<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
COMMISSION REGISTRANTS; STATE OF INCORPORATION; I.R.S. EMPLOYER
FILE NUMBER ADDRESS; AND TELEPHONE NUMBER IDENTIFICATION NO.
<C> <C> <C>
1-11607 DTE Energy Company 38-3217752
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-4000
1-2198 The Detroit Edison Company 38-0478650
(a Michigan corporation)
2000 2nd Avenue
Detroit, Michigan 48226-1279
313-235-8000
</TABLE>
Indicate by check mark whether the registrants (1) have 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
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. YES X NO
---- ----
At June 30, 1998, 145,075,152 shares of DTE Energy's Common Stock, substantially
all held by non-affiliates, were outstanding.
================================================================================
<PAGE> 2
DTE ENERGY COMPANY
AND
THE DETROIT EDISON COMPANY
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1998
This document contains the Quarterly Reports on Form 10-Q for the quarter ended
June 30, 1998 for each of DTE Energy Company and The Detroit Edison Company.
Information contained herein relating to an individual registrant is filed by
such registrant on its own behalf. Accordingly, except for its subsidiaries, The
Detroit Edison Company makes no representation as to information relating to any
other companies affiliated with DTE Energy Company.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Definitions................................................................................ 3
Quarterly Report on Form 10-Q for DTE Energy Company:
Part I - Financial Information...................................................... 4
Item 1 - Condensed Consolidated Financial Statements (Unaudited)......... 4
Notes to Condensed Consolidated Financial
Statements (Unaudited)......................................... 15
Independent Accountants' Report................................ 19
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 20
Item 3 - Quantitative and Qualitative Disclosures about Market Risk..... 27
Part II - Other Information......................................................... 28
Item 4 - Submission of Matters to a Vote of Security Holders.............. 28
Item 5 - Other Information............................................... 29
Quarterly Report on Form 10-Q for The Detroit Edison Company:
Part I - Financial Information..................................................... 30
Item 1 - Condensed Consolidated Financial Statements (Unaudited)........ 30
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 30
Part II - Other Information......................................................... 30
Item 5 - Other Information................................................ 30
Quarterly Reports on Form 10-Q for DTE Energy Company and The Detroit Edison Company:
Item 6 - Exhibits and Reports on Form 8-K............................... 32
Signature Page to DTE Energy Company Quarterly Report on Form 10-Q........................ 39
Signature Page to The Detroit Edison Company Quarterly Report on Form 10-Q................ 40
</TABLE>
2
<PAGE> 3
DEFINITIONS
Annual Report....................1997 Annual Report to the Securities and
Exchange Commission on Form 10-K for DTE
Energy Company or The Detroit Edison
Company, as the case may be
Annual Report Notes..............Notes to Consolidated Financial Statements
appearing on pages 39 through 61 and 65
through 67 of the 1997 Annual Report to the
Securities and Exchange Commission on Form
10-K for DTE Energy Company and The Detroit
Edison Company
Company..........................DTE Energy Company and Subsidiary Companies
Detroit Edison...................The Detroit Edison Company (a wholly owned
subsidiary of DTE Energy Company) and
Subsidiary Companies
Direct Access....................Gives all retail customers equal opportunity
to utilize the transmission system which
results in access to competitive generation
resources
DTE Capital......................DTE Capital Corporation (a wholly owned
subsidiary of DTE Energy Company)
Market Power.....................Exists when one company owns a sufficiently
large percentage of generation,
transmission, or distribution capabilities
in a region which allows it to set the
market price of electricity
MPSC.............................Michigan Public Service Commission
MW...............................Megawatt
MWh..............................Megawatthour
Note(s)..........................Note(s) to Condensed Consolidated Financial
Statements (Unaudited) appearing herein
PSCR.............................Power Supply Cost Recovery
Quarterly Report.................Quarterly Report to the Securities and
Exchange Commission on Form 10-Q for DTE
Energy Company or The Detroit Edison
Company, as the case may be, for the quarter
ended March 31, 1998
Quarterly Report Notes...........Notes to Condensed Consolidated Financial
Statements (Unaudited) appearing on pages 15
through 16 of the Quarterly Report to the
Securities and Exchange Commission on Form
10-Q for the quarter ended March 31, 1998
for DTE Energy Company and The Detroit
Edison Company
QUIDS............................Quarterly Income Debt Securities
Registrant.......................Company or Detroit Edison, as the case may be
3
<PAGE> 4
QUARTERLY REPORT ON FORM 10-Q FOR DTE ENERGY COMPANY
PART I - FINANCIAL INFORMATION
ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
DTE ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In Millions, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------------------------------------------------
1998 1997 1998 1997
-------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 1,064 $ 892 $ 2,009 $ 1,761
- -----------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Fuel and purchased power 285 197 493 395
Operation and maintenance 300 240 568 474
Depreciation and amortization 162 165 327 330
Taxes other than income 69 66 140 135
- -------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 816 668 1,528 1,334
- -------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 248 224 481 427
- -------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE AND OTHER
Interest expense 79 72 153 143
Preferred stock dividends
of subsidiary 2 3 5 6
Other - net 5 3 5 8
- -------------------------------------------------------------------------------------------------------------------------
Total Interest Expense and Other 86 78 163 157
- -------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 162 146 318 270
Income Taxes 61 61 113 114
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 101 $ 85 $ 205 $ 156
=========================================================================================================================
AVERAGE COMMON SHARES OUTSTANDING 145 145 145 145
- -----------------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE -
BASIC AND DILUTED $ 0.69 $ 0.59 $ 1.41 $ 1.07
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
4
<PAGE> 5
DTE ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In Millions)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------------------------------------------
1998 1997 1998 1997
------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net Income $ 101 $ 85 $ 205 $ 156
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 162 165 327 330
Other (6) (43) (3) 8
Changes in current assets and liabilities:
Accounts receivable (95) (7) (48) (25)
Inventories (42) (29) (30) (25)
Payables 55 (74) 60 (41)
Other 46 35 (51) (36)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash from operating activities 221 132 460 367
- ------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Plant and equipment expenditures (116) (336) (241) (427)
Investment in limited partnership - - (200) -
Nuclear decommissioning trust funds (12) (27) (41) (37)
Other (17) 1 (11) 1
- ------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (145) (362) (493) (463)
- ------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of long-term debt 200 243 200 250
(Decrease) Increase in short-term borrowings (115) 215 262 209
Redemption of long-term debt (18) (139) (187) (185)
Redemption of preferred stock (100) - (100) -
Dividends on common stock (75) (75) (149) (149)
Other 3 - 2 (1)
- ------------------------------------------------------------------------------------------------------------------------------
Net cash (used for) from financing activities (105) 244 28 124
- ------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (29) 14 (5) 28
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE PERIOD 123 67 99 53
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 94 $ 81 $ 94 $ 81
==============================================================================================================================
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest capitalized) $ 61 $ 61 $ 146 $ 138
Income taxes paid 30 127 66 128
New capital lease obligations 31 - 48 33
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
5
<PAGE> 6
DTE ENERGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In Millions, Except Per Share Amounts and Shares)
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
-------------- ----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 94 $ 99
Accounts receivable
Customer (less allowance for doubtful
accounts of $20) 304 305
Accrued unbilled revenues 167 137
Other 97 78
Inventories (at average cost)
Fuel 164 130
Materials and supplies 171 173
Assets from risk management activities 129 -
Other 52 13
--------------- ----------------
1,178 935
--------------- ----------------
INVESTMENTS
Nuclear decommissioning trust funds 280 239
Other 267 57
--------------- ----------------
547 296
--------------- ----------------
PROPERTY
Property, plant and equipment 14,692 14,495
Property under capital leases 256 256
Nuclear fuel under capital lease 655 607
Construction work in progress 22 16
--------------- ----------------
15,625 15,374
--------------- ----------------
Less accumulated depreciation and amortization 6,728 6,440
--------------- ----------------
8,897 8,934
--------------- ----------------
OTHER ASSETS
Regulatory assets 747 856
Other 226 202
--------------- ----------------
973 1,058
--------------- ----------------
TOTAL ASSETS $ 11,595 $ 11,223
=============== ================
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
6
<PAGE> 7
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
---------------- ----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 194 $ 161
Accrued interest 56 57
Dividends payable 76 78
Accrued payroll 86 81
Short-term borrowings 304 42
Liabilities from risk management activities 135 -
Accumulated deferred income taxes 83 64
Current portion long-term debt 159 205
Current portion capital leases 131 110
Other 236 219
--------------- ----------------
1,460 1,017
--------------- ----------------
OTHER LIABILITIES
Accumulated deferred income taxes 1,930 1,983
Accumulated deferred investment tax credits 294 301
Capital leases 132 137
Other 283 302
--------------- ----------------
2,639 2,723
--------------- ----------------
LONG-TERM DEBT 3,835 3,777
--------------- ----------------
SHAREHOLDERS' EQUITY
Detroit Edison cumulative preferred stock, $100 par value, 6,747,484
shares authorized, 5,207,657 issued, 500,000 and 1,501,223 shares
outstanding, respectively 48 144
Common stock, without par value, 400,000,000 shares
authorized, 145,075,152 and 145,097,829 issued
and outstanding, respectively 1,951 1,951
Retained earnings 1,662 1,611
--------------- ----------------
TOTAL SHAREHOLDERS' EQUITY 3,661 3,706
--------------- ----------------
CONTINGENCIES (NOTE 5)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,595 $ 11,223
=============== ================
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
7
<PAGE> 8
DTE ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(In Millions, Except Per Share Amounts; Shares in Thousands)
<TABLE>
<CAPTION>
1998
-----------------------------------
Shares Amount
-----------------------------------
DETROIT EDISON CUMULATIVE PREFERRED STOCK
<S> <C> <C>
Balance at beginning of year 1,501 $ 144
Redemption of cumulative preferred stock (1,001) (100)
Preferred stock expense 4
------------- --------------
Balance at June 30, 1998 500 $ 48
- -------------------------------------------------------------------------------------------------------------------
COMMON STOCK
Balance at beginning of year 145,098 $ 1,951
Repurchase and retirement of common stock (23) -
-------------- --------------
Balance at June 30, 1998 145,075 $ 1,951
- -------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance at beginning of year $ 1,611
Net income 205
Dividends declared on common stock ($0.515 per share) (150)
Preferred stock expense (4)
---------------
Balance at June 30, 1998 $ 1,662
- -------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY $ 3,661
===================================================================================================================
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
8
<PAGE> 9
[This page intentionally left blank.]
9
<PAGE> 10
THE DETROIT EDISON COMPANY
CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(In Millions)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
-------------------------------------------------------------------
1998 1997 1998 1997
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 992 $ 878 $ 1,893 $ 1,742
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Fuel and purchased power 266 197 474 395
Operation and maintenance 247 226 470 454
Depreciation and amortization 161 165 324 330
Taxes other than income 70 65 140 134
- -----------------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses 744 653 1,408 1,313
- -----------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 248 225 485 429
- -----------------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE AND OTHER
Interest expense 68 70 136 141
Other - net 5 4 10 9
- -----------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense and Other 73 74 146 150
- -----------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 175 151 339 279
Income Taxes 80 65 146 119
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME 95 86 193 160
PREFERRED STOCK DIVIDENDS 2 3 5 6
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME AVAILABLE FOR COMMON STOCK $ 93 $ 83 $ 188 $ 154
===================================================================================================================================
</TABLE>
Note: Detroit Edison's condensed consolidated financial statements
(unaudited) are presented here for ease of reference and are not
considered to be part of Item 1 of the Company's report.
See notes to condensed consolidated financial statements (unaudited).
