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EXHIBIT 4-201
EXECUTION COPY
SUPPORT AGREEMENT BETWEEN
DTE ENERGY COMPANY
AND
DTE CAPITAL CORPORATION
THIS SUPPORT AGREEMENT, dated as of January 19, 1999, 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 from time to time to make borrowings from
the lenders party to the Second Amended and Restated $400,000,000 Credit
Agreement (such agreement as it may be amended and in effect from time to time,
the "CREDIT AGREEMENT"), dated as of January 19, 1999 among the Subsidiary, the
lenders party thereto and Citibank, N.A. as Administrative Agent (such lenders
and the Administrative Agent being hereinafter collectively referred to as the
"LENDERS"), and to issue debt securities to the Lenders pursuant to the Credit
Agreement (such borrowings and debt securities, including without limitation all
interest, fees, expenses and other amounts payable in accordance with the
documentation relating to such borrowings and debt securities being hereinafter
collectively referred to as "DEBT");
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 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. SECTION STOCK OWNERSHIP. During the term of this Agreement,
Parent will own all of the voting common stock of Subsidiary and The Detroit
Edison Company ("DECO") now or hereafter issued and outstanding.
1. SECTION 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 by Parent or any capital stock of Subsidiary from time
to time owned by Parent, provided, however, that any restriction on the payment
of dividends by DECO or Subsidiary contained in any subordinated debt
instrument,
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preferred stock or preference stock of DECO or Subsidiary shall not constitute a
lien, security interest or other charge or encumbrance.
1. SECTION LIQUIDITY PROVISION. If, during the term of this
Agreement, Subsidiary is unable to make timely payment of interest, principal or
premium, if any, on any Debt owing to any Lender by Subsidiary, 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 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 to the extent and in the manner set forth in Section 7
below. Each of the parties hereto acknowledges that Parent's obligations
hereunder do not constitute a guarantee by Parent of Debt of the Subsidiary.
1. SECTION 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 increase in the principal amount of such Debt or 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.
1. SECTION AMENDMENT, SUSPENSION. This Agreement may be amended or
terminated at any time by written amendment or agreement signed by both parties;
provided, 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 been paid in
full and such Lender's Commitment (as defined in the Credit Agreement) shall
have been terminated, unless such Lender shall consent in writing to the
contrary. Notwithstanding the foregoing, 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) a long-term debt rating of not less than "A-" from Standard & Poor's
Corporation or its successor ("S&P) or a long-term debt rating of not less than
"A3" from Moody's Investors Service or its successor ("MOODY'S") or (B) a
short-term debt rating of not less than "A-2" from S&P or a short-term debt
rating of not less than "Prime-2" from Moody's and (ii) Parent shall have
submitted a written request to the Subsidiary that its obligations under this
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Agreement be so suspended (with a copy to the Administrative Agent) 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.
1. SECTION RIGHTS OF LENDER. Subsidiary hereby assigns and pledges
to the Lenders, for the ratable benefit of each Lender, Subsidiary's rights
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
Credit Agreement and the Notes (as defined in the Credit Agreement). 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 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.
1. SECTION SUBORDINATION. All loans made by Parent to Subsidiary
pursuant to Section 3 hereof (the "SUBORDINATED LOANS") shall be subordinate and
junior in right of payment to the prior payment in full of all Debt from time to
time outstanding owing to ally Lender, to the extent and in the manner provided
below:
a) Unless and until all Debt owing to the Lenders shall have
been paid in full and the Commitments shall have been terminated:
(1) Parent will not sell, assign or otherwise transfer any claim
against Subsidiary in respect of any Subordinated Loan unless such transfer is
made expressly subject to this Agreement and the transferee shall execute an
instrument whereby the transferee agrees to be bound by the provisions of this
Section 7;
(1) Subsidiary will not make, and Parent will not demand, accept
or receive, any direct or indirect payment (in cash, property, by set-off or
otherwise) of or on account of any Subordinated Loan, and no such payment shall
be due, except that nothing contained in this Section 7(a) shall prevent
Subsidiary from making, or Parent from accepting and receiving, any payment on
account of Subordinated Loans, if there is not then in existence a default by
Subsidiary under the Credit Agreement or the Notes (as defined in the Credit
Agreement) or a default by Parent under this Agreement.
a) In the event of (x) any insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relative to Subsidiary or its creditors of its property, or
(y) any proceeding for the voluntary liquidation, dissolution or other winding
up of subsidiary, whether or not involving insolvency or bankruptcy proceedings,
or (z) any assignment for the benefit of creditors or other marshalling of the
assets of Subsidiary, then and in any such event:
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(1) all Debt owing to the Lenders shall be paid in full before
any payment or distribution of any character (whether in cash, securities or
other property) shall be made in respect of any Subordinated Loans;
(1) any payment or distribution of any character (whether in
cash, securities or other property) which would otherwise (but for the
provisions of this Section 7) be payable or deliverable in respect of any
Subordinated Loan shall be paid or delivered directly to the Lenders until all
Debt owing to the Lenders shall have been paid in full;
(1) Parent irrevocably authorizes and empowers the Lenders to
demand, sue for, collect and receive any such payment or distribution and to
receipt therefor and to file all such claims and take all such other action, in
the name of Parent or the Lenders or otherwise, as the Lenders may determine to
be necessary or appropriate for the enforcement of the provisions of this
Section 7 (Parent hereby agreeing to execute and deliver to the Lenders such
further instruments confirming such authorization and such powers of attorney,
proofs of claim, assignments of claim and other instruments as may be requested
by the Lenders in order to enable them to enforce any and all claims with
respect to any Subordinated Loans); and
(1) in case any payment or distribution shall, despite the
foregoing provisions, be paid or delivered to Parent before all Debt owing to
the Lenders shall have been paid in full, such payment or distribution shall be
held in trust for, and shall be paid and delivered to, the Lenders until all
Debt owing to the Lenders shall have been paid in full.
a) Until all Debt shall be paid in full, Parent hereby defers
all rights of subrogation in respect of any payment of Debt made by Parent. Upon
payments in full of Debt owing to Lenders, Parent shall be subrogated to the
rights of Lenders to receive any further payment or distributions in respect of
Debt, provided, however, that nothing in this Section 7(c) will prohibit the
Parent from receiving any payments permitted under Section 7(a)(ii).
a) Notwithstanding anything contained in this Section 7, the
Parent shall have the right to loan up to $1,200,000,000 to the Subsidiary
pursuant to one or more "make-well", "keep-well" or support agreements, which
loans may be pari passu in right of payment with the payment in full of all Debt
from time to time outstanding owing to any Lender.
1. SECTION 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: 2000 Second Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer-Banking
If to Subsidiary: 2000 Second Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer
1. SECTION 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.
1. SECTION GOVERNING LAW. This Agreement shall be governed by the
laws of the State of New York.
DTE ENERGY COMPANY
By
Title:
DTE CAPITAL CORPORATION
By
Title: