EXHIBIT 4.5
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THE DETROIT EDISON COMPANY
AND
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
TRUSTEE
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SUPPLEMENTAL INDENTURE
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DATED AS OF
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SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30,1993
PROVIDING FOR
[Title of Securities]
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SUPPLEMENTAL INDENTURE, dated as of the day of , 200_,
between THE DETROIT EDISON COMPANY, a corporation organized and existing under
the laws of the State of Michigan (the "Company"), and BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States of America, having its principal office in The City of
Columbus, Ohio, as trustee (the "Trustee");
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Collateral Trust Indenture dated as of June 30, 1993 (the "Original
Indenture"), as supplemented, providing for the issuance by the Company from
time to time of its debt securities; and
WHEREAS, the Company now desires to provide for the issuance of
additional series of its senior debt securities pursuant to the Original
Indenture; and
WHEREAS, the Company intends hereby to designate series of debt
securities which shall have the benefit of the provisions of Article Four of the
Original Indenture and the other related provisions of the Original Indenture
relating to the grant of security, subject to the release provisions provided
for herein, and which shall have the terms and variations from the provisions of
the Original Indenture as set forth herein; and
WHEREAS, the Company, in the exercise of the power and authority
conferred upon and reserved to it under the provisions of the Original
Indenture, including Section 1001 thereof, and pursuant to appropriate
resolutions of the Board of Directors, has duly determined to make, execute and
deliver to the Trustee this Supplemental Indenture to the Original
Indenture as permitted by Sections 201 and 301 of the Original Indenture in
order to establish the form or terms of, and to provide for the creation and
issue of, series of its debt securities under the Original Indenture, which
shall be known as the due and the
due , respectively; and
WHEREAS, all things necessary to make such debt securities, when
executed by the Company and authenticated and delivered by the Trustee or any
Authenticating Agent and issued upon the terms and subject to the conditions
hereinafter and in the Original Indenture set forth against payment therefor,
the valid, binding and legal obligations of the Company and to make this
Supplemental Indenture a valid, binding and legal agreement of the Company, have
been done;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH that, in
order to establish the terms of series of debt securities, and for and in
consideration of the premises and of the covenants contained in the Original
Indenture and in this Supplemental Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. Each capitalized term that is used herein
and is defined in the Original Indenture shall have the meaning specified in the
Original Indenture unless such term is otherwise defined herein. The following
terms shall have the respective meanings set forth below:
"Business Day" means any day other than a day on which banking
institutions in The State of New York or the State of Michigan are authorized or
obligated pursuant to law or executive order to close.
"Capitalization" means the total of all the following items appearing
on, or included in, the consolidated balance sheet of the Company: (i)
liabilities for indebtedness maturing more than 12 months from the date of
determination; and (ii) common stock, common stock expense, accumulated other
comprehensive income or loss, preferred stock, preference stock, premium on
capital stock and retained earnings (however the foregoing may be designated),
less, to the extent not otherwise deducted, the cost of shares of capital stock
of the Company held in its treasury, if any. Subject to the foregoing,
Capitalization shall be determined in accordance with generally accepted
accounting principles and practices applicable to the type of business in which
the Company is engaged and approved by the independent accountants regularly
retained by the Company, and may be determined as of a date not more than 60
days prior to the happening of the event for which the determination is being
made.
"Debt" means any outstanding debt for money borrowed evidenced by
notes, debentures, bonds or other securities, or guarantees of any debt.
"Net Tangible Assets" means the amount shown as total assets on the
consolidated balance sheet of the Company, less (i) intangible assets including,
but without limitation, such items as goodwill, trademarks, trade names,
patents, unamortized debt discount and expense and other regulatory assets
carried as an asset on the Company's consolidated balance sheet, and (ii)
appropriate adjustments, if any, on account of minority interests. Net Tangible
Assets shall be determined in accordance with generally accepted accounting
principles and practices applicable to the type of business in which the Company
is engaged and approved by the independent accountants regularly retained by the
Company, and may be determined as of a date not more than 60 days prior to the
happening of the event for which such determination is being made.
"Operating Property" means (i) any interest in real property owned by
the Company and (ii) any asset owned by the Company that is depreciable in
accordance with generally accepted accounting principles, excluding, in either
case, any interest of the Company as lessee under any lease (except for a lease
that results from a Sale and Lease-Back Transaction) which has been or would be
capitalized on the books of the lessee in accordance with generally accepted
accounting principles.
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"Pledged Bonds" means the related series of Bonds and any other
Mortgage Bonds issued to secure Securities subject to the release provisions
provided herein or in any other supplemental indenture to the Original
Indenture.
"Release Date" means the date as of which all Mortgage Bonds, (i) other
than the Pledged Bonds, including the related series of Bonds, and (ii) other
than outstanding Mortgage Bonds (exclusive of Pledged Bonds), which do not in
aggregate principal amount exceed the greater of 5% of the Net Tangible Assets
of the Company or 5% of the Capitalization of the Company, have been retired
through payment, redemption or otherwise, provided that no default or Event of
Default has occurred and, at such time, is continuing under the Original
Indenture.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing to the Company of any Operating Property (except for
leases for a term, including any renewal or potential renewal, of not more than
48 months), which Operating Property has been or is to be sold or transferred by
the Company to the person; provided, however, Sale and Lease-Back Transaction
shall not include any arrangement first entered into prior to the date hereof
and shall not include any transaction pursuant to which the Company sells
Operating Property to, and thereafter purchase energy or services from, any
entity, which transaction is ordered or authorized by any regulatory authority
having jurisdiction over the Company or its operations or is entered into
pursuant to any plan or program of industry restructuring ordered or authorized
by any such regulatory authority.
"Substitute Mortgage" means a mortgage indenture of the Company, other
than the Mortgage, designated by the Company to the Trustee as a Substitute
Mortgage pursuant to Section 4.03 hereof.
"Substitute Mortgage Bonds" means any mortgage bonds issued by the
Company under a Substitute Mortgage and delivered to the Trustee pursuant to
Section 4.03 hereof or pursuant to the comparable provision of any other
supplemental indenture relating to Securities subject to the release provisions.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of
any particular time, the amount equal to the greater of (i) the net proceeds to
the Company from the sale or transfer of the property leased pursuant to the
Sale and Lease-Back Transaction or (ii) the net book value of the property, as
determined by the Company in accordance with generally accepted accounting
principles at the time of entering into the Sale and Lease-Back transaction, in
either case multiplied by a fraction, the numerator of which shall be equal to
the number of full years of the term of the lease that is part of the Sale and
Lease-Back Transaction remaining at the time of determination and the
denominator of which shall be equal to the number of full years of the term,
without regard, in any case, to any renewal or extension options contained in
the lease.