10
<PAGE> 11
THE DETROIT EDISON COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(In Millions)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------------------------------------------
1998 1997 1998 1997
------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net Income $ 95 $ 86 $ 193 $ 160
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization 161 165 324 330
Other (36) (7) (37) 45
Changes in current assets and liabilities:
Accounts receivable (84) (1) (30) (16)
Inventories (36) (17) (34) (14)
Payables 27 (81) 49 (48)
Other 50 36 (58) (35)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash from operating activities 177 181 407 422
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Plant and equipment expenditures (102) (123) (220) (209)
Nuclear decommissioning trust funds (12) (27) (41) (37)
Other (1) 5 (4) 7
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (115) (145) (265) (239)
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of long-term debt 100 - 100 -
Increase in short-term borrowings 23 182 187 176
Redemption of long-term debt - (139) (169) (185)
Redemption of preferred stock (100) - (100) -
Dividends on common and preferred stock (83) (83) (165) (165)
Other 4 - 3 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (56) (40) (144) (174)
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 6 (4) (2) 9
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE PERIOD 7 15 15 2
- -----------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $ 13 $ 11 $ 13 $ 11
===================================================================================================================================
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (excluding interest capitalized) $ 58 $ 60 $ 137 $ 137
Income taxes paid 53 131 111 132
New capital lease obligations 17 - 31 33
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
11
<PAGE> 12
THE DETROIT EDISON COMPANY
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(In Millions, Except Per Share Amounts and Shares)
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
--------------- ----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 13 $ 15
Accounts receivable
Customer (less allowance for doubtful
accounts of $20) 294 300
Accrued unbilled revenues 167 137
Other 69 63
Inventories (at average cost)
Fuel 164 130
Materials and supplies 154 150
Other 51 11
--------------- ----------------
912 806
--------------- ----------------
INVESTMENTS
Nuclear decommissioning trust funds 280 239
Other 43 38
--------------- ----------------
323 277
--------------- ----------------
PROPERTY
Property, plant and equipment 14,387 14,204
Property under capital leases 256 256
Nuclear fuel under capital lease 655 607
Construction work in progress 9 12
--------------- ----------------
15,307 15,079
--------------- ----------------
Less accumulated depreciation and amortization 6,712 6,431
--------------- ----------------
8,595 8,648
--------------- ----------------
OTHER ASSETS
Regulatory assets 747 856
Other 182 158
--------------- ----------------
929 1,014
--------------- ----------------
TOTAL ASSETS $ 10,759 $ 10,745
=============== ================
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
12
<PAGE> 13
<TABLE>
<CAPTION>
June 30 December 31
1998 1997
--------------- ----------------
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
<S> <C> <C>
Accounts payable $ 175 $ 150
Accrued interest 54 56
Dividends payable 80 83
Accrued payroll 84 80
Short-term borrowings 187 -
Accumulated deferred income taxes 85 64
Current portion long-term debt 119 169
Current portion capital leases 131 110
Other 227 218
--------------- ----------------
1,142 930
--------------- ----------------
OTHER LIABILITIES
Accumulated deferred income taxes 1,906 1,973
Accumulated deferred investment tax credits 294 301
Capital leases 132 137
Other 272 300
--------------- ----------------
2,604 2,711
--------------- ----------------
LONG-TERM DEBT 3,512 3,531
--------------- ----------------
SHAREHOLDER'S EQUITY
Cumulative preferred stock, $100 par value, 6,747,484 shares authorized,
5,207,657 issued, 500,000 and 1,501,223 shares outstanding,
respectively 48 144
Common stock, $10 par value, 400,000,000 shares
authorized, 145,119,875 issued and outstanding 1,451 1,451
Premium on common stock 548 548
Common stock expense (48) (48)
Retained earnings 1,502 1,478
--------------- ----------------
TOTAL SHAREHOLDER'S EQUITY 3,501 3,573
--------------- ----------------
CONTINGENCIES (NOTE 5)
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 10,759 $ 10,745
============== ===============
</TABLE>
See notes to condensed consolidated financial statements (unaudited).
13
<PAGE> 14
THE DETROIT EDISON COMPANY
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
(UNAUDITED)
(In Millions, Except Per Share Amounts; Shares in Thousands)
<TABLE>
<CAPTION>
1998
----------------------------------
Shares Amount
----------------------------------
CUMULATIVE PREFERRED STOCK
<S> <C> <C>
Balance at beginning of year $ 1,501 $ 144
Redemption of cumulative preferred stock (1,001) (100)
Preferred stock expense 4
------------- --------------
Balance at June 30, 1998 500 $ 48
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCK
Balance at beginning of year 145,120 $ 1,451
------------- --------------
Balance at June 30, 1998 145,120 $ 1,451
- ------------------------------------------------------------------------------------------------------------------
PREMIUM ON COMMON STOCK
Balance at beginning of year $ 548
--------------
Balance at June 30, 1998 $ 548
- ------------------------------------------------------------------------------------------------------------------
COMMON STOCK EXPENSE
Balance at beginning of year $ (48)
--------------
Balance at June 30, 1998 $ (48)
- ------------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance at beginning of year $ 1,478
Net income 193
Dividends declared
Common stock ($0.55 per share) (160)
Cumulative preferred stock* (5)
Preferred stock expense (4)
---------------
Balance at June 30, 1998 $ 1,502
- ------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY $ 3,501
==================================================================================================================
</TABLE>
* At established rate for each series.
See notes to condensed consolidated financial statements (unaudited).
14
<PAGE> 15
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
NOTE 1 - ANNUAL REPORT NOTES
These condensed consolidated financial statements (unaudited) should be read in
conjunction with the Annual Report Notes and the Quarterly Report Notes. The
Notes contained herein update and supplement matters discussed in the Annual
Report Notes.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
The condensed consolidated financial statements are unaudited, but in the
opinion of the Company and Detroit Edison, with respect to its own financial
statements, include all adjustments necessary for a fair statement of the
results for the interim periods. Financial results for this interim period are
not necessarily indicative of results that may be expected for any other interim
period or for the fiscal year.
NOTE 2 - ACCOUNTING FOR RISK MANAGEMENT ACTIVITIES
DTE Energy Trading, Inc. (DTE ET) is an indirect wholly owned subsidiary of the
Company and began operations in the first quarter of 1998. The new subsidiary
markets and trades electricity and natural gas physical products and
financial instruments, and provides risk management services utilizing energy
commodity derivative instruments which include futures, exchange traded and
over-the-counter options, and forward purchase and sale commitments.
Activities for trading purposes of DTE ET are accounted for using the
mark-to-market method of accounting. Under such method, DTE ET's electric power
trading contracts, including both transactions for physical delivery and
financial instruments, are recorded at market value. The resulting unrealized
gains and losses from changes in market value of open positions are recorded as
"Assets or Liabilities from risk management activities" on the Consolidated
Balance Sheet. Current period changes in the "Assets or Liabilities from risk
management activities" are recognized as net gains or losses in "Operating
Revenues" on the Consolidated Statement of Income. The market prices used to
value these transactions reflect management's best estimate considering various
factors including closing exchange and over-the-counter quotations, time value
and volatility factors underlying the commitments.
Detroit Edison continues to account for its forward purchase and sale
commitments and over-the-counter options on a settlement basis.
15
<PAGE> 16
NOTE 3 - SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS
At June 30, 1998, Detroit Edison had total short-term credit arrangements of
approximately $634 million under which $187 million was outstanding. The amounts
outstanding at June 30, 1998 consisted of $87 million of commercial paper and
$100 million secured by its customer accounts receivable and unbilled revenues
portfolio.
At June 30, 1998, DTE Capital had $117 million of commercial paper outstanding,
backed by a Support Agreement from the Company.
NOTE 4 - LONG-TERM DEBT
In May 1998, Detroit Edison issued $100 million of 7.54% QUIDS. The proceeds
were used to redeem all of the outstanding 7.75% Series Cumulative Preferred
Stock totaling approximately $100 million.
In June 1998, DTE Capital issued $100 million of Remarketed Notes, Series A due
2038. The notes pay interest at 6.17% through 2003. DTE Capital's obligations
have the benefit of a Support Agreement from the Company.
The Company had $62 million in cash and cash equivalents restricted by debt
covenants at June 30, 1998.
NOTE 5 - CONTINGENCIES
LEGAL PROCEEDINGS
Detroit Edison and plaintiffs in a class action pending in the Circuit Court for
Wayne County, Michigan (Gilford, et al v. Detroit Edison), as well as plaintiffs
in two other pending actions which make class claims (Sanchez, et al v. Detroit
Edison, Circuit Court for Wayne County, Michigan; and Frazier v. Detroit Edison,
United States District Court, Eastern District of Michigan), have continued
negotiations following a February 1998 agreement to settle the matters through
binding arbitration. In July 1998, Detroit Edison and the plaintiffs reached
agreement on the terms of a Consent Judgement, which is subject to approval by
the Court. A Fairness Hearing with respect to the terms of the settlement is
scheduled for August 1998. The agreement provides that Detroit Edison's monetary
liability is to be no less than $17.5 million and no greater than $65 million
after the conclusion of all related proceedings. An amount related to this
proceeding was accrued in 1997.
16
<PAGE> 17
NOTE 6 - FINANCIAL INSTRUMENTS
TRADING ACTIVITIES
NOTIONAL AMOUNTS AND TERMS
The notional amounts and terms of DTE ET's outstanding energy trading financial
instruments at June 30, 1998 were:
<TABLE>
<CAPTION>
Fixed Price Fixed Price Maximum
Payor Receiver Terms in Years
(Thousands of MWh)
<S> <C> <C> <C>
Electricity Commodities 523 1,063 1.5 years
--- -----
</TABLE>
At June 30, 1998, DTE ET also had sales and purchase commitments for physical
delivery associated with contracts based on fixed prices totaling 2,692,394 MWh
with terms extending up to 1.5 years.
Notional amounts reflect the volume of transactions but do not necessarily
represent the amounts exchanged by the parties to the energy commodity
derivative instruments. Accordingly, notional amounts do not accurately
measure DTE ET's exposure to market or credit risks. The maximum terms in
years detailed above are not indicative of likely future cash flows as these
positions may be offset in the markets at any time in response to DTE ET's risk
management needs.
FAIR VALUE
At June 30, 1998, the fair values of DTE ET's energy commodity derivative
instruments were :
<TABLE>
<CAPTION>
Current Current
Assets Liabilities
(Dollars in Millions)
<S> <C> <C>
Average Fair Value for the
Three Months Ended June 30, 1998 $ 49 $ 54
======= ======
Fair Value as of June 30, 1998 $ 129 $ 135
======= ======
</TABLE>
The weighted average term of DTE ET's energy commodity derivative instruments
as of June 30, 1998 was less than three months.
MARKET RISK
DTE ET manages, on a portfolio basis, the market risks inherent in its
activities subject to parameters established by the Company's Risk Management
Committee (RMC), which is
17
<PAGE> 18
authorized by its Board of Directors. Market risks are monitored
by the RMC to ensure compliance with the Company's stated risk management
policies. DTE ET marks its portfolio to market and measures its risk on a daily
basis in accordance with Value-at-Risk (VaR) and other risk methodologies. The
quantification of market risk using VaR provides a consistent measure of risk
across diverse energy markets and products.
CREDIT RISK
DTE ET is exposed to credit risk in the event of nonperformance by customers or
counterparties of its contractual obligations. The concentration of customers
and/or counterparties may impact overall exposure to credit risk, either
positively or negatively, in that the counterparties may be similarly affected
by changes in economic, regulatory or other conditions. However, DTE ET
maintains credit policies with regard to its customers' and counterparties' that
management believes significantly minimize overall credit risk. These policies
include an evaluation of potential customers and counterparties financial
condition and credit rating, collateral requirements or other credit
enhancements such as letters of credit or guarantees, and the use of
standardized agreements which allow for the netting or offsetting of positive
and negative exposures associated with a single counterparty. Based on these
policies, the Company does not anticipate a materially adverse effect on
financial position or results of operations as a result of customer or
counterparty nonperformance. Those futures and option contracts which are traded
on the New York Mercantile Exchange are financially guaranteed by the Exchange
and have nominal credit risk.
-----------------------------------
This Quarterly Report on Form 10-Q, including the report of Deloitte & Touche
LLP (on page 19) will automatically be incorporated by reference in the
Prospectuses constituting part of the Registration Statements on Form S-3
(Registration Nos. 33-53207 and 33-64296) of The Detroit Edison Company and Form
S-8 (Registration Nos. 333-00023 and 333-47247) and Form S-3 (Registration No.
