<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER
DECEMBER 31, 1994 1-2198
THE DETROIT EDISON COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 38-0478650
(State of incorporation) (I.R.S. employer identification no.)
2000 SECOND AVENUE, DETROIT, MICHIGAN 48226
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (313) 237-8000
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common Stock, $10 par value New York and Chicago Stock Exchanges
Preferred Stock (5 1/2%, 7.36%,
7.45%, 7.68%, 7.74% and
7.75% series), cumulative,
$100 par value New York Stock Exchange
General and Refunding Mortgage Bonds
(only Series R and S) New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
______________________________
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
At February 28, 1995, 144,863,966 shares of the Company's Common Stock,
substantially all held by non-affiliates, were outstanding, with an aggregate
market value of approximately $4,146,731,027 based upon the closing price on
the New York Stock Exchange.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information in the Company's definitive proxy statement dated March 9,
1995 (which is included with the prospectus of DTE Holdings, Inc.), in
connection with its Annual Meeting of Shareholders to be held on April 24,
1995, is incorporated herein by reference in Part III, Items 10, 11, 12 and 13
hereof.
<PAGE> 2
CROSS REFERENCE TO INFORMATION CONTAINED IN THE REGISTRANT'S
DEFINITIVE PROXY STATEMENT DATED MARCH 9, 1995
(INCORPORATED HEREIN BY REFERENCE)
<TABLE>
<CAPTION>
ANNUAL REPORT LOCATION OF INFORMATION
ON FORM 10-K IN PROXY STATEMENT
------------- -----------------------
<S> <C>
Part III, Item 10 - Directors and "The Election of Directors" - Pages 5-9
Executive Officers of the Registrant "Compliance with Section 16(a) of
the Securities Exchange Act of 1934" - Page
35
Part III, Item 11 - Executive "Board Compensation Committee Report on
Compensation Executive Compensation" - Pages 10-15
Part III, Item 12 - Security "Security Ownership of Management" - Page 9
Ownership of Certain Beneficial Owners and
Management
Part III, Item 13 - Certain "Compensation Committee Interlocks and Insider
Relationships and Related Transactions Participation" - Page 15
</TABLE>
2
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Part I - Items 1 and 2 - Business and Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Certain Factors Affecting Public Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Capital Expenditure Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 7
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fuel Costs and Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Nuclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Regulation and Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Michigan Public Service Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Federal Energy Regulatory Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Nuclear Regulatory Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Air . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Wastes and Toxic Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Employes and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Employes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Item 3 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 4 - Submission of Matters to a Vote of Security-Holders . . . . . . . . . . . . . . . . . . 22
Part II -Item 5 - Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 6 - Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 24
Item 8 - Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . 30
Item 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . 49
Part III -Item 10 - Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . 49
Item 11 - Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Item 12 - Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Item 13 - Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . 50
Part IV -Item 14 - Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
3
<PAGE> 4
DEFINITIONS
<TABLE>
<S> <C>
AFUDC . . . . . . . . . . . . . Allowance for Funds Used During Construction (both borrowed and other funds)
BTU . . . . . . . . . . . . . . British Thermal Unit
CERCLA . . . . . . . . . . . . Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980
Company . . . . . . . . . . . . The Detroit Edison Company and Subsidiary Companies
Consumers . . . . . . . . . . . Consumers Power Company (a wholly-owned subsidiary of CMS Energy Corporation)
DOE . . . . . . . . . . . . . . United States Department of Energy
DSM . . . . . . . . . . . . . . Demand-Side Management
EPA . . . . . . . . . . . . . . Environmental Protection Agency
ERA . . . . . . . . . . . . . . Department of Energy's Economic Regulatory Administration
FERC . . . . . . . . . . . . . Federal Energy Regulatory Commission
kWh . . . . . . . . . . . . . . Kilowatthour
Ludington . . . . . . . . . . . Ludington Hydroelectric Pumped Storage Plant (owned jointly with Consumers)
MDNR . . . . . . . . . . . . . Michigan Department of Natural Resources
Mortgage Bonds . . . . . . . . The Company's General and Refunding Mortgage Bonds
MPSC . . . . . . . . . . . . . Michigan Public Service Commission
MW . . . . . . . . . . . . . . Megawatt
MWh . . . . . . . . . . . . . . Megawatthour
MWRC . . . . . . . . . . . . . Michigan Water Resources Commission
Note . . . . . . . . . . . . . Notes to Consolidated Financial Statements
NPDES . . . . . . . . . . . . . National Pollutant Discharge Elimination System
NRC . . . . . . . . . . . . . . Nuclear Regulatory Commission
PCB's . . . . . . . . . . . . . Polychlorinated Biphenyls
PRP . . . . . . . . . . . . . . Potentially Responsible Party
PSCR . . . . . . . . . . . . . Power Supply Cost Recovery
RCRA . . . . . . . . . . . . . Resource Conservation and Recovery Act
Registrant . . . . . . . . . . The Detroit Edison Company
Renaissance . . . . . . . . . . Renaissance Energy Company (an unaffiliated company)
</TABLE>
4
<PAGE> 5
PART I
ITEMS 1 AND 2 - BUSINESS AND PROPERTIES.
GENERAL
The Company, incorporated in Michigan since 1967, is a regulated
public utility engaged in the generation, purchase, transmission, distribution
and sale of electric energy in a 7,600 square mile area in southeastern
Michigan. The Company's service area includes about 13% of Michigan's total
land area, and about half of its population (approximately five million
people), electric energy consumption and industrial capacity. The Company's
residential customers reside in urban and rural areas, including an extensive
shoreline along the Great Lakes and connecting waters. See operating revenues,
sales and customer data by rate class below.
<TABLE>
<CAPTION>
1994(1) 1993(1) 1992
----------------------- ----------------------- -----------------------
Percent Percent Percent
Operating Revenues Amount of Total Amount of Total Amount of Total
------------------ ----------- ---------- ----------- ---------- ----------- ----------
(Thousands, except percentages)
<S> <C> <C> <C> <C> <C> <C>
Electric
Residential . . . . . . . . $1,136,169 32.3% $1,125,624 31.7% $1,098,027 30.8%
Commercial . . . . . . . . . 1,473,309 41.9 1,428,321 40.2 1,438,258 40.4
Industrial . . . . . . . . . 736,339 20.9 720,002 20.2 749,240 21.1
Sales for resale and other (2) 102,534 2.9 193,410 5.4 187,058 5.3
---------- ----- ---------- ----- ---------- -----
Total System . . . . . . . 3,448,351 98.0 3,467,357 97.5 3,472,583 97.6
Interconnection . . . . . . 43,141 1.2 60,363 1.7 58,447 1.6
---------- ----- ---------- ----- ---------- -----
Total Electric . . . . . . 3,491,492 99.2 3,527,720 99.2 3,531,030 99.2
Steam Heating . . . . . . . . . 27,849 0.8 27,491 0.8 27,113 0.8
---------- ----- ---------- ----- ---------- -----
Total Operating Revenues . $3,519,341 100.0% $3,555,211 100.0% $3,558,143 100.0%
========== ===== ========== ===== ========== =====
</TABLE>
(1) 1994 and 1993 include unbilled sales and operating revenues by rate class
while 1992 includes unbilled sales and operating revenues in the other
category.
(2) Primary pumping operating revenues, sales and customers are included in
commercial in 1994 and in the other category in 1993 and 1992.
<TABLE>
<CAPTION>
1994(1) 1993(1) 1992
----------------------- ----------------------- -----------------------
Increase Increase Increase
(Decrease) (Decrease) (Decrease)
From Prior From Prior From Prior
Sales Amount Year Amount Year Amount Year
----- ----------- ---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Electric (thousands of kWh)
Residential . . . . . . . . 12,169,417 1.1 % 12,032,342 6.4% 11,309,007 (7.5)%
Commercial . . . . . . . . . 17,041,446 6.5 15,996,307 4.0 15,384,055 (1.2)
Industrial . . . . . . . . . 13,356,351 5.9 12,618,018 6.7 11,827,605 2.3
Sales for resale and other(2) 1,586,162 (31.6) 2,317,793 6.5 2,176,096 28.6
---------- ---------- ----------
Total System . . . . . . . 44,153,376 2.8 42,964,460 5.6 40,696,763 (0.9)
Interconnection . . . . . . 1,978,135 (45.2) 3,611,455 12.7 3,204,357 (42.1)
---------- ---------- ----------
Total Electric . . . . . 46,131,511 (1.0)% 46,575,915 6.1% 43,901,120 (5.8)%
========== ========== ==========
Steam Heating
(thousands of lbs.) . . . . 3,109,596 3.5 % 3,004,394 -% 3,005,724 7.5%
========== ========== ==========
</TABLE>
See footnote reference above.
5
<PAGE> 6
<TABLE>
<CAPTION>
Customers (at Year-End) 1994 1993 1992
----------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Electric
Residential . . . . . . . . . . . . . . . . 1,805,141 1,790,197 1,777,914
Commercial . . . . . . . . . . . . . . . . . 172,221 170,453 169,080
Industrial . . . . . . . . . . . . . . . . . 889 850 813
Other (2) . . . . . . . . . . . . . . . . . 1,967 2,034 1,985
--------- --------- ---------
Total System . . . . . . . . . . . . . . . 1,980,218 1,963,534 1,949,792
Interconnection . . . . . . . . . . . . . . 7 7 7
--------- --------- ---------
Total Electric . . . . . . . . . . . . . . 1,980,225 1,963,541 1,949,799
========= ========= =========
Steam Heating . . . . . . . . . . . . . . . . . . 367 378 412
========= ========= =========
</TABLE>
See footnote reference on Page 5.
During 1994, sales to automotive and automotive-related customers
accounted for approximately 11% of total operating revenues. The Company's 30
largest industrial customers accounted for approximately 18% of total operating
revenues in 1994 and 1993 (as compared to 19% in 1992) and no one customer
accounted for more than 4%.
Set forth below are comparisons of total system sales by year and quarter.
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
(Thousands of kWh)
<S> <C> <C> <C>
First Quarter . . . . . . . . . . . . . 10,892,135 10,583,641 10,133,257
Second Quarter . . . . . . . . . . . . . 10,696,503 10,170,611 9,938,869
Third Quarter . . . . . . . . . . . . . 11,790,735 11,606,908 10,359,706
Fourth Quarter . . . . . . . . . . . . . 10,774,003 10,603,300 10,264,931
---------- ---------- ----------
Total System . . . . . . . . . . . . . . 44,153,376 42,964,460 40,696,763
========== ========== ==========
</TABLE>
The Company generally experiences its peak load and highest total system
sales during the third quarter of the year as a result of air conditioning and
cooling-related loads; however, in 1994 a new all-time peak of 9,684 MW was
reached in the second quarter.
For information on an interruptible rate, commonly known as R-10, and the
special manufacturing contracts which are expected to reduce revenues and peak
demand, see "Regulation and Rates" and for information on the Company's future
sales growth which may be limited by the economic base in the Company's service
territory, see Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations.
For further information on financial results of the Company's operations,
see Item 6 - Selected Financial Data, Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations, Item 8 - Financial
Statements and Supplementary Data and Item 14 - Exhibits, Financial Statement
Schedules and Reports on Form 8-K.
6
<PAGE> 7
CERTAIN FACTORS AFFECTING PUBLIC UTILITIES
The Company, in common with other public utilities having industrialized
service areas, is experiencing increased competition and pressure to reduce
rates in order to retain industrial customers. These competitive issues are
further compounded by public interest in and existing and proposed regulations
dealing with cogeneration, transmission access and retail wheeling.
In response to competitive pressures, the Company has developed a DSM
program and has, also, entered into special manufacturing contracts with
Chrysler Corporation, Ford Motor Company and General Motors Corporation. These
competitive responses are expected to reduce revenues.
The Company has announced its intention to create a holding company.
Subject to the receipt of necessary approvals, the new structure will be in
place by year-end 1995. A holding company structure is responsive to
competitive issues and will allow the development of new non-utility revenue
sources while offering the utility protection from possible losses from
non-utility investments.
Also, in part, in response to competitive issues, in February 1995, the
MPSC announced its initiation of a thorough review of its powers and
jurisdiction, and current and future industry structure, to be able to
recommend statutory changes to the Michigan legislature, including
consideration of an overall recodification of the statutes governing energy
provision and utility regulation. This review would be in light of change in
the electric power and natural gas industries. The MPSC indicated it had no
specific time frame for completion of the review. The Company cannot predict
what suggestions for legislative changes may result from the review, or whether
it may result in regulation of the proposed holding company formation or
additional regulation of the relationship between the proposed holding company
and the Company.
On November 2, 1994, the Securities and Exchange Commission ("SEC")
issued a release requesting comments on possible revision of regulation of
public utility holding companies under the Public Utility Holding Company Act
of 1935. Various parties have suggested significant revisions to, or repeal
of, this statute. The Company cannot predict whether Congress will take any
action to significantly modify or repeal the Holding Company Act or whether the
SEC will take any action to significantly revise its rules promulgated under
such statute.
In addition, the Company, in common with other public utilities, is
subject to extensive environmental regulation. Additional costs may result as
the effects of various chemicals on the environment (including nuclear waste)
are studied and governmental regulations are developed and implemented. The
costs of future nuclear decommissioning activities are the subject of increased
regulatory attention.
CAPITAL EXPENDITURE PROGRAM
The Company has no current plans to construct additional generating
plants. However, an Integrated Resource Plan, reviewed by the MPSC biennially,
recognizes that the need for additional capacity may be satisfied by the return
to service of certain units in economy reserve status and various DSM programs.
See "Regulation and Rates - Michigan Public Service Commission - Integrated
Resource Plan".
7
<PAGE> 8
Capital expenditures in 1994, 1993 and 1992 were $366 million (including
$4 million of AFUDC), $396 million (including $3 million of AFUDC) and $416
million (including $3 million of AFUDC), respectively. Also, the purchase of
leased equipment totaled $11.5 million in 1994 and $2.4 million in 1993.
Projections for the 1995-1999 period contemplate capital expenditures of
approximately $1.9 billion (including an estimated $18 million of AFUDC).
Also, projections for capitalized leases and non-utility investments for the
same period are estimated to be $250 million. The 1995 capital expenditure
program is budgeted at $398 million (including $4 million of AFUDC). The 1995
capital expenditure program includes planned expenditures for production plant
improvement projects ($68 million), transmission and distribution facilities
($140 million), general plant projects ($87 million) and miscellaneous
construction and construction overheads capitalized ($103 million). Planned
expenditures for 1995 capitalized rail-car leases and non-utility investments
are estimated to be $22 million and $40 million, respectively.
FINANCING
The Company is required to obtain financing authority from the MPSC as to
the issuance of long-term debt and equity securities and from the FERC as to
short-term obligations (maturities of two years or less).
An MPSC order permits the Company to issue approximately $3.5 billion of
securities for the purpose of refinancing debt and preferred and/or preference
stock (issued prior to 1993) prior to maturity (when economic) and at maturity,
and to replace funds used for those purposes. The Company also has MPSC
authority to refinance substantially all non-taxable debt obligations.
In 1994, the Company optionally redeemed $218 million of higher-cost
Mortgage Bonds and $20 million of tax-exempt debt obligations utilizing, in
part, the proceeds of a $200 million collateralized note issue and two new
tax-exempt issues totaling $20 million. In addition, the Company financed
certain pollution control projects with the proceeds of two new tax-exempt debt
issues totaling $30 million.
The Company currently has authority from the FERC for short-term
borrowings in the amount of up to $1 billion, which authority expires in May
1995; and an application is pending with FERC to extend this authority an
additional two years. At February 28, 1995, the Company had short-term credit
arrangements of $404 million under which $67.5 million of borrowings were
outstanding. See Note 8.
At December 31, 1994, the book value of the Company's Common Stock, after
deduction of Common and Preferred Stock expenses, was $22.89 per share as
compared to $22.34 per share at December 31, 1993.
PROPERTIES
The summer net rated capability of electric department generating units
is as follows:
8
<PAGE> 9
<TABLE>
<CAPTION>
Summer Net
Location By Rated Capability(2)(3)
Michigan ----------------------- Year
Plant Name(1) County (MW) % in Service
-------------------------------- ----------- ------- -------- -------------------------
<S> <C> <C> <C> <C>
Fossil-fueled Steam-Electric
Belle River (4) St. Clair 1,026 10.0% 1984 and 1985
Greenwood (5) St. Clair 785 7.7 1979
Harbor Beach Huron 103 1.0 1968
Marysville St. Clair 167 1.6 1930, 1943 and 1947
Monroe Monroe 3,000 29.4 1971, 1973 and 1974
River Rouge Wayne 500 4.9 1957 and 1958
St. Clair St. Clair 1,379 13.5 1953, 1954, 1961 and 1969
Trenton Channel Wayne 725 7.1 1949, 1950 and 1968
------ -----
7,685 75.2%
Oil or Gas-fueled Peaking Units Various 525 5.2 1966-1971 and 1981
Nuclear-fueled Steam-Electric
Fermi 2 (6) Monroe 1,085 10.6 1988
Hydroelectric Pumped Storage
Ludington (7) Mason 917 9.0 1973
------ -----
10,212 100.0%
====== =====
</TABLE>
---------------
(1) See Note 10.
(2) Summer net rated capabilities of generating units in service are based on
periodic load tests and are changed depending on operating experience, the
physical condition of units, environmental control limitations and
customer requirements for steam, which otherwise would be used for
electric generation.
(3) Excludes two oil-fueled units, River Rouge Unit No. 1 (206 MW) and St.
Clair Unit No. 5 (250 MW), and one coal-fueled power plant, Conners Creek
(236 MW), all in economy reserve status.
(4) The Belle River capability represents the Company's entitlement to 81.39%
of the capacity and energy of the plant. See Note 4.
(5) Pursuant to MPSC orders, Greenwood Unit No. 1 was not in rate base during
the period January 1988 through January 21, 1994 with no return on the
investment during that period. See Note 3.
(6) Fermi 2 was out of service in 1994. See Note 2 and discussion below.
(7) Represents the Company's 49% interest in Ludington with a total capability
of 1,872 MW.
The four Monroe units, two Belle River units, Fermi 2 and one unit at each
of the Trenton Channel and St. Clair Power Plants account for 6,061 MW of the
Company's summer net rated capability. These units, which commenced commercial
operation during the period 1968 through 1988, are the Company's larger, more
efficient generating units. The Monroe, St. Clair and Belle River power plants
provided approximately 48%, 19% and 18%, respectively, of the Company's total
1994 power plant generation.
On December 25, 1993, the Fermi 2 reactor automatically shut down after a
turbine-generator failure. Major repairs have been completed and tests are
continuing to balance and synchronize the unit. See Note 2.
Sources of electric energy were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
(Thousands of MWh)
<S> <C> <C> <C>
Power plant generation
Fossil . . . . . . . . . . . . . . . . . . . . . . . . 42,410 38,882 36,689
Nuclear . . . . . . . . . . . . . . . . . . . . . . . . - 8,274 7,338
Purchased power . . . . . . . . . . . . . . . . . . . . . 6,599 2,211 2,705
------ ------ ------
Net system output . . . . . . . . . . . . . . . . . . . . 49,009 49,367 46,732
====== ====== ======
</TABLE>
9
<PAGE> 10
The Company and Consumers are parties to an Electric Coordination
Agreement providing for emergency assistance, coordination of operations and
planning for bulk power supply, with energy interchanged at nine
interconnections. The Company and Consumers also have interchange agreements
to exchange electric energy through 12 interconnections with The Toledo Edison
Company, Indiana Michigan Power Company, Northern Indiana Public Service
Company and Ontario Hydro. In addition, the Company has interchange agreements
for the exchange of electric energy with Michigan South Central Power Agency,
Rouge Steel Company and the City of Wyandotte.
The Company also purchases energy from cogeneration facilities and other
small power producers. Energy purchased from cogeneration facilities and small
power producers amounted to $10.9 million, $13.9 million and $16.7 million for
1992, 1993 and 1994, respectively, and is currently estimated at $22.7 million
for 1995.
An all time peak demand of 9,684 MW was experienced for the Company's
system on June 16, 1994, with a reserve margin of 6.2%. The previous peak was
9,362 MW set in August 1993. Based on the current load forecast and planned
generating capability, the Company estimates that its summer reserve margin,
expressed as a percentage of peak demand, will be approximately 14% for 1995
and 17% for 1996. Included as part of the 1995 and 1996 reserve margin
projections are the Company's present and projected capacity purchases and
anticipated peak reductions due to the implementation of various DSM programs,
including the R-10 interruptible rate. The 1995 and 1996 reserve margins are
above the Company's current planning criterion, which specifies a minimum
reserve margin of 12%.
The Company has an agreement for the sale and assignment, from time to
time, of an undivided ownership interest in $200 million of the Company's
customer accounts receivable and unbilled revenues. The agreement has been
extended to February 1996, although the Company anticipates that all customer
accounts receivable and unbilled revenues subject to this agreement will be
repurchased in 1995. See Note 5.
Gross property additions and retirements from January 1, 1990 through
December 31, 1994 were $1.69 billion and $299 million, respectively.
The Company's electric generating plants are interconnected by a
transmission system operating at 24 to 345 kilovolts through 94 transmission
stations. As of December 31, 1994, electric energy was being distributed in
the Company's service area through 577 substations over 2,946 distribution
circuits.
FUEL COSTS AND SUPPLY
The Company's 1990 through 1994 generating capability was primarily
dependent upon coal. Fuel information for these periods is shown below.
10
<PAGE> 11
<TABLE>
<CAPTION>
Percent of
Cents Per Million BTU Total Fuel Consumed Average
------------------------------ ----------------------- Cost
Per Ton
All of Coal
Coal Nuclear Oil Gas Fuels Coal Nuclear Oil Gas Consumed
---- ------- --- --- ----- ---- ------- --- --- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1994 153 - 337 285 157 99% -% -% 1% $32.25
1993 154 111 358 259 148 81 18 - 1 31.68
1992 160 97 403 212 150 81 17 - 2 32.88
1991 159 109 409 196 153 84 14 1 1 33.21
1990 163 114 414 166 156 83 16 - 1 34.21
</TABLE>
COAL. The Company estimates that it will require approximately 600
million tons of coal over the next 35 years for its coal-fueled generating
units. The Company expects to obtain a significant portion of its requirements
through long-term contracts and the balance through additional short-term
agreements and spot purchases. The Company has contracts with five coal
suppliers for a total purchase of up to 82 million tons of low-sulfur western
coal to be delivered during the period from 1995 through 2005. It also has
several contracts for the purchase of approximately 18 million tons of
Appalachian coal with varying contract expiration dates through 1999. These
existing long-term coal contracts include provisions for market price reopeners
and price escalation as well as deescalation.
Under current market conditions, the Company is able to purchase coal at
prices lower than some of its existing long-term contracts. As a result, the
Company is renegotiating some contracts and buying out others whenever it is
prudent and economic.
The low-sulfur western coal contracts have a maximum sulfur content of
0.55%. The Appalachian coal contracts range in maximum sulfur content from
0.70% to 3.0%. As required by the Michigan Air Pollution Control Commission,
the Company's aggregate consumption of both types of coal averages below 1%
sulfur content.
For further information on environmental matters, see "Environmental
Matters" and Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations.
OIL. The Company purchases No. 2 oil, used principally for peaking units
and start-up for other units, and No. 6 oil, used principally by Greenwood Unit
No. 1, through spot market purchases.
GAS. Natural gas is used principally at one of the Company's steam
heating plants and Greenwood Unit No. 1. Natural gas requirements are met
through spot market purchases.
NUCLEAR. Renaissance holds title to the nuclear fuel utilized at Fermi
2. Under the terms of a heat purchase contract between the Company and
Renaissance, the Company makes quarterly payments to Renaissance for the cost
of the nuclear fuel consumed and interest expense. For information on nuclear
fuel financing, see Notes 8 and 9.
Since Fermi 2 is not scheduled for refueling in 1995, the Company is
currently maintaining a minimal inventory for nuclear fuel requirements. Also,
11
<PAGE> 12
the Company believes that adequate uranium supplies exist to supplement
existing contracts to meet plant requirements beyond 1995. The Company has a
contract with the DOE for the future storage and disposal of spent nuclear fuel
from Fermi 2. Under the terms of the contract, the Company makes quarterly
payments to the DOE based upon a fee of 1 mill per kWh applied to the Fermi 2
electricity generated and sold. No fees were levied in 1994 due to Fermi 2
being out of service. The spent nuclear fuel will be stored on site until the
DOE accepts it for disposal. The DOE has stated that it will be unable to
store spent nuclear fuel at a permanent repository until after 2010. However,
the DOE and utilities with nuclear units are pursuing other interim storage
options. The Company estimates that existing temporary storage capacity at
Fermi 2 will be sufficient until the year 2000, or until 2015 with the
expansion of such storage capacity.
REGULATION AND RATES
MICHIGAN PUBLIC SERVICE COMMISSION. The Company is subject to the
general regulatory jurisdiction of the MPSC, which, from time to time, issues
its orders pertaining to the Company's conditions of service, rates and
recovery of certain costs, the issuance of securities (other than short-term
obligations), accounting and various other matters.
MPSC orders issued in December 1988 and on January 21, 1994 are currently
in effect with respect to the Company's rates and certain other revenue and
operating-related matters.
On January 21, 1994, the MPSC issued an order reducing the Company's
rates in the amount of $78 million annually. The order is the subject of
various appeals before the Michigan Court of Appeals. See Note 3 for a
discussion of the provisions of the January 21, 1994 order.
In 1994, the MPSC issued an order approving a settlement agreement
resolving the issues concerning the reconciliation of the Company's 1993 PSCR
plan and the Fermi 2 performance standard. The Company refunded approximately
$3.4 million, plus interest, to customers through a credit on their electric
bills. This refund is due to overcollection from its customers for its power
supply costs for calendar 1993. The order defers consideration of unamortized
nuclear fuel expense totaling $6.1 million until the Company's 1994 PSCR
reconciliation case. In addition, the Company refunded approximately $147,000
for 1993 to its customers due to provisions of the Fermi 2 performance
standard. On January 25, 1995, the MPSC approved a settlement agreement that
adopts a plan to utilize Fermi 2 insurance proceeds for the $6.1 million of
unamortized nuclear fuel and to substantially offset increased power supply
costs incurred during 1994 due to the forced outage at the Fermi 2 power plant.
The settlement will avoid the need for a potential surcharge to the Company's
PSCR customers to recover these increased costs for replacement power.
Conservation and Demand-Side Management Programs - As the result of a
generic review of Michigan conservation programs, the MPSC in June 1988 ordered
each Michigan gas and electric utility to file a biennial energy conservation
report, including a three-year plan. In December 1989, the MPSC issued an
order approving a settlement agreement under which the Company entered into a
number of conservation and DSM pilot programs to be funded by the existing 0.1
mill surcharge approved in a December 1988 MPSC order. On January 28, 1993,
the MPSC issued an order approving a settlement agreement of the reconciliation
of expenses and revenues for the period 1989-91. The order required that $4
million
12
<PAGE> 13
be utilized for program expenses. In May 1992, the MPSC issued an order
approving a settlement agreement covering the Company's demand and energy
conservation programs for the years 1992 and 1993. Funding was provided by the
existing 0.1 mill surcharge. The Company was also required to contribute an
additional $4 million, which was not recovered through the surcharge, for use
in the Residential Low Income Program, which amount was charged to Other Income
and Deductions in 1992 and 1993. On September 8, 1994, the MPSC issued an
order approving a settlement agreement of the reconciliation of expenses and
revenues for the Company's demand and energy conservation programs for the
years 1992 and 1993. The order required that $3.5 million be utilized for
program expenses and that $1.3 million plus interest be refunded to customers
during the billing month of October 1994.
On April 11, 1994, the MPSC issued an order approving a partial
settlement agreement covering the Company's energy conservation programs for
the period 1994-1996. The order authorizes the Company to collect $21.2
million through a surcharge for the three-year program to install energy
conservation measures in low-income customer households.
Also, as discussed in Note 3, the January 21, 1994 MPSC order authorized
a three-year $41.5 million DSM program. On September 1, 1994, the Company
filed for approval of a DSM surcharge for 1995. The Company's 1995 DSM plan
includes measures which pass the Ratepayer Impact Measure test and customer
value DSM measures totaling $4.9 million. An MPSC order is expected by June
1995.
Integrated Resource Plan - The Company's Integrated Resource Plan ("IRP")
is designed to provide resource plans which have adequate flexibility to react
to major changes and at the same time address the concerns of its customers.
It attempts to minimize risks and costs to customers and shareholders alike,
while maintaining an appropriate balance between demand-side and supply-side
alternatives. The Company's first IRP proposed to meet future load
requirements by utilizing existing power plant units that are in economy
reserve status rather than building new plants.
On September 1, 1994, the Company filed its biennial third Integrated
Resource Plan with the MPSC. This IRP, which covers a 15-year (1994-2008)
study period, calls for the return to service of existing plant and a DSM
program that will continue to provide for interruptible service to large
primary customers which is expected to reduce peak demand by 500 MW in 1995.
The recommended IRP plan again indicates that the Company will not need to add
capacity before the year 2000, at which time the restart of the Conners Creek
coal-fired units that are currently in economy reserve is the next supply-side
option to be used as the avoided unit for future capacity solicitations.
Competitive Bidding - In July 1992, the MPSC issued an order establishing
a competitive bidding framework for future electric capacity solicitations for
the Company. The MPSC directed the Company to proceed with a capacity
solicitation proceeding based on its 1992 IRP, which outlined the Company's
long-range plan for meeting its customers' electricity needs, and to submit a
Request For Proposal ("RFP") to meet the need for any future electrical
capacity. On March 1, 1993, the Company submitted its direct testimony
indicating that as a result of the IRP update performed in the first quarter of
1993, there was no need for additional supply-side capacity until the year
2000. It was also stated that the restart of Conners Creek Power Plant
continues to be the most economical supply-side selection and at this time
would represent the "avoided cost" unit. On July
13
<PAGE> 14
8, 1993, the MPSC issued an order dismissing that proceeding, in accordance
with the terms of a settlement agreement executed by the parties to the case.
The agreement provides that, based on a projected need for additional capacity
in the year 2000, the Company is scheduled to submit a new RFP filing on or
before May 1, 1995.
Retail Wheeling - The MPSC has been considering the propriety of retail
wheeling programs. In an interim order dated April 11, 1994, the MPSC approved
a framework for a five-year experimental retail wheeling program for the
Company to be limited to 90 MW and to be implemented when additional capacity
is required by the Company which is expected to be approximately the year 2000.
The interim order referred this case to the Administrative Law Judge for
further proceedings to determine rates for service to retail wheeling
customers. Both the Company's and the Michigan Attorney General's appeals of
the April 11, 1994 MPSC order to the Michigan Court of Appeals were dismissed
as premature. On August 26, 1994, the Company, in compliance with the MPSC's
April 11, 1994 interim order, filed its case for the pricing of retail wheeling
service. A final order is expected by the end of April 1995. On August 26,
1994, the Company also initiated a declaratory judgement action in the Federal
District Court for the Western District of Michigan asserting that the MPSC
lacks authority to compel the Company to undertake retail wheeling
involuntarily and the rates and terms and conditions for retail wheeling
transmission service are subject to federal rather than state jurisdiction. A
motion to dismiss, filed by the defendants, is pending.
Special Manufacturing Contracts - As part of a continuing response to the
challenge of competition, the Company has executed 10-year special
manufacturing contracts with Chrysler Corporation, Ford Motor Company and
General Motors Corporation, covering 54 of the Big Three automakers' largest
manufacturing locations in Southeastern Michigan. These long-term contracts are
expected to reduce annual operating revenues in amounts ranging from about $30
million in 1995 to $50 million in 1999 through 2004. The Company expects to
offset these reductions by further reducing operating expenses. On March 23,
1995, the MPSC issued an order approving the special manufacturing contracts.
The MPSC also found that the Company should assume full responsibility for
negotiating the discounted prices and that its shareholders should expect to
absorb much, if not all, of any revenue shortfall caused by the pricing and
other contract provisions that the Company negotiates. Therefore, unless the
Company can make a compelling showing why a different ratemaking treatment is
justified, the MPSC will not permit the Company to reallocate the costs of
serving contract customers to other ratepayer classes. In addition, the MPSC
agreed that other ratepayers should be protected from any underrecoveries of
PSCR costs and the other Company surcharges as a result of the contracts.
For further information on regulation and rates, see Note 3 and Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
FEDERAL ENERGY REGULATORY COMMISSION. The Company is subject to the
general jurisdiction of the FERC with respect to accounting, sales for resale
in interstate commerce, levels of short-term obligations, the licensing of
Ludington and other matters. The Company's electric transmission facilities,
interconnected with those of Ontario Hydro at the United States - Canada
border, are subject to safety regulation by various departments of the United
States
14
<PAGE> 15
government and to a permit administered by the ERA. The transmission of
electric energy to Ontario Hydro is subject to regulation by the FERC and the
ERA.
On February 14, 1995, the Company filed an Application with FERC seeking
authority to establish a holding company. The application requests that FERC
approve the Company's request by late April 1995. Based upon applicable
precedent, the Company anticipates that the requested authority will be
granted.
NUCLEAR REGULATORY COMMISSION. The NRC has regulatory jurisdiction over
all phases of the operation, construction (including plant modifications),
licensing and decommissioning of Fermi 2. Reports on plant operation are filed
with the NRC on a periodic basis. The scope of regulation is such that from
time to time assertions may be made that deviations from prescribed standards
and the unit's operating license have occurred. Assertions of such a nature
are subject to the NRC's investigative, administrative and appeal procedures
and are considered to be pending until such time as review within the NRC is
completed. At the conclusion of an investigation, the NRC may assess a fine
which should, in accordance with NRC regulations, be calculated in a manner
designed to take into account the severity, length and safety significance of
the alleged infraction. In February 1994, the Company was assessed a fine of
$50,000 for failure to correct significant conditions adverse to quality.
On May 18, 1994, the NRC issued the fourteenth Systematic Assessment of
Licensee Performance ("SALP") report on Fermi 2 operations. The report rates
four functional areas of plant performance during the period July 1, 1992
through April 2, 1994. The report ratings remained unchanged from the SALP
report for the prior rating period except one area of performance was reduced
from a good rating to an acceptable rating. This is the first rating of Fermi
2 under the NRC's recently revised SALP categories. The next SALP period is
expected to end in August 1995.
The Company will request that the NRC consent to the transfer of control
of its NRC Licenses as part of the formation of the holding company. Based
upon controlling precedent, the Company anticipates that the NRC will issue
such consent in a timely manner.
See Note 2 for further information on matters related to Fermi 2.
ENVIRONMENTAL MATTERS
The Company, in common with other electric utilities, is subject to
applicable permit requirements and to increasingly stringent federal, state and
local standards covering, among other things, particulate and gaseous stack
emission limitations, the discharge of effluents (including heated cooling
water) into lakes and streams and the handling and disposal of waste material.
In November 1990, the federal Clean Air Act was amended to further strengthen
federal regulations governing air emissions. For further information on
matters related to the 1990 Amendments to the federal Clean Air Act, see Item 7
- Management's Discussion and Analysis of Financial Condition and Results of
Operations.
Through 1994, the Company's capital expenditures for environmental
control and protection facilities were approximately $2.9 billion, including
expenditures of $24 million in 1994. The Company's 1995 capital expenditure
budget for environmental protection is approximately $19 million.
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<PAGE> 16
AIR. The Company's operations are subject to environmental regulations
of the EPA, the State of Michigan and Wayne County. Under the federal Clean
Air Act of 1970, as amended, the EPA has the authority to adopt and implement
additional regulations in support or in substitution of state and local
enactments where the EPA deems such enactments to be deficient in relation to
its regulations.
A May 1992 EPA rule provides an exemption from new source review for
major modifications at utility facilities associated with pollution control
projects unless the EPA administrator determines the modification renders the
unit "less environmentally beneficial."
The State of Michigan passed air fee legislation to provide revenues to
comply with Title V of the Clean Air Act. Beginning in 1995, it is anticipated
that the Company will pay less than $1 million in air fees annually.
On September 15, 1993, the Company received a Finding of Violation from
the EPA concerning alleged violations of asbestos regulations observed during
an EPA inspection of the Monroe Power Plant on February 9, 1993. On February
8, 1994, the Company and its contractor received an administrative order
proposing a penalty in the amount of $28,300. In May 1994, the Company and its
contractor signed a Consent Order with the EPA neither admitting nor denying
the allegations and the contractor paid the recalculated civil penalty of
$15,900.
Title III of the Clean Air Act Amendments, Hazardous Air Pollutants,
requires the EPA to conduct a four-year study of mercury emissions from fossil
fuel-fired boilers, to determine whether regulations are required. In May
1993, the Michigan Environmental Science Board recommended that the Governor
direct the MPSC to require utilities to compile an accurate emission inventory.
The Company has submitted a plan for such an inventory to the MPSC. Until
studies are completed and resulting regulations, if any, are promulgated, the
impact on the Company cannot be determined.
WATER. NPDES permits for the Company's power plants are issued by the
MDNR pursuant to delegation by the EPA under the federal Clean Water Act. In
1994, the Company submitted renewal applications for three Company facilities.
Two permits were issued in 1994, six permit applications (submitted in 1994 and
earlier) remain pending; the expired permits remain effective until new permits
are issued or denied.
In an effort to streamline the industrial facility permitting process, in
1993 the MDNR created a program to issue general storm water discharge permits
for various types of facilities across the state. Instead of applying for
individual permits, companies are now required to notify the state of the
operating facilities which should be included under the general permits. On
August 22, 1994, the Company filed Notices of Intent with the MDNR for coverage
for nine facilities under the NPDES general permit for storm water discharges
associated with industrial activity.
The Company is required to demonstrate that the cooling water intake
structures at all of its facilities reflect the "best technology available for
minimizing adverse environmental impact." The Company filed such
demonstrations in July 1976 and the MDNR Staff accepted all except those
relating to the St. Clair and Monroe Power Plants. The MDNR Staff rejected the
St. Clair demonstration and requested additional information, which was
submitted. The MDNR Staff has not made a formal initial decision about the
intake at the
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<PAGE> 17
Company's Monroe Power Plant but has requested additional information
which was submitted on alternative intake technologies. In the event of a
final adverse decision by the MDNR, the Company may be required to install
additional control technologies to further minimize the impact.
In January 1993, a number of environmental groups filed suit against
the EPA in the United States District Court for the Southern District of New
York. The suit sought a declaratory ruling that the EPA had failed to perform a
non-discretionary duty to adopt a technology-based requirement under Section
316b of the Federal Clean Water Act. The plaintiffs argue that Section 316b
requires the "best technology available" for cooling water intakes to protect
fish. The Utility Water Act Group ("UWAG") and the Company intervened in the
suit and the judge is currently considering jurisdictional arguments. Should
the suit prove successful, an adverse result in the rulemaking could require
the installation of cooling towers.
The Company was required under its Monroe Power Plant NPDES permit to
demonstrate that thermal discharge from the plant does not cause an adverse
environmental impact on Lake Erie. Such demonstration was submitted to the
MWRC and subsequently approved in 1976. The demonstration has been under
review by the EPA which indicated that it was unable to concur in the
acceptability of the demonstration until additional information had been
provided with respect to the cooling water intake effects of the plant.
Additional information was submitted, but it is unknown at this time when this
issue will be resolved, or what the impact, if any, upon the Company will be.
In November 1985, the National Wildlife Federation ("NWF") filed suit
against Consumers contending that Ludington had been illegally discharging
pollutants (fish and fish parts) without a NPDES permit. In March 1987, the
federal District Court ordered Consumers to apply for a NPDES permit. While
appealing the District Court order, Consumers filed a NPDES permit application
which was granted in June 1988 by the MWRC. Both the NWF and Consumers took
exception to the permit issuance and were granted combined contested case
status before the MWRC. In December 1988, the Sixth Circuit Court of Appeals
reversed the District Court, finding that no NPDES permit was required by
federal law. An Administrative Law Judge hearing the MWRC matter found in
favor of the companies and ruled that no state discharge permit was required
for the turbine discharge water. The decision was transmitted to the MWRC for
final action, but the MWRC remanded the matter back to the Administrative Law
Judge for clarification.
See Note 12 for further information on Ludington.
WASTES AND TOXIC SUBSTANCES. The Michigan Solid Waste and Hazardous
Waste Management Acts, the Michigan Environmental Response Act and the Federal
Resource Conservation and Recovery Act, Toxic Substances Control Act (TSCA),
and Comprehensive Environmental Response, Compensation and Liability Act
regulate the Company's handling, storage and disposal of its waste materials.
A nationwide environmental problem is the discovery of improperly
disposed of, hidden or buried hazardous wastes. The Company has extensive
property holdings, including approximately 400 miles of transmission corridors
which are accessible to the public. The Company could be responsible for
cleanup of wastes found on its property, despite the fact that the dumping may
have occurred without the Company's permission. The Company's Lulu-Milan
transmission corridor in northwestern Monroe County was used as a dump site for
drums of paint sludges,
17
<PAGE> 18
solvents and some PCB's and a portion of the corridor and adjoining
property is listed on the MDNR's "Priority List of Environmental Contamination
Sites." Although not responsible for placing the drums there, the Company has
spent approximately $550,000 on cleanup and disposal costs. In June 1993, the
Company and the MDNR reached an agreement to hire contractors to perform
additional investigative and remedial work at the site. While the costs will
be shared between the Company and the state, it is impossible at this time to
predict what impact this will have upon the Company.
See Note 12 for information on the Carter Industrials site matter.
A landfill site abandoned by the South Macomb Disposal Authority and now
owned in part by the Company is being surveyed by the MDNR for possible
contamination. The Company could be required to contribute toward cleanup
costs, if any occur. It is unknown at this time what impact, if any, this
situation will have upon the Company.
The Company has received letters from the EPA requesting information
about its involvement with the following sites of identified contamination in
Michigan: Rasmussen Dump site in Green Oak Township, Livingston County;
Metamora Landfill site in Lapeer County; and the Pioneer Equipment Company site
in Detroit. The Company has examined its records and finds no evidence of any
involvement at these sites. This information has been communicated to the EPA,
but it remains unknown what impact, if any, the EPA's ongoing investigations
will have upon the Company.
In February 1992, the Company received formal notice from the MDNR that
the Port of Monroe Landfill Site had been identified as a site of environmental
contamination. Also in February 1992, after an investigation of its records,
the Company sent a letter to the MDNR stating its belief that it has never
disposed of hazardous material at the Port of Monroe Landfill Site. On March
14, 1994, the MDNR sent formal notice to the PRPs (but not to the Company) that
it is seeking reimbursement for its past costs and interest totaling $750,000.
The PRPs sent a letter to Detroit Edison on April 8, 1994 advising that they
will seek a contribution from the Company on grounds that they believe it to be
a party despite the MDNR's decision not to include it. It is unknown what
impact, if any, this situation will have upon the Company.
In March 1989, the EPA served the Company with an investigative subpoena
requesting extensive information regarding the Company's PCB activities. The
Company responded to the investigative subpoena in June 1989. It is unknown at
this time what impact, if any, the investigation will have upon the Company.
EPA rules for underground storage tanks became effective in December
1988. These rules are now administered by the State of Michigan and contain
requirements on new tank system installations, leak detection monitoring,
notification and cleanup of leaks, corrosion resistance for new and existing
tank systems and spill prevention. Of the original 90, the Company now has 70
remaining regulated underground storage tanks containing petroleum products.
Although most of the tanks have been upgraded to "new tank standards", in
accordance with further review of the rules, six tanks and 23 piping systems
still need upgrading or replacement by December 22, 1998. It is estimated that
it will cost the Company approximately $1.25 million to complete the
underground storage tanks program.
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<PAGE> 19
On July 1, 1991, the Michigan Environmental Response Act ("Act 307")
became effective. The law is patterned after the CERCLA and gives the MDNR
authority to list sites of environmental contamination and bring about
environmental cleanups within the State of Michigan. Several Company-owned
properties are on the Act 307 list as a result of diesel oil releases or
dredged disposal operations, including portions of the Superior Station and
portions of the St. Clair and Monroe Power Plants. The Company is addressing
these issues and it is unknown what impact, if any, they will have upon the
Company.
In 1993, the Company received a letter from the MDNR requesting
information regarding the Satterlee-Sumpter Township landfill site in Wayne
County. In April 1994, the Company received a letter formally naming it as a
PRP in the case and requesting the Company, along with the other PRPs, to
conduct a remedial investigation of the site and to pay past costs incurred by
the State. The PRPs have met with the MDNR to clarify the extent of the
desired investigation. At this time, it is impossible to predict what the
impact upon the Company will be.
In July 1994, the Company received a Third Party summons and complaint
from Oakland Disposal, Inc., Bestway Recycling, Inc., Aero Disposal, Inc., and
Oakland Disposal No. 1 regarding the use of the Waterford Hills Sanitary
Landfill for disposal of hazardous waste or hazardous waste constituents. An
investigation of Company records revealed no evidence that any hazardous
material was sent to the site. It is impossible to predict what impact this
issue will have upon the Company.
The Company received approval from the MDNR on October 5, 1993 to close
its hazardous waste storage facility at its Warren Service Center. The
facility's hazardous waste storage area has been closed but the issue of
corrective actions at solid waste management units has not yet been addressed
by the MDNR or the EPA.
The Company has been minimizing radioactive waste production and all
Fermi 2 final form radioactive waste is being stored in on-site facilities.
During 1994, 72 drums of mixed (radioactive and hazardous) waste were disposed
of at an approved facility. Two drums will be shipped in 1995, however, there
are no facilities available to receive the remaining six drums of mixed waste.
Temporary on-site storage will very likely continue to be the radioactive waste
management option available in the near future.
The federal Low-Level Radioactive Waste Policy Act makes each state
responsible for the disposal of low-level radioactive waste situated within
each state's borders. In June 1992, the United States Supreme Court upheld
most of the provisions of this statute. The Court upheld the responsibility of
each state to develop low-level waste facilities, but declared a provision
requiring the state to take title to low-level radioactive waste in 1996 to be
unconstitutional.
For further information on nuclear waste disposal, see "Fuel Costs and
Supply - Nuclear."
For further information on environmental matters, see Notes 2 and 12 and
Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
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<PAGE> 20
EMPLOYES AND EXECUTIVE OFFICERS
EMPLOYES. The Company has 8,407 employes with an average length of
service of approximately 18 years. Of these, 3,264 employes are represented by
unions under two collective bargaining agreements. One agreement expires in
June 1995 for 2,713 employes and the other agreement expires in August 1996 for
551 employes.
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS. PRESENT
POSITION
NAME AGE(A) PRESENT POSITION HELD SINCE
---- ------ ---------------- ----------
<S> <C> <C> <C>
John E. Lobbia . . . . . . . . . . . 53 Chairman of the Board 5- 1-90
and Chief Executive Officer
Anthony F. Earley, Jr. . . . . . . . 45 President and Chief Operating 3- 1-94
Officer
Larry G. Garberding . . . . . . . . . 56 Executive Vice President and 8- 1-90
Chief Financial Officer
Frank E. Agosti . . . . . . . . . . . . 58 Senior Vice President- 2- 1-90
Power Supply
Robert J. Buckler . . . . . . . . . . . 45 Senior Vice President- 12- 1-92
Energy Marketing and
Distribution
Douglas R. Gipson . . . . . . . . . . . 47 Senior Vice President- 4- 1-93
Nuclear Generation
Gerard M. Anderson . . . . . . . . . . 36 Vice President for Non-Utility 12- 1-93
Business Ventures
Susan M. Beale . . . . . . . . . . . . . 46 Vice President and Corporate 3-27-95
Secretary
Michael E. Champley . . . . . . . . . . 46 Vice President-Marketing and 12- 1-92
Sales
Haven E. Cockerham . . . . . . . . . . 47 Vice President-Human Resources 6- 1-94
Ronald W. Gresens . . . . . . . . . . . 61 Vice President and Controller 5- 1-87
Leslie L. Loomans . . . . . . . . . . . 51 Vice President and Treasurer 10 -1-89
Christopher C. Nern . . . . . . . . . . 50 Vice President and General 6- 1-93
Counsel
S. Martin Taylor . . . . . . . . . . . 54 Vice President-Corporate and 2- 1-89
Public Affairs
</TABLE>
(a) As of March 1, 1995
Under the Company's By-Laws, the officers of the Company are elected
annually by the Board of Directors at a meeting held for such purpose, each to
serve until the next annual meeting of shareholders or until their respective
successors are chosen and qualified. With the exception of Messrs. Anderson,
Cockerham, Earley and Garberding, all of the above officers have been employed
by the Company in one or more management capacities during the past five years.
Gerard M. Anderson was a senior engagement manager at McKinsey & Company,
Inc., a management consulting firm, from 1988 to 1993. Effective December 1,
1993, he was elected Vice President of the Company.
20
<PAGE> 21
Haven E. Cockerham, from 1991 until 1994, was president of Cockerham,
McCain & Associates, Inc., a management, business development and human
resources consulting firm in Columbia, South Carolina. From 1989 to 1991, Mr.
Cockerham owned Cockerham Chevrolet-Oldsmobile, an automobile dealership in
Newberry, South Carolina. Prior to 1989, Mr. Cockerham was employed by General
Motors in various executive positions in the human resources area. Effective
June 1, 1994, he was elected Vice President-Human Resources.
Anthony F. Earley, Jr., from 1989 to 1994, was President and Chief
Operating Officer of Long Island Lighting Company ("LILCO"), an electric and
gas utility company serving Long Island, New York. He previously served in
various executive capacities at LILCO from 1985 to 1989. Effective March 1,
1994, he was elected President and Chief Operating Officer and a member of the
Board of Directors of the Company.
Larry G. Garberding, from 1987 until 1990, was President of NICOR, Inc.,
a natural gas utility serving suburban Chicago. Effective August 1, 1990, he
was elected Executive Vice President, Chief Financial Officer and a member of
the Board of Directors of the Company.
On July 1, 1994, Malcolm G. Dade, Jr., Vice President, retired from the
Company.
On July 2, 1994, Saul J. Waldman, Vice President-Corporate Communications,
retired from the Company.
Pursuant to Article VI of the Company's Articles of Incorporation,
directors of the Company will not be personally liable to the Company or its
shareholders in the performance of their duties to the full extent permitted by
law.
Article VII of the Company's Articles of Incorporation provides that each
person who is or was or had agreed to become a director or officer of the
Company, or each such person who is or was serving or who had agreed to serve
at the request of the Board of Directors as an employe or agent of the Company
or as a director, officer, employe or agent of another corporation,
partnership, joint venture, trust or other enterprise (including the heirs,
executors, administrators or estate of such person), shall be indemnified by
the Company to the full extent permitted by the Michigan Business Corporation
Act or any other applicable laws as presently or hereafter in effect. In
addition, the Company has entered into indemnification agreements with all of
its officers and directors, which agreements set forth procedures for claims
for indemnification as well as contractually obligating the Company to provide
indemnification to the maximum extent permissible by law.
The Company and its directors and officers in their capacities as such
are insured against liability for wrongful acts (to the extent defined) under
three insurance policies providing aggregate coverage in the amount of $85
million.
OTHER INFORMATION. Pursuant to the provisions of the Company's By-Laws,
the Board of Directors has by resolution set the number of directors comprising
the full Board, effective as of April 24, 1995, at thirteen.
21
<PAGE> 22
ITEM 3 - LEGAL PROCEEDINGS.
The Company in the ordinary course of its business, is involved in a
number of suits and controversies including claims for personal injuries and
property damage and matters involving zoning ordinances and other regulatory
matters. As of December 31, 1994, the Company was named as defendant in 194
lawsuits involving claims for personal injuries and property damage and had
been advised of 22 other potential claims not evidenced by lawsuits.
From time to time the Company has paid nominal penalties which were
administratively assessed by the United States Coast Guard, United States
Department of Transportation under the Federal Water Pollution Control Act, as
amended, with respect to minor accidental oil spills at the Company's power
plants into navigable waters of the United States. Payment of such penalties
represents full disposition of these matters.
The Company in its 1982 main electric rate case requested the MPSC to
recognize the costs associated with the abandoned Greenwood Unit Nos. 2 and 3
for ratemaking purposes. In March 1983, the MPSC, consistent with past
precedent, granted the Company authority to defer, amortize and recover these
costs (over a period of 10 years) through the ratemaking process. The Michigan
Attorney General appealed the MPSC's order. In August 1990, the Ingham County
Circuit Court remanded this matter to the MPSC for additional findings of fact.
On November 1, 1991, the MPSC issued its final order on remand affirming the
earlier decision to allow rate recovery of the costs. The Ingham County
Circuit Court has ordered that supplemental briefs be filed. The Company has
amortized the costs associated with the abandoned Greenwood Unit Nos. 2 and 3
in accordance with the MPSC's order. The amortization was completed in 1993.
The Company has announced its plans to form a holding company. The
holding company format is subject to approval by Common Stock Shareholders,
FERC and the NRC. The Company expects that the holding company structure will
be in place by year-end 1995 and that the new holding company will be exempt
from the practices of the federal Public Utility Holding Company Act of 1935.
See Note 12.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
Not applicable.
22
<PAGE> 23
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is listed on the New York Stock Exchange,
which is the principal market for such stock, and the Chicago Stock Exchange.
The following table indicates the reported high and low sales prices of the
Company's Common Stock on the Composite Tape of the New York Stock Exchange and
dividends paid per share for each quarterly period during the past two years:
<TABLE>
<CAPTION>
PRICE RANGE DIVIDENDS
------------------------ PAID
CALENDAR QUARTER HIGH LOW PER SHARE
---------------------- ------- ------- ---------
<S> <C> <C> <C> <C>
1993 First . . . . . . . . . 37-1/8 32 $0.495
Second . . . . . . . . 36-3/4 33-1/8 0.515
Third . . . . . . . . . 36 33-3/4 0.515
Fourth . . . . . . . . 34-3/4 29-7/8 0.515
1994 First . . . . . . . . . 30-1/4 26 0.515
Second . . . . . . . . 27-1/4 24-1/4 0.515
Third . . . . . . . . . 27-1/2 24-1/4 0.515
Fourth . . . . . . . . 27-1/2 24-3/4 0.515
</TABLE>
At December 31, 1994, there were 144,863,447 shares of the Company's
Common Stock outstanding. These shares were held by a total of 151,077
shareholders.
The Company's By-Laws provide that Chapter 7B of the Michigan Business
Corporation Act ("Act") does not apply to the Company. The Act regulates
shareholder rights when an individual's stock ownership reaches at least 20
percent of a Michigan corporation's outstanding shares. As a result of the
amendment, a shareholder seeking control of the Company cannot require the
Company's Board of Directors to call a meeting to vote on issues related to
corporate control within 10 days, as stipulated by the Act.
The level of dividends is dependent on earnings and other business
conditions, each of which is periodically reviewed by the Company's Board of
Directors.
ITEM 6 - SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Operating Revenues . . . . $ 3,519,341 $ 3,555,211 $ 3,558,143 $ 3,591,537 $ 3,576,281
Net Income . . . . . . . . $ 419,909 $ 521,903 $ 588,047 $ 568,037 $ 514,459
Earnings for Common Stock . $ 390,269 $ 491,066 $ 557,549 $ 535,205 $ 479,280
Earnings Per Common Share . $ 2.67 $ 3.34 $ 3.79 $ 3.64 $ 3.26
Dividends Declared Per
Share of Common Stock . $ 2.06 $ 2.06 $ 1.98 $ 1.88 $ 1.78
At year-end:
Total Assets . . . . . . $10,992,978 $11,134,879 $10,309,061 $10,463,624 $10,573,325
Long-Term Debt
Obligations (including
capital leases) and
Redeemable Preferred
and Preference Stock
Outstanding . . . . . $ 3,979,763 $ 4,007,622 $ 4,525,504 $ 4,900,020 $ 5,300,962
</TABLE>
23
<PAGE> 24
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and accompanying Notes thereto, contained
herein.
RESULTS OF OPERATIONS
In 1994, the Company's earnings for common stock were $390.3 million, or
$2.67 per share, a decrease of 20.5% from the $491.1 million, or $3.34 per
share earned in 1993. The earnings decrease was due in part to a January 21,
1994 order by the Michigan Public Service Commission ("MPSC"), which reduced
rates by $78 million annually and increased depreciation and operation expenses
by $84 million annually. In addition, accretion income decreased and
amortization of the Fermi 2 nuclear power plant phase-in plan increased
significantly in 1994. Also, the Company incurred additional one-time charges
at the Fermi 2 nuclear power plant, which was out of service in 1994 due to
equipment failure, for maintenance expenses and the establishment of a reserve
for estimated Fermi 2 performance in 1995-1997. The earnings decrease was
limited by higher system sales and lower interest expense due to the early
redemption and refinancing of higher cost debt and the redemption of maturing
debt.
At December 31, 1994, the book value of the Company's common stock was
$22.89 per share, an increase of 2.5% since December 31, 1993. Return on
average total common shareholders' equity was 11.6% in 1994, 15.2% in 1993 and
18.6% in 1992.
The ratio of earnings to fixed charges for 1994, 1993 and 1992 was 3.13,
3.25 and 3.09, respectively. The ratio of earnings to fixed charges and
preferred and preference stock dividend requirements for 1994, 1993 and 1992
was 2.73, 2.88 and 2.79, respectively.
OPERATING REVENUES
Total operating revenues increased (decreased) due to the following factors:
<TABLE>
<CAPTION>
1994 1993
-----------------------------
(Millions)
<S> <C> <C>
Rate Changes
MPSC rate reduction $(81) $ -
Expense stabilization procedure - (63)
Power Supply Cost Recovery Clause (5) (106)
-----------------------------
(86) (169)
System sales volume and mix 103 158
Interconnection sales (17) 2
Fermi 2 capacity factor
performance standard reserve (31) -
Other - net (5) 6
-----------------------------
Total $(36) $ (3)
=============================
</TABLE>
Rate Changes
The January 21, 1994 MPSC rate order reduced the Company's rates by $78
million annually. In keeping with the MPSC's recognition of the need for
industrial customers to be competitive, the January 1994 rate reduction was
allocated among the various classes of customers approximately as follows:
Industrial-$43 million, Commercial-$24 million, Residential-$10 million and
Governmental-$1 million.
A December 1988 MPSC rate order provided for a moratorium on base rate
changes for the five-year period 1989 - 1993, an expense stabilization
procedure ("ESP") surcharge, which provided annual revenues of $63 million in
1992 for the effects of inflation, and a suspension of the Power Supply Cost
Recovery ("PSCR") Clause for the four-year period 1989 - 1992. The ESP
surcharge expired for service rendered on or after January 1, 1993, and the
PSCR Clause was reinstated in 1993. As a result of these two items, 1993
operating revenues were reduced by approximately $169 million.
Kilowatthour Sales
Kilowatthour sales increased (decreased) as follows:
<TABLE>
<CAPTION>
1994 1993
------------------------------
<S> <C> <C>
Residential 1.1% 6.4%
Commercial 3.5 4.0
Industrial 5.9 6.6
Other (includes primarily sales for resale) (14.1) 6.7
Total System 2.8 5.6
Interconnection (45.2) 12.7
Total (1.0) 6.1
</TABLE>
1994
Residential sales increased due to substantially warmer weather in the
second quarter resulting in increased air conditioning and cooling-related
loads, partially offset by lower cooling-related loads in the third quarter.
The increased heating-related loads in the first quarter were offset by
decreased heating-related loads in the fourth quarter. Commercial sales
increased due primarily to improved economic conditions and increased
cooling-related loads. Industrial sales increased as a result of higher sales
to automotive, steel and other manufacturing customers reflecting the
improvement in the economy. The decreased sales to other customers reflect
lower sales to wholesale for resale customers.
1993
Residential and commercial sales increased due primarily to substantially
warmer summer weather resulting in increased air conditioning and
cooling-related loads, partially offset by warmer winter weather reducing
heating-related sales. Industrial sales increased due to higher automotive and
steel production and improved economic conditions. The increased sales to
other customers reflect increased load requirements of wholesale for resale
customers.
24
<PAGE> 25
Interconnection Sales
Interconnection sales represent sales between utilities to meet energy needs as
a result of demand and/or generating unit availability.
1994
Interconnection sales decreased due to the reduced availability of energy
for sale as a result of the Fermi 2 outage and lower sales to Consumers Power
Company.
1993
Interconnection sales increased due primarily to increased sales to
Consumers Power Company, partially offset by a decrease in sales to Ontario
Hydro.
OPERATING EXPENSES
Fuel and Purchased Power
Fuel and purchased power expenses increased (decreased) due to the following
factors:
<TABLE>
<CAPTION>
1994 1993
-------------------------------------
(Millions)
<S> <C> <C>
Net system output $ (6) $ 43
Average unit cost 59 (37)
Fermi 2 business interruption insurance proceeds (65) -
Other 6 5
-------------------------------------
Total $ (6) $ 11
=====================================
</TABLE>
Net system output and average unit costs were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
-------------------------------------------
(Thousands of Megawatthours)
<S> <C> <C> <C>
Power plant generation
Fossil 42,410 38,882 36,689
Nuclear - 8,274 7,338
Purchased power 6,599 2,211 2,705
-------------------------------------------
Net system output 49,009 49,367 46,732
===========================================
Average unit cost ($/Megawatthour) $16.94 $15.73 $16.49
===========================================
</TABLE>
1994
The increase in average unit cost resulted from replacing lower-cost nuclear
generation with higher-cost fossil generation and purchased power due to the
Fermi 2 outage in 1994 as a result of a turbine-generator failure on December
25, 1993. This increase was offset by the receipt of Fermi 2 business
interruption insurance proceeds.
1993
The decrease in average unit cost was due to declining fuel prices resulting
from greater use of lower-cost Western low-sulfur coal, increases in lower-cost
nuclear generation and decreases in the buyback of Belle River Power Plant
capacity and energy from the Michigan Public Power Agency.
Other Operation
1994
Other operation expense increased due primarily to other postretirement
health care and life insurance benefits expense, service quality claims expense
and higher nuclear plant, transmission and distribution and demand-side
management expenses. These increases were partially offset by lower incentive
award expenses related to a shareholder value improvement plan, expenses
recorded in the year-earlier period for the write-off of obsolete and excess
stock material and a reserve for steam purchases under the agreement with the
Greater Detroit Resource Recovery Authority, lower uncollectible and employee
reorganization expenses and lower injuries and damages expense.
1993
Other operation expense increased due primarily to the write-off of obsolete
and excess stock material, higher injuries and damages expenses, a provision
for employee reorganization expenses, a reserve for steam purchases under the
agreement with the Greater Detroit Resource Recovery Authority, incentive award
expenses related to a shareholder value improvement plan and expenses related
to the new collective bargaining agreement with employees represented by the
Utility Workers Union of America - Local 223. These increases were partially
offset by lower uncollectible expenses and a 1992 accrual for low-level nuclear
waste disposal.
Maintenance
1994
Maintenance expense increased due primarily to higher nuclear plant and
storm expenses, partially offset by lower fossil plant and line clearance
expenses. Since Fermi 2 was down for repair in 1994, the Company elected to
upgrade various plant facilities which resulted in higher nuclear plant
maintenance expense.
1993
Maintenance expense decreased due primarily to lower line clearance and
storm expenses, partially offset by expenses related to the new collective
bargaining agreement with employees represented by the Utility Workers Union of
America - Local 223.
Depreciation and Amortization
1994 and 1993
Depreciation and amortization expense increased due to increases in plant in
service and, for 1994, to increased Fermi 2 decommissioning costs authorized by
the January 21, 1994 MPSC rate order.
Deferred Fermi 2 Depreciation and Amortization
1994 and 1993
Deferred Fermi 2 depreciation, a non-cash item of income, was recorded
beginning with the implementation of the Fermi 2 rate phase-in plan in January
1988. The annual amount deferred decreased each year through 1992. Beginning
in 1993 and continuing through 1998, these deferred amounts are amortized to
operating expense as the cash recovery is realized
25
<PAGE> 26
through revenues. Deferred Fermi 2 amortization, also a non-cash item of
income, was recorded beginning with the Company's purchase of the Wolverine
Power Supply Cooperative, Inc.'s ownership interest in Fermi 2 in February
1990. The annual amount deferred decreases each year through 1999.
Amortization of Deferred Fermi 2 Depreciation and Return
1994 and 1993
Beginning in 1993, the Company began amortizing to operating expense
deferred Fermi 2 depreciation and return as discussed herein.
Taxes Other Than Income Taxes
1994
Taxes other than income taxes decreased due primarily to lower property
taxes, partially offset by higher Michigan Single Business Tax ("MSBT").
1993
Taxes other than income taxes increased due primarily to higher MSBT expense
and higher property taxes.
Income Taxes
1994
Income taxes decreased due primarily to lower pretax income, partially
offset by higher prior years' federal income tax accrual. In March 1994, the
Company and the Internal Revenue Service ("IRS") reached a settlement of the
Company's income tax returns for the years 1987 and 1988.
1993
Income taxes decreased due primarily to lower pretax income and prior years'
federal income tax accrual, partially offset by an increase in the federal
corporate income tax rate from 34% to 35% retroactive to January 1, 1993 and
higher taxes due to the reduction of deferred Fermi 2 depreciation,
amortization and return.
Deferred Fermi 2 Return
1993
Deferred Fermi 2 return, a non-cash item of income, was recorded beginning
with the implementation of the Fermi 2 rate phase-in plan in January 1988. The
annual amount deferred decreased each year through 1992. Beginning in 1993 and
continuing through 1998, these deferred amounts are amortized to operating
expense as the cash recovery is realized through revenues.
Other Income and Deductions
1994
Other deductions increased slightly due primarily to the write-off of
premiums and expenses related to the $50 million portion of 1989 Series A
Mortgage Bonds not refinanced and an accrual for a contribution to the Detroit
Edison Foundation.
1993
Other deductions increased due primarily to an increase in the accrual for
decommissioning expenses for Fermi 1, an experimental nuclear unit that has
been shut down since 1972.
Accretion Income
1994 and 1993
Accretion income, a non-cash item of income, was recorded beginning in
January 1988 to restore to income, over the period 1988-1998, losses recorded
due to discounting indirect disallowances of plant costs. The annual amount of
accretion income recorded decreases each year through 1998. Also, effective in
January 1994, accretion income decreased due to the return to rate base of
Greenwood Unit No. 1.
Long-Term Debt Interest Charges
1994 and 1993
Long-term debt interest charges decreased due to the early redemption and
refinancing of securities when economic and the redemption of maturing
securities.
Other Interest Charges
1994
Other interest charges increased due to higher levels of short-term
borrowings, accruals for prior years' MSBT audits and the settlement of 1987
and 1988 IRS audits.
Preferred and Preference Stock Dividend Requirements
1994
Preferred and preference stock dividend requirements decreased slightly due
to the optional and mandatory redemption of outstanding shares in 1993.
1993
Preferred and preference stock dividend requirements increased slightly due
to issuance of cumulative preferred stock, partially offset by optional and
mandatory redemption of outstanding shares.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity has improved since the 1988 commercial operation of
Fermi 2, a nuclear generating unit comprising 28% of the Company's total assets
and 11% of the Company's summer net rated capability, and lower levels of
capital expenditures.
Fermi 2
The commercial operation of Fermi 2 completed the Company's power plant
construction program. The Company has no current plans for additional
generating plants. Ownership of an operating nuclear generating unit such as
Fermi 2 subjects the Company to significant additional risks. Nuclear plants
are highly regulated by a number of governmental agencies concerned with public
health and safety as well as the environment, and consequently, are subject to
greater risks and scrutiny than conventional fossil-fueled plants.
Fermi 2 was out of service in 1994. On December 25, 1993, the reactor
automatically shut down following a turbine-generator failure. Safety systems
responded within design and regulatory specifications. The turbine suffered
mechanical damage, the exciter and generator incurred mechanical and
26
<PAGE> 27
fire damage, and the condenser had some internal damage. The fire was
contained in the turbine building, and there was no release of radioactive
contaminants during the event. The nuclear part of the plant was not damaged.