SECTION 1.02. Section References. Each reference to a particular
section set forth in this Supplemental Indenture shall, unless the context
otherwise requires, refer to this Supplemental Indenture.
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ARTICLE TWO
TITLE AND TERMS OF THE SECURITIES
SECTION 2.01. Title of the Securities; Stated Maturity. This
Supplemental Indenture hereby establishes two separate series of Securities,
which shall be known as the Company's " due " (the
" Notes"), and the " due " (the " Notes" and
together with the Notes, the "Notes"). For purposes of the Original
Indenture, each series of the Notes shall separately constitute a single series
of Securities. The Stated Maturity on which the principal of the Notes
shall be due and payable will be . The Stated Maturity on which
the principal of the Notes shall be due and payable will be
.
SECTION 2.02. Certain Variations from the Original Indenture. (a) The
Notes shall have the benefit of the provisions of Article Four of the Original
Indenture and shall have the benefit of, or be subject to, the other related
provisions of the Original Indenture relating to the grant of security,
including (for avoidance of doubt and not for purposes of limitation) the
Granting Clause, the definitions of "Deliverable Mortgage Bonds," "Deliverable
Securities," "Designated Mortgage Bonds," "Grant," "Mortgage," "Mortgage Bonds,"
"Mortgage Trustee," "Previously Delivered Mortgage Bonds," and "Trust Estate,"
Section 301 (20), Sections 301 (a) (v), (ix), (x) and (xi), Sections 301 (b)
(ii) and (iii), Section 301 (d), and Sections 601(4) and (8), subject, in each
case, to the release provisions provided for in Section 4.02 herein. In
addition, on and after the Release Date, unless Substitute Mortgage Bonds are
issued to secure the Notes, the Notes shall have the benefit of the additional
covenants set forth in Article Three hereof.
(b) Section 503 of the Original Indenture shall apply to the Notes. The
following shall be an additional condition to defeasance of the Notes under
Section 503: the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from the Internal Revenue
Service a letter ruling, or there has been published by the Internal Revenue
Service a Revenue Ruling, or (ii) since the date of execution of this
Supplemental Indenture, there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Outstanding Notes appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred, and, also, to the effect that, after the 123rd
day after the date of deposit, all money and other property as provided pursuant
to Section 503 of the Original Indenture (including the proceeds thereof)
deposited or caused to be deposited with the Trustee (or other qualifying
trustee) pursuant to Section 503 of the Original Indenture to be held in trust
will not be subject to any case or proceeding (whether voluntary or involuntary)
in respect of the Company under any Federal or State bankruptcy, insolvency,
reorganization or other similar law, or any decree or order for relief in
respect of the Company issued in connection therewith.
SECTION 2.03. Amount and Denominations; DTC.
(a) The aggregate principal amount of Notes that may be issued under
this Supplemental Indenture is limited initially to (in the case of
the Notes),
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and (in the case of the Notes) (except, in each case, as
provided in Section 301(2) of the Original Indenture)[; provided that the
Company may, without the consent of the Holders of the Outstanding Notes of any
series, "reopen" each series of Notes so as to increase the aggregate principal
amount of such Notes Outstanding in compliance with the procedures set forth in
the Original Indenture, including Section 301 and Section 303 thereof, so long
as any such additional Notes have the same tenor and terms (including, without
limitation, rights to security and to receive accrued and unpaid interest) as
the Notes of such series then Outstanding. No additional Notes of a series may
be issued if an Event of Default has occurred with respect to the applicable
series.] The Notes shall be issuable only in fully registered form and, as
permitted by Section 301 and Section 302 of the Original Indenture, in
denominations of $1,000 and integral multiples thereof. The Notes will initially
be issued in global form (the "Global Notes") under a book-entry system,
registered in the name of The Depository Trust Company, as depository ("DTC"),
or its nominee, which is hereby designated as "Depository" under the Indenture.
(b) Further to Section 305 of the Original Indenture, any Global Note
shall be exchangeable for Notes registered in the name of, and a transfer of a
Global Note of any series may be registered to, any Person other than the
Depository for such Note or its nominee only if (i) such Depository notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Note or if at any time such Depository ceases to be a clearing agency registered
under the Exchange Act, and, in either such case, the Company does not appoint a
successor Depository within 90 days thereafter, (ii) the Company executes and
delivers to the Trustee a Company Order that such Global Note shall be so
exchangeable and the transfer thereof so registrable or (iii) there shall have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
with respect to the Notes of such series. Upon the occurrence in respect of any
Global Note of any series of any or more of the conditions specified in clause
(i), (ii) or (iii) of the preceding sentence, such Global Note may be exchanged
for Notes registered in the name of, and the transfer of such Global Note may be
registered to, such Persons (including Persons other than the Depository with
respect to such series and its nominees) as such Depository, in the case of an
exchange, and the Company, in the case of a transfer, shall direct.
SECTION 2.04. Certain Common Terms of the Notes.
(a) The Notes of each series shall bear interest at the rate of
per annum (in the case of the Notes), and per annum (in the case of
the Notes) on the respective principal amount thereof from ,
, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, until the principal of such series of Notes becomes
due and payable, and on any overdue principal and premium and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum during such overdue
period. Interest on the Notes will be payable semiannually in arrears on
and of each year (each such date, an "Interest Payment Date"),
commencing . The amount of interest payable for any period shall be
computed on the basis of twelve 30-day months and a 360-day year.
(b) In the event that any Interest Payment Date, redemption date or
other date of Maturity of the Notes is not a Business Day, then payment of the
amount payable on such date
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will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
with respect to any Note will, as provided in the Original Indenture, be paid to
the person in whose name the Note (or one or more Predecessor Securities, as
defined in said Indenture) is registered at the close of business on the
relevant record date for such interest installment, which shall be the fifteenth
calendar day (whether or not a Business Day) prior to the relevant Interest
Payment Date (the "Regular Record Date"). Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such Regular Record Date, and may either be paid to the
person in whose name the Note (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the applicable series of Notes not less than
ten days prior to such Special Record Date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Original Indenture.