33-57545) of DTE Energy Company, filed under the Securities Act of 1933. Such
report of Deloitte & Touche LLP, however, is not a "report" or "part of the
Registration Statement" within the meaning of Sections 7 and 11 of the
Securities Act of 1933 and the liability provisions of Section 11(a) of such Act
do not apply.
18
<PAGE> 19
INDEPENDENT ACCOUNTANTS' REPORT
To the Boards of Directors and Shareholders of DTE Energy Company and
The Detroit Edison Company
We have reviewed the accompanying condensed consolidated balance sheets of DTE
Energy Company and subsidiaries and The Detroit Edison Company and subsidiaries
as of June 30, 1998, and the related condensed consolidated statements of income
and of cash flows for the three-month and six-month periods ended June 30, 1998
and 1997, and the condensed consolidated statements of changes in shareholders'
equity for the six-month period ended June 30, 1998. These financial
statements are the responsibility of DTE Energy Company's management and The
Detroit Edison Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists primarily of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheets of DTE Energy Company and
subsidiaries and The Detroit Edison Company and subsidiaries as of December 31,
1997, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated January 26, 1998, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheets
as of December 31, 1997 is fairly stated, in all material respects, in relation
to the consolidated balance sheets from which they have been derived.
DELOITTE & TOUCHE LLP
Detroit, Michigan
July 27, 1998
19
<PAGE> 20
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
This analysis for the three and six months ended June 30, 1998, as compared to
the same periods in 1997, should be read in conjunction with the condensed
consolidated financial statements (unaudited), the accompanying Notes, the
Quarterly Report Notes and the Annual Report Notes.
Detroit Edison is the principal subsidiary of the Company, and, as such, unless
otherwise identified, this discussion explains material changes in results of
operations of both the Company and Detroit Edison and identifies recent trends
and events affecting both the Company and Detroit Edison.
GROWTH
During the second quarter of 1998, the Company invested in DTE Energy
Solutions Inc., an indirect subsidiary of the Company, which provides high
quality and innovative utility products and services, specifically in the area
of system distribution and customer service for utilities, municipals and
cooperatives. DTE Energy Solutions Inc. and Probyn & Co. of Toronto have formed
a joint venture to market utility and energy related services to municipal
electric utilities in Canada. The new company, DTE/Probyn Energy Solutions
Inc., will combine the energy expertise of the Company with Probyn, a provider
of financial and energy advisory services, and the owner-operator of five
generating stations in four Canadian provinces. DTE Energy Solutions Inc. also
formed a partnership with National Pole Recycling Inc. to develop a sawmill
operation to recycle, manufacture and market products from retired utility
poles supplied by Detroit Edison.
DTE Energy Services, Inc. a wholly owned subsidiary of the Company, purchased
a coke oven battery from Bethlehem Steel Corp. in the third quarter of 1998.
The coke battery will serve the Bethlehem Burns Harbor, Indiania a Steelmaking
plant.
Non-regulated operations are projected to increase over the five year period
ending 2002, which could result in earnings of as much as $150 million annually
from those operations.
A new record electrical demand of 10,701 MW was set in June 1998. Detroit Edison
was able to meet the record demand through careful planning and implementation
of a summer electricity supply plan.
See Detroit Edison's Part II, "Item 5 - Other Information" for a discussion of
proceedings related to Detroit Edison's Conners Creek Power Plant.
ELECTRIC INDUSTRY DEREGULATION
Federal and state legislators and regulators are working to introduce
competition and customer choice into the generation segment of the electric
public utility industry, believing that competition will lead to reduced
electric rates and stimulate economic growth. Traditional utility services are
being unbundled, with many of such services becoming competitive; and a demand
is being created for new energy-related services.
As discussed in the Annual Report and the Quarterly Report, there are ongoing
Michigan legislative, judicial and administrative proceedings, which address
among other things, deregulation of the generation segment of the Michigan
electric public
20
<PAGE> 21
utility industry. Federal legislation relating to deregulation has also been
proposed. Although the Company and Detroit Edison expect a favorable outcome,
neither the Company nor Detroit Edison are able to predict the outcome or timing
of these proceedings.
The Financial Accountings Standards Board (FASB) and the Securities and Exchange
Commission (SEC) have been considering various accounting issues as a result of
the transition to competition.
Regulatory Accounting Issues
As discussed in Note 1 of the Annual Report, Detroit Edison is subject to
regulation by the MPSC and the Federal Energy Regulatory Commission (FERC).
Detroit Edison 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 cost based ratemaking process which results
in differences in the application of generally accepted accounting principles
between regulated and non-regulated businesses. SFAS No. 71 permits the
recording of regulatory assets and liabilities that would have been treated as
revenue and expense in non-regulated businesses. The deferred amounts are being
amortized to revenue and expense as they are included in rates. Continued
applicability of SFAS No. 71 requires that rates be designed to recover specific
costs of providing regulated services and products, including regulatory assets,
and that it be reasonable to assume that rates are set at levels that will
recover a utility's costs and can be charged to and collected from customers.
In guidance issued in 1997, the Emerging Issues Task Force (EITF) of the FASB
concluded that the application of SFAS No. 71 to a separable portion of a
business which is subject to a deregulation plan should cease when legislation
is passed and/or a rate order is issued that contains sufficient detail on a
transition plan. Various MPSC Orders and proposed Michigan legislation would
alter the regulatory process in Michigan and provide a plan for transition to
competition for the generation segment of Detroit Edison's business. However,
Detroit Edison has appealed the MPSC Orders that require the implementation of
a Direct Access program in Michigan. Detroit Edison believes that it continues
to qualify under the accounting model prescribed by SFAS No. 7l. The continued
applicability of SFAS No. 71 will depend on the outcome of legal and legislative
proceedings discussed herein.
During the second quarter of 1998, the SEC issued guidance regarding the
accounting treatment for the recovery of stranded costs during the transition to
competition. The SEC concluded that when an entity ceases to apply SFAS No. 71,
any impaired portion of plant assets, identified for recovery in
legislation/rate order by means of a regulated cash flow, should be treated as a
regulatory asset in the separable portion of the enterprise from which the
regulated cash flows are derived. The plant impairment analysis, performed at
the lowest level of identifiable cash flows based on the facts and
circumstances, should be exclusive of the regulated cash flows.
The EITF 1997 guidance also concluded that regulatory assets and liabilities
originating in the separable portion of the business which is no longer under
SFAS No. 71 should not
21
<PAGE> 22
be written off if they are recoverable from a separable portion of business
which still meets the criteria of SFAS No. 71. Detroit Edison's ability to
recover regulatory assets and investment in generation plant in the transition
to competition will depend on the outcome of regulatory and/or legislative
action which provides for and permits recovery of such assets. Detroit Edison
has $383 million of net regulatory assets and $4.9 billion of net investment in
generation plant recorded in Property, Plant and Equipment at June 30, 1998. At
the present time Detroit Edison believes that a satisfactory mechanism to
recover regulatory assets and the investment in generation plant will be adopted
by its regulators and/or legislators, although there can be no assurances that
this will occur.
Michigan Public Service Commission
In July 1998, Detroit Edison filed an application with the MPSC for accounting
authority to accelerate amortization of the Fermi 2 plant and its related
regulatory assets by $164.2 million annually beginning January 1, 1999. Detroit
Edison believes approval of its request will allow a reasonable opportunity,
consistent with SFAS No. 71 and EITF guidance, to recover its stranded assets by
the MPSC imposed deadline for recovery, December 31, 2007. An expedited hearing
schedule has been requested.
Detroit Edison filed an application with the MPSC in June 1998 requesting
approval of its Customer Choice Plan and accounting authority to defer costs
that would be incurred to implement Direct Access. In its filing, Detroit Edison
estimated that the cost to implement Direct Access would be approximately $100
million. Deferral of $19.9 million has been specifically requested in 1998.
Detroit Edison also indicated in its filings with the MPSC that recovery of
Fermi 2 assets and other stranded assets must be reasonably assured before
implementation of any Direct Access program begins. Under current accounting
rules, to the extent that Detroit Edison cannot be assured recovery prior to
implementation of a Direct Access program, it would be required to write off
such assets; however, the Company and Detroit Edison do not anticipate a write
off at this time.
The MPSC staff's Market Power Report was issued in June 1998. The MPSC staff
concluded that Detroit Edison and Consumers Energy Company will both possess
Market Power in a Michigan electricity market unless implementation of a
proactive regulatory strategy to counterbalance utility Market Power is
undertaken. The report notes, "The current Michigan market is so highly
concentrated and the advantages of incumbent utility companies are so pervasive
that proactive measures are imperative." Divestiture of generation, while
discussed as an effective and popular option in other states, is not recommended
by the MPSC staff at this time. However, the MPSC staff believes if measures
undertaken to mitigate Market Power are not successful, divestiture could be
revisited.
Detroit Edison has withdrawn its March 1998 request to suspend the PSCR clause,
but continues to pursue the suspension through its ongoing 1998 PSCR case.
22
<PAGE> 23
LIQUIDITY AND CAPITAL RESOURCES
CASH PROVIDED BY OPERATING ACTIVITIES
Net cash from operating activities was higher in the three and six month periods
due to decreases in accounts payable partially offset by increases in accounts
receivable.
CASH USED FOR INVESTING ACTIVITIES
Net cash used for investing was lower for the three month period due to lower
plant and equipment expenditures and lower contributions to the nuclear
decommissioning trust funds.
Net cash used for investing was higher for the six month period due to higher
investment in non-regulated investments, partially offset by lower plant and
equipment expenditures.
Cash requirements for non-regulated investments are estimated to be
approximately $488 million in 1998, of which $221 million had been expended as
of June 30, 1998.
DTE Energy Services Inc., a wholly owned subsidiary of the Company,
purchased a coke battery from Bethlehem Steel Corp. for approximately $227
million in the third quarter of 1998.
Detroit Edison's 1998 cash requirements for its capital expenditure program are
estimated at $512 million, of which $220 million had been expended as of June
30, 1998.
CASH (USED FOR) FROM FINANCING ACTIVITIES
Net cash used for financing was higher in the three month period due primarily
to the repayment of short-term borrowings and redemption of preferred stock.
Net cash from financing was lower in the six month period due primarily to the
redemption of preferred stock partially offset by higher short-term borrowings.
Detroit Edison will redeem tax exempt obligations Series A-1989 of
$100 million and A-1989 B of $18.4 million in December 1999 utilizing the
proceeds of a forward refinancing, with the issuance of refunding bonds planned
for September 1999, subject to the satisfactory completion of all
documentation.
Detroit Edison is also considering refinancing approximately $157 million of
tax exempt obligations (Series I-1989, I-1989 B, CC, I-1990) issued on its
behalf by Monroe County, MI.
RESULTS OF OPERATIONS
For the three months ended June 30, 1998, the Company's net income was $101
million or $0.69 per common share as compared to $85 million or $0.59 per common
share earned in the three months ended June 30, 1997. For the six months ended
June 30, 1998 net income was $205 million or $1.41 per common share compared to
$156 million or $1.07 per common share earned in the six months ended June 30,
1997.
23
<PAGE> 24
The 1998 three month and six month earnings were higher than 1997 due to higher
sales and increased earnings from non-regulated subsidiary operations, partially
offset by higher operating expenses.
On July 21, 1998, the Detroit Edison service territory experienced a severe
thunderstorm. High winds and lightning strikes caused approximately $28 million
of damage to its distribution system. Approximately $24 million will be a charge
to earnings in the third quarter of 1998.
OPERATING REVENUES
Increases in operating revenues were due primarily to higher non-regulated
subsidiary revenues, higher system sales and sales between utilities.
Detroit Edison kWh sales increased as compared to the prior year as follows:
<TABLE>
<CAPTION>
Three Six
Months Months
-------- --------
<S> <C> <C>
Residential 9.8 % 4.9 %
Commercial 8.4 5.7
Industrial 4.9 3.1
Other (primarily sales for resale) 20.7 35.0
Total System 8.1 5.8
Sales between utilities 157.3 194.3
Total 14.6 13.2
</TABLE>
The increase in residential sales resulted from growth in the customer base,
increased usage and increased cooling related sales in the second quarter due to
unusually warm weather. Commercial sales increased, reflecting a
continuation of favorable economic conditions. The increase in industrial sales
reflects increased demand in the construction and automotive sectors in spite of
the General Motors strike. Sales to other customers increased reflecting
increased demand from sales for resale customers. Sales between utilities
increased due to greater demand for energy and increased availability of energy
for sale.
OPERATING EXPENSES
FUEL AND PURCHASED POWER
Net system output and average fuel and purchased power unit costs for Detroit
Edison were as follows:
24
<PAGE> 25
<TABLE>
<CAPTION>
Three Months Six Months
---------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
(Thousands of MWh)
<S> <C> <C> <C> <C>
Power plant generation
Fossil 10,353 10,032 21,397 20,398
Nuclear 2,305 1,260 4,288 1,247
Purchased power 1,817 1,368 2,783 3,572
-------- --------- --------- --------
Net system output 14,475 12,660 28,468 25,217
======== ========= ========= ========
Average unit cost ($/MWh) $ 17.69 $ 14.26 $ 15.65 $ 14.59
======== ========= ========= ========
</TABLE>
Fuel and purchased power expense increased in the three month period due to
higher average unit costs because of higher purchased power unit costs as
a result of increased market demand for power during periods of hot
weather and higher net output.
For the six month period, fuel and purchased power expense increased due to
higher net system output, higher average unit costs because of higher purchased
power unit costs as a result of increased market demand for power during periods
of hot weather and the prior-period receipt of Fermi 2 business insurance
proceeds.
OPERATION AND MAINTENANCE
Operation and maintenance expense increased for the three month period due
primarily to new non-regulated subsidiary operation expense ($39 million), the
Conners Creek restart ($7.3 million), storm expense ($5.2 million) and Year 2000
expenses ($3.5 million).
Operation and maintenance expense increased for the six month period due
primarily to non-regulated subsidiary operation expense ($78 million), prior
year storm amoritization ($7.5 million), the Conners Creek restart ($7.3
million) and Year 2000 expense ($4.5 million), partially offset by lower storm
expense ($14.2 million).
Storm damage costs of $30 million incurred during the first three quarters of
1997 were deferred in the fourth quarter of 1997 and are being amortized to
expense over a 24 month period beginning in January 1998.
INCOME TAXES
Although income before income taxes was higher in 1998 than 1997, income tax
expense for the Company did not increase due primarily to increased alternate
fuels credits in 1998, partially offset by an increase relating to prior years
income taxes of Detroit Edison.
25
<PAGE> 26
NEW ACCOUNTING STANDARD
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement requires companies to record
derivatives on the balance sheet as assets and liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those derivatives
would be accounted for depending on the use of the derivative and whether it
qualifies for hedge accounting. The Company has not yet determined the impact of
this Statement on the consolidated financial statements. This Statement is
effective for fiscal years beginning after June 15, 1999, with earlier adoption
encouraged. The Company will adopt this accounting standard as required by
January 1, 2000.
FORWARD-LOOKING STATEMENTS
Certain information presented in this Quarterly Report on Form 10-Q is based
upon the expectations of the Company and Detroit Edison and, as such, is
forward-looking. The Private Securities Litigation Reform Act of 1995 encourages
reporting companies to provide analyses and estimates of future prospects and
also permits reporting companies to point out that actual results may differ
from those anticipated.
Actual results for the Company and Detroit Edison may differ from those expected
due to a number of variables including, but not limited to, actual sales, the
effects of competition, the implementation of utility restructuring in Michigan
(which involves pending regulatory proceedings, pending and proposed statutory
changes and the recovery of stranded costs), environmental and nuclear
requirements, the impact of newly-required FERC tariffs and the success of
non-regulated lines of business. While the Company and Detroit Edison believe
that estimates given accurately measure the expected outcome, actual results
could vary materially due to the variables mentioned as well as others.
26
<PAGE> 27
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
The Company measures the risk inherent in DTE ET's portfolio utilizing VaR
analysis and other methodologies, which simulate forward price curves in
electric power markets to quantify estimates of the magnitude and probability
of potential future losses related to open contract positions. DTE ET's VaR
expresses the potential loss in fair value of its forward contract and option
position over a particular period of time, with a specified likelihood of
occurrence, due to an adverse market movement. The Company reports VaR as a
percentage of its earnings, based on a 95% confidence interval, utilizing 10
day holding periods. At of June 30, 1998, DTE ET's VaR from its power
marketing and trading activities was less than 1% of the Company's
consolidated "Income Before Income Taxes" for the six month period ended June
30, 1998. The VaR model uses the variance-covariance statistical modeling
technique, and implied and historical volatilities and correlations over the
past 20 day period. The estimated market prices used to value these
transactions for VaR purposes reflect the use of established pricing models
and various factors including quotations from exchanges and over-the-counter
markets, price volatility factors, the time value of money, and location
differentials. For further information, see the Company's and Detroit Edison's
Note 2 - Accounting for Risk Management Activities and Note 6 - Financial
Instruments.
27
<PAGE> 28
DTE ENERGY COMPANY
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The annual meeting of the holders of Common Stock of the Company was held
on April 27, 1998. Proxies for the meeting were solicited pursuant to
Regulation 14(a).
(b) The following four directors were elected to serve until the annual
meeting in the year 2001 with the votes shown:
Total Vote
Total Vote For Withheld From
Each Director Each Director
--------------- --------------
Terence E. Adderley 111,704,821 3,736,422
Anthony F. Earley, Jr. 111,714,268 3,725,697
Allan D. Gilmour 111,715,170 3,725,221
Theodore S. Leipprandt 111,684,996 3,754,969
The terms of the previously elected nine directors listed
below continue until the annual meeting dates shown after each
name:
Lillian Bauder April 28, 1999
David Bing April 28, 1999
Larry G. Garberding April 28, 1999
Alan E. Schwartz April 28, 1999
William Wegner April 28, 1999
William C. Brooks April 26, 2000
John E. Lobbia April 26, 2000
Eugene A. Miller April 26, 2000
Dean E. Richardson April 26, 2000
(c) (i) Shareholders ratified the apointment of Deloitte & Touche LLP as the
Company's independent auditors for the year 1998 with the votes shown:
For Against Abstain
--- ------- -------
114,070,736 561,936 807,730
(ii) Shareholders also voted on the item below:
A shareholder proposal regarding the impact of deregulation, including
its impact on the operation of Fermi 2.
For Against Abstain
--- ------- -------
6,027,145 88,875,815 7,312,687
(d) Not applicable.
28
<PAGE> 29
DTE ENERGY COMPANY
PART II - OTHER INFORMATION
ITEM 5 - OTHER INFORMATION.
Effective August 1, 1998, Mr. Anthony F. Earley, Jr., currently President and
Chief Operating Officer of the Company and Detroit Edison, assumed the
positions of Chairman of the Board, Chief Executive Officer, President, and
member of a newly created Office of the President of the Company and Detroit
Edison. In addition to Mr. Earley, members of the Office of the President are
Gerard M. Anderson, currently Executive Vice President, who will also assume the
position of President and Chief Operating Officer, DTE Energy Resources and
Robert J. Buckler, currently Executive Vice President, who will assume the
position of President and Chief Operating Officer, DTE Energy Distribution. DTE
Energy Resources encompasses Detroit Edison's non-nuclear power generation and
fuel supply activities and the Company's non-regulated operating units. DTE
Energy Distribution includes Detroit Edison's electric transmission and
distribution activities and the Company's non-regulated retail product and
service activities.
Also effective August 1, 1998, Mr. John E. Lobbia retired from his duties as
Chairman of the Board and Chief Executive Officer of the Company and Detroit
Edison. He will continue as a director of both companies.
29
<PAGE> 30
QUARTERLY REPORT ON FORM 10-Q FOR
THE DETROIT EDISON COMPANY
PART I - FINANCIAL INFORMATION
ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).
See pages 10 through 18.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
See the Company's and Detroit Edison's "Item 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations," which is
incorporated herein by this reference.
PART II - OTHER INFORMATION
ITEM 5 - OTHER INFORMATION.
In March 1998, Detroit Edison filed its 1997 PSCR Reconciliation Case with the
MPSC. PSCR costs for 1997 which were under-recovered by $2.7 million, when
combined with Fermi 2 performance standards, would result in a refund to
customers of approximately $21 million. The Company has accrued for the refund.
In an April 24, 1998 informational filing with the MPSC, Detroit Edison proposed
customer options that will assist in meeting customer demand this summer.
Detroit Edison also proposed an experimental program permitting certain
industrial customers with interruptible service to secure their own backup power
during summer peak periods in 1998 and 1999. The filing also suggested that
large customers may be permitted to negotiate for reduced usage under a capacity
release program. Detroit Edison declined to implement the 90 MW retail
wheeling experiment for the reason that it would not contribute to meeting the
capacity need. In June 1998, the MPSC approved customer capacity options
conditioned on customer backup power being obtained from sources not available
to Detroit Edison.
In July 1998, Detroit Edison filed a required review of its current depreciation
expense with the MPSC. The application requests a change in the current
non-nuclear depreciation accrual rate from 3.35% to 4.01%, in effect increasing
annual depreciation expenses by 20%, or $68 million. An adjustment in electric
rates is not being sought at this time.
As discussed in Detroit Edison's Part II, "Item 5 - Other Information" of the
Quarterly Report, on April 14, 1998 the MPSC issued an order granting Detroit
Edison's March 31, 1998 request to waive competitive bidding for Conners Creek
and restart the plant. Although Detroit Edison believes that the plant complies
with all applicable environmental requirements, the Michigan Department of
Environmental Quality and
30
<PAGE> 31
the Wayne County Michigan Air Quality Management Division have issued notices of
violation contending that Detroit Edison is required to obtain a series of new
licenses prior to plant operation. Detroit Edison is contesting these notices of
violation.
Effective May 26, 1998, Lynne Halpin was elected Vice President and Chief
Information Officer. Since 1996 she was Vice President of Business Applications
at Netscape Communications Corp. From 1993 to 1996, she was Director of Business
Systems Development and Acting Vice President of Global Systems Development at
Xerox Corp.
Effective August 1, 1998, Ron A. May, currently Assistant Vice President, Energy
Delivery, was elected Vice President, Energy Delivery and Service.
See the Company's Part II, "Item 5 - Other Information" which is incorporated
herein by reference.
31
<PAGE> 32
QUARTERLY REPORTS ON FORM 10-Q FOR DTE ENERGY COMPANY
AND THE DETROIT EDISON COMPANY
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(i) Exhibits filed herewith.
Exhibit
Number
--------
4-193 - Sixth Supplemental Note Indenture,
dated as of May 1, 1998, between
Detroit Edison and Bankers Trust
Company, as Trustee, creating the
7.54% Quarterly Income Debt Securities
("QUIDS"), including form of QUIDS.
4-194 - $100,000,000 Support Agreement,
dated as of June 16, 1998, between DTE
Energy Company and DTE Capital
Corporation.
4-196 - Indenture, dated as of June 15,
1998, between DTE Capital Corporation
and The Bank of New York, as Trustee.
4-197 - First Supplemental Indenture, dated as
of June 15, 1998, between DTE Capital
Corporation and The Bank of New York,
as Trustee, creating the $100,000,000
Remarketed Notes, Series A due 2038,
including form of Note.
10-26* - Employment Agreement, dated April
16, 1998, between Detroit Edison and
Lynn Halpin.
11-12 - DTE Energy Company Basic and Diluted
Earnings Per Share.
12-12 - The Detroit Edison Company
Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock
Dividends.
15-8 - Awareness Letter of Deloitte &
Touche LLP regarding their report
dated July 27, 1998.
