EXHIBIT 4.237
EXECUTION COPY
THE DETROIT EDISON COMPANY
AND
J.P. Morgan Trust COMPANY, NATIONAL ASSOCIATION
TRUSTEE
THIRTEENTH SUPPLEMENTAL INDENTURE
DATED AS OF APRIL 1, 2004
SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30, 1993
PROVIDING FOR
4.875% SENIOR NOTES DUE 2029 AND 4.65% SENIOR NOTES DUE 2028
SUPPLEMENTAL INDENTURE, dated as of the 1st day of April 2004, between
THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws
of the State of Michigan (the "Company"), and J.P. Morgan TRUST COMPANY,
NATIONAL ASSOCIATION (successor to Bank One, National Association), a national
banking association organized under the laws of the United States of America,
having a corporate trust office in he City of Detroit, Michigan , 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 two
additional separate series of its senior debt securities pursuant to the
Original Indenture to secure its obligations to MBIA Insurance Corporation, an
insurance company incorporated under the laws of the State of New York ("MBIA"),
under that certain Reimbursement and Indemnity Agreement dated as of April 1,
2004 (the "Insurance Agreement") between the Company and MBIA relating to the
financial guaranty insurance policy, No 43644, issued by MBIA with respect to
the Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds (The
Detroit Edison Company Exempt Facilities Project), Series 2004A (AMT) (the
"2004A Bonds") and the financial guaranty insurance policy, No. 43645, issued by
MBIA with respect to the Michigan Strategic Fund Limited Obligation Refunding
Revenue Bonds (The Detroit Edison Company Exempt Facilities Project), Series
2004B (Non-AMT) (the "2004B Bonds", and together with the 2004A Bonds, the
"Bonds"); and
WHEREAS, the Company intends hereby to designate two 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 Thirteenth 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, two separate series of its debt securities under the Original
Indenture, which shall be known as the 4.875% Senior Notes due 2029 and the
4.65% Senior Notes dues 2028; 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 THIRTEENTH 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 Thirteenth 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:
"Bond Indenture" means the Bond Trust Indenture, dated as of April 1,
2004, between the Michigan Strategic Fund and the Bond Trustee providing for the
$36,000,000 Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds
(The Detroit Edison Company Exempt Facilities Project),2004A and $31,980,000
Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds (The Detroit
Edison Company Exempt Facilities Project),2004 B Bonds.
"Bond Trustee" means J.P Morgan Trust Company, National Association, as
trustee under the Bond Indenture.
"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) that has been or would be capitalized on the books of
the lessee in accordance with generally accepted accounting principles.
"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.
"2004A Bonds" means the $36,000,000 Michigan Strategic Fund Limited
Obligation Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities
Project), Series 2004A.
"2004B Bonds" means the $31,980,000 Michigan Strategic Fund Limited
Obligaton Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities
Project), Series 2004B.
"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.
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 "% Senior Notes due 2029" (the "4.875%
Notes) and the "4.65% Senior Notes-due2028" (the "4.65% Notes, and together with
the "4.875% Notes, the "Notes"). For purposes of the Original Indenture, the
Notes shall constitute two separate series of Securities. The Stated Maturity on
which the principal of the 4.875% Notes shall be due and payable will be June 1,
2029 and the Stated Maturity on which the principal of the 4.655% Notes shall be
due and payable will be October 1, 2028. The 4.875% Notes are being issued to
secure the Company's obligations to MBIA under the Insurance Agreement related
to the 2004A Bonds and the 4.65% Notes are being issued to secure the Company's
obligatins to MBIA under the Insurance Agreement related to the 2004B Bonds.
SECTION 2.02. Certain Variations from the Original Indenture. (a) The
Notes shall have the benefit of the provisions of the Original Indenture
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), Section 301 (a), Sections 301 (b), Section 301 (d), and
Article VI, 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) In the event the Company desires to provide for the payment of
either or both of the 4.875% Notes or the %4.65% Notes, in lieu of defeasing
either or both series of Notes in accordance with Section 5.03 of the Original
Indenture, it shall either redeem an equal principal amount of the 2004A Bonds
or 2004B Bonds, as the case may be, or take such action as shall be required by
Section 204 of the Bond Indenture to defease an equal principal amount of the
2004A Bonds or the 2004B Bonds, as the case may be. Pursuant to Section 2.03(c)
hereof, such redemption or defeasance shall result in the discharge of the
Company's obligation with respect to the 4.875% Notes or the 4.65% Notes, as the
case may be, and the cancellation of the 4.875% Notes or the 4.65% Notes, as the
case may be.