The principal of, and premium, if any, and the interest on the Notes shall be
payable at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, in any coin or currency of the
United States of America which at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest
may be made at the option of the Company by check mailed to the registered
Holder at the close of business on the Regular Record Date at such address as
shall appear in the Security Register. Notwithstanding the foregoing, so long as
the Notes are Global Notes and are held in book-entry form through the
facilities of the Depository, payments on the Notes will be made to the
Depository or its nominee in accordance with arrangements then in effect between
the Trustee and the Depository.
(c) The Notes are not subject to repayment at the option of the Holders
thereof and are not subject to any sinking fund. As provided in the forms of
Note attached hereto as Exhibit A and Exhibit B, respectively, the Notes are
subject to optional redemption, as a whole or in part, by the Company prior to
Stated Maturity of the principal thereof on the terms set forth therein. Except
as modified in the forms of the Notes, redemptions shall be effected in
accordance with Article Twelve of the Original Indenture.
(d) The Notes shall have such other terms and provisions as are set
forth in the form of Note attached hereto as Exhibit A and Exhibit B, as
applicable (each of which are incorporated by reference in and made a part of
this Supplemental Indenture as if set forth in full at this place).
SECTION 2.05. Form of Notes. Attached hereto as Exhibit A is the form
of the definitive Notes. Attached hereto as Exhibit B is the form of the
definitive Notes. If the Company elects to have the Notes secured by
Substitute Mortgage Bonds on and after the Release Date, the terms of the Notes
shall be amended to make appropriate reference to the Substitute Mortgage and
the Substitute Mortgage Bonds; provided, that the consent of Holders shall not
be required in connection with such amendment.
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ARTICLE THREE
ADDITIONAL COVENANTS
SECTION 3.01. Limitations on Liens. (a) From and after the Release
Date, unless Substitute Mortgage Bonds are issued to secure the Notes, so long
as any Notes are outstanding, the Company may not issue, assume, guarantee
(including any contingent obligation to purchase) or permit to exist any Debt
that is secured by any mortgage, security interest, pledge or lien ("Lien") of
or upon any Operating Property owned by the Company, whether owned at the
Release Date or subsequently acquired, without effectively securing the Notes
(together with, if the Company shall so determine, any other indebtedness of the
Company ranking equally with the Notes) equally and ratably with the Debt (but
only so long as the Debt is so secured).
The foregoing restriction will not apply to:
(i) Liens on any Operating Property existing at the time of its
acquisition and not created in contemplation of the
acquisition;
(ii) Liens on Operating Property of a corporation existing at the
time the corporation is merged into or consolidated with the
Company, or at the time the corporation disposes of
substantially all of its properties (or those of a division)
to the Company, provided that the Lien is not extended to
property owned by the Company immediately prior to the merger,
consolidation or other disposition and is not created in
contemplation of the merger, consolidation or other
disposition;
(iii) Liens on Operating Property to secure the cost of acquisition,
construction, development or substantial repair, alteration or
improvement of such property or to secure indebtedness
incurred to provide funds for any of these purposes or for
reimbursement of funds previously expended for any of these
purposes, provided the Liens are created or assumed
contemporaneously with, or within 18 months after, the
acquisition or the completion of substantial repair or
alteration, construction, development or substantial
improvement or within 6 months thereafter pursuant to a
commitment for financing arranged with a lender or investor
within such 18-month period;
(iv) Liens in favor of the United States or any state or any
department, agency or instrumentality or political subdivision
of the United States or any state, or for the benefit of
holders of securities issued by any of these entities, to
secure any Debt incurred for the purpose of financing all or
any part of the purchase price or the cost of substantially
repairing or altering, constructing, developing or
substantially improving the Operating Property of the Company;
or
(v) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of
any Lien referred to in the exceptions listed above, provided,
however, that the principal amount of Debt secured thereby and
not otherwise authorized by those exceptions listed above
shall not exceed the principal amount of Debt, plus any
premium or fee payable in connection with
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any such extension, renewal or replacement, so secured at the
time of such extension, renewal or replacement.
(b) In addition, notwithstanding the foregoing restrictions, from and
after the Release Date, the Company may issue, assume or guarantee Debt secured
by a Lien which would otherwise be subject to the foregoing restrictions up to
an aggregate amount which, together with all other of the Company's secured Debt
(not including secured Debt permitted under any of the foregoing exceptions) and
the Value of Sale and Lease-Back Transactions existing at such time (other than
Sale and Lease-Back Transactions the proceeds of which have been applied to the
retirement of certain indebtedness, Sale and Lease-Back Transactions in which
the property involved would have been permitted to be subjected to a Lien under
any of the foregoing exceptions, and Sale and Lease-Back Transactions that are
permitted by the first sentence of Section 3.02 below), does not exceed the
greater of 10% of the Company's Net Tangible Assets or 10% of the Company's
Capitalization. The foregoing restrictions do not limit the Company's ability to
place Liens on (i) the capital stock of any of the Company's subsidiaries or
(ii) the assets of any of the Company's subsidiaries.
SECTION 3.02. Limitations on Sale and Lease-Back Transactions. So long
as the Notes are outstanding from and after the Release Date, unless Substitute
Mortgage Bonds are issued to secure the Notes, the Company may not enter into or
permit to exist any Sale and Lease-Back Transaction with respect to any
Operating Property (except for leases for a term, including any renewal or
potential renewal, of not more than 48 months), if the purchaser's commitment is
obtained more than 18 months after the later of the completion of the
acquisition, construction or development of the Operating Property or the
placing in operation of the Operating Property or of the Operating Property as
constructed or developed or substantially repaired, altered or improved. This
restriction will not apply if (a) the Company would be entitled pursuant to
Section 3.01(a) above to issue, assume, guarantee or permit to exist Debt
secured by a Lien on the Operating Property without equally and ratably securing
the Notes, (b) after giving effect to the Sale and Lease-Back Transaction,
pursuant to Section 3.01(b) above, the Company could incur, at least $1.00 of
additional Debt secured by Liens (other than Liens permitted by clause (a)), or
(c) the Company applies within 180 days an amount equal to, in the case of a
sale or transfer for cash, the net proceeds (not less than the fair value of the
Operating Property so leased), and, otherwise, an amount equal to the fair value
(as determined by the Board of Directors of the Company) of the Operating
Property so leased to the retirement of Notes or other Debt of the Company
ranking equally with the Notes; provided, however, that any such retirement of
Notes shall be in accordance with the terms and provisions of the Indenture and
the Notes; provided, further, that the amount to be applied to such retirement
of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an
amount equal to the redemption price with respect to Notes delivered within such
one hundred eighty (180)-day period to the Trustee for retirement and
cancellation and (b) the principal amount, plus any premium or fee paid in
connection with any redemption in accordance with the terms of other Debt
voluntarily retired by the Company within such one hundred eighty (180)-day
period, excluding in each case retirements pursuant to mandatory sinking fund or
prepayment provisions and payments at maturity.