27-21 - Financial Data Schedule for the
period ended June 30, 1998 for DTE
Energy Company.
27-22 - Financial Data Schedule for the
period ended June 30, 1998 for The
Detroit Edison Company.
(ii) Exhibits incorporated herein by reference.
3(a) - Amended and Restated Articles of
Incorporation of DTE Energy Company,
dated December 13, 1995. (Exhibit 3-5
to Form 10-Q for quarter ended
September 30, 1997).
32
<PAGE> 33
3(b) - Certificate of Designation of Series
A Junior Participating Preferred Stock
of DTE Energy Company. (Exhibit 3-6 to
Form 10-Q for quarter ended September
30, 1997).
3(c) - Restated Articles of Incorporation
of Detroit Edison, 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).
3(d) - Certificate containing resolution of
the Detroit Edison 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).
3(e) - Certificate containing resolution of
the Detroit Edison 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).
3(f) - Rights Agreement, dated as of
September 23, 1997, by and between DTE
Energy Company and The Detroit Edison
Company, as Rights Agent (Exhibit 4-1
to DTE Energy Company Current Report
on Form 8-K, dated September 22,
1997).
3(g) - Agreement and Plan of Exchange
(Exhibit 1(2) to DTE Energy Form 8-B
filed January 2, 1996, File No.
1-11607).
4(a) - Mortgage and Deed of Trust, dated as
of October 1, 1924, between Detroit
Edison (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:
<TABLE>
<S> <C>
September 1, 1947 Exhibit B-20 to Registration
No. 2-7136
October 1, 1968 Exhibit 2-B-33 to Registration
No. 2-30096
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
</TABLE>
33
<PAGE> 34
<TABLE>
<S> <C>
August 15, 1982 Exhibit 4-32 to Registration
No. 2-79674
October 15, 1985 Exhibit 4-170 to Form 10-K for year
ended December 31, 1994
July 15, 1989 Exhibit 4-171 to Form 10-K for year
ended December 31, 1994
December 1, 1989 Exhibit 4-172 to Form 10-K for year
ended December 31, 1994
February 15, 1990 Exhibit 4-173 to Form 10-K for year
ended December 31, 1994
April 1, 1991 Exhibit 4-15 to Form 10-K for year
ended December 31, 1996
May 1, 1991 Exhibit 4-178 to Form 10-K for year
ended December 31, 1996
May 15, 1991 Exhibit 4-179 to Form 10-K for year
ended December 31, 1996
September 1, 1991 Exhibit 4-180 to Form 10-K for year
ended December 31, 1996
November 1, 1991 Exhibit 4-181 to Form 10-K for year
ended December 31, 1996
January 15, 1992 Exhibit 4-182 to Form 10-K for year
ended December 31, 1996
February 29, 1992 Exhibit 4-187 to form 10-Q for quarter
ended March 31, 1998
April 15, 1992 Exhibit 4-188 for quarter ended
March 31, 1998
July 15, 1992 Exhibit 4-189 for quarter ended
March 31, 1998
July 31, 1992 Exhibit 4-190 for quarter
ended March 31, 1998
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 4-191 to form 10-Q for
quarter ended March 31, 1998
March 15, 1993 Exhibit 4-192 to Form 10-Q for
quarter ended March 31, 1998
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)
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
</TABLE>
34
<PAGE> 35
<TABLE>
<S> <C> <C>
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
December 1, 1994 Exhibit 4-169 to Form 10-K for
year ended December 31, 1994
August 1, 1995 Exhibit 4-174 to Form 10-Q for
quarter ended September 30, 1995
</TABLE>
4(b) - Collateral Trust Indenture (notes),
dated as of June 30, 1993 (Exhibit
4-152 to Registration No. 33-50325).
4(c) - First Supplemental Note Indenture,
dated as of June 30, 1993 (Exhibit
4-153 to Registration No. 33-50325).
4(d) - Second Supplemental Note Indenture,
dated as of September 15, 1993
(Exhibit 4-159 to Form 10-Q for
quarter ended September 30, 1993).
4(e) - First Amendment, dated as of August
15, 1996, to Second Supplemental Note
Indenture (Exhibit 4-17 to Form 10-Q
for quarter ended September 30, 1996).
4(f) - Third Supplemental Note Indenture,
dated as of August 15, 1994 (Exhibit
4-169 to Form 10-Q for quarter ended
September 30, 1994).
4(g) - First Amendment, dated as of
December 12, 1995, to Third
Supplemental Note Indenture, dated as
of August 15, 1994 (Exhibit 4-12 to
Registration No. 333-00023).
4(h) - Fourth Supplemental Note Indenture,
dated as of August 15, 1995 (Exhibit
4-175 to Detroit Edison Form 10-Q for
quarter ended September 30, 1995).
4(i) - Fifth Supplemental Note Indenture,
dated as of February 1, 1996 (Exhibit
4-14 to Form 10-K for year ended
December 31, 1996).
4(j) - 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).
35
<PAGE> 36
99(a) - Belle River Participation Agreement
between Detroit Edison and Michigan
Public Power Agency, dated as of
December 1, 1982 (Exhibit 28-5 to
Registration No. 2-81501).
99(b) - Belle River Transmission Ownership
and Operating Agreement between
Detroit Edison 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 Detroit Edison
(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 Detroit
Edison 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 Detroit
Edison and Renaissance (Exhibit 99-8
to Registration No. 33-50325).
99(f) - Third Amendment, dated as of August
28, 1997, to 1988 Amended and Restated
Loan Agreement between Detroit Edison
and Renaissance. (Exhibit 99-22 to
Form 10-Q for quarter ended September
30, 1997).
99(g) - $200,000,000 364-Day Credit
Agreement, dated as of September 1,
1993, among Detroit Edison,
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, 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) - Third Amendment, dated as of March
8, 1996, to $200,000,000 364-Day
Credit Agreement, dated September 1,
1993, as amended, among Detroit
Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent (Exhibit 99-11
to Form 10-Q for quarter ended March
31, 1996).
99(j) - Fourth Amendment, dated as of
August 29, 1996, to $200,000,000
364-Day Credit Agreement as of
September 1, 1990, as amended, among
Detroit Edison, Renaissance, the Banks
party thereto and Barclays Bank, PLC,
New York
36
<PAGE> 37
Branch, as Agent (Exhibit 99-13 to
Form 10-Q for quarter ended September
30, 1996).
99(k) - Fifth Amendment, dated as of September
1, 1997, to $200,000,000 Multi-Year
Credit Agreement, dated as of
September 1, 1993, as amended, among
Detroit Edison, Renaissance, the Banks
Party thereto and Barclays Bank PLC,
New York Branch, as Agent. (Exhibit
99-24 to Form 10-Q for quarter ended
September 30, 1997).
99(l) - $200,000,000 Three-Year Credit
Agreement, dated September 1, 1993,
among Detroit Edison, Renaissance and
Barclays Bank, PLC, New York Branch,
as Agent (Exhibit 99-13 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 Detroit
Edison, Renaissance, 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) - Third Amendment, dated as of March
8, 1996, to $200,000,000 Three-Year
Credit Agreement, dated September 1,
1993, as amended among Detroit Edison,
Renaissance, the Banks party thereto
and Barclays Bank, PLC, New York
Branch, as Agent (Exhibit 99-12 to
Form 10-Q for quarter ended March 31,
1996).
99(o) - Fourth Amendment, dated as of
September 1, 1996, to $200,000,000
Multi-Year (formerly Three-Year)
Credit Agreement, dated as of
September 1, 1993, as amended among
Detroit Edison, Renaissance, the Banks
party thereto and Barclays Bank, PLC,
New York Branch, as Agent (Exhibit
99-14 to Form 10-Q for quarter ended
September 30, 1996).
99(p) - Fifth Amendment, dated as of August
28, 1997, to $200,000,000 364-Day
Credit Agreement, dated as of
September 1, 1990, as amended, among
Detroit Edison, Renaissance, the Banks
Party thereto and Barclays Bank PLC,
New York Branch, as Agent. (Exhibit
99-25 to Form 10-Q for quarter ended
September 30, 1997).
99(q) - 1988 Amended and Restated Nuclear
Fuel Heat Purchase Contract, dated
October 4, 1988, between Detroit
Edison and Renaissance (Exhibit 99-9
to Registration No. 33-50325).
99(r) - First Amendment to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated as of February 1,
1990, between Detroit Edison and
Renaissance (Exhibit 99-10 to
Registration No. 33-50325).
37
<PAGE> 38
99(s) - Second Amendment, dated as of
September 1, 1993, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract between Detroit Edison and
Renaissance (Exhibit 99-11 to
Registration No. 33-50325).
99(t) - Third Amendment, dated as of August
31, 1994, to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract,
dated October 4, 1988, between Detroit
Edison and Renaissance (Exhibit 99-21
to Form 10-Q for quarter ended
September 30, 1994).
99(u) - Fourth Amendment, dated as of March
8, 1996, to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract
Agreement, dated as of October 4,
1988, between Detroit Edison and
Renaissance (Exhibit 99-10 to Form
10-Q for quarter ended March 31,
1996).
99(v) - Sixth Amendment, dated as of August
28, 1997, to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract
between Detroit Edison and
Renaissance. (Exhibit 99-23 to Form
10-Q for quarter ended September 30,
1997).
99(w) - Standby Note Purchase Credit
Facility, dated as of September 12,
1997, among Detroit Edison and the
Bank's Signatory thereto and The Chase
Manhattan Bank, as Administrative
Agent, and Citicorp Securities, Inc.,
Lehman Brokers, Inc., as Remarketing
Agents and Chase Securities, Inc. as
Arranger. (Exhibit 999-26 to Form 10-Q
for quarter ended September 30, 1997).
99(x) - Amended and Restated Credit Agreement,
Dated as of January 21, 1998 among DTE
Capital Corporation, the Initial
Lenders, Citibank, N.A., as Agent, and
Barclays Bank PLC, New York Branch and
The First National Bnak of Chicago, as
Co-Agents, and Citicorp Securities,
Inc., as Arranger.
99(y) - $60,000,000 Support Agreement, dated
as of January 21, 1998, between DTE
Energy Company and DTE Capital
Corporation.
99(z) - $400,000,000 Support Agreement, dated
as of January 21, 1998, between DTE
Energy Company and DTE Capital
Corporation.
(b) Registrants did not file any reports on Form 8-K during second
quarter 1998.
(c) *Denotes management contract or compensatory plan or arrangement.
38
<PAGE> 39
SIGNATURES
Pursuant to the requirements 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.
DTE ENERGY COMPANY
---------------------------------------------
(Registrant)
Date August 13, 1998 /s/ SUSAN M. BEALE
--------------------- ---------------------------------------------
Susan M. Beale
Vice President and Corporate Secretary
Date August 13, 1998 /s/ DAVID E. MEADOR
--------------------- ---------------------------------------------
David E. Meador
Vice President and Controller
39
<PAGE> 40
SIGNATURES
Pursuant to the requirements 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)
Date August 13, 1998 /s/ SUSAN M. BEALE
--------------------- ---------------------------------------------
Susan M. Beale
Vice President and Corporate Secretary
Date August 13, 1998 /s/ DAVID E. MEADOR
--------------------- ---------------------------------------------
David E. Meador
Vice President and Controller
40
<PAGE> 41
QUARTERLY REPORTS ON FORM
10-Q FOR THE QUARTER
ENDED JUNE 30, 1998
DTE ENERGY COMPANY FILE NO. 1-11607
DETROIT EDISON COMPANY FILE NO. 1-2198
EXHIBIT INDEX
Exhibits filed herewith.
Exhibit
Number
4-193 - Sixth Supplemental Note Indenture,
dated as of May 1, 1998, between
Detroit Edison and Bankers Trust
Company, as Trustee creating the 7.54%
Quarterly Income Debt Securities
("QUIDS"), including form of QUIDS.
4-194 - $100,000,000 Support Agreement,
dated as of June 16, 1998 between
DTE Energy Company and DTE Capital
Corporation.
4-196 - Indenture, dated as of June 15,
1998, between DTE Capital Corporation
and The Bank of New York, as Trustee.
4-197 - First Supplemental Indenture, dated as
of June 15, 1998, between DTE Capital
Corporation and The Bank of New York,
as Trustee, creating the $100,000,000
Remarketed Notes, Series A due 2038,
including form of Note.
10-26* - Employment Agreement, dated April
16, 1998, between Detroit Edison and
Lynn Halpin.
11-12 - DTE Energy Company and Diluted
Earnings Per Share.
12-12 - The Detroit Edison Company
Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock
Dividends.
15-8 - Awareness Letter of Deloitte &
Touche LLP regarding their report
dated July , 1998.
41
<PAGE> 42
27-21 - Financial Data Schedule for the
period ended June 30. 1998 for DTE
Energy Company.
27-22 - Financial Data Schedule for the
period ended June 30, 1998 for The
Detroit Edison Company and Subsidiary
Companies.
Exhibits incorporated herein by reference. See Page Nos.___ through
___ for location of exhibits
incorporated by reference
3(a) - Amended and Restated Articles of
Incorporation of DTE Energy Company,
dated December 13, 1995.
3(b) - Certificate of Designation of Series
A Junior Participating Preferred Stock
of DTE Energy Company.
3(c) - Restated Articles of Incorporation
of Detroit Edison, as filed December
10, 1991 with the State of Michigan,
Department of Commerce - Corporation
and Securities Bureau.
3(d) - Certificate containing resolution of
the Detroit Edison 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.
3(e) - Certificate containing resolution of
the Detroit Edison 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.
3(f) - Rights Agreement, dated as of
September 23, 1997, by and between DTE
Energy Company and The Detroit Edison
Company, as Rights Agent.
3(g) - Agreement and Plan of Exchange.
4(a) - Mortgage and Deed of Trust, dated as
of October 1, 1924, between Detroit
Edison and Bankers Trust Company as
Trustee and indentures supplemental
thereto, dated as of dates indicated
below:
September 1, 1947
October 1, 1968
November 15, 1971
January 15, 1973
42
<PAGE> 43
February 29, 1992
April 5, 1992
July 15, 1992
July 31, 1992
June 1, 1978
June 30, 1982
August 15, 1982
October 15, 1985
July 15, 1989
December 1, 1989
February 15, 1990
April 1, 1991
May 1, 1991
May 15, 1991
September 1, 1991
November 1, 1991
January 15, 1992
November 30, 1992
January 1, 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
August 15, 1994
December 1 1994
August 1, 1995
4(b) - Collateral Trust Indenture (notes),
dated as of June 30, 1993.
4(c) - First Supplemental Note Indenture,
dated as of June 30, 1993.
4(d) - Second Supplemental Note Indenture,
dated as of September 15, 1993.
4(e) - First Amendment, dated as of August
15, 1996, to Second Supplemental Note
Indenture.
4(f) - Third Supplemental Note Indenture,
dated as of August 15, 1994.
4(g) - First Amendment, dated as of
December 12, 1995, to Third
Supplemental Note Indenture, dated as
of August 15, 1994.
43
<PAGE> 44
4(h) - Fourth Supplemental Note Indenture,
dated as of August 15, 1995.
4(i) - Fifth Supplemental Note Indenture,
dated as of February 1, 1996.
4(j) - 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.
99(a) - Belle River Participation Agreement
between Detroit Edison and Michigan
Public Power Agency, dated as of
December 1, 1982.
99(b) - Belle River Transmission Ownership
and Operating Agreement between
Detroit Edison 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 Detroit Edison.
99(d) - First Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
February 1, 1990, between Detroit
Edison and Renaissance.
99(e) - Second Amendment to 1988 Amended and
Restated Loan Agreement, dated as of
September 1, 1993, between Detroit
Edison and Renaissance.
99(f) - Third Amendment, dated as of August
28, 1997, to 1988 Amended and Restated
Loan Agreement between Detroit Edison
and Renaissance.
99(g) - $200,000,000 364-Day Credit
Agreement, dated as of September
1, 1993, among Detroit Edison,
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,
44
<PAGE> 45
Renaissance, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent.
99(i) - Third Amendment, dated as of March
8, 1996, to $200,000,000 364-Day
Credit Agreement, dated September 1,
1993, as amended, among Detroit
Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent.
99(j) - Fourth Amendment, dated as of August
29, 1996, to $200,000,000 364-Day
Credit Agreement as of September 1,
1990, as amended, among Detroit
Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent.
99(k) - Fifth Amendment, dated as of September
1, 1997, to $200,000,000 Multi-Year
Credit Agreement, dated as of
September 1, 1993, as amended, among
Detroit Edison, Renaissance, the Banks
Party thereto and Barclays Bank PLC,
New York Branch, as Agent.
99(l) - $200,000,000 Three-Year Credit
Agreement, dated September 1, 1993,
among Detroit Edison, Renaissance and
Barclays Bank, PLC, New York Branch,
as Agent.
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 Detroit
Edison, Renaissance, the Banks party
thereto and Barclays Bank, PLC, New
York Branch, as Agent.
99(n) - Third Amendment, dated as of March
8, 1996, to $200,000,000 Three-Year
Credit Agreement, dated September 1,
1993, as amended among Detroit Edison,
Renaissance, the Banks party thereto
and Barclays Bank, PLC, New York
Branch, as Agent.
99(o) - Fourth Amendment, dated as of
September 1, 1996, to $200,000,000
Multi-Year (formerly Three-Year)
Credit Agreement, dated as of
September 1, 1993, as amended among
Detroit Edison, Renaissance, the Banks
party thereto and Barclays Bank, PLC,
New York Branch, as Agent.
99(p) - Fifth Amendment, dated as of August
28, 1997, to $200,000,000 364-Day
Credit Agreement, dated as of
September 1, 1990, as amended, among
Detroit Edison,
45
<PAGE> 46
Renaissance, the Banks
Party thereto and Barclays Bank PLC,
New York Branch, as Agent.
99(q) - 1988 Amended and Restated Nuclear
Fuel Heat Purchase Contract, dated
October 4, 1988, between Detroit
Edison and Renaissance.
99(r) - First Amendment to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated as of February 1,
1990, between Detroit Edison and
Renaissance.
99(s) - Second Amendment, dated as of
September 1, 1993, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract between Detroit Edison and
Renaissance.
99(t) - Third Amendment, dated as of
August 31, 1994, to 1988 Amended and
Restated Nuclear Fuel Heat Purchase
Contract, dated October 4, 1988,
between Detroit Edison and Renaissance.
99(u) - Fourth Amendment, dated as of March 8,
1996, to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract
Agreement, dated as of October 4,
1988, between Detroit Edison and
Renaissance.
99(v) - Sixth Amendment, dated as of August
28, 1997, to 1988 Amended and Restated
Nuclear Fuel Heat Purchase Contract
between Detroit Edison and Renaissance.
99(w) - Standby Note Purchase Credit
Facility, dated as of September 12,
1997, among Detroit Edison and the
Bank's Signatory thereto and The Chase
Manhattan Bank, as Administrative
Agent, and Citicorp Securities, Inc.,
Lehman Brokers, Inc., as Remarketing
Agents and Chase Securities, Inc. as
Arranger.
99(x) - Amended and Restated Credit Agreement,
Dated as of January 21, 1998 among DTE
Capital Corporation, the Initial
Lenders, Citibank, N.A., as Agent, and
Barclays Bank PLC, New York Branch and
The First National Bnak of Chicago, as
Co-Agents, and Citicorp Securities,
Inc., as Arranger.
99(y) - $60,000,000 Support Agreement dated
as of January 21, 1998 between DTE
Energy Company and DTE Capital
Corporation.
46
<PAGE> 47
99(z) - $400,000,000 Support Agreement, dated
as of January 21, 1998, between DTE
Energy Company and DTE Capital
Corporation.
*Denotes management contract or compensatory plan or arrangement
required to be entered as an exhibit to this report.
47
<PAGE> 1
EXHIBIT 4.193
THE DETROIT EDISON COMPANY
AND
BANKERS TRUST COMPANY
TRUSTEE
SIXTH SUPPLEMENTAL INDENTURE
DATED AS OF MAY 1, 1998
SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30,1993
PROVIDING FOR
7.54% QUARTERLY INCOME DEBT SECURITIES
("QUIDS") (JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES, DUE 2028)
<PAGE> 2
SIXTH SUPPLEMENTAL INDENTURE, dated as of the 1st day of May 1998
between THE DETROIT EDISON COMPANY, a corporation organized and existing under
the laws of the State of Michigan (the "Company"), and BANKERS TRUST COMPANY, a
New York banking corporation, having its principal office in The City of New
York, New York, as trustee (the "Trustee");
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a Collateral Trust Indenture dated as of June 30, 1993 (the "Original
Indenture"), as supplemented by a First Supplemental Indenture dated as of June
30, 1993, a Second Supplemental Indenture dated as of September 15, 1993, as
amended, a Third Supplemental Indenture dated as of August 15, 1994, as amended,
a Fourth Supplemental Indenture dated as of August 15, 1995 and a Fifth
Supplemental Trust Indenture dated as of February 1, 1996 (the "Prior
Supplemental Indentures") providing for the issuance by the Company from time to
time of its debt securities; and
WHEREAS, the Company now desires to provide for the issuance of an
additional series of its unsecured, subordinated debt securities pursuant to the
Original Indenture; and
WHEREAS, the Company intends hereby to designate a series of debt
securities which shall not have the benefit of the provisions of Article Four of
the Original Indenture and the other related provisions of the Original
Indenture relating to the grant of security and which shall have the terms and
variations from the provisions of the Original Indenture as set forth herein;
and
WHEREAS, the Company, in the exercise of the power and authority
conferred upon and reserved to it under the provisions of the Original
Indenture, including Section 1001 thereof, and pursuant to appropriate
resolutions of the Board of Directors, has duly determined to make, execute and
deliver to the Trustee this Sixth Supplemental Indenture to the Original
Indenture as permitted by Sections 201 and 301 of the Original Indenture in
order to establish the form or terms of, and to provide for the creation and
issue of, a series of its debt securities under the Original Indenture, which
shall be known as the 7.54% Quarterly Income Debt Securities (the "QUIDS")
Junior Subordinated Deferrable Interest Debentures, Due 2028; and
WHEREAS, all things necessary to make such debt securities, when
executed by the Company and authenticated and delivered by the Trustee or any
Authenticating Agent and issued upon the terms and subject to the conditions
hereinafter and in the Original Indenture set forth against payment therefor,
the valid, binding and legal obligations of the Company and to make this Sixth
Supplemental Indenture a valid, binding and legal agreement of the Company, have
been done;
NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH that, in
order to establish the terms of a series of debt securities, and for and in
consideration of the premises and of the covenants contained in the Original
Indenture and in this Sixth Supplemental Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
<PAGE> 3
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. Each capitalized term that is used herein and
is defined in the Original Indenture shall have the meaning specified in the
Original Indenture unless such term is otherwise defined herein.
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions located in the State of
Michigan or in the state in which the principal corporate trust office of the
Trustee is located, are authorized or obligated by or pursuant to law or
executive order to close.
"Capital Stock" means any and all shares of the Company's Preferred
Stock, Preference Stock or Common Stock or any other equity securities of the
Company.
"Payment Obligation", when used with respect to Senior Indebtedness,
means an obligation stated in an agreement, instrument or lease to pay money
(whether for principal, premium, interest, sinking fund, periodic rent,
stipulated value, termination value, liquidated damages or otherwise), but
excluding an obligation to pay money in respect of fees of, or as payment or
reimbursement for expenses incurred by or on behalf of, or as indemnity for
losses, damages, taxes or other indemnity claims of any kind owed to, any holder
of Senior Indebtedness or other party to such agreement, instrument or lease.
"Senior Indebtedness" means each of the following, whether outstanding
on the date hereof or hereafter created, incurred or assumed:
(a) (i) any Payment Obligation of the Company in respect of
any indebtedness, directly or indirectly, created, incurred or assumed
for borrowed money other than (A) the $49.9 million in aggregate
principal amount of Quarterly Income Debt Securities (Junior
Subordinated Deferrable Interest Debentures, Due 2025) and (B) the
$185 million in aggregate principal amount of Quarterly Income Debt
Securities (Junior Subordinated Deferrable Interest Debentures, Due
2026), each of which has been expressly deemed by its terms to be
subordinate or (ii) in connection with the acquisition of any
business, property or asset (including securities), other than any
account payable or other indebtedness created, incurred or assumed in
the ordinary course of business in connection with the obtaining of
materials or services;
(b) any Payment Obligation of the Company in respect of any
lease that would, in accordance with generally accepted accounting
principles, be required to be classified and accounted for as a
capital lease;
(c) any Payment Obligation of the Company in respect of any
interest rate exchange agreement, currency exchange agreement or
similar agreement that provides
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<PAGE> 4
for payment (whether or not contingent) over a period or term
(including any renewals or extensions) longer than one year from the
execution thereof;
(d) any Payment Obligation of the Company in respect of any
agreement relating to the acquisition (including a sale and buyback)
or lease (including a sale and leaseback) of real or personal property
that provides for payment (whether or not contingent) over a period or
term (including any renewals or extensions) longer than one year from
the execution thereof;
(e) any Payment Obligation of any Subsidiary or of others of
the kind described in the preceding clauses (a) through (d) assumed or
guaranteed by the Company or for which the Company is otherwise
responsible or liable; and
(f) any amendment, renewal, extension or refunding of any
Payment Obligation described in the preceding subparagraphs
(a) through (e);
unless in the agreement, instrument or lease in which any such Payment
Obligation is stated it is expressly provided that such Payment Obligation is
not senior in right of payment to the QUIDS.
"Tax Event" means that the Company shall have received an opinion of
counsel (which may be counsel to the Company or an affiliate but not an employee
thereof) experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change), in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
original issuance of the QUIDS, there is more than an insubstantial risk that
interest payable by the Company on the QUIDS is not, or will not be, deductible
by the Company for federal income tax purposes.
SECTION 102. Section References. Each reference to a particular section
set forth in this Supplemental Indenture shall, unless the context otherwise
requires, refer to this Sixth Supplemental Indenture.
ARTICLE TWO
TITLE AND TERMS OF THE QUIDS
SECTION 201. Title of the QUIDS. This Sixth Supplemental Indenture
hereby establishes a series of QUIDS, which shall be known as the Company's
7.54% Quarterly Income Debt Securities (Junior Subordinated Deferrable Interest
Debentures, Due 2028) (referred to herein as the "QUIDS"). For purposes of the
Original Indenture, the QUIDS shall constitute a single series of Securities.
The stated maturity of the QUIDS will be June 30, 2028.
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<PAGE> 5
SECTION 202. Variations from the Original Indenture. Notwithstanding
the provisions of the Original Indenture, the QUIDS shall be without benefit of
any security and shall be subordinated to Senior Indebtedness as and to the
extent provided in Article Four of this Supplemental Indenture. The QUIDS shall
not have the benefit of the provisions of Article Four of the Original Indenture
and shall not have the benefit of, or be subject to, the other related
provisions of the Original Indenture relating to the grant of security,
including (for avoidance of doubt and not for purposes of limitation) the
Granting Clause, the definitions of "Deliverable Mortgage Bonds," "Deliverable
Securities," "Designated Mortgage Bonds," "Grant," "Mortgage," "Mortgage Bonds,"
"Mortgage Trustee," "Previously Delivered Mortgage Bonds," and "Trust Estate,"
Section 301 (20), Sections 301 (a) (v), (ix), (x) and (xi), Sections 301 (b)
(ii) and (iii), Section 301 (d), and Sections 601(4) and (8).
SECTION 203. Amount and Denominations; DTC. The aggregate principal
amount of QUIDS that may be issued under this Sixth Supplemental Indenture is
limited to $100,122,300. The QUIDS shall be issuable only in fully registered
form and, as permitted by Sections 301 and 302 of the Original Indenture, in
denominations of $25 and integral multiples thereof. The QUIDS will initially be
issued under a book-entry system, registered in the name of The Depository Trust
Company, as depository ("DTC"), or its nominee, who is hereby designated as
"U.S. Depository" under the Original Indenture.
SECTION 204. Interest Rate and Interest Payment Dates. (a) The QUIDS
will bear interest at the rate of 7.54% per annum from the date of original
issuance until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the same rate per
annum during such overdue period. Interest on the QUIDS will be payable
quarterly (subject to deferral as set forth herein) in arrears on March 31, June
30, September 30 and December 31 of each year (each an "Interest Payment Date"),
commencing June 30, 1998, to the persons in whose names the QUIDS are registered
at the close of business on the relevant record date for such interest
installment, which will be one Business Day prior to the relevant Interest
Payment Date or, in the case of a Deferral Period (as described herein), one
Business Day prior to the Interest Payment Date for such Deferral Period (each a
"Record Date"); provided, however, that, in the event that any Interest Payment
Date shall not be a Business Day, then interest shall be payable on the next day
that is a Business Day (but without interest or other payment in respect of such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day
without reduction in amount due to such early payment (and in which case the
relevant Record Date shall be on the Business Day immediately preceding such
Interest Payment Date), in each case with the same force and effect as if made
on such Interest Payment Date, subject to certain rights of deferral described
in Section 204(b) hereof.
The amount of interest payable in any period will be computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full quarterly interest period, will be computed on the basis of the
actual number of days elapsed in such period.
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(b) The provisions of Section 204(a) notwithstanding, the Company
shall have the right at any time, on one or more occasions so long as an Event
of Default with respect to the QUIDS has not occurred and is not continuing, to
extend any interest payment period on the QUIDS for a period (a "Deferral
Period") not to exceed 20 consecutive quarterly interest payment periods;
provided that the date on which such Deferral Period ends must be an Interest
Payment Date and must be no later than June 30, 2028 or any date on which any
QUIDS are fixed for redemption. The quarterly interest payments on the QUIDS so
deferred will continue to accrue with interest thereon at the rate of interest
of the QUIDS during such Deferral Period. On the Interest Payment Date at the
end of the Deferral Period, the Company shall pay all interest then accrued and
unpaid, which shall be compounded quarterly at the rate of interest on the QUIDS
(except to the extent prohibited by law) to the date of payment, to the persons
in whose names the QUIDS are registered on the Record Date for such Deferral
Period. The Company shall give the Holders of the QUIDS notice of its election
to defer interest payments or to extend the Deferral Period ten Business Days
prior to the earlier of (1) the next scheduled quarterly payment date and (2)
the date the Company is required to give notice of the record date of such
related interest payment to the New York Stock Exchange or other applicable
self-regulatory organization or to the Holders of the QUIDS, but in any event
not less than two Business Days prior to such record date. During the Deferral
Period the Company shall not declare or pay any dividend on or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its Capital Stock
or make any guaranty payment with respect to the foregoing, other than
redemptions of any series of Capital Stock of the Company pursuant to the terms
of any sinking fund provisions with respect thereto. During any Deferral Period,
the Company may not (i) make any distributions, loans or guarantees for the
benefit of, (ii) purchase, defease, redeem or otherwise acquire or retire for
value any securities of or (iii) make any other investment in, any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company, for the purpose of, or to enable the payment
of, directly or indirectly, dividends on any equity securities of DTE Energy
Company and its successors or assigns. During any Deferral Period, the Company
may continue to extend the interest payment period by extending the Deferral
Period, on one or more occasions, by notice given as aforesaid in this paragraph
(b), provided that such Deferral Period, as so extended, must end on an Interest
Payment Date and in no event shall the aggregate Deferral Period, as extended,
exceed 20 consecutive quarterly interest payment periods or extend beyond June
30, 2028 or any date on which QUIDS are fixed for redemption. No interest shall
be due and payable during a Deferral Period except at the end thereof.
SECTION 205. Optional Redemption of QUIDS. Other than in accordance
with Section 206 below, the QUIDS shall not be redeemable prior to June 30,
2003. Thereafter, upon notice given by mailing the same, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for redemption,
any or all of the QUIDS may be redeemed by the Company, at its option, at any
time and from time to time, at a redemption price equal to 100% of the principal
amount of the QUIDS to be redeemed plus accrued and unpaid interest thereon to
the date fixed for redemption.
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SECTION 206. Tax Event Redemption of QUIDS. If a Tax Event has occurred
and is continuing, the Company has the right, within 90 days following the
occurrence of such Tax Event, to redeem the QUIDS, in whole but not in part, at
a redemption price equal to the aggregate principal amount of the QUIDS plus
accrued and unpaid interest to the date of redemption.
SECTION 207. Form of QUIDS. Attached hereto as Exhibit A is a form of
the definitive QUIDS.
ARTICLE THREE
ADDITIONAL EVENTS OF DEFAULT AND COVENANTS
SECTION 301. Inapplicability of Certain Events of Default. The Events
of Default set forth in Sections 601(4) and 601(8) of the Original Indenture
shall not apply to the QUIDS. The omission by the Company to pay interest on the
QUIDS during a Deferral Period as permitted by Section 204 shall not constitute
an Event of Default under Section 601 (1) of the Original Indenture.
ARTICLE FOUR
SUBORDINATION OF QUIDS
SECTION 401. QUIDS Subordinate to Senior Indebtedness. The Company for
itself, its successors and assigns, covenants and agrees, and each Holder of
QUIDS issued, whether upon original issue or upon transfer or assignment
thereof, by its acceptance thereof likewise covenants and agrees, that the
payment of principal of and interest on each and all of the QUIDS is hereby
expressly subordinated, to the extent and in the manner hereinafter in this
Article set forth, in right of payment to the prior payment in full of all
existing and future Senior Indebtedness of the Company.
SECTION 402. Payments to Securityholders. (a) Upon (i) any acceleration
of the principal amount due on the QUIDS or (ii) any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest, if any, due upon all Senior Indebtedness shall
first be paid in full, or payment thereof provided for in money or money's worth
in accordance with its terms, before any payment is made on account of the
principal of or interest on the indebtedness evidenced by the QUIDS, and upon
any such dissolution or winding-up or liquidation or reorganization any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders of the QUIDS under the terms
of this Supplemental Indenture would be entitled, except for the provisions
hereof, shall (subject to the power of a court of competent jurisdiction to make
other equitable provision reflecting the rights conferred by the provisions
hereof upon the Senior Indebtedness and the holders thereof with respect to the
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<PAGE> 8
QUIDS and the Holders thereof by a lawful plan of reorganization under
applicable bankruptcy law), be paid by the Company or any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, or by the Holders of the QUIDS if received by them, directly to
the holders of Senior Indebtedness (pro rata to each such holder on the basis of
the respective amounts of Senior Indebtedness held by such holder) or their
representatives, to the extent necessary to pay all Senior Indebtedness
(including interest thereon) in full, in money or money's worth, in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness, before any payment or distribution is
made to the Holders of the indebtedness evidenced by the QUIDS. The
consolidation of the Company with, or a merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its property as an entirety, or substantially as an entirety, to
another Person upon the terms and conditions provided in Section 901 of the
Original Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 402(a).
(b) In the event that any payment or distribution of assets of the
Company of any kind or character not permitted by Section 402(a), whether in
cash, property or securities, shall be received by the Trustee or the Holders of
QUIDS before all Senior Indebtedness is paid in full, or provision made for such
payment, in accordance with its terms, upon written notice to the Trustee or, as
the case may be, such Holder, such payment or distribution shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
such Senior Indebtedness or their representative or representatives, or to the
Trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full in accordance with its terms, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
Nothing in this Article shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 706 of the Original Indenture. In addition, nothing
in this Article shall prevent the Company from making or the Trustee from
receiving or applying any payment in connection with the redemption of the QUIDS
if the first publication of notice of such redemption (whether by mail or
otherwise in accordance with this Supplemental Indenture) has been made, and the
Trustee has received such payment from the Company, prior to the occurrence of
any of the contingencies specified in this Section 402.