(c) Any amount payable by the Company in respect of principal of the
Notes whether at maturity or prior to maturity by redemption or upon redemption
or acceleration or otherwise, in a circumstance where there has not been a
corresponding payment of principal of 2004A Bonds or the 2004B Bonds, as the
case may be, shall be applied simultaneously to the redemption or defeasance of
any equal principal amount of 2004A Bonds or 2004B Bonds, as the case may be, in
accordance with the Bond Indenture. In the event the amount so paid is
insufficient to provide for such redemption or defeasance, the Company shall pay
such additional amounts as shall be necessary to make up the deficiency.
SECTION 2.03. Amount, Assignability and Redemption.
(a) The aggregate principal amount of 4.875% Notes that may be issued
under this Supplemental Indenture is limited to $36,000,000 and the aggregate
principal amount of 4.65% Notes that may be issued under this Supplemental
Indenture is limited to $31,980,000 (except as
provided in Section 301(2) of the Original Indenture). 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 to MBIA. The Notes shall not be assignable or transferable
except as may be required to effect a transfer to any successor insurer for the
2004A or 2004B Bonds, as the case may be.
(b) The Notes may bear such legends as may be necessary to refer to the
Insurance Agreement between the Company and MBIA or to comply with any law or
with any rules or regulations made pursuant thereto or to evidence the limited
assignability.
(c) Upon payment of the principal or premium, if any, or interest on
the 2004A Bonds or the 2004B Bonds, as the case may be, whether at maturity or
prior to maturity by redemption or otherwise, or upon provision for the payment
thereof having been made in accordance with Article I or IV of the Bond
Indenture, Notes of the applicable series in a principal amount equal to the
principal amount of the related Bonds shall, to the extent of such payment of
principal, premium or interest, be deemed fully paid and the obligation of the
Company thereunder to make such payment shall forthwith cease and be discharged,
and, in the case of the payment of principal and premium, if any, such related
Notes shall be surrendered for cancellation or presented for appropriate
notation to the Trustee.
(d) The 4.875% Notes and the 4.65% Notes shall be redeemed on the dates
and in the respective principal amounts which correspond to the redemption date
for, and the principal amount to be redeemed of, the 2004A Bonds and the 2004B
Bonds, respectively.
(e) In the event of an Event of Default under the Bond Indenture and
the acceleration of the 2004A Bonds or the 2004B Bonds, as the case may be, the
related 4.875% Notes or 4.65% Notes, as the case may be, shall be redeemable in
whole upon receipt by the Trustee of a written demand (Redemption Demand) from
MBIA indicating that it has paid accelerated principal.
SECTION 2.04. Certain Terms of the Notes.
(a) The 4.875%Notes shall bear interest at the rate of 4.875% per annum
on the respective principal amount thereof and the 4.65% Notes shall bear
interest at the rate of 4.65% per annum on the respective principal amount
thereof, in each case from April 1, 2004, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, until the
principal of each such series of Notes, as the case may be, 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 4.875% Notes will be payable semiannually in arrears on June 1
and December 1 of each year (each such date, a " 4.875% Notes Interest Payment
Date"), commencing December 1, 2004 and interest on the 4.65% Notes will be
payable semiannually in arrears on April 1 and October 1 of each year (each such
date, a "4.65% Notes Interest Payment Date", and together with a 4.875% Notes
Interest Payment Date, "Interest Payment Date), commencing on October 1, 2004.
Payment of interest on the 2004A Bonds and the 2004B Bonds, as the case may be,
shall be deemed to constitute payment on the 4.875% Notes and the 4.65% Notes,
respectively. 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 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 that 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.
(c) The Notes are not subject to repayment at the option of the Holders
thereof and are not subject to any sinking fund, except to the extent that MBIA,
or its successor in interest, may have exercised its rights pursuant to Section
2.03 hereof. As provided in the form of Note attached hereto as Exhibit A for
the 4.875% Notes and Exhibit B for the 4.65% Notes, the Notes are subject to
Optional Redemption and Extraordinary Optional Redemption, as a whole or in
part, and Special Optional Redemption, in whole, by the Company prior to Stated
Maturity of the principal thereof upon the same terms as the 2004A and 2004B
Bonds, respectively. Except as modified in each form of 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 each applicable form of Note attached hereto as Exhibits A and B as the
case may be (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 4.875% Notes and attached hereto as Exhibit B is the form of
the definitive 4.65% Notes. If the Company elects to have the 4.875% Notes or
4.65 Notes secured by Substitute Mortgage Bonds on and after the Release Date,
the terms of the applicable series of 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.
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 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.
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, the Notes will be
secured as to payments of principal, interest and premium, if any, by separate
series of Mortgage Bonds (the General and Refunding Mortgage Bonds, 2004 Series
A with respect to the 4.875% Notes, the "2004 Series A Bonds", and the General
and Refunding Mortgage Bonds, 2004 Series B with respect to the 4.65% Notes, the
"2004 Series B Bonds", and together with the 2004 Series A Bonds, the "Bonds,"
the "Bonds of the related series" or individually 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 J.P. Morgan Trust Company, National Association, as
successor trustee (the "Mortgage Trustee"), as amended and supplemented by
various supplemental indentures, including the supplemental indenture, dated as
of March 15, 2004, creating the Mortgage 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 of the
related series shall be issued in an aggregate principal amount equal to the
aggregate principal amount of the related 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 the 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 related Notes when and as the same
shall become due and payable in accordance with the terms and provisions of the
Indenture or such related 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 related Notes when and as the
same shall become due and payable in accordance with the terms and provisions of
this Indenture or the related Notes including, if and to the extent provided for
in such related 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 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 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."
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 Thirteenth 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
Thirteenth 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 Thirteenth Supplemental Indenture and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
This Thirteenth 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.
IN WITNESS WHEREOF, the parties hereto have caused this Thirteenth
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
THE DETROIT EDISON COMPANY
By:_______________________________
Name: N. A. Khouri
Title: Vice President and Treasurer
ATTEST:
By:_______________________________
Name: Susan M. Beale
Title: Vice President and Corporate Secretary
J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION, as
Trustee
By:_______________________________
Name
Title:
ATTEST:
By:_______________________________
Name:
Title:
EXHIBIT A
THIS NOTE IS BEING ISSUED TO MBIA INSURANCE CORPORATION, AN INSURANCE
COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK ("MBIA"), TO SECURE
THE OBLIGATIONS OF THE DETROIT EDISON COMPANY (THE "COMPANY") TO MBIA UNDER THAT
CERTAIN REIMBURSEMENT AND INDEMNITY AGREEMENT DATED AS OF APRIL 1, 2004 BETWEEN
THE COMPANY AND MBIA REFERRED TO HEREIN. THIS NOTE IS NOT TRANSFERABLE OR
ASSIGNABLE EXCEPT AS MAY BE REQUIRED TO EFFECT A TRANSFER TO A SUCCESSOR INSURER
OF THE MICHIGAN STRATEGIC FUND LIMITED OBLIGATION REFUNDING REVENUE BONDS (THE
DETROIT EDISON COMPANY EXEMPT FACILITIES PROJECT), SERIES 2004A (AMT)
NO. R-1 $36,000,000
THE DETROIT EDISON COMPANY
4.875% SENIOR NOTES DUE 2029
Principal Amount: $ 36,000,000
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: April 1, 2004
Stated Maturity: June 1, 2029
Interest Payment Dates: June 1 and December 1 of each year, commencing December
1, 2004
Interest Rate: 4.875% 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 MBIA Insurance Corporation or registered
assigns, at the office or agency of the Company in The City of New York, New
York, the principal sum of Thirty-Six Million Dollars ($36,000,000) on June 1,
2029 (the "Stated Maturity"), in the coin or currency of the United States, and
to pay interest 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 December 1, 2004, 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. This note is being
issued to MBIA Insurance Corporation, an insurance company incorporated under
New York law ("MBIA"), to secure the
Company's obligations to MBIA under that certain Reimbursement and Indemnity
Agreement dated as of April 1, 2004 (the "Insurance Agreement") between the
Company and MBIA relating to Financial Guaranty Insurance Policy No. 43644
issued by MBIA with respect to the Michigan Strategic Fund Limited Obligation
Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities Project),
Series 2004A (AMT) (the "2004A Bonds"), which are issued under the Trust
Indenture dated as of April 1, 2004 (the "2004A Bond Indenture") between
Michigan Strategic Fund and J.P Morgan Trust Company, National Association, as
trustee. 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, 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. 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, 2004 Series A (THE "MORTGAGE BONDS")
ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE
COMPANY'S SUPPLEMENTAL INDENTURE DATED AS OF March 15, 2004, SUPPLEMENTING THE
MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND
J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION (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 J.P. Morgan
Trust Company, National Association, as Trustee (herein referred to as the
"Trustee"), as supplemented through and including a Thirteenth Supplemental
Indenture dated as of April 1, 2004 (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.
