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EXHIBIT 4-199
SUPPORT AGREEMENT
BETWEEN
DTE ENERGY COMPANY
AND
DTE CAPITAL CORPORATION
THIS SUPPORT AGREEMENT, dated as of November 18, 1998, is between
DTE ENERGY COMPANY, a Michigan corporation ("Parent"), and DTE CAPITAL
CORPORATION, a Michigan corporation ("Subsidiary").
WHEREAS, Parent is the owner of 100% of the outstanding common
stock of Subsidiary;
WHEREAS, Subsidiary intends to issue $300,000,000 aggregate
principal amount of debt securities (hereinafter referred to as the "Debt
Securities," and such amount and all interest and other amounts, if any, payable
with respect thereto being hereinafter collectively referred to as "Debt") to
parties other than Parent pursuant to the Indenture dated as of June 15, 1998
(as amended or supplemented with respect to the Debt Securities, the
"Indenture") between Subsidiary and The Bank of New York (or any successor or
replacement trustee), as trustee (the "Trustee");
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 and its subsidiaries to incur indebtedness
on more advantageous and reasonable terms; and
WHEREAS, the Lenders (as defined below) will rely upon this
Agreement in making loans or extending credit or otherwise acquiring Debt
Securities of 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. Stock Ownership. During the term of this Agreement, Parent will
own directly or indirectly all of the voting common stock of Subsidiary and The
Detroit Edison Company ("DECO") now or hereafter issued and outstanding.
2. Negative Pledge. During the term of this Agreement, Parent will
not create or suffer to exist any lien, security interest or other charge of
encumbrance, upon or with respect to any voting common stock of DECO from time
to time owned directly or indirectly by Parent or any capital stock of
Subsidiary from time to time owned directly or indirectly by Parent, provided,
however, that any restriction on the payment of dividends by DECO or Subsidiary
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contained in any subordinated debt instrument, preferred stock or preference
stock of DECO or Subsidiary shall not constitute a lien, security interest or
other charge or encumbrance.
3. Liquidity Provision. If, during the term of this Agreement,
Subsidiary is unable to make timely payment on the relevant payment date of
interest, principal or premium, if any, on, or other amounts due in respect of,
all or any portion of the Debt Securities issued by it or related Debt, Parent
promptly shall provide to Subsidiary, at its request, such funds (in the form of
cash or liquid assets) in an amount sufficient to permit Subsidiary to make
timely payment on the relevant payment date in respect of such Debt as equity or
as a loan, as Parent shall determine in its sole discretion. 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
to any and all debt of Subsidiary owing to any lender (including any Lender)
other than Parent. Each of the parties hereto acknowledges that Parent's
obligations hereunder do not constitute a guarantee by Parent of Debt of
Subsidiary. As used herein, the term "Lender" shall mean (i) any person, firm,
corporation or other entity to which Subsidiary is indebted for any Debt or
which is acting as the Trustee or a trustee or authorized representative on
behalf of such person, firm corporation or other entity or which is acting as
MAPS Agent (as defined in the Indenture), and (ii) Xxxxxxx Xxxxx Xxxxxx Inc.,
Xxxxx Securities Inc., Barclays Capital Inc. and First Chicago Capital Markets,
Inc., and their respective successors (collectively, the "Initial Purchasers"),
with respect to Debt owing by Subsidiary to the Initial Purchasers in accordance
with the terms of that certain Purchase Agreement, dated as of November 18,
1998, relating to the Debt Securities; provided that, notwithstanding the
foregoing, the claims of the Initial Purchasers shall be subordinated to the
claims of the holders of the Debt Securities hereunder.
4. 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, including, without
limitation, any changes in the rate of interest payable thereon or any changes
in the method of calculating the rate of interest payable thereon, (b) grant
renewals and extensions 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.