SECTION 3.03. Waiver. Section 1109 of the Original Indenture shall
apply to the covenants set forth in Sections 3.01 and 3.02 above at any time
such covenants are in effect.
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ARTICLE FOUR
SECURITY AND RELEASE PROVISIONS
SECTION 4.01. Security. Subject to Section 4.02 below, as provided in
and pursuant to Article Four of the Original Indenture, each series of the Notes
will be secured as to payments of principal, interest and premium, if any, by a
series of Mortgage Bonds (the "General and Refunding Mortgage Bonds, Series
", in the case of the Notes, and the "General and Refunding Mortgage
Bonds, Series ", in the case of the Notes, or, singly or
collectively, the "Bonds," the "Bonds of the related series" or the "related
series of Bonds") of the Company to be issued concurrently with the issuance of
the Notes under and secured by a Mortgage and Deed of Trust, dated as of October
1, 1924, between the Company and [Bank One Trust Company], as successor trustee
(the "Mortgage Trustee"), as amended and supplemented by various supplemental
indentures, including the supplemental indenture, dated as of
creating the Bonds (collectively, the "Mortgage"), pledged by the
Company for the benefit of the Holders of the respective series of Notes to the
Trustee under this Supplemental Indenture. The Bonds shall be issued in an
aggregate principal amount equal to the aggregate principal amount of the Notes.
SECTION 4.02. Release. Until the Release Date and subject to Article
Four of the Original Indenture, the Bonds of the related series issued and
delivered to the Trustee shall serve as security for any and all obligations of
the Company under all Notes of the applicable series from time to time
Outstanding, including, but not limited to (1) the full and prompt payment of
the principal and premium, if any, on such Notes when and as the same shall
become due and payable in accordance with the terms and provisions of the
Indenture or such Notes, either at the Stated Maturity thereof, upon
acceleration of the maturity thereof, upon redemption, or otherwise, and (2) the
full and prompt payment of any interest on such Notes when and as the same shall
become due and payable in accordance with the terms and provisions of this
Indenture or the Notes including, if and to the extent provided for in such
Notes, interest on overdue installments of principal and (to the extent
permitted by law) interest on overdue installments of interest.
Each supplemental indenture to the Mortgage pursuant to which any Bonds
are issued shall contain a provision to the effect that any payment by the
Company hereunder of principal of or premium or interest on Notes which shall
have been authenticated and delivered in connection with the issuance and
delivery to the Trustee of such Bonds (other than by the application of the
proceeds of a payment in respect of such Bonds) shall to the extent thereof, be
deemed to satisfy and discharge the obligation of the Company, if any, to make a
payment of principal, premium or interest, as the case may be, in respect of
such Bonds which is then due.
Notwithstanding anything in the Original Indenture to the contrary,
from and after the Release Date, the obligation of the Company to make payment
with respect to the principal of and premium, if any, and interest on the Bonds
shall be deemed satisfied and discharged as provided in the supplemental
indenture or indentures to the Mortgage creating such Bonds and the Bonds shall
cease to secure in any manner Notes theretofore or subsequently issued; the
Trustee shall thereupon surrender the Bonds to the Mortgage Trustee for
cancellation and execute and deliver such proper instruments of release as may
be required. From and after the
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Release Date, all Notes, whether theretofore or subsequently issued, shall, at
the Company's option, either (i) become unsecured or (ii) be secured by
Substitute Mortgage Bonds pursuant to Section 4.03 below, and any conditions to
the issuance of Notes that refer or relate to Bonds or the Mortgage shall be
inapplicable (except as such conditions shall be deemed to refer to Substitute
Mortgage Bonds or a Substitute Mortgage pursuant to Section 4.03 below). From
and after the Release Date, the Company shall not issue any additional Mortgage
Bonds, including Pledged Bonds, under the Mortgage. Notice of the occurrence of
the Release Date shall be given by the Trustee to the Holders of the Notes in
the manner provided for in the Original Indenture not later than 30 days after
the Company notifies the Trustee of the occurrence of the Release Date.
In connection with the establishment of the occurrence of the Release
Date, the Trustee shall be entitled to receive, may presume the correctness of,
and shall be fully protected in relying upon, an Officers' Certificate
designating the Release Date and stating that the conditions to the occurrence
of the Release Date have been satisfied.
When the obligation of the Company to make payments with respect to the
principal of, and premium, if any, and interest on all or any part of the Bonds
shall be satisfied or deemed satisfied pursuant to the Original Indenture or
pursuant to this Supplemental Indenture, the Trustee shall, upon written request
of the Company, deliver to the Company without charge therefor all of the Bonds
so satisfied or deemed satisfied, together with such appropriate instruments of
transfer or release as may be reasonably requested by the Company. All Bonds
delivered to the Company in accordance with this Section shall be delivered by
the Company to the Mortgage Trustee for cancellation.
SECTION 4.03. Substitute Mortgage Bonds.
(a) The Company shall notify the Trustee not less than 90 days prior to
the Release Date (or such shorter period as the Company and the Trustee may
agree) that the Company has determined to deliver to the Trustee on the Release
Date Substitute Mortgage Bonds in an aggregate principal amount equal to the
aggregate principal amount of Notes and any other Securities subject to the
release provisions Outstanding on the Release Date, in trust for the benefit of
the Holders from time to time of the Notes and any other Securities subject to
the release provisions issued under the Original Indenture, as supplemented, as
security for any and all obligations of the Company under the Notes and any
other Securities subject to the release provisions, including but not limited
to, (1) the full and prompt payment of the principal of and premium, if any, on
the Notes and any other Securities subject to the release provisions when and as
the same shall become due and payable in accordance with the terms and
provisions of the Original Indenture, as supplemented, or the Notes or such
other Securities subject to the release provisions, either at the stated
maturity thereof, upon acceleration of the maturity thereof or upon redemption,
and (2) the full and prompt payment of any interest on the Notes and any other
Securities subject to the release provisions when and as the same shall become
due and payable in accordance with the terms and provisions of the Original
Indenture, as supplemented, or the Notes or such other Securities subject to the
release provisions.