The Notes are not subject to repayment at the option of the Holders
thereof and are not subject to any sinking fund, except to the extent that MBIA,
or its successor in interest, may have exercised its rights pursuant to Section
2.03 of the aforesaid Thirteenth Supplemental Indenture. The Notes are subject
to Optional Redemption and Extraordinary Optional Redemption, as a whole or in
part, and Special Optional Redemption, in whole, by the Company prior to Stated
Maturity of the principal thereof upon the same terms as the 2004A Bonds are
subject to redemption. Upon payment of the principal or premium, if any, on the
2004A Bonds, whether at maturity or prior to maturity by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with Article I or IV of the 2004A Bond Indenture, or upon payment of
interest on the 2004A Bonds, Notes in a principal amount equal to the principal
amount of the 2004A Bonds so paid, or interest on Notes in an amount equal to
the interest on the 2004A Bonds so paid, as the case may be, shall, to the
extent of such payment, be deemed fully paid and the obligation of the Company
thereunder to make such payment shall forthwith cease and be discharged, and, in
the case of the payment of principal and premium, if any, such Notes shall be
surrendered for cancellation or presented for appropriate notation to the
Trustee.
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.
Notice of any Optional, Extraordinary Optional or Special Optional
Redemption will be mailed at least 30 days but not more than 60 days before the
Optional, Extraordinary Optional or Special Optional Redemption Date, as the
case may be, 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 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. In the event the Company desires to provide for
the payment of Notes, in lieu of defeasing the Notes in accordance with the
Indenture, the Company shall either redeem an equal principal amount of 2004A
Bonds or take such action as shall be required by the 2004A Bond Indenture to
defease an equal principal amount of 2004A Bonds.
Any amount payable by the Company in respect of principal of the Notes,
whether at maturity or prior to maturity by redemption or otherwise, in a
circumstance where there has not been a corresponding payment of principal of
2004A Bonds shall be applied simultaneously to the redemption or defeasance of
any equal principal amount of 2004A Bonds in accordance with the 2004A Bond
Indenture.
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 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.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly
executed and attested, all as of the day and year first above written.
THE DETROIT EDISON COMPANY
By:_______________________________
Name: N.A. Khouri
Title: Vice President and Treasurer
ATTEST:
By:_______________________________
Name: Susan M. Beale
Title: Vice President and Corporate Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION
By_______________________________
Authorized Signatory
Date: April 1, 2003
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.