5. Amendment; Suspension. This Agreement may be amended or
terminated at any time by written amendment or agreement signed by both parties;
provided that such amendment or termination does not adversely affect the rights
of the Initial Purchasers; and provided further, however, that except as set
forth in the next succeeding sentence, no amendment to the Agreement which
adversely affects the rights of Subsidiary or any Lender and no termination of
this Agreement shall be effective as to Subsidiary or any Lender until such time
as all Debt owing to such Lender by Subsidiary on the date of such amendment or
termination shall have
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been paid in full, unless such Lender shall consent in writing to the contrary.
Notwithstanding the foregoing, (A) upon not less than 30 days prior notice to
the applicable Remarketing Agent and the Trustee, Subsidiary and Parent may
amend this Agreement (subject to the proviso that such amendment shall not
adversely affect the rights of the Initial Purchasers) on any Interest Rate
Adjustment Date (as defined in the Indenture) for Debt Securities, effective
commencing on such Interest Rate Adjustment Date; provided that such amendment
shall not be applicable to such Debt Securities until after the Debt Securities
have been tendered for remarketing and successfully remarketed on such Interest
Rate Adjustment Date; and provided further that no such amendment shall be of
such nature as would require (i) registration or re-registration of the Debt
Securities under the Securities Act of 1933, as amended (the "Securities Act"),
unless Subsidiary has a registration statement under the Securities Act
effective with respect thereto or (ii) registration of Subsidiary under the
Investment Company Act of 1940, as amended, and (B) Parent's obligations under
this Agreement shall be suspended and shall be of no force and effect as to the
parties hereto and as to all Lenders if and for so long as (i) Subsidiary shall
have a long-term debt rating of not less than "A-" from Standard & Poor's
Ratings Services or its successor or a long-term debt rating of not less than
"A3" from Xxxxx'x Investors Service, Inc. or its successor and (ii) Parent shall
have submitted a written request to Subsidiary that its obligations under this
Agreement be so suspended (with a copy to the Trustee, if applicable) and shall
not have revoked such request in writing. Parent covenants that it will revoke
any such request to the extent that the suspension of Parent's obligations under
this Agreement has an adverse effect on any debt rating of Subsidiary. For
purposes of this Section 5, ratings shall be based upon unsecured non-credit
enhanced debt of Subsidiary.
6. Rights of Lenders. Subsidiary hereby assigns and pledges to the
Lenders, for the ratable benefit of each Lender (subject to the subordination of
claims of the Initial Purchasers pursuant to Section 3 hereof), Subsidiary's
right under Sections 1, 2, 3 and 4 of this Agreement, and, if Subsidiary fails
or refuses to take timely action to enforce its rights under Section 1, 2, 3 or
4 of this Agreement, any Lender may enforce such rights on behalf of Subsidiary
directly against Parent. Parent hereby consents to such assignment and pledge.
This assignment and pledge secures all obligations of Subsidiary under the Debt.
Subsidiary and Parent agree, for the benefit of the Lenders to execute and
deliver all further instruments and documents, and take all further action, that
the Lenders may request in order to perfect and protect any security interest
purported to be granted hereby or to enable the Lenders to enforce their rights
and remedies hereunder.
7. Parity. Parent's obligations hereunder shall be pari passu with
Parent's obligations under any existing as well as additional "make-well,"
"keep-well" or support agreements (that are not by their terms subordinated) as
are entered into between Parent and Subsidiary from time to time.
8. 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 by United States first class mail, telex,
facsimile transmission or hand delivery, addressed as follows:
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If to Parent: 0000 0xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Assistant Treasurer-Banking
If to Subsidiary: 0000 0xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Assistant Treasurer
9. Successors. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and is also intended for the
benefit of Lenders, and, notwithstanding that such Lenders are not parties
hereto, each Lender shall be entitled to the full benefits of this Agreement and
to enforce the covenants and agreements contained herein as set forth in Section
6. This Agreement is not intended for the benefit of any person other than
Lenders and shall not confer or be deemed to confer upon any such person any
benefits, rights or remedies hereunder.
10. Governing Law. This Agreement shall be governed by the laws of
the State of New York.
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
duly executed as of the day and year first above written.
DTE ENERGY COMPANY
By:______________________________
Name:
Title:
DTE CAPITAL CORPORATION
By:______________________________
Name:
Title:
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