Major repairs have been completed and tests are continuing to balance
and synchronize the unit. The Company expects that most repair costs related to
returning the Fermi 2 turbine-generator to service will be covered by
insurance. These costs are estimated to be in the $70 million to $80 million
range. The Company has received partial insurance payments of $25 million for
property damage. In addition, the Company has received insurance payments of
$66 million for replacement power costs. As a result of an investigation as to
the cause of the December 1993 mechanical failure, the Company will replace
major Fermi 2 turbine components. Installation of new low-pressure turbine
sections is expected to add about 20 megawatts ("MW") of generating capacity to
the plant, which would expand the plant's capability by about 2%.
In the interim period the Company will operate Fermi 2 without the
large seventh and eighth stage turbine blades until the next refueling, which
will reduce the Fermi 2 power output to a range of about 800 MW to 900 MW.
During the lower output period, new turbine shafts and blades will be
manufactured for the plant's three low-pressure turbines. These major
components will be installed during the next refueling outage in 1996.
Replacing the major turbine components in 1996 is expected to cost between
$30 million and $40 million. These costs will not be covered by insurance.
These costs will be capitalized and are expected to be recovered in rates
because such costs are less than the cumulative amount available under the cap
on Fermi 2 capital expenditures, a provision of the MPSC's December 1988 order.
At December 31, 1994, Fermi 2 was insured for property damage in the amount
of $2.75 billion and the Company had available approximately $8.5 billion in
public liability insurance. To the extent that insurable claims for
replacement power, property damage, decontamination, repair and replacement and
other costs arising from a nuclear incident at Fermi 2 exceed the policy limits
of insurance, or to the extent that such insurance becomes unavailable in the
future, the Company will retain the risk of loss.
Cash Generation and Cash Requirements
Consolidated Statement of Cash Flows
The Company generates substantial cash flows from operating activities as shown
in the Consolidated Statement of Cash Flows. Net cash from operating
activities, which is the Company's primary source of liquidity, was $1,063
million in 1992, $1,141 million in 1993 and $953 million in 1994. Net cash
from operating activities decreased in 1994 due to lower net income and changes
in current assets and liabilities, partially offset by higher non-cash charges
to income for the Fermi 2 phase-in plan and depreciation and amortization. Net
cash from operating activities increased in 1993 due to lower non-cash items of
income for the Fermi 2 phase-in plan, higher depreciation and amortization, and
changes in current assets and liabilities, partially offset by lower net income
and deferred income taxes.
Net cash used for investing activities increased in 1994 due primarily to
increased funding of nuclear decommissioning trust funds, the purchase of
leased equipment and non-utility investments, partially offset by lower plant
and equipment expenditures. Net cash used for investing activities decreased
in 1993 due primarily to lower plant and equipment expenditures.
During the period 1992-1994, the Company has engaged in an extensive debt
refinancing program. Assuming favorable economic conditions, the Company
expects that it will continue to refinance existing higher-cost debt and equity
securities. Also, in 1994, as a result of a plan change, the Company entered
into the one-time purchase of common stock from the trustee of the Detroit
Edison Savings & Investment Plans.
Additional Information
An MPSC order permits the Company to issue approximately $3.5 billion of
securities for the purpose of refinancing debt and preferred and/or preference
stock (issued prior to 1993) prior to maturity (when economic) and at maturity,
and to replace funds used for those purposes. The Company also has MPSC
authority to refinance substantially all non-taxable debt obligations.
Cash requirements for scheduled long-term debt redemptions are expected to
be $19 million, $119 million, $144 million, $169 million and $219 million for
1995, 1996, 1997, 1998 and 1999, respectively.
Cash requirements for capital expenditures were $363 million in 1994 and are
expected to be approximately $1.9 billion for the period 1995 through 1999. In
1995, cash requirements for capital expenditures are estimated at $394 million.
Environmental expenditures are expected to approximate $79 million for the
period 1995 through 1999, including expenditures for Clean Air Act compliance
requirements. See "Environmental Matters" herein.
The Company's internal cash generation is expected to be sufficient to meet
cash requirements for capital expenditures as well as scheduled long-term debt
redemption requirements.
In May 1993, the Federal Energy Regulatory Commission ("FERC") issued its
order authorizing the continuation of the Company's $1 billion of short-term
borrowing authority. This authority will be in effect through May 31, 1995.
The Company had total short-term credit arrangements of approximately $405
million at December 31, 1994, under which $39.5 million of borrowings were
outstanding.
27
<PAGE> 28
Capitalization
The Company's capital structure ratios (excluding amounts of long-term debt and
preferred and preference stock due within one year) were as follows:
<TABLE>
<CAPTION>
December 31
---------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Common Shareholders' Equity 44.2% 43.9% 42.0%
Preferred and Preference Stock 5.0 5.1 4.5
Long-Term Debt 50.8 51.0 53.5
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
Competition
An electric public utility must compete with other energy suppliers to meet its
customers' energy needs. Serious issues facing the entire electric utility
industry include deregulation, municipalization, cogeneration, independent
power production, open access to transmission lines and a more competitive bulk
power supply market. Utility customers have the option of self-generation or
cogeneration and, depending on the extent of future deregulation, may be able
to enter into contracts with other power suppliers. In the future, electric
utilities may be required to unbundle their products and services to
accommodate emerging competitive alternatives brought about by possible
industry restructuring due to deregulation.
On December 5, 1994, the Company's Board of Directors approved the formation
of a holding company. The Company's shareholders will be asked to approve this
organizational structure at the Company's April 24, 1995 Annual Meeting of
Common Shareholders. This organizational structure will be subject to receipt
of a number of regulatory approvals.
A holding-company structure will provide greater financial flexibility to
develop and operate new non-utility businesses. It also will offer a mechanism
for better defining and separating the Company's regulated and unregulated
businesses, and for protecting the Company's utility business and customers
from any risks that may be involved in non-utility ventures.
When all approvals are in place, the Company's common stock will be
exchanged share-for-share for the common stock of the holding company. The
holding-company structure could be in place before the end of 1995.
As a result of the Energy Policy Act of 1992, the Company expects that, over
time, non-utility generation resources will be developed which will result in
greater competition for power sales. In addition, in April 1994, the MPSC
issued an interim order setting forth a framework for a retail wheeling
experiment. The 90 MW experiment would last five years commencing with the need
for additional capacity, which is expected to be approximately the year 2000,
and would be implemented concurrently with the Company's next Request for
Proposal case under the MPSC's capacity solicitation process. The Company has
appealed the MPSC's interim order with the U.S. District Court for the Western
District of Michigan claiming that the MPSC does not have the authority to
order the Company to participate in retail wheeling, and that the jurisdiction
over transmission rates for wheeling resides with the FERC. The MPSC is
expected to issue a final order by the end of April 1995.
In response to the changing market for electricity, the Company has
developed a number of programs designed to increase its efficiency and
competitive status and address customer needs. An aggressive demand-side
management program has been developed, an integral part of which is an
interruptible rate for large industrial customers. This rate, commonly
referred to as R-10 and approved by the MPSC, permits its customers to achieve
economic benefits while enabling the Company to reduce its peak demand
requirements. The January 21, 1994 MPSC rate order increased the 400 MW
available under the R-10 rate to 525 MW in 1994 and 650 MW in 1995, with the
Company absorbing revenue losses associated with the additional 250 MW made
available under this rate.
As part of a continuing response to the challenge of competition, the
Company has executed 10-year special manufacturing contracts with Chrysler
Corporation, Ford Motor Company and General Motors Corporation, covering 54 of
the Big Three automakers' largest manufacturing locations in Southeastern
Michigan. On August 3, 1994, the Company filed the executed special
manufacturing contracts with the MPSC. The MPSC must approve these contracts
before they can become effective. An order approving these long-term contracts
is expected to be issued in March 1995.
The special manufacturing contracts are available to customers with a total
connected load of 100 MW or more for specific locations of 5 MW and over.
Service under the special manufacturing contracts will include both firm and
interruptible service, which is priced to provide customers with
competitively-based electric rates.
A major feature of the special manufacturing contracts will be the
establishment of a long-term, 10-year relationships with these customers during
which the Company will be the customers' sole supplier of electricity through
the year 2000. The customers may reduce their purchases by 20% annually during
the last four years of the contracts. The special manufacturing contracts
provide that the customers' existing self-generation will only be used for
emergency back-up. It is anticipated that this will result in additional sales
and revenue for the Company. The contracts also provide for a corporate
minimum take-or-pay provision for 1995 through 1999 with specified price
reductions for 1995 through 2000. Through these agreements, the customers will
be assured of both a more competitive and predictable price for electric
energy. Detroit Edison will be assured that the customers will purchase their
electric requirements from the Company.
28
<PAGE> 29
Pursuant to the terms of the special manufacturing contracts, the customers
will be able to designate a percentage of their load at each facility as
interruptible. The customers will also have the ability to designate
interruptions on a corporate basis with the flexibility to shift interruptible
load among separate facilities. In total, approximately 160 MW of
interruptible capacity is expected.
In order to forge an energy partnership with these customers, the Company
will provide service delivery quality guarantees and on-site engineering
expertise to implement better service, identify energy conservation efficiency
improvement opportunities and achieve valuable energy savings for each
customer. The goal of these provisions of the special manufacturing contracts
is to combine the customers' energy conservation efforts with the knowledge and
skills provided by the Company. The Company also may invest in energy saving
projects with these customers.
The Company will serve the special manufacturing contract customers at rates
above its marginal cost. Further, at this time the Company is not requesting a
change in electric rates charged to other customers. As a result, annual
revenue reductions will range in amounts from about $30 million in 1995 to $50
million for 1999 through 2004. The Company expects to offset these reductions
by further reducing operating expenses.
In 1994, the Company completed its accelerated reliability improvement
program which upgraded its transmission and distribution system. This program
has helped reduce interruptions and the duration of outages thus increasing
customer satisfaction.
The Company is reviewing potential energy services as a method of remaining
competitive while diversifying within the scope of its core business.
Meeting Energy Demands
Since 1980, the compound annual sales growth was 1.8% and peak demand growth
was 2.4% (after adjusting for the effects of unusual weather). System sales
and demand are expected to grow at a compound annual rate of about 1.5% per
year for the next 15 years.
Sales to the non-manufacturing segment, which include customers such as
agribusiness, grocery stores, restaurants and government, are projected to grow
at a strong pace in the next 15 years, a compound annual increase of 1.9% per
year. This projected increase indicates the Company's customer base is
becoming more diverse and less dependent on the manufacturing segment.
The Company expects to meet its near-term demand for energy by the return to
service, subject to environmental regulations, of power plant units currently
in economy reserve status when energy demand and consumption requirements
provide economic justification. The return to service of these units is
conditioned upon the outcome of a competitive bidding process which was
established by an MPSC order issued in July 1992. The Company will submit a
new plan to the MPSC detailing its proposed method of meeting energy demands on
or before May 1, 1995.
Inflation
Inflation is a measure of the purchasing power of the dollar. In 1994, the
inflation rate, as defined by the Consumer Price Index, was 2.7%. Although the
current inflation rate is relatively low, its compound effect through time can
be significant, primarily in its effect on the Company's ability to replace its
investment in utility plant.
The regulatory process limits the amount of depreciation expense recoverable
through revenues to the historical cost of the Company's investment in utility
plant. Such amount produces cash flows which are inadequate to replace such
property in future years. However, the Company believes that it will be able
to recover the increased cost of replacement facilities when, and if,
replacement occurs.
Regulation and Rates
The Company has no plans to seek increased rates for electric service from the
MPSC in the near future.
Environmental Matters
Protecting the environment from damage, as well as correcting past
environmental damage, continues to be the focus of state and federal
regulators. Committees at both the state and federal level are studying the
effects of a wide array of chemicals and electromagnetic fields as well as
global warming (as potentially affected by carbon dioxide emissions).
Legislation and/or rulemaking resulting from these and any future studies could
further impact the electric utility industry including the Company.
The Environmental Protection Agency ("EPA") and the Michigan Department of
Natural Resources have aggressive programs regarding the cleanup of
contaminated property. The Company anticipates that it will be periodically
included in these types of environmental proceedings. Further, additional
environmental expenditures, although difficult to quantify, will be necessary
as the Company prepares to comply with the phase-in of the 1990 Amendments to
the federal Clean Air Act. The Company currently meets the first phase of
sulfur dioxide emissions and nitrogen oxides emissions requirements. The
second phase begins in the year 2000. The Company currently burns low-sulfur
coal (less than 1% sulfur) at all its coal-fired units and believes it can meet
the second phase sulfur dioxide emission requirements through additional
blending of coals. Current projections indicate that annual fuel costs may
increase by $13-20 million in the period 2000-2009 in order to comply with new
sulfur dioxide emissions requirements. In addition, approximately $59 million
in capital expenditures may be necessary for nitrogen oxides emissions
requirements.
The Company expects that substantially all of the costs of environmental
compliance will be recovered through the ratemaking process.
29
<PAGE> 30
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following consolidated financial statements and schedules are
included herein.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Consolidated Statement of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Consolidated Statement of Common Shareholders' Equity . . . . . . . . . . . . . . . . . 36
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 37
Schedule VIII - Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . 59
</TABLE>
Note:
All other schedules and portions of included schedules are omitted
because they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
The Company's individual financial statements have been omitted since
the Company is primarily an operating company and all subsidiaries included in
the consolidated financial statements being filed, in the aggregate, do not
have minority equity interests and/or indebtedness to any person other than the
Company or its consolidated subsidiaries in amounts which together exceed 5
percent of the total assets as shown in the December 31, 1994 Consolidated
Balance Sheet.
30
<PAGE> 31
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of The Detroit Edison Company
In our opinion, the consolidated financial statements listed in the
index on page 30 present fairly, in all material respects, the financial
position of The Detroit Edison Company and its subsidiary companies at December
31, 1994 and 1993, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1994, in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Detroit, Michigan
January 23, 1995
31
<PAGE> 32
The Detroit Edison Company and Subsidiary Companies
CONSOLIDATED STATEMENT OF INCOME
(Dollars in Thousands)
<TABLE>
<CAPTION>
-------------------------------------------
Year Ended December 31
---------------------------------------------------------------------------------------------------------------------
1994 1993 1992
-------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Electric - System $3,448,351 $3,467,357 $3,472,583
Electric - Interconnection 43,141 60,363 58,447
Steam 27,849 27,491 27,113
---------------------------------------------------------------------------------------------------------------------
Total Operating Revenues $3,519,341 $3,555,211 $3,558,143
---------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Operation
Fuel $ 719,215 $ 750,127 $ 704,371
Purchased power 116,947 91,747 126,101
Other operation 621,066 604,882 548,520
Maintenance 262,409 251,149 262,803
Depreciation and amortization 476,415 432,512 423,407
Deferred Fermi 2 depreciation and amortization (7,465) (8,959) (14,984)
Amortization of deferred Fermi 2 depreciation and return 84,828 30,888 -
Taxes other than income 255,874 261,449 252,011
Income taxes 270,657 297,469 302,758
---------------------------------------------------------------------------------------------------------------------
Total Operating Expenses $2,799,946 $2,711,264 $2,604,987
---------------------------------------------------------------------------------------------------------------------
OPERATING INCOME $ 719,395 $ 843,947 $ 953,156
---------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND DEDUCTIONS
Allowance for other funds used during construction $ 1,684 $ 2,055 $ 1,363
Deferred Fermi 2 return - - 13,785
Other income and deductions (24,973) (24,961) (21,179)
Income taxes 8,111 8,594 7,108
Accretion income 13,644 44,130 45,695
Income taxes - disallowed plant costs and accretion income (4,252) (14,062) (15,576)
---------------------------------------------------------------------------------------------------------------------
Net Other Income and Deductions $ (5,786) $ 15,756 $ 31,196
---------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES $ 713,609 $ 859,703 $ 984,352
---------------------------------------------------------------------------------------------------------------------
INTEREST CHARGES
Long-term debt $ 273,763 $ 325,194 $ 388,580
Amortization of debt discount, premium and expense 10,832 9,114 3,952
Other 11,170 4,928 5,169
Allowance for borrowed funds used during construction (credit) (2,065) (1,436) (1,396)
---------------------------------------------------------------------------------------------------------------------
Net Interest Charges $ 293,700 $ 337,800 $ 396,305
---------------------------------------------------------------------------------------------------------------------
NET INCOME $ 419,909 $ 521,903 $ 588,047
PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS 29,640 30,837 30,498
---------------------------------------------------------------------------------------------------------------------
EARNINGS FOR COMMON STOCK $ 390,269 $ 491,066 $ 557,549
=====================================================================================================================
COMMON SHARES OUTSTANDING - AVERAGE 146,151,505 147,031,446 146,998,485
---------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE $2.67 $3.34 $3.79
=====================================================================================================================
</TABLE>
(See accompanying Notes to Consolidated Financial Statements.)
32
<PAGE> 33
The Detroit Edison Company and Subsidiary Companies
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
------------------------------------------------
Year Ended December 31
-----------------------------------------------------------------------------------------------------------------------
1994 1993 1992
------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income $ 419,909 $ 521,903 $ 588,047
Adjustments to reconcile net income to net cash from
operating activities:
Accretion income (13,644) (44,130) (45,695)
Depreciation and amortization 476,415 432,512 423,407
Deferred Fermi 2 depreciation, amortization and return - net 77,363 21,929 (28,769)
Deferred income taxes and investment tax credit - net 93,287 85,574 132,179
Fermi 2 refueling outage - net (19,507) 17,856 (6,084)
Other (31,091) 32,367 6,714
Changes in current assets and liabilities:
Customer accounts receivable and unbilled revenues (505) 10,733 9,068
Other accounts receivable (7,593) (2,247) 17,815
Inventories (1,774) 33,839 5,239
Accounts payable (13,858) 21,364 (24,930)
Taxes payable (18,031) (6,499) (8,109)
Interest payable (6,174) (19,769) (15,199)
Other (2,189) 35,350 9,807
-----------------------------------------------------------------------------------------------------------------------
Net cash from operating activities $ 952,608 $ 1,140,782 $ 1,063,490
-----------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Plant and equipment expenditures $ (366,392) $ (396,407) $ (415,937)
Purchase of leased equipment (11,500) (2,402) -
Nuclear decommissioning trust funds (46,563) (5,346) (4,482)
Non-utility investments (12,843) 182 (614)
Changes in current assets and liabilities 5,042 10,225 (7,897)
Other (11,537) (19,988) 2,047
-----------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities $ (443,793) $ (413,736) $ (426,883)
-----------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Sale of cumulative preferred stock $ - $ 200,000 $ -
Sale of general and refunding mortgage bonds 200,000 1,510,000 350,000
Funds received from Trustees: Installment sales contracts and
loan agreements 50,470 76,510 348,960
Increase (decrease) in short-term borrowings (98,715) 109,210 (9,000)
Redemption of long-term debt (258,034) (2,024,289) (957,859)
Redemption of preferred and preference stock - (164,158) (22,005)
Premiums on reacquired long-term debt and
preferred and preference stock (11,563) (81,453) (16,556)
Purchase of common stock (59,855) - -
Dividends on common, preferred and preference stock (331,445) (330,792) (318,349)
Other (2,622) (20,417) (9,225)
-----------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities $ (511,764) $ (725,389) $ (634,034)
-----------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS $ (2,949) $ 1,657 $ 2,573
CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF THE PERIOD 11,071 9,414 6,841
-----------------------------------------------------------------------------------------------------------------------
CASH AND TEMPORARY CASH INVESTMENTS AT END OF THE PERIOD $ 8,122 $ 11,071 $ 9,414
=======================================================================================================================
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest capitalized) $ 289,375 $ 346,542 $ 406,571
Income taxes paid 183,172 233,542 178,786
New capital lease obligations 9,328 36,606 39,320
</TABLE>
For purposes of the consolidated financial statements, the Company considers
investments purchased with a maturity of three months or less to be temporary
cash investments.
(See accompanying Notes to Consolidated Financial Statements.)
33
<PAGE> 34
The Detroit Edison Company and Subsidiary Companies
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
-----------------------------
December 31
ASSETS
1994 1993
-----------------------------
<S> <C> <C>
UTILITY PROPERTIES
Plant in service
Electric $12,941,414 $12,557,267
Steam 69,813 70,948
-----------------------------------------------------------------------------------------------------------
$13,011,227 $12,628,215
Less: Accumulated depreciation and amortization (4,529,692) (4,137,881)
-----------------------------------------------------------------------------------------------------------
$ 8,481,535 $ 8,490,334
Construction work in progress 104,431 160,230
-----------------------------------------------------------------------------------------------------------
Net utility properties $ 8,585,966 $ 8,650,564
-----------------------------------------------------------------------------------------------------------
Property under capital leases (less accumulated amortization
of $94,678 and $101,381, respectively) $ 134,542 $ 154,837
Nuclear fuel under capital lease (less accumulated amortization
of $374,405) 193,411 184,083
-----------------------------------------------------------------------------------------------------------
Net property under capital leases $ 327,953 $ 338,920
-----------------------------------------------------------------------------------------------------------
Total owned and leased properties $ 8,913,919 $ 8,989,484
-----------------------------------------------------------------------------------------------------------
OTHER PROPERTY AND INVESTMENTS
Non-utility property $ 11,281 $ 10,053
Investments and special funds 18,722 15,914
Nuclear decommissioning trust funds 76,492 29,929
-----------------------------------------------------------------------------------------------------------
$ 106,495 $ 55,896
-----------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash and temporary cash investments $ 8,122 $ 11,071
Customer accounts receivable and unbilled revenues (less allowance
for uncollectible accounts of $30,000 and $34,000, respectively) 195,824 195,319
Other accounts receivable 34,212 26,619
Inventories (at average cost)
Fuel 136,331 129,024
Materials and supplies 155,921 165,187
Prepayments 10,516 10,914
-----------------------------------------------------------------------------------------------------------
$ 540,926 $ 538,134
-----------------------------------------------------------------------------------------------------------
DEFERRED DEBITS
Unamortized debt expense $ 42,876 $ 45,396
Unamortized loss on reacquired debt 123,996 124,567
Recoverable income taxes 663,101 771,277
Other postretirement benefits 36,562 48,568
Fermi 2 phase-in plan 390,764 475,592
Fermi 2 deferred amortization 52,259 44,794
Other 122,080 41,171
-----------------------------------------------------------------------------------------------------------
$ 1,431,638 $ 1,551,365
-----------------------------------------------------------------------------------------------------------
TOTAL $10,992,978 $11,134,879
===========================================================================================================
</TABLE>
(See accompanying Notes to Consolidated Financial Statements.)
34
<PAGE> 35
The Detroit Edison Company and Subsidiary Companies
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
-----------------------------
December 31
--------------------------------------------------------------------------------------------------------------
LIABILITIES
1994 1993
-----------------------------
<S> <C> <C>
CAPITALIZATION
Common stock - $10 par value, 400,000,000 shares authorized;
144,863,447 and 147,047,918 shares outstanding, respectively
(311,804 and 334,002 shares, respectively, reserved for conversion
of preferred stock) $ 1,448,635 $ 1,470,479
Premium on common stock 545,825 553,966
Common stock expense (47,461) (48,175)
Retained earnings used in the business 1,379,081 1,319,685
-----------------------------------------------------------------------------------------------------------------
Total common shareholders' equity $ 3,326,080 $ 3,295,955
Cumulative preferred stock - $100 par value, 6,747,484 shares
authorized; 3,905,470 and 3,909,419 shares outstanding,
respectively (1,539,827 shares unissued)
Redeemable solely at the option of the Company 380,283 380,683
Long-term debt 3,825,296 3,830,596
-----------------------------------------------------------------------------------------------------------------
Total Capitalization $ 7,531,659 $ 7,507,234
-----------------------------------------------------------------------------------------------------------------
OTHER NON-CURRENT LIABILITIES
Obligations under capital leases $ 126,076 $ 141,043
Other postretirement benefits 37,143 48,567
Other 48,707 15,130
-----------------------------------------------------------------------------------------------------------------
$ 211,926 $ 204,740
-----------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Short-term borrowings $ 39,489 $ 138,204
Amounts due within one year
Long-term debt 19,214 19,649
Obligations under capital leases 201,877 197,877
Accounts payable 147,020 159,870
Property and general taxes 31,608 38,592
Income taxes 5,304 16,839
Accumulated deferred income taxes 32,625 63,046
Interest 60,214 66,388
Dividends payable 82,012 83,143
Payrolls 71,958 67,778
Fermi 2 refueling outage 1,267 20,774
Other 97,215 103,193
-----------------------------------------------------------------------------------------------------------------
$ 789,803 $ 975,353
-----------------------------------------------------------------------------------------------------------------
DEFERRED CREDITS
Accumulated deferred income taxes $ 2,014,821 $ 1,986,463
Accumulated deferred investment tax credits 346,379 359,205
Other 98,390 101,884
-----------------------------------------------------------------------------------------------------------------
$ 2,459,590 $ 2,447,552
-----------------------------------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (Notes 2, 3, 4, 9, 12 and 13)
-----------------------------------------------------------------------------------------------------------------
TOTAL $10,992,978 $11,134,879
=================================================================================================================
</TABLE>
(See accompanying Notes to Consolidated Financial Statements.)
35
<PAGE> 36
The Detroit Edison Company and Subsidiary Companies
CONSOLIDATED STATEMENT OF COMMON SHAREHOLDERS' EQUITY
(Dollars in Thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
Common Stock Premium Retained
-------------------------- on Common Earnings
$10 Par Common Stock Used in the
Shares Value Stock Expense Business
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1991 146,983,123 $1,469,831 $553,463 $(48,150) $ 872,428
Issuance of common stock on conversion of
convertible cumulative preferred stock,
5 1/2% series 33,568 336 261 (13)
Expense associated with preferred and
preference stock redeemed (847)
Net income 588,047
Cash dividends declared
Common stock - $1.98 per share (291,066)
Cumulative preferred and
preference stock* (30,403)
-----------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1992 147,016,691 $1,470,167 $553,724 $(48,163) $1,138,159
Issuance of common stock on conversion of
convertible cumulative preferred stock,
5 1/2% series 31,227 312 242 (12)
Expense associated with preferred and
preference stock redeemed (6,634)
Net income 521,903
Cash dividends declared
Common stock - $2.06 per share (302,894)
Cumulative preferred and
preference stock* (30,849)
-----------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1993 147,047,918 $1,470,479 $553,966 $(48,175) $1,319,685
Issuance of common stock on conversion of
convertible cumulative preferred stock,
5 1/2% series 22,164 222 173 (9)
Common stock reacquired from Detroit Edison
Savings & Investment Plans,
August 4, 1994 (2,206,635) (22,066) (8,314) 723 (30,198)
Net income 419,909
Cash dividends declared
Common stock - $2.06 per share (300,676)
Cumulative preferred stock* (29,639)
-----------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 144,863,447 $1,448,635 $545,825 $(47,461) $1,379,081
=============================================================================================================================
</TABLE>
*At established rate for each series.
(See accompanying Notes to Consolidated Financial Statements.)
36
<PAGE> 37
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
INDUSTRY SEGMENT - The Detroit Edison Company ("Company") is a regulated
public utility engaged in the generation, purchase, transmission, distribution
and sale of electric energy.
REGULATION - The Company is subject to regulation by the Michigan Public
Service Commission ("MPSC") and the Federal Energy Regulatory Commission
("FERC") with respect to accounting matters and maintains its accounts in
accordance with Uniform Systems of Accounts prescribed by these agencies. As a
regulated entity, taking into account the cost recovery restrictions contained
in the December 1988 and January 21, 1994 MPSC rate orders and the provisions
of the Energy Policy Act of 1992 ("Energy Act"), the Company meets the criteria
of Statement of Financial Accounting Standards ("SFAS") No. 71, "Accounting for
the Effects of Certain Types of Regulation." This accounting standard
recognizes the ratemaking process which results in differences in the
application of generally accepted accounting principles between regulated and
non-regulated businesses. Such differences concern mainly the time at which
various items enter into the determination of net income in order to follow the
principle of matching costs and revenues.
PRINCIPLES APPLIED IN CONSOLIDATION - The Consolidated Financial Statements
include the accounts of all subsidiary companies, all of which are
wholly-owned.
REVENUES - The Company records unbilled revenues for electric and steam heating
services provided after cycle billings through month-end.
PROPERTY, RETIREMENT AND MAINTENANCE, DEPRECIATION AND AMORTIZATION - Utility
properties are recorded at original cost less regulatory disallowances. In
general, the cost of properties retired in the normal course of business is
charged to accumulated depreciation. Expenditures for maintenance and repairs
are charged to expense, and the cost of new property installed, which replaces
property retired, is charged to property accounts. The annual provision for
depreciation is calculated on the straight-line remaining life method by
applying annual rates approved by the MPSC to the average of year-beginning and
year-ending balances of depreciable property by primary plant accounts.
Provision for depreciation of Fermi 2, excluding decommissioning expense, was
3.26% of average depreciable property for 1994 and 2.63% for 1993 and 1992,
except for $300 million being amortized over 10 years commencing in 1989 and
$513 million being amortized over 19 years commencing in 1990. See Note 3 and
Deferred Fermi 2 Amortization below. Provision for depreciation of all other
utility plant, as a percent of average depreciable property, was 3.2% for 1994,
3.4% for 1993 and 3.3% for 1992.
DEFERRED FERMI 2 DEPRECIATION AND RETURN - An MPSC authorized phase-in plan for
Fermi 2, effective in January 1988, provided for gradual rate increases in the
early years of plant operation rather than a one-time substantial rate increase
which conventional ratemaking would provide. SFAS No. 92, "Regulated
Enterprises - Accounting for Phase-in Plans," permits the capitalization of
costs deferred for future recovery under a phase-in plan. Accordingly, the
Company recorded non-cash income of deferred depreciation and deferred return
totaling $506.5 million through 1992. In 1992, deferred depreciation was $4.5
million and deferred return was $13.8 million. Beginning in 1993 and
continuing through 1998, these deferred amounts will be amortized to operating
expense as the cash recovery is realized through revenues. Amortization of
these deferred amounts totaled $84.8 million in 1994 and $30.9 million in 1993.
DEFERRED FERMI 2 AMORTIZATION - The December 1988 MPSC rate order provides for
the Company's February 1990 purchase of Wolverine Power Supply Cooperative,
Inc.'s ("Cooperative") ownership interest in Fermi 2 for $513 million to be
treated as a regulatory asset with a 19-year principal amortization and
associated interest of 8%, which is the composite average of the Cooperative
debt assumed by the Company at the time of the purchase. Since the
straight-line amortization of the regulatory asset exceeds the revenues
provided for such amortization during the first 10 years of the recovery
period, the Company is recording deferred amortization, a non-cash item of
income, totaling $67.2 million through 1999. For 1994, 1993 and 1992, the
amounts deferred were $7.5 million, $9 million and $10.5 million,
respectively. The deferred amounts will be amortized to operating expense as
the cash recovery is realized through revenues during the years 2000 through
2008.
PROPERTY TAXES - The Company accrues property taxes monthly during the fiscal
period of the applicable taxing authority.
INCOME TAXES - Deferred income taxes are provided for temporary differences
between book and taxable income to the extent authorized by the MPSC. For
federal income tax purposes, the Company computes depreciation using
accelerated methods and shorter depreciable lives. Investment tax credits
utilized which relate to utility property were deferred and are amortized over
the estimated composite service life of the related property. See Note 6.
ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION ("AFUDC") - AFUDC, a non-operating
non-cash item, is defined in the FERC Uniform System of Accounts to include
"the net cost for the period of construction of borrowed funds used for
construction purposes and a reasonable rate on other funds when so used."
AFUDC involves an accounting procedure whereby the approximate interest expense
and the cost of other (common, preferred and preference shareholders' equity)
funds applicable to the cost of construction are transferred from the income
statement to construction work in progress in the balance sheet. The cash
recovery of AFUDC, as well as other costs of construction, occurs as
37
<PAGE> 38
completed projects are placed in service and related depreciation is authorized
to be recovered through customer rates. The Company capitalized
AFUDC at 7.66% in 1994 and 9.65% in 1993 and 1992.
ACCRETION INCOME - In 1988, the Company adopted SFAS No. 90, "Regulated
Enterprises - Accounting for Abandonments and Disallowances of Plant Costs,"
and recorded indirect losses for Greenwood Unit No. 1, for the abandoned
Greenwood Unit Nos. 2 and 3 and for a portion of Fermi 2 as a discount
(reduction) of the Company's investment in these units. These net after-tax
losses, due to discounting, originally totaled $198 million, which amounts are
being restored to net income over the period 1988-1998 as the Company records a
non-cash return (accretion income) on its investment in these units. The
Company recorded $8.9 million, $29.5 million and $30.2 million of net after-tax
accretion income in 1994, 1993 and 1992, respectively.
CAPITALIZATION - DISCOUNT, PREMIUM AND EXPENSE - The discount, premium and
expense related to the issuance of long-term debt are amortized over the life
of each issue. In accordance with MPSC regulations, the discount, premium and
expense, when related to debt redeemed without refunding, are written off to
other income and deductions, and when related to debt redeemed with refunding,
are amortized over the life of the replacement issue. Capital stock premium
and expense related to redeemed preferred and preference stock are written off
against retained earnings used in the business.
FERMI 2 REFUELING OUTAGES - The Company recognizes the cost of Fermi 2
refueling outages over periods in which related revenues are recognized. Under
this procedure, the Company records a provision for incremental costs
anticipated to be incurred during the next scheduled Fermi 2 refueling outage.
See Note 2.
LEASES - See Note 9.
EMPLOYEES' RETIREMENT PLAN AND OTHER POSTRETIREMENT BENEFITS - See Note 13.
NOTE 2 - FERMI 2
GENERAL - Fermi 2, a nuclear generating unit, began commercial operation in
January 1988. Fermi 2 has a design electrical rating (net) of 1,139 megawatts
("MW"). However, due to certain equipment limitations, Fermi 2 is rated at
1,116 MW until modifications can be made to achieve the design rating. This
unit represents approximately 28% of total assets, 11% of total operation and
maintenance expenses and 11% of summer net rated capability.
MPSC rate orders issued in April 1986, January 1987, December 1988 and
January 1994 contain provisions with respect to the recovery of Fermi 2 costs.
See Note 3 for a discussion of Fermi 2 rate matters and the MPSC's treatment of
Fermi 2 project costs of $4.858 billion.
LICENSING AND OPERATION - The Nuclear Regulatory Commission ("NRC") maintains
jurisdiction over the licensing and operation of Fermi 2.
Fermi 2 was out of service in 1994. On December 25, 1993, the reactor
automatically shut down following a turbine-generator failure. Safety systems
responded within design and regulatory specifications. The turbine suffered
mechanical damage, the exciter and generator incurred mechanical and fire
damage, and the condenser had some internal damage. The fire was contained in
the turbine building, and there was no release of radioactive contaminants
during the event. The nuclear part of the plant was not damaged.
Major repairs have been completed and tests are continuing to balance
and synchronize the unit. The Company expects that most repair costs related
to returning the Fermi 2 turbine-generator to service will be covered by
insurance. These costs are estimated to be in the $70 million to $80 million
range. The Company has received partial insurance payments of $25 million for
property damage. In addition, the Company has received insurance payments of
$66 million for replacement power costs. As a result of an investigation as to
the cause of the December 1993 mechanical failure, the Company will replace
major Fermi 2 turbine components. Installation of new low-pressure turbine
sections is expected to add about 20 MW of generating capacity to the plant,
which would expand the plant's capability by about 2%.
In the interim period the Company will operate Fermi 2 without the
large seventh and eighth stage turbine blades until the next refueling, which
will reduce the Fermi 2 power output to a range of about 800 MW to 900 MW.
During the lower output period, new turbine shafts and blades will be
manufactured for the plant's three low-pressure turbines. These major
components will be installed during the next refueling outage in 1996.
Replacing the major turbine components in 1996 is expected to cost between
$30 million and $40 million. These costs will not be covered by insurance.
These costs will be capitalized and are expected to be recovered in rates
because such costs are less than the cumulative amount available under the cap
on Fermi 2 capital expenditures, a provision of the MPSC's December 1988 order.
See Note 3.
INSURANCE - The Company insures Fermi 2 with property damage insurance provided
by Nuclear Mutual Limited ("NML") and Nuclear Electric Insurance Limited
("NEIL"). The NML and NEIL insurance policies provide $500 million of
composite primary coverage (with a $1 million deductible) and $2.25 billion of
excess coverage, respectively, for stabilization, decontamination and debris
removal costs and repair and/or replacement of property. Accordingly, the
combined limits provide total property damage insurance of $2.75 billion.
38
<PAGE> 39
The Company maintains an insurance policy with NEIL providing for extra
expenses, including certain replacement power costs necessitated by Fermi 2's
unavailability due to an insured event. This policy, which has a 21-week
waiting period, provides for three years of coverage.
Under the NML and NEIL policies, the Company could be liable for maximum
retrospective assessments of up to approximately $28 million per loss if any
one loss should exceed the accumulated funds available to NML or NEIL.
As required by federal law, the Company maintains $200 million of public
liability insurance for a nuclear incident. Further, under the Price-Anderson
Amendments Act of 1988, deferred premium charges of $75.5 million could be
levied against each licensed nuclear facility, but not more than $10 million
per year per facility. On December 31, 1994, there were 110 licensed nuclear
facilities in the United States. Thus, deferred premium charges in the
aggregate amount of approximately $8.3 billion could be levied against all
owners of licensed nuclear facilities in the event of a nuclear incident.
Accordingly, public liability for a single nuclear incident is currently
limited to approximately $8.5 billion.
DECOMMISSIONING - The NRC has jurisdiction over the decommissioning of nuclear
power plants. An NRC rule requires decommissioning funding based upon a
site-specific estimate or a predetermined NRC formula. Using the NRC's
formula, the Company estimates that the cost of decommissioning Fermi 2 when
its license expires in the year 2025 is $489 million in current 1994 dollars
and $3 billion in future 2025 dollars. The assumed annual inflation rate used
to increase the cost to decommission is 6%, compounded annually.
The MPSC and FERC regulate the recovery of costs of decommissioning nuclear
power plants. A January 1994 MPSC order authorized a $500 million external
trust fund in 1994 dollars to finance the decommissioning of Fermi 2. The
MPSC's January 21, 1994 rate order includes an increase in rates for the
decommissioning of Fermi 2, which the Company believes will be adequate to fund
the estimated cost of decommissioning using the NRC formula. See Note 3. The
order approves a decommissioning surcharge on customer bills under which the
Company is currently collecting approximately $31.4 million annually, including
$3.5 million for the recovery of low-level radioactive waste disposal. The
FERC has approved the recovery of decommissioning expense in base rates, most
recently in its June 1993 order.
The Company has established external trust funds to hold decommissioning and
low-level radioactive waste disposal funds collected from customers. During
1994, 1993 and 1992, the Company collected $26.9 million, $3.7 million and $3.4
million, respectively, from customers for decommissioning Fermi 2. Also, in
1994, the Company collected $3.3 million from customers for low-level
radioactive waste disposal. Such amounts were recorded as components of
depreciation and amortization expense in the Consolidated Statement of Income
and accumulated depreciation and amortization in the Consolidated Balance
Sheet. Earnings on the external decommissioning trust fund assets during 1994,
1993 and 1992 were $1.3 million, $1.2 million and $1.0 million, respectively.
Earnings on the external low-level radioactive waste disposal trust fund assets
were $0.2 million in 1994. Trust fund earnings are recorded as an investment
with a corresponding credit to accumulated depreciation and amortization.
Trust fund assets are assumed to earn an after-tax rate of return of 7%,
compounded annually.
The external trust fund for low-level radioactive waste disposal costs was
initially established by charges to other operation expense in the Consolidated
Statement of Income of $1.4 million in 1993 and $5.9 million in 1992.
At December 31, 1994, the Company had a reserve of $51.5 million for the
future decommissioning of Fermi 2 and $10.8 million for low-level radioactive
waste disposal costs. These reserves are included in accumulated depreciation
and amortization in the Consolidated Balance Sheet with a like amount deposited
in external trust funds.
The Company also had a reserve of $14.2 million at December 31, 1994 for the
future decommissioning of Fermi 1, an experimental nuclear unit on the Fermi 2
site that has been shut down since 1972. This reserve is included in other
deferred credits in the Consolidated Balance Sheet with a like amount deposited
in an external trust fund. The Company estimates that the cost of
decommissioning Fermi 1 in the year 2025 is $19 million in current 1994 dollars
and $114 million in future 2025 dollars.
The staff of the Securities and Exchange Commission has questioned certain
of the current accounting practices of the electric utility industry regarding
the recognition, measurement and classification of decommissioning costs for
nuclear generating units in the financial statements of electric utilities. In
response to these questions, the Financial Accounting Standards Board has
agreed to review the accounting for removal costs, including decommissioning.
If current electric utility industry accounting practices for such
decommissioning are changed: (1) annual provisions for decommissioning could
increase, (2) the estimated cost for decommissioning could be recorded as a
liability rather than as accumulated depreciation, and (3) trust fund income
from the external decommissioning trusts could be reported as investment income
rather than as a reduction to decommissioning expense.
The Energy Act provided for a fund to be established for the decommissioning
and decontamination of existing United States Department of Energy ("DOE")
uranium enrichment facilities. Utilities with nuclear units are required to
pay for a portion of the cost by making annual payments into the fund over a 15
year period. The law directs state regulators to treat these payments as a
necessary and reasonable cost of fuel and, accordingly, the Company has
recorded a regulatory asset and liability in the Consolidated Balance Sheet to
reflect these costs.
39
<PAGE> 40
NUCLEAR FUEL DISPOSAL COSTS - The Company has a contract with the DOE for the
future storage and disposal of spent nuclear fuel from Fermi 2. Under the
terms of the contract, the Company makes quarterly payments to the DOE based
upon a fee of 1 mill per kilowatthour applied to the Fermi 2 electricity
generated and sold. The spent nuclear fuel disposal cost is included as a
component of the Company's nuclear fuel expense. The DOE has stated that it
will be unable to store spent nuclear fuel at a permanent repository until
after 2010. However, the DOE and utilities with nuclear units are pursuing
other interim storage options. The Company estimates that existing temporary
storage capacity at Fermi 2 will be sufficient until the year 2000, or until
2015 with the expansion of such storage capacity.
NOTE 3 - RATE MATTERS
The Company is subject to the primary regulatory jurisdiction of the MPSC,
which, from time to time, issues its orders pertaining to the Company's
conditions of service, rates and recovery of certain costs including the costs
of generating facilities. MPSC orders issued in December 1988 and on January
21, 1994 are currently in effect with respect to the Company's rates and
certain other revenue and operating-related matters.
On January 21, 1994, the MPSC issued an order reducing the Company's rates
in the amount of $78 million annually. The rate reduction was determined by
using a 1994 test year and an overall rate of return of 7.66%, incorporating an
11% return on common equity and a capital structure comprised of 40% common
equity, 55.01% long-term debt and 4.99% preferred stock. The MPSC order
includes the recovery of (1) increased Fermi 2 decommissioning costs of $28.1
million annually, which includes the recovery of low-level radioactive waste
disposal costs, (2) full recovery of 1994 other postretirement benefit costs
plus recovery and amortization of the 1993 deferred cost (see Note 13), (3)
costs associated with the return to rate base of Greenwood Unit No. 1, (4)
Fermi 2 phase-in plan revenue requirements of $70.8 million in 1994 and (5)
costs associated with a three-year $41.5 million ($7.6 million in 1994, $14.9
million in 1995 and $19 million in 1996) demand-side management program. In
keeping with the MPSC's recognition of the need for industrial customers to be
competitive, the January 1994 rate reduction was allocated among the various
classes of customers approximately as follows: Industrial-$43 million,
Commercial-$24 million, Residential-$10 million and Governmental-$1 million.
The order was effective for service rendered on and after January 22, 1994 and
is the subject of various appeals before the Michigan Court of Appeals.
INDUSTRIAL RATES - In August 1994, the Company entered into 10-year special
manufacturing contracts which, if approved by the MPSC, will lower costs for
the Company's three largest customers (Chrysler Corporation, Ford Motor Company
and General Motors Corporation) without impacting the rates or service of other
customers. Annual revenue reductions will range in amounts from about $30
million in 1995 to $50 million for 1999 through 2004. The Company expects to
offset these reductions by further reducing operating expenses.
In August 1994, the Company filed an application with the MPSC seeking
approval of the special manufacturing contracts. The Commission scheduled
expedited hearings in this case, which were completed in December 1994. An
order approving these long-term contracts is expected to be issued in March
1995.
FERMI 2 - The December 1988 MPSC order established, for the period
January 1989 through December 2003, (1) a cap on Fermi 2 capital additions of
$25 million per year, in 1988 dollars adjusted by the Consumers Price Index
("CPI"), cumulative, (2) a cap on Fermi 2 non-fuel operation and maintenance
expenses adjusted by the CPI and (3) a capacity factor performance standard
based on a three-year rolling average commencing in 1991. For a capital
investment of $200 million or more (in 1988 dollars adjusted by the CPI), the
Company must obtain prior MPSC approval to be included in rate base. See Note
1 - Regulation.
Under the cap on Fermi 2 capital expenditures, the cumulative amount
available totals $50 million (in 1994 dollars) at December 31, 1994. Under the
cap on non-fuel operation and maintenance expenses, the cumulative amount
available totals $31 million (in 1994 dollars) at December 31, 1994.
Under the capacity factor performance standard, a disallowance of net
incremental replacement power cost will be imposed for the amount by which the
Fermi 2 three-year rolling average capacity factor is less than the greater of
either the average of the top 50% of U.S. boiling water reactors or 50%. For
purposes of the capacity factor performance standard, the capacity for Fermi 2
for the period 1989-1993 shall be 1,093 MW, and 1,139 MW for each year
thereafter until December 31, 2003.
As discussed in Note 2, Fermi 2 was out of service in 1994 and will operate
at a reduced power output until the installation of major turbine components
during the next refueling outage in 1996. As a result, the three-year rolling
average capacity factor will be unfavorably affected in 1994-1997. The plant's
capacity factor was 0%, 86.5% and 76.6% during 1994, 1993 and 1992,
respectively, or a three-year rolling average of 54.4% in 1994. The average
capacity factor for the top 50% of U.S. boiling water reactors for the
36-month period ending September 1994, was 79.2%. The Company has accrued
for the Fermi 2 capacity factor performance standard disallowances that will be
imposed during the period 1994-1997.
In accordance with April 1986 and December 1988 MPSC rate orders, ratemaking
treatment of the Company's Fermi 2 project costs of $4.858 billion is as
follows: (1) $3.018 billion
40
<PAGE> 41
in rate base with recovery and return, (2) $300 million
amortized over 10 years with no return, (3) $513 million amortized over 19
years with associated interest of 8% and (4) $1.027 billion disallowed and
written off by the Company in 1988.
At December 31, 1994, the Company's net plant investment in Fermi 2 was $3.1
billion ($3.9 billion less accumulated depreciation and amortization of $0.8
billion).
Under the December 1988 MPSC order, if nuclear operations at Fermi 2
permanently cease, amortization in rates of the $300 million and $513 million
investments in Fermi 2 would continue and the remaining net rate base
investment amount shall be removed from rate base and amortized in rates,
without return, over 10 years with such amortization not to exceed $290 million
per year. In this event, unamortized amounts of deferred depreciation and
deferred return, recorded in the Consolidated Balance Sheet under the phase-in
plan prior to the removal of Fermi 2 from rate base, will continue to be
amortized, with a full return on such unamortized balances, so that all amounts
deferred are recovered during the period ending no later than December 31,
1998. The December 1988 and January 21, 1994 rate orders do not address the
costs of decommissioning if operations at Fermi 2 prematurely cease.
The Company has and believes it will continue to operate under the terms of
all applicable MPSC orders with no significant adverse effects as a result of
any cost recovery restrictions contained therein.
NOTE 4 - JOINTLY-OWNED UTILITY PLANT
The Company's portion of jointly-owned utility plant is as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
LUDINGTON
PUMPED
BELLE RIVER STORAGE
------------------------------------------------------------------------------------
<S> <C> <C>
In-service date 1984-1985 1973
Undivided ownership interest * 49%
Investment (millions) $1,026.6 $174.3
Accumulated depreciation
(millions) $ 297.8 $ 67.1
</TABLE>
* The Company's undivided ownership interest is 62.78% in Unit No. 1,
81.39% of the portion of the facilities applicable to Belle River
used jointly by the Belle River and St. Clair Power Plants, 49.59%
in certain transmission lines and, at December 31, 1994, 75% in
facilities used in common with Unit No. 2.
BELLE RIVER - The Michigan Public Power Agency ("MPPA") has an undivided
ownership interest in Belle River Unit No. 1 and certain other related
facilities. MPPA is entitled to 18.61% of the capacity and energy of the
entire plant and is responsible for the same percentage of the plant's
operation and maintenance expenses and capital improvements. The Company is
obligated to provide MPPA with backup power when either unit is out of service.
The Company was required to purchase MPPA's capacity and energy entitlement
through 1994. Such purchases were 80% for 1992, 20% for 1993 and 10% for 1994.
The cost for the buyback of power was based on MPPA's plant-related investment,
interest costs incurred by MPPA on their original project financing plus 2.5%,
and certain other costs such as depreciation and operation and maintenance
expenses. Buyback payments to MPPA were $50.9 million, $12.5 million and $6.0
million for 1992, 1993 and 1994, respectively.
LUDINGTON PUMPED STORAGE - Operation, maintenance and other expenses of the
Ludington Pumped Storage Plant ("Ludington") are shared by the Company and
Consumers Power Company ("Consumers") in proportion to their respective
interests in the plant. See Note 12 for a discussion of litigation related to
Ludington.
NOTE 5 - SALE OF ACCOUNTS RECEIVABLE AND UNBILLED REVENUES
The Company has an agreement providing for the sale and assignment, from time
to time, of an undivided ownership interest in $200 million of the Company's
customer accounts receivable and unbilled revenues.
At December 31, 1994 and 1993, customer accounts receivable and unbilled
revenues in the Consolidated Balance Sheet have been reduced by $200 million
reflecting the sale. All expenses associated with the program are being
charged to other income and deductions in the Consolidated Statement of Income.
NOTE 6 - INCOME TAXES
Total income tax expense as a percent of income before tax varies from the
statutory federal income tax rate for the following reasons:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Percent of Income Before Tax
------------------------------------------------------
1994 1993 1992
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory income tax rate 35.0% 35.0% 34.0%
Deferred Fermi 2 depreciation
and return 3.5 1.1 (0.6)
Investment tax credit (1.9) (1.7) (1.9)
Depreciation 5.5 3.9 3.3
Other-net (3.2) (1.6) (0.2)
------------------------------------------------------
Effective income tax rate 38.9% 36.7% 34.6%
======================================================
</TABLE>
41
<PAGE> 42
Components of income taxes were applicable to the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
1994 1993 1992
--------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
Operating expenses
Current $195,848 $243,480 $204,346
Deferred-net ---------------------------------------------
Borrowed funds component of AFUDC (1,081) (1,081) (1,081)
Depreciation and amortization 52,873 74,567 70,864
Property taxes (23,640) (9,590) 3,952
Alternative minimum tax - 28,174 50,537
Fermi 2 capitalized labor and
expenses (1,998) (1,692) (1,692)
Nuclear fuel 14,645 (1,543) 6,313
Fermi 2 performance reserve (10,850) - -
Reacquired debt losses 43,162 - -
Indirect construction costs (1,268) (1,268) (1,268)
Uncollectible accounts 1,380 (700) (3,060)
Contributions in aid of construction (6,898) (3,756) (4,877)
Fermi 2 refueling outage 6,798 (6,136) 2,068
Shareholder value improvement plan 2,244 559 (2,256)
Coal contract buyouts (401) (1,411) (1,918)
Injuries and damages (1,071) (5,855) -
Steam purchase reserve - (3,850) -
Employee reorganization expenses 4,200 (4,200) -
Pensions and benefits 10,130 4,925 3,708
Other (590) 1,073 (6,110)
---------------------------------------------
87,635 68,216 115,180
---------------------------------------------
Investment tax credit-net
Utilized 2,612 250 (417)
Amortized (15,438) (14,477) (16,351)
---------------------------------------------
(12,826) (14,227) (16,768)
---------------------------------------------
Total 270,657 297,469 302,758
---------------------------------------------
Other income and deductions
Current (8,083) (7,712) (5,464)
Deferred-net (28) (882) (1,644)
---------------------------------------------
Total (8,111) (8,594) (7,108)
---------------------------------------------
Disallowed plant costs and accretion income
Current (18,384) (18,405) (19,835)
Deferred-net
Disallowed plant costs 17,863 17,863 19,874
Accretion income 4,773 14,604 15,537
---------------------------------------------
Total 4,252 14,062 15,576
---------------------------------------------
Total income taxes $266,798 $302,937 $311,226
=============================================
</TABLE>
The Fermi 2 phase-in plan required the Company to record additional deferred
income tax expense related to deferred depreciation totaling $33.5 million,
with this amount amortized to income over the six-year period ending December
31, 1998.
In January 1993, the Company adopted SFAS No. 109, "Accounting for Income
Taxes." SFAS No. 109 requires an asset and liability approach for financial
accounting and reporting for income taxes. At January 1, 1993, the Company
recorded an increase in accumulated deferred income tax liabilities of $740
million representing (a) the tax effect of temporary differences not previously
recognized and (b) the recomputing of its tax liability at the current tax
rate. The liability increase was offset by a regulatory asset of equal value,
titled "Recoverable Income Taxes" in the Consolidated Balance Sheet. This
regulatory asset represents the future revenue recovery from customers for
these taxes as they become payable, with no effect on net income. In August
1993, the Omnibus Budget Reconciliation Act of 1993 increased the federal
corporate income tax rate from 34% to 35% retroactive to January 1, 1993. As a
result, the Company recorded (1) an increase of $88.1 million in accumulated
deferred income tax liabilities, offset by a corresponding increase in
"Recoverable Income Taxes," and (2) an increase of $10.4 million in income tax
expense.
At December 31, 1994, "Recoverable Income Taxes" totaled $663.1 million
(deferrals of $828.1 million in 1993 less amortization of $108.2 million in
1994 and $56.8 million in 1993).
Deferred income tax assets (liabilities) are comprised of the following at
December 31:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
1994 1993
------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Property $(2,070,943) $(2,023,328)
Fermi 2 deferred depreciation and return (170,668) (207,724)
Property taxes (52,913) (76,553)
Investment tax credit 187,000 195,000
Reacquired debt losses (43,162) -
Other 103,240 63,096
----------- -----------
$(2,047,446) $(2,049,509)
=========== ===========
Deferred income tax liabilities $(2,566,578) $(2,590,064)
Deferred income tax assets 519,132 540,555
----------- -----------
$(2,047,446) $(2,049,509)
=========== ===========
</TABLE>
In 1993, the MPSC issued an order, in a generic proceeding, authorizing
accounting procedures consistent with SFAS No. 109 and providing assurance that
the effects of previously flowed-through tax benefits will continue to be
allowed rate recovery.
The federal income tax returns of the Company are settled through the year
1988. The Company believes that adequate provisions for federal income taxes
have been made through December 31, 1994.
42
<PAGE> 43
NOTE 7 - COMMON STOCK AND CUMULATIVE PREFERRED AND PREFERENCE STOCK
At December 31, the outstanding Cumulative Preferred Stock redeemable solely at
the option of the Company was:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Date of Issuance 1994 1993
------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
CUMULATIVE PREFERRED STOCK
5 1/2% Convertible Series, 55,470 and 59,419 shares,
respectively October 1967 $ 5,547 $ 5,942
7.68% Series, 500,000 shares March 1971 50,000 50,000
7.45% Series, 600,000 shares November 1971 60,000 60,000
7.36% Series, 750,000 shares December 1972 75,000 75,000
7.75% Series, 1,500,000 shares February 1993 150,000 150,000
7.74% Series, 500,000 shares April 1993 50,000 50,000
Preferred stock expense (10,264) (10,259)
-----------------------
Total Cumulative Preferred Stock $380,283 $380,683
=======================
</TABLE>
The Convertible Cumulative Preferred Stock, 5 1/2% Series, is convertible by
the holder into Common Stock. The conversion price was $17.79 per share at
December 31, 1994. The number of shares converted during 1994, 1993 and 1992
was 3,949, 5,563 and 5,978, respectively. The number of shares of Common Stock
reserved for issuance upon conversion and the conversion price are subject to
further adjustment in certain events. This Series may be redeemed at any time
in whole or in part at the option of the Company at $100 per share, plus
accrued dividends.
The Company's 7.68% Series, 7.45% Series and 7.36% Series Cumulative
Preferred Stock are redeemable solely at the option of the Company at a per
share redemption price of $101, plus accrued dividends.
The Company's 7.75% Series and 7.74% Series Cumulative Preferred Stock are
redeemable solely at the option of the Company at a per share redemption price
of $100 (equivalent to $25 per Depositary Share), plus accrued dividends, on
and after April 15, 1998 and July 15, 1998, respectively.
Apart from MPSC approval and the requirement that common, preferred and
preference stock be sold for at least par value, there are no legal
restrictions on the issuance of additional authorized shares of such stock.
At December 31, 1994, there was no outstanding Cumulative Preferred Stock
subject to mandatory redemption.
At December 31, 1994, the Company had Cumulative Preference Stock of $1 par
value, 30,000,000 shares authorized with 30,000,000 shares unissued.
On August 4, 1994, the Company purchased 2,206,635 shares of its $10 par
value Common Stock at a price of $27.125 per share, totaling $59.9 million,
from the trustee of the Detroit Edison Savings & Investment Plans. These
shares were canceled and reverted to the status of authorized but unissued
shares.
NOTE 8 - SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
As described below, at December 31, 1994, the Company had total short-term
credit arrangements of approximately $405 million. At December 31, 1994 and
December 31, 1993, $39.5 million and $138.2 million of short-term borrowings
were outstanding with weighted average interest rates of 6.2% and 3.4%,
respectively.
The Company had bank lines of credit of $200 million, all of which had
commitment fees in lieu of compensating balances. Commitment fees incurred in
1994 for bank lines of credit were approximately $0.3 million. The Company
uses bank lines of credit to support the issuance of commercial paper and bank
loans. All borrowings are at prevailing money market rates which are below the
banks' prime lending rates.
In May 1993, FERC issued its order authorizing the continuation of the
Company's $1 billion of short-term borrowing authority. This authority will be
in effect through May 31, 1995.
The Company has a nuclear fuel financing arrangement (heat purchase
contract) with Renaissance Energy Company ("Renaissance"), an unaffiliated
company. Renaissance may issue commercial paper or borrow from participating
banks on the basis of promissory notes. To the extent the maximum amount of
funds available to Renaissance (currently $400 million) is not needed by
Renaissance to purchase nuclear fuel, such funds may be loaned to the Company
for general corporate purposes pursuant to a separate Loan Agreement. At
December 31, 1994, approximately $205 million was available to the Company
under such Loan Agreement. See Note 9 for a discussion of the Company's heat
purchase contract with Renaissance.
Renaissance entered into five-year interest rate swap agreements, guaranteed
by the Company, in December 1990, with five banks for a nominal amount of $125
million. These agreements are used to reduce the potential impact of increases
in interest rates on the variable rate debt by exchanging the receipt of
variable rate amounts for fixed interest payments at rates ranging from 8.12%
to 8.145% over the life of the agreements. The differential to be paid or
received is recognized as an adjustment to the interest component included as
part of nuclear fuel expense.
43
<PAGE> 44
NOTE 9 - LEASES
Future minimum lease payments under long-term noncancellable leases, consisting
of nuclear fuel ($221 million computed on a projected units of production
basis), lake vessels ($48 million), locomotives and coal cars ($149 million),
office space ($28 million) and computers, vehicles and other equipment ($6
million) at December 31, 1994 are as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
(MILLIONS) (MILLIONS)
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1995 $103 1998 $ 41
1996 99 1999 23
1997 61 Remaining years 125
----
Total $452
====
----------------------------------------------------------------------------------------------------------
</TABLE>
The Company has a heat purchase contract with Renaissance which provides for
the purchase by Renaissance for the Company of up to $400 million of nuclear
fuel, subject to the continued availability of funds to Renaissance to purchase
such fuel. Title to the nuclear fuel is held by Renaissance. The Company
makes quarterly payments under the heat purchase contract based on the
consumption of nuclear fuel for the generation of electricity. Renaissance's
investment in nuclear fuel was $193 million and $184 million at December 31,
1994 and 1993, respectively. The increase in 1994 from 1993 of $9 million
includes purchases of $3 million and capitalized interest of $6 million.
Under SFAS No. 71, amortization of leased assets is modified so that the
total of interest on the obligation and amortization of the leased asset is
equal to the rental expense allowed for ratemaking purposes. For ratemaking
purposes, the MPSC has treated all leases as operating leases. Net income is
not affected by capitalization of leases.
Rental expenses for both capital and operating leases were $49 million
(including $8 million for nuclear fuel), $126 million (including $89 million
for nuclear fuel) and $108 million (including $70 million for nuclear fuel) for
1994, 1993 and 1992, respectively.
NOTE 10 - LONG-TERM DEBT
The Company's 1924 Mortgage and Deed of Trust ("Mortgage"), the lien of which
covers substantially all of the Company's properties, provides for the issuance
of additional bonds. At December 31, 1994, approximately $3.1 billion principal
amount of Mortgage Bonds could have been issued on the basis of property
additions, combined with an earnings test provision, assuming an interest rate
of 8.9% on any such additional Mortgage Bonds. An additional $1.2 billion
principal amount of Mortgage Bonds could have been issued on the basis of bond
retirements.
Long-term debt outstanding at December 31 was:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
Interest Rate 1994 1993
---------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
GENERAL AND REFUNDING MORTGAGE BONDS
Series R, due 12/1/96 6 % $ 100,000 $ 100,000
Series S, due 10/1/98 6.4 150,000 150,000
1989 Series A, due 7/1/19 9 7/8 - 168,285
1990 Series A, due 3/31/20 7.904 163,254 169,533
1990 Series B, due 3/31/16 7.904 209,352 218,868
1990 Series C, due 3/31/14 8.357 68,380 71,799
1992 Series D, due 8/1/02 and 8/1/22 7.605 * 290,000 300,000
1992 Series E, due 12/15/99 6.83 50,000 50,000
1993 Series B, due 12/15/99 6.83 50,000 50,000
1993 Series C, due 1/15/03 and 1/13/23 7.939 * 225,000 225,000
1993 Series D, due 4/1/99 6.45 100,000 100,000
1993 Series E, due 3/15/00, 3/17/03 and 3/15/23 6.854 * 390,000 400,000
1993 Series G, due 5/1/97 and 5/1/01 5.921 * 225,000 225,000
1993 Series J, due 6/1/18 7.74 270,000 300,000
Less: Unamortized net discount (182) (1,906)
Amount due within one year (19,214) (19,214)
-------------------------
$2,271,590 $2,507,365
-------------------------
REMARKETED NOTES
Secured by corresponding amounts of General and
Refunding Mortgage Bonds
1993 Series H, due 7/15/28 5.839 ** $ 50,000 $ 50,000
1993 Series K, due 8/15/33 4 5/8 ** 160,000 160,000
1994 Series C, due 8/15/34 6.708 ** 200,000 -
Less: Unamortized net discount (177) (181)
-------------------------
$ 409,823 $ 209,819
-------------------------
</TABLE>
<TABLE>
<CAPTION>
Interest Rate 1994 1993
------------------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
TAX EXEMPT REVENUE BOND OBLIGATIONS
Secured by corresponding amounts of General and
Refunding Mortgage Bonds
Installment Sales Contracts, due 9/1/05 - 9/1/24 7.32%* $ 302,155 $ 306,440
Less: Unamortized net discount (279) (293)
Funds on deposit with Trustee - (160)
Amount due within one year - (435)
-----------------------------
$ 301,876 $ 305,552
-----------------------------
Loan Agreements, due 7/15/08 - 8/1/24 6.73 * $ 487,495 $ 467,025
Less: Unamortized net discount (73) -
-----------------------------
$ 487,422 $ 467,025
-----------------------------
Unsecured
Installment Sales Contracts, due 12/15/15 - 12/1/19 8.95 * $ 314,060 $ 290,360
-----------------------------
Loan Agreements, due 4/15/10 - 10/1/24 5.02 * $ 40,525 $ 50,475
-----------------------------
$1,143,883 $1,113,412
-----------------------------
Total Long-Term Debt $3,825,296 $3,830,596
=============================
</TABLE>
* Weighted average interest rate at December 31, 1994.
** Variable rate at December 31, 1994.
44
<PAGE> 45
In 1995, 1996, 1997, 1998 and 1999, long-term debt maturities consist of $19
million, $119 million, $144 million, $169 million and $219 million,
respectively.
In June 1992, the Company entered into a three-year interest rate swap
agreement matched to a $31 million variable rate tax exempt revenue bond. This
agreement is used to reduce the potential impact of increases in interest rates
on the variable rate debt by exchanging the receipt of variable rate amounts
for fixed interest payments at a rate of 4.32% over the life of the agreement.
The differential to be paid or received is recognized as an adjustment to
interest expense related to the debt.
NOTE 11 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
CASH AND TEMPORARY CASH INVESTMENTS/SHORT-TERM BORROWINGS
The carrying amount approximates fair value because of the short maturity of
those instruments.
OTHER INVESTMENTS
The fair value of the Company's other investments was not estimated since
they are not material and because some are already recorded at fair value.
NUCLEAR DECOMMISSIONING TRUST FUNDS
The fair value of the Company's nuclear decommissioning trust funds is
estimated based on quoted market prices for securities and carrying amount for
the cash equivalents.
SALE OF ACCOUNTS RECEIVABLE AND UNBILLED REVENUES
The carrying amount approximates fair value because of the short maturity of
accounts receivable and unbilled revenues pledged for sale.
CUMULATIVE PREFERRED STOCK
The fair value of the Company's preferred stock outstanding is estimated
based on the quoted market prices for the same or similar issues.
LONG-TERM DEBT
The fair value of the Company's long-term debt is estimated based on the
quoted market prices for the same or similar issues or on the current rates
offered to the Company for debt of the same remaining maturities.
CUSTOMER SURETY DEPOSITS
Surety deposits, including interest as specified by MPSC regulation, are
returned to customers. The carrying amount approximates fair value.
The estimated fair values of the Company's financial instruments at December
31, all of which are held or issued for purposes other than trading, are as
follows:
<TABLE>
<CAPTION>
1994 1993
-------------------------- -------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- -------- -------- --------
(Thousands)
<S> <C> <C> <C> <C>
Cash and temporary cash investments $ 8,122 $ 8,122 $ 11,071 $ 11,071
Other investments 15,168 15,168 2,809 2,809
Nuclear decommissioning trust funds 76,492 76,492 29,929 31,290
Sale of accounts receivable and
unbilled revenues 200,000 200,000 200,000 200,000
Cumulative preferred stock 390,547 336,249 390,942 396,154
Long-term debt 3,844,510 3,511,459 3,850,405 4,106,216
Short-term borrowings 39,489 39,489 138,204 138,204
Customer surety deposits 10,870 10,870 10,819 10,819
</TABLE>
NOTE 12 - COMMITMENTS AND CONTINGENCIES
COMMITMENTS - The Company has entered into purchase commitments of
approximately $638 million at December 31, 1994, which includes, among other
things, the costs of major turbine components to be replaced at Fermi 2 and
line construction and clearance costs. The Company also has entered into
substantial long-term fuel supply and transportation commitments.
The Company has an Energy Purchase Agreement ("Agreement") for the purchase
of steam and electricity from the Detroit Resource Recovery Facility. Under
the Agreement, the Company will purchase steam through the year 2008 and
electricity through June 30, 2024. Purchases of steam and electricity were
$21.3 million, $23.6 million and $24.5 million for 1992, 1993 and 1994,
respectively, and annual purchase commitments are approximately $30.0 million,
$33.2 million, $35.8 million, $37.0 million and $38.3 million for 1995, 1996,
1997, 1998 and 1999, respectively.
CONTINGENCIES - In 1986, the Michigan Attorney General and the Michigan Natural
Resources Commission filed a state lawsuit against the Company and Consumers as
co-owners of Ludington for claimed aquatic losses. The Company is a 49%
co-owner of Ludington. The suit, which alleges violations of the Michigan
Environmental Protection Act and the common law for claimed aquatic losses,
seeks past damages (including interest) of approximately $148 million and
future damages (from the time of the filing of the lawsuit) in the amount of
approximately $89,500 per day (of which 49% would be applicable to the
Company).
