1
EXHIBIT 4.194
FORM OF SUPPORT AGREEMENT
BETWEEN
DTE ENERGY COMPANY
AND
DTE CAPITAL CORPORATION
THIS SUPPORT AGREEMENT, dated as of June 16, 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 $100,000,000 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
2
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 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
SPURS Agent (as defined in the Indenture), and (ii) Citicorp Securities, Inc.
and Salomon Brothers Inc, and their respective successors (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
June 16, 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 and the Insurer (as defined below)
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
2
3
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 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
3
4
made by United States first class mail, telex, facsimile transmission or hand
delivery, addressed as follows:
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.
11. Insurer Provisions. (a) Notwithstanding anything to the contrary
herein, if a Financial Guaranty Insurance Policy (hereinafter the "Policy")
issued by MBIA Insurance Corporation (the "Insurer") is in effect with respect
to any Debt Securities and the Insurer is not in default with respect to its
obligations under the Policy, the Insurer shall be deemed a Lender for all
purposes of this Agreement and shall possess the same rights, in all respects,
as any Lender under this Agreement for such time as the Policy is in effect and
the Insurer shall possess the exclusive right to exercise or direct the exercise
of the rights of all Lenders in accordance with the terms of this Agreement.
(b) For so long as the Policy is in effect or the Insurer is a holder
of any Debt Securities, this Agreement shall not be amended or terminated
without the prior written consent of the Insurer, and the Insurer's consent
shall be required for any action by the Subsidiary or Parent that would require
the Lenders' consent under the terms of this Agreement.
(c) Notwithstanding anything to the contrary herein, for so long as a
Policy is in effect or the Insurer is a holder of any Debt Securities, the
Parent's obligations hereunder shall not be suspended pursuant to Section 5 of
this Agreement.
4
5
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:
5