(b) The Substitute Mortgage Bonds to be delivered pursuant to the
notice described in Section 4.03(a) shall be delivered in separate series and
issues corresponding to the series and
10
issues of Notes and other Securities subject to the release provisions
Outstanding on the Release Date, each series or issue of Substitute Mortgage
Bonds having the same stated rate or rates of interest (or interest calculated
in the same manner), Interest Payment Dates, stated maturity date and redemption
provisions, and in the same aggregate principal amount, as the related series or
issue of Notes or other Securities subject to the release provisions outstanding
on the Release Date. The Company shall enter into a Substitute Mortgage for the
issuance of Substitute Mortgage Bonds, and designate it as such in the notice.
(c) The notice described in Section 4.03(a) shall also state that on
the Release Date the Company shall deliver to the Trustee a supplemental
indenture to the Original Indenture that will provide, among other things, that
upon the issuance of Notes and other Securities subject to the release
provisions on or after the Release Date, the Company shall deliver to the
Trustee in trust for the benefit of the Holders as described in Section 4.03(a)
hereof, and the Trustee shall accept therefor, related series of Substitute
Mortgage Bonds registered in the name of the Trustee and conforming to the
requirements therein specified.
(d) The determination whether to deliver Substitute Mortgage Bonds
shall be made in the Company's sole discretion and without any obligation to do
so.
(e) In the event that the Company does not deliver the notice described
in Section 4.03(a), the Notes and other Securities subject to the release
provisions Outstanding on the Release Date shall, as of the Release Date, no
longer be entitled to the benefit of the pledge of the Pledged Bonds and shall
thereafter be general unsecured obligations of the Company.
(f) Article Four and related provisions of the Original Indenture shall
apply to Substitute Mortgage Bonds pledged to the Trustee hereunder and the
provisions thereof shall be deemed to refer to the Substitute Mortgage and the
Substitute Mortgage Bonds. If the Company elects to have the Notes secured by
Substitute Mortgage Bonds on and after the Release Date, Article Four and
related provisions may be amended to make appropriate reference to the
Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the
consent of Holders shall not be required in connection with such amendment.
SECTION 4.04. Events of Default.
(a) On and after the Release Date, Section 601(8) of the Original
Indenture shall no longer apply to the Notes.
(b) On and after the Release Date, if the Notes become secured by
Substitute Mortgage Bonds pursuant to Section 4.03 above, the occurrence of a
"default" (as defined in the Substitute Mortgage) shall constitute an Event of
Default under Section 601 of the Original Indenture with respect to the Notes
and the references in Section 601(4) of the Original Indenture and related
provisions to "Mortgage Bonds" shall be deemed to refer to "Substitute Mortgage
Bonds."
11
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect of, and
shall not be responsible in any manner whatsoever for and in respect of, the
validity or sufficiency of this Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Except as expressly amended hereby and by the supplemental indenture
appointing the Trustee as successor trustee, the Original Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Original Indenture is in all respects hereby ratified and confirmed. This
Supplemental Indenture and all its provisions shall be deemed a part of
the Original Indenture in the manner and to the extent herein and therein
provided.
This Supplemental Indenture and the Notes shall be governed by,
and construed in accordance with, the laws of the State of New York.
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
12
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
THE DETROIT EDISON COMPANY
By:
-----------------------------
Name:
Title:
ATTEST:
By:
-------------------------------------
Name:
Title:
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By:
-----------------------------
Name:
Title:
ATTEST:
By:
-------------------------------------
Name:
Title:
13
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NO. R-1 $
----------------
THE DETROIT EDISON COMPANY
SENIOR NOTES DUE
Principal Amount: $
-------------------
Authorized Denomination: $1,000
Regular Record Date: close of business on the 15th calendar day (whether or not
a Business Day) prior to the relevant Interest Payment Date
Original Issue Date:
Stated Maturity:
Interest Payment Dates: and of each year, commencing
Interest Rate: per annum
THE DETROIT EDISON COMPANY, a corporation duly organized and existing
under the laws of the State of Michigan (the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co. or registered assigns, at the
office or agency of the Company in The City of New York, New York, the principal
sum of ____________________ ($________) on , (the "Stated
Maturity"), in the coin or currency of the United States, and to pay interest
A-1
thereon from the Original Issue Date shown above, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually in arrears on each Interest Payment Date as specified above,
commencing on , and on the Stated Maturity at the rate per annum
shown above (the "Interest Rate") until the principal hereof is paid or made
available for payment and on any overdue principal and premium and on any
overdue installment of interest. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered on the Regular Record Date as specified
above next preceding such Interest Payment Date. Except as otherwise provided in
the Indenture, any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person in whose name this Note is registered at the
close of business on a Special Record Date for the payment of such defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Notes of this series not less than 10 days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Notes of this
series shall be listed, and upon such notice as may be required by any such
exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal and premium, if any,
and, to the extent lawful, on overdue installments of interest at the rate per
annum borne by this Note. In the event that any Interest Payment Date,
Redemption Date or Maturity Date is not a Business Day, then the required
payment of principal, premium, if any, and interest will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay). "Business Day" means any day other than a day on
which banking institutions in the State of New York or the State of Michigan are
authorized or obligated pursuant to law or executive order to close.
Payment of principal of, premium, if any, and interest on the Notes
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Notes represented by
a Global Note shall be made by wire transfer of immediately available funds to
the Holder of such Global Note , provided that, in the case of payments of
principal and premium, if any, such Global Note is first surrendered to the
Paying Agent (as defined in the Indenture). If any of the Notes of this series
are no longer represented by a Global Note, (i) payments of principal, premium,
if any, and interest due at the Stated Maturity or earlier redemption of such
Securities shall be made at the office of the Paying Agent upon surrender of
such Securities to the Paying Agent, and (ii) payments of interest shall be
made, at the option of the Company, subject to such surrender where applicable,
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register.
UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED
BY GENERAL AND REFUNDING MORTGAGE BONDS (THE "MORTGAGE BONDS") ISSUED AND
DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY'S
SUPPLEMENTAL INDENTURE DATED AS OF , SUPPLEMENTING THE
MORTGAGE AND DEED OF
A-2
TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND FIRST CHICAGO TRUST
COMPANY OF NEW YORK (THE "MORTGAGE TRUSTEE"), PLEDGED BY THE COMPANY FOR THE
BENEFIT OF THE HOLDERS OF THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE
"MORTGAGE"). ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH
MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, SHALL EITHER (1) BECOME UNSECURED
GENERAL OBLIGATIONS OF THE COMPANY OR (2) BE SECURED BY SUBSTITUTE MORTGAGE
BONDS UNDER A SUBSTITUTE MORTGAGE.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by
the Trustee or a duly appointed Authentication Agent referred to herein, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Note is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to a Collateral Trust Indenture dated as of June 30, 1993 (the "Original
Indenture") duly executed and delivered between the Company and Bank One Trust
Company, National Association, as Trustee (herein referred to as the "Trustee"),
as supplemented through and including a Supplemental Indenture dated as of
(together with the Original Indenture, the "Indenture") between
the Company and the Trustee, to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the registered Holders of the Notes and of the terms
upon which the Notes are, and are to be, authenticated and delivered.
This Note is not subject to repayment at the option of the Holder
hereof. Except as provided below, this Note is not redeemable by the Company
prior to maturity and is not subject to any sinking fund.
[This Note will be redeemable at the option of the Company, in whole at
any time or in part from time to time, (any such date of optional redemption, an
"Optional Redemption Date," which shall be a "Redemption Date" for purposes of
the Indenture), at an optional redemption price (which shall be a "Redemption
Price" for purposes of the Indenture) equal to the greater of (i) 100% of the
principal amount of this Note to be redeemed and (ii) the sum of the present
values of the principal amount of this Note to be redeemed and the remaining
scheduled payments of interest on the principal amount of this Note to be
redeemed (exclusive of interest accrued to the related Optional Redemption Date)
until Stated Maturity, in each case discounted from their respective scheduled
payment dates to such Optional Redemption Date on a semiannual basis (assuming a
360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as
defined below) plus 20 basis points, as determined by the Reference Treasury
Dealer, plus accrued interest thereon to the date of redemption.
A-3
Notwithstanding the foregoing, installments of interest on this Note
that are due and payable on Interest Payment Dates falling on or prior to a
Redemption Date will be payable on the Interest Payment Date to the registered
Holders as of the close of business on the relevant Record Date.
"Adjusted Treasury Rate" means, with respect to any Optional Redemption
Date, the rate per annum equal to the semiannual yield to maturity of the
Comparable Treasury Issue, calculated on the third Business Day preceding such
Optional Redemption Date, using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Optional Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
determined by the Reference Treasury Dealer selected by the Company as having a
maturity comparable to the remaining term of this Note that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity with the
remaining term of this Note.
"Comparable Treasury Price" means, with respect to any Optional
Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for
such Optional Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all such
quotations, or (iii) if only one Reference Treasury Dealer Quotation is
received, such quotation.
"Reference Treasury Dealer" means each of: (i) Banc One Capital
Markets, Inc., Barclays Capital Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (or their
respective affiliates which are Primary Treasury Dealers), and their respective
successors; provided, however, that if any of the foregoing cease to be a
primary U.S. Government securities dealer in The City of New York (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other Primary Treasury Dealer(s) selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any Optional Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Optional Redemption
Date.]
[Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Optional Redemption Date to the Holder hereof
at its registered address.]
[Unless the Company defaults in payment of the applicable Redemption
Price, on and after the applicable Redemption Date interest will cease to accrue
on the principal amount of this Note called for redemption.]
[If money sufficient to pay the applicable Redemption Price with
respect to the principal amount of and accrued interest on the principal amount
of this Note to be redeemed on the applicable Redemption Date is deposited with
the Trustee or Paying Agent on or before the
A-4
related Redemption Date and certain other conditions are satisfied, then on or
after such date, interest will cease to accrue on the principal amount of this
Note called for redemption.]
[If the Notes are only partially redeemed by the Company, the Trustee
shall select which Notes are to be redeemed in a manner it deems fair and
appropriate in accordance with the terms of the Indenture.]
[In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the registered Holder hereof upon the cancellation hereof.]
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the registered Holders of not less than a majority
in aggregate principal amount of the outstanding Securities of each series
affected at the time, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the registered Holders of
the Securities; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Securities of any series, or reduce the
principal amount thereof, or reduce the rate of or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the registered Holder of each Security so affected or
(ii) reduce the aforesaid percentage of Securities, the registered Holders of
which are required to consent to any such supplemental indenture, without the
consent of the registered Holders of each Security then outstanding and affected
thereby. The Indenture also contains provisions permitting (i) the registered
Holders of at least 66 2/3% in aggregate principal amount of the Securities of
all series at the time outstanding affected thereby, on behalf of the registered
Holders of the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and (ii) the registered Holders of a
majority in aggregate principal amount of the Securities of all series at the
time outstanding affected thereby, on behalf of the registered Holders of the
Securities of such series, to waive certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the registered Holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such registered Holder and upon all future registered Holders and
owners of this Note and of any Note issued in exchange hereof or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay
A-5
the principal of and interest on this Note at the time and place and at the rate
and in the coin or currency herein prescribed.
Prior to the Release Date, the Notes of this series shall be secured by
a series of Mortgage Bonds (the "Related Series of Bonds"), delivered by the
Company to the Trustee for the benefit of the Holders of the Notes. Reference is
made to the Mortgage and the Indenture for a description of the rights of the
Trustee as Holder of the Related Series of Bonds, the property mortgaged and
pledged under the Mortgage and the rights of the Company and of the Mortgage
Trustee in respect thereof, the duties and immunities of the Mortgage Trustee
and the terms and conditions upon which the Related Series of Bonds are secured
and the circumstances under which additional Mortgage Bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS,
INCLUDING THE RELATED SERIES OF BONDS, AND (2) MORTGAGE BONDS (EXCLUSIVE OF
PLEDGED BONDS), WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF
FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION,
HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE
MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH
THE MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT
OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE
RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in any place where the principal of and any
interest on this Note are payable or at such other offices or agencies as the
Company may designate, duly endorsed by or accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the Security
Registrar or any transfer agent duly executed by the registered Holder hereof or
his or her attorney duly authorized in writing, and thereupon one or more new
Notes of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Note Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any Paying Agent nor any Security Registrar shall be affected by any notice to
the contrary.
The Notes of this series are issuable only in fully registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
This Global Note is exchangeable for
A-6
Notes in definitive form only under certain limited circumstances set forth in
the Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes of this series are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination,
as requested by the registered Holder surrendering the same.