In 1986, two environmental organizations requested FERC to withdraw the
Ludington license or provide some mitigation for fish mortality. In April
1989, Consumers and the Company were ordered by the FERC to install a temporary
barrier net around the plant to protect fish on an interim basis until
45
<PAGE> 46
permanent measures could be developed. A net has been in operation for
six seasons and the companies have proposed that it be utilized as part of the
permanent solution.
On October 5, 1994, the Company and all other parties to the state action and
the FERC proceeding, except certain Indian tribes, reached a tentative
settlement. The settlement agreement is subject to FERC and MPSC approval.
(The Michigan Supreme Court is holding this matter in abeyance pending approval
of a settlement.) The settlement provides for damages and use of the net as a
permanent solution. The net present value of the Company's portion of the
damages is estimated to be approximately $30 million which will be paid over a
24-year period, including $10 million to enhance recreational opportunities on
Company-owned and donated property. At December 31, 1994, the Company has
recorded a regulatory asset and liability of $7 million for past damages,
pending approval by the FERC and MPSC.
In January 1989, the Environmental Protection Agency ("EPA") issued an
administrative order under the Comprehensive Environmental Response,
Compensation and Liability Act ordering the Company and 23 other potentially
responsible parties ("PRPs") to begin removal activities at the Carter
Industrials superfund site. In June 1993, a Consent Decree was entered by the
U.S. District Court for the Eastern District of Michigan. It included a
provision for the payment of past costs incurred by the EPA of which the
Company's share was approximately $1.3 million, paid in June 1993. The Company
has recorded a liability of $8.4 million, which amount was charged to other
operation expense in the Consolidated Statement of Income in 1989-1992, as its
anticipated cost of the clean-up in 1995-1997. On July 7, 1994, the PRPs in
this matter petitioned the EPA to consider amending the clean-up plan to permit
landfill disposal of certain contaminated soil and on December 12, 1994, the
EPA issued a public notice of its intent to amend the Consent Decree to
incorporate the proposed change in the clean-up plan. Should the procedure be
approved, the Company's portion of the clean-up costs will be reduced by
approximately $3 million. There is, however, the possibility that EPA may,
through subsequent proceedings, require a clean-up of the sewer and sewer
outfall emptying into the Detroit River.
In August 1993, the Company, along with approximately 28 other parties,
received a "Notice of Demand" from the Michigan Department of Natural Resources
("MDNR"), acting pursuant to a Michigan statute, for all past ($142,000) and
future costs incurred by the state in performing response activities related to
the Carter Industrials site. In addition, the notice indicated the need to
conduct a PCB-sediment sampling program at the sewer outfall emptying into the
Detroit River. In response to the "Notice of Demand," the Carter Industrials
Site Group (the group, including the Company, of PRPs formed to jointly
remediate the Carter Industrials site) paid $126,600 of past costs incurred by
the MDNR, of which approximately 45% ($57,000) was paid by the Company. The
group declined to commit to pay future costs which the MDNR may incur and
declined to conduct the program of Detroit River sediment sampling and analysis
requested by the MDNR. At this time, it is impossible to predict what impact,
if any, this matter will have upon the Company.
The Energy Act became effective in October 1992. While the Company is unable
to predict the ultimate impact of this legislation on its operations, the
Company expects that, over time, non-utility generation resources will be
developed which will result in greater competition for power sales.
In addition to the matters reported herein, the Company is involved in
litigation and environmental matters dealing with the numerous aspects of its
business operations. The Company believes that such litigation and the matters
discussed above will not have a material effect on its financial position or
results of operations.
See Notes 2 and 3 for a discussion of contingencies related to Fermi 2.
NOTE 13 - EMPLOYEES' RETIREMENT PLAN AND OTHER POSTRETIREMENT BENEFITS
EMPLOYEES' RETIREMENT PLAN - The Company has a trusteed and non-contributory
defined benefit retirement plan ("Plan") covering all eligible employees who
have completed six months of service. The Plan provides retirement benefits
based on the employee's years of benefit service, average final compensation
and age at retirement. The Company's policy is to fund pension cost calculated
under the projected unit credit actuarial cost method, provided that this
amount is at least equal to the minimum funding requirement of the Employee
Retirement Income Security Act of 1974, as amended, and is not greater than the
maximum amount deductible for federal income tax purposes. Contributions were
made to the Plan totaling $23.7 million in 1992, $29.4 million in 1993 and
$45.8 million in 1994.
Net pension cost included the following components:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
1994 1993 1992
-----------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C> <C>
Service cost - benefits earned during
the period $ 25,146 $ 22,945 $ 21,644
Interest cost on projected benefit
obligation 75,922 74,490 70,511
Actual return on Plan assets (3,272) (119,037) (56,208)
Net deferral and amortization:
Deferral of net gain (loss) during
current period (90,069) 33,435 (23,528)
Amortization of unrecognized prior
service cost 3,613 3,297 2,776
Amortization of unrecognized net
asset resulting from initial
application (4,507) (4,507) (4,507)
--------------------------------------------
Net pension cost $ 6,833 $ 10,623 $ 10,688
============================================
</TABLE>
46
<PAGE> 47
Assumptions used in determining net pension cost are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Discount rate 7.5% 8.0% 8.0%
Annual increase in future compensation
levels 4.5 5.0 5.0
Expected long-term rate of return on
Plan assets 9.5 9.5 9.5
------------------------------------------------------------------------------------------------------------
</TABLE>
The following reconciles the funded status of the Plan to the amount
recorded in the Company's Consolidated Balance Sheet:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
December 31
-------------------------------
1994 1993
------------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Plan assets at fair value, primarily equity
and debt securities $1,054,048 $1,059,775
-------------------------------
Less actuarial present value of benefit obligation:
Accumulated benefit obligation, including vested
benefits of $852,374 and $872,138, respectively 872,530 892,761
Increase in future compensation levels 138,411 152,279
-------------------------------
Projected benefit obligation 1,010,941 1,045,040
-------------------------------
Plan assets in excess of projected benefit obligation 43,107 14,735
Unrecognized net asset resulting from initial
application (33,288) (37,795)
Unrecognized net loss (gain) 3,856 (7,315)
Unrecognized prior service cost 40,391 45,518
-------------------------------
Asset recorded as Other Deferred Debits
in the Consolidated Balance Sheet $ 54,066 $ 15,143
===============================
------------------------------------------------------------------------------------------------------------
</TABLE>
Assumptions used in determining the projected benefit obligation are as
follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
December 31
--------------------------
1994 1993
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Discount rate 8.0% 7.5%
Annual increase in future compensation levels 4.5 4.5
-----------------------------------------------------------------------------------------------------------
</TABLE>
The unrecognized net asset at date of initial application is being amortized
over approximately 15.4 years, which was the average remaining service period
of employees at January 1, 1987.
In addition to the Plan, the Company has several supplemental non-qualified,
non-contributory, unfunded retirement benefit plans for certain management
employees.
OTHER POSTRETIREMENT BENEFITS - The Company provides certain postretirement
health care and life insurance benefits for retired employees. Substantially
all of the Company's employees will become eligible for such benefits if they
reach retirement age while working for the Company. These benefits are
provided principally through insurance companies and other organizations.
Effective January 1, 1993, the Company adopted the provisions of SFAS No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions."
The standard required the Company to change its accounting for postretirement
benefits from the pay-as-you-go (cash) basis to the accrual of such benefits
during the active service periods of employees to the date they attain full
eligibility for benefits. The transition obligation at the time of adoption is
being amortized over 20 years. The Company's incremental cost upon adoption of
the standard was $49 million for 1993 which is being deferred in accordance
with the January 21, 1994 MPSC rate order. See Note 3. This amount is being
amortized and recovered in rates over the estimated four-year period 1994-1997.
Net other postretirement benefits cost included the following components:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
1994 1993
-----------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Service cost - benefits earned
during the period $16,267 $15,312
Interest cost on accumulated
postretirement benefit obligation 33,459 33,787
Actual return on assets (208) (18)
Deferral of net loss during current period (833) -
Amortization of unrecognized
transition obligation 20,633 21,685
-----------------------------
Net other postretirement benefits cost $69,318 $70,766
=============================
-----------------------------------------------------------------------------------------------------------
</TABLE>
Assumptions used in determining net other postretirement benefits cost are
as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
1994 1993
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Discount rate 7.5% 8.0%
Annual increase in future compensation levels 4.5 5.0
Expected long-term rate of return on assets 9.5 9.5
-----------------------------------------------------------------------------------------------------------
</TABLE>
47
<PAGE> 48
The following reconciles the funded status to the amount recorded in the
Company's Consolidated Balance Sheet:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
December 31
----------------------------
1994 1993
----------------------------------------------------------------------------------------------------------
(Thousands)
<S> <C> <C>
Actuarial present value of benefit obligation:
Retirees $(256,370) $(242,787)
Fully eligible active participants (67,581) (65,933)
Other active participants (140,710) (129,075)
----------------------------
Accumulated postretirement benefit obligation (464,661) (437,795)
Less assets at fair value, primarily
equity and debt securities 58,080 599
----------------------------
Benefit obligation in excess of assets (406,581) (437,196)
Unrecognized transition obligation 369,459 392,026
Unrecognized net gain (21) (3,397)
----------------------------
Liability recorded as Other Non-Current
Liabilities in the Consolidated Balance Sheet $ (37,143) $ (48,567)
============================
------------------------------------------------------------------------------------------------------------
</TABLE>
Assumptions used in determining the accumulated benefit obligation are as
follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
December 31
-----------------------------
1994 1993
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Discount rate 8.0% 7.5%
Annual increase in future compensation levels 4.5 4.5
-----------------------------------------------------------------------------------------------------------
</TABLE>
Benefit costs were calculated assuming health care cost trend rates beginning
at 12.6% for 1994 and decreasing to 6.0% in 2008 and thereafter for persons
under age 65 and decreasing from 7.4% to 6.0% for persons age 65 and over. A
one-percentage-point increase in health care cost trend rates would increase
the aggregate of the service cost and interest cost components of benefit costs
by $6 million for 1994 and increase the accumulated benefit obligation by $47
million at December 31, 1994.
NOTE 14 - SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
1994 Quarter Ended
------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------------------------------------------------------------------------------------------------------------
(Thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating Revenues $899,589 $872,690 $944,389 $802,673
Operating Income 189,319 161,832 200,298 167,946
Net Income 112,870 87,283 124,381 95,375
Earnings for Common Stock 105,458 79,872 116,972 87,967
Earnings Per Share 0.72 0.54 0.80 0.61
------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
1993 Quarter Ended
-----------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
------------------------------------------------------------------------------------------------------------
(Thousands, except per share amounts)
<S> <C> <C> <C> <C>
Operating Revenues $874,847 $835,171 $976,248 $868,945
Operating Income 221,732 186,498 228,436 207,281
Net Income 135,203 102,664 153,365 130,671
Earnings for Common Stock 127,060 94,799 145,950 123,257
Earnings Per Share 0.86 0.64 0.99 0.84
------------------------------------------------------------------------------------------------------------
</TABLE>
The fourth quarter of 1994 includes a decrease in operating revenues of $59
million, a decrease in operation expense of $65 million and a decrease in
maintenance expense of $1 million related to a settlement agreement, with the
parties intervening in the 1994 PSCR reconciliation case with the MPSC, for
business interruption insurance proceeds associated with the December 25, 1993
outage at Fermi 2. See Note 2.
Earnings per share amounts for each quarter are required to be computed
independently and, therefore, may not equal the amount computed for the total
year.
48
<PAGE> 49
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
The Company's Board of Directors, upon the recommendation of the
Board's Audit Committee, has appointed Deloitte & Touche LLP as independent
accountants of the Company for the year 1995. The appointment is subject to
ratification by the Company's Common Stock Shareholders at the Annual Meeting
of Common Stock Shareholders to be held on April 24, 1995 ("Annual Meeting").
(The Company's Board of Directors has also approved the formation of a holding
company; and ratification of the appointment of Deloitte & Touche LLP as
independent accountants of the Company will be considered ratification of the
firm's appointment as independent accountants for the holding company if the
holding company is approved at the Annual Meeting.)
In prior years, Price Waterhouse LLP served as independent accountants of the
Company. During the Company's two fiscal years ending December 31, 1994 and
the subsequent interim period from January 1, 1995 through the date hereof,
there have been no disagreements with Price Waterhouse LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to its satisfaction, would have
caused Price Waterhouse LLP to make reference thereto in their report on the
financial statements for such years. None of Price Waterhouse LLP's reports on
the financial statements for the past two years contained an adverse opinion or
a disclaimer of opinion, or was qualified or modified as to uncertainty, audit
scope or accounting principles.
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding the Company's executive officers is incorporated
herein by reference to Items 1 and 2 - Business and Properties, "Employes and
Executive Officers" on pages 20-21 hereof; information regarding compliance
with section 16(a) of the Securities Exchange Act of 1934 is incorporated
herein by reference to the data under the heading "Compliance with Section
16(a) of the Securities Exchange Act of 1934" on page 35 of the Company's
definitive proxy statement dated March 9, 1995, in connection with its Annual
Meeting of Shareholders to be held on April 24, 1995; and information regarding
directors is incorporated herein by reference to the data under the heading
"The Election of Directors" on pages 5-9 of the Company's definitive proxy
statement dated March 9, 1995, in connection with its Annual Meeting of
Shareholders to be held on April 24, 1995.
ITEM 11 - EXECUTIVE COMPENSATION.
Information regarding "Executive Compensation" is incorporated herein
by reference to the data under the heading "Board Compensation Committee Report
on Executive Compensation" on pages 10-15 of the Company's definitive proxy
statement dated March 9, 1995, in connection with its Annual Meeting of
Shareholders to be held on April 24, 1995.
49
<PAGE> 50
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding ownership of equity securities is incorporated
herein by reference to the heading "Security Ownership of Management" on page 9
of the Company's definitive proxy statement dated March 9, 1995, in connection
with its Annual Meeting of Shareholders to be held on April 24, 1995.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding certain relationships and related transactions
is incorporated herein by reference to the heading "Compensation Committee
Interlocks and Insider Participation" on page 15 of the Company's definitive
proxy statement dated March 9, 1995, in connection with its Annual Meeting of
Shareholders to be held on April 24, 1995.
50
<PAGE> 51
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Annual Report
on Form 10-K.
(1) Consolidated financial statements. See "Item 8 - Financial
Statements and Supplementary Data" on page 30.
(2) Financial statement schedules. See "Item 8 - Financial
Statements and Supplementary Data" on page 30.
(3) Exhibits (* Denotes management contract or compensatory
plan or arrangement required to be filed as an exhibit to
this report pursuant to Item 14 (c) of this report).
(i) Exhibits filed herewith.
Exhibit
Number
-------
4-169 - Supplemental Indenture, dated as of
December 1, 1994, establishing the
Series KKP No. 15 and 1994 Series DP
Mortgage Bonds.
4-170 - Supplemental Indenture, dated as of
October 15, 1985, establishing the
Series KKP No. 9 Mortgage Bonds.
4-171 - Supplemental Indenture, dated as of
July 15, 1989, establishing the
Series KKP No. 10 Mortgage Bonds.
4-172 - Supplemental Indenture, dated as of
December 1, 1989, establishing the
Series KKP No. 11 and 1989 Series BP
Mortgage Bonds.
4-173 - Supplemental Indenture, dated as of
February 15, 1990, establishing the
1990 Series A, 1990 Series B, 1990
Series C, 1990 Series D, 1990 Series
E and 1990 Series F Mortgage Bonds.
*10-56 - Amended and Restated 1994 Officers'
Shareholder Value Improvement Plan
(1994 and subsequent years, January
23, 1995).
*10-57 - 1995 Officers' Shareholder Value
Improvement Plan (January 23, 1995).
*10-58 - Plan for Deferring the Payment of
Directors' Fees (January 23, 1995).
*10-59 - Retirement Plan for Non-Employe
Directors (February 27, 1995).
51
<PAGE> 52
Exhibit
Number
-------
11-21 - Primary and Fully Diluted Earnings
Per Share of Common Stock.
12-26 - Computation of Ratio of Earnings to
Fixed Charges.
12-27 - Computation of Ratio of Earnings to
Fixed Charges and Preferred and
Preference Stock Dividend
Requirements.
23-7 - Consent of Independent Accountants.
(ii) Exhibits incorporated herein by reference.
4(a) - Restated Articles of Incorporation of
the Company, as filed December 10,
1991 with the State of Michigan,
Department of Commerce - Corporation
and Securities Bureau (Exhibit 4-117
to Form 10-Q for quarter ended March
31, 1993).
4(b) - Certificate containing resolution of
the Board of Directors establishing
the Cumulative Preferred Stock, 7.75%
Series as filed February 22, 1993
with the State of Michigan,
Department of Commerce - Corporation
and Securities Bureau (Exhibit 4-134
to Form 10-Q for quarter ended March
31, 1993).
4(c) - Certificate containing resolution of
the Board of Directors establishing
the Cumulative Preferred Stock, 7.74%
Series, as filed April 21, 1993 with
the State of Michigan, Department of
Commerce - Corporation and Securities
Bureau (Exhibit 4-140 to Form 10-Q
for quarter ended March 31, 1993).
4(d) - By-Laws of the Company as amended
November 25, 1991 (Exhibit 4-118 to
Form 10-K for year ended December 31,
1991).
4(e) - Mortgage and Deed of Trust, dated as
of October 1, 1924, between the
Company (File No. 1-2198) and Bankers
Trust Company as Trustee (Exhibit B-1
to Registration No. 2-1630) and
indentures supplemental thereto,
dated as of dates indicated below,
and filed as exhibits to the filings
as set forth below:
September 1, 1947 Exhibit B-20 to
Registration No. 2-7136
October 1, 1968 Exhibit 2-B-33 to
Registration No. 2-30096
52
<PAGE> 53
Exhibit
Number
-------
November 15, 1971 Exhibit 2-B-38 to
Registration No. 2-42160
January 15, 1973 Exhibit 2-B-39 to
Registration No. 2-46595
June 1, 1978 Exhibit 2-B-51 to
Registration No. 2-61643
June 30, 1982 Exhibit 4-30 to
Registration No. 2-78941
August 15, 1982 Exhibit 4-32 to
Registration No. 2-79674
November 30, 1987 Exhibit 4-139 to
Form 10-K for year
ended December 31, 1992
November 1, 1990 Exhibit 4-110 to
Form 10-K for year
ended December 31, 1990
April 1, 1991 Exhibit 4-111 to
Form 10-Q for quarter
ended March 31, 1991
May 1, 1991 Exhibit 4-112 to
Form 10-Q for quarter
ended June 30, 1991
May 15, 1991 Exhibit 4-113 to Form 10-Q
for quarter ended June 30,
1991
September 1, 1991 Exhibit 4-116 to Form 10-Q
for quarter ended September
30, 1991
November 1, 1991 Exhibit 4-119 to Form 10-K
for year ended December 31,
1991
January 15, 1992 Exhibit 4-120 to Form 10-K
for year ended December 31,
1991
February 29, 1992 Exhibit 4-121 to Form 10-Q
for quarter ended March 31,
1992
April 15, 1992 Exhibit 4-122 to Form 10-Q
for quarter ended June 30,
1992
July 15, 1992 Exhibit 4-123 to Form 10-Q
for quarter ended September
30, 1992
July 31, 1992 Exhibit 4-124 to Form 10-Q
for quarter ended September
30, 1992
November 30, 1992 Exhibit 4-130 to
Registration No. 33-56496
January 1, 1993 Exhibit 4-131 to
Registration No. 33-56496
March 1, 1993 Exhibit 4-141 to Form 10-Q
for quarter ended March 31,
1993
March 15, 1993 Exhibit 4-142 to Form 10-Q
for quarter ended March 31,
1993
April 1, 1993 Exhibit 4-143 to Form 10-Q
for quarter ended March 31,
1993
April 26, 1993 Exhibit 4-144 to Form 10-Q
for quarter ended March 31,
1993
May 31, 1993 Exhibit 4-148 to
Registration No. 33-64296
June 30, 1993 Exhibit 4-149 to Form 10-Q
for quarter ended June 30,
1993 (1993 Series AP)
53
<PAGE> 54
Exhibit
Number
-------
June 30, 1993 Exhibit 4-150 to Form 10-Q
for quarter ended June 30,
1993 (1993 Series H)
September 15, 1993 Exhibit 4-158 to Form 10-Q
for quarter ended September
30, 1993
March 1, 1994 Exhibit 4-163 to
Registration No. 33-53207.
June 15, 1994 Exhibit 4-166 to Form 10-Q
for quarter ended June 30,
1994.
August 15, 1994 Exhibit 4-168 to Form 10-Q
for quarter ended September
30, 1994.
4(f) - Collateral Trust Indenture (notes),
dated as of June 30, 1993 (Exhibit
4-152 to Registration No. 33-50325).
4(g) - First Supplemental Note Indenture,
dated as of June 30, 1993 (Exhibit
4-153 to Registration No. 33-50325).
4(h) - Second Supplemental Note Indenture,
dated as of September 15, 1993
(Exhibit 4-159 to Form 10-Q for
quarter ended September 30, 1993).
4(i) - Third Supplemental Note Indenture,
dated as of August 15, 1994 (Exhibit
4-169 to Form 10-Q for quarter ended
September 30, 1994).
4(j) - Amended and Restated Standby Note
Purchase Credit Facility, dated as of
April 26, 1994, among The Detroit
Edison Company, The Bank of New York,
The Toronto-Dominion Bank, acting
through its Houston Agency,
Toronto-Dominion (Texas), Inc., as
Administrative Agent and Citicorp
Securities, Inc., as Remarketing
Agent (Exhibit 99-5 to Registration
No. 33-50325).
4(k) - Standby Note Purchase Credit
Facility, dated as of August 17,
1994, among The Detroit Edison
Company, Barclays Bank PLC, as Bank
and Administrative Agent, Bank of
America, The Bank of New York, The
Fuji Bank Limited, The Long-Term
Credit Bank of Japan, LTD, Union Bank
and Citicorp Securities, Inc. and
First Chicago Capital Markets, Inc.
as Remarketing Agents (Exhibit 99-18
to Form 10-Q for quarter ended
September 30, 1994).
54
<PAGE> 55
Exhibit
Number
-------
*10(a)- Form of Indemnification Agreement
between the Company and (1) Frank E.
Agosti, (2) Gerard M. Anderson, (3)
Robert J. Buckler, (4) Malcolm G.
Dade, Jr., (5) Ronald W. Gresens, (6)
Leslie L. Loomans, (7) S. Martin
Taylor, (8) Saul J. Waldman, (9)
Susan M. Beale, (10) Frederick S.
Karwacki, (11) Douglas R. Gipson,
(12) Robert J. Horn, (13) Thomas A.
Hughes, (14) Christopher C. Nern,
(15) Ronald J. Gdowski, (16) Elaine
M. Godfrey, (17) Allen W. Anning,
(18) Christopher C. Arvani, (19)
James R. McGillivary, (20) Thomas J.
Howlin, (21) Donald J. Brett, (22)
Michael E. Champley, (23) T. Michael
Holton, and (24) Haven E. Cockerham
(Exhibit 10-41 to Form 10-Q for
quarter ended June 30, 1993).
*10(b)- 1991 Shareholder Value Improvement
Plan - A, as amended effective
January 25, 1993 (Exhibit 10-43 to
Form 10-Q for quarter ended June 30,
1993).
*10(c)- 1990 Shareholder Value Improvement
Plan - A, as amended January 25, 1993
(Exhibit 10-44 to Form 10-Q for
quarter ended June 30, 1993).
*10(d)- 1994 Officers' Shareholder Value
Improvement Plan, January, 1994
(Exhibit 10-50 to Form 10-K for year
ended December 31, 1993).
*10(e)- Certain Arrangements Pertaining to
the Employment of S. Martin Taylor
(Exhibit 10-38 to Form 10-K for year
ended December 31, 1992).
*10(f)- Certain arrangements pertaining to
the employment of Anthony F. Earley,
Jr. (Exhibit 10-53 to Form 10-Q for
quarter ended March 31, 1994).
*10(g)- Amended and Restated Savings
Separation Plan, June 1994 (Exhibit
10-54 to Form 10-Q for quarter ended
June 30, 1994.)
*10(h)- Certain arrangements pertaining to
the employment of Haven E. Cockerham
(Exhibit 10-55 to Form 10-Q for
quarter ended September 30, 1994).
*10(i)- Key Employe Deferred Compensation
Plan (January 1990). (Exhibit 10-21
to Form 10-K for year ended December
31, 1989).
55
<PAGE> 56
Exhibit
Number
*10(j)- Retirement Reparation Plan for
Certain Employes of The Detroit
Edison Company (as amended through
May 22, 1989). (Exhibit 10-25 to
Form 10-K for year ended December 31,
1989).
*10(k)- Benefit Equalization Plan for Certain
Employes of The Detroit Edison
Company (as amended through May 22,
1989). (Exhibit 10-26 to Form 10-K
for year ended December 31, 1989).
*10(l)- Certain Arrangements Pertaining to
the Employment of Larry G. Garberding
(Exhibit 28-52 to Form 10-Q for
quarter ended June 30, 1990).
*10(m)- Form of Indemnification Agreement,
between the Company and (1) John E.
Lobbia, (2) Larry G. Garberding and
(3) Anthony F. Earley, Jr. (Exhibit
19-7 to Form 10-Q for quarter ended
March 31, 1992).
*10(n)- Form of Indemnification Agreement,
dated March 17, 1992, between the
Company and (1) Terence E. Adderley,
(2) Wendell W. Anderson, Jr., (3)
Walter J. McCarthy, Jr., (4) Lillian
Bauder, (5) David Bing, (6) Alan E.
Schwartz, (7) William Wegner, (8)
Theodore S. Leipprandt, (9) Patricia
S. Longe, (10) Eugene A. Miller, (11)
Dean E. Richardson, (12) David M.
Gates, and (13) Otis M. Smith
(Exhibit 19-8 to Form 10-Q for
quarter ended March 31, 1992).
*10(o)- Supplemental Long Term Disability
Plan, dated November 5, 1991 (Exhibit
10-32 to Form 10-K for year ended
December 31, 1991).
*10(p)- Executive Vehicle Program, dated
October 1, 1993 (Exhibit 10-47 to
Form 10-Q for quarter ended September
30, 1993).
*10(q)- Amendment No. 1 to Executive Vehicle
Plan, November 1993 (Exhibit 10-58 to
Form 10-K for year ended December 31,
1993).
*10(r)- Certain arrangements pertaining to
the employment of Gerard M. Anderson
(Exhibit 10-40 to Form 10-K for year
ended December 31, 1993).
*10(s)- Restated Management Supplemental
Benefit Plan, January 1994 (Exhibit
10-57 to Form 10-K for year ended
December 31, 1993).
99(a)- Belle River Participation Agreement
between the Company and Michigan
Public Power Agency, dated as of
December 1, 1982 (Exhibit 28-5 to
Registration No. 2-81501).
56
<PAGE> 57
Exhibit
Number
-------
99(b)- Belle River Transmission Ownership
and Operating Agreement between the
Company and Michigan Public Power
Agency, dated as of December 1, 1982
(Exhibit 28-6 to Registration No.
2-81501.)
99(c)- 1988 Amended and Restated Loan
Agreement, dated as of October 4,
1988, between Renaissance Energy
Company (an unaffiliated company)
("Renaissance") and the Company
(Exhibit 99-6 to Registration No.
33-50325).
99(d)- First Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
February 1, 1990, between the Company
and Renaissance (Exhibit 99-7 to
Registration No. 33-50325).
99(e)- Second Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
September 1, 1993, between the
Company and Renaissance (Exhibit 99-8
to Registration No. 33-50325).
99(f)- Third Amendment, dated as of August
31, 1994, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated October 4, 1988,
between The Detroit Edison Company
and Renaissance Energy Company
(Exhibit 99-21 to Form 10-Q for
quarter ended September 30, 1994).
99(g)- $200,000,000 364-Day Credit
Agreement, dated as of September 1,
1993, among the Company, Renaissance
and Barclays Bank PLC, New York
Branch, as Agent (Exhibit 99-12 to
Registration No. 33-50325).
99(h)- First Amendment, dated as of August
31, 1994, to $200,000,000 364-Day
Credit Agreement, dated September 1,
1993, among The Detroit Edison
Company, Renaissance Energy Company,
the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent
(Exhibit 99-19 to Form 10-Q for
quarter ended September 30, 1994).
99(i)- $200,000,000 Three-Year Credit
Agreement, dated September 1, 1993,
among the Company, Renaissance and
Barclays Bank PLC, New York Branch,
as Agent (Exhibit 99-13 to
Registration No. 33-50325).
99(j)- 1988 Amended and Restated Nuclear
Fuel Heat Purchase Contract, dated
October 4, 1988, between the Company
and Renaissance (Exhibit 99-9 to
Registration No. 33-50325).
99(k)- First Amendment to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated as of February 1,
1990, between the Company and
Renaissance (Exhibit 99-10 to
Registration No. 33-50325).
57
<PAGE> 58
Exhibit
Number
-------
99(l)- Second Amendment, dated as of
September 1, 1993, to 1988 Amended
and Restated Nuclear Fuel Heat
Purchase Contract between the Company
and Renaissance (Exhibit 99-11 to
Registration No. 33-50325).
99(m)- First Amendment, dated as of
September 1, 1994, to $200,000,000
Three-Year Credit Agreement, dated as
of September 1, 1993, among The
Detroit Edison Company, Renaissance
Energy Company, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent (Exhibit 99-20
to Form 10-Q for quarter ended
September 30, 1994).
99(n)- Master Trust Agreement, dated as of
June 30, 1994, between the Company
and Fidelity Management Trust Company
relating to the Employes Savings
Plans (Exhibit 4-167 to Form 10-Q for
quarter ended June 30, 1994).
(b) Registrant did not file any reports on Form 8-K during the
fourth quarter of 1994.
(c) * Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit to this
report.
58
<PAGE> 59
THE DETROIT EDISON COMPANY AND SUBSIDIARY COMPANIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Additions
Balance at ------------------------- Balance
Beginning Charged to Charged at End
of Costs and to Other of
Description Period Expenses Accounts(a) Deductions(b) Period
----------- ---------- ---------- ----------- ------------- -------
(Thousands)
<S> <C> <C> <C> <C> <C>
YEAR 1994
Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) . . . . . . . $34,000 $11,585 $3,246 $(18,831) $30,000
YEAR 1993
Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) . . . . . . . $32,000 $21,953 $2,752 $(22,705) $34,000
YEAR 1992
Allowance for
uncollectible accounts
(shown as deduction
from accounts receivable
in balance sheet) . . . . . . . $23,000 $31,834 $2,127 $(24,961) $32,000
</TABLE>
-----------------------
(a) Collection of accounts previously written off.
(b) Uncollectible accounts written off.
59
<PAGE> 60
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE DETROIT EDISON COMPANY
----------------------------------
(Registrant)
By /s/ JOHN E. LOBBIA By /s/ LARRY G. GARBERDING
---------------------------------- ----------------------------------
John E. Lobbia Larry G. Garberding
Chairman of the Board, Executive Vice President,
Chief Executive Chief Financial Officer and Director
Officer and Director
By /s/ ANTHONY F. EARLEY, JR. By /s/ RONALD W. GRESENS
--------------------------------- ----------------------------------
Anthony F. Earley, Jr. Ronald W. Gresens
President and Chief Operating Vice President and Controller
Officer and Director
By /s/ TERENCE E. ADDERLEY By /s/ WALTER J. McCARTHY, JR.
--------------------------------- ----------------------------------
Terence E. Adderley, Director Walter J. McCarthy, Jr., Director
By /s/ WENDELL W. ANDERSON, JR. By /s/ EUGENE A. MILLER
--------------------------------- ----------------------------------
Wendell W. Anderson, Jr., Director Eugene A. Miller, Director
By /s/ LILLIAN BAUDER By
--------------------------------- ----------------------------------
Lillian Bauder, Director Dean E. Richardson, Director
By /s/ DAVID BING By /s/ ALAN E. SCHWARTZ
--------------------------------- ----------------------------------
David Bing, Director Alan E. Schwartz, Director
By /s/ THEODORE S. LEIPPRANDT By /s/ WILLIAM WEGNER
---------------------------------- ---------------------------------
Theodore S. Leipprandt, Director William Wegner, Director
By /s/ PATRICIA S. LONGE
----------------------------------
Patricia S. Longe, Director
Date: March 27, 1995
60
<PAGE> 61
THE DETROIT EDISON COMPANY
ANNUAL REPORT ON FORM 10-K FOR
YEAR ENDED DECEMBER 31, 1994
File No. 1-2198
EXHIBIT INDEX
Exhibit Page
Number Number
------- ------
Exhibits Filed Herewith
4-169 - Supplemental Indenture, dated as of
December 1, 1994, establishing the
Series KKP No. 15 and 1994 Series DP
Mortgage Bonds.
4-170 - Supplemental Indenture, dated as of
October 15, 1985, establishing the
Series KKP No. 9 Mortgage Bonds.
4-171 - Supplemental Indenture, dated as of
July 15, 1989, establishing the
Series KKP No. 10 Mortgage Bonds.
4-172 - Supplemental Indenture, dated as of
December 1, 1989, establishing the
Series KKP No. 11 and 1989 Series BP
Mortgage Bonds.
4-173 - Supplemental Indenture, dated as of
February 15, 1990, establishing the
1990 Series A, 1990 Series B, 1990
Series C, 1990 Series D, 1990 Series
E and 1990 Series F Mortgage Bonds.
*10-56 - Amended and Restated 1994 Officers'
Shareholder Value Improvement Plan
(1994 and subsequent years, January
23, 1995).
*10-57 - 1995 Officers' Shareholder Value
Improvement Plan (January 23, 1995).
*10-58 - Plan for Deferring the Payment of
Directors Fees (January 23, 1995).
*10-59 - Retirement Plan for Non-Employe
Directors (February 27, 1995).
11-21 - Primary and Fully Diluted Earnings
Per Share of Common Stock.
12-26 - Computation of Ratio of Earnings to
Fixed Charges.
12-27 - Computation of Ratio of Earnings to
Fixed Charges and Preferred and
Preference Stock Dividend
Requirements.
23-7 - Consent of Independent Accountants.
1
<PAGE> 62
Exhibit Page
Number Number
------- ------
Exhibits incorporated herein by reference.
See Page Numbers
______ for location of
Exhibits Incorporated
By Reference
4(a) - Restated Articles of Incorporation of
the Company, as filed December 10,
1991 with the State of Michigan,
Department of Commerce - Corporation
and Securities Bureau.
4(b) - Certificate containing Resolution of
the Board of Directors establishing
the Cumulative Preferred Stock, 7.75%
Series, as filed February 22, 1993
with the State of Michigan,
Department of Commerce - Corporation
and Securities Bureau.
4(c) - Certificate containing resolution of
the Board of Directors establishing
the Cumulative Preferred Stock, 7.74%
Series, as filed April 21, 1993 with
the State of Michigan, Department of
Commerce - Corporation and Securities
Bureau.
4(d) - By-Laws of the Company as amended
November 25, 1991.
4(e) - Mortgage and Deed of Trust, dated as
of October 1, 1924, between the
Company and Bankers Trust Company as
Trustee and indentures supplemental
thereto, dated as of the dates indicated
below:
September 1, 1947
October 1, 1968
<PAGE> 63
Exhibit
Number
-------
November 15, 1971
January 15, 1973
June 1, 1978
June 30, 1982
August 15, 1982
November 30, 1987
November 1, 1990
April 1, 1991
May 1, 1991
May 15, 1991
September 1, 1991
November 1, 1991
January 15, 1992
February 29, 1992
April 15, 1992
July 15, 1992
July 31, 1992
November 30, 1992
January 1, 1993
March 1, 1993
March 15, 1993
April 1, 1993
April 26, 1993
May 31, 1993
June 30, 1993 (1993 Series AP)
<PAGE> 64
Exhibit
Number
-------
June 30, 1993 (1993 Series H)
September 15, 1993
March 1, 1994
June 15, 1994
August 15, 1994
4(f) Collateral Trust Indenture (notes),
dated as of June 30, 1993.
4(g) First Supplemental Note Indenture,
dated as of June 30, 1993.
4(h) Second Supplemental Note Indenture,
dated as of September 15, 1993.
4(i) Third Supplemental Note Indenture,
dated as of August 15, 1994.
4(j) Amended and Restated Standby Note
Purchase Credit Facility, dated as of
April 26, 1994, among The Detroit
Edison Company, The Bank of New York,
The Toronto-Dominion Bank, acting
through its Houston Agency,
Toronto-Dominion (Texas), Inc., as
Administrative Agent and Citicorp
Securities, Inc., as Remarketing
Agent.
4(k) Standby Note Purchase Credit
Facility, dated as of August 17,
1994, among The Detroit Edison
Company, Barclays Bank PLC, as Bank
and Administrative Agent, Bank of
America, The Bank of New York, The
Fuji Bank Limited, The Long-Term
Credit Bank of Japan, LTD, Union Bank
and Citicorp Securities, Inc. and
First Chicago Capital Markets, Inc.
as Remarketing Agents.
<PAGE> 65
Exhibit
Number
-------
*10(a)- Form of Indemnification Agreement
between the Company and (1) Frank E.
Agosti, (2) Gerard M. Anderson, (3)
Robert J. Buckler, (4) Malcolm G.
Dade, Jr., (5) Ronald W. Gresens, (6)
Leslie L. Loomans, (7) S. Martin
Taylor, (8) Saul J. Waldman, (9)
Susan M. Beale, (10) Frederick S.
Karwacki, (11) Douglas R. Gipson,
(12) Robert J. Horn, (13) Thomas A.
Hughes, (14) Christopher C. Nern,
(15) Ronald J. Gdowski, (16) Elaine
M. Godfrey, (17) Allen W. Anning,
(18) Christopher C. Arvani, (19)
James R. McGillivary, (20) Thomas J.
Howlin, (21) Donald J. Brett, (22)
Michael E. Champley, (23) T. Michael
Holton, and (24) Haven E. Cockerham.
*10(b)- 1991 Shareholder Value Improvement
Plan - A, as amended effective
January 25, 1993.
*10(c)- 1990 Shareholder Value Improvement
Plan - A, as amended January 25, 1993.
*10(d)- 1994 Officers' Shareholder Value
Improvement Plan, January, 1994.
*10(e)- Certain Arrangements Pertaining to
the Employment of S. Martin Taylor.
*10(f)- Certain arrangements pertaining to
the employment of Anthony F. Earley,
Jr.
*10(g)- Amended and Restated Savings
Separation Plan, June 1994.
*10(h)- Certain arrangements pertaining to
the employment of Haven E. Cockerham.
*10(i)- Key Employe Deferred Compensation
Plan (January 1990).
<PAGE> 66
Exhibit
Number
-------
*10(j)- Retirement Reparation Plan for
Certain Employes of The Detroit
Edison Company (as amended through
May 22, 1989).
*10(k)- Benefit Equalization Plan for Certain
Employes of The Detroit Edison
Company (as amended through May 22,
1989).
*10(l)- Certain Arrangements Pertaining to
the Employment of Larry G. Garberding.
*10(m)- Form of Indemnification Agreement,
between the Company and (1) John E.
Lobbia, (2) Larry G. Garberding and
(3) Anthony F. Earley, Jr.
*10(n)- Form of Indemnification Agreement,
dated March 17, 1992, between the
Company and (1) Terence E. Adderley,
(2) Wendell W. Anderson, Jr., (3)
Walter J. McCarthy, Jr., (4) Lillian
Bauder, (5) David Bing, (6) Alan E.
Schwartz, (7) William Wegner, (8)
Theodore S. Leipprandt, (9) Patricia
S. Longe, (10) Eugene A. Miller, (11)
Dean E. Richardson, (12) David M.
Gates, and (13) Otis M. Smith.
*10(o)- Supplemental Long Term Disability
Plan, dated November 5, 1991.
*10(p)- Executive Vehicle Program, dated
October 1, 1993.
*10(q)- Amendment No. 1 to Executive Vehicle
Plan, November 1993.
*10(r)- Certain arrangements pertaining to
the employment of Gerard M. Anderson.
*10(s)- Restated Management Supplemental
Benefit Plan, January 1994.
99(a)- Belle River Participation Agreement
between the Company and Michigan
Public Power Agency, dated as of
December 1, 1982.
<PAGE> 67
Exhibit
Number
-------
99(b)- Belle River Transmission Ownership
and Operating Agreement between the
Company and Michigan Public Power
Agency, dated as of December 1, 1982.
99(c)- 1988 Amended and Restated Loan
Agreement, dated as of October 4,
1988, between Renaissance Energy
Company (an unaffiliated company)
("Renaissance") and the Company.
99(d)- First Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
February 1, 1990, between the Company
and Renaissance.
99(e)- Second Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
September 1, 1993, between the
Company and Renaissance.
99(f)- Third Amendment, dated as of August
31, 1994, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated October 4, 1988,
between The Detroit Edison Company.
99(g)- $200,000,000 364-Day Credit
Agreement, dated as of September 1,
1993, among the Company, Renaissance
and Barclays Bank PLC, New York
Branch, as Agent.
99(h)- First Amendment, dated as of August
31, 1994, to $200,000,000 364-Day
Credit Agreement, dated September 1,
1993, among The Detroit Edison
Company, Renaissance Energy Company,
the Banks party thereto and Barclays
Bank, PLC, New York Branch, as Agent.
99(i)- $200,000,000 Three-Year Credit
Agreement, dated September 1, 1993,
among the Company, Renaissance and
Barclays Bank PLC, New York Branch,
as Agent.
99(j)- 1988 Amended and Restated Nuclear
Fuel Heat Purchase Contract, dated
October 4, 1988, between the Company
and Renaissance.
99(k)- First Amendment to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated as of February 1,
1990, between the Company and
Renaissance.
<PAGE> 68
Exhibit
Number
-------
99(l)- Second Amendment, dated as of
September 1, 1993, to 1988 Amended
and Restated Nuclear Fuel Heat
Purchase Contract between the Company
and Renaissance.
99(m)- First Amendment, dated as of
September 1, 1994, to $200,000,000
Three-Year Credit Agreement, dated as
of September 1, 1993, among The
Detroit Edison Company, Renaissance
Energy Company, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as agent.
99(n)- Master Trust Agreement, dated as of
June 30, 1994, between the Company
and Fidelity Management Trust Company
relating to the Employes Savings
Plans.
* Denotes management contract or compensatory plan or
arrangement required to be filed as an exhibit to this
report.
<PAGE> 1
EXHIBIT 4-169
EXECUTED IN COUNTERPARTS
OF WHICH THIS IS COUNTERPART NO. .
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
INDENTURE
Dated as of December 1, 1994
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 15, DUE SEPTEMBER 1, 2004,
(B) GENERAL AND REFUNDING MORTGAGE BONDS,
1994 SERIES DP, DUE DECEMBER 1, 2004
AND
(C) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 5
Bonds to be Series KKP No. 15 and 1994 Series DP................... 5
Further Assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 6
PART I.
CREATION OF THREE HUNDRED SIXTEENTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 15
Sec. 1. Terms of Bonds of Series KKP No. 15.......................... 6
Sec. 2. Redemption of Bonds of Series KKP No. 15..................... 8
Sec. 3. Redemption in Event of Acceleration.......................... 8
Sec. 4. Form of Bonds of Series KKP No. 15........................... 9
Form of Trustee's Certificate................................ 14
PART II.
CREATION OF THREE HUNDRED SEVENTEENTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
1994 SERIES DP
Sec. 1. Terms of Bonds of 1994 Series DP............................. 14
Sec. 2. Redemption of Bonds of 1994 Series DP........................ 16
Sec. 3. Redemption and Payment in Event of AMBAC Payment............. 16
Sec. 4. Form of Bonds of 1994 Series DP.............................. 17
Form of Trustee's Certificate................................ 21
PART III.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 21
Recording and filing of Supplemental Indentures...................... 21
Recording of Certificates of Provision for Payment................... 28
PART IV.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 28
PART V.
MISCELLANEOUS
Confirmation of Section 318(c) of Trust Indenture Act................ 28
Execution in Counterparts............................................ 28
Testimonium.......................................................... 29
Execution............................................................ 29
Acknowledgements..................................................... 29
Affidavit as to consideration and good faith......................... 31
</TABLE>
------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
<TABLE>
<S> <C>
PARTIES SUPPLEMENTAL INDENTURE, dated as of the first day of December,
in the year one thousand nine hundred and ninety-four, between THE
DETROIT EDISON COMPANY, a corporation organized and existing under
the laws of the State of Michigan and a transmitting utility (hereinafter
called the "Company"), party of the first part, and BANKERS TRUST COMPANY, a
corporation organized and existing under the laws of the State of New York,
having its corporate trust office at Four Albany Street, in the Borough of
Manhattan, The City and State of New York, as Trustee under the Mortgage
and Deed of Trust hereinafter mentioned (hereinafter called the "Trustee"),
party of the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989, July 15, 1989, December 1, 1989, February 15, 1990, November 1,
1990, April 1, 1991, May 1, 1991, May 15, 1991, September 1, 1991,
November 1, 1991, January 15, 1992, February 29, 1992, April 15, 1992,
July 15, 1992, July 31, 1992, November 30, 1992, December 15, 1992,
January 1, 1993, March 1, 1993, March 15, 1993, April 1, 1993, April 26,
1993, May 31, 1993, June 30, 1993, June 30, 1993, September 15, 1993,
March 1, 1994, June 15, 1994 and August 15, 1994 supplemental to the
Original Indenture, have heretofore been entered into between the Company
and the Trustee (the Original Indenture and all indentures supplemental
thereto together being hereinafter sometimes referred to as the
"Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Eight billion two hundred
ISSUED. ninety-eight million five hundred seventy-seven thousand dollars
($8,298,577,000) have heretofore been issued under the indenture as
follows, viz:
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
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(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series AA -- Principal Amount $100,000,000,
(20) Bonds of Series BB -- Principal Amount $50,000,000,
(21) Bonds of Series CC -- Principal Amount $50,000,000,
(22) Bonds of Series UU -- Principal Amount $100,000,000,
(23-31) Bonds of Series DDP Nos. 1-9 -- Principal Amount $14,305,000,
(32-45) Bonds of Series FFR Nos. 1-14 -- Principal Amount $45,600,000,
(46-67) Bonds of Series GGP Nos. 1-22 -- Principal Amount $42,300,000,
(68) Bonds of Series HH -- Principal Amount $50,000,000,
(69-90) Bonds of Series IIP Nos. 1-22 -- Principal Amount $3,750,000,
(91-98) Bonds of Series JJP Nos. 1-8 -- Principal Amount $6,850,000,
(99-106) Bonds of Series KKP Nos. 1-8 -- Principal Amount $14,890,000,
(107-121) Bonds of Series LLP Nos. 1-15 -- Principal Amount $8,850,000,
(122-142) Bonds of Series NNP Nos. 1-21 -- Principal Amount $47,950,000,
(143-160) Bonds of Series OOP Nos. 1-18 -- Principal Amount $18,880,000,
(161-179) Bonds of Series QQP Nos. 1-19 -- Principal Amount $13,650,000,
(180-194) Bonds of Series TTP Nos. 1-15 -- Principal Amount $3,800,000,
(195) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(196-220) Bonds of 1980 Series CP Nos. 1-25 -- Principal Amount $35,000,000,
(221-231) Bonds of 1980 Series DP Nos. 1-11 -- Principal Amount $10,750,000,
(232-247) Bonds of 1981 Series AP Nos. 1-16 -- Principal Amount $124,000,000,
(248) Bonds of 1985 Series A -- Principal Amount $35,000,000,
(249) Bonds of 1985 Series B -- Principal Amount $50,000,000,
(250) Bonds of Series PP -- Principal Amount $70,000,000,
(251) Bonds of Series RR -- Principal Amount $70,000,000,
(252) Bonds of Series EE -- Principal Amount $50,000,000,
(253-254) Bonds of Series MMP and MMP No. 2 -- Principal Amount $5,430,000,
(255) Bonds of Series T -- Principal Amount $75,000,000,
(256) Bonds of Series U -- Principal Amount $75,000,000,
(257) Bonds of 1986 Series B -- Principal Amount $100,000,000,
(258) Bonds of 1987 Series D -- Principal Amount $250,000,000,
(259) Bonds of 1987 Series E -- Principal Amount $150,000,000,
(260) Bonds of 1987 Series C -- Principal Amount $225,000,000,
(261) Bonds of Series V -- Principal Amount $100,000,000,
(262) Bonds of Series SS -- Principal Amount $150,000,000,
(263) Bonds of 1980 Series B -- Principal Amount $100,000,000,
(264) Bonds of 1986 Series C -- Principal Amount $200,000,000,
(265) Bonds of 1986 Series A -- Principal Amount $200,000,000,
(266) Bonds of 1987 Series B -- Principal Amount $175,000,000,
(267) Bonds of Series X -- Principal Amount $100,000,000,
(268) Bonds of 1987 Series F -- Principal Amount $200,000,000,
(269) Bonds of 1987 Series A -- Principal Amount $300,000,000,
(270) Bonds of Series Y -- Principal Amount $60,000,000,
(271) Bonds of Series Z -- Principal Amount $100,000,000,
(272) Bonds of 1989 Series A -- Principal Amount $300,000,000,
(273) Bonds of 1984 Series AP -- Principal Amount $2,400,000
(274) Bonds of 1984 Series BP -- Principal Amount $7,750,000
all of which have either been retired and cancelled, or no longer represent obligations of
the Company, having been called for redemption and funds necessary to effect the
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payment, redemption and retirement thereof having been deposited with the
Trustee as a special trust fund to be applied for such purpose;
(275) Bonds of Series R in the principal amount of One hundred million
dollars ($100,000,000), all of which are outstanding at the date hereof;
(276) Bonds of Series S in the principal amount of One hundred fifty
million dollars ($150,000,000), all of which are outstanding at the date
hereof;
(277-282) Bonds of Series KKP Nos. 9-14 in the principal amount of One
hundred ninety-three million two hundred ninety thousand dollars
($193,290,000), all of which are outstanding at the date hereof;
(283) Bonds of 1989 Series BP in the principal amount of Sixty-six million
five hundred sixty-five thousand dollars ($66,565,000), all of which are
outstanding at the date hereof;
(284) Bonds of 1990 Series A in the principal amount of One hundred
ninety-four million six hundred forty-nine thousand dollars
($194,649,000) of which Thirty-one million three hundred ninety-five
thousand dollars ($31,395,000) principal amount have heretofore been
retired and One hundred sixty-three million two hundred fifty-four
thousand dollars ($163,254,000) principal amount are outstanding at the
date hereof;
(285) Bonds of 1990 Series B in the principal amount of Two hundred
fifty-six million nine hundred thirty-two thousand dollars
($256,932,000) of which Forty-seven million five hundred eighty thousand
dollars ($47,580,000) principal amount have heretofore been retired and
Two hundred nine million three hundred fifty-two thousand dollars
($209,352,000) principal amount are outstanding at the date hereof;
(286) Bonds of 1990 Series C in the principal amount of Eighty-five
million four hundred seventy-five thousand dollars ($85,475,000) of
which Seventeen million ninety-five thousand dollars ($17,095,000)
principal amount have heretofore been retired and Sixty-eight million
three hundred eighty thousand dollars ($68,380,000) principal amount are
outstanding at the date hereof;
(287) Bonds of 1991 Series AP in the principal amount of Thirty-two
million three hundred seventy-five thousand dollars ($32,375,000), all
of which are outstanding at the date hereof;
(288) Bonds of 1991 Series BP in the principal amount of Twenty-five
million nine hundred ten thousand dollars ($25,910,000), all of which
are outstanding at the date hereof;
(289) Bonds of 1991 Series CP in the principal amount of Thirty-two
million eight hundred thousand dollars ($32,800,000), all of which are
outstanding at the date hereof;
(290) Bonds of 1991 Series DP in the principal amount of Thirty-seven
million six hundred thousand dollars ($37,600,000), all of which are
outstanding at the date hereof;
(291) Bonds of 1991 Series EP in the principal amount of Forty-one million
four hundred eighty thousand dollars ($41,480,000), all of which are
outstanding at the date hereof;
(292) Bonds of 1991 Series FP in the principal amount of Ninety-eight
million three hundred seventy-five thousand dollars ($98,375,000), all
of which are outstanding at the date hereof;
(293) Bonds of 1992 Series BP in the principal amount of Twenty million
nine hundred seventy-five thousand dollars ($20,975,000), all of which
are outstanding at the date hereof;
(294) Bonds of 1992 Series AP in the principal amount of Sixty-six million
dollars ($66,000,000), all of which are outstanding at the date hereof;
(295) Bonds of 1992 Series D in the principal amount of Three hundred
million dollars ($300,000,000), of which Ten million dollars
(10,000,000) principal amount have
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heretofore been retired and Two hundred ninety million ($290,000,000)
principal amount are outstanding at the date hereof;
(296) Bonds of 1992 Series CP in the principal amount of Thirty-five
million dollars ($35,000,000), all of which are outstanding at the date
hereof;
(297) Bonds of 1992 Series E in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(298) Bonds of 1989 Series BP No. 2 in the principal amount of Thirty-six
million dollars ($36,000,000), all of which are outstanding at the date
hereof;
(299) Bonds of 1993 Series C in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(300) Bonds of 1993 Series B in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(301) Bonds of 1993 Series E in the principal amount of Four hundred
million dollars ($400,000,000), of which Ten million dollars
($10,000,000) principal amount have heretofore been retired and Three
hundred ninety million ($390,000,000) principal amount are outstanding at
the date hereof;
(302) Bonds of 1993 Series D in the principal amount of One hundred
million dollars ($100,000,000), all of which are outstanding at the date
hereof;
(303) Bonds of 1993 Series FP in the principal amount of Five million six
hundred eighty-five thousand dollars ($5,685,000), all of which are
outstanding at the date hereof;
(304) Bonds of 1993 Series G in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(305) Bonds of 1993 Series J in the principal amount of Three hundred
million dollars ($300,000,000), of which Thirty million dollars
($30,000,000) principal amount have heretofore been retired and Two
hundred seventy million ($270,000,000) principal amount are outstanding at
the date hereof;
(306) Bonds of 1993 Series IP in the principal amount of Five million
eight hundred twenty-five thousand dollars ($5,825,000), all of which
are outstanding at the date hereof;
(307) Bonds of 1993 Series AP in the principal amount of Sixty-five
million dollars ($65,000,000), all of which are outstanding at the date
hereof;
(308) Bonds of 1993 Series H in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(309) Bonds of 1993 Series K in the principal amount of One hundred sixty
million dollars ($160,000,000), all of which are outstanding at the date
hereof;
(310) Bonds of 1994 Series AP in the principal amount of Seven million
five hundred thirty-five thousand dollars ($7,535,000), all of which are
outstanding at the date hereof;
(311) Bonds of 1994 Series BP in the principal amount of Twelve million
nine hundred thirty-five thousand dollars ($12,935,000), all of which
are outstanding at the date hereof;
(312) Bonds of 1994 Series C in the principal amount of Two hundred
million dollars ($200,000,000), all of which are outstanding at the date
hereof;
and, accordingly, of the bonds so issued, Three billion four hundred
eighty-four million three hundred thirty-six thousand dollars
($3,484,336,000) principal amount are outstanding at the date hereof; and
WHEREAS, the County of Monroe, Michigan has agreed to issue and sell
$6,300,000 principal amount of its Pollution Control Revenue Bonds
(The Detroit Edison Company Monroe and Fermi Plants Project),
Collateralized Series I-1994 so as
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to provide funds the purchase and construction of certain pollution
control facilities installed in the Company's Monroe and Fermi 2
Power Plants; and
WHEREAS, the Company has entered into an Installment Sales Contract,
dated as of March 1, 1977, as previously amended and amended as of
December 1, 1994 in order to purchase certain pollution control
facilities, and pursuant to such Installment Sales Contract, as amended,
the Company has agreed to issue its General and Refunding Mortgage Bonds
under the Indenture in order further to secure its obligations under such
Installment Sales Contract, as amended; and
WHEREAS, the County of Monroe, Michigan has agreed to issue and sell
$23,700,000 principal amount of its Pollution Control Revenue Bonds (The
Detroit Edison Company Project), Series A-1994 so as to provide funds for
the purchase and construction of certain pollution control facilities
installed in the Company's Fermi 2 Power Plant; and subject to certain
conditions, AMBAC Indemnity Corporation, a Wisconsin-domiciled stock
insurance company, has agreed to issue its municipal bond insurance policy
guaranteeing the payment of principal and interest on the Series A-1994
Bonds; and
WHEREAS, the Company, in order to induce AMBAC to issue its municipal
bond insurance policy relating to the Series A-1994 Bonds, has agreed to
issue its General and Refunding Mortgage Bonds under the Indenture to
AMBAC; and
WHEREAS, for such purposes the Company desires to issue new series of
bonds to be issued under the Indenture and to be authenticated and
delivered pursuant to Section 8 of Article III of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental Indenture to create
SERIES KKP such new series of bonds, to be designated "General and Refunding Mortgage
NO. 15 AND 1994 Bonds, Series KKP No. 15" and "General and Refunding Mortgage Bonds, 1994
SERIES DP. Series DP"; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the property
ASSURANCE. subject to the lien thereof all of the estates and properties, real,
personal and mixed, rights, privileges and franchises of every nature and
kind and wheresoever situate, then or thereafter owned or possessed by or
belonging to the Company or to which it was then or at any time thereafter
might be entitled in law or in equity (saving and excepting, however, the
property therein specifically excepted or released from the lien thereof),
and the Company therein covenanted that it would, upon reasonable request,
execute and deliver such further instruments as may be necessary or proper
for the better assuring and confirming unto the Trustee all or any part of
the trust estate, whether then or thereafter owned or acquired by the
Company (saving and excepting, however, property specifically excepted or
released from the lien thereof); and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers and authority
OF SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
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CONSIDERATION NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
FOR SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
PART I.
CREATION OF THREE HUNDRED SIXTEENTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 15
CERTAIN TERMS SECTION 1. The Company hereby creates the Three hundred sixteenth series
OF BONDS OF of bonds to be issued under and secured by the Original Indenture as
SERIES KKP NO. 15. amended to date and as further amended by this Supplemental Indenture, to
be designated, and to be distinguished from the bonds of all other series,
by the title "General and Refunding Mortgage Bonds, Series KKP No. 15"
(elsewhere herein referred to as the "bonds of Series KKP No. 15"). The
aggregate principal amount of bonds of Series KKP No. 15 shall be limited
to six million three hundred thousand dollars ($6,300,000), except as
provided in Sections 7 and 13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds.
Each bond of Series KKP No. 15 is to be irrevocably assigned to, and
registered in the name of, Comerica Bank, successor to Manufacturers Bank,
N.A., formerly known as Manufacturers National Bank of Detroit, as
trustee, or a successor trustee (said trustee or any successor trustee
being hereinafter referred to as the "Monroe Trust Indenture Trustee"),
under the Trust Indenture, dated as of March 1, 1977, as amended September
1, 1979, October 15, 1985, July 1, 1989, December 1, 1989, November 1,
1990, May 1, 1992, December 15, 1992 and December 1, 1994 (hereinafter
called the "Monroe Trust Indenture"), between the County of Monroe,
Michigan (hereinafter called "Monroe"), and the Monroe Trust Indenture
Trustee, to secure payment of the County of Monroe, Michigan, Pollution
Control Revenue Bonds (The Detroit Edison Company Monroe and Fermi Plants
Project), Collateralized Series I-1994 (hereinafter called the "Monroe
Revenue Bonds"), issued by Monroe under the Monroe Trust Indenture, the
proceeds of which (other than any accrued interest thereon) have been
provided for the acquisition and construction of certain pollution control
facilities which the Company has agreed to purchase pursuant to the
provisions of the Installment Sales Contract, dated as of March 1, 1977,
as amended as of September 1, 1979, as of October 15, 1985, as of July 1,
1989, as of December 1, 1989, as of November 1, 1990, as of May 1, 1992 as
of December 15, 1992 and as of December 1, 1994 (hereinafter called the
"Monroe Contract"), between the Company and Monroe.
The bonds of Series KKP No. 15 shall be issued as registered bonds
without coupons in denominations of a multiple of $5,000. The bonds of
Series KKP No. 15 shall be issued in the aggregate principal amount of
$6,300,000, shall mature on September 1, 2004 and shall bear interest,
payable semi-annually on March 1 and September 1 of each year (commencing
March 1, 1995), at the rate of 6.35%, until the principal thereof shall
have become due and payable and thereafter until the Company's obligation
with respect to the payment of said principal shall have been discharged
as provided in the Indenture.
The bonds of Series KKP No. 15 shall be payable as to principal,
premium, if any, and interest as provided in the Indenture, but only to
the extent and in the manner herein provided. The bonds of Series KKP No.
15 shall be payable, both as to principal and interest, at the office or
agency of the Company in the Borough of Manhattan, The City and State of
New York, in any coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts.
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Except as provided herein, each bond of Series KKP No. 15 shall be dated
the date of its authentication and interest shall be payable on the
principal represented thereby from the March 1 or September 1 next
preceding the date thereof to which interest has been paid on bonds of
Series KKP No. 15, unless the bond is authenticated on a date to which
interest has been paid, in which case interest shall be payable from the
date of authentication, or unless the date of authentication is prior to
March 1, 1995, in which case interest shall be payable from December 1,
1994.
The bonds of Series KKP No. 15 in definitive form shall be, at the
election of the Company, fully engraved or shall be lithographed or
printed in authorized denominations as aforesaid and numbered 1 and
upwards (with such further designation as may be appropriate and desirable
to indicate by such designation the form, series and denominations of
bonds of Series KKP No. 15). Until bonds of Series KKP No. 15 in
definitive form are ready for delivery, the Company may execute, and upon
its request in writing the Trustee shall authenticate and deliver in lieu
thereof, bonds of Series KKP No. 15 in temporary form, as provided in
Section 10 of Article II of the Indenture. Temporary bonds of Series KKP
No. 15, if any, may be printed and may be issued in authorized
denominations in substantially the form of definitive bonds of Series KKP
No. 15, but with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
Bonds of Series KKP No. 15 shall not be assignable or transferable
except as may be required to effect a transfer to any successor trustee
under the Monroe Trust Indenture, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under the Monroe Trust
Indenture. Any such transfer shall be made upon surrender thereof for
cancellation at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, together with a written
instrument of transfer (if so required by the Company or by the Trustee)
in form approved by the Company duly executed by the holder or by its duly
authorized attorney. Bonds of Series KKP No. 15 shall in the same manner
be exchangeable for a like aggregate principal amount of bonds of Series
KKP No. 15 upon the terms and conditions specified herein and in Section 7
of Article II of the Indenture. The Company waives its rights under
Section 7 of Article II of the Indenture not to make exchanges or
transfers of bonds of Series KKP No. 15, during any period of ten days
next preceding any redemption date for such bonds.
Bonds of Series KKP No. 15, in definitive and temporary form, may bear
such legends as may be necessary to comply with any law or with any rules
or regulations made pursuant thereto or as may be specified in the Monroe
Contract.
Upon payment of the principal or premium, if any, or interest on the
Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 15 in a principal amount equal to the principal
amount of such Monroe Revenue 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 bonds shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
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REDEMPTION SECTION 2. Bonds of Series KKP No. 15 shall be redeemed on the
OF BONDS OF respective dates and in the respective principal amounts which correspond
SERIES KKP NO. 15. to the redemption dates for, and the principal amounts to be redeemed of,
the Monroe Revenue Bonds.
In the event the Company elects to redeem any Monroe Revenue Bonds prior
to maturity in accordance with the provisions of the Monroe Trust
Indenture, the Company shall on the same date redeem bonds of Series KKP
No. 15 in principal amounts and at redemption prices corresponding to the
Monroe Revenue Bonds so redeemed. The Company agrees to give the Trustee
notice of any such redemption of bonds of Series KKP No. 15 on the same
date as it gives notice of redemption of Monroe Revenue Bonds to the
Monroe Trust Indenture Trustee.
REDEMPTION SECTION 3. In the event of an Event of Default under the Monroe Trust
OF BONDS OF SERIES Indenture and the acceleration of all Monroe Revenue Bonds, the bonds of
KKP NO. 15 IN Series KKP No. 15 shall be redeemable in whole upon receipt by the Trustee
EVENT OF of a written demand (hereinafter called a "Redemption Demand") from the
ACCELERATION Monroe Trust Indenture Trustee stating that there has occurred under the
OF MONROE Monroe Trust Indenture both an Event of Default and a declaration of
REVENUE BONDS. acceleration of payment of principal, accrued interest and premium, if
any, on the Monroe Revenue Bonds, specifying the last date to which
interest on the Monroe Revenue Bonds has been paid (such date being
hereinafter referred to as the "Initial Interest Accrual Date") and
demanding redemption of the bonds of said series. The Trustee shall,
within five days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its receipt by the
Trustee. Promptly upon receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will redeem the bonds of
said series so demanded to be redeemed (hereinafter called the "Demand
Redemption Date"). Notice of the date fixed as the Demand Redemption Date
shall be mailed by the Company to the Trustee at least ten days prior to
such Demand Redemption Date. The date to be fixed by the Company as and
for the Demand Redemption Date may be any date up to and including the
earlier of (x) the 60th day after receipt by the Trustee of the Redemption
Demand or (y) the maturity date of such bonds first occurring following
the 20th day after the receipt by the Trustee of the Redemption Demand;
provided, however, that if the Trustee shall not have received such notice
fixing the Demand Redemption Date on or before the 10th day preceding the
earlier of such dates, the Demand Redemption Date shall be deemed to be
the earlier of such dates. The Trustee shall mail notice of the Demand
Redemption Date (such notice being hereinafter called the "Demand
Redemption Notice") to the Monroe Trust Indenture Trustee not more than
ten nor less than five days prior to the Demand Redemption Date.
Each bond of Series KKP No. 15 shall be redeemed by the Company on the
Demand Redemption Date therefore upon surrender thereof by the Monroe
Trust Indenture Trustee to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest thereon at the rate
specified for such bond from the Initial Interest Accrual Date to the
Demand Redemption Date plus an amount equal to the aggregate premium, if
any, due and payable on such Demand Redemption Date on all Monroe Revenue
Bonds; provided, however, that in the event of a receipt by the Trustee of
a notice that, pursuant to Section 1010 of the Monroe Trust Indenture, the
Monroe Trust Indenture Trustee has terminated proceedings to enforce any
right under the Monroe Trust Indenture, then any Redemption Demand shall
thereby be rescinded by the Monroe Trust Indenture Trustee, and no Demand
Redemption Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or annulment shall extend
to or affect any subsequent default or impair any right consequent
thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or effect, unless it is
executed in the name of the Monroe Trust Indenture Trustee by its
President or one of its Vice Presidents.
</TABLE>
<PAGE> 11
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<TABLE>
<S> <C>
FORM OF BONDS SECTION 4. The bonds of Series KKP No. 15 and the form of Trustee's
OF SERIES KKP NO. Certificate to be endorsed on such bonds shall be substantially in the
15. following forms, respectively:
</TABLE>
<PAGE> 12
10
<TABLE>
<S> <C>
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
SERIES KKP NO. 15, 6.35% DUE SEPTEMBER 1, 2004
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor trustee under the Trust Indenture, dated as of
March 1, 1977 and amended as of September 1, 1979, October 15, 1985, July
1, 1989, December 1, 1989, November 1, 1990, May 1, 1992, December 15,
1992 and December 1, 1994 between the County of Monroe, Michigan and
Comerica Bank, successor to Manufacturers Bank, N.A., formerly known as
Manufacturers National Bank of Detroit, as trustee, or, subject to
compliance with applicable law, as may be involved in the course of the
exercise of rights and remedies consequent upon an Event of Default under
said Trust Indenture.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to Comerica Bank, as trustee, or registered assigns, at the
Company's office or agency in the Borough of Manhattan, The City and State
of New York, the principal sum of dollars ($ ) in
lawful money of the United States of America on the date specified in the
title hereof and interest thereon at the rate specified in the title
hereof, in like lawful money, from December 1, 1994, and after the first
payment of interest on bonds of this Series has been made or otherwise
provided for, from the most recent date to which interest has been paid or
otherwise provided for, semi-annually on March 1 and September 1 of each
year (commencing March 1, 1995), until the Company's obligation with
respect to payment of said principal shall have been discharged, all as
provided, to the extent and in the manner specified in the Indenture
hereinafter mentioned on the reverse hereof and in the supplemental
indenture pursuant to which this bond has been issued.
Under a Trust Indenture, dated as of March 1, 1977 and amended as of
September 1, 1979, October 15, 1985, July 1, 1989, December 1, 1989,
November 1, 1990, May 1, 1992, December 15, 1992 and December 1, 1994
(hereinafter called the "Monroe Trust Indenture"), between the County of
Monroe, Michigan (hereinafter called "Monroe"), and Comerica Bank, as
trustee (hereinafter called the "Monroe Trust Indenture Trustee"), Monroe
has issued Pollution Control Revenue Bonds (The Detroit Edison Company
Monroe and Fermi Plants Project), Collateralized Series I-1994
(hereinafter called the "Monroe Revenue Bonds"). This bond was originally
issued to Monroe and simultaneously irrevocably assigned to the Monroe
Trust Indenture Trustee so as to secure the payment of the Monroe Revenue
Bonds. Payments of principal of, or premium, if any, or interest on, the
Monroe Revenue Bonds shall constitute like payments on this bond as
further provided herein and in the supplemental indenture pursuant to
which this bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
</TABLE>
<PAGE> 13
11
<TABLE>
<S> <C>
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its Vice
President and Treasurer, with their manual or facsimile signatures, and
its corporate seal, or a facsimile thereof, to be impressed or imprinted
hereon and the same to be attested by its Corporate Secretary or an
Assistant Corporate Secretary with his or her manual or facsimile
signature.
Dated: THE DETROIT EDISON COMPANY
By
----------------------------
Chairman of the Board
----------------------------
Vice President
Attest: and Treasurer
----------------------------
Corporate Secretary
</TABLE>
<PAGE> 14
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<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of General and Refunding Mortgage Bonds known as Series KKP No. 15,
limited to an aggregate principal amount of $6,300,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond and
all other bonds of said series are issued and to be issued under, and are
all equally and ratably secured (except insofar as any sinking,
amortization, improvement or analogous fund, established in accordance
with the provisions of the Indenture hereinafter mentioned, may afford
additional security for the bonds of any particular series and except as
provided in Section 3 of Article VI of said Indenture) by an Indenture,
dated as of October 1, 1924, duly executed by the Company to Bankers Trust
Company, a corporation of the State of New York, as Trustee, to which
Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of December 1, 1994) reference is hereby
made for a description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and conditions
upon which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee in
respect of such security (which Indenture and all indentures supplemental
thereto, including the Supplemental Indenture dated as of December 15,
1992, are hereinafter collectively called the "Indenture"). As provided in
the Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear interest
at different rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and
of the holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or altered in
certain respects by affirmative vote of at least eighty-five percent (85%)
in amount of the bonds then outstanding, and, if the rights of one or
more, but less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by affirmative vote
of at least eighty-five percent (85%) in amount of the series of bonds so
to be affected (excluding in every instance bonds disqualified from voting
by reason of the Company's interest therein as specified in the
Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of or the interest on this
bond, which in those respects is unconditional.
This bond is redeemable upon the terms and conditions set forth in the
Indenture, including provision for redemption upon demand of the Monroe
Trust Indenture Trustee following the occurrence of an Event of Default
under the Monroe Trust Indenture and the acceleration of the principal of
the Monroe Revenue Bonds.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of Series KKP No. 15 (or portions thereof), in
trust for the redemption of such bonds (or portions thereof) and the
interest due or to become due thereon, and thereupon all obligations of
the Company in respect of such bonds (or portions thereof) so to be
redeemed and such interest shall cease and be discharged, and the holders
thereof shall thereafter be restricted exclusively to such funds for any
and all claims of whatsoever nature on their part under the Indenture or
with respect to such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
</TABLE>
<PAGE> 15
13
<TABLE>
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Upon payment of the principal of, or premium, if any, or interest on,
the Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 15 in a principal amount equal to the principal
amount of such Monroe Revenue Bonds and having both a corresponding
maturity date and interest rate 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 bonds of said series shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
This bond is not assignable or transferable except as may be required to
effect a transfer to any successor trustee under the Monroe Trust
Indenture, or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and remedies consequent
upon an Event of Default under the Monroe Trust Indenture. Any such
transfer shall be made by the registered holder hereof, in person or by
his attorney duly authorized in writing, on the books of the Company kept
at its office or agency in the Borough of Manhattan, The City and State of
New York, upon surrender and cancellation of this bond, and thereupon, a
new registered bond of the same series of authorized denominations for a
like aggregate principal amount will be issued to the transferee in
exchange therefor, and this bond with others in like form may in like
manner be exchanged for one or more new bonds of the same series of other
authorized denominations, but of the same aggregate principal amount, all
as provided and upon the terms and conditions set forth in the Indenture,
and upon payment, in any event, of the charges prescribed in the
Indenture.
No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 16
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<TABLE>
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[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
---------------------------
Authorized Officer
PART II.
CREATION OF THREE HUNDRED SEVENTEENTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
1994 SERIES DP
CERTAIN TERMS SECTION 1. The Company hereby creates the Three hundred seventeenth
OF BONDS OF series of bonds to be issued under and secured by the Original Indenture
1994 SERIES DP. as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, 1994 Series
DP" (elsewhere herein referred to as the "bonds of 1994 Series DP"). The
aggregate principal amount of bonds of 1994 Series DP shall be limited to
Twenty-three million seven hundred thousand dollars ($23,700,000), except
as provided in Sections 7 and 13 of Article II of the Original Indenture
with respect to exchanges and replacements of bonds.
Each bond of 1994 Series DP is to be issued to AMBAC Indemnity
Corporation ("AMBAC"), a Wisconsin-domiciled stock insurance company, and
simultaneously assigned to, and registered in the name of, United States
Trust Company of New York, as trustee ("Insurance Trustee") under the
Municipal Bond Insurance Policy ("Series A Insurance Policy") issued by
AMBAC relating to the guarantee of payment of principal and interest with
respect to the County of Monroe, Michigan Pollution Control Revenue Bonds
(The Detroit Edison Company Project), Series A-1994 in the aggregate
principal amount of Twenty-three million seven hundred thousand dollars
($23,700,000) ("Series A-1994 Bonds"), which Series A-1994 Bonds were
created and issued pursuant to a Resolution adopted by the County of
Monroe, Michigan ("Monroe") on May 22, 1973, as previously amended and
supplemented and as amended and supplemented by a Resolution adopted
December 13, 1994 (the "Series A Resolution"), to induce AMBAC to issue
the Series A Insurance Policy. Under an Installment Sales Contract, dated
as of June 1, 1973, as previously amended and as amended as of December 1,
1994, between the Company and Monroe (the "Series A Contract"), the
Company is obligated to make payments to NBD Bank, N.A. (or its
successor), as trustee (the "Series A Trustee") for the Series
A-1994-Bonds in amounts and at times equal and corresponding to the amount
and time of payments of principal, premium and interest due on the Series
A-1994.
The bonds of 1994 Series DP shall be issued as registered bonds without
coupons in denominations of a multiple of $5,000. The bonds of 1994 Series
DP shall be issued in the aggregate principal amount of $23,700,000, shall
mature on December 1, 2004 and shall bear interest, payable semi-annually
on June 1 and December 1 of each year (commencing June 1, 1995), at the
rate of 6.35%, until the principal thereof shall have become due and
payable and thereafter until the Company's obligation with respect to the
payment of said principal shall have been discharged as provided in the
Indenture.
</TABLE>
<PAGE> 17
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<TABLE>
<S> <C>
The bonds of 1994 Series DP shall be payable as to principal, premium,
if any, and interest as provided in the Indenture, but only to the extent
and in the manner herein provided. The bonds of 1994 Series DP shall be
payable, both as to principal and interest, at the office or agency of the
Company in the Borough of Manhattan, The City and State of New York, in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts.
Except as provided herein, each bond of 1994 Series DP shall be dated
the date of its authentication and interest shall be payable on the
principal represented thereby from the June 1 or December 1 next preceding
the date thereof to which interest has been paid on bonds of 1994 Series
DP, unless the bond is authenticated on a date to which interest has been
paid, in which case interest shall be payable from the date of
authentication, or unless the date of authentication is prior to June 1,
1995, in which case interest shall be payable from December 1, 1994.
The bonds of 1994 Series DP in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denominations of bonds of 1994
Series DP). Until bonds of 1994 Series DP in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1994
Series DP in temporary form, as provided in Section 10 of Article II of
the Indenture. Temporary bonds of 1994 Series DP, if any, may be printed
and may be issued in authorized denominations in substantially the form of
definitive bonds of 1994 Series DP, but with such omissions, insertions
and variations as may be appropriate for temporary bonds, all as may be
determined by the Company.
Bonds of 1994 Series DP shall not be assignable or transferable except
as may be required to effect a transfer to any successor insurance trustee
under the Series A Insurance Policy, or, to AMBAC in the event that (1)
AMBAC makes a payment to fulfill its obligations under the Series A
Resolution to cure an Event of Default by the Company as may have occurred
under the Series A Resolution and/or (2) an Event of Default shall have
occurred under the Indenture. Any such transfer shall be made upon
surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City and State of New York, together with
a written instrument of transfer (if so required by the Company or by the
Trustee) in form approved by the Company duly executed by the holder or by
its duly authorized attorney. Bonds of 1994 Series DP shall in the same
manner be exchangeable for a like aggregate principal amount of bonds of
1994 Series DP upon the terms and conditions specified herein and in
Section 7 of Article II of the Indenture. The Company waives its rights
under Section 7 of Article II of the Indenture not to make exchanges or
transfers of bonds of 1994 Series DP, during any period of ten days next
preceding any redemption date for such bonds.
So long as the Series A Insurance Policy shall be in full force and
effect, AMBAC shall have the right to direct the Trustee in all matters
relating to the bonds of 1994 Series DP.
Bonds of 1994 Series DP, in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or as may be specified pursuant to the
terms and conditions specified herein.
</TABLE>
<PAGE> 18
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<TABLE>
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Upon payment by the Company as part of its obligations under the Series
A Contract of the principal or premium, if any, or interest on the Series
A-1994 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 the Series A Resolution, bonds of 1994 Series DP in a
principal amount equal to the principal amount of such Series A-1994
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
bonds shall be surrendered for cancellation or presented for appropriate
notation to the Trustee.
REDEMPTION SECTION 2. Bonds of 1994 Series DP shall be redeemed on the respective
OF BONDS dates and in the respective principal amounts which correspond to the
OF 1994 redemption dates for, and the principal amounts to be redeemed of, the
SERIES DP. Series A-1994 Bonds.
In the event the Company elects to redeem any Series A-1994 Bonds prior
to maturity in accordance with the provisions of the Monroe Trust
Indenture, the Company shall on the same date redeem bonds of 1994 Series
DP in principal amounts and at redemption prices corresponding to the
Series A-1994 Bonds so redeemed. The Company agrees to give the Trustee
notice of any such redemption of bonds of 1994 Series DP on the same date
as it gives notice of redemption of Series A-1994 Bonds to the Series A
Trustee.
REDEMPTION SECTION 3. In the event that (1) AMBAC cures an Event of Default (as
OF BONDS OF defined in the Series A Resolution) by the Company under the Series A
1994 SERIES Resolution by the payment of principal or interest, or both, due on the
DP IN EVENT Series A-1994 Bonds pursuant to the Series A Resolution, the bonds of 1994
OF AMBAC PAYMENT. Series DP shall be payable or redeemable, or both, in an amount
corresponding to the payment of principal or interest or both, by AMBAC or
(2) the Series A Trustee has called for redemption the Series A-1994 Bonds
as a result of an Event of Default under the Series A Resolution and, in
each case, upon receipt by the Trustee of a written demand by the AMBAC,
accompanied by a certification from the Series A Trustee as to the amount
and type (principal, interest or both) of payment by AMBAC ("Payment
Demand"). The Trustee shall, within five days after receiving such Payment
Demand, mail a copy thereof to the Company marked to indicate the date of
its receipt by the Trustee. Promptly upon receipt by the Company of such
copy of a Payment Demand, the Company shall be obligated to pay such
amount as may be deemed to be interest and shall fix a date on which it
will redeem the bonds of said series so demanded to be redeemed
(hereinafter called the "Demand Redemption Date") and. Notice of the date
fixed as the Demand Redemption Date shall be mailed by the Company to the
Trustee at least ten days prior to such Demand Redemption Date. The date
to be fixed by the Company as and for the Demand Redemption Date may be
any date up to and including the earlier of (x) the 60th day after receipt
by the Trustee of the Payment Demand or (y) the maturity date of such
bonds first occurring following the 20th day after the receipt by the
Trustee of the Payment Demand; provided, however, that if the Trustee
shall not have received such notice fixing the Demand Redemption Date on
or before the 10th day preceding the earlier of such dates, the Demand
Redemption Date shall be deemed to be the earlier of such dates. The
Trustee shall mail notice of the Demand Redemption Date (such notice being
hereinafter called the "Demand Redemption Notice") to the Insurance
Trustee not more than ten nor less than five days prior to the Demand
Redemption Date.
</TABLE>
<PAGE> 19
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<TABLE>
<S> <C>
Each bond of 1994 Series DP shall be redeemed by the Company on the
Demand Redemption Date therefore upon surrender thereof by the Insurance
Trustee to the Trustee at a redemption price equal to the principal amount
thereof plus accrued interest paid by AMBAC pursuant to the Series A
Resolution from the date of such payment to the Demand Redemption Date
plus an amount equal to the aggregate premium, if any, due and payable on
such Demand Redemption Date on a corresponding amount of Series A-1994
Bonds; provided, however, that in the event of a receipt by the Trustee of
a notice that, pursuant to the Series A Resolution, AMBAC has terminated
proceedings to enforce any right it may have against the Company under the
Series A Insurance Policy, then any Payment Demand shall thereby be
rescinded by the Insurance Trustee, and no Demand Redemption Notice shall
be given, or, if already given, shall be automatically annulled; but no
such rescission or annulment shall extend to or affect any subsequent
default or impair any right consequent thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Payment Demand and such
Payment Demand shall be of no force or effect, unless it is executed in
the name of the Insurance Trustee by its President or one of its Vice
Presidents.
FORM OF BONDS SECTION 4. The bonds of 1994 Series DP and the form of Trustee's
OF 1994 SERIES DP. Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1994 SERIES DP, 6.35% DUE DECEMBER 1, 2004
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor insurance trustee under the Municipal Bond
Insurance Policy, dated as of December 21, 1994 issued by AMBAC Indemnity
Corporation and relating to the County of Monroe, Michigan Pollution
Control Bonds (The Detroit Edison Company Project), Series A-1994, or to
AMBAC Indemnity Corporation pursuant to Part II, Section 1 of the
Supplemental Indenture dated as of December 1, 1994, or, subject to
compliance with applicable law.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to United States Trust Company of New York, as Insurance Trustee,
or registered assigns, at the Company's office or agency in the Borough of
Manhattan, The City and State of New York, the principal sum of
Twenty-three million seven hundred thousand dollars ($23,700,000) in
lawful money of the United States of America on the date specified in the
title hereof and interest thereon at the rate specified in the title
hereof, in like lawful money, from December 1, 1994, and after the first
payment of interest on bonds of this Series has been made or otherwise
provided for, from the most recent date to which interest has been paid or
otherwise provided for, semi-annually on June 1 and December 1 of each
year (commencing June 1, 1995), until the Company's obligation with
respect to payment of said principal shall have been discharged, all as
provided, to the extent and in the manner specified in the Indenture
hereinafter mentioned on the reverse hereof and in the supplemental
indenture pursuant to which this bond has been issued.
</TABLE>
<PAGE> 20
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<TABLE>
<S> <C>
Under a Resolution, dated as of May 8, 1973, as previously amended and
supplemented and amended and supplemented as of December 13, 1994
(hereinafter called the "Series A Resolution Monroe Trust Indenture"),
adopted by the County of Monroe, Michigan (hereinafter called "Monroe"),
Monroe has issued Pollution Control Revenue Bonds (The Detroit Edison
Company Project), Series A-1994 (hereinafter called the "Series A-1994
Bonds") and AMBAC Indemnity Corporation ("AMBAC") has issued its Municipal
Bond Insurance Policy ("Series A Insurance Policy") relating to the
guarantee of the payment of principal and interest on the Series A-1994
Bond. This bond is being issued to induce AMBAC to issue the Series A
Insurance Policy. Payments of principal of, or premium, if any, or
interest on, the Series A-1994 Bonds shall constitute like payments on
this bond as further provided herein and in the supplemental indenture
pursuant to which this bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its President
or a Vice President, with their manual or facsimile signatures, and its
corporate seal, or a facsimile thereof, to be impressed or imprinted
hereon and the same to be attested by its Secretary or an Assistant
Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
-------------------------------
Chairman of the Board
-------------------------------
Vice President and Treasurer
Attest:
----------------------------
Corporate Secretary
</TABLE>
<PAGE> 21
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<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of General and Refunding Mortgage Bonds known as 1994 Series DP, limited
to an aggregate principal amount of $23,700,000, except as otherwise
provided in the Indenture hereinafter mentioned. This bond and all other
bonds of said series are issued and to be issued under, and are all
equally and ratably secured (except insofar as any sinking, amortization,
improvement or analogous fund, established in accordance with the
provisions of the Indenture hereinafter mentioned, may afford additional
security for the bonds of any particular series and except as provided in
Section 3 of Article VI of said Indenture) by an Indenture, dated as of
October 1, 1924, duly executed by the Company to Bankers Trust Company, a
corporation of the State of New York, as Trustee, to which Indenture and
all indentures supplemental thereto (including the Supplemental Indenture
dated as of December 1, 1994) reference is hereby made for a description
of the properties and franchises mortgaged and conveyed, the nature and
extent of the security, the terms and conditions upon which the bonds are
issued and under which additional bonds may be issued, and the rights of
the holders of the bonds and of the Trustee in respect of such security
(which Indenture and all indentures supplemental thereto, including the
Supplemental Indenture dated as of December 1, 1994, are hereinafter
collectively called the "Indenture"). As provided in the Indenture, said
bonds may be for various principal sums and are issuable in series, which
may mature at different times, may bear interest at different rates and
may otherwise vary as in said Indenture provided. With the consent of the
Company and to the extent permitted by and as provided in the Indenture,
the rights and obligations of the Company and of the holders of the bonds
and the terms and provisions of the Indenture, or of any indenture
supplemental thereto, may be modified or altered in certain respects by
affirmative vote of at least eighty-five percent (85%) in amount of the
bonds then outstanding, and, if the rights of one or more, but less than
all, series of bonds then outstanding are to be affected by the action
proposed to be taken, then also by affirmative vote of at least
eighty-five percent (85%) in amount of the series of bonds so to be
affected (excluding in every instance bonds disqualified from voting by
reason of the Company's interest therein as specified in the Indenture);
provided, however, that, without the consent of the holder hereof, no such
modification or alteration shall, among other things, affect the terms of
payment of the principal of or the interest on this bond, which in those
respects is unconditional.
This bond is redeemable upon the terms and conditions set forth in the
Indenture.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of 1994 Series DP (or portions thereof), in trust
for the redemption of such bonds (or portions thereof) and the interest
due or to become due thereon, and thereupon all obligations of the Company
in respect of such bonds (or portions thereof) so to be redeemed and such
interest shall cease and be discharged, and the holders thereof shall
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or with respect to
such bonds (or portions thereof) and interest.
</TABLE>
<PAGE> 22
20
<TABLE>
<S> <C>
Upon payment by the Company as part of its obligations under the Series
A Resolution of the principal of, or premium, if any, or interest on, the
Series A-1994 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 Series A Resolution, bonds of 1994 Series DP
in a principal amount equal to the principal amount of such Series A-1994
Bonds and having both a corresponding maturity date and interest rate
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 bonds of said series
shall be surrendered for cancellation or presented for appropriate
notation to the Trustee.
This bond is not assignable or transferable except as may be required to
effect a transfer to any successor insurance trustee under the Series A
Insurance Policy, or, to AMBAC Indemnity Corporation pursuant to the terms
and conditions set forth in Part II, Section I of the Supplemental
Indenture, dated as of December 1, 1994 or subject to compliance with
applicable law. Any such transfer shall be made by the registered holder
hereof, in person or by his attorney duly authorized in writing, on the
books of the Company kept at its office or agency in the Borough of
Manhattan, The City and State of New York, upon surrender and cancellation
of this bond, and thereupon, a new registered bond of the same series of
authorized denominations for a like aggregate principal amount will be
issued to the transferee in exchange therefor, and this bond with others
in like form may in like manner be exchanged for one or more new bonds of
the same series of other authorized denominations, but of the same
aggregate principal amount, all as provided and upon the terms and
conditions set forth in the Indenture, and upon payment, in any event, of
the charges prescribed in the Indenture.
So long as the Series A Insurance Policy shall be in full force and
effect, AMBAC shall have the right to direct the Trustee in all matters
relating to the bonds of 1994 Series DP.
No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 23
21
<TABLE>
<S> <C>
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
---------------------------
Authorized Officer
PART III.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Secretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
</TABLE>
<PAGE> 24
22
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
</TABLE>
<PAGE> 25
23
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
</TABLE>
<PAGE> 26
24
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C January 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
December 1, 1989.................. Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990................. 1990 Series A, 1990 November 1, 1990
Series B, 1990 Series
C, 1990 Series D, 1990
Series E and 1990
Series F
November 1, 1990.................. Series KKP No. 12 April 1, 1991
April 1, 1991..................... 1991 Series AP May 1, 1991
May 1, 1991....................... 1991 Series BP and 1991 May 15, 1991
Series CP
May 15, 1991...................... 1991 Series DP September 1, 1991
September 1, 1991................. 1991 Series EP November 1, 1991
November 1, 1991.................. 1991 Series FP January 15, 1992
January 15, 1992.................. 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992................. 1992 Series AP April 15, 1992
April 15, 1992.................... Series KKP No. 13 July 15, 1992
July 15, 1992..................... 1992 Series CP November 30, 1992
July 31, 1992..................... 1992 Series D November 30, 1992
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C January 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
December 1, 1989.................. Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990................. 1990 Series A, 1990 November 1, 1990
Series B, 1990 Series
C, 1990 Series D, 1990
Series E and 1990
Series F
November 1, 1990.................. Series KKP No. 12 April 1, 1991
</TABLE>
<PAGE> 27
25
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
April 1, 1991..................... 1991 Series AP May 1, 1991
May 1, 1991....................... 1991 Series BP and 1991 May 15, 1991
Series CP
May 15, 1991...................... 1991 Series DP September 1, 1991
September 1, 1991................. 1991 Series EP November 1, 1991
November 1, 1991.................. 1991 Series FP January 15, 1992
January 15, 1992.................. 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992................. 1992 Series AP April 15, 1992
April 15, 1992.................... Series KKP No. 13 July 15, 1992
July 15, 1992..................... 1992 Series CP November 30, 1992
November 30, 1992................. 1992 Series E and 1993 March 15, 1993
Series D
December 15, 1992................. Series KKP No. 14 and March 15, 1992
1989 Series BP No. 2
January 1, 1993................... 1993 Series C April 1, 1993
March 1, 1993..................... 1993 Series E June 30, 1993
March 15, 1993.................... 1993 Series D September 15, 1993
April 1, 1993..................... 1993 Series FP and 1993 September 15, 1993
Series IP
April 26, 1993.................... 1993 Series G and September 15, 1993
Amendment of Article
II, Section 5
May 31, 1993...................... 1993 Series J September 15, 1993
September 15, 1993................ 1993 Series K March 1, 1994
March 1, 1994..................... 1994 Series AP June 15, 1994
June 15, 1994..................... 1994 Series BP December 1, 1994
August 15, 1994................... 1994 Series C December 1, 1994
</TABLE>
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<PAGE> 28
26
<TABLE>
<S> <C>
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as June 15, 1994 providing for
the terms of bonds to be issued thereunder of 1994 Series BP has
heretofore been entered into between the Company and the Trustee and has
been filed in the Office of the Secretary of State of Michigan as a
financing statement on July 1, 1994 (Filing No. 44411B), has been filed
and recorded in the Office of the Interstate Commerce Commission
(Recordation No. 5485-NNNN) on July 1, 1994, and has been recorded as a
real estate mortgage in the offices of the respective Register of Deeds of
certain counties in the State of Michigan, as follows:
</TABLE>
<TABLE>
<CAPTION>
LIBER OF
MORTGAGES
OR COUNTY
COUNTY RECORDED RECORDS PAGE
------------------------------------------- -------------- --------- ---------
<S> <C> <C> <C>
Genesee.................................... July 5, 1994 3052 811-834
Huron...................................... July 1, 1994 630 333-356
Ingham..................................... July 1, 1994 2191 854-877
Lapeer..................................... July 1, 1994 0864 0459-0482
Lenawee.................................... July 1, 1994 1319 901-924
Livingston................................. July 1, 1994 1843 0672-0695
Macomb..................................... July 1, 1994 06381 684-707
Mason...................................... July 1, 1994 442 90-113
Monroe..................................... July 1, 1994 1390 0931-0954
Oakland.................................... July 20, 1994 14843 827-850
St. Clair.................................. July 5, 1994 1361 599-622
Sanilac.................................... July 1, 1994 459 74-97
Tuscola.................................... July 6, 1994 661 391-414
Washtenaw.................................. July 1, 1994 2997 527-550
Wayne...................................... July 1, 1994 27471 444-467
</TABLE>
<PAGE> 29
27
<TABLE>
<S> <C>
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as August 15, 1994 providing for
the terms of bonds to be issued thereunder of 1994 Series C has heretofore
been entered into between the Company and the Trustee and has been filed
in the Office of the Secretary of State of Michigan as a financing
statement on August 16, 1994 (Filing No. 46000B), has been filed and
recorded in the Office of the Interstate Commerce Commission (Recordation
No. 5485-OOOO) on August 16, 1994, and has been recorded as a real estate
mortgage in the offices of the respective Register of Deeds of certain
counties in the State of Michigan, as follows:
</TABLE>
<TABLE>
<CAPTION>
LIBER OF
MORTGAGES
OR COUNTY
COUNTY RECORDED RECORDS PAGES
----------------------------------------- ---------------- --------- ---------
<S> <C> <C> <C>
Genesee.................................. August 16, 1994 3068 11-33
Huron.................................... August 16, 1994 632 650-672
Ingham................................... August 16, 1994 2202 288-310
Lapeer................................... August 16, 1994 0869 0936-0958
Lenawee.................................. August 16, 1994 1325 559-581
Livingston............................... August 16, 1994 1855 0990-1012
Macomb................................... August 16, 1994 06425 191-213
Mason.................................... August 16, 1994 443 561-583
Monroe................................... August 16, 1994 1398 0968-0990
Oakland.................................. August 16, 1994 14910 248-270
St. Clair................................ August 16, 1994 1370 957-979
Sanilac.................................. August 16, 1994 460 661-683
Tuscola.................................. August 16, 1994 662 1224-1246
Washtenaw................................ August 16, 1994 3016 827-849
Wayne.................................... August 16, 1994 27560 686-708
</TABLE>
<PAGE> 30
28
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, Y, Z, AA, BB, CC, DDP Nos. 1-9, FFR Nos.
FOR PAYMENT. 1-14, GGP Nos. 1-22, HH, IIP Nos. 1-22, JJP Nos. 1-8, KKP Nos. 1-8, LLP
Nos. 1-15, NNP Nos. 1-21, OOP Nos. 1-18, QQP Nos. 1-17, TTP Nos. 1-15, UU,
1980 Series A, 1980 Series CP Nos. 1-25, 1980 Series DP Nos. 1-11, 1981
Series AP Nos. 1-16, 1984 Series AP, 1984 Series BP, 1985 Series A, 1985
Series B, 1987 Series A, PP, RR, EE, MMP, MMP No. 2 and 1989 Series A
which were issued under Supplemental Indentures dated as of, respectively,
June 1, 1925, August 1, 1927, February 1, 1931, October 1, 1932, September
25, 1935, September 1, 1936, December 1, 1940, September 1, 1947, November
15, 1951, January 15, 1953, May 1, 1953, March 15, 1954, May 15, 1955,
August 15, 1957, December 15, 1970, November 15, 1971, January 15, 1973,
May 1, 1974, October 1, 1974, January 15, 1975, November 1, 1975, February
1, 1976, June 15, 1976, July 15, 1976, October 1, 1977, March 1, 1977,
July 1, 1979, March 1, 1977, March 1, 1977, March 1, 1977, September 1,
1979, July 1, 1977, July 1, 1979, September 15, 1979, October 1, 1977,
June 1, 1978, October 1, 1977, July 1, 1979, January 1, 1980, August 15,
1980, November 1, 1981, October 1, 1984, May 1, 1985, May 15, 1985,
January 31, 1987, June 1, 1978, October 15, 1978, December 15, 1975,
February 15, 1977, September 1, 1979 and June 15, 1989 have matured or
have been called for redemption and funds sufficient for such payment or
redemption have been irrevocably deposited with the Trustee for that
purpose; and Certificates of Provision for Payment have been recorded in
the offices of the respective Registers of Deeds of certain counties in
the State of Michigan, with respect to all bonds of Series A, B, C, D, E,
F, G, H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1
and 2, IIP No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART IV.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
PART V.
MISCELLANEOUS.
CONFIRMATION OF Except to the extent specifically provided therein, no provision of
SECTION 318(C) OF this supplemental indenture or any future supplemental indenture is
TRUST INDENTURE intended to modify, and the parties do hereby adopt and confirm, the
ACT provisions of Section 318(c) of the Trust Indenture Act which amend and
supercede provisions of the Indenture in effect prior to November 15,
1990.
EXECUTION IN THIS SUPPLEMENTAL INDENTURE MAY BE SIMULTANEOUSLY EXECUTED IN ANY
COUNTERPARTS. NUMBER OF COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO
BE AN ORIGINAL; BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE
AND THE SAME INSTRUMENT.
</TABLE>
<PAGE> 31
29
<TABLE>
<S> <C>
TESTIMONIUM. IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND BANKERS TRUST
COMPANY HAVE CAUSED THESE PRESENTS TO BE SIGNED IN THEIR RESPECTIVE
CORPORATE NAMES BY THEIR RESPECTIVE CHAIRMEN OF THE BOARD, PRESIDENTS,
VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS, TREASURERS OR ASSISTANT
TREASURERS AND IMPRESSED WITH THEIR RESPECTIVE CORPORATE SEALS, ATTESTED
BY THEIR RESPECTIVE SECRETARIES OR ASSISTANT SECRETARIES, ALL AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By
------------------------------
L. L. Loomans
Vice President and Treasurer
EXECUTION. Attest:
----------------------------------
Ronald J. Gdowski
Assistant Corporate Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
-----------------------------------
Jack L. Somers
-----------------------------------
Cathy M. Lewis
STATE OF MICHIGAN SS.:
COUNTY OF WAYNE
ACKNOWLEDGMENT On this day of December, 1994, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of Wayne, in the State of Michigan,
BY COMPANY. personally appeared L. L. Loomans, to me personally known, who, being by
me duly sworn, did say that he does business at 2000 Second Avenue,
Detroit, Michigan 48226 and is the Vice President and Treasurer of THE
DETROIT EDISON COMPANY, one of the corporations described in and which
executed the foregoing instrument; that he knows the corporate seal of the
said corporation and that the seal affixed to said instrument is the
corporate seal of said corporation; and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of
Directors and that he subscribed his name thereto by like authority; and
said L. L. Loomans, acknowledged said instrument to be the free act and
deed of said corporation.
------------------------------------
(Notarial Seal) Judith Thun, Notary Public
Wayne County, MI
My Commission Expires March 4, 1995
</TABLE>
<PAGE> 32
30
<TABLE>
<S> <C> <C>
BANKERS TRUST COMPANY,
(Corporate Seal) By
---------------------
Robert Caporale
Vice President
Attest:
-------------------------------
M. Lisa Morrone
Assistant Vice President
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
-------------------------------
Scott Thiel
-------------------------------
Denise Mitchell
STATE OF NEW YORK SS.:
COUNTY OF NEW YORK
ACKNOWLEDGMENT On this day of December, 1994, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of New York, in the State of New York,
BY TRUSTEE. personally appeared Robert Caporale, to me personally known, who, being by
me duly sworn, did say that his business office is located at Four Albany
Street, New York, New York 10015, and he is Vice President of BANKERS
TRUST COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and said Robert
Caporale acknowledged said instrument to be the free act and deed of said
corporation.
(Notarial Seal)
-----------------------------------
Karen J. Morena
Notary Public, State of New York
No. 41-4991083
Qualified in Queens County
Certificate Filed in New York County
Commission Expires 1-21-96
</TABLE>
<PAGE> 33
31
<TABLE>
<S> <C>
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
AFFIDAVIT AS TO L. L. Loomans, being duly sworn, says: that he is the Vice President
CONSIDERATION and Treasurer of THE DETROIT EDISON COMPANY, the Mortgagor named in the
AND GOOD FAITH. foregoing instrument, and that he has knowledge of the facts in regard to
the making of said instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and adequate, and that
the same was given in good faith for the purposes in such instrument set
forth.
-----------------
L. L. Loomans
Sworn to before me this day of
December, 1994
/s/ JUDITH THUN
--------------------------
Judith Thun, Notary Public
Wayne County, MI
My Commission Expires March 4, 1995
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq., 2000 Second Avenue,
Detroit, Michigan 48226
</TABLE>
<PAGE> 1
Exhibit 4-170
EXECUTED IN 50 COUNTER-
PARTS OF WHICH THIS IS,
COUNTERPART NUMBER 50
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(16 Wall Street,
New York, New York 10015)
AS TRUSTEE
----------------------------
INDENTURE
Dated as of October 15, 1985
----------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS, SERIES KKP NO. 9
(B) LISTING OF ADDITIONAL REAL ESTATE AND
(C) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
<TABLE>
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PAGE
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<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS
Original Indenture and Supplementals . . . . . . . . . . . . . . . . . . . . . . . . . 1
Issue of Bonds under Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bonds heretofore issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reason for creation of new series . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Bonds to be Series KKP No. 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Further assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Authorization of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . 5
Consideration for Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . 5
PART I.
CREATION OF TWO HUNDRED SIXTY-SEVENTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 9
Sec. 1. Certain terms of Bonds of Series KKP No. 9 . . . . . . . . . . . . . . . . . . 6
Sec. 2. Redemption of Bonds of Series KKP No. 9 . . . . . . . . . . . . . . . . . . . . 7
Sec. 3. Redemption of Bonds of Series KKP No. 9 in event
of acceleration of Monroe Revenue Bonds . . . . . . . . . . . . . . . . . . . 7
Sec. 4. Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sec. 5. Form of Bonds of Series KKP No. 9 . . . . . . . . . . . . . . . . . . . . . . . 8
Form of Trustee's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 12
PART II.
ADDITIONAL REAL ESTATE
After acquired property being specifically subjected to Indenture . . . . . . . . . . . 12
Assignment of income, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Habendum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
In trust nevertheless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PART III.
RECORDING AND FILING DATA
Recording and filing of Original Indenture . . . . . . . . . . . . . . . . . . . . . . . 13
Recording and filing of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . 13
Recording of Certificates of Provision for Payment . . . . . . . . . . . . . . . . . . . 17
PART IV.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee . . . . . . . . . . . . . . . . . 17
PART V.
MISCELLANEOUS
Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Affidavit as to consideration and good faith . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
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* This Table of Contents shall not (have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
PARTIES SUPPLEMENTAL INDENTURE, dated as of the fifteenth day of
October, in the year one thousand nine hundred and
eighty-five, between THE DETROIT EDISON COMPANY, a
corporation organized and existing under the laws of the
State of Michigan and a transmitting utility (hereinafter
called the "Company"), party of the first part, and
BANKERS TRUST COMPANY, a corporation organized and
existing under the laws of the State of New York, having
its corporate trust office at Four Albany Street, in the
Borough of Manhattan, The City and State of New York, as
Trustee under the Mortgage and Deed of Trust hereinafter
mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and
INDENTURE AND delivered its Mortgage and Deed of Trust (hereinafter
SUPPLEMENTALS. referred to as the "Original Indenture"), dated as of
October 1, 1924, to the Trustee, for the security of all
bonds of the Company outstanding thereunder, and
pursuant to the terms and provisions of the Original
Indenture, indentures dated as of, respectively, June 1,
1925, August 1, 1927, February 1, 1931, June 1, 1931,
October 1, 1932, September 25, 1935, September 1, 1936,
November 1, 1936, February 1, 1940, December 1, 1940,
September 1, 1947, March 1, 1950, November 15, 1951,
January 15, 1953, May 1, 1953, March 15, 1954, May 15,
1955, August 15, 1957, June 1, 1959, December 1, 1966,
October 1, 1968, December 1, 1969, July 1, 1970,
December 15, 1970, June 15, 1971, November 15, 1971,
January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1,
1976, June 15, 1976, July 15, 1976, February 15, 1977,
March 1, 1977, June 15, 1977, July 1, 1977, October 1,
1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979,
January 1, 1980, April 1, 1980, August 15, 1980, August
1, 1981, November 1, 1981, June 30, 1982, August 15,
1982, June 1, 1983, October 1, 1984, May 1, 1985 and
May 15, 1985 supplemental to the Original Indenture,
have heretofore been entered into between the Company
and the Trustee (the Original Indenture and all
indentures supplemental thereto together being
hereinafter sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be
BONDS UNDER issuable in one or more series, and makes provision that
INDENTURE. the rates of interest and dates for the payment thereof,
the date of maturity or dates of maturity, if of serial
maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without
coupons of any series and any other provisions and
agreements in respect thereof, in the Indenture provided
and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made
by the Company to the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Two billion
ISSUED. eight hundred eighteen million one hundred seventy-one
thousand dollars ($2,818,171,000) have heretofore been
issued under the Indenture as follows, viz:
<TABLE>
<S> <C> <C>
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
</TABLE>
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2
<TABLE>
<S> <C> <C>
(16) Bonds of Series W -- Principal Amount $50,000,000,
(17) Bonds of Series BB -- Principal Amount $50,000,000,
(18) Bonds of Series CC -- Principal Amount $50,000,000,
(19-23) Bonds of Series DDP Nos. 1-5 -- Principal Amount $4,000,000,
(24-29) Bonds of Series FFR Nos. 1-6 -- Principal Amount $3,100,000,
(30-38) Bonds of Series GGP Nos. 1-5 and 8-11 -- Principal Amount $5,580,000,
(39-44) Bonds of Series IIP Nos. 1-4 and 8-9 -- Principal Amount $260,000,
(45-48) Bonds of Series JJP Nos. 1-4 -- Principal Amount $460,000,
(49-52) Bonds of Series KKP Nos. 1-4 -- Principal Amount $1,060,000,
(53-58) Bonds of Series LLP Nos. 1-4 and 8-9 -- Principal Amount $1,640,000,
(59-64) Bonds of Series NNP Nos. 1-4 and 8-9 -- Principal Amount $4,300,000,
(65-68) Bonds of Series OOP Nos. 1-4 -- Principal Amount $1,340,000,
(69-72) Bonds of Series QQP Nos. 1-3 and 10 -- Principal Amount $1,755,000,
(73-74) Bonds of Series TTP Nos. 1-2 -- Principal Amount $110,000,
(75) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(76) Bonds of 1980 Series CP No. 1 -- Principal Amount $490,000,
(77) Bonds of 1980 Series DP No. 1 -- Principal Amount $185,000,
</TABLE>
all of which have either been retired and cancelled, or
no longer represent obligations of the Company, having
been called for redemption and funds necessary to effect
the payment, redemption and retirement thereof having
been deposited with the Trustee as a special trust fund
to be applied for such purpose;
(78) Bonds of Series P in the principal amount of
Seventy million dollars ($70,000,000), of which Three
million six hundred seventy-five thousand dollars
($3,675,000) principal amount have heretofore been
retired and cancelled and Sixty-six million three
hundred twenty-five thousand dollars ($66,325,000)
principal amount are outstanding at the date hereof;
(79) Bonds of Series Q in the principal amount of
Forty million dollars ($40,000,000), of which Two
million three hundred five thousand dollars
($2,305,000) principal amount have heretofore been
retired and cancelled and Thirty-seven million six
hundred ninety-five thousand dollars ($37,695,000)
principal amount are outstanding at the date hereof;
(80) Bonds of Series R in the principal amount of One
hundred million dollars ($100,000,000), all of which
are outstanding at the date hereof;
(81) Bonds of Series S in the principal amount of One
hundred fifty million dollars ($150,000,000), all of
which are outstanding at the date hereof;
(82) Bonds of Series T in the principal amount of
Seventy-five million dollars ($75,000,000), all of
which are outstanding at the date hereof;
(83) Bonds of Series U in the principal amount
of Seventy-five million dollars ($75,000,000), all of
which are outstanding at the date hereof;
(84) Bonds of Series V in the principal amount of One
hundred million dollars ($100,000,000), all of which
are outstanding at the date hereof;
(85) Bonds of Series X in the principal amount of One
hundred million dollars ($100,000,000), all of which
are outstanding at the date hereof;
(86) Bonds of Series Y in the principal amount of
Sixty million dollars ($60,000,000), all of which are
outstanding at the date hereof;
(87) Bonds of Series Z in the principal amount of One
hundred million dollars ($100,000,000), all of which
are outstanding at the date hereof;
(88) Bonds of Series AA in the principal amount of One
hundred million dollars ($100,000,000), all of which
are outstanding at the date hereof;
<PAGE> 5
3
(89-92) Bonds of Series DDP Nos. 6-9 in the principal
amount of Ten million three hundred five thousand
dollars ($10,305,000), all of which are outstanding at
the date hereof;
(93) Bonds of Series EE in the principal amount of
Fifty million dollars ($50,000,000), of which Twelve
million five hundred thousand dollars ($12,500,000)
principal amount have heretofore been retired and
Thirty-seven million five hundred thousand dollars
($37,500,000) principal amount are outstanding at the
date hereof:
(94-101) Bonds of Series FFR Nos. 7-14 in the
principal amount of Forty-two million five
hundred thousand dollars ($42,500,000), all of which
are outstanding at the date hereof;
(102-114) Bonds of Series GGP Nos. 6-7 and 12-22 in
the principal amount of Thirty-six million seven
hundred twenty thousand dollars ($36,720,000), all of
which are outstanding at the date hereof;
(115) Bonds of Series HH in the principal amount of
Fifty million dollars ($50,000,000), all of which are
outstanding at the date hereof;
(116-117) Bonds of Series MMP and MMP No. 2 in the
principal amount of Five million four hundred thirty
thousand dollars ($5,430,000), of which Five hundred
ten thousand dollars ($510,000) principal amount have
heretofore been retired and Four million nine hundred
twenty thousand dollars ($4,920,000) principal amount
are outstanding at the date hereof;
(118-133) Bonds of Series IIP Nos. 5-7 and 10-22 in
the principal amount of Three million four hundred
ninety thousand dollars ($3,490,000), all of which are
outstanding at the date hereof:
(134-137) Bonds of Series JJP Nos. 5-8 in the
principal amount of Six million three hundred
ninety thousand dollars ($6,390,000), of which Forty
thousand dollars ($40,000) principal amount have
heretofore been retired and Six million three hundred
fifty thousand dollars ($6,350,000) are outstanding at
the date hereof;
(138-141) Bonds of Series KKP Nos. 5-8 in the
principal amount of Thirteen million eight hundred
thirty thousand dollars ($13,830,000), of which Sixty
thousand dollars ($60,000) principal amount have
heretofore been retired and Thirteen million seven
hundred seventy thousand dollars ($13,770,000) are
outstanding at the date hereof;
(142-150) Bonds of Series LLP Nos. 5-7 and 10-15 in
the principal amount of Seven million two hundred
ten thousand dollars ($7,210,000), all of which are
outstanding at the date hereof;
(151-165) Bonds of Series NNP Nos. 5-7 and 10-21 in
the principal amount of Forty-three million six
hundred fifty thousand dollars ($43,650,000), all of
which are outstanding at the date hereof,
(166-179) Bonds of Series OOP Nos. 5-18 in the
principal amount of Seventeen million five
hundred forty thousand dollars ($17,540,000), of which
Eighty thousand dollars ($80,000) principal amount
have heretofore been retired and Seventeen million
four hundred sixty thousand dollars ($17,460,000) are
outstanding at the date hereof;
(180) Bonds of Series PP in the principal amount of
Seventy million dollars ($70,000,000), all of which
are outstanding at the date hereof;
<PAGE> 6
4
(181-195) Bonds of Series QQP Nos. 4-9 and 11-19 in
the principal amount of Eleven million eight
hundred ninety-five thousand dollars ($11,895,000),
all of which are outstanding at the date hereof;
(196) Bonds of Series RR in the principal amount of
Seventy million dollars ($70,000,000), all of which
are outstanding at the date hereof;
(197) Bonds of Series SS in the principal amount of
One hundred fifty million dollars ($150,000,000),
of which Ten million dollars ($10,000,000) principal
amount have heretofore been retired and One hundred
forty million dollars ($140,000,000) principal amount
are outstanding at the date hereof;
(198-210) Bonds of Series TTP Nos. 3-15 in the
principal amount of Three million six hundred
ninety thousand dollars ($3,690,000), all of which are
outstanding at the date hereof;
(211) Bonds of Series UU in the principal amount of
One hundred million dollars ($100,000,000), all of
which are outstanding at the date hereof;
(212) Bonds of 1980 Series B in the principal amount
of One hundred million dollars ($100,000,000), all
of which are outstanding at the date hereof;
(213-236) Bonds of 1980 Series CP Nos. 2-25 in the
principal amount of Thirty-four million five hundred
ten thousand dollars ($34,510,000), all of which are
outstanding at the date hereof:
(237-246) Bonds of 1980 Series DP Nos. 2-11 in the
principal amount of Ten million five hundred
sixty-five thousand dollars ($10,565,000), all of
which are outstanding at the date hereof;
(247-262) Bonds of 1981 Series AP Nos. 1-16 in the
principal amount of One hundred twenty-four million
dollars ($124,000,000), all of which are outstanding
at the date hereof;
(263) Bonds of 1984 Series AP in the principal amount
of Two million four hundred thousand dollars
($2,400,000), all of which are outstanding at the
date hereof;
(264) Bonds of 1984 Series BP in the principal amount
of Seven million seven hundred fifty thousand
dollars ($7,750,000), all of which are outstanding at
the date hereof;
(265) Bonds of 1985 Series A in the principal amount
of Thirty-five million dollars ($35,000,000), all
of which are outstanding at the date hereof; and
(266) Bonds of 1985 Series B in the principal amount
of Fifty million dollars ($50,000,000), all of
which are outstanding at the date hereof;
and, accordingly, of the bonds so issued, one billion
nine hundred ninety-seven million seven hundred five
thousand dollars ($1,997,705,000) principal amount are
outstanding at the date hereof; and
REASON FOR WHEREAS, the County of Monroe, Michigan has agreed
CREATION OF to issue and sell $20,000,000 principal amount of its
NEW SERIES. Pollution Control Revenue Bonds (The Detroit Edison
Company Monroe and Fermi Plants Project), Collateralized
Series I-1985 so as to provide funds for the purchase
and construction of certain pollution control facilities
installed in the Company's Fermi 2 Plant; and
WHEREAS, the Company has entered into an
Installment Sales Contract, dated as of March 1, 1977
and amended as of September 1, 1979 and November 1,
1985 with the County of Monroe, in order to purchase
certain pollution control facilities, and pursuant to
such Installment Sales Contract the Company has agreed
to issue its General and Refunding Mortgage Bonds under
the Indenture in order further to secure its
obligations under such Installment Sales Contract; and
<PAGE> 7
5
WHEREAS, for such purposes the Company desires to
issue a new series of bonds to be issued under the
Indenture and to be authenticated and delivered pursuant
to Section 4 of Article III of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental
SERIES KKP Indenture to create such new series of bonds, to be
NO. 9 designated "General and Refunding Mortgage Bonds, Series
KKP No. 9"; and
FURTHER WHEREAS, the Original Indenture, by its terms,
ASSURANCE. includes in the property subject to the lien thereof all
of the estates and properties, real, personal and mixed,
rights, privileges and franchises of every nature and
kind and wheresoever situate, then or thereafter owned or
possessed by or belonging to the Company or to which it
was then or at any time thereafter might be entitled in
law or in equity (saving and excepting, however, the
property therein specifically excepted or released from
the lien thereof), and the Company therein covenanted that
it would, upon reasonable request, execute and deliver
such further instruments as may be necessary or proper for
the better assuring and confirming unto the Trustee all or
any part of the trust estate, whether then or thereafter
owned or acquired by the Company (saving and excepting,
however, property specifically excepted or released from
the lien thereof); and
WHEREAS, the Company has, since the date as of which
the Original Indenture was executed, viz, October 1,
1924, acquired and/or perfected its title to certain
property hereinafter described. not previously
specifically subjected to the lien of the Indenture,
which is subject to the lien of the Indenture and, for
the better security and protection of the bonds now or
hereafter issued under the Indenture, the Company desires
by this Supplemental Indenture to evidence the specific
conveyance of said property to the Trustee upon the
trusts set forth in the Original Indenture and in said
indentures supplemental thereto; and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers
OF SUPPLEMENTAL and authority conferred upon and reserved to it under and
INDENTURE. by virtue of the provisions of the Indenture, and
pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver
to the Trustee a supplemental indenture in the form hereof
for the purposes herein provided; and
WHEREAS, all conditions and requirements necessary to
make this Supplemental Indenture a valid and legally
binding instrument in accordance with its terms have been
done, performed and fulfilled, and the execution and
delivery hereof have been in all respects duly
authorized;
CONSIDERATION NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The
FOR SUPPLE- Detroit Edison Company, in consideration of the premises
MENTAL and of the covenants contained in the Indenture and of
INDENTURE. the sum of One Dollar ($1.00) and other good and valuable
consideration to it duly paid by the Trustee at or
before the ensealing and delivery of these presents, the
receipt whereof is hereby acknowledged, hereby covenants
and agrees to and with the Trustee and its successors in
the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
<PAGE> 8
6
PART I.
CREATION OF TWO HUNDRED SIXTY-SEVENTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 9
CERTAIN TERMS SECTION 1. The Company hereby creates the Two hundred
OF BONDS OF sixty-seventh series of bonds to be issued under and
SERIES KKP secured by the Original Indenture as amended to date and
NO. 9 as further amended by this Supplemental Indenture, to be
designated, and to be distinguished from the bonds of
all other series, by the title "General and Refunding
Mortgage Bonds, Series KKP No. 9" (elsewhere herein
referred to as the "bonds of Series KKP No. 9"). The
aggregate principal amount of bonds of Series KKP No. 9
shall be limited to twenty million dollars ($20,000,000),
except as provided in Sections 7 and 13 of Article II of
the Original Indenture with respect to exchanges and
replacements of bonds.
Each bond of Series KKP No. 9 is to be irrevocably
assigned to, and registered in the name of, Manufacturers
National Bank of Detroit, as trustee, or a successor
trustee (said trustee or any successor trustee being
hereinafter referred to as the Monroe Trust Indenture
Trustee"), under the Trust Indenture, dated as of March 1,
1977, as amended September 1, 1979 and October 15, 1985
(hereinafter called the "Monroe Trust Indenture"),
between the County of Monroe, Michigan (hereinafter
called "Monroe"), and the Monroe Trust Indenture Trustee,
to secure payment of the County of Monroe, Michigan,
Pollution Control Revenue Bonds (The Detroit Edison
Company Monroe and Fermi Plants Project), Collateralized
Series I-1985 (hereinafter called the "Monroe Revenue
Bonds"), issued by Monroe under the Monroe Trust
Indenture, the proceeds of which (other than any accrued
interest thereon) have been provided for the acquisition
and construction of certain pollution control facilities
which the Company has agreed to purchase pursuant to the
provisions of the Installment Sales Contract, dated as of
March 1, 1977, as amended as of September 1, 1979 and as
of October 15, 1985 (hereinafter called the "Monroe
Contract"), between the Company and Monroe.
The bonds of Series KKP No. 9 shall be issued as
registered bonds without coupons in denominations of a
multiple of $5,000. The bonds of Series KKP No. 9 shall be
issued in the aggregate principal amount of $20,000,000,
shall mature on September 1, 2005 and shall bear
interest, payable semi-annually on March 1 and September 1
of each year, at the rate of 10-1/8 %, until the
principal thereof shall have become due and payable and
thereafter until the Company's obligation with respect to
the payment of said principal shall have been discharged
as provided in the Indenture.
The bonds of Series KKP No. 9 shall be payable as to
principal, premium, if any, and interest as provided in
the Indenture, but only to the extent and in the manner
herein provided. The bonds of Series KKP No. 9 shall be
payable, both as to principal and interest, at the
office or agency of the Company in the Borough of
Manhattan, The City and State of New York, in any coin or
currency of the United States of America which at the
time of payment is legal tender for public and private
debts.
Except as provided herein, each bond of Series KKP No. 9
shall be dated the date of its authentication and
interest shall be payable on the principal represented
thereby from the March 1 or September 1 next preceding
the date thereof to which interest has been paid on bonds
of Series KKP No. 9, unless the bond is authenticated on a
date to which interest has been paid, in which case
interest shall be payable from the date of
authentication, or unless the date of authentication is
prior to March 1, 1986, in which case interest shall be
payable from October 15, 1985.
The bonds of Series KKP No. 9 in definitive form shall
be, at the election of the Company, fully engraved or
shall be lithographed or printed in authorized denom-
inations as aforesaid and numbered 1 and upwards (with
such further designation as
<PAGE> 9
7
may be appropriate and desirable to indicate by such
designation the form, series and denominations of bonds of
Series KKP No. 9). Until bonds of Series KKP No. 9 in
definitive form are ready for delivery, the Company may
execute, and upon its request in writing the Trustee shall
authenticate and deliver in lieu thereof, bonds of Series
KKP No. 9 in temporary form, as provided in Section 10 of
Article II of the Indenture. Temporary bonds of Series
KKP No. 9, if any, may be printed and may be issued in
authorized denominations in substantially the form of
definitive bonds of Series KKP No. 9, but with such
omissions, insertions and variations as may be appropriate
for temporary bonds, all as may be determined by the
Company.
Bonds of Series KKP No. 9 shall not be assignable or
transferable except as may be required to effect a
transfer to any successor trustee under the Monroe Trust
Indenture, or, subject to compliance with applicable law,
as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under the
Monroe Trust Indenture. Any such transfer shall be made
upon surrender thereof for cancellation at the office or
agency of the Company in the Borough of Manhattan, The
City and State of New York, together with a written
instrument of transfer (if so required by the Company or
by the Trustee) in form approved by the Company duly
executed by the holder or by its duly authorized
attorney. Bonds of Series KKP No. 9 shall in the same
manner be exchangeable for a like aggregate principal
amount of bonds of Series KKP No. 9 upon the terms and
conditions specified herein and in Section 7 of
Article II of the Indenture. The Company waives its
rights under Section 7 of Article II of the
Indenture not to make exchanges or transfers of bonds of
Series KKP No. 9, during any period of ten days next
preceding any redemption date for such bonds.
Bonds of Series KKP No. 9, in definitive and temporary
form, may bear such legends as may be necessary to comply
with any law or with any rules or regulations made
pursuant thereto or as may be specified in the Monroe
Contract.
Upon payment of the principal or premium, if any, or
interest on the Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 9 in a principal amount equal to
the principal amount of such Monroe Revenue 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 bonds shall be
surrendered for cancellation or presented for appropriate
notation to the Trustee.
REDEMPTION SECTION 2. Bonds of Series KKP No. 9 shall be redeemed
OF BONDS on the respective dates and in the respective
OF SERIES KKP principal amounts which correspond to the redemption
NO. 9. dates for, and the principal amounts to be redeemed of,
the Monroe Revenue Bonds.
In the event the Company elects to redeem any Monroe
Revenue Bonds prior to maturity in accordance with the
provisions of the Monroe Trust Indenture, the Company
shall on the same date redeem bonds of Series KKP No. 9 in
principal amounts and at redemption prices corresponding
to the Monroe Revenue Bonds so redeemed. The Company
agrees to give the Trustee notice of any such redemption
of bonds of Series KKP No. 9 on the same date as it gives
notice of redemption of Monroe Revenue Bonds to the Monroe
Trust Indenture Trustee.
REDEMPTION SECTION 3. In the event of an Event of Default under the
OF BONDS OF Monroe Trust Indenture and the acceleration of all Monroe
SERIES KKP Revenue Bonds, the bonds of Series KKP No. 9 shall be
NO. 9 IN EVENT redeemable in whole upon receipt by the Trustee of a
OF ACCELERATION written demand (hereinafter called a "Redemption Demand")
OF MONROE from the Monroe Trust Indenture Trustee stating that
REVENUE BONDS. there has occurred under the Monroe Trust Indenture both
an Event of Default and a declaration of acceleration of
payment of principal, accrued interest and premium, if
any, on the Monroe Revenue Bonds, specifying the last
date to
<PAGE> 10
8
which interest on the Monroe Revenue Bonds has been paid
(such date being hereinafter referred to as the "Initial
Interest Accrual Date") and demanding redemption of the
bonds of said series. The Trustee shall, within five
days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its
receipt by the Trustee. Promptly upon receipt by the
Company of such copy of a Redemption Demand, the Company
shall fix a date on which it will redeem the bonds of said
series so demanded to be redeemed (hereinafter called the
"Demand Redemption Date"). Notice of the date fixed as
the Demand Redemption Date shall be mailed by the Company
to the Trustee at least ten days prior to such Demand
Redemption Date. The date to be fixed by the Company as
and for the Demand Redemption Date may be any date up to
and including the earlier of (x) the 60th day after
receipt by the Trustee of the Redemption Demand or (y)
the maturity date of such bonds first occurring following
the 20th day after the receipt by the Trustee of the
Redemption Demand; provided, however, that if the Trustee
shall not have received such notice fixing the Demand
Redemption Date on or before the 10th day preceding the
earlier of such dates, the Demand Redemption Date shall
be deemed to be the earlier of such dates. The Trustee
shall mail notice of the Demand Redemption Date (such
notice being hereinafter called the "Demand Redemption
Notice") to the Monroe Trust Indenture Trustee not more
than ten nor less than five days prior to the Demand
Redemption Date.
Each bond of Series KKP No. 9 shall be redeemed by the
Company on the Demand Redemption Date therefore upon
surrender thereof by the Monroe Trust Indenture Trustee
to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest thereon at
the rate specified for such bond from the Initial
Interest Accrual Date to the Demand Redemption Date plus
an amount equal to the aggregate premium, if any, due
and payable on such Demand Redemption Date on all Monroe
Revenue Bonds; provided, however, that in the event of
a receipt by the Trustee of a notice that, pursuant to
Section 1010 of the Monroe Trust Indenture, the Monroe
Trust Indenture Trustee has terminated proceedings to
enforce any right under the Monroe Trust Indenture, then
any Redemption Demand shall thereby be rescinded By the
Monroe Trust Indenture Trustee, and no Demand Redemption
Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or
annulment shall extend to or affect any subsequent
default or impair any right consequent thereon.
Anything herein contained to the contrary
notwithstanding, the Trustee is not authorized to take any
action pursuant to a Redemption Demand and such Redemption
Demand shall be of no force or effect, unless it is
executed in the name of the Monroe Trust Indenture Trustee
by its President or one of its Vice Presidents.
CONSENT. SECTION 4. The holders of the bonds of Series KKP No.
9, by their acceptance of and holding thereof, consent
and agree that bonds of any series may be issued which
mature on a date or dates later than October 1, 2024 and
also consent to the deletion from the first paragraph of
Section 5 of Article II of the Indenture of the phrase
"but in no event later than October 1, 2024". Such
holders further agree that (a) such consent shall, for
all purposes of Article XV of the Indenture and without
further action on the part of such holders, be deemed the
affirmative vote of such holders at any meeting called
pursuant to said Article XV for the purpose of approving
such deletion, and (b) such deletion shall become
effective at such time as not less than eighty-five
percent (85%) in principal amount of bonds outstanding
under the Indenture shall have consented thereto
substantially in the manner set forth in this Section 4,
or in writing, or by affirmative vote cast a meeting
called pursuant to said Article XV, or by any
combination thereof.
<PAGE> 11
9
FORM OF BONDS SECTION 5. The bonds of Series KKP No. 9 and the form of
OF SERIES KKP Trustee's Certifcate to be endorsed on such bonds shall
NO. 9. be substantially in the following forms, respectively:
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
SERIES KKP NO. 9, 10-1/8% DUE SEPTEMBER 1, 2005
Notwithstanding any provisions hereof or in the
Indenture, this bond is not assignable or transferable
except as may be required to effect a transfer to any
successor trustee under the Trust Indenture, dated as of
March 1, 1977 and amended as of September 1, 1979 and
October 15, 1985 between the County of Monroe, Michigan
and Manufacturers National Bank of Detroit, as trustee,
or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and
remedies consequent upon an Event of Default under said
Trust Indenture.
$....... No........
THE DETROIT EDISON COMPANY (hereinafter called the
"Company"), a corporation of the State of Michigan, for
value received, hereby promises to pay to Manufacturers
National Bank of Detroit, as trustee, or registered
assigns, at the Company's office or agency in the Borough
of Manhattan, The City and State of New York, the
principal sum of dollars ($ ) in lawful
money of the United States of America on the date
specified in the title hereof and interest thereon at the
rate specified in the title hereof, in like lawful money,
from October 15, 1985, and after the first payment of
interest on bonds of this Series has been made or
otherwise provided for, from the most recent date to
which interest has been paid or otherwise provided for,
semiannually on March 1 and September 1 of each year,
until the Company's obligation with respect to payment of
said principal shall have been discharged, all as
provided, to the extent and in the manner specified in
the Indenture hereinafter mentioned on the reverse hereof
and in the supplemental indenture pursuant to which this
bond has been issued.
Under a Trust Indenture, dated as of March 1, 1977 and
amended as of September 1, 1979 and October 15, 1985
(hereinafter called the "Monroe Trust Indenture"), between
the County of Monroe, Michigan (hereinafter called
"Monroe"), and Manufacturers National Bank of Detroit, as
trustee (hereinafter called the "Monroe Trust Indenture
Trustee"), Monroe has issued Pollution Control Revenue
Bonds (The Detroit Edison Company Monroe and Fermi Plants
Project), Collateralized Series I-1985 (hereinafter
called the "Monroe Revenue Bonds"). This bond was
originally issued to Monroe and simultaneously irrevocably
assigned to the Monroe Trust Indenture Trustee so as to
secure the payment of the Monroe Revenue Bonds. Payments
of principal of, or premium, if any, or interest on,
Monroe Revenue Bonds shall constitute like pavements on
this bond as further provided herein and in the
supplemental indenture pursuant to which this bond has
been issued.
Reference is hereby made to such further provisions of
this bond set forth on the reverse hereof and such further
provisions shall for all purposes have the same effect as
though set forth at this place.
This bond shall not be valid or become obligatory for
any purpose until Bankers Trust Company, the Trustee under
the Indenture hereinafter mentioned on the reverse hereof,
or its successor thereunder, shall have signed the form of
certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has
caused this instrument to be executed by its Chairman of
the Board and its President or a
<PAGE> 12
10
Vice President, with their manual or facsimile
signatures, and its corporate seal, or a facsimile
thereof, to be impressed or imprinted hereon and the same
to be attested by its Secretary, or an Assistant
Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By .............................
Chairman of the Board
Attest: .............................
President
........................
Secretary
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of
the Company, unlimited as to amount except as provided in
the Indenture hereinafter mentioned or any indentures
supplemental thereto, and is one of a series of General
and Refunding Mortgage Bonds known as Series KKP No. 9,
limited to an aggregate principal amount of $20,000,000,
except as otherwise provided in the Indenture hereinafter
mentioned. This bond and all other bonds of said series
are issued and to be issued under, and are all equally
and ratably secured (except insofar as any sinking,
amortization, improvement or analogous fund, established
in accordance with the provisions of the Indenture
hereinafter mentioned, may afford additional security for
the bonds of any particular series and except as provided
in Section 3 of Article VI of said Indenture) by an
Indenture, dated as of October 1, 1924, duly executed by
the Company to Bankers Trust Company, a corporation of
the State of New York, as Trustee, to which Indenture
and all indentures supplemental thereto (including the
Supplemental Indenture dated as of October 15, 1985)
reference is hereby made for a description of the
properties and franchises mortgaged and conveyed, the
nature and extent of the security, the terms and
conditions upon which the bonds are issued and under
which additional bonds may be issued, and the rights of
the holders of the bonds and of the Trustee in respect of
such security (which Indenture and all indentures
supplemental thereto, including the Supplemental
Indenture dated as of October 15, 1985, are hereinafter
collectively called the "Indenture"). As provided in the
Indenture, said bonds may be for various principal sums
and are issuable in series, which may mature at different
times, may bear interest at different rates and may
otherwise vary as in said Indenture provided. With the
consent of the Company and to the extent permitted by and
as provided in the Indenture, the rights and obligations
of the Company and of the holders of the bonds
and the terms and provisions of the Indenture, or of any
indenture supplemental thereto, may be modified or
altered in certain respects by affirmative vote of at
least eighty-five percent (85%) in amount of the bonds
then outstanding, and, if the rights of one or more, but
less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by
affirmative vote of at least eighty-five percent (85%)
in amount of the series of bonds so to be affected
(excluding in every instance bonds disqualified from
voting by reason of the Company's interest therein as
specified in the Indenture); provided, however, that,
without the consent of the holder hereof, no such
modification or alteration shall, among other things,
affect the terms of payment of the principal of or the
interest on this bond, which in those respects is
unconditional.
The holders of the bonds of Series KKP No. 9, by
their acceptance of and holding thereof, consent and
agree that bonds of any series may be issued which
mature on a date or dates later than October 1, 2024 and
also consent to the deletion from the first paragraph of
Section 5 of Article II of the Indenture of the phrase
"but in no event later than October 1, 2024,". Such
holders further agree that (a) such consent shall, for
all purposes of Article XV of the Indenture and without
further action on the part
<PAGE> 13
11
of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV
for the purpose of approving such deletion, and (b) such
deletion shall become effective at such time as not less
than eighty-five per cent (85%) in principal amount of
bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in Section 4
of Part II of the Supplemental Indenture dated as of
October 15, 1985, or in writing, or by affirmative vote
cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
This bond is redeemable upon the terms and conditions
set forth in the Indenture, including provision for
redemption upon demand of the Monroe Trust Indenture
Trustee following the occurrence of an Event of Default
under the Monroe Trust Indenture and the acceleration of
the principal of the Monroe Revenue Bonds.
Under the Indenture, funds may be deposited with the
Trustee (which shall have become available for payment),
in advance of the redemption date of any of the bonds of
Series KKP No. 9 (or portions thereof), in trust for the
redemption of such bonds (or portions thereof) and the
interest due or to become due thereon, and thereupon all
obligations of the Company in respect of such bonds (or
portions thereof) so to be redeemed and such interest
shall cease and be discharged, and the holders thereof
shall thereafter be restricted exclusively to such funds
for any and all claims of whatsoever nature on their part
under the Indenture or with respect to such bonds (or
portions thereof) and interest.
In case an event of default, as defined in the
Indenture, shall occur, the principal of all the bonds
issued thereunder may become or be declared due and
payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.
Upon payment of the principal of, or premium, if any,
or interest on, the Monroe Revenue 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 IX of the Monroe Trust
Indenture, bonds of Series KKP No. 9 in a principal
amount equal to the principal amount of such Monroe
Revenue Bonds and having both a corresponding maturity
date and interest rate 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 bonds of said series shall be
surrendered for cancellation or presented for appropriate
notation to the Trustee.
This bond is not assignable or transferable except as
may be required to effect a transfer to any successor
trustee under the Monroe Trust Indenture, or, subject to
compliance with applicable law, as may be involved in the
course of the exercise of rights and remedies consequent
upon an Event of Default under the Monroe Trust
Indenture. Any such transfer shall be made by the
registered holder hereof, in person or by his attorney
duly authorized in writing, on the books of the Company
kept at its office or agency in the Borough of Manhattan,
The City and State of New York, upon surrender and
cancellation of this bond, and thereupon, a new
registered bond of the same series of authorized
denominations for a like aggregate principal amount will
be issued to the transferee in exchange therefor, and
this bond with others in like form may in like manner be
exchanged for one or more new bonds of the same series of
other authorized denominations, but of the same aggregate
principal amount, all as provided and upon the terms and
conditions set forth in the Indenture, and upon payment,
in any event, of the charges prescribed in the Indenture.
No recourse shall be had for the payment of the
principal of or the interest on this bond, or for any
claim based hereon or otherwise in respect hereof or of
the Indenture, or of any indenture supplemental thereto,
against any incorporator, or against any past, present or
future stockholder, director or officer, as such, of the
Company, or of any predecessor or successor corporation,
either directly or through
<PAGE> 14
12
the Company or any such predecessor or successor
corporation, whether for amounts unpaid on stock
subscriptions or by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or
penalty or otherwise howsoever; all such liability being,
by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released by
every holder or owner hereof, as more fully provided in
the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated
TRUSTEE'S therein, described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By ............................
Authorized Officer
PART II.
ADDITIONAL REAL ESTATE
AFTER ACQUIRED The Company, in order to secure the payment of the
PROPERTY BEING principal of, and interest on, the bonds now or hereafter
SPECIFICALLY issued under the Indenture according to their tenor and
SUBJECTED TO effect, has granted, bargained, sold, released, conveyed,
INDENTURE. assigned, transferred, pledged, set over and confirmed
and by these presents does grant, bargain, sell, release,
convey, assign, transfer, pledge, set over and confirm
unto Bankers Trust Company, as Trustee under the
Indenture, and to its successor or successors in said
trust, and to its and their assigns forever, all the
following described property:
All those certain tracts and parcels of land located as
noted in the following schedule and acquired by the
Company under the deeds therein set forth:
<TABLE>
<CAPTION>
RECORDED IN LIBER OF
OFFICE OF MORTGAGES
REGISTER OF OR
PARCEL DEEDS FOR COUNTY
NO. NAME LOCATION COUNTY OF RECORDS PAGE
----- ---- -------- --------- --------- ----
<S> <C> <C> <C> <C> <C>
941 AX Central Huron County Power Verona Township Huron 377 496
Plant Site
941 AY Central Huron County Power Verona Township Huron 376 090
Plant Site
941 AZ Central Huron County Power Verona Township Huron 381 389
Plant Site
934 AE Greenwood Energy Center Greenwood Township St. Clair 982 671
934 AF Greenwood Energy Center Greenwood Township St. Clair 982 671
922 S Enrico Fermi Power Plant Frenchtown Township Monroe 930 635
Addition
923 N Monroe Power Plant Addition Monroe Township Monroe 866 914
943 F Belle River Power Plant China Township St. Clair 1153 403
Addition
1043 Monroe Edison Club House Frenchtown Township Monroe 806 104
1033 AD Yukon-Saratoga Corridor Richmond Township Macomb 3722 465
1033 AE Yukon-Saratoga Corridor Richmond Township Macomb 3760 671
1033 AF Yukon-Saratoga Corridor Armada Township Macomb 3785 548
1033 AG Yukon-Saratoga Corridor Columbus Township St. Clair 1150 206
984 O Greenwood-Saratoga Corridor Kenockee Township St. Clair 992 568
904 I Genoa-North Corridor Genoa Township Livingston 707 447
</TABLE>
<PAGE> 15
13
ASSIGNMENT OF TOGETHER WITH all the tolls, incomes, revenues, rents,
INCOME, ETC. issues and profits of the above described properties and
of all properties mortgaged and conveyed by the Original
Indenture and by indentures supplemental thereto.
HABENDUM. TO HAVE AND TO HOLD, all the above described properties,
together with all properties, real, personal and mixed,
and securities mortgaged, pledged and conveyed by the
Company in and by the terms of the Original Indenture and
in the indentures supplemental thereto, or intended so to
be, unto the Trustee and its successor or successors in
said trust, and to its and their assigns forever.
IN TRUST IN TRUST NEVERTHELESS, upon the terms and trusts in the
NEVERTHELESS. Original Indenture and in the indentures supplemental
thereto, including this Supplemental Indenture, set
forth, for the equal and proportionate use, benefit and
security of all present and future holders of the bonds
and coupons issued and to be issued under the Original
Indenture and all indentures supplemental thereto,
including this Supplemental Indenture, and for the
enforcement of the payment of said bonds and coupons when
payable according to their tenor, purport and effect, and
to secure the performance of and compliance with the
covenants and conditions of said bonds and coupons and of
the Original Indenture and all indentures supplemental
thereto, including this Supplemental Indenture, without
preference, priority or distinction as to lien or
otherwise (except as otherwise provided in the Indenture)
of any one bond or coupon over any other bond or coupon,
or of the bonds or coupons of any series over the bonds
or coupons of any other series, by reason of priority in
the time of issue, sale or negotiation thereof or by
reason of the purpose of issue or otherwise howsoever.
PART III.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures supplemental
FILING OF ORIGINAL thereto have been recorded and/or filed and Certificates
INDENTURE. of Provision for Payment have been recorded as
hereinafter set forth.
The Original Indenture has been recorded as a real
estate mortgage and filed as a chattel mortgage in the
offices of the respective Registers of Deeds of certain
counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has
been recorded as a real estate mortgage in the office of
the Register of Deeds of Genesee County, Michigan as
set forth in the Supplemental Indenture dated as of May
1, 1974, has been filed in the Office of the Secretary of
State of Michigan on November 16, 1951 and has been
filed and recorded in the office of the Interstate
Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original
FILING OF Indenture, indentures supplemental thereto heretofore
SUPPLEMENTAL entered into have been recorded as a real estate mortgage
INDENTURES. and/or filed as a chattel mortgage or as a financing
statement in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan, the
Office of the Secretary of State of Michigan and
the Office of the Interstate Commerce Commission, as set
forth in supplemental indentures as follows:
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
----------- ------------ ---------------------
<S> <C> <C>
June 1, 1925(a)(b) . . . . . . . . Series B Bonds February 1, 1940
August 1, 1927(a)(b) . . . . . . . Series C Bonds February 1, 1940
February 1, 1931(a)(b) . . . . . . Series D Bonds February 1, 1940
June 1, 1931(a)(b) . . . . . . . . Subject Properties February 1, 1940
October 1, 1932(a)(b) . . . . . . Series E Bonds February 1, 1940
September 25, 1935(a)(b) . . . . . Series F Bonds February 1, 1940
September 1, 1936(a)(b) . . . . . Series G Bonds February 1, 1940
November 1, 1936(a)(b) . . . . . . Subject Properties February 1, 1940
</TABLE>
<PAGE> 16
14
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
----------- ------------ -------------------
<S> <C> <C>
February 1, 1940(a)(b) . . . . . . Subject Properties September 1, 1947
December 1, 1940(a)(b) . . . . . . Series H Bonds September 1, 1947
and Additional
Provisions
September 1, 1947(a)(b)(c) . . . . Series I Bonds, November 15, 1951
Subject Properties
and Additional
Provisions
March 1, 1950(a)(b)(c) . . . . . . Series J Bonds November 15, 1951
and Additional
Provisions
November 15, 1951 (a)(b)(c) . . . . Series K Bonds January 15, 1953
Additional
Provisions and
Subject
Properties
January 15, 1953(a)(b) . . . . . . Series L Bonds May 1, 1953
May 1, 1953(a) . . . . . . . . . . Series M Bonds March 15, 1954
and Subject
Properties
March 15, 1954(a)(c) . . . . . . . Series N Bonds May 15, 1955
and Subject
Properties
May 15, 1955(a)(c) . . . . . . . . Series O Bonds August 15, 1957
and Subject
Properties
August 15, 1957(a)(c) . . . . . . . Series P Bonds June 1, 1959
Additional
Provisions and
Subject
Properties
June 1, 1959(a)(c) . . . . . . . . Series Q Bonds December 1, 1966
and Subject
Properties
December 1, 1966(a)(c) . . . . . . Series R Bonds October 1, 1968
Additional
Provisions and
Subject
Properties
October 1, 1968(a)(c) . . . . . . Series S Bonds December 1, 1969
and Subject
Properties
December 1, 1969(a)(c) . . . . . . Series T Bonds July 1, 197O
and Subject
Properties
July 1, 1970(c) . . . . . . . . . Series U Bonds December 15, 1970
and Subject
Properties
December 15, 1970(c) . . . . . . . Series V and June 15, 1971
Series W Bonds
June 15, 1971 (c) . . . . . . . . Series X Bonds November 15, 1971
and Subject
Properties
November 15, 1971 (c) . . . . . . Series Y Bonds January 15, 1973
and Subject
Properties
January 15, 1973(c) . . . . . . . Series Z Bonds May 1, 1974
and Subject
Properties
May 1, 1974 . . . . . . . . . . . Series AA Bonds October 1, 1974
and Subject
Properties
October 1, 1974 . . . . . . . . . Series BB Bonds January 15, 1975
and Subject
Properties
</TABLE>
<PAGE> 17
15
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
----------- ------------ -------------------
<S> <C> <C>
January 15, 1975 . . . . . . . . . Series CC Bonds November 1, 1975
and Subject
Properties
November 1, 1975 . . . . . . . . . Series DDP Nos. December 15, 1975
1-9 Bonds and
Subject
Properties
December 15, 1975 . . . . . . . . Series EE Bonds February 1, 1976
and Subject
Properties
February 1, 1976 . . . . . . . . . Series FFR Nos. June 15, 1976
1-13 Bonds
June 15, 1976 . . . . . . . . . . Series GGP Nos. July 15, 1976
1-7 Bonds and
Subject
Properties
July 15, 1976 . . . . . . . . . . Series HH Bonds February 15, 1977
and Subject
Properties
February 15, 1977 . . . . . . . . Series MMP March 1, 1977
Bonds and
Subject
Properties
March 1, 1977 . . . . . . . . . . Series IIP Nos. June 15, 1977
1-7 Bonds,
Series JJP Nos.
1-7 Bonds,
Series KKP
Nos. 1-7 Bonds
and Series LLP
Nos. 1-7 Bonds
June 15, 1977 . . . . . . . . . . Series FFR No. July 1, 1977
14 Bonds and
Subject
Properties
July 1, 1977 . . . . . . . . . . . Series NNP Nos. October 1, 1977
1-7 Bonds and
Subject
Properties
October 1, 1977 . . . . . . . . . Series GGP Nos. June 1, 1978
8-22 Bonds and
Series OOP
Nos. 1-17
Bonds and
Subject
Properties
June 1, 1978 . . . . . . . . . . . Series PP Bonds, October 15, 1978
Series QQP
Nos. 1-9 Bonds
and Subject
Properties
October 15, 1978 . . . . . . . . . Series RR Bonds March 15, 1979
and Subject
Properties
March 15, 1979 . . . . . . . . . . Series SS Bonds July 1, 1979
and Subject
Properties
July 1, 1979 . . . . . . . . . . Series IIP Nos. September 1, 1979
8-22 Bonds,
Series NNP
Nos. 8-21
Bonds and
Series TTP
Nos. 1-15
Bonds and
Subject
Properties
</TABLE>
<PAGE> 18
16
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
----------- ------------ -------------------
<S> <C> <C>
September 1, 1979 . . . . . . . . Series JJP No. 8 September 15, 1979
Bonds, Series
KKP No. 8
Bonds, Series
LLP Nos. 8-15
Bonds, Series
MMP No. 2
Bonds and
Series OOP
No. 18 Bonds
and Subject
Properties
September 15, 1979 . . . . . . . . Series UU Bonds January 1, 1980
January 1, 1980 . . . . . . . . . 1980 Series A April 1, 1980
Bonds and
Subject
Properties
April 1, 1980 . . . . . . . . . . 1980 Series B August 15, 1980
Bonds
August 15, 1980 . . . . . . . . . Series QQP Nos. August 1, 1981
10-19 Bonds,
1980 Series CP
Nos. 1-12
Bonds and
1980 Series DP
No. 1-11 Bonds
and Subject
Properties
August 1, 1981 . . . . . . . . . . 1980 Series CP November 1, 1981
Nos. 13-25
Bonds and
Subject
Properties
November 1, 1981 . . . . . . . . . 1981 Series AP June 30, 1982
Nos. 1-12
Bonds
June 30, 1982 . . . . . . . . . . Article XIV August 15, 1982
Reconfirmation
August 15, 1982 . . . . . . . . . 1981 Series AP Nos. June 1, 1983
13-14 Bonds and
Subject Properties
June 1, 1983 . . . . . . . . . . 1981 Series AP October 1, 1984
Nos. 15-16 Bonds
and Subject
Properties
October 1, 1984 . . . . . . . . . 1984 Series AP and May 1, 1985
1984 Series BP
Bonds and
Subject Properties
May 1, 1985 . . . . . . . . . . 1985 Series A Bonds May 15, 1985
-------------------------
</TABLE>
(a) See Supplemental Indenture dated as of July 1, 1970
for Interstate Commerce Commission filing and
recordation information.
(b) See Supplemental Indenture dated as of May 1, 1953
for Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974
for County of Genesee, Michigan recording and
filing information.
Further, pursuant to the terms and provisions of the
Original Indenture, a Supplemental Indenture dated as of
May 15, 1985 providing for the terms of bonds to be issued
thereunder of 1985 Series B has heretofore been entered
into between the Company and the Trustee and has been
filed in the Office of the Secretary of State of Michigan
as a financing statement on May 30, 1985 (Filing No.
67215A), has been
<PAGE> 19
17
filed and recorded in the Office of the Interstate
Commerce Commission (Recordation No. 5485-DDD), and has
been recorded as a real estate mortgage in the offices of
the respective Register of Deeds of certain counties in
the State of Michigan, as follows:
<TABLE>
<CAPTION>
LIBER OF
MORTGAGES
OR COUNTY
COUNTY RECORDED RECORDS PAGE
------ -------- --------- ----
<S> <C> <C> <C>
Genesee . . . . . . . . . . . . . . May 30, 1985 2266 391-411
Huron . . . . . . . . . . . . . . . May 30, 1985 461 44-64
Ingham . . . . . . . . . . . . . . . May 30, 1985 1511 1217-1237
Lapeer . . . . . . . . . . . . . . . May 30, 1985 567 711-731
Lenawee . . . . . . . . . . . . . . May 30, 1985 990 9-29
Livingston . . . . . . . . . . . . . May 30, 1985 1125 857-877
Macomb . . . . . . . . . . . . . . . May 30, 1985 3770 600-620
Mason . . . . . . . . . . . . . . . May 30, 1985 326 884-904
Monroe . . . . . . . . . . . . . . . May 30, 1985 930 702-722
Oakland . . . . . . . . . . . . . . May 30, 1985 8995 663-683
Sanilac . . . . . . . . . . . . . . May 30, 1985 377 71-91
St. Clair . . . . . . . . . . . . . May 30, 1985 827 177-197
Tuscola . . . . . . . . . . . . . . May 30, 1985 550 697-717
Washtenaw . . . . . . . . . . . . . May 30, 1985 1985 351-371
Wayne . . . . . . . . . . . . . . . May 30, 1985 22385 675-695
</TABLE>
RECORDING OF All the bonds of Series A which were issued under the
CERTIFICATES Original Indenture dated as of October 1, 1924, and of
OF PROVISION Series B, C, D, E, F, G, H, I, J, K, L, M, N, O, W, BB,
FOR PAYMENT. CC, DDP Nos. 1-5, FFR Nos. 1-6, GGP Nos. 1-5 and 8-11,
IIP Nos. 1-4 and 8-9, JJP Nos. 1-4, KKP Nos. 1-4, LLP
Nos. 1-4 and 8-9, NNP Nos. 1-4 and 8-9, OOP Nos. 1-4, QQP
Nos. 1-3 and 10 and TTP No. 1-2 1980 Series A, 1980
Series CP No. 1, and 1980 Series DP No. 1 which were
issued under Supplemental Indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1,
1931, October 1, 1932, September 25, 1935, September 1,
1936, December 1, 1940, September 1, 1947, November 15,
1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, December 15, 1970, October 1, 1974,
January 15, 1975, November 1, 1975, February 1, 1976,
June 15, 1976, October 1, 1977, March 1, 1977, July 1,
1979, March 1, 1977, March 1, 1977, March 1, 1977,
September 1, 1979, July 1, 1977, July 1, 1979, October
1, 1977, June 1, 1978, October 1, 1977, July 1, 1979,
January 1, 1980 and August 15, 1980 have matured or have
been called for redemption and funds sufficient for such
payment or redemption have been irrevocably deposited
with the Trustee for that purpose; and Certificates of
Provision for Payment have been recorded in the offices
of the respective Registers of Deeds of certain counties
in the State of Michigan, with respect to all bonds of
Series A, B, C, D, E, F, G, H, K, L, M, O, W, BB, CC,
DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1 and 2, IIP No.
1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART IV.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and
CONDITIONS OF provided, and agrees to perform the same upon the terms
ACCEPTANCE OF and conditions in the Original Indenture, as amended to
TRUST BY TRUSTEE. date and as supplemented by this Supplemental Indenture,
and in this Supplemental Indenture set forth, and upon
the following terms and conditions:
The Trustee shall not be responsible in any manner
whatsoever for and in respect of the validity or
sufficiency of this Supplemental Indenture or the due
execution hereof by the Company or for or in respect of
the recitals contained herein, all of which recitals are
made by the Company solely.
<PAGE> 20
18
PART V.
MISCELLANEOUS.
EXECUTION IN This Supplemental Indenture may be simultaneously
COUNTERPARTS. executed in any number of counterparts, each of which
when so executed shall be deemed to be an original; but
such counterparts shall together constitute but one and
the same instrument.
TESTIMONIUM. IN WITNESS WHEREOF, The Detroit Edison Company and
Bankers Trust Company have caused these presents to be
signed in their respective corporate names by their
respective Chairmen of the Board, Presidents, Vice
Presidents, Assistant Vice Presidents or Treasurers and
impressed with their respective corporate seals, attested
by their respective Secretaries or Assistant Secretaries,
all as of the day and year first above written.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By L.L. Loomans
-------------------------
L.L. Loomans
Treasurer
EXECUTION. Attest:
Kathryn L. Westman
----------------------------
Kathryn L. Westman
Secretary
Signed, sealed and delivered
by THE DETROIT EDISON COMPANY,
in the presence of
Elaine M. Godfrey
----------------------------
Elaine M. Godfrey
Janet A. Scullen
----------------------------
Janet A. Scullen
BANKERS TRUST COMPANY,
(Corporate Seal) Joan M. Morgan
---------------------------
Joan M. Morgan
Vice President
Attest:
Michele Stein
----------------------------
Michele Stein
Assistant Secretary
Signed, sealed and delivered
by BANKERS TRUST COMPANY, in
the presence of
Shirley R. West
----------------------------
Shirley R. West
Claudia Dillard
----------------------------
Claudia Dillard
<PAGE> 21
19
STATE OF MICHIGAN ss.:
COUNTY OF WAYNE
ACKNOWLEDGMENT On this 30th day of October, 1985, before me, the
OF EXECUTION subscriber, a Notary Public within and for the County of
BY COMPANY. Wayne, in the State of Michigan, personally appeared
L.L. LOOMANS, to me personally known, who, being by me
duly sworn, did say that he resides at 2666 Danburv Lane,
Ann Arbor, Michigan 48103 and is the Treasurer of THE
DETROIT EDISON COMPANY, one of the corporations described
in and which executed the foregoing instrument; that he
knows the corporate seal of the said corporation and that
the seal affixed to said instrument is the corporate seal
of said corporation; and that said instrument was signed
and sealed in behalf of said corporation by authority of
its Board of Directors and that he subscribed his name
thereto by like authority; and said L.L. LOOMANS,
acknowledged said instrument to be the free act and deed
of said corporation.
(Notarial Seal) Janet A. Scullen
--------------------------------------
Janet A. Scullen
Notary Public, Macomb County, Michigan
My Commission Expires July 31, 1989
Acting in Wayne County, Michigan
STATE OF NEW YORK
COUNTY OF NEW YORK ss.:
ACKNOWLEDGMENT On this 28th day of October, 1985, before me, the
OF EXECUTION subscriber, a Notary Public within and for the County
BY TRUSTEE. of New York, in the State of New York, personally
appeared JOAN M. MORGAN, to me personally known, who,
being by me duly sworn, did say that she resides at 315
Hillcrest Road, Englewood, New Jersey 07631, and is a
Vice President of BANKERS TRUST COMPANY, one of the
corporations described in and which executed the
foregoing instrument; that she knows the corporate seal
of the said corporation and that the seal affixed to said
instrument is the corporate seal of said corporation; and
that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors
and that she subscribed her name thereto by like
authority; and said JOAN M. MORGAN acknowledged said
instrument to be the free act and deed of said
corporation.
(Notarial Seal) Louise G. Buckley
---------------------------------------
Louise G. Buckley
Notary Public, State of New York
No. 41-4742240
Qualified in Queens County
Certificate filed in New York County
Commission Expires March 30, 1987
<PAGE> 22
20
STATE OF MICHIGAN ss.:
COUNTY OF WAYNE
AFFIDAVIT AS TO L.L. LOOMANS, being duly sworn, says: that he is
CONSIDERATION the Treasurer of THE DETROIT EDISON COMPANY, the
AND GOOD FAITH. Mortgagor named in the foregoing instrument, and that he
has knowledge of the facts in regard to the making of
said instrument and of the consideration therefor; that
the consideration for said instrument was and is actual
and adequate, and that the same was given in good faith
for the purposes in such instrument set forth.
L.L. Loomans
---------------------------------------
L.L. Loomans
Sworn to before me this 30th day of
October, 1985
Janet A. Scullen
---------------------------
Notary Public, Macomb County, Michigan
My Commission Expires July 31, 1989
Acting in Wayne County, Michigan
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman,
Esq., 2000 Second Avenue, Detroit, Michigan 48226
<PAGE> 1
EXHIBIT 4-171
CONFORMED COPY
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
INDENTURE
Dated as of July 15, 1989
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS, SERIES KKP NO. 10, DUE SEPTEMBER 1,
2019
AND
(B) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 5
Bonds to be Series KKP No. 10...................................... 5
Further assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 6
PART I.
CREATION OF TWO HUNDRED SEVENTY-EIGHTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 10
Sec. 1. Terms of Bonds of Series KKP No. 10.......................... 6
Sec. 2. Redemption of Bonds of Series KKP No. 10..................... 7
Exchange and transfer........................................ 7
Sec. 3. Consent...................................................... 8
Sec. 4. Form of Bonds of Series KKP No. 10........................... 9
Form of Trustee's Certificate................................ 13
PART II.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 13
Recording and filing of Supplemental Indentures...................... 13
Recording of Certificates of Provision for Payment................... 17
PART III.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 17
PART IV.
MISCELLANEOUS
Execution in Counterparts............................................ 18
Testimonium.......................................................... 18
Execution............................................................ 18
Acknowledgements..................................................... 19
Affidavit as to consideration and good faith......................... 20
</TABLE>
------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
<TABLE>
<S> <C>
PARTIES. SUPPLEMENTAL INDENTURE, dated as of the fifteenth day of July, in the
year one thousand nine hundred and eighty-nine, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987 and
June 15, 1989 supplemental to the Original Indenture, have heretofore been
entered into between the Company and the Trustee (the Original Indenture
and all indentures supplemental thereto together being hereinafter
sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Four billion nine hundred
ISSUED. thirty-eight million one hundred seventy-one thousand dollars
($4,938,171,000) have heretofore been issued under the Indenture as
follows, viz:
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
</TABLE>
<PAGE> 4
2
<TABLE>
<S> <C> <C>
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series BB -- Principal Amount $50,000,000,
(20) Bonds of Series CC -- Principal Amount $50,000,000,
(21-28) Bonds of Series DDP Nos. 1-8 -- Principal Amount $6,400,000,
(29-38) Bonds of Series FFR Nos. 1-10 -- Principal Amount $5,800,000,
(39-52) Bonds of Series GGP Nos. 1-6 and
8-15 -- Principal Amount $7,960,000,
(53-64) Bonds of Series IIP Nos. 1-6 and
8-13 -- Principal Amount $450,000,
(65-70) Bonds of Series JJP Nos. 1-6 -- Principal Amount $690,000,
(71-76) Bonds of Series KKP Nos. 1-6 -- Principal Amount $1,590,000,
(77-88) Bonds of Series LLP Nos. 1-6 and
8-13 -- Principal Amount $4,760,000,
(89-100) Bonds of Series NNP Nos. 1-6 and
8-13 -- Principal Amount $7,950,000,
(101-107) Bonds of Series OOP Nos. 1-7 -- Principal Amount $2,345,000,
(108-119) Bonds of Series QQP Nos. 1-7 and
10-14 -- Principal Amount $7,075,000,
(120-125) Bonds of Series TTP Nos. 1-6 -- Principal Amount $330,000,
(126) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(127-133) Bonds of 1980 Series CP Nos. 1-4
and 13-15 -- Principal Amount $2,560,000,
(134-137) Bonds of 1980 Series DP Nos. 1-4 -- Principal Amount $740,000,
(138-140) Bonds of 1981 Series AP Nos. 1-3 -- Principal Amount $2,400,000,
all of which have either been retired and cancelled, or no longer represent
obligations of the Company, having been called for redemption and funds necessary
to effect the payment, redemption and retirement thereof having been deposited with
the Trustee as a special trust fund to be applied for such purpose;
(141) Bonds of Series R in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(142) Bonds of Series S in the principal amount of One hundred fifty million dollars
($150,000,000), all of which are outstanding at the date hereof;
(143) Bonds of Series T in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(144) Bonds of Series U in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(145) Bonds of Series V in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(146) Bonds of Series X in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(147) Bonds of Series Y in the principal amount of Sixty million dollars
($60,000,000), all of which are outstanding at the date hereof;
(148) Bonds of Series Z in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(149) Bonds of Series AA in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(150) Bonds of Series DDP No. 9 in the principal amount of Seven million nine hundred
five thousand dollars ($7,905,000), of which Eight hundred thousand dollars ($800,000)
principal amount have heretofore been retired and Seven million one hundred five thousand
dollars ($7,105,000) principal amount are outstanding at the date hereof;
</TABLE>
<PAGE> 5
3
<TABLE>
<S> <C>
(151) Bonds of Series EE in the principal amount of Fifty million dollars ($50,000,000),
of which Twenty-five million dollars ($25,000,000) principal amount have heretofore been
retired and Twenty-five million dollars ($25,000,000) principal amount are outstanding at
the date hereof;
(152-155) Bonds of Series FFR Nos. 11-14 in the principal amount of Thirty-nine million
eight hundred thousand dollars ($39,800,000), all of which are outstanding at the date
hereof;
(156-163) Bonds of Series GGP Nos. 7 and 16-22 in the principal amount of Thirty-four million
three hundred forty thousand dollars ($34,340,000), of which Two million four hundred
thousand dollars ($2,400,000) principal amount have heretofore been retired and Thirty-one million
nine hundred forty thousand dollars ($31,940,000) principal amount are outstanding at the
date hereof;
(164) Bonds of Series HH in the principal amount of Fifty million dollars ($50,000,000), all of
which are outstanding at the date hereof;
(165-166) Bonds of Series MMP and MMP No. 2 in the principal amount of Five million four hundred
thirty thousand dollars ($5,430,000), of which One million ninety thousand dollars ($1,090,000)
principal amount have heretofore been retired and Four million three hundred forty thousand
dollars ($4,340,000) principal amount are outstanding at the date hereof;
(167-176) Bonds of Series IIP Nos. 7 and 14-22 in the principal amount of Three million three hundred
thousand dollars ($3,300,000), of which One hundred ten thousand dollars principal amount have
heretofore been retired and Three million one hundred ninety thousand dollars ($3,190,000)
principal amount are outstanding at the date hereof;
(177-178) Bonds of Series JJP Nos. 7-8 in the principal amount of Six million one hundred sixty
thousand dollars ($6,160,000), of which Three hundred fifty thousand dollars ($350,000)
principal amount have heretofore been retired and Five million eight hundred ten thousand
dollars ($5,810,000) are outstanding at the date hereof;
(179-181) Bonds of Series KKP Nos. 7-9 in the principal amount of Thirty-three million three
hundred thousand dollars ($33,300,000), of which Seven hundred ten thousand dollars
($710,000) principal amount have heretofore been retired and Thirty-two million five hundred
ninety thousand dollars ($32,590,000) are outstanding at the date hereof;
(182-184) Bonds of Series LLP Nos. 7 and 14-15 in the principal amount of Four million ninety
thousand dollars ($4,090,000), of which Two million five hundred thirty-five thousand dollars
($2,535,000) principal amount have heretofore been retired and One million five hundred fifty-
five thousand dollars ($1,555,000) principal amount are outstanding at the date hereof;
(185-193) Bonds of Series NNP Nos. 7 and 14-21 in the principal amount of Forty million
($40,000,000), of which One million six hundred fifty thousand dollars ($1,650,000)
principal amount have heretofore been retired and Thirty-eight million three hundred fifty
thousand dollars ($38,350,000) principal amount are outstanding at the date hereof;
(194-204) Bonds of Series OOP Nos. 8-18 in the principal amount of Sixteen million five hundred
thirty-five thousand dollars ($16,535,000), of which Two hundred thousand dollars ($200,000)
principal amount have heretofore been retired and Sixteen million three hundred thirty-five
thousand dollars ($16,335,000) are outstanding at the date hereof;
(205) Bonds of Series PP in the principal amount of Seventy million dollars ($70,000,000), all
of which are outstanding at the date hereof;
</TABLE>
<PAGE> 6
4
<TABLE>
<S> <C>
(206-212) Bonds of Series QQP Nos. 8-9 and 15-19 in the principal amount
of Six million five hundred seventy-five thousand dollars ($6,575,000),
all of which are outstanding at the date hereof;
(213) Bonds of Series RR in the principal amount of Seventy million dollars
($70,000,000), all of which are outstanding at the date hereof;
(214) Bonds of Series SS in the principal amount of One hundred fifty million
dollars ($150,000,000), of which Fifty million dollars ($50,000,000) principal
amount have heretofore been retired and One hundred million dollars ($100,000,000)
principal amount are outstanding at the date hereof;
(215-223) Bonds of Series TTP Nos. 7-15 in the principal amount of Three million
four hundred seventy thousand dollars ($3,470,000), all of which are outstanding
at the date hereof;
(224) Bonds of Series UU in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(225) Bonds of 1980 Series B in the principal amount of One hundred million dollars
($100,000,000), of which Fifty-three million two hundred thousand dollars ($53,200,000)
principal amount have heretofore been retired and Forty-six million eight hundred
thousand dollars ($46,800,000) principal amount are outstanding at the date hereof;
(226-243) Bonds of 1980 Series CP Nos. 5-12 and 16-25 in the principal amount of Thirty-
two million four hundred forty thousand dollars ($32,440,000), all of which are
outstanding at the date hereof;
(244-250) Bonds of 1980 Series DP Nos. 5-11 in the principal amount of Ten million ten
thousand dollars ($10,010,000), all of which are outstanding at the date hereof;
(251-263) Bonds of 1981 Series AP Nos. 4-16 in the principal amount of One hundred twenty-
one million six hundred thousand dollars ($121,600,000), all of which are outstanding at the
date hereof;
(264) Bonds of 1984 Series AP in the principal amount of Two million four hundred thousand
dollars ($2,400,000), all of which are outstanding at the date hereof;
(265) Bonds of 1984 Series BP in the principal amount of Seven million seven hundred fifty
thousand dollars ($7,750,000), all of which are outstanding at the date hereof;
(266) Bonds of 1985 Series A in the principal amount of Thirty-five million dollars
($35,000,000), all of which are outstanding at the date hereof;
(267) Bonds of 1985 Series B in the principal amount of Fifty million dollars ($50,000,000),
all of which are outstanding at the date hereof;
(268) Bonds of 1986 Series A in the principal amount of Two hundred million dollars
($200,000,000), all of which are outstanding at the date hereof;
(269) Bonds of 1986 Series B in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(270) Bonds of 1986 Series C in the principal amount of Two hundred million dollars
($200,000,000), all of which are outstanding at the date hereof;
(271) Bonds of 1987 Series A in the principal amount of Three hundred million dollars
($300,000,000), all of which are outstanding at the date hereof;
(272) Bonds of 1987 Series B in the principal amount of One hundred seventy-five
million dollars ($175,000,000), all of which are outstanding at the date hereof;
(273) Bonds of 1987 Series C in the principal amount of Two hundred twenty-five
million dollars ($225,000,000), all of which are outstanding at the date hereof;
(274) Bonds of 1987 Series D in the principal amount of Two hundred fifty million
dollars ($250,000,000), all of which are outstanding at the date hereof;
(275) Bonds of 1987 Series E in the principal amount of One hundred fifty million
dollars ($150,000,000), all of which are outstanding at the date hereof;
</TABLE>
<PAGE> 7
5
<TABLE>
<S> <C>
(276) Bonds of 1987 Series F in the principal amount of Two hundred million
dollars ($200,000,000), all of which are outstanding at the date hereof; and
(277) Bonds of 1989 Series A in the principal amount of Three hundred million
dollars ($300,000,000), all of which are outstanding at the date hereof;
and, accordingly, of the bonds so issued, Three billion eight hundred seventy-
two million sixty thousand dollars ($3,872,060,000) principal amount are
outstanding at the date hereof; and
REASON FOR WHEREAS, the County of Monroe, Michigan has agreed to issue and sell
CREATION OF $30,000,000 principal amount of its Pollution Control Revenue Bonds (The
NEW SERIES. Detroit Edison Company Monroe and Fermi Plants Project), Collateralized
Series I-1989 so as to provide funds for the purchase and construction of
certain pollution control facilities installed in the Company's Fermi 2
Plant; and
WHEREAS, the Company has entered into an Installment Sales Contract,
dated as of March 1, 1977 and amended as of September 1, 1979, October 15,
1985 and July 1, 1989 with the County of Monroe, in order to purchase
certain pollution control facilities, and pursuant to such Installment
Sales Contract the Company has agreed to issue its General and Refunding
Mortgage Bonds under the Indenture in order further to secure its
obligations under such Installment Sales Contract; and
WHEREAS, for such purposes the Company desires to issue a new series of
bonds to be issued under the Indenture and to be authenticated and
delivered pursuant to Section 8 of Article III of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental Indenture to create
SERIES KKP such new series of bonds, to be designated "General and Refunding Mortgage
NO. 10 Bonds, Series KKP No. 10"; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the property
ASSURANCE. subject to the lien thereof all of the estates and properties, real,
personal and mixed, rights, privileges and franchises of every nature and
kind and wheresoever situate, then or thereafter owned or possessed by or
belonging to the Company or to which it was then or at any time thereafter
might be entitled in law or in equity (saving and excepting, however, the
property therein specifically excepted or released from the lien thereof),
and the Company therein covenanted that it would, upon reasonable request,
execute and deliver such further instruments as may be necessary or proper
for the better assuring and confirming unto the Trustee all or any part of
the trust estate, whether then or thereafter owned or acquired by the
Company (saving and excepting, however, property specifically excepted or
released from the lien thereof); and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers and authority
OF SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
FOR SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
</TABLE>
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PART I.
CREATION OF TWO HUNDRED SEVENTY-EIGHTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 10
CERTAIN TERMS SECTION 1. The Company hereby creates the Two hundred seventy-eighth
OF BONDS OF series of bonds to be issued under and secured by the Original Indenture
SERIES KKP as amended to date and as further amended by this Supplemental Indenture,
NO. 10 to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, Series KKP No.
10" (elsewhere herein referred to as the "bonds of Series KKP No. 10").
The aggregate principal amount of bonds of Series KKP No. 10 shall be
limited to Thirty million dollars ($30,000,000), except as provided in
Sections 7 and 13 of Article II of the Original Indenture with respect to
exchanges and replacements of bonds.
Each bond of Series KKP No. 10 is to be irrevocably assigned to, and
registered in the name of, Manufacturers National Bank of Detroit, as
trustee, or a successor trustee (said trustee or any successor trustee
being hereinafter referred to as the "Monroe Trust Indenture Trustee"),
under the Trust Indenture, dated as of March 1, 1977, as amended September
1, 1979, October 15, 1985 and July 1, 1989 (hereinafter called the "
Monroe Trust Indenture"), between the County of Monroe, Michigan
(hereinafter called "Monroe"), and the Monroe Trust Indenture Trustee, to
secure payment of the County of Monroe, Michigan, Pollution Control
Revenue Bonds (The Detroit Edison Company Monroe and Fermi Plants
Project), Collateralized Series I-1989 (hereinafter called the "Monroe
Revenue Bonds"), issued by Monroe under the Monroe Trust Indenture, the
proceeds of which (other than any accrued interest thereon) have been
provided for the acquisition and construction of certain pollution control
facilities which the Company has agreed to purchase pursuant to the
provisions of the Installment Sales Contract, dated as of March 1, 1977,
as amended as of September 1, 1979, as of October 15, 1985 and as of July
1, 1989 (hereinafter called the "Monroe Contract"), between the Company
and Monroe.
The bonds of Series KKP No. 10 shall be issued as registered bonds
without coupons in denominations of a multiple of $5,000. The bonds of
Series KKP No. 10 shall be issued in the aggregate principal amount of
$30,000,000, shall mature on September 1, 2019 and shall bear interest,
payable semi-annually on March 1 and September 1 of each year (commencing
March 1, 1990), at the rate of 7.30%, until the principal thereof shall
have become due and payable and thereafter until the Company's obligation
with respect to the payment of said principal shall have been discharged
as provided in the Indenture.
The bonds of Series KKP No. 10 shall be payable as to principal,
premium, if any, and interest as provided in the Indenture, but only to
the extent and in the manner herein provided. The bonds of Series KKP No.
10 shall be payable, both as to principal and interest, at the office or
agency of the Company in the Borough of Manhattan, The City and State of
New York, in any coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts.
Except as provided herein, each bond of Series KKP No. 10 shall be dated
the date of its authentication and interest shall be payable on the
principal represented thereby from the March 1 or September 1 next
preceding the date thereof to which interest has been paid on bonds of
Series KKP No. 10, unless the bond is authenticated on a date to which
interest has been paid, in which case interest shall be payable from the
date of authentication, or unless the date of authentication is prior to
September 1, 1989, in which case interest shall be payable from July 1,
1989.
</TABLE>
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The bonds of Series KKP No. 10 in definitive form shall be, at the
election of the Company, fully engraved or shall be lithographed or
printed in authorized denominations as aforesaid and numbered 1 and
upwards (with such further designation as may be appropriate and desirable
to indicate by such designation the form, series and denominations of
bonds of Series KKP No. 10). Until bonds of Series KKP No. 10 in
definitive form are ready for delivery, the Company may execute, and upon
its request in writing the Trustee shall authenticate and deliver in lieu
thereof, bonds of Series KKP No. 10 in temporary form, as provided in
Section 10 of Article II of the Indenture. Temporary bonds of Series KKP
No. 10, if any, may be printed and may be issued in authorized
denominations in substantially the form of definitive bonds of Series KKP
No. 10, but with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
Bonds of Series KKP No. 10 shall not be assignable or transferable
except as may be required to effect a transfer to any successor trustee
under the Monroe Trust Indenture, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under the Monroe Trust
Indenture. Any such transfer shall be made upon surrender thereof for
cancellation at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, together with a written
instrument of transfer (if so required by the Company or by the Trustee)
in form approved by the Company duly executed by the holder or by its duly
authorized attorney. Bonds of Series KKP No. 10 shall in the same manner
be exchangeable for a like aggregate principal amount of bonds of Series
KKP No. 10 upon the terms and conditions specified herein and in Section 7
of Article II of the Indenture. The Company waives its rights under
Section 7 of Article II of the Indenture not to make exchanges or
transfers of bonds of Series KKP No. 10, during any period of ten days
next preceding any redemption date for such bonds.
Bonds of Series KKP No. 10, in definitive and temporary form, may bear
such legends as may be necessary to comply with any law or with any rules
or regulations made pursuant thereto or as may be specified in the Monroe
Contract.
Upon payment of the principal or premium, if any, or interest on the
Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 10 in a principal amount equal to the principal
amount of such Monroe Revenue 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 bonds shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
REDEMPTION SECTION 2. Bonds of Series KKP No. 10 shall be redeemed on the
OF BONDS respective dates and in the respective principal amounts which correspond
OF SERIES KKP to the redemption dates for, and the principal amounts to be redeemed of,
NO. 10 the Monroe Revenue Bonds.
In the event the Company elects to redeem any Monroe Revenue Bonds prior
to maturity in accordance with the provisions of the Monroe Trust
Indenture, the Company shall on the same date redeem bonds of Series KKP
No. 10 in principal amounts and at redemption prices corresponding to the
Monroe Revenue Bonds so redeemed. The Company agrees to give the Trustee
notice of any such redemption of bonds of Series KKP No. 10 on the same
date as it gives notice of redemption of Monroe Revenue Bonds to the
Monroe Trust Indenture Trustee.
</TABLE>
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REDEMPTION SECTION 3. In the event of an Event of Default under the Monroe Trust
OF BONDS OF Indenture and the acceleration of all Monroe Revenue Bonds, the bonds of
SERIES KKP Series KKP No. 10 shall be redeemable in whole upon receipt by the Trustee
NO. 10 IN EVENT of a written demand (hereinafter called a "Redemption Demand") from the
OF ACCELERATION Monroe Trust Indenture Trustee stating that there has occurred under the
OF MONROE Monroe Trust Indenture both an Event of Default and a declaration of
REVENUE BONDS. acceleration of payment of principal, accrued interest and premium, if
any, on the Monroe Revenue Bonds, specifying the last date to which
interest on the Monroe Revenue Bonds has been paid (such date being
hereinafter referred to as the "Initial Interest Accrual Date") and
demanding redemption of the bonds of said series. The Trustee shall,
within five days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its receipt by the
Trustee. Promptly upon receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will redeem the bonds of
said series so demanded to be redeemed (hereinafter called the "Demand
Redemption Date"). Notice of the date fixed as the Demand Redemption Date
shall be mailed by the Company to the Trustee at least ten days prior to
such Demand Redemption Date. The date to be fixed by the Company as and
for the Demand Redemption Date may be any date up to and including the
earlier of (x) the 60th day after receipt by the Trustee of the Redemption
Demand or (y) the maturity date of such bonds first occurring following
the 20th day after the receipt by the Trustee of the Redemption Demand;
provided, however, that if the Trustee shall not have received such notice
fixing the Demand Redemption Date on or before the 10th day preceding the
earlier of such dates, the Demand Redemption Date shall be deemed to be
the earlier of such dates. The Trustee shall mail notice of the Demand
Redemption Date (such notice being hereinafter called the "Demand
Redemption Notice") to the Monroe Trust Indenture Trustee not more than
ten nor less than five days prior to the Demand Redemption Date.
Each bond of Series KKP No. 10 shall be redeemed by the Company on the
Demand Redemption Date therefore upon surrender thereof by the Monroe
Trust Indenture Trustee to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest thereon at the rate
specified for such bond from the Initial Interest Accrual Date to the
Demand Redemption Date plus an amount equal to the aggregate premium, if
any, due and payable on such Demand Redemption Date on all Monroe Revenue
Bonds; provided, however, that in the event of a receipt by the Trustee of
a notice that, pursuant to Section 1010 of the Monroe Trust Indenture, the
Monroe Trust Indenture Trustee has terminated proceedings to enforce any
right under the Monroe Trust Indenture, then any Redemption Demand shall
thereby be rescinded by the Monroe Trust Indenture Trustee, and no Demand
Redemption Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or annulment shall extend
to or affect any subsequent default or impair any right consequent
thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or effect, unless it is
executed in the name of the Monroe Trust Indenture Trustee by its
President or one of its Vice Presidents.
CONSENT. SECTION 4. The holders of the bonds of Series KKP No. 10, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five per cent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 4, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
</TABLE>
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FORM OF BONDS SECTION 5. The bonds of Series KKP No. 10 and the form of Trustee's
OF SERIES KKP Certificate to be endorsed on such bonds shall be substantially in the
NO. 10. following forms, respectively:
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
SERIES KKP NO. 10, 7.30% DUE SEPTEMBER 1, 2019
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor trustee under the Trust Indenture, dated as of
March 1, 1977 and amended as of September 1, 1979, October 15, 1985 and
July 1, 1989 between the County of Monroe, Michigan and Manufacturers
National Bank of Detroit, as trustee, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under said Trust
Indenture.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to Manufacturers National Bank of Detroit, as trustee, or
registered assigns, at the Company's office or agency in the Borough of
Manhattan, The City and State of New York, the principal sum of
dollars ($ ) in lawful money of the United States of
America on the date specified in the title hereof and interest thereon at
the rate specified in the title hereof, in like lawful money, from July 1,
1989, and after the first payment of interest on bonds of this Series has
been made or otherwise provided for, from the most recent date to which
interest has been paid or otherwise provided for, semi-annually on March 1
and September 1 of each year (commencing March 1, 1990), until the
Company's obligation with respect to payment of said principal shall have
been discharged, all as provided, to the extent and in the manner
specified in the Indenture hereinafter mentioned on the reverse hereof and
in the supplemental indenture pursuant to which this bond has been issued.
Under a Trust Indenture, dated as of March 1, 1977 and amended as of
September 1, 1979, October 15, 1985 and July 1, 1989 (hereinafter called
the "Monroe Trust Indenture"), between the County of Monroe, Michigan
(hereinafter called "Monroe"), and Manufacturers National Bank of Detroit,
as trustee (hereinafter called the "Monroe Trust Indenture Trustee"),
Monroe has issued Pollution Control Revenue Bonds (The Detroit Edison
Company Monroe and Fermi Plants Project), Collateralized Series I-1989
(hereinafter called the "Monroe Revenue Bonds"). This bond was originally
issued to Monroe and simultaneously irrevocably assigned to the Monroe
Trust Indenture Trustee so as to secure the payment of the Monroe Revenue
Bonds. Payments of principal of, or premium, if any, or interest on,
Monroe Revenue Bonds shall constitute like payments on this bond as
further provided herein and in the supplemental indenture pursuant to
which this bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its President
or a Vice President, with their manual or facsimile signatures, and its
corporate seal, or a facsimile thereof, to be impressed or imprinted
hereon and the same to be attested by its Secretary or an Assistant
Secretary with his manual or facsimile signature.
</TABLE>
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Dated: THE DETROIT EDISON COMPANY
By ............................
Chairman of the Board
............................
Attest: President
........................
Secretary
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of General and Refunding Mortgage Bonds known as Series KKP No. 10,
limited to an aggregate principal amount of $30,000,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond and
all other bonds of said series are issued and to be issued under, and are
all equally and ratably secured (except insofar as any sinking,
amortization, improvement or analogous fund, established in accordance
with the provisions of the Indenture hereinafter mentioned, may afford
additional security for the bonds of any particular series and except as
provided in Section 3 of Article VI of said Indenture) by an Indenture,
dated as of October 1, 1924, duly executed by the Company to Bankers Trust
Company, a corporation of the State of New York, as Trustee, to which
Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of July 15, 1989) reference is hereby made
for a description of the properties and franchises mortgaged and conveyed,
the nature and extent of the security, the terms and conditions upon which
the bonds are issued and under which additional bonds may be issued, and
the rights of the holders of the bonds and of the Trustee in respect of
such security (which Indenture and all indentures supplemental thereto,
including the Supplemental Indenture dated as of July 15, 1989, are
hereinafter collectively called the "Indenture"). As provided in the
Indenture, said bonds may be for various principal sums and are issuable
in series, which may mature at different times, may bear interest at
different rates and may otherwise vary as in said Indenture provided. With
the consent of the Company and to the extent permitted by and as provided
in the Indenture, the rights and obligations of the Company and of the
holders of the bonds and the terms and provisions of the Indenture, or of
any indenture supplemental thereto, may be modified or altered in certain
respects by affirmative vote of at least eighty-five percent (85%) in
amount of the bonds then outstanding, and, if the rights of one or more,
but less than all, series of bonds then outstanding are to be affected by
the action proposed to be taken, then also by affirmative vote of at least
eighty-five percent (85%) in amount of the series of bonds so to be
affected (excluding in every instance bonds disqualified from voting by
reason of the Company's interest therein as specified in the Indenture);
provided, however, that, without the consent of the holder hereof, no such
modification or alteration shall, among other things, affect the terms of
payment of the principal of or the interest on this bond, which in those
respects is unconditional.
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The holders of the bonds of Series KKP No. 10, by their acceptance of
and holding thereof, consent and agree that bonds of any series may be
issued which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five per cent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 4 of Part I of the
Supplemental Indenture dated as of July 15, 1989, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
This bond is redeemable upon the terms and conditions set forth in the
Indenture, including provision for redemption upon demand of the Monroe
Trust Indenture Trustee following the occurrence of an Event of Default
under the Monroe Trust Indenture and the acceleration of the principal of
the Monroe Revenue Bonds.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of Series KKP No. 10 (or portions thereof), in
trust for the redemption of such bonds (or portions thereof) and the
interest due or to become due thereon, and thereupon all obligations of
the Company in respect of such bonds (or portions thereof) so to be
redeemed and such interest shall cease and be discharged, and the holders
thereof shall thereafter be restricted exclusively to such funds for any
and all claims of whatsoever nature on their part under the Indenture or
with respect to such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
Upon payment of the principal of, or premium, if any, or interest on,
the Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 10 in a principal amount equal to the principal
amount of such Monroe Revenue Bonds and having both a corresponding
maturity date and interest rate 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 bonds of said series shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
This bond is not assignable or transferable except as may be required to
effect a transfer to any successor trustee under the Monroe Trust
Indenture, or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and remedies consequent
upon an Event of Default under the Monroe Trust Indenture. Any such
transfer shall be made by the registered holder hereof, in person or by
his attorney duly authorized in writing, on the books of the Company kept
at its office or agency in the Borough of Manhattan, The City and State of
New York, upon surrender and cancellation of this bond, and thereupon, a
new registered bond of the same series of authorized denominations for a
like aggregate principal amount will be issued to the transferee in
exchange therefor, and this bond with others in like form may in like
manner be exchanged for one or more new bonds of the same series of other
authorized denominations, but of the same aggregate principal amount, all
as provided and upon the terms and conditions set forth in the Indenture,
and upon payment, in any event, of the charges prescribed in the
Indenture.
</TABLE>
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No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
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[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By ...........................
Authorized Officer
PART II.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Scretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
</TABLE>
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<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
</TABLE>
<PAGE> 17
15
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
</TABLE>
<PAGE> 18
16
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C Janaury 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
</TABLE>
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<TABLE>
<S> <C>
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as of June 15, 1989 providing
for the terms of bonds to be issued thereunder of 1989 Series A has
heretofore been entered into between the Company and the Trustee and has
been filed in the Office of the Secretary of State of Michigan as a
financing statement on June 26, 1989 (Filing No. 95793A), has been filed
and recorded in the Office of the Interstate Commerce Commission
(Recordation No. 5485-MMM), and has been recorded as a real estate
mortgage in the offices of the respective Register of Deeds of certain
counties in the State of Michigan, as follows:
</TABLE>
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
-------------------------------- ------------- ------ ----------
<S> <C> <C> <C>
Genesee......................... June 26, 1989 2515 559-581
Huron........................... June 26, 1989 525 420-442
Ingham.......................... June 26, 1989 1762 166-188
Lapeer.......................... June 26, 1989 663 562-584
Lenawee......................... June 26, 1989 1098 723-745
Livingston...................... June 26, 1989 1350 936-958
Macomb.......................... June 26, 1989 04671 742-764
Mason........................... June 26, 1989 381 750-772
Monroe.......................... June 26, 1989 1082 0466-0488
Oakland......................... June 26, 1989 10955 346-368
Sanilac......................... June 26, 1989 403 718-740
St. Clair....................... June 26, 1989 932 735-757
Tuscola......................... June 26, 1989 593 1035-1057
Washtenaw....................... June 26, 1989 2326 425-447
Wayne........................... June 26, 1989 24229 673-695
</TABLE>
<PAGE> 19
17
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, BB, CC, DDP Nos. 1-7, FFR Nos. 1-10, GGP
FOR PAYMENT. Nos. 1-6 and 8-15, IIP Nos. 1-6 and 8-13, JJP Nos. 1-6, KKP Nos. 1-6, LLP
Nos. 1-6 and 8-13, NNP Nos. 1-6 and 8-13, OOP Nos. 1-7, QQP Nos. 1-7 and
10-14 and TTP Nos. 1-6, 1980 Series A, 1980 Series CP Nos. 1-4 and 13-15,
1980 Series DP Nos. 1-4 and 1981 Series AP No. 1-3 which were issued under
Supplemental Indentures dated as of, respectively, June 1, 1925, August 1,
1927, February 1, 1931, October 1, 1932, September 25, 1935, September 1,
1936, December 1, 1940, September 1, 1947, November 15, 1951, January 15,
1953, May 1, 1953, March 15, 1954, May 15, 1955, August 15, 1957, December
15, 1970, October 1, 1974, January 15, 1975, November 1, 1975, February 1,
1976, June 15, 1976, October 1, 1977, March 1, 1977, July 1, 1979, March
1, 1977, March 1, 1977, March 1, 1977, September 1, 1979, July 1, 1977,
July 1, 1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1,
1979, January 1, 1980, August 15, 1980 and November 1, 1981 have matured
or have been called for redemption and funds sufficient for such payment
or redemption have been irrevocably deposited with the Trustee for that
purpose; and Certificates of Provision for Payment have been recorded in
the offices of the respective Registers of Deeds of certain counties in
the State of Michigan, with respect to all bonds of Series A, B, C, D, E,
F, G, H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1
and 2, IIP No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART III.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
</TABLE>
<PAGE> 20
18
<TABLE>
<S> <C>
PART IV.
MISCELLANEOUS.
EXECUTION IN This Supplemental Indenture may be simultaneously executed in any
COUNTERPARTS. number of counterparts, each of which when so executed shall be deemed to
be an original; but such counterparts shall together constitute but one
and the same instrument.
TESTIMONIUM. IN WITNESS WHEREOF, The Detroit Edison Company and Bankers Trust
Company have caused these presents to be signed in their respective
corporate names by their respective Chairmen of the Board, Presidents,
Vice Presidents, Assistant Vice Presidents or Treasurers and impressed
with their respective corporate seals, attested by their respective
Secretaries or Assistant Secretaries, all as of the day and year first
above written.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By /s/ L. L. LOOMANS
---------------------------
L. L. Loomans
Treasurer
EXECUTION. Attest:
/s/ ELAINE M. GODFREY
---------------------------
Elaine M. Godfrey
Assistant Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
/s/ PEARL KOTTER
---------------------------
Pearl Kotter
/s/ BETTY M. HANSEN
---------------------------
Betty M. Hansen
(Corporate Seal)
BANKERS TRUST COMPANY,
--------------------------
By /s/ BARBARAJOINER
Barbara A. Joiner
Vice President
Attest:
/s/ SANDRA SHIRLEY
---------------------------
Sandra Shirley
Assistant Secretary
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
/s/ ERIC M. HAWNER
---------------------------
Eric M. Hawner
/s/ TODD A. GASPER
---------------------------
Todd A. Gasper
</TABLE>
<PAGE> 21
19
<TABLE>
<S> <C>
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
ACKNOWLEDGMENT On this 19th day of July, 1989, before me, the subscriber, a Notary Public
OF EXECUTION within and for the County of Wayne, in the State of Michigan, personally
BY COMPANY. appeared L. L. Loomans, to me personally known, who, being by me duly
sworn, did say that he does business at 2000 Second Avenue, Detroit,
Michigan 48226 and is the Treasurer of THE DETROIT EDISON COMPANY, one of
the corporations described in and which executed the foregoing instrument;
that he knows the corporate seal of the said corporation and that the seal
affixed to said instrument is the corporate seal of said corporation; and
that said instrument was signed and sealed in behalf of said corporation
by authority of its Board of Directors and that he subscribed his name
thereto by like authority; and said L. L. Loomans, acknowledged said
instrument to be the free act and deed of said corporation.
/s/ JANET A. SCULLEN
-------------------------------
(Notarial Seal) Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires July 31, 1989
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
ACKNOWLEDGMENT On this 18th day of July, 1989, before me, the subscriber, a Notary Public
OF EXECUTION within and for the County of New York, in the State of New York,
BY TRUSTEE. personally appeared Barbara A. Joiner, to me personally known, who, being
by me duly sworn, did say that she does business at Four Albany Street,
New York, New York 10015, and is Vice President of BANKERS TRUST COMPANY,
one of the corporations described in and which executed the foregoing
instrument; that she knows the corporate seal of the said corporation and
that the seal affixed to said instrument is the corporate seal of said
corporation; and that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors and that she
subscribed her name thereto by like authority; and said Barbara A. Joiner
acknowledged said instrument to be the free act and deed of said
corporation.
(Notarial Seal)
/s/ DESIREE MARSHALL
-------------------------------
Desiree Marshall
Notary Public, State of New York
No. 24-4885294
Qualified in Kings County
Certificate filed in New York County
Commission Expires February 17, 1991
</TABLE>
<PAGE> 22
20
<TABLE>
<S> <C>
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
AFFIDAVIT AS TO L. L. Loomans, being duly sworn, says: that he is the Treasurer of THE
CONSIDERATION DETROIT EDISON COMPANY, the Mortgagor named in the foregoing instrument,
AND GOOD FAITH. and that he has knowledge of the facts in regard to the making of said
instrument and of the consideration therefor; that the consideration for
said instrument was and is actual and adequate, and that the same was
given in good faith for the purposes in such instrument set forth.
/s/ L. L. LOOMANS
------------------------
L. L. Loomans
Sworn to before me this 19th day of
July, 1989
/s/ JANET A. SCULLEN
-------------------------------
Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires July 31, 1989
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq., 2000 Second Avenue,
Detroit, Michigan 48226
</TABLE>
<PAGE> 1
EXHIBIT 4-172
CONFORMED COPY
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
INDENTURE
Dated as of December 1, 1989
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS, SERIES KKP NO. 11, DUE SEPTEMBER 1,
2019,
(B) GENERAL AND REFUNDING MORTGAGE BONDS, 1989 SERIES BP, DUE DECEMBER 1, 2019
AND
(C) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 5
Bonds to be Series KKP No. 11 and 1989 Series BP................... 5
Further Assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 6
PART I.
CREATION OF TWO HUNDRED SEVENTY-NINTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 11
Sec. 1. Terms of Bonds of Series KKP No. 11.......................... 6
Sec. 2. Redemption of Bonds of Series KKP No. 11..................... 7
Sec. 3. Redemption in Event of Acceleration.......................... 8
Sec. 4. Consent...................................................... 9
Sec. 5. Form of Bonds of Series KKP No. 11........................... 9
Form of Trustee's Certificate................................ 13
PART II.
CREATION OF TWO HUNDRED EIGHTIETH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
1989 SERIES BP
Sec. 1. Terms of Bonds of 1989 Series BP............................. 13
Sec. 2. Redemption of Bonds of 1989 Series BP........................ 14
Sec. 3. Redemption in Event of Acceleration.......................... 15
Sec. 4. Consent...................................................... 16
Sec. 5. Form of Bonds of 1989 Series BP.............................. 16
Form of Trustee's Certificate................................ 20
PART III.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 20
Recording and filing of Supplemental Indentures...................... 20
Recording of Certificates of Provision for Payment................... 24
PART IV.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 24
PART V.
MISCELLANEOUS
Execution in Counterparts............................................ 25
Testimonium.......................................................... 25
Execution............................................................ 25
Acknowledgements..................................................... 26
Affidavit as to consideration and good faith......................... 27
</TABLE>
------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
<TABLE>
<S> <C>
PARTIES. SUPPLEMENTAL INDENTURE, dated as of the first day of December, in the year
one thousand nine hundred and eighty-nine, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989 and July 15, 1989 supplemental to the Original Indenture, have
heretofore been entered into between the Company and the Trustee (the
Original Indenture and all indentures supplemental thereto together being
hereinafter sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Four billion nine hundred
ISSUED. sixty-eight million one hundred seventy-one thousand dollars
($4,968,171,000) have heretofore been issued under the Indenture as
follows, viz:
</TABLE>
<TABLE>
<S> <C> <C> <C>
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
</TABLE>
<PAGE> 4
2
<TABLE>
<S> <C> <C> <C>
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series BB -- Principal Amount $50,000,000,
(20) Bonds of Series CC -- Principal Amount $50,000,000,
(21-28) Bonds of Series DDP Nos. 1-8 -- Principal Amount $6,400,000,
(29-38) Bonds of Series FFR Nos. 1-10 -- Principal Amount $5,800,000,
(39-52) Bonds of Series GGP Nos. 1-6 and
8-15 -- Principal Amount $7,960,000,
(53-64) Bonds of Series IIP Nos. 1-6 and
8-13 -- Principal Amount $450,000,
(65-70) Bonds of Series JJP Nos. 1-6 -- Principal Amount $690,000,
(71-76) Bonds of Series KKP Nos. 1-6 -- Principal Amount $1,590,000,
(77-88) Bonds of Series LLP Nos. 1-6 and
8-13 -- Principal Amount $4,760,000,
(89-100) Bonds of Series NNP Nos. 1-6 and
8-13 -- Principal Amount $7,950,000,
(101-108) Bonds of Series OOP Nos. 1-8 -- Principal Amount $2,680,000,
(109-120) Bonds of Series QQP Nos. 1-7 and
10-14 -- Principal Amount $7,075,000,
(121-126) Bonds of Series TTP Nos. 1-6 -- Principal Amount $330,000,
(127) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(128-136) Bonds of 1980 Series CP Nos. 1-5
and 13-16 -- Principal Amount $3,250,000,
(137-141) Bonds of 1980 Series DP Nos. 1-5 -- Principal Amount $925,000,
(142-145) Bonds of 1981 Series AP Nos. 1-4 -- Principal Amount $3,200,000,
all of which have either been retired and cancelled, or no longer represent obligations
of the Company, having been called for redemption and funds necessary to effect the
payment, redemption and retirement thereof having been deposited with the Trustee as a
special trust fund to be applied for such purpose;
(146) Bonds of Series R in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(147) Bonds of Series S in the principal amount of One hundred fifty million dollars
($150,000,000), all of which are outstanding at the date hereof;
(148) Bonds of Series T in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(149) Bonds of Series U in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(150) Bonds of Series V in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(151) Bonds of Series X in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(152) Bonds of Series Y in the principal amount of Sixty million dollars
($60,000,000), all of which are outstanding at the date hereof;
(153) Bonds of Series Z in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(154) Bonds of Series AA in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(155) Bonds of Series DDP No. 9 in the principal amount of Seven million nine hundred
five thousand dollars ($7,905,000), of which One million six hundred thousand dollars
($1,600,000) principal amount have heretofore been retired and Six million three hundred
five thousand dollars ($6,305,000) principal amount are outstanding at the date hereof;
</TABLE>
<PAGE> 5
3
<TABLE>
<S> <C>
(156) Bonds of Series EE in the principal amount of Fifty million dollars
($50,000,000), of which Twenty-five million dollars ($25,000,000) principal
amount have heretofore been retired and Twenty-five million dollars
($25,000,000) principal amount are outstanding at the date hereof;
(157-160) Bonds of Series FFR Nos. 11-14 in the principal amount of
Thirty-nine million eight hundred thousand dollars ($39,800,000), all
of which are outstanding at the date hereof;
(161-168) Bonds of Series GGP Nos. 7 and 16-22 in the principal amount of
Thirty-four million three hundred forty thousand dollars ($34,340,000), of
which Two million four hundred thousand dollars ($2,400,000) principal amount
have heretofore been retired and Thirty-one million nine hundred forty
thousand dollars ($31,940,000) principal amount are outstanding at the
date hereof;
(169) Bonds of Series HH in the principal amount of Fifty million dollars
($50,000,000), all of which are outstanding at the date hereof;
(170-171) Bonds of Series MMP and MMP No. 2 in the principal amount of
Five million four hundred thirty thousand dollars ($5,430,000), of which
One million ninety thousand dollars ($1,090,000) principal amount have
heretofore been retired and Four million three hundred forty thousand dollars
($4,340,000) principal amount are outstanding at the date hereof;
(172-181) Bonds of Series IIP Nos. 7 and 14-22 in the principal amount of
Three million three hundred thousand dollars ($3,300,000), of which One
hundred ten thousand dollars ($110,000) principal amount have heretofore
been retired and Three million one hundred ninety thousand dollars ($3,190,000)
principal amount are outstanding at the date hereof;
(182-183) Bonds of Series JJP Nos. 7-8 in the principal amount of Six million
one hundred sixty thousand dollars ($6,160,000), of which Three hundred fifty
thousand dollars ($350,000) principal amount have heretofore been retired and
Five million eight hundred ten thousand dollars ($5,810,000) are outstanding
at the date hereof;
(184-187) Bonds of Series KKP Nos. 7-10 in the principal amount of Sixty-three
million three hundred thousand dollars ($63,300,000), of which Seven hundred
ten thousand dollars ($710,000) principal amount have heretofore been retired
and Sixty-two million five hundred ninety thousand dollars ($62,590,000) are
outstanding at the date hereof;
(188-190) Bonds of Series LLP Nos. 7 and 14-15 in the principal amount of
Four million ninety thousand dollars ($4,090,000), of which Two million five
hundred thirty-five thousand dollars ($2,535,000) principal amount have
heretofore been retired and One million five hundred fifty-five thousand
dollars ($1,555,000) principal amount are outstanding at the date hereof;
(191-199) Bonds of Series NNP Nos. 7 and 14-21 in the principal amount of
Forty million ($40,000,000), of which One million six hundred fifty thousand
dollars ($1,650,000) principal amount have heretofore been retired and
Thirty-eight million three hundred fifty thousand dollars ($38,350,000)
principal amount are outstanding at the date hereof;
(200-209) Bonds of Series OOP Nos. 9-18 in the principal amount of Sixteen
million two hundred thousand dollars ($16,200,000), of which Two hundred
forty thousand dollars ($240,000) principal amount have heretofore been
retired and Fifteen million nine hundred sixty thousand dollars ($15,960,000)
are outstanding at the date hereof;
(210) Bonds of Series PP in the principal amount of Seventy million dollars
($70,000,000), all of which are outstanding at the date hereof;
(211-217) Bonds of Series QQP Nos. 8-9 and 15-19 in the principal amount of
Six million five hundred seventy-five thousand dollars ($6,575,000), all
of which are outstanding at the date hereof;
</TABLE>
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(218) Bonds of Series RR in the principal amount of Seventy million
dollars ($70,000,000), all of which are outstanding at the date hereof;
(219) Bonds of Series SS in the principal amount of One hundred fifty
million dollars ($150,000,000), of which Fifty million dollars ($50,000,000)
principal amount have heretofore been retired and One hundred million
dollars ($100,000,000) principal amount are outstanding at the date hereof;
(220-228) Bonds of Series TTP Nos. 7-15 in the principal amount of Three
million four hundred seventy thousand dollars ($3,470,000), all of which
are outstanding at the date hereof;
(229) Bonds of Series UU in the principal amount of One hundred million
dollars ($100,000,000), all of which are outstanding at the date hereof;
(230) Bonds of 1980 Series B in the principal amount of One hundred million
dollars ($100,000,000), of which Fifty-three million two hundred thousand
dollars ($53,200,000) principal amount have heretofore been retired and
Forty-six million eight hundred thousand dollars ($46,800,000) principal
amount are outstanding at the date hereof;
(231-246) Bonds of 1980 Series CP Nos. 6-12 and 17-25 in the principal
amount of Thirty-one million seven hundred fifty thousand dollars
($31,750,000), all of which are outstanding at the date hereof;
(247-252) Bonds of 1980 Series DP Nos. 6-11 in the principal amount of
Nine million eight hundred twenty-five thousand dollars ($9,825,000),
all of which are outstanding at the date hereof;
(253-264) Bonds of 1981 Series AP Nos. 5-16 in the principal amount of
One hundred twenty million eight hundred thousand dollars ($120,800,000),
all of which are outstanding at the date hereof;
(265) Bonds of 1984 Series AP in the principal amount of Two million four
hundred thousand dollars ($2,400,000), all of which are outstanding at the
date hereof;
(266) Bonds of 1984 Series BP in the principal amount of Seven million
seven hundred fifty thousand dollars ($7,750,000), all of which are
outstanding at the date hereof;
(267) Bonds of 1985 Series A in the principal amount of Thirty-five million
dollars ($35,000,000), all of which are outstanding at the date hereof;
(268) Bonds of 1985 Series B in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(269) Bonds of 1986 Series A in the principal amount of Two hundred million
dollars ($200,000,000), all of which are outstanding at the date hereof;
(270) Bonds of 1986 Series B in the principal amount of One hundred million
dollars ($100,000,000), all of which are outstanding at the date hereof;
(271) Bonds of 1986 Series C in the principal amount of Two hundred million
dollars ($200,000,000), all of which are outstanding at the date hereof;
(272) Bonds of 1987 Series A in the principal amount of Three hundred million
dollars ($300,000,000), all of which are outstanding at the date hereof;
(273) Bonds of 1987 Series B in the principal amount of One hundred
seventy-five million dollars ($175,000,000), all of which are outstanding
at the date hereof;
(274) Bonds of 1987 Series C in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(275) Bonds of 1987 Series D in the principal amount of Two hundred
fifty million dollars ($250,000,000), all of which are outstanding
at the date hereof;
(276) Bonds of 1987 Series E in the principal amount of One hundred
fifty million dollars ($150,000,000), all of which are outstanding at
the date hereof;
(277) Bonds of 1987 Series F in the principal amount of Two hundred
million dollars ($200,000,000), all of which are outstanding at the
date hereof; and
</TABLE>
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(278) Bonds of 1989 Series A in the principal amount of Three hundred
million dollars ($300,000,000), all of which are outstanding at the date
hereof;
and, accordingly, of the bonds so issued, Three billion eight hundred
ninety-nine million two hundred ten thousand dollars ($3,899,210,000)
principal amount are outstanding at the date hereof; and
REASON FOR WHEREAS, the County of Monroe, Michigan has agreed to issue and sell
CREATION OF $9,745,000 principal amount of its Pollution Control Revenue Bonds (The
NEW SERIES. Detroit Edison Company Monroe and Fermi Plants Project), Collateralized
Series I-1989B and $66,565,000 principal amount of its Pollution Control
Revenue Bonds (The Detroit Edison Company Fermi Plant Project),
Collateralized Series CC so as to provide funds for the purchase and
construction of certain pollution control facilities installed in the
Company's Fermi 2 Plant; and
WHEREAS, the Company has entered into (1) an Installment Sales Contract,
dated as of March 1, 1977 and amended as of September 1, 1979, October 15,
1985, July 1, 1989 and December 1, 1989 and (2) an Installation
Subcontract, dated as of December 1, 1989, each with the County of Monroe,
in order to purchase certain pollution control facilities, and pursuant to
such Installment Sales Contracts the Company has agreed to issue its
General and Refunding Mortgage Bonds under the Indenture in order further
to secure its obligations under such Installment Sales Contracts; and
WHEREAS, for such purposes the Company desires to issue new series of
bonds to be issued under the Indenture and to be authenticated and
delivered pursuant to Section 8 of Article III of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental Indenture to create
SERIES KKP such new series of bonds, to be designated "General and Refunding Mortgage
NO. 11 AND 1989 Bonds, Series KKP No. 11" and "General and Refunding Mortgage Bonds, 1989
SERIES BP Series BP"; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the property
ASSURANCE. subject to the lien thereof all of the estates and properties, real,
personal and mixed, rights, privileges and franchises of every nature and
kind and wheresoever situate, then or thereafter owned or possessed by or
belonging to the Company or to which it was then or at any time thereafter
might be entitled in law or in equity (saving and excepting, however, the
property therein specifically excepted or released from the lien thereof),
and the Company therein covenanted that it would, upon reasonable request,
execute and deliver such further instruments as may be necessary or proper
for the better assuring and confirming unto the Trustee all or any part of
the trust estate, whether then or thereafter owned or acquired by the
Company (saving and excepting, however, property specifically excepted or
released from the lien thereof); and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers and authority
OF SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
FOR SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
</TABLE>
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PART I.
CREATION OF TWO HUNDRED SEVENTY-NINTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES KKP NO. 11
CERTAIN TERMS SECTION 1. The Company hereby creates the Two hundred seventy-ninth
OF BONDS OF series of bonds to be issued under and secured by the Original Indenture
SERIES KKP as amended to date and as further amended by this Supplemental Indenture,
NO. 11 to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, Series KKP No.
11" (elsewhere herein referred to as the "bonds of Series KKP No. 11").
The aggregate principal amount of bonds of Series KKP No. 11 shall be
limited to Nine million seven hundred and forty-five thousand dollars
($9,745,000), except as provided in Sections 7 and 13 of Article II of the
Original Indenture with respect to exchanges and replacements of bonds.
Each bond of Series KKP No. 11 is to be irrevocably assigned to, and
registered in the name of, Manufacturers National Bank of Detroit, as
trustee, or a successor trustee (said trustee or any successor trustee
being hereinafter referred to as the "Monroe Trust Indenture Trustee"),
under the Trust Indenture, dated as of March 1, 1977, as amended September
1, 1979, October 15, 1985, July 1, 1989 and December 1, 1989 (hereinafter
called the " Monroe Trust Indenture"), between the County of Monroe,
Michigan (hereinafter called "Monroe"), and the Monroe Trust Indenture
Trustee, to secure payment of the County of Monroe, Michigan, Pollution
Control Revenue Bonds (The Detroit Edison Company Monroe and Fermi Plants
Project), Collateralized Series I-1989B (hereinafter called the "Monroe
Revenue Bonds"), issued by Monroe under the Monroe Trust Indenture, the
proceeds of which (other than any accrued interest thereon) have been
provided for the acquisition and construction of certain pollution control
facilities which the Company has agreed to purchase pursuant to the
provisions of the Installment Sales Contract, dated as of March 1, 1977,
as amended as of September 1, 1979, as of October 15, 1985, as of July 1,
1989 and December 1, 1989 (hereinafter called the "Monroe Contract"),
between the Company and Monroe.
The bonds of Series KKP No. 11 shall be issued as registered bonds
without coupons in denominations of a multiple of $5,000. The bonds of
Series KKP No. 11 shall be issued in the aggregate principal amount of
$9,745,000, shall mature on September 1, 2019 and shall bear interest,
payable semi-annually on March 1 and September 1 of each year (commencing
March 1, 1990), at the rate of 7 1/2%, until the principal thereof shall
have become due and payable and thereafter until the Company's obligation
with respect to the payment of said principal shall have been discharged
as provided in the Indenture.
The bonds of Series KKP No. 11 shall be payable as to principal,
premium, if any, and interest as provided in the Indenture, but only to
the extent and in the manner herein provided. The bonds of Series KKP No.
11 shall be payable, both as to principal and interest, at the office or
agency of the Company in the Borough of Manhattan, The City and State of
New York, in any coin or currency of the United States of America which at
the time of payment is legal tender for public and private debts.
Except as provided herein, each bond of Series KKP No. 11 shall be dated
the date of its authentication and interest shall be payable on the
principal represented thereby from the March 1 or September 1 next
preceding the date thereof to which interest has been paid on bonds of
Series KKP No. 11, unless the bond is authenticated on a date to which
interest has been paid, in which case interest shall be payable from the
date of authentication, or unless the date of authentication is prior to
March 1, 1990, in which case interest shall be payable from December 1,
1989.
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The bonds of Series KKP No. 11 in definitive form shall be, at the
election of the Company, fully engraved or shall be lithographed or
printed in authorized denominations as aforesaid and numbered 1 and
upwards (with such further designation as may be appropriate and desirable
to indicate by such designation the form, series and denominations of
bonds of Series KKP No. 11). Until bonds of Series KKP No. 11 in
definitive form are ready for delivery, the Company may execute, and upon
its request in writing the Trustee shall authenticate and deliver in lieu
thereof, bonds of Series KKP No. 11 in temporary form, as provided in
Section 10 of Article II of the Indenture. Temporary bonds of Series KKP
No. 11, if any, may be printed and may be issued in authorized
denominations in substantially the form of definitive bonds of Series KKP
No. 10, but with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
Bonds of Series KKP No. 11 shall not be assignable or transferable
except as may be required to effect a transfer to any successor trustee
under the Monroe Trust Indenture, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under the Monroe Trust
Indenture. Any such transfer shall be made upon surrender thereof for
cancellation at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, together with a written
instrument of transfer (if so required by the Company or by the Trustee)
in form approved by the Company duly executed by the holder or by its duly
authorized attorney. Bonds of Series KKP No. 11 shall in the same manner
be exchangeable for a like aggregate principal amount of bonds of Series
KKP No. 11 upon the terms and conditions specified herein and in Section 7
of Article II of the Indenture. The Company waives its rights under
Section 7 of Article II of the Indenture not to make exchanges or
transfers of bonds of Series KKP No. 11, during any period of ten days
next preceding any redemption date for such bonds.
Bonds of Series KKP No. 11, in definitive and temporary form, may bear
such legends as may be necessary to comply with any law or with any rules
or regulations made pursuant thereto or as may be specified in the Monroe
Contract.
Upon payment of the principal or premium, if any, or interest on the
Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 11 in a principal amount equal to the principal
amount of such Monroe Revenue 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 bonds shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
REDEMPTION SECTION 2. Bonds of Series KKP No. 11 shall be redeemed on the
OF BONDS respective dates and in the respective principal amounts which correspond
OF SERIES KKP to the redemption dates for, and the principal amounts to be redeemed of,
NO. 11 the Monroe Revenue Bonds.
In the event the Company elects to redeem any Monroe Revenue Bonds prior
to maturity in accordance with the provisions of the Monroe Trust
Indenture, the Company shall on the same date redeem bonds of Series KKP
No. 11 in principal amounts and at redemption prices corresponding to the
Monroe Revenue Bonds so redeemed. The Company agrees to give the Trustee
notice of any such redemption of bonds of Series KKP No. 11 on the same
date as it gives notice of redemption of Monroe Revenue Bonds to the
Monroe Trust Indenture Trustee.
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REDEMPTION SECTION 3. In the event of an Event of Default under the Monroe Trust
OF BONDS OF Indenture and the acceleration of all Monroe Revenue Bonds, the bonds of
SERIES KKP Series KKP No. 11 shall be redeemable in whole upon receipt by the Trustee
NO. 11 IN EVENT of a written demand (hereinafter called a "Redemption Demand") from the
OF ACCELERATION Monroe Trust Indenture Trustee stating that there has occurred under the
OF MONROE Monroe Trust Indenture both an Event of Default and a declaration of
REVENUE BONDS. acceleration of payment of principal, accrued interest and premium, if
any, on the Monroe Revenue Bonds, specifying the last date to which
interest on the Monroe Revenue Bonds has been paid (such date being
hereinafter referred to as the "Initial Interest Accrual Date") and
demanding redemption of the bonds of said series. The Trustee shall,
within five days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its receipt by the
Trustee. Promptly upon receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will redeem the bonds of
said series so demanded to be redeemed (hereinafter called the "Demand
Redemption Date"). Notice of the date fixed as the Demand Redemption Date
shall be mailed by the Company to the Trustee at least ten days prior to
such Demand Redemption Date. The date to be fixed by the Company as and
for the Demand Redemption Date may be any date up to and including the
earlier of (x) the 60th day after receipt by the Trustee of the Redemption
Demand or (y) the maturity date of such bonds first occurring following
the 20th day after the receipt by the Trustee of the Redemption Demand;
provided, however, that if the Trustee shall not have received such notice
fixing the Demand Redemption Date on or before the 10th day preceding the
earlier of such dates, the Demand Redemption Date shall be deemed to be
the earlier of such dates. The Trustee shall mail notice of the Demand
Redemption Date (such notice being hereinafter called the "Demand
Redemption Notice") to the Monroe Trust Indenture Trustee not more than
ten nor less than five days prior to the Demand Redemption Date.
Each bond of Series KKP No. 11 shall be redeemed by the Company on the
Demand Redemption Date therefore upon surrender thereof by the Monroe
Trust Indenture Trustee to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest thereon at the rate
specified for such bond from the Initial Interest Accrual Date to the
Demand Redemption Date plus an amount equal to the aggregate premium, if
any, due and payable on such Demand Redemption Date on all Monroe Revenue
Bonds; provided, however, that in the event of a receipt by the Trustee of
a notice that, pursuant to Section 1010 of the Monroe Trust Indenture, the
Monroe Trust Indenture Trustee has terminated proceedings to enforce any
right under the Monroe Trust Indenture, then any Redemption Demand shall
thereby be rescinded by the Monroe Trust Indenture Trustee, and no Demand
Redemption Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or annulment shall extend
to or affect any subsequent default or impair any right consequent
thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or effect, unless it is
executed in the name of the Monroe Trust Indenture Trustee by its
President or one of its Vice Presidents.
CONSENT. SECTION 4. The holders of the bonds of Series KKP No. 11, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five per cent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 4, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
</TABLE>
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FORM OF BONDS SECTION 5. The bonds of Series KKP No. 11 and the form of Trustee's
OF SERIES KKP Certificate to be endorsed on such bonds shall be substantially in the
NO. 11. following forms, respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
SERIES KKP NO. 11, 7 1/2% DUE SEPTEMBER 1, 2019
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor trustee under the Trust Indenture, dated as of
March 1, 1977 and amended as of September 1, 1979, October 15, 1985, July
1, 1989 and December 1, 1989 between the County of Monroe, Michigan and
Manufacturers National Bank of Detroit, as trustee, or, subject to
compliance with applicable law, as may be involved in the course of the
exercise of rights and remedies consequent upon an Event of Default under
said Trust Indenture.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to Manufacturers National Bank of Detroit, as trustee, or
registered assigns, at the Company's office or agency in the Borough of
Manhattan, The City and State of New York, the principal sum of
dollars ($ ) in lawful money of the United States of
America on the date specified in the title hereof and interest thereon at
the rate specified in the title hereof, in like lawful money, from
December 1, 1989, and after the first payment of interest on bonds of this
Series has been made or otherwise provided for, from the most recent date
to which interest has been paid or otherwise provided for, semi-annually
on March 1 and September 1 of each year (commencing March 1, 1990), until
the Company's obligation with respect to payment of said principal shall
have been discharged, all as provided, to the extent and in the manner
specified in the Indenture hereinafter mentioned on the reverse hereof and
in the supplemental indenture pursuant to which this bond has been issued.
Under a Trust Indenture, dated as of March 1, 1977 and amended as of
September 1, 1979, October 15, 1985, July 1, 1989 and December 1, 1989
(hereinafter called the "Monroe Trust Indenture"), between the County of
Monroe, Michigan (hereinafter called "Monroe"), and Manufacturers National
Bank of Detroit, as trustee (hereinafter called the "Monroe Trust
Indenture Trustee"), Monroe has issued Pollution Control Revenue Bonds
(The Detroit Edison Company Monroe and Fermi Plants Project),
Collateralized Series I-1989B (hereinafter called the "Monroe Revenue
Bonds"). This bond was originally issued to Monroe and simultaneously
irrevocably assigned to the Monroe Trust Indenture Trustee so as to secure
the payment of the Monroe Revenue Bonds. Payments of principal of, or
premium, if any, or interest on, Monroe Revenue Bonds shall constitute
like payments on this bond as further provided herein and in the
supplemental indenture pursuant to which this bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its President
or a Vice President, with their manual or facsimile signatures, and its
corporate seal, or a facsimile thereof, to be impressed or imprinted
hereon and the same to be attested by its Secretary or an Assistant
Secretary with his manual or facsimile signature.
</TABLE>
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Dated: THE DETROIT EDISON COMPANY
By
--------------------------
Chairman of the Board
----------------------------
Attest: President
----------------------------
Secretary
</TABLE>
<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of General and Refunding Mortgage Bonds known as Series KKP No. 11,
limited to an aggregate principal amount of $9,745,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond and
all other bonds of said series are issued and to be issued under, and are
all equally and ratably secured (except insofar as any sinking,
amortization, improvement or analogous fund, established in accordance
with the provisions of the Indenture hereinafter mentioned, may afford
additional security for the bonds of any particular series and except as
provided in Section 3 of Article VI of said Indenture) by an Indenture,
dated as of October 1, 1924, duly executed by the Company to Bankers Trust
Company, a corporation of the State of New York, as Trustee, to which
Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of December 1, 1989) reference is hereby
made for a description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and conditions
upon which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee in
respect of such security (which Indenture and all indentures supplemental
thereto, including the Supplemental Indenture dated as of December 1,
1989, are hereinafter collectively called the "Indenture"). As provided in
the Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear interest
at different rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and
of the holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or altered in
certain respects by affirmative vote of at least eighty-five percent (85%)
in amount of the bonds then outstanding, and, if the rights of one or
more, but less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by affirmative vote
of at least eighty-five percent (85%) in amount of the series of bonds so
to be affected (excluding in every instance bonds disqualified from voting
by reason of the Company's interest therein as specified in the
Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of or the interest on this
bond, which in those respects is unconditional.
</TABLE>
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The holders of the bonds of Series KKP No. 11, by their acceptance of
and holding thereof, consent and agree that bonds of any series may be
issued which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (A) Such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five per cent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 4 of Part I of the
Supplemental Indenture dated as of December 1, 1989, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
This bond is redeemable upon the terms and conditions set forth in the
Indenture, including provision for redemption upon demand of the Monroe
Trust Indenture Trustee following the occurrence of an Event of Default
under the Monroe Trust Indenture and the acceleration of the principal of
the Monroe Revenue Bonds.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of Series KKP No. 11 (or portions thereof), in
trust for the redemption of such bonds (or portions thereof) and the
interest due or to become due thereon, and thereupon all obligations of
the Company in respect of such bonds (or portions thereof) so to be
redeemed and such interest shall cease and be discharged, and the holders
thereof shall thereafter be restricted exclusively to such funds for any
and all claims of whatsoever nature on their part under the Indenture or
with respect to such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
Upon payment of the principal of, or premium, if any, or interest on,
the Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of Series KKP No. 11 in a principal amount equal to the principal
amount of such Monroe Revenue Bonds and having both a corresponding
maturity date and interest rate 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 bonds of said series shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
This bond is not assignable or transferable except as may be required to
effect a transfer to any successor trustee under the Monroe Trust
Indenture, or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and remedies consequent
upon an Event of Default under the Monroe Trust Indenture. Any such
transfer shall be made by the registered holder hereof, in person or by
his attorney duly authorized in writing, on the books of the Company kept
at its office or agency in the Borough of Manhattan, The City and State of
New York, upon surrender and cancellation of this bond, and thereupon, a
new registered bond of the same series of authorized denominations for a
like aggregate principal amount will be issued to the transferee in
exchange therefor, and this bond with others in like form may in like
manner be exchanged for one or more new bonds of the same series of other
authorized denominations, but of the same aggregate principal amount, all
as provided and upon the terms and conditions set forth in the Indenture,
and upon payment, in any event, of the charges prescribed in the
Indenture.
</TABLE>
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<TABLE>
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No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 15
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<S> <C>
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By ----------------------------
Authorized Officer
PART II.
CREATION OF TWO HUNDRED EIGHTIETH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
1989 SERIES BP
CERTAIN TERMS SECTION 1. The Company hereby creates the Two hundred eightieth series
OF BONDS OF of bonds to be issued under and secured by the Original Indenture as
1989 SERIES BP amended to date and as further amended by this Supplemental Indenture, to
be designated, and to be distinguished from the bonds of all other series,
by the title "General and Refunding Mortgage Bonds, 1989 Series BP"
(elsewhere herein referred to as the "bonds of 1989 Series BP"). The
aggregate principal amount of bonds of 1989 Series BP shall be limited to
sixty-six million five hundred and sixty-five thousand dollars
($66,565,000), except as provided in Sections 7 and 13 of Article II of
the Original Indenture with respect to exchanges and replacements of
bonds.
Each bond of 1989 Series BP is to be irrevocably assigned to, and
registered in the name of, Manufacturers National Bank of Detroit, as
trustee, or a successor trustee (said trustee or any successor trustee
being hereinafter referred to as the "Monroe Trust Indenture Trustee"),
under the Trust Indenture, dated as of December 1, 1989 (hereinafter
called the "Monroe Trust Indenture"), between the County of Monroe,
Michigan (hereinafter called "Monroe"), and the Monroe Trust Indenture
Trustee, to secure payment of the County of Monroe, Michigan, Pollution
Control Revenue Bonds (The Detroit Edison Company Fermi Plant Project),
Collateralized Series CC (hereinafter called the "Monroe Revenue Bonds"),
issued by Monroe under the Monroe Trust Indenture, the proceeds of which
(other than any accrued interest thereon) have been provided for the
acquisition and construction of certain pollution control facilities which
the Company has agreed to purchase pursuant to the provisions of the
Installment Sales Contract, dated as of December 1, 1989 (hereinafter
called the "Monroe Contract"), between the Company and Monroe.
The bonds of 1989 Series BP shall be issued as registered bonds without
coupons in denominations of a multiple of $5,000. The bonds of 1989 Series
BP shall be issued in the aggregate principal amount of $66,565,000, shall
mature on December 1, 2019 and shall bear interest, payable semi-annually
on June 1 and December 1 of each year (commencing June 1, 1990), at the
rate of 7 1/2%, until the principal thereof shall have become due and
payable and thereafter until the Company's obligation with respect to the
payment of said principal shall have been discharged as provided in the
Indenture.
The bonds of 1989 Series BP shall be payable as to principal, premium,
if any, and interest as provided in the Indenture, but only to the extent
and in the manner herein provided. The bonds of 1989 Series BP shall be
payable, both as to principal and interest, at the office or agency of the
Company in the Borough of Manhattan, The City and State of New York, in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts.
</TABLE>
<PAGE> 16
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Except as provided herein, each bond of 1989 Series BP shall be dated
the date of its authentication and interest shall be payable on the
principal represented thereby from the June 1 or December 1 next preceding
the date thereof to which interest has been paid on bonds of 1989 Series
BP, unless the bond is authenticated on a date to which interest has been
paid, in which case interest shall be payable from the date of
authentication, or unless the date of authentication is prior to June 1,
1990, in which case interest shall be payable from December 1, 1989.
The bonds of 1989 Series BP in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denominations of bonds of 1989
Series BP). Until bonds of 1989 Series BP in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1989
Series BP in temporary form, as provided in Section 10 of Article II of
the Indenture. Temporary bonds of 1989 Series BP, if any, may be printed
and may be issued in authorized denominations in substantially the form of
definitive bonds of 1989 Series BP, but with such omissions, insertions
and variations as may be appropriate for temporary bonds, all as may be
determined by the Company.
Bonds of 1989 Series BP shall not be assignable or transferable except
as may be required to effect a transfer to any successor trustee under the
Monroe Trust Indenture, or, subject to compliance with applicable law, as
may be involved in the course of the exercise of rights and remedies
consequent upon an Event of Default under the Monroe Trust Indenture. Any
such transfer shall be made upon surrender thereof for cancellation at the
office or agency of the Company in the Borough of Manhattan, The City and
State of New York, together with a written instrument of transfer (if so
required by the Company or by the Trustee) in form approved by the Company
duly executed by the holder or by its duly authorized attorney. Bonds of
1989 Series BP shall in the same manner be exchangeable for a like
aggregate principal amount of bonds of 1989 Series BP upon the terms and
conditions specified herein and in Section 7 of Article II of the
Indenture. The Company waives its rights under Section 7 of Article II of
the Indenture not to make exchanges or transfers of bonds of 1989 Series
BP, during any period of ten days next preceding any redemption date for
such bonds.
Bonds of 1989 Series BP, in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or as may be specified in the Monroe
Contract.
Upon payment of the principal or premium, if any, or interest on the
Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of 1989 Series BP in a principal amount equal to the principal
amount of such Monroe Revenue 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 bonds shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
REDEMPTION SECTION 2. Bonds of 1989 Series BP shall be redeemed on the respective
OF BONDS dates and in the respective principal amounts which correspond to the
OF 1989 redemption dates for, and the principal amounts to be redeemed of, the
SERIES BP Monroe Revenue Bonds.
</TABLE>
<PAGE> 17
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In the event the Company elects to redeem any Monroe Revenue Bonds prior
to maturity in accordance with the provisions of the Monroe Trust
Indenture, the Company shall on the same date redeem bonds of 1989 Series
BP in principal amounts and at redemption prices corresponding to the
Monroe Revenue Bonds so redeemed. The Company agrees to give the Trustee
notice of any such redemption of bonds of 1989 Series BP on the same date
as it gives notice of redemption of Monroe Revenue Bonds to the Monroe
Trust Indenture Trustee.
REDEMPTION SECTION 3. In the event of an Event of Default under the Monroe Trust
OF BONDS OF Indenture and the acceleration of all Monroe Revenue Bonds, the bonds of
1989 SERIES 1989 Series BP shall be redeemable in whole upon receipt by the Trustee of
BP IN EVENT a written demand (hereinafter called a "Redemption Demand") from the
OF ACCELERATION Monroe Trust Indenture Trustee stating that there has occurred under the
OF MONROE Monroe Trust Indenture both an Event of Default and a declaration of
REVENUE BONDS. acceleration of payment of principal, accrued interest and premium, if
any, on the Monroe Revenue Bonds, specifying the last date to which
interest on the Monroe Revenue Bonds has been paid (such date being
hereinafter referred to as the "Initial Interest Accrual Date") and
demanding redemption of the bonds of said series. The Trustee shall,
within five days after receiving such Redemption Demand, mail a copy
thereof to the Company marked to indicate the date of its receipt by the
Trustee. Promptly upon receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will redeem the bonds of
said series so demanded to be redeemed (hereinafter called the "Demand
Redemption Date"). Notice of the date fixed as the Demand Redemption Date
shall be mailed by the Company to the Trustee at least ten days prior to
such Demand Redemption Date. The date to be fixed by the Company as and
for the Demand Redemption Date may be any date up to and including the
earlier of (x) the 60th day after receipt by the Trustee of the Redemption
Demand or (y) the maturity date of such bonds first occurring following
the 20th day after the receipt by the Trustee of the Redemption Demand;
provided, however, that if the Trustee shall not have received such notice
fixing the Demand Redemption Date on or before the 10th day preceding the
earlier of such dates, the Demand Redemption Date shall be deemed to be
the earlier of such dates. The Trustee shall mail notice of the Demand
Redemption Date (such notice being hereinafter called the "Demand Re-
demption Notice") to the Monroe Trust Indenture Trustee not more than ten
nor less than five days prior to the Demand Redemption Date.
Each bond of 1989 Series BP shall be redeemed by the Company on the
Demand Redemption Date therefore upon surrender thereof by the Monroe
Trust Indenture Trustee to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest thereon at the rate
specified for such bond from the Initial Interest Accrual Date to the
Demand Redemption Date plus an amount equal to the aggregate premium, if
any, due and payable on such Demand Redemption Date on all Monroe Revenue
Bonds; provided, however, that in the event of a receipt by the Trustee of
a notice that, pursuant to Section 1010 of the Monroe Trust Indenture, the
Monroe Trust Indenture Trustee has terminated proceedings to enforce any
right under the Monroe Trust Indenture, then any Redemption Demand shall
thereby be rescinded by the Monroe Trust Indenture Trustee, and no Demand
Redemption Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or annulment shall extend
to or affect any subsequent default or impair any right consequent
thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or effect, unless it is
executed in the name of the Monroe Trust Indenture Trustee by its
President or one of its Vice Presidents.
</TABLE>
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CONSENT. SECTION 4. The holders of the bonds of 1989 Series BP, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five per cent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 4, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
FORM OF BONDS SECTION 5. The bonds of 1989 Series BP and the form of Trustee's
OF 1989 SERIES BP. Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1989 SERIES BP, 7 1/2% DUE DECEMBER 1, 2019
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor trustee under the Trust Indenture, dated as of
December 1, 1989 between the County of Monroe, Michigan and Manufacturers
National Bank of Detroit, as trustee, or, subject to compliance with
applicable law, as may be involved in the course of the exercise of rights
and remedies consequent upon an Event of Default under said Trust
Indenture.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to Manufacturers National Bank of Detroit, as trustee, or
registered assigns, at the Company's office or agency in the Borough of
Manhattan, The City and State of New York, the principal sum of
dollars ($ ) in lawful money of the United States of
America on the date specified in the title hereof and interest thereon at
the rate specified in the title hereof, in like lawful money, from
December 1, 1989, and after the first payment of interest on bonds of this
Series has been made or otherwise provided for, from the most recent date
to which interest has been paid or otherwise provided for, semi-annually
on June 1 and December 1 of each year (commencing June 1, 1990), until the
Company's obligation with respect to payment of said principal shall have
been discharged, all as provided, to the extent and in the manner
specified in the Indenture hereinafter mentioned on the reverse hereof and
in the supplemental indenture pursuant to which this bond has been issued.
Under a Trust Indenture, dated as of December 1, 1989 (hereinafter
called the "Monroe Trust Indenture"), between the County of Monroe,
Michigan (hereinafter called "Monroe"), and Manufacturers National Bank of
Detroit, as trustee (hereinafter called the "Monroe Trust Indenture
Trustee"), Monroe has issued Pollution Control Revenue Bonds (The Detroit
Edison Company Fermi Plant Project), Collateralized Series CC (hereinafter
called the "Monroe Revenue Bonds"). This bond was originally issued to
Monroe and simultaneously irrevocably assigned to the Monroe Trust Inden-
ture Trustee so as to secure the payment of the Monroe Revenue Bonds.
Payments of principal of, or premium, if any, or interest on, Monroe
Revenue Bonds shall constitute like payments on this bond as further
provided herein and in the supplemental indenture pursuant to which this
bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
</TABLE>
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This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its President
or a Vice President, with their manual or facsimile signatures, and its
corporate seal, or a facsimile thereof, to be impressed or imprinted
hereon and the same to be attested by its Secretary or an Assistant
Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
----------------------------
Chairman of the Board
-------------------------------
President
Attest:
----------------------------
Secretary
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of General and Refunding Mortgage Bonds known as 1989 Series BP, limited
to an aggregate principal amount of $66,565,000, except as otherwise
provided in the Indenture hereinafter mentioned. This bond and all other
bonds of said series are issued and to be issued under, and are all
equally and ratably secured (except insofar as any sinking, amortization,
improvement or analogous fund, established in accordance with the
provisions of the Indenture hereinafter mentioned, may afford additional
security for the bonds of any particular series and except as provided in
Section 3 of Article VI of said Indenture) by an Indenture, dated as of
October 1, 1924, duly executed by the Company to Bankers Trust Company, a
corporation of the State of New York, as Trustee, to which Indenture and
all indentures supplemental thereto (including the Supplemental Indenture
dated as of December 1, 1989) reference is hereby made for a description
of the properties and franchises mortgaged and conveyed, the nature and
extent of the security, the terms and conditions upon which the bonds are
issued and under which additional bonds may be issued, and the rights of
the holders of the bonds and of the Trustee in respect of such security
(which Indenture and all indentures supplemental thereto, including the
Supplemental Indenture dated as of December 1, 1989, are hereinafter
collectively called the "Indenture"). As provided in the Indenture, said
bonds may be for various principal sums and are issuable in series, which
may mature at different times, may bear interest at different rates and
may otherwise vary as in said Indenture provided. With the consent of the
Company and to the extent permitted by and as provided in the Indenture,
the rights and obligations of the Company and of the holders of the bonds
and the terms and provisions of the Indenture, or of any indenture
supplemental thereto, may be modified or altered in certain respects by
affirmative vote of at least eighty-five percent (85%) in amount of the
bonds then outstanding, and, if the rights of one or more, but less than
all, series of bonds then outstanding are to be affected by the action
proposed to be taken, then also by affirmative vote of at least
eighty-five percent (85%) in amount of the series of bonds so to be
affected (excluding in every instance bonds disqualified from voting by
reason of the Company's interest therein as specified in the Indenture);
provided, however, that, without the consent of the holder hereof, no such
modification or alteration shall, among other things, affect the terms of
payment of the principal of or the interest on this bond, which in those
respects is unconditional.
</TABLE>
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The holders of the bonds of 1989 series BP, by their acceptance of and
holding thereof, consent and agree that bonds of any series may be issued
which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five per cent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 4 of Part II of the
Supplemental Indenture dated as of December 1, 1989, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
This bond is redeemable upon the terms and conditions set forth in the
Indenture, including provision for redemption upon demand of the Monroe
Trust Indenture Trustee following the occurrence of an event of default
under the Monroe Trust Indenture and the acceleration of the principal of
the Monroe Revenue Bonds.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of 1989 Series BP (or portions thereof), in trust
for the redemption of such bonds (or portions thereof) and the interest
due or to become due thereon, and thereupon all obligations of the Company
in respect of such bonds (or portions thereof) so to be redeemed and such
interest shall cease and be discharged, and the holders thereof shall
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or with respect to
such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
Upon payment of the principal of, or premium, if any, or interest on,
the Monroe Revenue 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 IX of the Monroe Trust Indenture,
bonds of 1989 Series BP in a principal amount equal to the principal
amount of such Monroe Revenue Bonds and having both a corresponding
maturity date and interest rate 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 bonds of said series shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
This bond is not assignable or transferable except as may be required to
effect a transfer to any successor trustee under the Monroe Trust
Indenture, or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and remedies consequent
upon an Event of Default under the Monroe Trust Indenture. Any such
transfer shall be made by the registered holder hereof, in person or by
his attorney duly authorized in writing, on the books of the Company kept
at its office or agency in the Borough of Manhattan, The City and State of
New York, upon surrender and cancellation of this bond, and thereupon, a
new registered bond of the same series of authorized denominations for a
like aggregate principal amount will be issued to the transferee in
exchange therefor, and this bond with others in like form may in like
manner be exchanged for one or more new bonds of the same series of other
authorized denominations, but of the same aggregate principal amount, all
as provided and upon the terms and conditions set forth in the Indenture,
and upon payment, in any event, of the charges prescribed in the
Indenture.
</TABLE>
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No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 22
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[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By ...........................
Authorized Officer
PART III.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Scretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
</TABLE>
<PAGE> 23
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<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
</TABLE>
<PAGE> 24
22
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
</TABLE>
<PAGE> 25
23
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C Janaury 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
</TABLE>
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<TABLE>
<S> <C>
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as of July 15, 1989 providing
for the terms of bonds to be issued thereunder of Series KKP No. 10 has
heretofore been entered into between the Company and the Trustee and has
been filed in the Office of the Secretary of State of Michigan as a
financing statement on June 25, 1989 (Filing No. 96570A), has been filed
and recorded in the Office of the Interstate Commerce Commission
(Recordation No. 5485-NNN), and has been recorded as a real estate
mortgage in the offices of the respective Register of Deeds of certain
counties in the State of Michigan, as follows:
</TABLE>
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
-------------------------------- ------------- ------ ----------
<S> <C> <C> <C>
Genesee......................... July 25, 1989 2520 334-355
Huron........................... July 25, 1989 526 646-667
Ingham.......................... July 25, 1989 1766 822-843
Lapeer.......................... July 25, 1989 665 769-790
Lenawee......................... July 25, 1989 1100 937-958
Livingston...................... July 25, 1989 1355 0779-0800
Macomb.......................... July 25, 1989 04689 282-303
Mason........................... July 25, 1989 382 755-776
Monroe.......................... July 25, 1989 1085 0862-0883
Oakland......................... July 25, 1989 10993 471-492
Sanilac......................... July 25, 1989 404 446-467
St. Clair....................... July 25, 1989 935 34-55
Tuscola......................... July 25, 1989 594 728-749
Washtenaw....................... July 25, 1989 2333 501-522
Wayne........................... July 25, 1989 24269 192-213
</TABLE>
<PAGE> 26
24
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, BB, CC, DDP Nos. 1-8, FFR Nos. 1-10, GGP
FOR PAYMENT. Nos. 1-6 and 8-15, IIP Nos. 1-6 and 8-13, JJP Nos. 1-6, KKP Nos. 1-6, LLP
Nos. 1-6 and 8-13, NNP Nos. 1-6 and 8-13, OOP Nos. 1-8, QQP Nos. 1-7 and
10-14 and TTP Nos. 1-6, 1980 Series A, 1980 Series CP Nos. 1-5 and 13-16,
1980 Series DP Nos. 1-5 and 1981 Series AP No. 1-4 which were issued under
Supplemental Indentures dated as of, respectively, June 1, 1925, August 1,
1927, February 1, 1931, October 1, 1932, September 25, 1935, September 1,
1936, December 1, 1940, September 1, 1947, November 15, 1951, January 15,
1953, May 1, 1953, March 15, 1954, May 15, 1955, August 15, 1957, December
15, 1970, October 1, 1974, January 15, 1975, November 1, 1975, February 1,
1976, June 15, 1976, October 1, 1977, March 1, 1977, July 1, 1979, March
1, 1977, March 1, 1977, March 1, 1977, September 1, 1979, July 1, 1977,
July 1, 1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1,
1979, January 1, 1980, August 15, 1980 and November 1, 1981 have matured
or have been called for redemption and funds sufficient for such payment
or redemption have been irrevocably deposited with the Trustee for that
purpose; and Certificates of Provision for Payment have been recorded in
the offices of the respective Registers of Deeds of certain counties in
the State of Michigan, with respect to all bonds of Series A, B, C, D, E,
F, G, H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1
and 2, IIP No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART IV.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
</TABLE>
<PAGE> 27
25
<TABLE>
<S> <C>
PART V.
MISCELLANEOUS.
EXECUTION IN This Supplemental Indenture may be simultaneously executed in any
COUNTERPARTS. number of counterparts, each of which when so executed shall be deemed to
be an original; but such counterparts shall together constitute but one
and the same instrument.
TESTIMONIUM. IN WITNESS WHEREOF, The Detroit Edison Company and Bankers Trust
Company have caused these presents to be signed in their respective
corporate names by their respective Chairmen of the Board, Presidents,
Vice Presidents, Assistant Vice Presidents or Treasurers and impressed
with their respective corporate seals, attested by their respective
Secretaries or Assistant Secretaries, all as of the day and year first
above written.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By /s/ L. L. LOOMANS
-----------------------------
L. L. Loomans
Vice President and Treasurer
EXECUTION. Attest:
/s/SUSAN M. BEALE
----------------------------
Susan M. Beale
Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
/s/ PEARL KOTTER
----------------------------
Pearl Kotter
/s/ BETTY M. HANSEN
----------------------------
Betty M. Hansen
(Corporate Seal)
BANKERS TRUST COMPANY,
By /s/ BARBARA A. JOINER
------------------------------
Barbara A. Joiner
Vice President
Attest:
/s/ SANDRA SHIRLEY
----------------------------
Sandra Shirley
Assistant Secretary
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
/s/ ERIC M. HAWNER
----------------------------
Eric M. Hawner
/s/ Y. PATRICIA BLUE
----------------------------
Y. Patricia Blue
</TABLE>
<PAGE> 28
26
<TABLE>
<S> <C>
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
ACKNOWLEDGMENT On this 13th day of December, 1989, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of Wayne, in the State of Michigan,
BY COMPANY. personally appeared L. L. Loomans, to me personally known, who, being by
me duly sworn, did say that he does business at 2000 Second Avenue,
Detroit, Michigan 48226 and is the Vice President and Treasurer of THE
DETROIT EDISON COMPANY, one of the corporations described in and which
executed the foregoing instrument; that he knows the corporate seal of the
said corporation and that the seal affixed to said instrument is the
corporate seal of said corporation; and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of
Directors and that he subscribed his name thereto by like authority; and
said L. L. Loomans, acknowledged said instrument to be the free act and
deed of said corporation.
/s/ JANET A. SCULLEN
---------------------------------
(Notarial Seal) Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires March 30, 1993
STATE OF NEW YORK
COUNTY OF NEW YORK SS.:
ACKNOWLEDGMENT On this 13th day of December, 1989, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of New York, in the State of New York,
BY TRUSTEE. personally appeared Barbara A. Joiner, to me personally known, who, being
by me duly sworn, did say that she does business at Four Albany Street,
New York, New York 10015, and is Vice President of BANKERS TRUST COMPANY,
one of the corporations described in and which executed the foregoing
instrument; that she knows the corporate seal of the said corporation and
that the seal affixed to said instrument is the corporate seal of said
corporation; and that said instrument was signed and sealed in behalf of
said corporation by authority of its Board of Directors and that she
subscribed her name thereto by like authority; and said Barbara A. Joiner
acknowledged said instrument to be the free act and deed of said
corporation.
(Notarial Seal)
/s/ DESIREE MARSHALL
--------------------------------
Desiree Marshall
Notary Public, State of New York
No. 24-4885294
Qualified in Kings County
Certificate filed in New York County
Commission Expires February 17, 1991
</TABLE>
<PAGE> 29
27
<TABLE>
<S> <C>
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
AFFIDAVIT AS TO L. L. Loomans, being duly sworn, says: that he is the Vice President and
CONSIDERATION Treasurer of THE DETROIT EDISON COMPANY, the Mortgagor named in the
AND GOOD FAITH. foregoing instrument, and that he has knowledge of the facts in regard to
the making of said instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and adequate, and that
the same was given in good faith for the purposes in such instrument set
forth.
/s/ L. L. LOOMANS
----------------------------
L. L. Loomans
Sworn to before me this 13th day of
December, 1989
/s/ JANET A. SCULLEN
------------------------------------
Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires March 30, 1993
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq., 2000 Second Avenue,
Detroit, Michigan 48226
</TABLE>
<PAGE> 1
EXHIBIT 4-173
CONFORMED COPY
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
INDENTURE
Dated as of February 15, 1990
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES A AND 1990 SERIES D, DUE MARCH 31, 2020,
(B) GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES B AND 1990 SERIES E, DUE MARCH 31, 2016,
(C) 1990 SERIES C AND 1990 SERIES F, DUE MARCH 31, 2014
AND
(D) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 5
Bonds to be 1990 Series A/1990 Series D, 1990 Series B/1990 Series
E, and 1990 Series C/1990 Series F.............................. 5
Further assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 6
PART I.
CREATION OF TWO HUNDRED EIGHTY-FIRST
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES A
Sec. 1. Terms of Bond of 1990 Series A............................... 7
Sec. 2. Redemption of 1990 Series A Bond............................. 8
Sec. 3. Exchange..................................................... 9
Sec. 4. Consent...................................................... 9
Sec. 5. Form of 1990 Series A Bond................................... 9
Form of Trustee's Certificate................................ 13
PART II.
CREATION OF TWO HUNDRED EIGHTY-SECOND
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES D
Sec. 1. Terms of Bonds of 1990 Series D.............................. 14
Sec. 2. Redemption of Bonds of 1990 Series D......................... 15
Exchange and transfer........................................ 17
Sec. 3. Consent...................................................... 17
Sec. 4. Form of Bonds of 1990 Series D............................... 18
Form of Trustee's Certificate................................ 21
PART III.
CREATION OF TWO HUNDRED EIGHTY-THIRD
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES B
Sec. 1. Terms of Bond of 1990 Series B............................... 22
Sec. 2. Redemption of 1990 Series B Bond............................. 23
Sec. 3. Exchange..................................................... 24
Sec. 4. Consent...................................................... 24
Sec. 5. Form of 1990 Series B Bond................................... 25
Form of Trustee's Certificate................................ 30
</TABLE>
<PAGE> 3
ii
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PART IV.
CREATION OF TWO HUNDRED EIGHTY-FOURTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES E
Sec. 1. Terms of Bonds of 1990 Series E.............................. 31
Sec. 2. Redemption of Bonds of 1990 Series E......................... 32
Exchange and transfer........................................ 34
Sec. 3. Consent...................................................... 34
Sec. 4. Form of Bonds of 1990 Series E............................... 35
Form of Trustee's Certificate................................ 38
PART V.
CREATION OF TWO HUNDRED EIGHTY-FIFTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES C
Sec. 1. Terms of Bond of 1990 Series C............................... 39
Sec. 2. Redemption of 1990 Series C Bond............................. 40
Sec. 3. Exchange..................................................... 41
Sec. 4. Consent...................................................... 41
Sec. 5. Form of 1990 Series C Bond................................... 42
Form of Trustee's Certificate................................ 47
PART VI.
CREATION OF TWO HUNDRED EIGHTY-SIXTH
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES F
Sec. 1. Terms of Bonds of 1990 Series F.............................. 48
Sec. 2. Redemption of Bonds of 1990 Series F......................... 49
Exchange and transfer........................................ 51
Sec. 3. Consent...................................................... 51
Sec. 4. Form of Bonds of 1990 Series F............................... 52
Form of Trustee's Certificate................................ 55
PART VII.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 56
Recording and filing of Supplemental Indentures...................... 56
Recording of Certificates of Provision for Payment................... 60
PART VIII.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 60
PART IX.
MISCELLANEOUS
Execution in Counterparts............................................ 61
Testimonium.......................................................... 61
Execution............................................................ 61
Acknowledgements..................................................... 62
Affidavit as to consideration and good faith......................... 63
</TABLE>
------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 4
1
<TABLE>
<S> <C>
PARTIES. SUPPLEMENTAL INDENTURE, dated as of the fifteenth day of February, in the
year one thousand nine hundred and ninety, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989, July 15, 1989 and December 1, 1989 supplemental to the Original
Indenture, have heretofore been entered into between the Company and the
Trustee (the Original Indenture and all indentures supplemental thereto
together being hereinafter sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Five billion forty-four million
ISSUED. four hundred eighty-one thousand dollars ($5,044,481,000) have heretofore
been issued under the Indenture as follows, viz:
</TABLE>
<TABLE>
<S> <C> <C>
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
</TABLE>
<PAGE> 5
2
<TABLE>
<S> <C> <C>
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series BB -- Principal Amount $50,000,000,
(20) Bonds of Series CC -- Principal Amount $50,000,000,
(21-28) Bonds of Series DDP Nos. 1-8 -- Principal Amount $6,400,000,
(29-39) Bonds of Series FFR Nos. 1-11 -- Principal Amount $6,500,000,
(40-53) Bonds of Series GGP Nos. 1-6 and
8-15 -- Principal Amount $7,960,000,
(54-65) Bonds of Series IIP Nos. 1-6 and
8-13 -- Principal Amount $450,000,
(66-71) Bonds of Series JJP Nos. 1-6 -- Principal Amount $690,000,
(72-77) Bonds of Series KKP Nos. 1-6 -- Principal Amount $1,590,000,
(78-89) Bonds of Series LLP Nos. 1-6 and
8-13 -- Principal Amount $4,760,000,
(90-101) Bonds of Series NNP Nos. 1-6 and
8-13 -- Principal Amount $7,950,000,
(102-109) Bonds of Series OOP Nos. 1-8 -- Principal Amount $2,680,000,
(110-121) Bonds of Series QQP Nos. 1-7 and
10-14 -- Principal Amount $7,075,000,
(122-127) Bonds of Series TTP Nos. 1-6 -- Principal Amount $330,000,
(128) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(129-137) Bonds of 1980 Series CP Nos. 1-5
and 13-16 -- Principal Amount $3,250,000,
(138-142) Bonds of 1980 Series DP Nos. 1-5 -- Principal Amount $925,000,
(143-146) Bonds of 1981 Series AP Nos. 1-4 -- Principal Amount $3,200,000,
all of which have either been retired and cancelled, or no longer represent
obligations of the Company, having been called for redemption and funds necessary
to effect the payment, redemption and retirement thereof having been deposited
with the Trustee as a special trust fund to be applied for such purpose;
(147) Bonds of Series R in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(148) Bonds of Series S in the principal amount of One hundred fifty million
dollars ($150,000,000), all of which are outstanding at the date hereof;
(149) Bonds of Series T in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(150) Bonds of Series U in the principal amount of Seventy-five million dollars
($75,000,000), all of which are outstanding at the date hereof;
(151) Bonds of Series V in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(152) Bonds of Series X in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(153) Bonds of Series Y in the principal amount of Sixty million dollars
($60,000,000), all of which are outstanding at the date hereof;
(154) Bonds of Series Z in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(155) Bonds of Series AA in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(156) Bonds of Series DDP No. 9 in the principal amount of Seven million nine
hundred five thousand dollars ($7,905,000), of which One million six hundred
thousand dollars ($1,600,000) principal amount have heretofore been retired and
Six million three hundred five thousand dollars ($6,305,000) principal amount
are outstanding at the date hereof;
</TABLE>
<PAGE> 6
3
<TABLE>
<S> <C>
(157) Bonds of Series EE in the principal amount of Fifty million dollars
($50,000,000), of which Thirty million dollars ($30,000,000) principal amount
have heretofore been retired and Twenty million dollars ($20,000,000) principal
amount are outstanding at the date hereof;
(158-160) Bonds of Series FFR Nos. 12-14 in the principal amount of Thirty-nine
million one hundred thousand dollars ($39,100,000), all of which are outstanding
at the date hereof;
(161-168) Bonds of Series GGP Nos. 7 and 16-22 in the principal amount of Thirty-four
million three hundred forty thousand dollars ($34,340,000), of which Two million four
hundred thousand dollars ($2,400,000) principal amount have heretofore been retired
and Thirty-one million nine hundred forty thousand dollars ($31,940,000) principal
amount are outstanding at the date hereof;
(169) Bonds of Series HH in the principal amount of Fifty million dollars ($50,000,000),
all of which are outstanding at the date hereof;
(170-171) Bonds of Series MMP and MMP No. 2 in the principal amount of Five million
four hundred thirty thousand dollars ($5,430,000), of which One million two hundred
thirty-five thousand dollars ($1,235,000) principal amount have heretofore been
retired and Four million one hundred ninety-five thousand dollars ($4,195,000)
principal amount are outstanding at the date hereof;
(172-181) Bonds of Series IIP Nos. 7 and 14-22 in the principal amount of Three
million three hundred thousand dollars ($3,300,000), of which One hundred ten
thousand dollars ($110,000) principal amount have heretofore been retired and
Three million one hundred ninety thousand dollars ($3,190,000) principal amount
are outstanding at the date hereof;
(182-183) Bonds of Series JJP Nos. 7-8 in the principal amount of Six million one
hundred sixty thousand dollars ($6,160,000), of which Three hundred fifty thousand
dollars ($350,000) principal amount have heretofore been retired and Five million
eight hundred ten thousand dollars ($5,810,000) are outstanding at the date hereof;
(184-188) Bonds of Series KKP Nos. 7-11 in the principal amount of Seventy-three
million forty-five thousand dollars ($73,045,000), of which Seven hundred ten
thousand dollars ($710,000) principal amount have heretofore been retired and
Seventy-two million three hundred thirty-five thousand dollars ($72,335,000) are
outstanding at the date hereof;
(189-191) Bonds of Series LLP Nos. 7 and 14-15 in the principal amount of Four million
ninety thousand dollars ($4,090,000), of which Two million five hundred thirty-five
thousand dollars ($2,535,000) principal amount have heretofore been retired and One
million five hundred fifty-five thousand dollars ($1,555,000) principal amount are
outstanding at the date hereof;
(192-200) Bonds of Series NNP Nos. 7 and 14-21 in the principal amount of Forty million
($40,000,000), of which One million six hundred fifty thousand dollars ($1,650,000)
principal amount have heretofore been retired and Thirty-eight million three hundred
fifty thousand dollars ($38,350,000) principal amount are outstanding at the date hereof;
(201-210) Bonds of Series OOP Nos. 9-18 in the principal amount of Sixteen million two
hundred thousand dollars ($16,200,000), of which Two hundred forty thousand dollars
($240,000) principal amount have heretofore been retired and Fifteen million nine
hundred sixty thousand dollars ($15,960,000) are outstanding at the date hereof;
(211) Bonds of Series PP in the principal amount of Seventy million dollars
($70,000,000), all of which are outstanding at the date hereof;
(212-218) Bonds of Series QQP Nos. 8-9 and 15-19 in the principal amount of Six million
five hundred seventy-five thousand dollars ($6,575,000), all of which are outstanding at
the date hereof;
</TABLE>
<PAGE> 7
4
<TABLE>
<S> <C>
(219) Bonds of Series RR in the principal amount of Seventy million dollars
($70,000,000), all of which are outstanding at the date hereof;
(220) Bonds of Series SS in the principal amount of One hundred fifty million
dollars ($150,000,000), of which Fifty million dollars ($50,000,000) principal
amount have heretofore been retired and One hundred million dollars ($100,000,000)
principal amount are outstanding at the date hereof;
(221-229) Bonds of Series TTP Nos. 7-15 in the principal amount of Three million
four hundred seventy thousand dollars ($3,470,000), all of which are outstanding
at the date hereof;
(230) Bonds of Series UU in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(231) Bonds of 1980 Series B in the principal amount of One hundred million dollars
($100,000,000), of which Fifty-three million two hundred thousand dollars ($53,200,000)
principal amount have heretofore been retired and Forty-six million eight hundred
thousand dollars ($46,800,000) principal amount are outstanding at the date
hereof;
(232-247) Bonds of 1980 Series CP Nos. 6-12 and 17-25 in the principal amount of
Thirty-one million seven hundred fifty thousand dollars ($31,750,000), all of which are
outstanding at the date hereof;
(248-253) Bonds of 1980 Series DP Nos. 6-11 in the principal amount of Nine million eight
hundred twenty-five thousand dollars ($9,825,000), all of which are outstanding at the
date hereof;
(254-265) Bonds of 1981 Series AP Nos. 5-16 in the principal amount of One hundred
twenty million eight hundred thousand dollars ($120,800,000), all of which are
outstanding at the date hereof;
(266) Bonds of 1984 Series AP in the principal amount of Two million four hundred
thousand dollars ($2,400,000), all of which are outstanding at the date hereof;
(267) Bonds of 1984 Series BP in the principal amount of Seven million seven hundred
fifty thousand dollars ($7,750,000), all of which are outstanding at the date hereof;
(268) Bonds of 1985 Series A in the principal amount of Thirty-five million dollars
($35,000,000), all of which are outstanding at the date hereof;
(269) Bonds of 1985 Series B in the principal amount of Fifty million dollars ($50,000,000),
all of which are outstanding at the date hereof;
(270) Bonds of 1986 Series A in the principal amount of Two hundred million dollars
($200,000,000), all of which are outstanding at the date hereof;
(271) Bonds of 1986 Series B in the principal amount of One hundred million dollars
($100,000,000), all of which are outstanding at the date hereof;
(272) Bonds of 1986 Series C in the principal amount of Two hundred million dollars
($200,000,000), all of which are outstanding at the date hereof;
(273) Bonds of 1987 Series A in the principal amount of Three hundred million dollars
($300,000,000), all of which are outstanding at the date hereof;
(274) Bonds of 1987 Series B in the principal amount of One hundred seventy-five
million dollars ($175,000,000), all of which are outstanding at the date hereof;
(275) Bonds of 1987 Series C in the principal amount of Two hundred twenty-five
million dollars ($225,000,000), all of which are outstanding at the date hereof;
(276) Bonds of 1987 Series D in the principal amount of Two hundred fifty million
dollars ($250,000,000), all of which are outstanding at the date hereof;
(277) Bonds of 1987 Series E in the principal amount of One hundred fifty million
dollars ($150,000,000), all of which are outstanding at the date hereof;
(278) Bonds of 1987 Series F in the principal amount of Two hundred million dollars
($200,000,000), all of which are outstanding at the date hereof;
</TABLE>
<PAGE> 8
5
<TABLE>
<S> <C>
(279) Bonds of 1989 Series A in the principal amount of Three hundred million
dollars ($300,000,000), all of which are outstanding at the date hereof; and
(280) Bonds of 1989 Series BP in the principal amount of Sixty-six million five
hundred sixty-five thousand dollars ($66,565,000), all of which are outstanding
at the date hereof;
and, accordingly, of the bonds so issued, Three billion nine hundred sixty-nine
million six hundred seventy-five thousand dollars ($3,969,675,000) principal
amount are outstanding at the date hereof; and
REASON FOR WHEREAS, the Company is purchasing the undivided ownership interest of Wolverine
CREATION OF Power Supply Cooperative, Inc. in Fermi 2 and related nuclear fuel, materials and
NEW SERIES. supplies and for this purpose desires to issue new series of bonds as final payment
of the purchase price; such bonds to be issued under the Indenture in the aggregate
principal amount of Five hundred thirty-seven million and fifty-six thousand dollars
($537,056,000) to be authenticated and delivered pursuant to Section 4 of Article III
of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental Indenture to create such new series
1990 SERIES A/ of bonds, to be designated "General and Refunding Mortgage Bond, 1990 Series A",
1990 SERIES D, "General and Refunding Mortgage Bond, 1990 Series B", "General and Refunding Mortgage
1990 SERIES B/ Bond, 1990 Series C", "General and Refunding Mortgage Bonds, 1990 Series D", "General
1990 SERIES E AND and Refunding Mortgage Bonds, 1990 Series E" and "General and Refunding Mortgage Bonds,
1990 SERIES C/ 1990 Series F"; and to provide for the exchange of: (1) General and Refunding Mortgage
1990 SERIES F. Bonds, 1990 Series A for General and Refunding Mortgage Bonds, 1990 Series D; (2) General
and Refunding Mortgage Bonds, 1990 Series B for General and Refunding Mortgage Bonds, 1990
Series E; and (3) General and Refunding Mortgage Bonds, 1990 Series C for General and
Refunding Mortgage Bonds, 1990 Series F; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the property subject to
ASSURANCE. the lien thereof all of the estates and properties, real, personal and mixed, rights,
privileges and franchises of every nature and kind and wheresoever situate, then or
thereafter owned or possessed by or belonging to the Company or to which it was then or
at any time thereafter might be entitled in law or in equity (saving and excepting,
however, the property therein specifically excepted or released from the lien thereof),
and the Company therein convenanted that it would, upon reasonable request, execute and
deliver such further instruments as may be necessary or proper for the better assuring
and confirming unto the Trustee all or any part of the trust estate, whether then or
thereafter owned or acquired by the Company (saving and excepting, however, property
specifically excepted or released from the lien thereof); and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers and authority conferred upon and
OF SUPPLEMENTAL reserved to it under and by virtue of the provisions of the Indenture, and pursuant to
INDENTURE. resolutions of its Board of Directors has duly resolved and determined to make, execute
and deliver to the Trustee a supplemental indenture in the form hereof for the purposes
herein provided; and
WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture
a valid and legally binding instrument in accordance with its terms have been done,
performed and fulfilled, and the execution and delivery hereof have been in all respects
duly authorized;
CONSIDERATION FOR NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison Company, in
SUPPLEMENTAL consideration of the premises and of the covenants contained in the Indenture and
INDENTURE. of the sum of One Dollar ($1.00) and other good and valuable consideration to it duly
paid by the Trustee at or before the ensealing and delivery of these presents, the
reciept whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee
and its successors in the trusts under the Original Indenture and in said indentures
supplemental thereto as follows:
</TABLE>
<PAGE> 9
6
PART I.
CREATION OF TWO HUNDRED EIGHTY-FIRST
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES A
<TABLE>
<S> <C>
TERMS OF BOND SECTION 1. The Company hereby creates the Two hundred eighty-first
OF 1990 SERIES A. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bond, 1990 Series A
(elsewhere herein referred to as the "1990 Series A Bond"). The aggregate
principal amount of the 1990 Series A Bond shall be limited to One hundred
ninety-four million six hundred forty-nine thousand dollars
($194,649,000), except as provided in Section 13 of Article II of the
Original Indenture with respect to exchanges and replacement of bonds. The
1990 Series A Bond shall be a multiple of $1,000.
The 1990 Series A Bond shall be issued as one registered bond without
coupons in the amount of $$194,649,000, which shall bear interest, payable
semi-annually on March 31 and September 30 of each year (commencing March
31, 1990) at the rate of 7.904%, and principal payments shall be made
thereon annually, payable on March 31 of each year (commencing March 31,
1990) as set forth below, until the final payment of principal shall be
made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- ------------
<S> <C> <C> <C>
March 31, 1990............................... $6,279,000 $188,370,000
March 31, 1991............................... 6,279,000 182,091,000
March 31, 1992............................... 6,279,000 175,812,000
March 31, 1993............................... 6,279,000 169,533,000
March 31, 1994............................... 6,279,000 163,254,000
March 31, 1995............................... 6,279,000 156,975,000
March 31, 1996............................... 6,279,000 150,696,000
March 31, 1997............................... 6,279,000 144,417,000
March 31, 1998............................... 6,279,000 138,138,000
March 31, 1999............................... 6,279,000 131,859,000
March 31, 2000............................... 6,279,000 125,580,000
March 31, 2001............................... 6,279,000 119,301,000
March 31, 2002............................... 6,279,000 113,022,000
March 31, 2003............................... 6,279,000 106,743,000
March 31, 2004............................... 6,279,000 100,464,000
March 31, 2005............................... 6,279,000 94,185,000
March 31, 2006............................... 6,279,000 87,906,000
March 31, 2007............................... 6,279,000 81,627,000
March 31, 2008............................... 6,279,000 75,348,000
March 31, 2009............................... 6,279,000 69,069,000
March 31, 2010............................... 6,279,000 62,790,000
March 31, 2011............................... 6,279,000 56,511,000
March 31, 2012............................... 6,279,000 50,232,000
March 31, 2013............................... 6,279,000 43,953,000
March 31, 2014............................... 6,279,000 37,674,000
March 31, 2015............................... 6,279,000 31,395,000
March 31, 2016............................... 6,279,000 25,116,000
March 31, 2017............................... 6,279,000 18,837,000
March 31, 2018............................... 6,279,000 12,558,000
March 31, 2019............................... 6,279,000 6,279,000
March 31, 2020............................... 6,279,000 0
</TABLE>
<PAGE> 10
7
<TABLE>
<S> <C>
Payments of principal, premium, if any, and interest on the 1990 Series
A Bond shall be made by bank wire transfer in immediately available funds
in lawful money of the United States of America to the bank account of the
registered holder of such bond which such registered holder shall
designate in writing to Bankers Trust Company, Trustee, not less than
fifteen (15) days prior to the date such payment shall become due and
payable.
When a semi-annual interest payment date falls on a Saturday, Sunday or
a day on which the Federal Reserve Bank of New York or the Trustee is not
open for business, all payments shall be payable on the first day
thereafter on which the Federal Reserve Bank of New York and the Trustee
are open for business.
The 1990 Series A Bond shall be dated January 3, 1990 and interest shall
be payable from January 3, 1990.
The 1990 Series A Bond in definitive form shall be, at the election of
the Company, fully engraved or shall be lithographed or printed.
The 1990 Series A Bond shall not be subject to or entitled to any
sinking fund.
REDEMPTION OF SECTION 2. The 1990 Series A Bond shall be redeemable prior to stated
1990 SERIES A BOND. maturity, at the election of the Company on any interest payment date, at
redemption prices calculated in accordance with the formula set forth
below on giving notice of such redemption by first class mail, postage
prepaid, by or on behalf of the Company not more than ninety (90) days nor
less than thirty (30) days prior to the date fixed for redemption to the
registered holder of the 1990 Series A Bond.
Any such redemption payment shall be equal to one hundred percent (100%)
of the principal so redeemed, plus a prepayment premium, if any, in an
amount equal to one hundred percent (100%) of the amount of interest for
one year on the unpaid principal balance proposed to be redeemed,
multiplied by the ratio which the number of semi-annual payment dates
between the proposed redemption date and the final maturity date of the
series bears to the number of semi-annual payment dates between December
31, 1994 and the final maturity date, plus in each case accrued interest
to the date fixed for redemption. Any partial redemption shall, as the
principal portion of such redemption, be no less than $100,000. No
redemption pursuant to this paragraph shall be credited to, or relieve the
Company to any extent from its obligation to make the principal payments
provided for in Section 1 hereof.
On or before the first day of February or August in each year,
commencing September 1 1990, the Company will deliver to the Trustee a
treasurer's certificate, which shall be irrevocable, specifying the amount
of bonds to be optionally redeemed and the corresponding premium, if any,
and accrued interest on such bonds on the next ensuing March 31 or
September 30, or the first business day thereafter, respectively. The
Trustee shall, upon the receipt of the treasurer's certificate, cause
notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner herein provided for. Such notice
having been duly given, the redemption of bonds of 1990 Series A shall be
made upon the terms and in the manner and with the effect hereinabove
provided for with respect to redemptions. A treasurer's certificate shall
not be required if no bonds of a series are to be redeemed under this
paragraph.
EXCHANGE. SECTION 3. At the option of the holder, upon written request to both the
Company and the Trustee made at least forty-five (45) days prior to an
interest payment date and subject to the terms of the Indenture and
compliance with applicable securities laws, the 1990 Series A Bond shall
be exchangeable, in whole but not in part, for bonds of 1990 Series D (as
hereinafter described) in an aggregate principal amount equal to the
aggregate amount of unpaid principal which shall remain outstanding on the
1990 Series A Bond as of the date of such exchange. Such exchange shall
occur only on an interest payment date for the 1990 Series A Bond at the
office of the Trustee in the Borough of Manhattan, The City of New York,
The State of New York.
</TABLE>
<PAGE> 11
8
<TABLE>
<S> <C>
THE 1990 SERIES A BOND SHALL BEAR A LEGEND STATING THAT SUCH BOND HAS
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND THAT AS A CONSEQUENCE SUCH BOND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION,
UNLESS REGISTERED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION APPLICABLE TO SUCH OFFER, SALE OR OTHER TRANSFER, AND MAY
BEAR SUCH OTHER LEGENDS AS MAY BE NECESSARY TO COMPLY WITH ANY LAW OR WITH
ANY RULES OR REGULATIONS MADE PURSUANT THERETO.
CONSENT. SECTION 4. THE HOLDER OF THE 1990 SERIES A BOND, BY ITS ACCEPTANCE OF
AND HOLDING THEREOF, CONSENTS AND AGREES THAT BONDS OF ANY SERIES MAY BE
ISSUED WHICH MATURE ON A DATE OR DATES LATER THAN OCTOBER 1, 2024 AND ALSO
CONSENTS TO THE DELETION FROM THE FIRST PARAGRAPH OF SECTION 5 OF ARTICLE
II OF THE INDENTURE OF THE PHRASE "BUT IN NO EVENT LATER THAN OCTOBER 1,
2024." SUCH HOLDER FURTHER AGREES THAT (A) SUCH CONSENT SHALL, FOR ALL
PURPOSES OF ARTICLE XV OF THE INDENTURE AND WITHOUT FURTHER ACTION ON THE
PART OF SUCH HOLDER, BE DEEMED THE AFFIRMATIVE VOTE OF SUCH HOLDER AT ANY
MEETING CALLED PURSUANT TO SAID ARTICLE XV FOR THE PURPOSE OF APPROVING
SUCH DELETION, AND (B) SUCH DELETION SHALL BECOME EFFECTIVE AT SUCH TIME
AS NOT LESS THAN EIGHTY-FIVE PER CENT (85%) IN PRINCIPAL AMOUNT OF BONDS
OUTSTANDING UNDER THE INDENTURE SHALL HAVE CONSENTED THERETO SUBSTANTIALLY
IN THE MANNER SET FORTH IN THIS SECTION 4, OR IN WRITING, OR BY
AFFIRMATIVE VOTE CAST AT A MEETING CALLED PURSUANT TO SAID ARTICLE XV, OR
BY ANY COMBINATION THEREOF.
FORM OF SECTION 5. THE 1990 SERIES A BOND AND THE FORM OF TRUSTEE'S CERTIFICATE
1990 SERIES A BOND. TO BE ENDORSED ON SUCH BOND SHALL BE SUBSTANTIALLY IN THE FOLLOWING FORMS,
RESPECTIVELY:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series A, 7.904% due March 31, 2020
(Payable in annual installments, commencing March 31, 1990)
$194,649,000 No.
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to UNITED STATES OF AMERICA, at its office or agency in the Borough
of Manhattan, the City and State of New York, in lawful money of the
United States of America, the principal sum of $194,649,000, together with
interest at the rate specified in the title hereof on the amount of said
principal sum remaining unpaid from time to time from January 3, 1990, and
after the first interest payment hereon from the most recent date to which
interest has been paid hereon, until the Company's obligation with respect
to payment of said principal shall have been discharged, all as provided,
to the extent and in the manner specified in the Indenture hereinafter
mentioned on the reverse hereof and in the supplemental indenture pursuant
to which this bond has been issued. Interest shall be due and payable in
61 consecutive semi-annual payments on March 31 and September 30 in each
year, commencing on March 31, 1990, and principal shall be due and payable
in 31 consecutive annual payments of $6,279,000 on March 31, in each year,
commencing on March 31, 1990, as more fully set forth on the reverse
hereof.
PAYMENTS OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST ON THIS BOND ARE TO
BE MADE BY BANK WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO THE HOLDER
HEREOF ALL AS PROVIDED, TO THE EXTENT AND IN THE MANNER SPECIFIED IN THE
INDENTURE HEREINAFTER MENTIONED ON THE REVERSE HEREOF AND IN THE
SUPPLEMENTAL INDENTURE PURSUANT TO WHICH THIS BOND HAS BEEN ISSUED.
WHEN ANY PAYMENT DATE FALLS ON A SATURDAY, SUNDAY OR A DAY ON WHICH THE
FEDERAL RESERVE BANK OF NEW YORK OR THE TRUSTEE IS NOT OPEN FOR BUSINESS,
ALL PAYMENTS SHALL BE PAYABLE ON THE FIRST DAY THEREAFTER ON WHICH THE
FEDERAL RESERVE BANK OF NEW YORK AND THE TRUSTEE ARE OPEN FOR BUSINESS.
</TABLE>
<PAGE> 12
9
<TABLE>
<S> <C>
AT THE WRITTEN REQUEST OF THE REGISTERED HOLDER HEREOF MADE TO THE
COMPANY AND THE TRUSTEE AT LEAST FORTY-FIVE (45) DAYS IN ADVANCE OF AN
INTEREST PAYMENT DATE, THIS BOND SHALL BE EXCHANGEABLE, IN WHOLE BUT NOT
IN PART, ON ANY INTEREST PAYMENT DATE IN AN AGGREGATE PRINCIPAL AMOUNT
EQUAL TO THE AMOUNT OF UNPAID PRINCIPAL WHICH SHALL REMAIN OUTSTANDING ON
THIS BOND AS OF THE DATE OF SUCH EXCHANGE (AFTER GIVING EFFECT TO THE
PAYMENT OF PRINCIPAL HEREON ON THE DATE OF SUCH EXCHANGE), ALL AS
PROVIDED, TO THE EXTENT AND IN THE MANNER SPECIFIED IN THE INDENTURE AND
THE SUPPLEMENTAL INDENTURE HEREINAFTER MENTIONED ON THE REVERSE HEREOF.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET
FORTH ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH SET FORTH AT THIS PLACE.
THIS BOND SHALL NOT BE VALID OR BECOME OBLIGATORY FOR ANY PURPOSE UNTIL
BANKERS TRUST COMPANY, THE TRUSTEE UNDER THE INDENTURE HEREINAFTER
MENTIONED ON THE REVERSE HEREOF, OR ITS SUCCESSOR THEREUNDER, SHALL HAVE
SIGNED THE FORM OF CERTIFICATE ENDORSED HEREON.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed on its behalf by its Chairman of the Board and
its President or a Vice President, with their manual or facsimile
signatures, and its corporate seal, or a facsimile thereof, to be
impressed or imprinted hereon and the same to be attested by its Secretary
or an Assistant Secretary by manual or facsimile signature.
THE DETROIT EDISON COMPANY
Dated: January 3, 1990 By
------------------------
Chairman of the Board
------------------------
President
Attest:
-----------------------------------
Secretary
</TABLE>
<PAGE> 13
10
<TABLE>
<CAPTION>
[FORM OF REVERSE OF BOND]
<S> <C>
This bond is the only bond of an authorized issue of bonds of the
Company, unlimited as to amount except as provided in the Indenture
hereinafter mentioned or any indentures supplemental thereto, and is one
of a series of said bonds known as General and Refunding Mortgage Bonds,
1990 Series A (elsewhere herein referred to as the "1990 Series A Bond"),
limited to an aggregate principal amount of $194,649,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond is
issued and to be issued under, and is equally and ratably secured (except
insofar as any sinking, amortization, improvement or analogous fund,
established in accordance with the provisions of the Indenture hereinafter
mentioned, may afford additional security for the bonds of any particular
series and except as provided in Section 3 of Article VI of said
Indenture) by an Indenture, dated as of October 1, 1924, duly executed by
the Company to Bankers Trust Company, a corporation of the State of New
York, as Trustee, to which Indenture and all indentures supplemental
thereto (including the Supplemental Indenture dated as of February 15,
1990) reference is hereby made for a description of the properties and
franchises mortgaged and conveyed, the nature and extent of the security,
the terms and conditions upon which the bonds are issued and under which
additional bonds may be issued, and the rights of the holders of the bonds
and of the Trustee in respect of such security (which Indenture and all
indentures supplemental thereto, including the Supplemental Indenture
dated as of February 15, 1990, are hereinafter collectively called the
"Indenture"). As provided in the Indenture, said bonds may be for various
principal sums and are issuable in series, which may mature at different
times, may bear interest at different rates and may otherwise vary as in
said Indenture provided. With the consent of the Company and to the extent
permitted by and as provided in the Indenture, the rights and obligations
of the Company and of the holders of the bonds and the terms and
provisions of the Indenture, or of any indenture supplemental thereto, may
be modified or altered in certain respects by affirmative vote of at least
eighty-five percent (85%) in principal amount of the bonds then
outstanding, and, if the rights of one or more, but less than all, series
of bonds then outstanding are to be affected by the action proposed to be
taken, then also by affirmative vote of at least eighty-five percent (85%)
in principal amount of the series of bonds so to be affected (excluding in
every instance bonds disqualified from voting by reason of the Company's
interest therein as specified in the Indenture); provided, however, that,
without the consent of the holder hereof, no such modification or
alteration shall, among other things, affect the terms of payment of the
principal of, or the interest on, this bond, which in those respects is
unconditional.
The holder of the 1990 Series A Bond, by its acceptance of and holding
thereof, consents and agrees that bonds of any series may be issued which
mature on a date or dates later than October 1, 2024 and also consents to
the deletion from the first paragraph of Section 5 of Article II of the
Indenture of the phrase "but in no event later than October 1, 2024." Such
holder further agrees that (a) such consent shall, for all purposes of
Article XV of the Indenture and without further action on the part of such
holder, be deemed the affirmative vote of such holder at any meeting
called pursuant to said Article XV for the purpose of approving such
deletion, and (b) such deletion shall become effective at such time as not
less than eighty-five percent (85%) in principal amount of bonds
outstanding under the Indenture shall have consented thereto substan-
tially in the manner set forth in Section 3 of Part I of the Supplemental
Indenture dated as of February 15, 1990, or in writing, or by affirmative
vote cast at a meeting called pursuant to said Article XV, or by any
combination thereof.
Principal payments shall be made hereon annually, payable on March 31 of
each year (commencing March 31, 1990) as set forth below, until the final
payment of principal shall be made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- ------------
<S> <C> <C> <C>
March 31, 1990............................... $6,279,000 $188,370,000
</TABLE>
<PAGE> 14
11
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- ------------
<S> <C> <C> <C>
March 31, 1991............................... 6,279,000 182,091,000
March 31, 1992............................... 6,279,000 175,812,000
March 31, 1993............................... 6,279,000 169,533,000
March 31, 1994............................... 6,279,000 163,254,000
March 31, 1995............................... 6,279,000 156,975,000
March 31, 1996............................... 6,279,000 150,696,000
March 31, 1997............................... 6,279,000 144,417,000
March 31, 1998............................... 6,279,000 138,138,000
March 31, 1999............................... 6,279,000 131,859,000
March 31, 2000............................... 6,279,000 125,580,000
March 31, 2001............................... 6,279,000 119,301,000
March 31, 2002............................... 6,279,000 113,022,000
March 31, 2003............................... 6,279,000 106,743,000
March 31, 2004............................... 6,279,000 100,464,000
March 31, 2005............................... 6,279,000 94,185,000
March 31, 2006............................... 6,279,000 87,906,000
March 31, 2007............................... 6,279,000 81,627,000
March 31, 2008............................... 6,279,000 75,348,000
March 31, 2009............................... 6,279,000 69,069,000
March 31, 2010............................... 6,279,000 62,790,000
March 31, 2011............................... 6,279,000 56,511,000
March 31, 2012............................... 6,279,000 50,232,000
March 31, 2013............................... 6,279,000 43,953,000
March 31, 2014............................... 6,279,000 37,674,000
March 31, 2015............................... 6,279,000 31,395,000
March 31, 2016............................... 6,279,000 25,116,000
March 31, 2017............................... 6,279,000 18,837,000
March 31, 2018............................... 6,279,000 12,558,000
March 31, 2019............................... 6,279,000 6,279,000
March 31, 2020............................... 6,279,000 0
</TABLE>
<TABLE>
<S> <C>
This bond shall be redeemable prior to stated maturity, at the election
of the Company on any interest payment date, at redemption prices
calculated in accordance with the formula set forth below on giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company not more than ninety (90) days nor less than thirty (30)
days prior to the date fixed for redemption to the registered holder of
the 1990 Series A Bond.
Any such redemption payment shall be equal to one hundred percent (100%)
of the principal so redeemed, plus a prepayment premium, if any, in an
amount equal to one hundred percent (100%) of the amount of interest for
one year on the unpaid principal balance proposed to be redeemed,
multiplied by the ratio which the number of semi-annual payment dates
between the proposed redemption date and the final maturity date of the
series bears to the number of semi-annual payment dates between December
31, 1994 and the final maturity date, plus in each case accrued interest
to the date fixed for redemption. Any partial redemption shall, as the
principal portion of such redemption, be no less than $100,000. No
redemption pursuant to this paragraph shall be credited to, or relieve the
Company to any extent from its obligation to make the principal payments
provided for above.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
</TABLE>
<PAGE> 15
12
<TABLE>
<S> <C>
No recourse shall be had for the payment of the principal of, or the
interest on, this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever, all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is the only bond of the series designated therein, described
TRUSTEE'S in the within- mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
---------------------------------------
Authorized Officer
</TABLE>
<PAGE> 16
13
<TABLE>
<S> <C>
PART II.
CREATION OF TWO HUNDRED EIGHTY-SECOND
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES D
TERMS OF BONDS SECTION 1. The Company hereby creates the Two hundred eighty-second
OF 1990 SERIES D. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, 1990 Series D"
(elsewhere herein referred to as the "bonds of 1990 Series D"). The
aggregate principal amount of bonds of 1990 Series D shall be limited to
the principal amount of 1990 Series A Bond being exchanged, except as
provided in Sections 7 and 13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds.
The bonds of 1990 Series D shall mature on March 31, 2020 and shall be
issued in exchange for, and in an aggregate principal amount equal to the
principal amount remaining outstanding on, the 1990 Series A Bond as of
the date of such exchange. The Bonds of Series D shall be issued as
registered bonds without coupons in denominations of $10,000 and any
multiple thereof, and shall bear interest, payable semi-annually on March
31 and September 30 of each year (commencing on the first March 31 or
September 30 following the date of such exchange), at the rate of seven
and 904/1000 per centum (7.904%) per annum until the principal shall have
become due and payable, and thereafter until the Company's obligation with
respect to the payment of said principal shall have been discharged as
provided in the Indenture. Except as otherwise specifically provided in
this Supplemental Indenture, the principal of and interest on the bonds of
1990 Series D shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York, The State of New York in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts. The interest on
bonds of 1990 Series D, whether in temporary or definitive form, shall be
payable without presentation of such bonds and (subject to the provisions
of this Section 1) only to or upon the written order of the registered
holders thereof.
Each bond of 1990 Series D shall be dated the date of its authentication
and interest shall be payable on the principal represented thereby from
the March 31 or September 30 next preceding the date thereof to which
interest has been paid on bonds of 1990 Series D, unless the bond is
authenticated on a date to which interest has been paid, in which case
interest shall be payable from the date of authentication.
The bonds of 1990 Series D in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denomination of bonds of 1990
Series D). Until bonds of 1990 Series D in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1990
Series D in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of 1990 Series D, if any, may be printed and
may be issued in authorized denominations in substantially the form of
definitive bonds of 1990 Series D, but without a recital of redemption
prices and with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
</TABLE>
<PAGE> 17
14
<TABLE>
<S> <C>
Interest on any bond of 1990 Series D which is payable on any interest
payment date and is punctually paid or duly provided for shall be paid to
the person in whose name that bond, or any previous bond to the extent
evidencing the same debt as that evidenced by that bond, is registered at
the close of business on the regular record date for such interest, which
regular record date shall be the fifteenth day of March or September as
the case may be (whether or not a business day) next preceding such
interest payment date. If the Company shall default in the payment of the
interest due on any interest payment date on the principal represented by
any bond of 1990 Series D, such defaulted interest shall forthwith cease
to be payable to the registered holder of that bond on the relevant
regular record date by virtue of his having been such holder, and such
defaulted interest may be paid to the registered holder of that bond (or
any bond or bonds of 1990 Series D issued upon transfer or exchange
thereof) on the date of payment of such defaulted interest or, at the
election of the Company, to the person in whose name that bond (or any
bond or bonds of 1990 Series D issued upon transfer or exchange thereof)
is registered on a subsequent record date established by notice given by
mail by or on behalf of the Company to the holders of bonds of 1990 Series
D not less than ten (10) days preceding such subsequent record date, which
subsequent record date shall be at least five (5) days prior to the
payment date of such defaulted interest.
REDEMPTION OF BONDS SECTION 2. The bonds of 1990 Series D shall be redeemable (i) on March
OF 1990 31 in each year, commencing March 31 in the first calendar year
SERIES D. subsequent to initial issuance, through the operation of the sinking fund
hereinafter described at 100% of the principal amount thereof, (ii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance, as a
whole, or in part, from time to time, at par plus in each case accrued
interest to the date fixed for redemption if such redemption does not
utilize, directly or indirectly, the proceeds of and is not in
anticipation of any refunding operation involving borrowing at an interest
cost to the Company, computed in accordance with generally accepted
financial practice, of less than 7.904% per annum, and (iii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance, as a
whole, or in part, from time to time, at the following redemption prices
(expressed as percentages of the principal amount thereof) plus in each
case (whether through operation of the sinking fund or otherwise) accrued
interest to the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
The bonds of 1990 Series D shall be redeemable as aforesaid as provided
herein and as specified in Article IV of the Indenture upon giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company at least thirty (30) days prior to the date fixed for
redemption to the registered holders of bonds of 1990 Series D so called
for redemption at their last respective addresses appearing on the
register thereof, but failure to mail such notice to the registered
holders of any bonds of 1990 Series D designated for redemption shall not
affect the validity of any such redemption of any other bonds of such
series. Interest shall cease to accrue on any bonds of 1990 Series D (or
any portion thereof) so called for redemption from and after the date
fixed for redemption if payment sufficient to redeem the bonds of 1990
Series D (or such protion) designated for redemption has been duly
provided for. Bonds of 1990 Series D redeemed in part only shall be in
amounts of $10,000 or any multiple thereof.
</TABLE>
<PAGE> 18
15
<TABLE>
<S> <C>
If the giving of the notice of redemption shall have been completed, or
if provision satisfactory to the Trustee for the giving of such notice
shall have been made, and if the Company shall have deposited with the
Trustee in trust funds (which shall become available for payment to the
holders of the bonds of 1990 Series D so to be redeemed) sufficient to
redeem bonds of 1990 Series D in whole or in part, on the date fixed for
redemption, then all obligations of the Company in respect of such bonds
(or portions thereof) so to be redeemed and interest due or to become due
thereon shall cease and be discharged and the holders of such bonds of
1990 Series D (or portions thereof) shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature on
their part under the Indenture or in respect of such bonds (or portions
thereof) and interest.
As and for the sinking fund for the retirement of the bonds of 1990
Series D the Company will, until all the bonds of 1990 Series D are paid
or payment thereof provided for, deposit with the Trustee prior to March
31 in each year, commencing March 31 of the first calendar year subsequent
to initial issuance, an amount in cash sufficient to redeem on such March
31 $6,280,000 principal amount of bonds of 1990 Series D.
On or before February 1 in each year, commencing February 1 of the first
calendar year subsequent to initial issuance the Company (i) may deliver
bonds of 1990 Series D (other than any previously called for redemption
for the sinking fund) and (ii) may apply as a credit bonds for 1990 Series
D redeemed at the election of the Company otherwise than through the
sinking fund, in each case in satisfaction of all or any part of the
amount of any sinking fund payment. Each such bond of 1990 Series D shall
be received or credited for such purpose by the Trustee at the principal
amount thereof and the amount of such sinking fund payment shall be
reduced accordingly.
On February 1 in each year, commencing February 1 of the first calendar
year subsequent to initial issuance, the Company will deliver to the
Trustee a treasurer's certificate, which shall be irrevocable, specifying
the amount of the next ensuing sinking fund payment and the portions
thereof which are to be satisfied by payment of cash, by delivery of bonds
of 1990 Series D or by crediting bonds of 1990 Series D previously
redeemed. The treasurer's certificate shall also state that bonds of 1990
Series D forming the basis of any such credit do not include any bonds of
1990 Series D which have been called for redemption for the sinking fund
or previously credited against any sinking fund payment. The Trustee
shall, upon the receipt of the treasurer's certificate, select the bonds
of 1990 Series D to be redeemed upon the next ensuing March 31 in the
manner hereinabove provided for and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the manner
hereinabove provided for. Such notice having been duly given, the
redemption of such bonds of 1990 Series D shall be made upon the terms and
in the manner and with the effect hereinabove provided for with respect to
redemptions.
EXCHANGE AND At the option of the registered holder, any bonds of 1990 Series D, upon
TRANSFER. surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City of New York, The State of New York,
together with a written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the Company duly executed
by the holder or by its duly authorized attorney, shall be exchangeable
for a like aggregate principal amount of bonds of 1990 Series D of other
authorized denominations, upon the terms and conditions specified herein
and in Section 7 of Article II of the Indenture. Bonds of 1990 Series D
shall be transferable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, The State of New York. The
Company waives its rights under Section 7 of Article II of the Indenture
not to make exchanges or transfers of bonds of 1990 Series D during any
period of ten (10) days next preceding any interest payment date for such
bonds.
</TABLE>
<PAGE> 19
16
<TABLE>
<S> <C>
Bonds of 1990 Series D, in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or with the rules or regulations of any
stock exchange or to conform to usage with respect thereto.
CONSENT. SECTION 3. The holders of the bonds of 1990 Series D, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five percent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 3, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
</TABLE>
<PAGE> 20
17
<TABLE>
<S> <C>
FORM OF BONDS OF SECTION 4. The bonds of 1990 Series D and the form of Trustee's
1990 SERIES D. Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively.
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series D, 7.904% due March 31, 2020
$_________ No. _________
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to or registered assigns, at its office
or agency in the Borough of Manhattan, The City and State of New York, the
principal sum of in lawful money of the United States of
America on the thirty-first day of March, 2020, and to pay interest
thereon at the rate specified in the title hereof, at such office or
agency, in like lawful money, from , and after the first
interest payment on bonds of this Series from the most recent date to
which such interest has been paid, semi-annually on the thirty-first day
of March and the thirtieth day in September each year, to the person in
whose name this bond is registered at the close of business on the
preceding fifteenth day of March or September (subject to certain
exceptions provided in the Indenture hereinafter mentioned), until the
Company's obligation with respect to payment of said principal shall have
been discharged as provided in such Indenture.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the aforesaid Indenture, or its
successor thereunder, shall have signed the form of certificate endorsed
hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this instru-
ment to be executed on its behalf by its Chairman of the Board and its
President or a Vice President, with their manual or facsimile signatures,
and its corporate seal, or a facsimile thereof, to be impressed or
imprinted hereon and the same to be attested by its Secretary or an
Assistant Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
------------------------
Chairman of the Board
------------------------
Attest: President
-------------------------------------
Secretary
</TABLE>
<PAGE> 21
18
<TABLE>
<CAPTION>
[FORM OF REVERSE OF BOND]
<S> <C>
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of said bonds known as General and Refunding Mortgage Bonds, 1990 Series
D, (elsewhere herein referred to as the "bonds of 1990 Series D"), limited
to [the aggregate principal amount of the 1990 Series A Bond being
converted], except as otherwise provided in the Indenture hereinafter
mentioned. This bond and all other bonds of said series are issued and to
be issued under, and are all equally and ratably secured (except insofar
as any sinking, amortization, improvement or analogous fund, established
in accordance with the provisions of the Indenture hereinafter mentioned,
may afford additional security for the bonds of any particular series and
except as provided in Section 3 of Article VI of said Indenture) by an
Indenture, dated as of October 1, 1924, duly executed by the Company to
Bankers Trust Company, a corporation of the State of New York, as Trustee,
to which Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of February 15, 1990) reference is hereby
made for a description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and conditions
upon which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee in
respect of such security (which Indenture and all indentures supplemental
thereto, including the Supplemental Indenture dated as of February 15,
1990, are hereinafter collectively called the "Indenture"). As provided in
the Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear interest
at different rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and
of the holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or altered in
certain respects by affirmative vote of at least eighty-five percent (85%)
in principal amount of the bonds then outstanding, and, if the rights of
one or more, but less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by affirmative vote
of at least eighty-five percent (85%) in principal amount of the series of
bonds so to be affected (excluding in every instance bonds disqualified
from voting by reason of the Company's interest therein as specified in
the Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of, or the interest on, this
bond, which in those respects is unconditional.
The holders of the bonds of 1990 Series D, by their acceptance of and
holding thereof, consent and agree that bonds of any series may be issued
which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five percent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 3 of Part I of the
Supplemental Indenture dated as of February 15, 1990, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
</TABLE>
<PAGE> 22
19
<TABLE>
<S> <C>
This bond is redeemable on giving notice of such redemption by first
class mail, postage prepaid, by or on behalf of the Company at least
thirty (30) but not more than ninety (90) days prior to the date fixed for
redemption to the registered holder of this bond at his last address
appearing on the register thereof, in the manner and upon the terms
provided in the Indenture, (i) on March 31 in each year, commencing [March
31, ], through the operation of the sinking fund for bonds of 1990
Series D at 100% of the principal amount hereof, (ii) at the election of
the Company on any date prior to maturity, commencing March 31 of the
eleventh (11th) calendar year subsequent to initial issuance, as a whole,
or in part, from time to time, at par plus in each case accrued interest
to the date fixed for redemption if such redemption does not utilize,
directly or indirectly, the proceeds of and is not in anticipation of any
refunding operation involving borrowing at an interest cost to the
Company, computed in accordance with generally accepted financial
practice, of less than 7.904% per annum, and (iii) at the election of the
Company on any date prior to maturity, commencing March 31 of the eleventh
(11th) calendar year subsequent to initial issuance, as a whole or in
part, from time to time, at the following redemption prices (expressed as
percentages of the principal amount hereof) plus in each case (whether
through operation of the sinking fund or otherwise) accrued interest to
the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
</TABLE>
<TABLE>
<S> <C>
The Company will deposit with the Trustee as and for a sinking fund for
the bonds of Series D prior to each March 31, commencing [ ],
an amount sufficient to redeem $6,280,000 principal amount of bonds of
1990 Series D, less the amount of any credit against any such payment
taken by the Company for bonds of 1990 Series D delivered to the Trustee
or redeemed by the Company otherwise than through the sinking fund.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of 1990 Series D (or portions thereof), in trust
for the redemption of such bonds (or portions thereof) and the interest
due or to become due thereon, and thereupon all obligations of the Company
in respect of such bonds (or portions thereof) so to be redeemed and such
interest shall cease and be discharged, and the holders thereof shall
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or with respect to
such bonds and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
This bond is transferable by the registered holder hereof, in person or
by his attorney duly authorized in writing, on the books of the Company
kept at its office or agency in the Borough of Manhattan, The City and
State of New York, upon surrender and cancellation of this bond, and
thereupon, a new registered bond or bonds of the same series of authorized
denominations for a like aggregate principal amount will be issued to the
transferee or transferees in exchange herefor, and this bond with others
in like form may in like manner be exchanged for one or more new
registered bonds of the same series of other authorized denominations, but
of the same aggregate principal amount, all as provided and upon the terms
and conditions set forth in the Indenture, and upon payment, in any event,
of the charges prescribed in the Indenture.
</TABLE>
<PAGE> 23
20
<TABLE>
<S> <C>
No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
-------------------------------------------
Authorized Officer
</TABLE>
<PAGE> 24
21
PART III.
CREATION OF TWO HUNDRED EIGHTY-THIRD
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES B
<TABLE>
<S> <C>
TERMS OF BOND SECTION 1. The Company hereby creates the Two hundred eighty-third
OF 1990 SERIES B. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bond, 1990 Series B
(elsewhere herein referred to as the "1990 Series B Bond"). The aggregate
principal amount of the 1990 Series B Bond shall be limited to Two hundred
fifty-six million nine hundred thirty-two thousand dollars ($256,932,000),
except as provided in Section 13 of Article II of the Original Indenture
with respect to exchanges and replacement of bonds. The 1990 Series B Bond
shall be a multiple of $1,000.
The 1990 Series B Bond shall be issued as one registered bond without
coupons in the amount of $256,932,000, which shall bear interest, payable
semi-annually on March 31 and September 30 of each year (commencing March
31, 1990) at the rate of 7.904%, and principal payments shall be made
thereon annually, payable on March 31 of each year (commencing March 31,
1990) as set forth below, until the final payments of interest and
principal shall be made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- ------------
<S> <C> <C> <C>
March 31, 1990............................... $9,516,000 $247,416,000
March 31, 1991............................... 9,516,000 237,900,000
March 31, 1992............................... 9,516,000 228,384,000
March 31, 1993............................... 9,516,000 218,868,000
March 31, 1994............................... 9,516,000 209,352,000
March 31, 1995............................... 9,516,000 199,836,000
March 31, 1996............................... 9,516,000 190,320,000
March 31, 1997............................... 9,516,000 180,804,000
March 31, 1998............................... 9,516,000 171,288,000
March 31, 1999............................... 9,516,000 161,772,000
March 31, 2000............................... 9,516,000 152,256,000
March 31, 2001............................... 9,516,000 142,740,000
March 31, 2002............................... 9,516,000 133,224,000
March 31, 2003............................... 9,516,000 123,708,000
March 31, 2004............................... 9,516,000 114,192,000
March 31, 2005............................... 9,516,000 104,676,000
March 31, 2006............................... 9,516,000 95,160,000
March 31, 2007............................... 9,516,000 85,644,000
March 31, 2008............................... 9,516,000 76,128,000
March 31, 2009............................... 9,516,000 66,612,000
March 31, 2010............................... 9,516,000 57,096,000
March 31, 2011............................... 9,516,000 47,580,000
March 31, 2012............................... 9,516,000 38,064,000
March 31, 2013............................... 9,516,000 28,548,000
March 31, 2014............................... 9,516,000 19,032,000
March 31, 2015............................... 9,516,000 9,516,000
March 31, 2016............................... 9,516,000 0
</TABLE>
<PAGE> 25
22
<TABLE>
<S> <C>
Payments of principal, premium, if any, and interest on the 1990 Series
B Bond shall be made by bank wire transfer in immediately available funds
in lawful money of the United States of America to the bank account of the
registered holder of such bond which such registered holder shall
designate in writing to Bankers Trust Company, Trustee, not less than
fifteen (15) days prior to the date such payment shall become due and
payable.
When a semi-annual interest payment date falls on a Saturday, Sunday or
a day on which the Federal Reserve Bank of New York or the Trustee is not
open for business, all payments shall be payable on the first day
thereafter on which the Federal Reserve Bank of New York and the Trustee
are open for business.
In the event any semi-annual payment is not made when due, the amount
payable shall be such payment, plus interest thereon at the interest rate
on such bond, based on a 360-day year, from the due date to the date of
payment.
The 1990 Series B Bond shall be dated January 3, 1990 and interest shall
be payable from January 3, 1990.
The 1990 Series B Bond in definitive form shall be, at the election of
the Company, fully engraved or shall be lithographed or printed.
The 1990 Series B Bond shall not be subject to or entitled to any
sinking fund.
REDEMPTION OF SECTION 2. The 1990 Series B Bond shall be redeemable prior to stated
1990 SERIES B BOND. maturity, at the election of the Company on any interest payment date, at
redemption prices calculated in accordance with the formula set forth
below on giving notice of such redemption by first class mail, postage
prepaid, by or on behalf of the Company not more than ninety (90) days nor
less than thirty (30) days prior to the date fixed for redemption to the
registered holder of the 1990 Series B Bond.
The optional redemption payment of each bond to be redeemed shall be
equal to the present worth, on the date of redemption, of the remaining
scheduled semi-annual payments of interest and annual retirement of
principal of such bond, calculated as follows. Determine the present value
of each scheduled semi-annual payment of interest and annual retirement of
principal by dividing each payment by the Present Value Divisor (PVD),
where:
________
PVD = ( \/ 1.0 + I) (D)
I = That annual interest rate (which has been adjusted for semi-annual
compounding) for U.S. Treasury securities, with comparable maturities as
set forth in the Federal Reserve statistical release, designated
H.15 (519), or its successor, published at least 4 days but not
more than 10 days prior to the optional redemption date. The rate
shall be the "This Week" rate for Treasury Constant Maturities.
Straight line interpolate to 3 decimal places after rounding the
prepayment period to the nearest month (1st-15th round down) to
match the remaining term of the bond to be redeemed.
D = Present value divisor for the preceding 6 month interest period (D
equals 1.0 for the period preceding the first period, which is the period
from the redemption date to the first scheduled payment date
thereafter).
Add the present value for all scheduled annual retirements of
principal and semi-annual payments of interest to determine the sum
to be paid upon redemption of each bond.
If the optional redemption payment is greater than the principal
outstanding as of the date of optional redemption, the prepayment
results in a premium, plus in each case accrued interest to the date
fixed for redemption. If the optional redemption payment is less
than the principal outstanding as of the date of the optional
redemption, the prepayment results in a discount which shall be
deducted from the outstanding principal amount which otherwise would
have been paid, plus in each case accrued interest to the date fixed
for redemption.
</TABLE>
<PAGE> 26
23
<TABLE>
<S> <C>
ANY PARTIAL REDEMPTION SHALL, AS THE PRINCIPAL PORTION OF SUCH
REDEMPTION, BE NO LESS THAN $100,000. NO REDEMPTION PURSUANT TO THIS
PARAGRAPH SHALL BE CREDITED TO, OR RELIEVE THE COMPANY TO ANY EXTENT FROM
ITS OBLIGATION TO MAKE THE PRINCIPAL PAYMENTS PROVIDED FOR IN SECTION 1
HEREOF.
ON OR BEFORE THE FIRST DAY OF FEBRUARY OR AUGUST IN EACH YEAR,
COMMENCING SEPTEMBER 1 1990, THE COMPANY WILL DELIVER TO THE TRUSTEE A
TREASURER'S CERTIFICATE, WHICH SHALL BE IRREVOCABLE, SPECIFYING THE
PRINCIPAL AMOUNT OF BONDS TO BE OPTIONALLY REDEEMED AND ACCRUED INTEREST
ON SUCH BONDS ON THE NEXT ENSUING MARCH 31 OR SEPTEMBER 30, OR THE FIRST
BUSINESS DAY THEREAFTER, RESPECTIVELY. THE TRUSTEE SHALL, UPON THE RECEIPT
OF THE TREASURER'S CERTIFICATE, CAUSE NOTICE OF THE REDEMPTION THEREOF TO
BE GIVEN IN THE NAME OF AND AT THE EXPENSE OF THE COMPANY IN THE MANNER
HEREIN PROVIDED FOR. ON OR BEFORE NOON OF THE BUSINESS DAY PRECEDING THE
DAY OF PREPAYMENT, THE COMPANY WILL ADVISE THE TRUSTEE OF THE APPLICABLE
PREMIUM OR DISCOUNT APPLICABLE TO SUCH PREPAYMENT. SUCH NOTICE HAVING BEEN
DULY GIVEN, THE REDEMPTION OF BONDS OF 1990 SERIES B SHALL BE MADE UPON
THE TERMS AND IN THE MANNER AND WITH THE EFFECT HEREINABOVE PROVIDED FOR
WITH RESPECT TO REDEMPTIONS. A TREASURER'S CERTIFICATE SHALL NOT BE
REQUIRED IF NO BONDS OF A SERIES ARE TO BE REDEEMED UNDER THIS PARAGRAPH.
EXCHANGE. SECTION 3. AT THE OPTION OF THE HOLDER, UPON WRITTEN REQUEST MADE AT
LEAST FORTY-FIVE (45) DAYS PRIOR TO AN INTEREST PAYMENT DATE AND SUBJECT
TO THE TERMS OF THE INDENTURE AND COMPLIANCE WITH APPLICABLE SECURITIES
LAWS, THE 1990 SERIES B BOND SHALL BE EXCHANGEABLE, IN WHOLE BUT NOT IN
PART, FOR BONDS OF 1990 SERIES E (AS HEREINAFTER DESCRIBED) IN AN
AGGREGATE PRINCIPAL AMOUNT EQUAL TO THE AGGREGATE AMOUNT OF UNPAID
PRINCIPAL WHICH SHALL REMAIN OUTSTANDING ON THE 1990 SERIES B BOND AS OF
THE DATE OF SUCH EXCHANGE. SUCH EXCHANGE SHALL OCCUR ONLY ON AN INTEREST
PAYMENT DATE FOR THE 1990 SERIES B BOND AT THE OFFICE OF THE TRUSTEE IN
THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, THE STATE OF NEW YORK.
THE 1990 SERIES B BOND SHALL BEAR A LEGEND STATING THAT SUCH BOND HAS
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND THAT AS A CONSEQUENCE SUCH BOND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, WHETHER OR NOT FOR CONSIDERATION,
UNLESS REGISTERED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION APPLICABLE TO SUCH OFFER, SALE OR OTHER TRANSFER, AND MAY
BEAR SUCH OTHER LEGENDS AS MAY BE NECESSARY TO COMPLY WITH ANY LAW OR WITH
ANY RULES OR REGULATIONS MADE PURSUANT THERETO.
CONSENT. SECTION 4. THE HOLDER OF THE 1990 SERIES B BOND, BY ITS ACCEPTANCE OF
AND HOLDING THEREOF, CONSENTS AND AGREES THAT BONDS OF ANY SERIES MAY BE
ISSUED WHICH MATURE ON A DATE OR DATES LATER THAN OCTOBER 1, 2024 AND ALSO
CONSENTS TO THE DELETION FROM THE FIRST PARAGRAPH OF SECTION 5 OF ARTICLE
II OF THE INDENTURE OF THE PHRASE "BUT IN NO EVENT LATER THAN OCTOBER 1,
2024." SUCH HOLDER FURTHER AGREES THAT (A) SUCH CONSENT SHALL, FOR ALL
PURPOSES OF ARTICLE XV OF THE INDENTURE AND WITHOUT FURTHER ACTION ON THE
PART OF SUCH HOLDER, BE DEEMED THE AFFIRMATIVE VOTE OF SUCH HOLDER AT ANY
MEETING CALLED PURSUANT TO SAID ARTICLE XV FOR THE PURPOSE OF APPROVING
SUCH DELETION, AND (B) SUCH DELETION SHALL BECOME EFFECTIVE AT SUCH TIME
AS NOT LESS THAN EIGHTY-FIVE PER CENT (85%) IN PRINCIPAL AMOUNT OF BONDS
OUTSTANDING UNDER THE INDENTURE SHALL HAVE CONSENTED THERETO SUBSTANTIALLY
IN THE MANNER SET FORTH IN THIS SECTION 4, OR IN WRITING, OR BY
AFFIRMATIVE VOTE CAST AT A MEETING CALLED PURSUANT TO SAID ARTICLE XV, OR
BY ANY COMBINATION THEREOF.
FORM OF SECTION 5. THE 1990 SERIES B BOND AND THE FORM OF TRUSTEE'S CERTIFICATE
1990 SERIES B BOND. TO BE ENDORSED ON SUCH BOND SHALL BE SUBSTANTIALLY IN THE FOLLOWING FORMS,
RESPECTIVELY:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series B, 7.904% due March 31, 2016
(Payable in annual installments, commencing March 31, 1990)
$256,932,000 No.____
</TABLE>
<PAGE> 27
24
<TABLE>
<S> <C>
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to UNITED STATES OF AMERICA, at its office or agency in the Borough
of Manhattan, the City and State of New York, in lawful money of the
United States of America, the principal sum of $256,932,000, together with
interest at the rate specified in the title hereof on the amount of said
principal sum remaining unpaid from time to time from January 3, 1990, and
after the first interest payment hereon from the most recent date to which
interest has been paid hereon, until the Company's obligation with respect
to payment of said principal shall have been discharged, all as provided,
to the extent and in the manner specified in the Indenture hereinafter
mentioned on the reverse hereof and in the supplemental indenture pursuant
to which this bond has been issued. Interest shall be due and payable in
53 consecutive semi-annual payments on March 31 and September 30 in each
year, commencing on March 31, 1990, and principal shall be due and payable
in 27 consecutive annual payments on March 31, in each year, commencing on
March 31, 1990, each as more fully set forth on the reverse hereof.
Payments of principal, premium, if any, and interest on this bond are to
be made by bank wire transfer in immediately available funds to the holder
hereof all as provided, to the extent and in the manner specified in the
indenture hereinafter mentioned on the reverse hereof and in the
supplemental indenture pursuant to which this bond has been issued.
When any payment date falls on a Saturday, Sunday or a day on which the
Federal Reserve Bank of New York or the Trustee is not open for business,
all payments shall be payable on the first day thereafter on which the
Federal Reserve Bank of New York and the Trustee are open for business.
In the event any semi-annual payment is not made when due, the amount
payable shall be such payment, plus interest thereon at the interest rate
on such bond, based on a 360-day year, from the due date to the date of
payment.
At the written request of the registered holder hereof made at least
forty-five (45) days in advance of an interest payment date, this bond
shall be exchangeable, in whole but not in part, on any interest payment
date in an aggregate principal amount equal to the amount of unpaid
principal which shall remain outstanding on this bond as of the date of
such exchange (after giving effect to the payment of principal hereon on
the date of such exchange), all as provided, to the extent and in the
manner specified in the Indenture and the Supplemental Indenture
hereinafter mentioned on the reverse hereof.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed on its behalf by its Chairman of the Board and
its President or a Vice President, with their manual or facsimile
signatures, and its corporate seal, or a facsimile thereof, to be
impressed or imprinted hereon and the same to be attested by its Secretary
or an Assistant Secretary by manual or facsimile signature.
THE DETROIT EDISON COMPANY
By
-------------------------------------------
Dated: January 3, 1990 Chairman of the Board
</TABLE>
<PAGE> 28
25
------------------------------
President
Attest:
----------------------------
Secretary
<PAGE> 29
26
<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is the only bond of an authorized issue of bonds of the
Company, unlimited as to amount except as provided in the Indenture
hereinafter mentioned or any indentures supplemental thereto, and is one
of a series of said bonds known as General and Refunding Mortgage Bonds,
1990 Series B (elsewhere herein referred to as the "1990 Series B Bond"),
limited to an aggregate principal amount of $256,932,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond is
issued and to be issued under, and is equally and ratably secured (except
insofar as any sinking, amortization, improvement or analogous fund,
established in accordance with the provisions of the Indenture hereinafter
mentioned, may afford additional security for the bonds of any particular
series and except as provided in Section 3 of Article VI of said
Indenture) by an Indenture, dated as of October 1, 1924, duly executed by
the Company to Bankers Trust Company, a corporation of the State of New
York, as Trustee, to which Indenture and all indentures supplemental
thereto (including the Supplemental Indenture dated as of February 15,
1990) reference is hereby made for a description of the properties and
franchises mortgaged and conveyed, the nature and extent of the security,
the terms and conditions upon which the bonds are issued and under which
additional bonds may be issued, and the rights of the holders of the bonds
and of the Trustee in respect of such security (which Indenture and all
indentures supplemental thereto, including the Supplemental Indenture
dated as of February 15, 1990, are hereinafter collectively called the
"Indenture"). As provided in the Indenture, said bonds may be for various
principal sums and are issuable in series, which may mature at different
times, may bear interest at different rates and may otherwise vary as in
said Indenture provided. With the consent of the Company and to the extent
permitted by and as provided in the Indenture, the rights and obligations
of the Company and of the holders of the bonds and the terms and
provisions of the Indenture, or of any indenture supplemental thereto, may
be modified or altered in certain respects by affirmative vote of at least
eighty-five percent (85%) in principal amount of the bonds then
outstanding, and, if the rights of one or more, but less than all, series
of bonds then outstanding are to be affected by the action proposed to be
taken, then also by affirmative vote of at least eighty-five percent (85%)
in principal amount of the series of bonds so to be affected (excluding in
every instance bonds disqualified from voting by reason of the Company's
interest therein as specified in the Indenture); provided, however, that,
without the consent of the holder hereof, no such modification or
alteration shall, among other things, affect the terms of payment of the
principal of, or the interest on, this bond, which in those respects is
unconditional.
The holder of the 1990 Series B Bond, by its acceptance of and holding
thereof, consents and agrees that bonds of any series may be issued which
mature on a date or dates later than October 1, 2024 and also consents to
the deletion from the first paragraph of Section 5 of Article II of the
Indenture of the phrase "but in no event later than October 1, 2024." Such
holder further agrees that (a) such consent shall, for all purposes of
Article XV of the Indenture and without further action on the part of such
holder, be deemed the affirmative vote of such holder at any meeting
called pursuant to said Article XV for the purpose of approving such
deletion, and (b) such deletion shall become effective at such time as not
less than eighty-five percent (85%) in principal amount of bonds
outstanding under the Indenture shall have consented thereto substan-
tially in the manner set forth in Section 3 of Part I of the Supplemental
Indenture dated as of February 15, 1990, or in writing, or by affirmative
vote cast at a meeting called pursuant to said Article XV, or by any
combination thereof.
</TABLE>
<PAGE> 30
27
<TABLE>
<S> <C>
Principal payments shall be made hereon annually, payable on March 31 of
each year (commencing March 31, 1990) as set forth below, until the final
payment of principal shall be made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- ------------
<S> <C> <C> <C>
March 31, 1990............................... $9,516,000 $247,416,000
March 31, 1991............................... 9,516,000 237,900,000
March 31, 1992............................... 9,516,000 228,384,000
March 31, 1993............................... 9,516,000 218,868,000
March 31, 1994............................... 9,516,000 209,352,000
March 31, 1995............................... 9,516,000 199,836,000
March 31, 1996............................... 9,516,000 190,320,000
March 31, 1997............................... 9,516,000 180,804,000
March 31, 1998............................... 9,516,000 171,288,000
March 31, 1999............................... 9,516,000 161,772,000
March 31, 2000............................... 9,516,000 152,256,000
March 31, 2001............................... 9,516,000 142,740,000
March 31, 2002............................... 9,516,000 133,224,000
March 31, 2003............................... 9,516,000 123,708,000
March 31, 2004............................... 9,516,000 114,192,000
March 31, 2005............................... 9,516,000 104,676,000
March 31, 2006............................... 9,516,000 95,160,000
March 31, 2007............................... 9,516,000 85,644,000
March 31, 2008............................... 9,516,000 76,128,000
March 31, 2009............................... 9,516,000 66,612,000
March 31, 2010............................... 9,516,000 57,096,000
March 31, 2011............................... 9,516,000 47,580,000
March 31, 2012............................... 9,516,000 38,064,000
March 31, 2013............................... 9,516,000 28,548,000
March 31, 2014............................... 9,516,000 19,032,000
March 31, 2015............................... 9,516,000 9,516,000
March 31, 2016............................... 9,516,000 0
</TABLE>
<TABLE>
<S> <C>
This bond shall be redeemable prior to stated maturity, at the election
of the Company on any interest payment date, at the redemption prices
calculated in accordance with the formula set forth below on giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company not more than ninety (90) days nor less than thirty (30)
days prior to the date fixed for redemption to the registered holder of
the 1990 Series B Bond.
</TABLE>
<PAGE> 31
28
<TABLE>
<S> <C>
The optional redemption payment of each bond to be redeemed shall be
equal to the present worth, on the date of redemption, of the remaining
scheduled semi- annual payments of interest and annual retirement of
principal of such bond, calculated as follows. Determine the present value
of each scheduled semi-annual payment of interest and annual retirement of
principal by dividing each payment by the Present Value Divisor (PVD),
where:
________
PVD = (\/ 1.0 + I) (D)
I = That annual interest rate (which has been adjusted for semi-annual
compounding) for U.S. Treasury securities, with comparable maturities as
set forth in the Federal Reserve statistical release, designated
H.15 (519), or its successor, published at least 4 days but not
more than 10 days prior to the optional redemption date. The rate
shall be the "This Week" rate for Treasury Constant Maturities.
Straight line interpolate to 3 decimal places after rounding the
prepayment period to the nearest month (1st-15th round down) to
match the remaining term of the bond to be redeemed.
D = Present value divisor for the preceding 6 month interest period (D
equals 1.0 for the period preceding the first period, which is the period
from the redemption date to the first scheduled payment date
thereafter).
Add the present value for all scheduled annual retirements of
principal and semi-annual payments of interest to determine the sum
to be paid upon redemption of each bond.
If the optional redemption payment is greater than the principal
outstanding as of the date of optional redemption, the prepayment
results in a premium, plus in each case accrued interest to the date
fixed for redemption. If the optional redemption payment is less
than the principal outstanding as of the date of the optional
redemption, the prepayment results in a discount which shall be
deducted from the outstanding principal amount which otherwise would
have been paid, plus in each case accrued interest to the date fixed
for redemption.
No redemption pursuant to this paragraph shall be credited to, or relieve
the Company to any extent from its obligation to make the principal
payment provided for above.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
No recourse shall be had for the payment of the principal of, or the
interest on, this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever, all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 32
29
<TABLE>
<S> <C>
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is the only bond of the series designated therein, described
TRUSTEE'S in the within- mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
----------------------------------------------
Authorized Officer
</TABLE>
<PAGE> 33
30
<TABLE>
<S> <C>
PART IV.
CREATION OF TWO HUNDRED EIGHTY-FOURTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES E
TERMS OF BONDS SECTION 1. The Company hereby creates the Two hundred eighty-fourth
OF 1990 SERIES E. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, 1990 Series E"
(elsewhere herein referred to as the "bonds of 1990 Series E"). The
aggregate principal amount of bonds of 1990 Series E shall be limited to
the principal amount of 1990 Series B Bond being exchanged, except as
provided in Sections 7 and 13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds.
The bonds of 1990 Series E shall mature on March 31, 2016 and shall be
issued in exchange for, and in an aggregate principal amount equal to the
principal amount remaining outstanding on, the 1990 Series B Bond as of
the date of such exchange. The Bonds of Series E shall be issued as
registered bonds without coupons in denominations of $10,000 and any
multiple thereof, and shall bear interest, payable semi-annually on March
31 and September 30 of each year (commencing on the first March 31 or
September 30 following the date of such exchange), at the rate of seven
and 904/1000 per centum (7.904%) per annum until the principal shall have
become due and payable, and thereafter until the Company's obligation with
respect to the payment of said principal shall have been discharged as
provided in the Indenture. Except as otherwise specifically provided in
this Supplemental Indenture, the principal of and interest on the bonds of
1990 Series E shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York, The State of New York in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts. The interest on
bonds of 1990 Series E, whether in temporary or definitive form, shall be
payable without presentation of such bonds and (subject to the provisions
of this Section 1) only to or upon the written order of the registered
holders thereof.
Each bond of 1990 Series E shall be dated the date of its authentication
and interest shall be payable on the principal represented thereby from
the March 31 or September 30 next preceding the date thereof to which
interest has been paid on bonds of 1990 Series E, unless the bond is
authenticated on a date to which interest has been paid, in which case
interest shall be payable from the date of authentication.
The bonds of 1990 Series E in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denomination of bonds of 1990
Series E). Until bonds of 1990 Series E in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1990
Series E in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of 1990 Series E, if any, may be printed and
may be issued in authorized denominations in substantially the form of
definitive bonds of 1990 Series E, but without a recital of redemption
prices and with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
</TABLE>
<PAGE> 34
31
<TABLE>
<S> <C>
Interest on any bond of 1990 Series E which is payable on any interest
payment date and is punctually paid or duly provided for shall be paid to
the person in whose name that bond, or any previous bond to the extent
evidencing the same debt as that evidenced by that bond, is registered at
the close of business on the regular record date for such interest, which
regular record date shall be the fifteenth day of March or September as
the case may be (whether or not a business day) next preceding such
interest payment date. If the Company shall default in the payment of the
interest due on any interest payment date on the principal represented by
any bond of 1990 Series E, such defaulted interest shall forthwith cease
to be payable to the registered holder of that bond on the relevant
regular record date by virtue of his having been such holder, and such
defaulted interest may be paid to the registered holder of that bond (or
any bond or bonds of 1990 Series E issued upon transfer or exchange
thereof) on the date of payment of such defaulted interest or, at the
election of the Company, to the person in whose name that bond (or any
bond or bonds of 1990 Series E issued upon transfer or exchange thereof)
is registered on a subsequent record date established by notice given by
mail by or on behalf of the Company to the holders of bonds of 1990 Series
E not less than ten (10) days preceding such subsequent record date, which
subsequent record date shall be at least five (5) days prior to the
payment date of such defaulted interest.
REDEMPTION OF BONDS SECTION 2. The bonds of 1990 Series E shall be redeemable (i) on March
OF 1990 31 in each year, commencing March 31 in the first calendar year
SERIES E. subsequent to initial issuance, through the operation of the sinking fund
hereinafter described at 100% of the principal amount thereof, (ii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance, as a
whole, or in part, from time to time, at par plus in each case accrued
interest to the date fixed for redemption if such redemption does not
utilize, directly or indirectly, the proceeds of and is not in
anticipation of any refunding operation involving borrowing at an interest
cost to the Company, computed in accordance with generally accepted
financial practice, of less than 7.904% per annum, and (iii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance, as a
whole, or in part, from time to time, at the following redemption prices
(expressed as percentages of the principal amount thereof) plus in each
case (whether through operation of the sinking fund or otherwise) accrued
interest to the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
The bonds of 1990 Series E shall be redeemable as aforesaid as provided
herein and as specified in Article IV of the Indenture upon giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company at least thirty (30) days prior to the date fixed for
redemption to the registered holders of bonds of 1990 Series E so called
for redemption at their last respective addresses appearing on the
register thereof, but failure to mail such notice to the registered
holders of any bonds of 1990 Series E designated for redemption shall not
affect the validity of any such redemption of any other bonds of such
series. Interest shall cease to accrue on any bonds of 1990 Series E (or
any portion thereof) so called for redemption from and after the date
fixed for redemption if payment sufficient to redeem the bonds of 1990
Series E (or such portion) designated for redemption has been duly
provided for. Bonds of 1990 Series E redeemed in part only shall be in
amounts of $10,000 or any multiple thereof.
</TABLE>
<PAGE> 35
32
<TABLE>
<S> <C>
If the giving of the notice of redemption shall have been completed, or
if provision satisfactory to the Trustee for the giving of such notice
shall have been made, and if the Company shall have deposited with the
Trustee in trust funds (which shall become available for payment to the
holders of the bonds of 1990 Series E so to be redeemed) sufficient to
redeem bonds of 1990 Series E in whole or in part, on the date fixed for
redemption, then all obligations of the Company in respect of such bonds
(or portions thereof) so to be redeemed and interest due or to become due
thereon shall cease and be discharged and the holders of such bonds of
1990 Series E (or portions thereof) shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature on
their part under the Indenture or in respect of such bonds (or portions
thereof) and interest.
As and for the sinking fund for the retirement of the bonds of 1990
Series E the Company will, until all the bonds of 1990 Series E are paid
or payment thereof provided for, deposit with the Trustee prior to March
31 in each year, commencing March 31 of the first calendar year subsequent
to initial issuance, an amount in cash sufficient to redeem on such March
31 $9,520,000 principal amount of bonds of 1990 Series E.
On or before February 1 in each year, commencing February 1 of the first
calendar year subsequent to initial issuance the Company (i) may deliver
bonds of 1990 Series E (other than any previously called for redemption
for the sinking fund) and (ii) may apply as a credit bonds for 1990 Series
E redeemed at the election of the Company otherwise than through the
sinking fund, in each case in satisfaction of all or any part of the
amount of any sinking fund payment. Each such bond of 1990 Series E shall
be received or credited for such purpose by the Trustee at the principal
amount thereof and the amount of such sinking fund payment shall be
reduced accordingly.
On February 1 in each year, commencing February 1 of the first calendar
year subsequent to initial issuance, the Company will deliver to the
Trustee a treasurer's certificate, which shall be irrevocable, specifying
the amount of the next ensuing sinking fund payment and the portions
thereof which are to be satisfied by payment of cash, by delivery of bonds
of 1990 Series E or by crediting bonds of 1990 Series E previously
redeemed. The treasurer's certificate shall also state that bonds of 1990
Series E forming the basis of any such credit do not include any bonds of
1990 Series E which have been called for redemption for the sinking fund
or previously credited against any sinking fund payment. The Trustee
shall, upon the receipt of the treasurer's certificate, select the bonds
of 1990 Series E to be redeemed upon the next ensuing March 31 in the
manner hereinabove provided for and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the manner
hereinabove provided for. Such notice having been duly given, the
redemption of such bonds of 1990 Series E shall be made upon the terms and
in the manner and with the effect hereinabove provided for with respect to
redemptions.
EXCHANGE AND At the option of the registered holder, any bonds of 1990 Series E, upon
TRANSFER. surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City of New York, The State of New York,
together with a written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the Company duly executed
by the holder or by its duly authorized attorney, shall be exchangeable
for a like aggregate principal amount of bonds of 1990 Series E of other
authorized denominations, upon the terms and conditions specified herein
and in Section 7 of Article II of the Indenture. Bonds of 1990 Series E
shall be transferable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, The State of New York. The
Company waives its rights under Section 7 of Article II of the Indenture
not to make exchanges or transfers of bonds of 1990 Series E during any
period of ten (10) days next preceding any interest payment date for such
bonds.
</TABLE>
<PAGE> 36
33
<TABLE>
<S> <C>
Bonds of 1990 Series E, in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or with the rules or regulations of any
stock exchange or to conform to usage with respect thereto.
CONSENT. SECTION 3. The holders of the bonds of 1990 Series E, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five percent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 3, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
</TABLE>
<PAGE> 37
34
<TABLE>
<S> <C>
FORM OF BONDS OF SECTION 4. The bonds of 1990 Series E and the form of Trustee's
1990 SERIES E. Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively.
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series E, 7.904% due March 31, 2016
$_____________ No.________
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to or registered assigns, at its office
or agency in the Borough of Manhattan, The City and State of New York, the
principal sum of in lawful money of the United States of
America on the thirty-first day of March, 2016, and to pay interest
thereon at the rate specified in the title hereof, at such office or
agency, in like lawful money, from , and after the first
interest payment on bonds of this Series from the most recent date to
which such interest has been paid, semi-annually on the thirty-first day
of March and the thirtieth day in September each year, to the person in
whose name this bond is registered at the close of business on the
preceding fifteenth day of March or September (subject to certain
exceptions provided in the Indenture hereinafter mentioned), until the
Company's obligation with respect to payment of said principal shall have
been discharged as provided in such Indenture.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the aforesaid Indenture, or its
successor thereunder, shall have signed the form of certificate endorsed
hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this instru-
ment to be executed on its behalf by its Chairman of the Board and its
President or a Vice President, with their manual or facsimile signatures,
and its corporate seal, or a facsimile thereof, to be impressed or
imprinted hereon and the same to be attested by its Secretary or an
Assistant Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
--------------------------
Chairman of the Board
--------------------------
President
Attest:
-----------------------------------
Secretary
</TABLE>
<PAGE> 38
35
<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of said bonds known as General and Refunding Mortgage Bonds, 1990 Series
E, (elsewhere herein referred to as the "bonds of 1990 Series E"), limited
to the aggregate principal amount of [the 1990 Series B Bonds being
converted], except as otherwise provided in the Indenture hereinafter
mentioned. This bond and all other bonds of said series are issued and to
be issued under, and are all equally and ratably secured (except insofar
as any sinking, amortization, improvement or analogous fund, established
in accordance with the provisions of the Indenture hereinafter mentioned,
may afford additional security for the bonds of any particular series and
except as provided in Section 3 of Article VI of said Indenture) by an
Indenture, dated as of October 1, 1924, duly executed by the Company to
Bankers Trust Company, a corporation of the State of New York, as Trustee,
to which Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of February 15, 1990) reference is hereby
made for a description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and conditions
upon which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee in
respect of such security (which Indenture and all indentures supplemental
thereto, including the Supplemental Indenture dated as of February 15,
1990, are hereinafter collectively called the "Indenture"). As provided in
the Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear interest
at different rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and
of the holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or altered in
certain respects by affirmative vote of at least eighty-five percent (85%)
in principal amount of the bonds then outstanding, and, if the rights of
one or more, but less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by affirmative vote
of at least eighty-five percent (85%) in principal amount of the series of
bonds so to be affected (excluding in every instance bonds disqualified
from voting by reason of the Company's interest therein as specified in
the Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of, or the interest on, this
bond, which in those respects is unconditional.
The holders of the bonds of 1990 Series E, by their acceptance of and
holding thereof, consent and agree that bonds of any series may be issued
which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five percent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 3 of Part I of the
Supplemental Indenture dated as of February 15, 1990, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
</TABLE>
<PAGE> 39
36
<TABLE>
<S> <C>
This bond is redeemable on giving notice of such redemption by first
class mail, postage prepaid, by or on behalf of the Company at least
thirty (30) but not more than ninety (90) days prior to the date fixed for
redemption to the registered holder of this bond at his last address
appearing on the register thereof, in the manner and upon the terms
provided in the Indenture, (i) on March 31 in each year, commencing [March
31, ], through the operation of the sinking fund for bonds of 1990
Series E at 100% of the principal amount hereof, (ii) at the election of
the Company on any date prior to maturity, commencing March 31 of the
eleventh (11th) calendar year subsequent to initial issuance, as a whole,
or in part, from time to time, at par plus in each case accrued interest
to the date fixed for redemption if such redemption does not utilize,
directly or indirectly, the proceeds of and is not in anticipation of any
refunding operation involving borrowing at an interest cost to the
Company, computed in accordance with generally accepted financial
practice, of less than 7.904% per annum, and (iii) at the election of the
Company on any date prior to maturity, commencing March 31 of the eleventh
(11th) calendar year subsequent to initial issuance, as a whole or in
part, from time to time, at the following redemption prices (expressed as
percentages of the principal amount hereof) plus in each case (whether
through operation of the sinking fund or otherwise) accrued interest to
the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
The Company will deposit with the Trustee as and for a sinking fund for
the bonds of Series E prior to each March 31, commencing [ ],
an amount sufficient to redeem $9,520,000 principal amount of bonds of
1990 Series E, less the amount of any credit against any such payment
taken by the Company for bonds of 1990 Series E delivered to the Trustee
or redeemed by the Company otherwise than through the sinking fund.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of 1990 Series E (or portions thereof), in trust
for the redemption of such bonds (or portions thereof) and the interest
due or to become due thereon, and thereupon all obligations of the Company
in respect of such bonds (or portions thereof) so to be redeemed and such
interest shall cease and be discharged, and the holders thereof shall
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or with respect to
such bonds and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
This bond is transferable by the registered holder hereof, in person or
by his attorney duly authorized in writing, on the books of the Company
kept at its office or agency in the Borough of Manhattan, The City and
State of New York, upon surrender and cancellation of this bond, and
thereupon, a new registered bond or bonds of the same series of authorized
denominations for a like aggregate principal amount will be issued to the
transferee or transferees in exchange herefor, and this bond with others
in like form may in like manner be exchanged for one or more new
registered bonds of the same series of other authorized denominations, but
of the same aggregate principal amount, all as provided and upon the terms
and conditions set forth in the Indenture, and upon payment, in any event,
of the charges prescribed in the Indenture.
</TABLE>
<PAGE> 40
37
<TABLE>
<S> <C>
No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
--------------------------------------
Authorized Officer
</TABLE>
<PAGE> 41
38
PART V.
CREATION OF TWO HUNDRED EIGHTY-FIFTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BOND,
1990 SERIES C
<TABLE>
<S> <C>
TERMS OF BOND SECTION 1. The Company hereby creates the Two hundred eighty-fifth
OF 1990 SERIES C. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bond, 1990 Series C
(elsewhere herein referred to as the "1990 Series C Bond"). The aggregate
principal amount of the 1990 Series C Bond shall be limited to Eighty-five
million four hundred seventy-five thousand dollars ($85,475,000), except
as provided in Section 13 of Article II of the Original Indenture with
respect to exchanges and replacement of bonds. The 1990 Series C Bond
shall be a multiple of $1,000.
The 1990 Series C Bond shall be issued as one registered bond without
coupons in the amount of $85,475,000, which shall bear interest, payable
semi-annually on March 31 and September 30 of each year (commencing March
31, 1990) at the rate of 8.357%, and principal payments shall be made
thereon annually, payable on March 31 of each year (commencing March 31,
1990) as set forth below, until the final payments of interest and
principal shall be made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- -----------
<S> <C> <C> <C>
March 31, 1990................................ $3,419,000 $82,056,000
March 31, 1991................................ 3,419,000 78,637,000
March 31, 1992................................ 3,419,000 75,218,000
March 31, 1993................................ 3,419,000 71,799,000
March 31, 1994................................ 3,419,000 68,380,000
March 31, 1995................................ 3,419,000 64,961,000
March 31, 1996................................ 3,419,000 61,542,000
March 31, 1997................................ 3,419,000 58,123,000
March 31, 1998................................ 3,419,000 54,704,000
March 31, 1999................................ 3,419,000 51,285,000
March 31, 2000................................ 3,419,000 47,866,000
March 31, 2001................................ 3,419,000 44,447,000
March 31, 2002................................ 3,419,000 41,028,000
March 31, 2003................................ 3,419,000 37,609,000
March 31, 2004................................ 3,419,000 34,190,000
March 31, 2005................................ 3,419,000 30,771,000
March 31, 2006................................ 3,419,000 27,352,000
March 31, 2007................................ 3,419,000 23,933,000
March 31, 2008................................ 3,419,000 20,514,000
March 31, 2009................................ 3,419,000 17,095,000
March 31, 2010................................ 3,419,000 13,676,000
March 31, 2011................................ 3,419,000 10,257,000
March 31, 2012................................ 3,419,000 6,838,000
March 31, 2013................................ 3,419,000 3,419,000
March 31, 2014................................ 3,419,000 0
Payments of principal, premium, if any, and interest on the 1990 Series
C Bond shall be made by bank wire transfer in immediately available funds
in lawful money of the United States of America to the bank account of the
registered holder of such bond which such registered holder shall
designate in writing to Bankers Trust Company, Trustee, not less than
fifteen (15) days prior to the date such payment shall become due and
payable.
</TABLE>
<PAGE> 42
39
<TABLE>
<S> <C>
When a semi-annual interest payment date falls on a Saturday, Sunday or
a day on which the Federal Reserve Bank of New York or the Trustee is not
open for business, all payments shall be payable on the first day
thereafter on which the Federal Reserve Bank of New York and the Trustee
are open for business.
In the event any semi-annual payment is not made when due, the amount
payable shall be such payment, plus interest thereon at the interest rate
of one and one-half times the rate to be determined by the Secretary of
the Treasury taking into consideration the prevailing market yield on the
remaining maturity of the most recently auctioned 13-week U.S. Treasury
bills, from the due date to the date of payment. Upon the expiration of
each successive 91-day period following the scheduled payment date for any
outstanding payment, a new rate shall be established pursuant to this
paragraph and such rate shall be applied to the outstanding payment and
all late charges accrued thereon.
The 1990 Series C Bond shall be dated January 3, 1990 and interest shall
be payable from January 3, 1990.
The 1990 Series C Bond in definitive form shall be, at the election of
the Company, fully engraved or shall be lithographed or printed.
The 1990 Series C Bond shall not be subject to or entitled to any
sinking fund.
REDEMPTION OF SECTION 2. The 1990 Series C Bond shall be redeemable prior to stated
1990 SERIES C BOND. maturity, at the election of the Company on any interest payment date, at
redemption prices calculated in accordance with the formula set forth
below on giving notice of such redemption by first class mail, postage
prepaid, by or on behalf of the Company not more than ninety (90) days nor
less than thirty (30) days prior to the date fixed for redemption to the
registered holder of the 1990 Series C Bond.
The optional redemption payment of each bond to be redeemed shall be
equal to the present worth, on the date of redemption, of the remaining
scheduled semi- annual payments of interest and annual retirement of
principal of such bond, calculated as follows. Determine the present value
of each scheduled semi-annual payment of interest and annual retirement of
principal by dividing each payment by the Present Value Divisor (PVD),
where:
__________
PVD = (\/ 1.0 + I) (D)
I = That annual interest rate (which has been adjusted for semi-annual
compounding) for U.S. Treasury securities, with comparable maturities as
set forth in the Federal Reserve statistical release, designated
H.15 (519), or its successor, published at least 4 days but not
more than 10 days prior to the optional redemption date. The rate
shall be the "This Week" Rate for Treasury Constant Maturities.
Straight line interpolate to 3 decimal places after rounding the
prepayment period to the nearest month (1st-15th round down) to
match the remaining term of the bond to be redeemed.
D = Present value divisor for the preceding 6 month interest period (D
equals 1.0 for the period preceding the first period, which is the period
from the redemption date to the first scheduled payment date
thereafter).
Add the present value for all scheduled annual retirements of
principal and semi-annual payments of interest to determine the sum
to be paid upon redemption of each bond.
If the optional redemption payment is greater than the principal
outstanding as of the date of optional redemption, the prepayment
results in a premium, plus in each case accrued interest to the date
fixed for redemption. If the optional redemption payment is less
than the principal outstanding as of the date of the optional
redemption, the prepayment results in a discount which shall be
deducted from the outstanding principal amount which otherwise would
have been paid, plus in each case accrued interest to the date fixed
for redemption.
</TABLE>
<PAGE> 43
40
<TABLE>
<S> <C>
Any partial redemption shall, as the principal portion of such
redemption, be no less than $100,000. No redemption pursuant to this
paragraph shall be credited to, or relieve the Company to any extent from
its obligation to make the principal payments provided for in Section 1
hereof.
On or before the first day of February or August in each year,
commencing September 1 1990, the Company will deliver to the Trustee a
treasurer's certificate, which shall be irrevocable, specifying the
principal amount of bonds to be optionally redeemed and accrued interest
on such bonds on the next ensuing March 31 or September 30, or the first
business day thereafter, respectively. The Trustee shall, upon the receipt
of the treasurer's certificate, cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
herein provided for. On or before noon of the business day preceding the
day of prepayment, the Company will advise the Trustee of the applicable
premium or discount applicable to such prepayment. Such notice having been
duly given, the redemption of bonds of 1990 Series C shall be made upon
the terms and in the manner and with the effect hereinabove provided for
with respect to redemptions. A treasurer's certificate shall not be
required if no bonds of a series are to be redeemed under this paragraph.
EXCHANGE. SECTION 3. At the option of the holder, upon written request made at
least forty-five (45) days prior to an interest payment date and subject
to the terms of the Indenture and compliance with applicable securities
laws, the 1990 Series C Bond shall be exchangeable, in whole but not in
part, for bonds of 1990 Series F (as hereinafter described) in an
aggregate principal amount equal to the aggregate amount of unpaid
principal which shall remain outstanding on the 1990 Series C Bond as of
the date of such exchange. Such exchange shall occur only on an interest
payment date for the 1990 Series C Bond at the office of the Trustee in
the Borough of Manhattan, The City of New York, The State of New York.
The 1990 Series C Bond shall bear a legend stating that such bond has
not been registered under the United States Securities Act of 1933, as
amended (the "Act") and that as a consequence such bond may not be
offered, sold or otherwise transferred, whether or not for consideration,
unless registered under such Act or pursuant to an exemption from such
registration applicable to such offer, sale or other transfer, and may
bear such other legends as may be necessary to comply with any law or with
any rules or regulations made pursuant thereto.
