Enterprises Company, a Michigan corporation, CMS
Gas Transmission Company, a Michigan corporation, and CMS Generation Co., a
Michigan corporation (each a "Guarantor" and along with any additional
Subsidiaries of the Borrower that become parties to the Guaranty, including the
undersigned by the execution of this Annex I to Guaranty, the "Guarantors") in
favor of the Collateral Agent for the ratable benefits of the Lenders under the
Credit Agreements. Capitalized terms used herein and not defined herein shall
have the meanings given to them in the Guaranty. By its execution below, the
undersigned [Name of New Guarantor], a __________, agrees to become a Guarantor
under the Guaranty and agrees to be bound by such Guaranty as if originally a
party thereto. By its execution below, the undersigned represents and warrants
as to itself that all of the representations and warranties contained in the
Guaranty are true and correct as of the date hereof.
In witness whereof [Name of New Guarantor], a ________, has executed and
delivered this ANNEX I counterpart to the Guaranty as of their _______, _____.
[Name of New Guarantor]
By
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Title:
