EXHIBIT 4.1
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THE DETROIT EDISON COMPANY
AND
X.X. XXXXXX TRUST COMPANY, NATIONAL ASSOCIATION
TRUSTEE
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SEVENTEENTH SUPPLEMENTAL INDENTURE
DATED AS OF AUGUST 1, 2005
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SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30, 1993
PROVIDING FOR
2005 SERIES DT VARIABLE RATE SENIOR NOTES DUE 2029
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SUPPLEMENTAL INDENTURE, dated as of the 1st day of August 2005, between
THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws
of the State of Michigan (the "Company"), and X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION (successor to Bank One Trust Company, National
Association), a national banking association organized under the laws of the
United States of America, having a corporate trust office in the 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 an
additional series of its senior debt securities pursuant to the Original
Indenture to secure its obligations to XL Capital Assurance Inc., an insurance
company incorporated under the laws of the State of New York (the "Insurer"),
under the Insurance Agreement dated as of August 1, 2005 (the "Insurance
Agreement") among the Company, the Insurer and the Bond Trustee relating to the
financial guaranty insurance policy, No. CA02313A, issued by the Insurer with
respect to the Michigan Strategic Fund Variable Rate Limited Obligation
Refunding Revenue Bonds (The Detroit Edison Company Exempt Facilities Project),
Series 2005DT (the "2005DT Bonds"); and
WHEREAS, the Company intends hereby to designate a 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 Seventeenth 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, a
series of its debt securities under the Original Indenture, which shall be known
as the 2005 Series DT Variable Rate Senior Notes due 2029; 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 SEVENTEENTH SUPPLEMENTAL INDENTURE WITNESSETH that,
in order to establish the terms of a series of debt securities, and for and in
consideration of the premises and of the covenants contained in the Original
Indenture and in this Seventeenth Supplemental Indenture and for other good and
valuable consideration the receipt
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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:
"2005DT Bonds" means the $119,175,000 Michigan Strategic Fund Variable
Rate Limited Obligation Refunding Revenue Bonds (The Detroit Edison Company
Exempt Facilities Project), Series 0000XX.
"Xxxx Xxxxxxxxx" means the Trust Indenture, dated as of August 1, 2005,
between the Michigan Strategic Fund and the Bond Trustee providing for the
2005DT Bonds.
"Bond Trustee" means X.X. Xxxxxx Trust Company, National Association, as
trustee under the Bond Indenture.
"Business Day" means any day except a Saturday, Sunday or other day (i) on
which commercial banks located in the cities in which the Principal Office of
the Trustee, the Principal Office of the Company, the Principal Office of the
Remarketing Agent, the Principal Office of the Auction Agent during any Auction
Period or the Principal Office of the Paying Agent, each as defined in the Bond
Indenture, are located are required or authorized by law or regulation to remain
closed or are closed, or (ii) on which The New York Stock Exchange is closed.
"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
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. In connection with such
determination, the Company shall certify to the Trustee that it has, prior to
making its final determination, consulted with the independent accountants
regularly retained by the Company.
"Debt" means any outstanding debt for money borrowed evidenced by notes,
debentures, bonds or other securities, or guarantees of any debt.
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"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 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. In connection
with such determination, the Company shall certify to the Trustee that it has,
prior to making its final determination, consulted with the independent
accountants regularly retained by the Company.
"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 (as hereafter defined)
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 purchases 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. The lien of the Substitute Mortgage
shall have such priority, and be with respect to such property, as shall be
specified by the Company in its sole discretion.
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"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.
ARTICLE TWO
TITLE AND TERMS OF THE SECURITIES
SECTION 2.01. Title of the Securities; Stated Maturity. This Supplemental
Indenture hereby establishes a series of Securities, which shall be known as the
Company's "2005 Series DT Variable Rate Senior Notes due 2029" (the "Notes").
For purposes of the Original Indenture, the Notes shall constitute a single
series of Securities. The Stated Maturity on which the principal of the Notes
shall be due and payable will be August 1, 2029. The Notes are being issued to
secure the Company's obligations to the Insurer under the Insurance Agreement.
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), Section 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 the
Notes, in lieu of defeasing the Notes in accordance with Section 503 of the
Original Indenture, it shall either redeem an equal principal amount of the
2005DT Bonds or take such action as shall be required by Article VIII of the
Bond Indenture to defease an equal principal amount of the 2005DT Bonds.
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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 Notes and the
cancellation of the Notes.
(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 2005DT Bonds, shall be applied
simultaneously to the redemption or defeasance of an equal principal amount of
2005DT Bonds 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 Notes that may be issued under this
Supplemental Indenture is limited to $119,175,000 (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 the
Insurer. The Notes shall not be assignable or transferable except as may be
required to effect a transfer to any successor insurer for the 2005DT Bonds.
(b) The Notes may bear such legends as may be necessary to refer to the
Insurance Agreement between the Company and the Insurer 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, premium, if any, or interest on the
2005DT 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 IV or VIII of the Bond Indenture, Notes in a principal
amount equal to the principal amount of the 2005DT 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 Notes shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
(d) The Notes shall be redeemed on the date and in the principal amount
which corresponds to the redemption date for, and the principal amount to be
redeemed of, the 2005DT Bonds.
(e) In the event of an Event of Default under the Bond Indenture and the
acceleration of the 2005DT Bonds, the Notes shall be redeemable in whole upon
receipt by the Trustee of a written demand (Redemption Demand) from the Insurer
indicating that it has paid accelerated principal.
SECTION 2.04. Certain Terms of the Notes.
(a) The Notes shall bear interest at the rate of interest established for
the 2005DT Bonds from time to time in accordance with the Bond Indenture on the
principal amount thereof from the date of original issue, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, until the principal of the Notes becomes due and payable, and on any
overdue
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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 during such overdue period. Interest on the Notes will be payable on
such dates as interest shall be payable on the 2005DT Bonds (each such date, an
"Interest Payment Date"). Payment of interest on the 2005DT Bonds shall be
deemed to constitute payment of interest on the Notes. The amount of interest
payable for any period shall be computed on the same basis as interest on the
2005DT Bonds pursuant to the Bond Indenture.
(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 the Original Indenture) is registered at
the close of business on the relevant record date for such interest installment,
which shall be the same as the record date for the 2005DT Bonds with respect 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 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. Any waiver or rescission of a
declaration of acceleration of principal of the 2005DT Bonds shall constitute a
waiver or rescission with respect to the Notes.
(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 the
Insurer, or its successor in interest, may have exercised its rights pursuant to
Section 2.03 hereof. As provided in the form of the Note attached hereto as
Exhibit A, 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 2005DT Bonds. Except as modified in the form of Note,
redemptions shall be effected in accordance with Article Twelve of the Original
Indenture.
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(d) The Notes shall have such other terms and provisions as are set forth
in the form of Note attached hereto as Exhibit A (which is 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 Note. Attached hereto as Exhibit A is the form of
the definitive Note. 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.
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;
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(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; 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
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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 Stated 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 a series of Mortgage
Bonds (the "General and Refunding Mortgage Bonds, 2005 Series DT", 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 X.X. Xxxxxx 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
August 1, 2005, creating the Bonds (collectively, the "Mortgage"), pledged by
the Company for the benefit of the Holders of the 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 from time to time Outstanding, including, but not
limited to (1) the full and prompt payment of the principal and premium, if any,
on the Notes when and as the same shall become due and payable in accordance
with the terms and provisions of the Indenture or the 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
the 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 the 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
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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
10
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.
11
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.
For purposes of the Notes, Section 601(8) of the Original Indenture shall
read, "the occurrence of an "event of default" as such term is defined in the
Mortgage; or".
(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 an
"event of 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 Seventeenth 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
Seventeenth 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 Seventeenth Supplemental Indenture and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
This Seventeenth 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 Seventeenth
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
THE DETROIT EDISON COMPANY
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer
ATTEST:
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: Corporate Secretary
13
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By: /s/ J. Xxxxxxx Xxxxx
----------------------------
Name: J. Xxxxxxx Xxxxx
Title: Vice President
ATTEST:
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Officer
14
EXHIBIT A
THIS NOTE IS BEING ISSUED TO XL Capital Assurance Inc., an insurance
company incorporated under the laws of the State of New York (the "Insurer"), TO
SECURE THE OBLIGATIONS OF THE DETROIT EDISON COMPANY (THE "COMPANY") TO THE
INSURER UNDER THE INSURANCE AGREEMENT DATED AS OF AUGUST 1, 2005 AMONG THE
COMPANY, THE INSURER AND THE BOND TRUSTEE 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 VARIABLE RATE LIMITED
OBLIGATION REFUNDING REVENUE BONDS (THE DETROIT EDISON COMPANY EXEMPT FACILITIES
PROJECT), SERIES 2005DT.
No. R-1 $119,175,000
THE DETROIT EDISON COMPANY
2005 Series DT variable rate SENIOR NOTES DUE 2029
Principal Amount: $119,175,000
Authorized Denomination: $1,000
Regular Record Date: Same as the record date for the 2005DT Bonds with respect
to the relevant Interest Payment Date
Original Issue Date: August 17, 2005
Stated Maturity: August 1, 2029
Interest Payment Dates: Such dates as interest shall be payable on the 2005DT
Bonds
Interest Rate: Such rate as is established for the 2005DT Bonds from time to
time
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 XL Capital Assurance Inc., or registered
assigns, at the office or agency of the Company in The City of New York, New
York, the principal sum of One Hundred Nineteen Million One Hundred Seventy-five
Thousand Dollars ($119,175,000) on August 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, in arrears on each
Interest Payment Date as specified above, commencing on the first date on which
interest is payable on the 2005DT Bonds, 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
A-1
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 XL Capital Assurance Inc.,
an insurance company incorporated under the laws of the State of New York (the
"Insurer"), to secure the Company's obligations to the Insurer under the
Insurance Agreement dated as of August 1, 2005 (the "Insurance Agreement") among
the Company, the Insurer and the Bond Trustee relating to Financial Guaranty
Insurance Policy No. CA02313A issued by the Insurer with respect to the Michigan
Strategic Fund Variable Rate Limited Obligation Refunding Revenue Bonds (The
Detroit Edison Company Exempt Facilities Project), Series 2005DT (the "2005DT
Bonds"), which are issued under the Trust Indenture dated as of August 1, 2005
(the "Bond Indenture") between the Michigan Strategic Fund and X.X. Xxxxxx Trust
Company, National Association, as trustee (the "Bond 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 same basis as interest on the 2005DT Bonds
pursuant to the Bond Indenture. 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), in each
case with the same force and effect as if made on such date. "Business Day"
means any day except a Saturday, Sunday or other day (i) on which commercial
banks located in the cities in which the Principal Office of the Trustee, the
Principal Office of the Company, the Principal Office of the Remarketing Agent,
the Principal Office of the Auction Agent during any Auction Period or the
Principal Office of the Paying Agent, each as defined in the Bond Indenture, are
located are required or authorized by law or regulation to remain closed or are
closed, or (ii) on which The New York Stock Exchange is closed.
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.
A-2
UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED BY
GENERAL AND REFUNDING MORTGAGE BONDS, 2005 SERIES DT (THE "MORTGAGE BONDS")
ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE
COMPANY'S SUPPLEMENTAL INDENTURE DATED AS OF AUGUST 1, 2005, SUPPLEMENTING THE
MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND
X.X. XXXXXX 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.
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 X.X. Xxxxxx Trust Company,
National Association, as Trustee (herein referred to as the "Trustee"), as
supplemented through and including an Seventeenth Supplemental Indenture dated
as of August 1, 2005 (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 the
Insurer, or its successor in interest, may have exercised its rights pursuant to
Section 2.03 of the aforesaid Seventeenth 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 2005DT Bonds
are subject to redemption. Upon payment of the principal or premium, if any, on
the 2005DT 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 IV or VIII of the Bond Indenture, or upon payment of
interest on the 2005DT Bonds, Notes in a principal amount equal to the principal
amount of the 2005DT Bonds so paid, or interest on Notes in an amount equal to
the interest on the 2005DT 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.
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.
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 Company elects to redeem all or a portion of the Notes, the
redemption will be conditional upon receipt by the Paying Agent or the Trustee
of monies sufficient to pay the Redemption Price. 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 2005DT Bonds or take
such action as shall be required by the Bond Indenture to defease an equal
principal amount of 2005DT 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
2005DT Bonds, shall be applied simultaneously to the redemption or defeasance of
any equal principal amount of 2005DT Bonds in accordance with the Bond
Indenture.
A-4
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
A-5
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.
A-6
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:
Title:
ATTEST:
By: _______________________________
Name:
Title:
A-7
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
X.X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By: ___________________________________
Authorized Signatory
Date: August 17, 2005
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