CONSENT. SECTION 4. The holder of the 1990 Series C Bond, by its acceptance of
and holding thereof, consents and agrees that bonds of any series may be
issued which mature on a date or dates later than October 1, 2024 and also
consents to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024." Such holder further agrees that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holder, be deemed the affirmative vote of such holder at any
meeting called pursuant to said Article XV for the purpose of approving
such deletion, and (b) such deletion shall become effective at such time
as not less than eighty-five per cent (85%) in principal amount of bonds
outstanding under the Indenture shall have consented thereto substan-
tially in the manner set forth in this Section 4, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
FORM OF SECTION 5. The 1990 Series C Bond and the form of Trustee's Certificate
1990 SERIES C BOND. to be endorsed on such bond shall be substantially in the following forms,
respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series C, 8.357% due March 31, 2014
(Payable in annual installments, commencing March 31, 1990)
$85,475,000 No.________
</TABLE>
<PAGE> 44
41
<TABLE>
<S> <C>
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to UNITED STATES OF AMERICA, at its office or agency in the Borough
of Manhattan, the City and State of New York, in lawful money of the
United States of America, the principal sum of $85,475,000, together with
interest at the rate specified in the title hereof on the amount of said
principal sum remaining unpaid from time to time from January 3, 1990, and
after the first interest payment hereon from the most recent date to which
interest has been paid hereon, until the Company's obligation with respect
to payment of said principal shall have been discharged, all as provided,
to the extent and in the manner specified in the Indenture hereinafter
mentioned on the reverse hereof and in the supplemental indenture pursuant
to which this bond has been issued. Interest shall be due and payable in
49 consecutive semi-annual payments on March 31 and September 30 in each
year, commencing on March 31, 1990, and principal shall be due and payable
in 25 consecutive annual payments on March 31, in each year, commencing on
March 31, 1990, each as more fully set forth on the reverse hereof.
Payments of principal, premium, if any, and interest on this bond are to
be made by bank wire transfer in immediately available funds to the holder
hereof all as provided, to the extent and in the manner specified in the
Indenture hereinafter mentioned on the reverse hereof and in the
supplemental indenture pursuant to which this bond has been issued.
In the event any semi-annual payment is not made when due, the amount
payable shall be such payment, plus interest thereon at the interest rate
of one and one-half times the rate to be determined by the Secretary of
the Treasury taking into consideration the prevailing market yield on the
remaining maturity of the most recently auctioned 13-week U.S. Treasury
bills, from the due date to the date of payment. Upon the expiration of
each successive 91-day period following the scheduled payment date for any
outstanding payment, a new rate shall be established pursuant to this
paragraph and such rate shall be applied to the outstanding payment and
all late charges accrued thereon.
When any payment date falls on a Saturday, Sunday or a day on which the
Federal Reserve Bank of New York or the Trustee is not open for business,
all payments shall be payable on the first day thereafter on which the
Federal Reserve Bank of New York and the Trustee are open for business.
At the written request of the registered holder hereof made at least
forty-five (45) days in advance of an interest payment date, this bond
shall be exchangeable, in whole but not in part, on any interest payment
date in an aggregate principal amount equal to the amount of unpaid
principal which shall remain outstanding on this bond as of the date of
such exchange (after giving effect to the payment of principal hereon on
the date of such exchange), all as provided, to the extent and in the
manner specified in the Indenture and the Supplemental Indenture
hereinafter mentioned on the reverse hereof.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
</TABLE>
<PAGE> 45
42
<TABLE>
<S> <C>
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed on its behalf by its Chairman of the Board and
its President or a Vice President, with their manual or facsimile
signatures, and its corporate seal, or a facsimile thereof, to be
impressed or imprinted hereon and the same to be attested by its Secretary
or an Assistant Secretary by manual or facsimile signature.
THE DETROIT EDISON COMPANY
Dated January 3, 1990 By
----------------------------------
Chairman of the Board
----------------------------------
President
Attest:
----------------------------------
Secretary
</TABLE>
<PAGE> 46
43
<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is the only bond of an authorized issue of bonds of the
Company, unlimited as to amount except as provided in the Indenture
hereinafter mentioned or any indentures supplemental thereto, and is one
of a series of said bonds known as General and Refunding Mortgage Bonds,
1990 Series C (elsewhere herein referred to as the "1990 Series C Bond"),
limited to an aggregate principal amount of $85,475,000, except as
otherwise provided in the Indenture hereinafter mentioned. This bond is
issued and to be issued under, and is equally and ratably secured (except
insofar as any sinking, amortization, improvement or analogous fund,
established in accordance with the provisions of the Indenture hereinafter
mentioned, may afford additional security for the bonds of any particular
series and except as provided in Section 3 of Article VI of said
Indenture) by an Indenture, dated as of October 1, 1924, duly executed by
the Company to Bankers Trust Company, a corporation of the State of New
York, as Trustee, to which Indenture and all indentures supplemental
thereto (including the Supplemental Indenture dated as of February 15,
1990) reference is hereby made for a description of the properties and
franchises mortgaged and conveyed, the nature and extent of the security,
the terms and conditions upon which the bonds are issued and under which
additional bonds may be issued, and the rights of the holders of the bonds
and of the Trustee in respect of such security (which Indenture and all
indentures supplemental thereto, including the Supplemental Indenture
dated as of February 15, 1990, are hereinafter collectively called the
"Indenture"). As provided in the Indenture, said bonds may be for various
principal sums and are issuable in series, which may mature at different
times, may bear interest at different rates and may otherwise vary as in
said Indenture provided. With the consent of the Company and to the extent
permitted by and as provided in the Indenture, the rights and obligations
of the Company and of the holders of the bonds and the terms and
provisions of the Indenture, or of any indenture supplemental thereto, may
be modified or altered in certain respects by affirmative vote of at least
eighty-five percent (85%) in principal amount of the bonds then
outstanding, and, if the rights of one or more, but less than all, series
of bonds then outstanding are to be affected by the action proposed to be
taken, then also by affirmative vote of at least eighty-five percent (85%)
in principal amount of the series of bonds so to be affected (excluding in
every instance bonds disqualified from voting by reason of the Company's
interest therein as specified in the Indenture); provided, however, that,
without the consent of the holder hereof, no such modification or
alteration shall, among other things, affect the terms of payment of the
principal of, or the interest on, this bond, which in those respects is
unconditional.
The holder of the 1990 Series C Bond, by its acceptance of and holding
thereof, consents and agrees that bonds of any series may be issued which
mature on a date or dates later than October 1, 2024 and also consents to
the deletion from the first paragraph of Section 5 of Article II of the
Indenture of the phrase "but in no event later than October 1, 2024." Such
holder further agrees that (a) such consent shall, for all purposes of
Article XV of the Indenture and without further action on the part of such
holder, be deemed the affirmative vote of such holder at any meeting
called pursuant to said Article XV for the purpose of approving such
deletion, and (b) such deletion shall become effective at such time as not
less than eighty-five percent (85%) in principal amount of bonds
outstanding under the Indenture shall have consented thereto substan-
tially in the manner set forth in Section 3 of Part I of the Supplemental
Indenture dated as of February 15, 1990, or in writing, or by affirmative
vote cast at a meeting called pursuant to said Article XV, or by any
combination thereof.
Principal payments shall be made hereon annually, payable on March 31 of
each year (commencing March 31, 1990) as set forth below, until the final
payment of principal shall be made:
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- -----------
<S> <C> <C> <C>
March 31, 1990................................ $3,419,000 $82,056,000
</TABLE>
<PAGE> 47
44
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL PRINCIPAL AMOUNT
PAYMENT PAYMENT REMAINING
DATE DUE OUTSTANDING
------------------ ---------- -----------
<S> <C> <C> <C>
March 31, 1991................................ 3,419,000 78,637,000
March 31, 1992................................ 3,419,000 75,218,000
March 31, 1993................................ 3,419,000 71,799,000
March 31, 1994................................ 3,419,000 68,380,000
March 31, 1995................................ 3,419,000 64,961,000
March 31, 1996................................ 3,419,000 61,542,000
March 31, 1997................................ 3,419,000 58,123,000
March 31, 1998................................ 3,419,000 54,704,000
March 31, 1999................................ 3,419,000 51,285,000
March 31, 2000................................ 3,419,000 47,866,000
March 31, 2001................................ 3,419,000 44,447,000
March 31, 2002................................ 3,419,000 41,028,000
March 31, 2003................................ 3,419,000 37,609,000
March 31, 2004................................ 3,419,000 34,190,000
March 31, 2005................................ 3,419,000 30,771,000
March 31, 2006................................ 3,419,000 27,352,000
March 31, 2007................................ 3,419,000 23,933,000
March 31, 2008................................ 3,419,000 20,514,000
March 31, 2009................................ 3,419,000 17,095,000
March 31, 2010................................ 3,419,000 13,676,000
March 31, 2011................................ 3,419,000 10,257,000
March 31, 2012................................ 3,419,000 6,838,000
March 31, 2013................................ 3,419,000 3,419,000
March 31, 2014................................ 3,419,000 0
This bond shall be redeemable prior to stated maturity, at the election
of the Company on any interest payment date, at the redemption prices
calculated in accordance with the formula set forth below on giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company not more than ninety (90) days nor less than thirty (30)
days prior to the date fixed for redemption to the registered holder of
the 1990 Series C Bond.
</TABLE>
<PAGE> 48
45
<TABLE>
<S> <C>
The optional redemption payment of each bond to be redeemed shall be
equal to the present worth, on the date of redemption, of the remaining
scheduled semi- annual payments of interest and annual retirement of
principal of such bond, calculated as follows. Determine the present value
of each scheduled semi-annual payment of interest and annual retirement of
principal by dividing each payment by the Present Value Divisor (PVD),
where:
____________
PVD = (\/1.0 + I) (D)
I = That annual interest rate (which has been adjusted for semi-annual
compounding) for U.S. Treasury securities, with comparable maturities
as set forth in the Federal Reserve statistical release, designated
H.15 (519), or its successor, published at least 4 days but not
more than 10 days prior to the optional redemption date. The rate
shall be the "This Week" rate for Treasury Constant Maturities.
Straight line interpolate to 3 decimal places after rounding the
prepayment period to the nearest month (1st-15th round down) to
match the remaining term of the bond to be redeemed.
D = Present value divisor for the preceding 6 month interest period (D
equals 1.0 for the period preceding the first period, which is the
period from the redemption date to the first scheduled payment date
thereafter).
Add the present value for all scheduled annual retirements of
principal and semi-annual payments of interest to determine the sum
to be paid upon redemption of each bond.
If the optional redemption payment is greater than the principal
outstanding as of the date of optional redemption, the prepayment
results in a premium, plus in each case accrued interest to the date
fixed for redemption. If the optional redemption payment is less
than the principal outstanding as of the date of the optional
redemption, the prepayment results in a discount which shall be
deducted from the outstanding principal amount which otherwise would
have been paid, plus in each case accrued interest to the date fixed
for redemption.
No redemption pursuant to this paragraph shall be credited to, or relieve
the Company to any extent from its obligation to make the principal
payment provided for above.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
No recourse shall be had for the payment of the principal of, or the
interest on, this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever, all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
</TABLE>
<PAGE> 49
46
<TABLE>
<S> <C>
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is the only bond of the series designated therein, described
TRUSTEE'S in the within- mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
---------------------------------
Authorized Officer
</TABLE>
<PAGE> 50
47
<TABLE>
<S> <C>
PART VI.
CREATION OF TWO HUNDRED EIGHTY-SIXTH
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
1990 SERIES F
TERMS OF BONDS SECTION 1. The Company hereby creates the Two hundred eighty-sixth
OF 1990 SERIES F. series of bonds to be issued under and secured by the Original Indenture
as amended to date and as further amended by this Supplemental Indenture,
to be designated, and to be distinguished from the bonds of all other
series, by the title "General and Refunding Mortgage Bonds, 1990 Series F"
(elsewhere herein referred to as the "bonds of 1990 Series F"). The
aggregate principal amount of bonds of 1990 Series F shall be limited to
the principal amount of 1990 Series C Bond being exchanged, except as
provided in Sections 7 and 13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds.
The bonds of 1990 Series F shall mature on March 31, 2014 and shall be
issued in exchange for, and in an aggregate principal amount equal to the
principal amount remaining outstanding on, the 1990 Series C Bond as of
the date of such exchange. The bonds of 1990 Series F shall be issued as
registered bonds without coupons in denominations of $10,000 and any
multiple thereof, and shall bear interest, payable semi-annually on March
31 and September 30 of each year (commencing on the first March 31 or
September 30 following the date of such exchange), at the rate of eight
and 357/1000 per centum (8.357%) per annum until the principal shall have
become due and payable, and thereafter until the Company's obligation with
respect to the payment of said principal shall have been discharged as
provided in the Indenture. Except as otherwise specifically provided in
this Supplemental Indenture, the principal of and interest on the bonds of
1990 Series F shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York, The State of New York in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts. The interest on
bonds of 1990 Series F, whether in temporary or definitive form, shall be
payable without presentation of such bonds and (subject to the provisions
of this Section 1) only to or upon the written order of the registered
holders thereof.
Each bond of 1990 Series F shall be dated the date of its authentication
and interest shall be payable on the principal represented thereby from
the March 31 or September 30 next preceding the date thereof to which
interest has been paid on bonds of 1990 Series F, unless the bond is
authenticated on a date to which interest has been paid, in which case
interest shall be payable from the date of authentication.
The bonds of 1990 Series F in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denomination of bonds of 1990
Series F). Until bonds of 1990 Series F in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1990
Series F in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of 1990 Series F, if any, may be printed and
may be issued in authorized denominations in substantially the form of
definitive bonds of 1990 Series F, but without a recital of redemption
prices and with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
</TABLE>
<PAGE> 51
48
<TABLE>
<S> <C>
Interest on any bond of 1990 Series F which is payable on any interest
payment date and is punctually paid or duly provided for shall be paid to
the person in whose name that bond, or any previous bond to the extent
evidencing the same debt as that evidenced by that bond, is registered at
the close of business on the regular record date for such interest, which
regular record date shall be the fifteenth day of March or September as
the case may be (whether or not a business day) next preceding such
interest payment date. If the Company shall default in the payment of the
interest due on any interest payment date on the principal represented by
any bond of 1990 Series F, such defaulted interest shall forthwith cease
to be payable to the registered holder of that bond on the relevant
regular record date by virtue of his having been such holder, and such
defaulted interest may be paid to the registered holder of that bond (or
any bond or bonds of 1990 Series F issued upon transfer or exchange
thereof) on the date of payment of such defaulted interest or, at the
election of the Company, to the person in whose name that bond (or any
bond or bonds of 1990 Series F issued upon transfer or exchange thereof)
is registered on a subsequent record date established by notice given by
mail by or on behalf of the Company to the holders of bonds of 1990 Series
F not less than ten (10) days preceding such subsequent record date, which
subsequent record date shall be at least five (5) days prior to the
payment date of such defaulted interest.
REDEMPTION OF BONDS SECTION 2. The bonds of 1990 Series F shall be redeemable (i) on March
OF 1990 31 in each year, commencing March 31 in the first calendar year
SERIES F. subsequent to initial issuance, through the operation of the sinking fund
hereinafter described at 100% of the principal amount thereof, (ii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance, as a
whole, or in part, from time to time, at par plus in each case accrued
interest to the date fixed for redemption if such redemption does not
utilize, directly or indirectly, the proceeds of and is not in
anticipation of any refunding operation involving borrowing at an interest
cost to the Company, computed in accordance with generally accepted
financial practice, of less than 8.357% per annum, and (iii) at the
election of the Company on any date prior to maturity, commencing March 31
of the eleventh (11th) calendar year subsequent to initial issuance as a
whole, or in part, from time to time, at the following redemption prices
(expressed as percentages of the principal amount thereof) plus in each
case (whether through operation of the sinking fund or otherwise) accrued
interest to the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
The bonds of 1990 Series F shall be redeemable as aforesaid as provided
herein and as specified in Article IV of the Indenture upon giving notice
of such redemption by first class mail, postage prepaid, by or on behalf
of the Company at least thirty (30) days prior to the date fixed for
redemption to the registered holders of bonds of 1990 Series F so called
for redemption at their last respective addresses appearing on the
register thereof, but failure to mail such notice to the registered
holders of any bonds of 1990 Series F designated for redemption shall not
affect the validity of any such redemption of any other bonds of such
series. Interest shall cease to accrue on any bonds of 1990 Series F (or
any portion thereof) so called for redemption from and after the date
fixed for redemption if payment sufficient to redeem the bonds of 1990
Series F (or such protion) designated for redemption has been duly
provided for. Bonds of 1990 Series F redeemed in part only shall be in
amounts of $10,000 or any multiple thereof.
</TABLE>
<PAGE> 52
49
<TABLE>
<S> <C>
If the giving of the notice of redemption shall have been completed, or
if provision satisfactory to the Trustee for the giving of such notice
shall have been made, and if the Company shall have deposited with the
Trustee in trust funds (which shall become available for payment to the
holders of the bonds of 1990 Series F so to be redeemed) sufficient to
redeem bonds of 1990 Series F in whole or in part, on the date fixed for
redemption, then all obligations of the Company in respect of such bonds
(or portions thereof) so to be redeemed and interest due or to become due
thereon shall cease and be discharged and the holders of such bonds of
1990 Series F (or portions thereof) shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature on
their part under the Indenture or in respect of such bonds (or portions
thereof) and interest.
As and for the sinking fund for the retirement of the bonds of 1990
Series F the Company will, until all the bonds of 1990 Series F are paid
or payment thereof provided for, deposit with the Trustee prior to March
31 in each year, commencing March 31 of the first calendar year subsequent
to initial issuance, an amount in cash sufficient to redeem on such March
31 $3,420,000 principal amount of bonds of 1990 Series F.
On or before February 1 in each year, commencing February 1 of the first
calendar year subsequent to initial issuance the Company (i) may deliver
bonds of 1990 Series F (other than any previously called for redemption
for the sinking fund) and (ii) may apply as a credit bonds for 1990 Series
F redeemed at the election of the Company otherwise than through the
sinking fund, in each case in satisfaction of all or any part of the
amount of any sinking fund payment. Each such bond of 1990 Series F shall
be received or credited for such purpose by the Trustee at the principal
amount thereof and the amount of such sinking fund payment shall be
reduced accordingly.
On February 1 in each year, commencing February 1 of the first calendar
year subsequent to initial issuance, the Company will deliver to the
Trustee a treasurer's certificate, which shall be irrevocable, specifying
the amount of the next ensuing sinking fund payment and the portions
thereof which are to be satisfied by payment of cash, by delivery of bonds
of 1990 Series F or by crediting bonds of 1990 Series F previously
redeemed. The treasurer's certificate shall also state that bonds of 1990
Series F forming the basis of any such credit do not include any bonds of
1990 Series F which have been called for redemption for the sinking fund
or previously credited against any sinking fund payment. The Trustee
shall, upon the receipt of the treasurer's certificate, select the bonds
of 1990 Series F to be redeemed upon the next ensuing March 31 in the
manner hereinabove provided for and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the manner
hereinabove provided for. Such notice having been duly given, the
redemption of such bonds of 1990 Series F shall be made upon the terms and
in the manner and with the effect hereinabove provided for with respect to
redemptions.
EXCHANGE AND At the option of the registered holder, any bonds of 1990 Series F, upon
TRANSFER. surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City of New York, The State of New York,
together with a written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the Company duly executed
by the holder or by its duly authorized attorney, shall be exchangeable
for a like aggregate principal amount of bonds of 1990 Series F of other
authorized denominations, upon the terms and conditions specified herein
and in Section 7 of Article II of the Indenture. Bonds of 1990 Series F
shall be transferable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, The State of New York. The
Company waives its rights under Section 7 of Article II of the Indenture
not to make exchanges or transfers of bonds of 1990 Series F during any
period of ten (10) days next preceding any interest payment date for such
bonds.
</TABLE>
<PAGE> 53
50
<TABLE>
<S> <C>
Bonds of 1990 Series F, in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or with the rules or regulations of any
stock exchange or to conform to usage with respect thereto.
CONSENT. SECTION 3. The holders of the bonds of 1990 Series F, by their
acceptance of and holding thereof, consent and agree that bonds of any
series may be issued which mature on a date or dates later than October 1,
2024 and also consent to the deletion from the first paragraph of Section
5 of Article II of the Indenture of the phrase "but in no event later than
October 1, 2024". Such holders further agree that (a) such consent shall,
for all purposes of Article XV of the Indenture and without further action
on the part of such holders, be deemed the affirmative vote of such
holders at any meeting called pursuant to said Article XV for the purpose
of approving such deletion, and (b) such deletion shall become effective
at such time as not less than eighty-five percent (85%) in principal
amount of bonds outstanding under the Indenture shall have consented
thereto substantially in the manner set forth in this Section 3, or in
writing, or by affirmative vote cast at a meeting called pursuant to said
Article XV, or by any combination thereof.
</TABLE>
<PAGE> 54
51
<TABLE>
<S> <C>
FORM OF BONDS OF SECTION 4. The bonds of 1990 Series F and the form of Trustee's
1990 SERIES F. Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively.
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
1990 Series F, 8.357% due March 31, 2014
$______________ No. _____________
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to or registered assigns, at its office
or agency in the Borough of Manhattan, The City and State of New York, the
principal sum of in lawful money of the United States of
America on the thirty-first day of March, 2014, and to pay interest
thereon at the rate specified in the title hereof, at such office or
agency, in like lawful money, from , and after the first
interest payment on bonds of this Series from the most recent date to
which such interest has been paid, semi-annually on the thirty-first day
of March and the thirtieth day in September each year, to the person in
whose name this bond is registered at the close of business on the
preceding fifteenth day of March or September (subject to certain
exceptions provided in the Indenture hereinafter mentioned), until the
Company's obligation with respect to payment of said principal shall have
been discharged as provided in such Indenture.
Reference is hereby made to the further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the aforesaid Indenture, or its
successor thereunder, shall have signed the form of certificate endorsed
hereon.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this instru-
ment to be executed on its behalf by its Chairman of the Board and its
President or a Vice President, with their manual or facsimile signatures,
and its corporate seal, or a facsimile thereof, to be impressed or
imprinted hereon and the same to be attested by its Secretary or an
Assistant Secretary with his manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
-------------------------
Chairman of the Board
-------------------------
Attest: President
-------------------------
Secretary
</TABLE>
<PAGE> 55
52
<TABLE>
<S> <C>
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a series
of said bonds known as General and Refunding Mortgage Bonds, 1990 Series
F, (elsewhere herein referred to as the "bonds of 1990 Series F"), limited
to [the aggregate principal amount of the 1990 Series C Bond being
converted], except as otherwise provided in the Indenture hereinafter
mentioned. This bond and all other bonds of said series are issued and to
be issued under, and are all equally and ratably secured (except insofar
as any sinking, amortization, improvement or analogous fund, established
in accordance with the provisions of the Indenture hereinafter mentioned,
may afford additional security for the bonds of any particular series and
except as provided in Section 3 of Article VI of said Indenture) by an
Indenture, dated as of October 1, 1924, duly executed by the Company to
Bankers Trust Company, a corporation of the State of New York, as Trustee,
to which Indenture and all indentures supplemental thereto (including the
Supplemental Indenture dated as of February 15, 1990) reference is hereby
made for a description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and conditions
upon which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee in
respect of such security (which Indenture and all indentures supplemental
thereto, including the Supplemental Indenture dated as of February 15,
1990, are hereinafter collectively called the "Indenture"). As provided in
the Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear interest
at different rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by and as
provided in the Indenture, the rights and obligations of the Company and
of the holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or altered in
certain respects by affirmative vote of at least eighty-five percent (85%)
in principal amount of the bonds then outstanding, and, if the rights of
one or more, but less than all, series of bonds then outstanding are to be
affected by the action proposed to be taken, then also by affirmative vote
of at least eighty-five percent (85%) in principal amount of the series of
bonds so to be affected (excluding in every instance bonds disqualified
from voting by reason of the Company's interest therein as specified in
the Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of, or the interest on, this
bond, which in those respects is unconditional.
The holders of the bonds of 1990 Series F, by their acceptance of and
holding thereof, consent and agree that bonds of any series may be issued
which mature on a date or dates later than October 1, 2024 and also
consent to the deletion from the first paragraph of Section 5 of Article
II of the Indenture of the phrase "but in no event later than October 1,
2024,". Such holders further agree that (a) such consent shall, for all
purposes of Article XV of the Indenture and without further action on the
part of such holders, be deemed the affirmative vote of such holders at
any meeting called pursuant to said Article XV for the purpose of
approving such deletion, and (b) such deletion shall become effective at
such time as not less than eighty-five percent (85%) in principal amount
of bonds outstanding under the Indenture shall have consented thereto
substantially in the manner set forth in Section 3 of Part I of the
Supplemental Indenture dated as of February 15, 1990, or in writing, or by
affirmative vote cast at a meeting called pursuant to said Article XV, or
by any combination thereof.
</TABLE>
<PAGE> 56
53
<TABLE>
<S> <C>
This bond is redeemable on giving notice of such redemption by first
class mail, postage prepaid, by or on behalf of the Company at least
thirty (30) but not more than ninety (90) days prior to the date fixed for
redemption to the registered holder of this bond at his last address
appearing on the register thereof, in the manner and upon the terms
provided in the Indenture, (i) on March 31 in each year, commencing [March
31, ], through the operation of the sinking fund for bonds of 1990
Series F at 100% of the principal amount hereof, (ii) at the election of
the Company on any date prior to maturity, commencing March 31 of the
eleventh (11th) calendar year subsequent to initial issuance, as a whole,
or in part, from time to time, at par plus in each case accrued interest
to the date fixed for redemption if such redemption does not utilize,
directly or indirectly, the proceeds of and is not in anticipation of any
refunding operation involving borrowing at an interest cost to the
Company, computed in accordance with generally accepted financial
practice, of less than 8.357% per annum, and (iii) at the election of the
Company on any date prior to maturity, commencing March 31 of the eleventh
(11th) calendar year subsequent to initial issuance, as a whole or in
part, from time to time, at the following redemption prices (expressed as
percentages of the principal amount hereof) plus in each case (whether
through operation of the sinking fund or otherwise) accrued interest to
the date fixed for redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED
DURING 12 MONTH
PERIOD ENDING REDEMPTION
MARCH 31, PRICE
--------------- -----------
<S> <C>
Year 11................................ 102.50%
Year 12................................ 102.00
Year 13................................ 101.50
Year 14................................ 101.00
Year 15................................ 100.50
Thereafter............................. 100.00
</TABLE>
<TABLE>
<S> <C>
The Company will deposit with the Trustee as and for a sinking fund for
the bonds of Series F prior to each March 31, commencing [ ],
an amount sufficient to redeem $3,420,000 principal amount of bonds of
1990 Series F, less the amount of any credit against any such payment
taken by the Company for bonds of 1990 Series F delivered to the Trustee
or redeemed by the Company otherwise than through the sinking fund.
Under the Indenture, funds may be deposited with the Trustee (which
shall have become available for payment), in advance of the redemption
date of any of the bonds of 1990 Series F (or portions thereof), in trust
for the redemption of such bonds (or portions thereof) and the interest
due or to become due thereon, and thereupon all obligations of the Company
in respect of such bonds (or portions thereof) so to be redeemed and such
interest shall cease and be discharged, and the holders thereof shall
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or with respect to
such bonds and interest.
In case an event of default, as defined in the Indenture, shall occur,
the principal of all the bonds issued thereunder may become or be declared
due and payable, in the manner, with the effect and subject to the
conditions provided in said Indenture.
This bond is transferable by the registered holder hereof, in person or
by his attorney duly authorized in writing, on the books of the Company
kept at its office or agency in the Borough of Manhattan, The City and
State of New York, upon surrender and cancellation of this bond, and
thereupon, a new registered bond or bonds of the same series of authorized
denominations for a like aggregate principal amount will be issued to the
transferee or transferees in exchange herefor, and this bond with others
in like form may in like manner be exchanged for one or more new
registered bonds of the same series of other authorized denominations, but
of the same aggregate principal amount, all as provided and upon the terms
and conditions set forth in the Indenture, and upon payment, in any event,
of the charges prescribed in the Indenture.
</TABLE>
<PAGE> 57
54
<TABLE>
<S> <C>
No recourse shall be had for the payment of the principal of or the
interest on this bond, or for any claim based hereon or otherwise in
respect hereof or of the Indenture, or of any indenture supplemental
thereto, against any incorporator, or against any past, present or future
stockholder, director or officer, as such, of the Company, or of any
predecessor or successor corporation, either directly or through the
Company or any such predecessor or successor corporation, whether for
amounts unpaid on stock subscriptions or by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty
or otherwise howsoever; all such liability being, by the acceptance hereof
and as part of the consideration for the issue hereof, expressly waived
and released by every holder or owner hereof, as more fully provided in
the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated therein,
TRUSTEE'S described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By
-----------------------------------
Authorized Officer
</TABLE>
<PAGE> 58
55
<TABLE>
<S> <C>
PART VII.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Scretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
</TABLE>
<PAGE> 59
56
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
</TABLE>
<PAGE> 60
57
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
</TABLE>
<PAGE> 61
58
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C Janaury 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
</TABLE>
-----------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<TABLE>
<S> <C>
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as of December 1, 1989 providing
for the terms of bonds to be issued thereunder of Series KKP No. 11 and
1989 Series BP has heretofore been entered into between the Company and
the Trustee and has been filed in the Office of the Secretary of State of
Michigan as a financing statement on December 19, 1989 (Filing No. 99782),
has been filed and recorded in the Office of the Interstate Commerce
Commission (Recordation No. 5485-000), and has been recorded as a real
estate mortgage in the offices of the respective Register of Deeds of
certain counties in the State of Michigan, as follows:
</TABLE>
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
--------------------------- ----------------- ------ ---------
<S> <C> <C> <C>
Genesee.................... December 19, 1989 2548 1-29
Huron...................... December 19, 1989 533 702-730
Ingham..................... December 19, 1989 1793 766-794
Lapeer..................... December 19, 1989 676 970-998
Lenawee.................... December 19, 1989 1113 98-126
Livingston................. December 19, 1989 1382 437-465
Macomb..................... December 19, 1989 04784 792-820
Mason...................... December 19, 1989 387 516-544
Monroe..................... December 19, 1989 1103 0100-0128
Oakland.................... December 19, 1989 11194 511-539
Sanilac.................... December 19, 1989 407 685-713
St. Clair.................. December 19, 1989 946 919-947
Tuscola.................... December 19, 1989 598 863-891
Washtenaw.................. December 19, 1989 2371 834-862
Wayne...................... December 19, 1989 24466 89-837
</TABLE>
<PAGE> 62
59
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, BB, CC, DDP Nos. 1-9, FFR Nos. 1-11, GGP
FOR PAYMENT. Nos. 1-6 and 8-15, IIP Nos. 1-6 and 8-13, JJP Nos. 1-6, KKP Nos. 1-6, LLP
Nos. 1-6 and 8-13, NNP Nos. 1-6 and 8-13, OOP Nos. 1-8, QQP Nos. 1-7 and
10-14 and TTP Nos. 1-6, 1980 Series A, 1980 Series CP Nos. 1-5 and 13-16,
1980 Series DP Nos. 1-5 and 1981 Series AP No. 1-4 which were issued under
Supplemental Indentures dated as of, respectively, June 1, 1925, August 1,
1927, February 1, 1931, October 1, 1932, September 25, 1935, September 1,
1936, December 1, 1940, September 1, 1947, November 15, 1951, January 15,
1953, May 1, 1953, March 15, 1954, May 15, 1955, August 15, 1957, December
15, 1970, October 1, 1974, January 15, 1975, November 1, 1975, February 1,
1976, June 15, 1976, October 1, 1977, March 1, 1977, July 1, 1979, March
1, 1977, March 1, 1977, March 1, 1977, September 1, 1979, July 1, 1977,
July 1, 1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1,
1979, January 1, 1980, August 15, 1980 and November 1, 1981 have matured
or have been called for redemption and funds sufficient for such payment
or redemption have been irrevocably deposited with the Trustee for that
purpose; and Certificates of Provision for Payment have been recorded in
the offices of the respective Registers of Deeds of certain counties in
the State of Michigan, with respect to all bonds of Series A, B, C, D, E,
F, G, H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1
and 2, IIP No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART VIII.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
</TABLE>
<PAGE> 63
60
<TABLE>
<S> <C>
PART IX.
MISCELLANEOUS.
EXECUTION IN This Supplemental Indenture may be simultaneously executed in any
COUNTERPARTS. number of counterparts, each of which when so executed shall be deemed to
be an original; but such counterparts shall together constitute but one
and the same instrument.
TESTIMONIUM. IN WITNESS WHEREOF, The Detroit Edison Company and Bankers Trust
Company have caused these presents to be signed in their respective
corporate names by their respective Chairmen of the Board, Presidents,
Vice Presidents, Assistant Vice Presidents or Treasurers and impressed
with their respective corporate seals, attested by their respective
Secretaries or Assistant Secretaries, all as of the day and year first
above written.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By /s/ L. L. LOOMANS
------------------------------
L. L. Loomans
Vice President and Treasurer
EXECUTION. Attest:
/s/ SUSAN M. BEALE
------------------------------------
Susan M. Beale
Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
/s/ ELAINE M. GODFREY
------------------------------------
Elaine M. Godfrey
/s/ BETTY M. HANSEN
------------------------------------
Betty M. Hansen
(Corporate Seal)
BANKERS TRUST COMPANY,
By /s/ BARBARA A. JOINER
------------------------------
Barbara A. Joiner
Vice President
Attest:
/s/ SANDRA SHIRLEY
------------------------------------
Sandra Shirley
Assistant Secretary
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
/s/ ERIC M. HAWNER
------------------------------------
Eric M. Hawner
/s/ Y. PATRICIA BLUE
------------------------------------
Y. Patricia Blue
</TABLE>
<PAGE> 64
61
<TABLE>
<S> <C>
STATE OF MICHIGAN SS.:
COUNTY OF WAYNE
ACKNOWLEDGMENT On this 14th day of February, 1990, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of Wayne, in the State of Michigan,
BY COMPANY. personally appeared L. L. Loomans , to me personally known, who, being by
me duly sworn, did say that his business address is 2000 Second Avenue,
Detroit, Michigan 48226 and he is the Vice President and Treasurer of THE
DETROIT EDISON COMPANY, one of the corporations described in and which
executed the foregoing instrument; that he knows the corporate seal of the
said corporation and that the seal affixed to said instrument is the
corporate seal of said corporation; and that said instrument was signed
and sealed in behalf of said corporation by authority of its Board of
Directors and that he subscribed his name thereto by like authority; and
said L. L. Loomans, acknowledged said instrument to be the free act and
deed of said corporation.
/s/ JANET A. SCULLEN
---------------------------------
(Notarial Seal) Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires March 30, 1993
STATE OF NEW YORK SS.:
COUNTY OF NEW YORK
ACKNOWLEDGMENT On this 12th day of February, 1990, before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of New York, in the State of New York,
BY TRUSTEE. personally appeared Barbara A. Joiner, to me personally known, who, being
by me duly sworn, did say that her business address is Four Albany Street,
New York, New York 10015, and she is Vice President of BANKERS TRUST
COMPANY, one of the corporations described in and which executed the
foregoing instrument; that she knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that she subscribed her name thereto by like authority; and said Barbara
A. Joiner acknowledged said instrument to be the free act and deed of said
corporation.
(Notarial Seal)
/s/ DESIREE MARSHALL
---------------------------------
Desiree Marshall
Notary Public, State of New York
No. 24-4885294
Qualified in Kings County
Certificate filed in New York County
Commission Expires February 17, 1991
</TABLE>
<PAGE> 65
62
<TABLE>
<S> <C>
STATE OF MICHIGAN SS.:
COUNTY OF WAYNE
AFFIDAVIT AS TO L. L. Loomans, being duly sworn, says: that he is the Vice President and
CONSIDERATION Treasurer of THE DETROIT EDISON COMPANY, the Mortgagor named in the
AND GOOD FAITH. foregoing instrument, and that he has knowledge of the facts in regard to
the making of said instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and adequate, and that
the same was given in good faith for the purposes in such instrument set
forth.
/s/ L. L. LOOMANS
--------------------------------
L. L. Loomans
Sworn to before me this 14th day of
February, 1990
/s/ JANET A. SCULLEN
-------------------------------------
Janet A. Scullen, Notary Public
Macomb County, MI
(Acting in Wayne County)
My Commission Expires March 30, 1993
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq., 2000 Second Avenue,
Detroit, Michigan 48226
</TABLE>
<PAGE> 1
EXHIBIT 10-56
THE DETROIT EDISON COMPANY ("COMPANY")
SHAREHOLDER VALUE IMPROVEMENT PLAN - A
OFFICIAL PLAN DOCUMENT
(POSITIONS OF VICE PRESIDENT AND ABOVE)
- A PART OF THE COMPANY-WIDE PROGRAM TO INCREASE SHAREHOLDER VALUE.
AS AMENDED AND RESTATED EFFECTIVE JANUARY 23, 1995
<PAGE> 2
SHAREHOLDER VALUE IMPROVEMENT PLAN-A
AS AMENDED AND RESTATED EFFECTIVE JANUARY 23, 1995
OVERVIEW
The Shareholder Value Improvement Plan - A (Plan) is designed to encourage
continued improvement in performance and operating results. The Plan's
ultimate objective is to increase shareholder value. It provides a method for
senior levels of management to share in the added value that they create by
contributing to corporate performance improvement.
The Plan provides for possible financial awards to eligible members of senior
management if specified annual corporate and organizational unit goals are
achieved and is intended to motivate senior levels of management toward taking
actions that have long-term performance outcomes which improve shareholder
value. For Plan years 1991, 1992 and 1993, a portion of approved awards was
deferred for a specified period of time. Commencing with the 1996 Plan Year,
recipients of Plan awards will be permitted, under specified conditions, to
defer the payment of awards.
The Plan measures calendar year performance. The current year's standards and
requirements will be communicated annually.
ADMINISTRATION
The Organization and Compensation Committee (Committee) of the Board of
Directors is Plan Administrator with responsibility for the administration of
the Plan. The Committee has the authority to interpret the provisions of the
Plan and prescribe any regulations relating to its administration. The
decisions of the Committee with respect thereto shall be conclusive.
The Committee, on an annual basis, will review and if appropriate, recommend to
the Board of Directors for approval, the specific criteria for eligibility, the
type and timing of awards and the manner of payment of awards (current and/or
deferred), the performance measures and related weights to be used in computing
award amounts for Plan Years 1991, 1992, 1993 and 1994 and the Performance Fund
for Plan year 1995 and thereafter and the performance levels for each
performance measure. The Board of Directors reserves the right to amend,
suspend or terminate the Plan at any time (See "Awards").
Current awards calculated under the terms of the Plan are not payable until
such time as the Board's approval has been granted. The Board of Directors
reserves the right to reduce or cancel any awards that might otherwise be made
if in its sole discretion it determines that the performance achieved is not
indicative of an
<PAGE> 3
improvement in shareholder value. If such a determination is made, the Plan
may be canceled or substantially modified with the result of terminating or
decreasing any awards that might otherwise be made hereunder.
The Treasurer will be responsible for making award payments, for establishing
and maintaining the equity and deferred accounts for award recipients, and for
maintaining all necessary records regarding the valuation and payment of
awards.
The Vice President-Human Resources will assist the Committee in the
development, administration and communication of the Plan.
ELIGIBILITY
Only those individuals that hold and actively perform (where "hold and actively
perform" excludes all temporary assignments, all step-up assignments and
lengthy periods of absences) in positions of Vice President or above who
receive at least a "satisfactory" or "solid" performance appraisal for the
applicable calendar year will be eligible to participate in the Plan. The
Board of Directors may at any time specify additional positions that may be
eligible to participate in the Plan.
Any person who is elected to an eligible position in The Detroit Edison Company
will become eligible to participate in the Plan provided, however, that any
such participant must hold, and actively perform in, one or more eligible
positions for a total of at least seven months during a Plan year to receive
any award under the Plan. Employes are not eligible to participate in the Plan
if they are eligible to participate in any other Company incentive program
(other than the Long Term Incentive Plan to be submitted to Common Shareholders
for approval in April 1995).
Exceptions to the eligibility criteria may be authorized by the Board of
Directors.
Participation in the Plan does not guarantee continued employment with the
Company.
AWARD OPPORTUNITY
For Plan years 1991, 1992, 1993 and 1994, awards were calculated as a percent
of pay based on the achievement of specific performance measures. Each
performance measure was assigned performance levels and weights. The amount of
an award was dependent upon the achieved level of performance, the associated
weight and the applicable award opportunity percentage.
2
<PAGE> 4
For Plan years 1991, 1992, 1993 and 1994, the award opportunity percentage that
applied to participants was determined by the eligible position that each
applicable participant held and actively performed for at least seven months
during the calendar year (Plan year). If during a calendar year participants
held and actively performed in different eligible positions for a total of at
least seven months, their award was calculated at the award level for the
lowest eligible position they held provided that they did not hold and actively
perform in a single eligible position for at least seven months, in which event
the eligible position held for seven months was used for purposes of the Plan.
Effective with the 1995 Plan year, awards, if any, will be payable from a fund
("Performance Fund") established by multiplying the base salary (including
applicable amounts deferred under Company-sponsored benefit plans) of otherwise
eligible members of senior management by a percent based upon the achievement
of specific performance measures. (For purposes of the Performance Fund, base
salary is defined as being the sum of the base salary of all otherwise eligible
members of senior management who performed in one or more senior management
positions for a total of at least seven months during the applicable calendar
year which is also a Plan year.)
PERFORMANCE MEASURES, LEVELS AND WEIGHTS
The measures of performance and weight applicable to each Plan year will be
communicated annually to all eligible employes.
AWARDS
Award amounts for 1991, 1992, 1993 and 1994 were calculated with reference to
the base salary paid during the applicable calendar year including certain
amounts deferred under Company-sponsored benefit plans. Effective with the
1995 Plan year, award amounts will be payable from the Performance Fund and
will be granted, in the sole discretion of the Board of Directors, to otherwise
eligible members of senior management, in such amounts, if any, as are
determined to be appropriate by the Board of Directors.
For Plan years 1991, 1992, 1993 and 1994, if an otherwise eligible participant
met the eligibility criteria but terminated employment and the termination was
due to disability (where disability is defined as being eligible to receive a
benefit under the Company's Long Term Disability Plan) or retirement (where
retirement is defined as a resignation at age 55 or older and with at least 10
years of Company service or at age 65 or older) or died, such otherwise
eligible participant remained eligible for a prorated award for the applicable
Plan year.
3
<PAGE> 5
Awards under the Plan are not considered compensation for purposes of the
Company's qualified and non-qualified savings plans, the Company's qualified
and non-qualified retirement plans, insurance or any other Company-sponsored
qualified or non-qualified employe benefit programs.
See "Forfeiture" herein.
AWARD CALCULATION
For Plan years 1991, 1992, 1993 and 1994, award amounts were calculated by
multiplying a participant's base salary (as defined previously in "Awards") by
the award percentage approved by the Board of Directors. Effective with the
1995 Plan year, awards, if any, will be payable from the Performance Fund in
such amounts as deemed appropriate by the Board of Directors.
AWARD PAYMENT
For Plan years 1991, 1992 and 1993, fifty percent (50%) of annual awards were
paid as soon as practicable following approval by the Board of Directors.
Effective with the 1994 Plan year, annual awards, if any, will be paid as soon
as practicable following approval by the Board of Directors unless deferred as
permitted herein.
Effective with the 1996 Plan year, members of senior management will be
permitted to defer the payment of 50% to 100% of an approved award for a period
of from one to five years ("Deferred Awards"). A Deferred Award Account will
be established for each award recipient with a timely Deferral Notice on file
with the Company. Deferrals must be irrevocably submitted prior to the
commencement of the Plan year during which the services giving rise to the
award will be performed on a form ("Deferral Notice") to be furnished by the
Company. For example, a Deferral Notice for an award to be based on 1996
performance must be filed with the Company by the end of 1995. Once filed with
the Company, the Deferral Notice may not be changed or revoked.
For Plan years 1991, 1992 and 1993, fifty percent (50%) of the annual awards
were converted to equity units and deferred for a three-year period. This
deferred portion of the approved award was deemed to be invested in Company
Common Stock by converting the award into equity units equal in value to the
average of the high and low sales prices of Detroit Edison Common Stock as
listed in the Wall Street Journal for the New York Stock Exchange Composite
Tape, on the last business day on which such stock was traded in the Plan year
to which the award related. Equity units were credited to each participant's
unfunded equity account as described in the section entitled "Equity Units".
4
<PAGE> 6
See "Forfeiture" herein.
EQUITY UNITS
For Plan years 1991, 1992 and 1993, unfunded equity accounts were created for
each participant and fifty percent (50%) of the approved award was converted
into equity units. Subsequently, as dividends were and are paid on the
Company's Common Stock, a dividend was and will be deemed to be paid on each
equity unit in an amount equal to the dividend which is declared and paid on
the Company's Common Stock. Deemed dividends have been and will be converted
to equity units equal in value to the average of the high and low sales prices
of Detroit Edison Common Stock as listed in the Wall Street Journal for the New
York Stock Exchange Composite Tape on the dividend payment date, or if such day
was not or is not a business day, on the business day immediately preceding the
dividend date. Equity units created as a result of deemed dividends have been
and will be credited to each participant's unfunded equity account as of the
dividend payment date, or if such day was or is not a business day, on the
business day immediately preceding the dividend date.
The value of equity units is subject to appreciation and depreciation depending
upon the trading price of the Company's Common Stock as listed in the Wall
Street Journal for the New York Stock Exchange Composite tape.
DEFERRED AWARD ACCOUNTS
Effective for Plan Year 1996 and thereafter, Deferred Award Accounts will be
established for each recipient with a timely Deferral Notice on file as soon as
practicable following Board approval of an award. Amounts in Deferred Award
Accounts will be deemed to earn interest at a rate calculated on the last
business day of each month with reference to the Five-Year United States
Treasury Bond rate, as reported in a nationally-recognized financial service.
Deferred Awards, including deemed earnings thereon, will be payable as soon as
practicable in the calendar year selected by an award recipient in the Deferral
Notice. In the event that a participant with a Deferred Account dies, retires
or terminates employment prior to the time established for payment in the
Deferral Notice, such participant's Deferred Account, plus earnings thereon,
shall be paid to such participant or participant's designated beneficiary as
soon as possible thereafter.
5
<PAGE> 7
EQUITY ACCOUNT PAYMENTS
The value of the equity units established for Plan Years 1991, 1992 and 1993
will be paid to the eligible participant in a lump sum cash payment after the
end of the third year following the year to which the award relates provided
the participant is actively employed by the Company at the end of the third
year (December 31) of the three-year award deferral period. (For example, the
value of an equity account that is based on the 1992 Plan year is payable as
soon as practicable during 1996.) In the event that the participant terminates
employment prior to the end of the third year following the year to which the
award relates, and the termination is due to disability (where disability is
defined as being eligible to receive a benefit under the Company's Long Term
Disability Plan) or retirement (where retirement is defined as a resignation at
age 55 or older and with at least 10 years of Company service or at age 65 or
older), the total value of any or all unfunded equity accounts will be
converted to cash and paid as soon as practicable in a lump sum cash payment to
the participant. In the event that the participant dies, the total value of
all unfunded equity account balances will be paid as soon as practicable in a
lump sum cash payment.
The value of the unfunded equity account will be determined by multiplying the
number of equity units in the account by the average of the high and low sales
prices of Detroit Edison Common Stock, as listed in the Wall Street Journal for
the New York Stock Exchange Composite Tape, on (1) the day the three-year
period ends; (2) the day the employe terminates employment due to disability
(last day of employment); (3) the day the employe dies (official date of
death); or (4) the day the employe retires (last day of employment), as
applicable. If the day the three-year period ends or the last day of
employment or date of death is not a business day, the deferred award will be
valued on the preceding business day. If the date of a participant's
termination of employment due to disability or retirement as defined herein or
death or the day after such three-year period ends falls within the record date
and the associated dividend payment date for the Company's Common Stock, then
such dividend will be deemed to be paid on the equity units in the
participant's unfunded account. The value of such deemed dividend will be paid
in cash.
FORFEITURE
Eligible participants who are discharged or resign (except for terminations due
to disability or retirement as defined herein or death) prior to the end of the
third year following the year to which an award required to be deferred by the
Company relates will forfeit the value of the equity units.
6
<PAGE> 8
Unless the termination is the result of disability, death or by normal or early
retirement as defined herein, a participant will forfeit an annual award
required to be deferred by the Company if the participant is not actively
employed by the Company at the end of the Plan year (December 31).
Deferred Accounts are not subject to forfeiture.
FUNDING STATUS
Benefits under the Plan including any equity accounts and Deferred Accounts are
payable solely from the general assets of the Company and shall remain unfunded
and unsecured (under federal income tax laws and Title I of the Employee
Retirement Income Security Act of 1974, as amended) during the entire period of
the Plan's existence. The participant, the participant's spouse or beneficiary
are merely general creditors of the Company and the obligations of the Company
hereunder are purely contractual and shall not be funded or secured in any way.
If and to the extent the Company chooses to actually invest in any Detroit
Edison Common Stock, assets acquired by the Company shall remain the sole
property of the Company, subject to the claims of its general creditors, and
shall not be deemed to form part of the participant's unfunded equity account.
NON-ALIENABILITY AND NON-TRANSFERABILITY
The right of a participant, participant's spouse or beneficiary to payment of
any benefit or deferred compensation hereunder shall not be alienated,
assigned, transferred, pledged or encumbered and shall not be subject to
execution, attachment or similar process. No participant may borrow against
the unfunded equity or deferred account established for his or her benefit
hereunder. No account shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, whether voluntary or involuntary, including but not limited
to any liability which is for alimony or other payments for the support of a
spouse or former spouse, or for any other relative of any employe. Any
attempted assignment, pledge, levy or similar process shall be null and void
and without effect.
BENEFICIARY DESIGNATION
Each eligible participant may name any beneficiary to whom awards under the
Plan are to be paid in case of the eligible participant's death before he/she
receives an award hereunder. Each designation will revoke all prior
designations by the eligible participant and shall be on a form prescribed by
the Plan Administrator and will be effective only when filed by the eligible
participant with the Treasurer. In the absence of any such designation, awards
due
7
<PAGE> 9
shall be paid to the participant's (1) life insurance beneficiary designated by
the participant with respect to life insurance maintained by the Company for
the benefit of the participant, or, in the absence of a designated life
insurance beneficiary, (2) to the participant's estate.
8
<PAGE> 1
EXHIBIT 10-57
1995 Shareholder Value Improvement Plan - A
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
TARGET LEVELS
MEASURE WEIGHT 1 2 3
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Positive & Positive &
Top 10% Within To Below
TOTAL SHAREHOLDER RETURN (TSR)* 40% of 48 10%-50% Median but
DJEU Prorated at least 10%
CUSTOMER VALUE MEASURES**
CUSTOMER SATISFACTION 20% 91% 90% 89%
SAFETY
LWDC 5% 7 8 10
RECORDABLES*** 5% 220 240 260
O&M AND CAPITAL 10% -4% -2% 0
PRODUCTION COST 20% $21.24 $21.69 $22.13
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
PERFORMANCE FUND 20% 15% 10%
-----------------------------------------------------------------------------------------------
Conditions for Awards:
*There is no award if the total return is negative ***LWDC must be at least Level 3
**TSR must be positive or above the median of DJEU.
</TABLE>
Approved:
_______________________________________________________________
Wendell W. Anderson, Jr., Chairman Date
Organization and Compensation Committee
<PAGE> 1
EXHIBIT 10.58
THE DETROIT EDISON COMPANY
PLAN FOR DEFERRING THE
PAYMENT OF DIRECTORS' FEES
AMENDED AS OF
JANUARY 23, 1995
<PAGE> 2
AMENDED 1/23/95
THE DETROIT EDISON COMPANY
PLAN FOR DEFERRING THE
PAYMENT OF DIRECTORS' FEES
SECTION I
PURPOSE
The purpose of The Detroit Edison Company Plan for Deferring the Payment of
Directors' Fees (the "Plan") is to enable each Director to defer all or a
portion of his or her fees for future services as a member of the Board of
Directors or as a member of any committee thereof.
SECTION II
ELIGIBILITY
Any Director of the Company who is not a Company employe shall be eligible to
participate in the Plan.
SECTION III
ELECTION, MODIFICATION, AND TERMINATION PROCEDURES
Any Director wishing to participate in the Plan must file with the Corporate
Secretary of the Company at 2000 Second Avenue, Detroit, MI 48226, a written
Notice of Election on the form attached as Exhibit "A" to defer payment of all
or a portion of his or her Director's fees. Such an election to participate in
the Plan must be made prior to the beginning of the month for which fees are
payable. An effective election with respect to Directors' fees that have been
deferred under the terms of this Plan and fees that have already been earned
may not be modified or revoked. An effective election with regard to fees that
have not been deferred or earned may be modified by filing a new Notice of
Election or may be terminated by filing a Notice of Termination on the form
attached as Exhibit "B". A Director who shall have terminated an effective
election may thereafter file a new election covering a subsequent period.
<PAGE> 3
AMENDED 1/23/95
SECTION IV
ESTABLISHMENT AND ADMINISTRATION OF
DEFERRED DIRECTORS' FEE ACCOUNT
The amount of any Director's fees deferred in accordance with an election shall
be credited to a deferred Director's fee account maintained by the Company.
Such account shall remain a part of the general funds of the Company, and
nothing contained in this Plan shall be deemed to create a trust or fund of any
kind or create any fiduciary relationship.
As of the last day of each month, the deferred Directors' fee account shall be
adjusted as follows:
(a) The account shall first be charged with any distributions made during the
month.
(b) The account balance shall then be credited with interest for that month.
Commencing January 1, 1995, such interest shall be computed by multiplying
the applicable portion of the account balance after the adjustment
provided for in Subsection (a) of this Section by a fraction, the
numerator of which is the 5-Year United States Treasury Bond rate, as
reported in The Wall Street Journal as of the last business day of each
month and the denominator of which is 12.
(c) Finally, the account shall be credited with the amount, if any, of
Directors' fees deferred during that month.
A separate record of deferred Director's fees and applicable interest shall be
maintained by the Company for each participant in the Plan.
SECTION V
PAYMENT OF DEFERRED DIRECTORS' FEES
Deferred fees shall be paid to a Director or, in the event of death, to his or
her designated beneficiary in accordance with the Notice of Election and
Beneficiary Designation forms that have been filed with the Corporate Secretary
of the Company. If a Director elects to receive payment of his or her deferred
fees in installments rather than in a lump sum, the payment period shall not
exceed ten years following the payment commencement date. The amount of any
installment payment shall be determined by multiplying the balance of the
Director's unpaid deferred fees and applicable interest on the date of such
installment by a fraction, the numerator of which is one and the denominator of
which is the
2
<PAGE> 4
AMENDED 1/23/95
number of remaining unpaid installments. Such balance shall be appropriately
reduced to reflect the installment payments made hereunder.
SECTION VI
WHEN PAYMENT OF DEFERRED DIRECTORS' FEES COMMENCES
The payment in a lump sum or installments of amounts deferred pursuant to an
election under the Plan shall commence on January 15 of the first year to which
payment has been deferred and shall be paid in accordance with the terms of
such election. If a Director shall die prior to the first year to which payment
has been deferred, such payment shall commence on January 15 of the calendar
year immediately following the year of death and shall be paid in the manner
specified in such election.
SECTION VII
DESIGNATION OF BENEFICIARY
Each Director, on becoming a participant, shall file with the Corporate
Secretary of the Company a beneficiary designation on the form attached as
Exhibit "C" form designating one or more beneficiaries to whom payments
otherwise due the participant shall be made in the event of his or her death
while serving as a Director or after leaving the Board. A beneficiary
designation will be effective only if the signed beneficiary designation form
is filed with the Corporate Secretary of the Company while the Director is
alive, and will cancel all beneficiary designations signed and filed
previously. If the primary beneficiary shall survive the Director but dies
before receiving all the amounts due hereunder, the deferred amounts remaining
unpaid at the time of death shall be paid in one lump sum to the legal
representative of the primary beneficiary's estate. If the primary beneficiary
shall predecease the Director, amounts remaining unpaid at the time of the
Director's death shall be paid in the order specified by the Director to the
contingent beneficiary(s) surviving the Director. If the contingent
beneficiary(s) dies before receiving all the amounts due hereunder, the unpaid
amount shall be paid in one lump sum to the legal representative of such
contingent beneficiary(s) estate. If the Director shall fail to designate a
beneficiary(s) as provided in this Section, or if all designated beneficiaries
shall predecease the Director, the deferred amounts remaining unpaid at the
time of such Director's death shall be paid in one lump sum to the legal
representative of the Director's estate.
3
<PAGE> 5
AMENDED 1/23/95
SECTION VIII
NON-ALIENABILITY AND NON-TRANSFERABILITY
Neither the Director nor any beneficiary designated by him or her shall have
any right to, directly or indirectly, alienate, assign, or encumber any amount
that is or may be payable hereunder.
SECTION IX
ADMINISTRATION OF PLAN
Full power and authority to construe, interpret, and administer the Plan shall
be vested in the Company's Board of Directors. Decisions of the Board shall
be final, conclusive, and binding upon all parties.
SECTION X
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors may amend or terminate this Plan at any time. Any
amendment or termination of this Plan shall not affect the rights of
participants or beneficiaries to the amounts in the deferred Directors' fee
accounts at the time of such amendment or termination.
SECTION XI
APPLICABLE LAW
The provisions of this Plan shall be interpreted and construed in accordance
with the laws of the State of Michigan.
SECTION XII
EFFECTIVE DATE OF PLAN
This Plan shall become operative and in effect on such date as shall be fixed
by the Board of Directors of the Company.
4
<PAGE> 6
AMENDED 1/23/95
EXPLANATION OF THE DETROIT EDISON COMPANY
PLAN FOR DEFERRING THE PAYMENT OF DIRECTORS' FEES
AND
INSTRUCTIONS FOR ELECTING TO PARTICIPATE
Explanation of Plan
The Plan provides that each Company Director can elect to defer all or a
portion of his or her retainer and meeting fees (Directors' Fees). In order to
compensate for inflation, the Plan provides that deferred Directors' fees earn
interest at the 5-Year United States Treasury Bond rate, as reported in The
Wall Street Journal as of the last business day of each month (see Section IV
of The Detroit Edison Company Plan for Deferring the Payment of Directors' Fees
amended as of 1/23/95). Once an election has been made under the Plan to defer
all or a portion of Directors' fees, it cannot be modified or revoked with
respect to fees that have already been deferred or earned. Such an election
can, however, be modified or revoked at any time with respect to fees that have
not been deferred or earned. An election must be made to have Directors' fees
that are deferred under the Plan paid in either a lump sum or installments.
Deferred Directors' fees will remain a part of general Company funds. Under
present Federal income tax law, fees that have been deferred and interest that
has been imputed will be taxed as ordinary income in the year of payment.
<PAGE> 1
EXHIBIT 10.59
THE DETROIT EDISON COMPANY
RETIREMENT PLAN
FOR NON-EMPLOYE DIRECTORS
PURPOSE
This Plan is to provide a retirement allowance for service as a director while
not an employe.
ADMINISTRATION
This Plan shall be administered by the Chairman of the Board, who shall have
full power and authority to make each determination provided for in the Plan,
to interpret the Plan, and to establish rules, regulations, and procedures for
carrying out its purpose.
The Secretary of the Company shall be responsible for recordkeeping under the
Plan and shall also be responsible for making all payments provided for by the
Plan.
This Plan is a non-contributory, non-qualified and unfunded plan and represents
only an unsecured general obligation of the Company.
ELIGIBILITY
The Plan provides a monthly retirement allowance to each director (participant)
who has served (a) on the Board as a director for five or more years and (b) as
a non-employe director at any time on or after January 1, 1990.
AMOUNT OF DISTRIBUTION
The monthly retirement allowance will be equal to one-twelfth (1/12th) of the
annual retainer (not including Board meeting, Board committee meeting, or
Company-related meeting fees) in effect on the date of the participant's
termination of service on the Board.
Payments shall be made monthly commencing with the month following such
participant's termination of service on the Board.
DURATION
The monthly retirement allowance payments will continue for a period equal to
the number of months served on the Board while not an employe, or until the
participant's death, whichever occurs first. In the event of death prior to
the conclusion of scheduled payments under this Plan, any and all liability of
the Company under the Plan is terminated. The participant's estate shall have
no rights hereunder. There is no allowance to a surviving spouse or other
beneficiary.
<PAGE> 2
SUSPENSION OF PAYMENTS
Payment of the retirement allowance to a participant who is again elected to
the Board will be suspended. Any future allowance will be recalculated based
on the annual retainer in effect at the time of the participant's subsequent
termination of service on the Board. The duration of payments will be
determined by the cumulative number of whole months served on the Board minus
the number of retirement allowance payments received prior to re-election of
the Board.
NONALIENATION OF BENEFITS
The right of a participant to payment of a retirement allowance hereunder shall
not be alienated, assigned, transferred, pledged or encumbered and shall not be
subject to execution, attachment or similar process. Any attempted assignment,
pledge, levy or similar process shall be null and void and without effect.
AMENDMENT OR TERMINATION
The Company reserves the right to amend, modify, supplement, suspend or
terminate the Plan at any time, provided, however, that no such amendment,
modification, supplement, or termination shall affect the right of any
participant who is immediately eligible to receive an allowance hereunder to
receive benefits theretofore accrued.
EFFECTIVE DATE
This Plan became effective on January 1, 1990 and is amended as of February 27,
1995.
<PAGE> 1
EXHIBIT 11-21
PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
OF COMMON STOCK
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------
1994 1993 1992
------ ------ ------
(Thousands, except per share amounts)
<S> <C> <C> <C>
PRIMARY:
Earnings for Common Stock . . . . . . . . . . . . . . . . . $390,269 $491,066 $557,549
Weighted average number of common
shares outstanding (a) . . . . . . . . . . . . . . . . . 146,152 147,031 146,998
Earnings per share of Common Stock
based on weighted average number
of shares outstanding . . . . . . . . . . . . . . . . . . $ 2.67 $ 3.34 $ 3.79
FULLY DILUTED:
Earnings for Common Stock . . . . . . . . . . . . . . . . . $390,269 $491,066 $557,549
Convertible Preferred Stock dividends . . . . . . . . . . . 314 340 373
-------- -------- --------
$390,583 $491,406 $557,922
======== ======== ========
Weighted average number of common
shares outstanding (a) . . . . . . . . . . . . . . . . . 146,152 147,031 146,998
Conversion of convertible Preferred
Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 324 351 384
-------- -------- --------
146,476 147,382 147,382
======= ======= =======
Earnings per share of Common Stock
assuming conversion of outstanding
convertible Preferred Stock . . . . . . . . . . . . . . . $ 2.67 $ 3.33 $ 3.79
</TABLE>
---------------
(a) Based on a daily average.
61
<PAGE> 1
EXHIBIT 12-26
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------
1994 1993 1992
------ ------ ------
(Thousands, except for ratio)
<S> <C> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 419,909 $ 521,903 $ 588,047
---------- ---------- ----------
Taxes based on income:
Current income taxes . . . . . . . . . . . . . . . . . . . . 169,381 217,363 179,047
Deferred taxes - net . . . . . . . . . . . . . . . . . . . . 110,243 99,801 148,947
Investment tax credit adjustments - net . . . . . . . . . . (12,826) (14,227) (16,768)
Municipal and state . . . . . . . . . . . . . . . . . . . . 2,566 3,373 3,353
---------- ---------- ----------
Total taxes based on income . . . . . . . . . . . . . . . 269,364 306,310 314,579
---------- ---------- ----------
Fixed charges:
Interest on long-term debt . . . . . . . . . . . . . . . . . 273,763 325,194 388,580
Amortization of debt discount, premium
and expense . . . . . . . . . . . . . . . . . . . . . . . 10,832 9,114 3,952
Other interest . . . . . . . . . . . . . . . . . . . . . . . 11,170 4,928 5,169
Interest factor of rents . . . . . . . . . . . . . . . . . . 28,000 29,200 34,400
---------- ---------- ----------
Total fixed charges . . . . . . . . . . . . . . . . . . . 323,765 368,436 432,101
---------- ---------- ----------
Earnings before taxes based on income
and fixed charges . . . . . . . . . . . . . . . . . . . . . $1,013,038 $1,196,649 $1,334,727
========== ========== ==========
Ratio of earnings to fixed charges . . . . . . . . . . . . . . 3.13 3.25 3.09
</TABLE>
62
<PAGE> 1
EXHIBIT 12-27
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED AND PREFERENCE STOCK DIVIDEND REQUIREMENTS
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------
1994 1993 1992
------ ------ ------
(Thousands, except for ratio and percent)
<S> <C> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 419,909 $ 521,903 $ 588,047
---------- ---------- ----------
Taxes based on income:
Current income taxes . . . . . . . . . . . . . . . . . . . . 169,381 217,363 179,047
Deferred taxes - net . . . . . . . . . . . . . . . . . . . . 110,243 99,801 148,947
Investment tax credit adjustments - net . . . . . . . . . . (12,826) (14,227) (16,768)
Municipal and state . . . . . . . . . . . . . . . . . . . . 2,566 3,373 3,353
---------- ---------- ----------
Total taxes based on income . . . . . . . . . . . . . . . 269,364 306,310 314,579
---------- ---------- ----------
Fixed charges:
Interest on long-term debt . . . . . . . . . . . . . . . . . 273,763 325,194 388,580
Amortization of debt discount, premium
and expense . . . . . . . . . . . . . . . . . . . . . . . 10,832 9,114 3,952
Other interest . . . . . . . . . . . . . . . . . . . . . . . 11,170 4,928 5,169
Interest factor of rents . . . . . . . . . . . . . . . . . . 28,000 29,200 34,400
---------- ---------- ----------
Total fixed charges . . . . . . . . . . . . . . . . . . . 323,765 368,436 432,101
---------- ---------- ----------
Earnings before taxes based on income
and fixed charges . . . . . . . . . . . . . . . . . . . . . $1,013,038 $1,196,649 $1,334,727
========== ========== ==========
Preferred and preference stock
dividend requirements . . . . . . . . . . . . . . . . . . . $ 29,640 $ 30,837 $ 30,498
Dividends meeting requirement of
IRC Section 247 . . . . . . . . . . . . . . . . . . . . . . 3,870 4,383 4,651
Percent deductible for income tax purposes . . . . . . . . . . 40.00% 40.00% 41.18%
Amount deductible . . . . . . . . . . . . . . . . . . . . . . . 1,548 1,753 1,915
Amount not deductible . . . . . . . . . . . . . . . . . . . . . 28,092 29,084 28,583
Ratio of pretax income to net income . . . . . . . . . . . . . 1.64 1.58 1.53
Dividend factor for amount not deductible . . . . . . . . . . . 46,071 45,953 43,732
Amount deductible . . . . . . . . . . . . . . . . . . . . . . . 1,548 1,753 1,915
---------- ---------- ----------
Total preferred and preference stock
dividend factor . . . . . . . . . . . . . . . . . . . . . 47,619 47,706 45,647
Total fixed charges . . . . . . . . . . . . . . . . . . . . 323,765 368,436 432,101
---------- ---------- ----------
Total fixed charges and preferred and
preference stock dividends . . . . . . . . . . . . . . . $ 371,384 $ 416,142 $ 477,748
========== ========== ==========
Ratio of earnings to fixed charges and
preferred and preference stock
dividend requirements . . . . . . . . . . . . . . . . . . . 2.73 2.88 2.79
</TABLE>
63
<PAGE> 1
EXHIBIT 23-7
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Registration Nos.
33-30809, 33-50325, 33-53207, 33-57095 and 33-64296) and Form S-8 (Registration
No. 33-32449) of The Detroit Edison Company and in the Prospectus and Proxy
Statement constituting a part of the Registration Statement on Form S-4
(Registration No. 33-57545) of DTE Holdings, Inc. of our report dated January
23, 1995, appearing on page 31 of this Form 10-K.
PRICE WATERHOUSE LLP
Detroit, Michigan
March 27, 1995