As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Note will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless (i) such Holder shall have
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Notes of this series, (ii) the Holders of not less than 25%
in principal amount of the outstanding Notes of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, (iii) the Trustee shall have failed to institute
such proceeding within 60 days and (iv) the Trustee shall not have received from
the Holders of a majority in principal amount of the outstanding Notes of this
series a direction inconsistent with such request within such 60-day period;
provided, however, that such limitations do not apply to a suit instituted by
the Holder hereof for the enforcement of payment of the principal of or any
interest on this Note on or after the respective due dates expressed herein.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
A-7
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
THE DETROIT EDISON COMPANY
By
-------------------------------
Attest:
By
---------------------------------------
Secretary
[Corporate Seal]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee
By
-------------------------------
Authorized Signatory
Date:
A-8
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
------------------------------------------------------------------------------
(Please insert Social Security or Other Identifying Number of Assignee)
------------------------------------------------------------------------------
(Please print or type name and address, including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorneys to transfer the within Note on the books of the
Issuer, with full power of substitution in the premises.
Dated:
-----------------
NOTICE: The signature of this assignment must correspond with the name
as written upon the face of the within Note in every particular, without
alteration or enlargement or any change whatever and NOTICE: Signature(s) must
be guaranteed by a financial institution that is a member of the Securities
Transfer Agents Medallion Program ("STAMP"), the Stock Exchange, Inc. Medallion
Signature Program ("MSP"). When assignment is made by a guardian, trustee,
executor or administrator, an officer of a corporation, or anyone in a
representative capacity, proof of his or her authority to act must accompany
this Note.
A-9
EXHIBIT B
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NO. R-1 $
------------
THE DETROIT EDISON COMPANY
SENIOR NOTES DUE
Principal Amount: $
-----------------
Authorized Denomination: $1,000
Regular Record Date: close of business on the 15th calendar day (whether or not
a Business Day) prior to the relevant Interest Payment Date
Original Issue Date:
Stated Maturity:
Interest Payment Dates: and of each year, commencing
Interest Rate: % per annum
THE DETROIT EDISON COMPANY, a corporation duly organized and existing
under the laws of the State of Michigan (the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co. or registered assigns, at the
office or agency of the Company in The City of New York, New York, the principal
sum of ____________ ($________ ) on (the "Stated Maturity"), in
the coin or currency of the United States, and to pay interest thereon
B-1
from the Original Issue Date shown above, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on each Interest Payment Date as specified above, commencing on
, and on the Stated Maturity at the rate per annum shown above (the
"Interest Rate") until the principal hereof is paid or made available for
payment and on any overdue principal and premium and on any overdue installment
of interest. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered on the Regular Record Date as specified above next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Note is registered at the close of business on a
Special Record Date for the payment of such defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Notes of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Notes of this series shall be listed,
and upon such notice as may be required by any such exchange, all as more fully
provided in the Indenture.
Payments of interest on this Note will include interest accrued to but
excluding the respective Interest Payment Dates. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal and premium, if any,
and, to the extent lawful, on overdue installments of interest at the rate per
annum borne by this Note. In the event that any Interest Payment Date,
Redemption Date or Maturity Date is not a Business Day, then the required
payment of principal, premium, if any, and interest will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay). "Business Day" means any day other than a day on
which banking institutions in the State of New York or the State of Michigan are
authorized or obligated pursuant to law or executive order to close.
Payment of principal of, premium, if any, and interest on the Notes
shall be made in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.
Payments of principal of, premium, if any, and interest on Notes represented by
a Global Note shall be made by wire transfer of immediately available funds to
the Holder of such Global Note , provided that, in the case of payments of
principal and premium, if any, such Global Note is first surrendered to the
Paying Agent (as defined in the Indenture). If any of the Notes of this series
are no longer represented by a Global Note, (i) payments of principal, premium,
if any, and interest due at the Stated Maturity or earlier redemption of such
Securities shall be made at the office of the Paying Agent upon surrender of
such Securities to the Paying Agent, and (ii) payments of interest shall be
made, at the option of the Company, subject to such surrender where applicable,
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register.
UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED
BY GENERAL AND REFUNDING MORTGAGE BONDS (THE "MORTGAGE BONDS") ISSUED AND
DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY'S
SUPPLEMENTAL INDENTURE DATED AS OF , SUPPLEMENTING THE
MORTGAGE AND DEED OF
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TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND FIRST CHICAGO TRUST
COMPANY OF NEW YORK (THE "MORTGAGE TRUSTEE"), PLEDGED BY THE COMPANY FOR THE
BENEFIT OF THE HOLDERS OF THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE
"MORTGAGE"). ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH
MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, SHALL EITHER (1) BECOME UNSECURED
GENERAL OBLIGATIONS OF THE COMPANY OR (2) BE SECURED BY SUBSTITUTE MORTGAGE
BONDS UNDER A SUBSTITUTE MORTGAGE.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by
the Trustee or a duly appointed Authentication Agent referred to herein, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Note is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Notes"), specified in the
Indenture, all issued or to be issued in one or more series under and pursuant
to a Collateral Trust Indenture dated as of June 30, 1993 (the "Original
Indenture") duly executed and delivered between the Company and Bank One Trust
Company, National Association, as Trustee (herein referred to as the "Trustee"),
as supplemented through and including a Supplemental Indenture dated as of
(together with the Original Indenture, the "Indenture") between
the Company and the Trustee, to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the registered Holders of the Notes and of the terms
upon which the Notes are, and are to be, authenticated and delivered.
This Note is not subject to repayment at the option of the Holder
hereof. Except as provided below, this Note is not redeemable by the Company
prior to maturity and is not subject to any sinking fund.
[This Note will be redeemable at the option of the Company, in whole at
any time or in part from time to time, (any such date of optional redemption, an
"Optional Redemption Date," which shall be a "Redemption Date" for purposes of
the Indenture), at an optional redemption price (which shall be a "Redemption
Price" for purposes of the Indenture) equal to the greater of (i) 100% of the
principal amount of this Note to be redeemed and (ii) the sum of the present
values of the principal amount of this Note to be redeemed and the remaining
scheduled payments of interest on the principal amount of this Note to be
redeemed (exclusive of interest accrued to the related Optional Redemption Date)
until Stated Maturity, in each case discounted from their respective scheduled
payment dates to such Optional Redemption Date on a semiannual basis (assuming a
360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as
defined below) plus 25 basis points, as determined by the Reference Treasury
Dealer, plus accrued interest thereon to the date of redemption.