EXHIBIT B
THIS NOTE IS BEING ISSUED TO MBIA INSURANCE CORPORATION, AN INSURANCE
COMPANY INCORPORATED UNDER THE LAWS OF THE STATE OF NEW YORK ("MBIA"), TO SECURE
THE OBLIGATIONS OF THE DETROIT EDISON COMPANY (THE "COMPANY") TO MBIA UNDER THAT
CERTAIN REIMBURSEMENT AND INDEMNITY AGREEMENT DATED AS OF APRIL 1, 2004 BETWEEN
THE COMPANY AND MBIA REFERRED TO HEREIN. THIS NOTE IS NOT TRANSFERABLE OR
ASSIGNABLE EXCEPT AS MAY BE REQUIRED TO EFFECT A TRANSFER TO A SUCCESSOR INSURER
OF THE MICHIGAN STRATEGIC FUND LIMITED OBLIGATION REFUNDING REVENUE BONDS (THE
DETROIT EDISON COMPANY EXEMPT FACILITIES PROJECT), SERIES 2004b (NON-AMT)
NO. R-1 $ 31,980,000
THE DETROIT EDISON COMPANY
4.65% SENIOR NOTES DUE 2028
Principal Amount: $31,9800,000
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: April 1, 2004
Stated Maturity: October 1, 2028
Interest Payment Dates: April 1 and October 1 of each year, commencing October
1, 2004
Interest Rate: 4.65% 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 MBIA Insurance Corporation or registered
assigns, at the office or agency of the Company in The City of New York, New
York, the principal sum of Thirty-One Million Nine Hundred Eighty Thousand
Dollars ($31,980,000) on October 1, 2028 (the "Stated Maturity"), in the coin or
currency of the United States, and to pay interest 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 October 1, 2004, 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. This note is being issued to MBIA Insurance Corporation, an insurance
company incorporated under New York law ("MBIA"), to secure the Company's
obligations to MBIA under that certain
Reimbursement and Indemnity Agreement dated as of April 1, 2004 (the "Insurance
Agreement") between the Company and MBIA relating to Financial Guaranty
Insurance Policy No. 43645 issued by MBIA with respect to the Michigan Strategic
Fund Limited Obligation Refunding Revenue Bonds (The Detroit Edison Company
Exempt Facilities Project), Series 2004B (NON-AMT) (the "2004B Bonds"), which
are issued under the Trust Indenture dated as of April 1, 2004 (the "2004B Bond
Indenture") between Michigan Strategic Fund and J.P Morgan Trust Company,
National Association, as trustee. 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, 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. 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, 2004 Series B (THE "MORTGAGE BONDS")
ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE
COMPANY'S SUPPLEMENTAL INDENTURE DATED AS OF March 15, 2004, SUPPLEMENTING THE
MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND
J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION (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 J.P. Morgan
Trust Company, National Association, as Trustee (herein referred to as the
"Trustee"), as supplemented through and including a Thirteenth Supplemental
Indenture dated as of April 1, 2004 (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.
The Notes are not subject to repayment at the option of the Holders
thereof and are not subject to any sinking fund, except to the extent that MBIA,
or its successor in interest, may have exercised its rights pursuant to Section
2.03 of the aforesaid Thirteenth Supplemental Indenture. The Notes are subject
to Optional Redemption and Extraordinary Optional Redemption, as a whole or in
part, and Special Optional Redemption, in whole, by the Company prior to Stated
Maturity of the principal thereof upon the same terms as the 2004B Bonds are
subject to redemption. Upon payment of the principal or premium, if any, on the
2004B Bonds, whether at maturity or prior to maturity by redemption or
otherwise, or upon provision for the payment thereof having been made in
accordance with Article I or IV of the 2004B Bond Indenture, or upon payment of
interest on the 2004B Bonds, Notes in a principal amount equal to the principal
amount of the 2004B Bonds so paid, or interest on Notes in an amount equal to
the interest on the 2004B Bonds so paid, as the case may be, shall, to the
extent of such payment, be deemed fully paid and the obligation of the Company
thereunder to make such payment shall forthwith crease and be discharged, and,
in the case of the payment of principal and premium, if any, such Notes shall be
surrendered for cancellation or presented for appropriate notation to the
Trustee.
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.
Notice of any Optional, Extraordinary Optional or Special Optional
Redemption will be mailed at least 30 days but not more than 60 days before the
Optional, Extraordinary Optional or Special Optional Redemption Date, as the
case may be, 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 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. In the event the Company desires to provide for
the payment of Notes, in lieu of defeasing the Notes in accordance with the
Indenture, the Company shall either redeem an equal principal amount of 2004A
Bonds or take such action as shall be required by the 2004B Bond Indenture to
defease an equal principal amount of 2004A Bonds.
Any amount payable by the Company in respect of principal of the Notes,
whether at maturity or prior to maturity by redemption or otherwise, in a
circumstance where there has not been a corresponding payment of principal of
2004B Bonds shall be applied simultaneously to the redemption or defeasance of
any equal principal amount of 2004B Bonds in accordance with the 2004B Bond
Indenture.
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 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.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Note to be duly
executed and attested, all as of the day and year first above written.
THE DETROIT EDISON COMPANY
By:_______________________________
Name: N.A. Khouri
Title: Vice President and Treasurer
ATTEST:
By:_______________________________
Name: Susan M. Beale
Title: Vice President and Corporate Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
J.P. MORGAN TRUST COMPANY,
NATIONAL ASSOCIATION
By_______________________________
Authorized Signatory
Date: April, 2003
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.