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Notwithstanding the foregoing, installments of interest on this Note
that are due and payable on Interest Payment Dates falling on or prior to a
Redemption Date will be payable on the Interest Payment Date to the registered
Holders as of the close of business on the relevent Record Date.
"Adjusted Treasury Rate" means, with respect to any Optional Redemption
Date, the rate per annum equal to the semiannual yield to maturity of the
Comparable Treasury Issue, calculated on the third Business Day preceding such
Optional Redemption Date, using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Optional Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
determined by the Reference Treasury Dealer selected by the Company as having a
maturity comparable to the remaining term of this Note that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity with the
remaining term of this Note.
"Comparable Treasury Price" means, with respect to any Optional
Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for
such Optional Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than
three such Reference Treasury Dealer Quotations, the average of all such
quotations, or (iii) if only one Reference Treasury Dealer Quotation is
received, such quotation.
"Reference Treasury Dealer" means each of: (i) Banc One Capital
Markets, Inc., Barclays Capital Inc. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (or their
respective affiliates which are Primary Treasury Dealers), and their respective
successors; provided, however, that if any of the foregoing cease to be a
primary U.S. Government securities dealer in The City of New York (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer; and (ii) any other Primary Treasury Dealer(s) selected by the
Trustee after consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any Optional Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Optional Redemption
Date.]
[Notice of any optional redemption will be mailed at least 30 days but
not more than 60 days before the Optional Redemption Date to the Holder hereof
at its registered address.]
[Unless the Company defaults in payment of the applicable Redemption
Price, on and after the applicable Redemption Date interest will cease to accrue
on the principal amount of this Note called for redemption.]
[If money sufficient to pay the applicable Redemption Price with
respect to the principal amount of and accrued interest on the principal amount
of this Note to be redeemed on the applicable Redemption Date is deposited with
the Trustee or Paying Agent on or before the
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related Redemption Date and certain other conditions are satisfied, then on or
after such date, interest will cease to accrue on the principal amount of this
Note called for redemption.]
[If the Notes are only partially redeemed by the Company, the Trustee
shall select which Notes are to be redeemed in a manner it deems fair and
appropriate in accordance with the terms of the Indenture.]
[In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the registered Holder hereof upon the cancellation hereof.]
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth therein.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the registered Holders of not less than a majority
in aggregate principal amount of the outstanding Securities of each series
affected at the time, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the registered Holders of
the Securities; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Securities of any series, or reduce the
principal amount thereof, or reduce the rate of or extend the time of payment of
interest thereon, or reduce any premium payable upon the redemption thereof,
without the consent of the registered Holder of each Security so affected or
(ii) reduce the aforesaid percentage of Securities, the registered Holders of
which are required to consent to any such supplemental indenture, without the
consent of the registered Holders of each Security then outstanding and affected
thereby. The Indenture also contains provisions permitting (i) the registered
Holders of at least 66 2/3% in aggregate principal amount of the Securities of
all series at the time outstanding affected thereby, on behalf of the registered
Holders of the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and (ii) the registered Holders of a
majority in aggregate principal amount of the Securities of all series at the
time outstanding affected thereby, on behalf of the registered Holders of the
Securities of such series, to waive certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the registered Holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such registered Holder and upon all future registered Holders and
owners of this Note and of any Note issued in exchange hereof or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay
B-5
the principal of and interest on this Note at the time and place and at the rate
and in the coin or currency herein prescribed.
Prior to the Release Date, the Notes of this series shall be secured by
a series of Mortgage Bonds (the "Related Series of Bonds"), delivered by the
Company to the Trustee for the benefit of the Holders of the Notes. Reference is
made to the Mortgage and the Indenture for a description of the rights of the
Trustee as Holder of the Related Series of Bonds, the property mortgaged and
pledged under the Mortgage and the rights of the Company and of the Mortgage
Trustee in respect thereof, the duties and immunities of the Mortgage Trustee
and the terms and conditions upon which the Related Series of Bonds are secured
and the circumstances under which additional Mortgage Bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS,
INCLUDING THE RELATED SERIES OF BONDS, AND (2) MORTGAGE BONDS (EXCLUSIVE OF
PLEDGED BONDS), WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF
FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION,
HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE
MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH
THE MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT
OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE
RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in any place where the principal of and any
interest on this Note are payable or at such other offices or agencies as the
Company may designate, duly endorsed by or accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the Security
Registrar or any transfer agent duly executed by the registered Holder hereof or
his or her attorney duly authorized in writing, and thereupon one or more new
Notes of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Note Registrar may deem and treat
the registered Holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any Paying Agent nor any Security Registrar shall be affected by any notice to
the contrary.
The Notes of this series are issuable only in fully registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
This Global Note is exchangeable for
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Notes in definitive form only under certain limited circumstances set forth in
the Indenture. As provided in the Indenture and subject to certain limitations
therein set forth, Notes of this series are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination,
as requested by the registered Holder surrendering the same.
As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Note will have any right to institute any proceeding with respect
to the Indenture or for any remedy thereunder, unless (i) such Holder shall have
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Notes of this series, (ii) the Holders of not less than 25%
in principal amount of the outstanding Notes of this series shall have made
written request, and offered reasonable indemnity, to the Trustee to institute
such proceeding as trustee, (iii) the Trustee shall have failed to institute
such proceeding within 60 days and (iv) the Trustee shall not have received from
the Holders of a majority in principal amount of the outstanding Notes of this
series a direction inconsistent with such request within such 60-day period;
provided, however, that such limitations do not apply to a suit instituted by
the Holder hereof for the enforcement of payment of the principal of or any
interest on this Note on or after the respective due dates expressed herein.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
THE DETROIT EDISON COMPANY
By
--------------------------------
Attest:
By
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Secretary
[Corporate Seal]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee
By
--------------------------------
Authorized Signatory
Date:
B-8
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
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(Please insert Social Security or Other Identifying Number of Assignee)
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(Please print or type name and address, including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorneys to transfer the within Note on the books of the
Issuer, with full power of substitution in the premises.
Dated:
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NOTICE: The signature of this assignment must correspond with the name
as written upon the face of the within Note in every particular, without
alteration or enlargement or any change whatever and NOTICE: Signature(s) must
be guaranteed by a financial institution that is a member of the Securities
Transfer Agents Medallion Program ("STAMP"), the Stock Exchange, Inc. Medallion
Signature Program ("MSP"). When assignment is made by a guardian, trustee,
executor or administrator, an officer of a corporation, or anyone in a
representative capacity, proof of his or her authority to act must accompany
this Note.
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