(c) No payment on account of principal of or interest on the QUIDS
shall be made unless full payment of amounts then due for principal, premium, if
any, sinking funds and interest on any Senior Indebtedness has been made or duly
provided for in money or money's worth in accordance with the terms of such
Senior Indebtedness. No payment on account of principal or interest on the QUIDS
shall be made if, at the time of such payment or immediately after giving effect
thereto, (i) there shall exist a default in the payment of principal, premium,
if any, sinking fund or interest with respect to any Senior Indebtedness, or
(ii) there shall have occurred an event of default (other than a default in the
payment of principal, premium, if any, sinking funds or interest) with respect
to any Senior Indebtedness, as defined therein or in the instrument under which
the same is outstanding, permitting the holders thereof to accelerate the
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<PAGE> 9
maturity thereof and upon written notice thereof given to the Trustee, with a
copy to the Company (the delivery of which shall not affect the validity of the
notice to the Trustee), and such event of default shall not have been cured or
waived or shall not have ceased to exist; provided, however, that if the holders
of the Senior Indebtedness to which the default relates have not declared such
Senior Indebtedness to be immediately due and payable within 180 days after the
occurrence of such default (or have declared such Senior Indebtedness to be
immediately due and payable and within such period have rescinded such
declaration of acceleration), then the Company shall resume making any and all
required payments in respect of the QUIDS (including any missed payments). Only
one payment blockage period under the immediately preceding sentence may be
commenced within any consecutive 365-day period with respect to the QUIDS of any
series. No event of default which existed or was continuing on the date of the
commencement of any 180-day payment blockage period with respect to the Senior
Indebtedness initiating such payment blockage period shall be, or be made, the
basis for the commencement of a second payment blockage period by a registered
holder or representative of such Senior Indebtedness whether or not within a
period of 365 consecutive days unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days (and, in the
case of any such waiver, no payment shall be made by the Company to the holders
of Senior Indebtedness in connection with such waiver other than amounts due
pursuant to the terms of the Senior Indebtedness as in effect at the time of
such default).
SECTION 403. Subrogation to Rights of Holders of Senior Indebtedness.
From and after the payment in full of all Senior Indebtedness, the Holders of
the QUIDS (together with the holders of any other indebtedness of the Company
which is subordinate in right of payment to the payment in full of all Senior
Indebtedness, which is not subordinate in right of payment to the QUIDS and
which by its terms grants such right of subrogation to the holder thereof) shall
be subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets or securities of the Company applicable to
the Senior Indebtedness until the QUIDS shall be paid in full, and, for the
purposes of such subrogation, no such payments or distributions to the holders
of Senior Indebtedness of assets or securities, which otherwise would have been
payable or distributable to Holders of the QUIDS, shall, as between the Company,
its creditors other than the holders of Senior Indebtedness, and the Holders of
the QUIDS, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article are
and are intended solely for the purpose of defining the relative rights of the
Holders of the QUIDS, on the one hand, and the holders of the Senior
Indebtedness, on the other hand, and nothing contained herein is intended to or
shall impair as between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders of the QUIDS, the obligation of the
Company, which is unconditional and absolute, to pay to the Holders of the QUIDS
the principal of and interest on the QUIDS as and when the same shall become due
and payable in accordance with their terms, or to affect the relative rights of
the Holders of the QUIDS and creditors of the Company other than the holders of
the Senior Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of QUIDS from exercising all remedies otherwise permitted
by applicable law upon default hereunder with respect to the QUIDS subject to
the rights of the holders of Senior Indebtedness, under Section
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<PAGE> 10
402, to receive cash, property or securities of the Company otherwise payable
or deliverable to the Trustee or the Holders of the QUIDS or to a representative
of such Holders, on their behalf.
Upon any distribution or payment in connection with any proceedings or
sale referred to in Section 402(a), the Trustee and each Holder of the QUIDS
then Outstanding, shall be entitled to rely upon a certificate of the
liquidating trustee or agent or other Person making any distribution or payment
to the Trustee or such Holder for the purpose of ascertaining the holders of
Senior Indebtedness entitled to participate in such payment or distribution, the
amount of such Senior Indebtedness or the amount payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article.
SECTION 404. No Impairment of Subordination. Nothing contained in this
Article or elsewhere in this Supplemental Indenture or the QUIDS shall prevent
at any time the Company from making payments at any time of principal of or
interest on the QUIDS, except under the conditions described in Section 402 or
during the pendency of any proceedings or sale therein referred to.
SECTION 405. Trustee to Effectuate Subordination. Each Holder of QUIDS
by his acceptance thereof, whether upon original issue or upon transfer or
assignment, authorizes and directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provisions in
this Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
No rights of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Trustee
or any Holder of the QUIDS then Outstanding, or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by any such holder, with
the terms, provisions and covenants of this Supplemental Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Holders of the QUIDS, without incurring
responsibility to the Holders of the QUIDS and without impairing or releasing
the subordination provided in this Article or the obligations of the Holders of
the QUIDS to the holders of Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 406. Notice to Trustee. The Company shall give prompt written
notice to the Trustee in the form of an Officers' Certificate of any fact known
to the Company which would
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prohibit the making of any payment of money to or by the Trustee in respect of
the QUIDS pursuant to the provisions of this Article. Notwithstanding the
provisions of this Article or any other provisions of this Supplemental
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the QUIDS pursuant to the provisions of this Article, unless and
until the Trustee shall have received at its Corporate Trust Office written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor at least two Business Days prior to such payment date;
and, prior to the receipt of any such written notice, the Trustee, shall be
entitled in all respects to assume that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under the Article, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 407. Reliance on Certificate of Liquidating Agent. Upon any
payment or distribution referred to in this Article, the Trustee and the Holders
of the QUIDS shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which a dissolution, winding up or total or
partial liquidation or reorganization of the Company is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of the
QUIDS, for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article.
SECTION 408. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith mistakenly pay over or distribute to Holders of the QUIDS of any
series or to the Company or to any other Person cash, property or securities to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 409. Rights of Trustee as Holder of Senior Indebtedness. The
Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article with respect to any Senior Indebtedness which may at any
time be held by it, to the same extent as any other holder
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<PAGE> 12
of Senior Indebtedness, and nothing in this Supplemental Indenture shall deprive
the Trustee of any of its rights as such holder.
SECTION 410. Article Applicable to Paying Agent. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context shall otherwise require) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that this Section
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect of, and
shall not be responsible in any manner whatsoever for and in respect of, the
validity or sufficiency of this Sixth Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Except as expressly amended hereby, the Original Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Original Indenture is in all respects hereby ratified and confirmed. This
Sixth Supplemental Indenture and all its provisions shall be deemed a part of
the Original Indenture in the manner and to the extent herein and therein
provided.
This Sixth Supplemental Indenture shall be governed by, and construed
in accordance with, the laws of the State of New York.
This Sixth Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
THE DETROIT EDISON COMPANY
By:______________________________
Name:
Title:
ATTEST:
By:_____________________________
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<PAGE> 14
[Corporate Seal]
STATE OF MICHIGAN )
) :
COUNTY OF WAYNE )
On the , day of May 1998, before me personally came , to
me known, who, being by me duly sworn, did depose and say that he is of THE
DETROIT EDISON COMPANY, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and he signed his
name thereto by like authority.
___________________________
Notary Public
My Commission Expires
[Notarial Seal]
BANKERS TRUST COMPANY,
as Trustee
By:_________________________________
Name:
Title:
ATTEST:
By:________________________
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<PAGE> 15
[Corporate Seal]
STATE OF NEW YORK )
) :
COUNTY OF NEW YORK )
On the day of May 1998, before me personally came , to me known,
who, being by me duly sworn, did depose and say that he is of BANKERS
TRUST COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and she signed her
name thereto by like authority.
______________________________
[Notarial Seal]
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EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NO. R-1 $100,122,300
THE DETROIT EDISON COMPANY
7.54% QUARTERLY INCOME DEBT SECURITIES
(JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES
DUE 2028)
ISSUE PRICE ISSUE DATE CUSIP NO.
$25.00, or any integral
multiple thereof. May 11, 1998 250847696
THE DETROIT EDISON COMPANY, a corporation duly organized and existing
under the laws of the State of Michigan (herein referred to as the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of $100,122,300 on June 30, 2028 and to
pay interest at the rate of 7.54% per annum on said principal sum from the date
of issuance until the principal of this Debenture ("Note") hereof becomes due
and payable, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment of
interest at the same rate per annum during such overdue period. Interest on this
Note will be payable quarterly (subject to deferral as set forth
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<PAGE> 17
herein) in arrears on March 31, June 30, September 30 and December 31 of each
year (each such date, an "Interest Payment Date"), commencing June 30, 1998.
The amount of interest payable for any period shall be computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full quarterly interest period, will be computed on the basis of the
actual number of days elapsed in such period. In the event that any date on
which interest is payable on this Note is not a Business Day, then payment of
the amount payable on such date will be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day
without reduction in the amount due to such early payment (and in which case the
relevant Record Date shall be on the Business Day immediately preceding such
Interest Payment Date), in each case with the same force and effect as if made
on such date, subject to certain rights of deferral described below. A "Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions located in the State of Michigan or in
the state in which the principal corporate trust office of the Trustee is
located are authorized or obligated by or pursuant to law or executive order to
close. The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date (other than interest payable on redemption or
maturity) will, as provided in the Indenture (as defined herein), be paid to the
person in whose name this Note (or one or more Predecessor Notes, as defined in
said Indenture) is registered at the close of business on the relevant record
date for such interest installment, which shall be one Business Day prior to the
relevant Interest Payment Date or, in the case of a Deferral Period (as defined
in the Indenture), one Business Day prior to Interest Payment Date for such
Deferral Period (each a "Record Date"). Interest payable on redemption or
maturity shall be payable to the person to whom the principal is paid. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered holders on such Record Date, and may be
paid to the person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Notes not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of and
the interest on this Note shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, in any coin or currency of the United States of America which at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the registered holder at the close of business on the Record
Date at such address as shall appear in the Security Register.
Payment of the principal of and interest on this Note is, to the extent
provided in the Indenture, subordinated and subject in right of payment to the
prior payment in full of all existing and future Senior Indebtedness, as defined
in the Indenture, of the Company and this
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<PAGE> 18
Note is issued subject to the provisions of the Indenture with respect thereto.
Each registered holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee as his or her attorney-in-fact for any and all such purposes. Each
registered holder hereof, by his or her acceptance hereof, hereby waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Note shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
Unless the Certificate of Authentication hereon has been executed by
the Trustee or a duly appointed Authentication Agent referred to herein, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
This Note is one of a duly authorized series of Notes of the Company
(herein sometimes referred to as the "Notes"), specified in the Indenture, all
issued or to be issued in one or more series under and pursuant to a Collateral
Trust Indenture dated as of June 30, 1993 (the "Original Indenture") duly
executed and delivered between the Company and Bankers Trust Company, a New York
banking corporation, as Trustee (herein referred to as the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of June 30, 1993, a
Second Supplemental Indenture dated as of September 15, 1993, as amended, a
Third Supplemental Indenture dated as of August 15, 1994, as amended, a Fourth
Supplemental Indenture dated as of August 15, 1995 , a Fifth Supplemental
Indenture dated as of February 1, 1996 and a Sixth Supplemental Indenture dated
as of May 1, 1998 (together with the Original Indenture, the "Indenture")
between the Company and the Trustee, to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the registered holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. By the terms of the Indenture, the Notes are issuable in series which
may vary as to amount, date of maturity, rate of interest and in other respects
as in the Indenture provided. This series of Notes is limited in aggregate
principal amount as specified in said Sixth Supplemental Indenture.
Notwithstanding the provisions of the Original Indenture, this Note
shall be without benefit of any security and shall be subordinated to Senior
Indebtedness (as defined in the Indenture) as and to the extent provided in
Article Four of said Sixth Supplemental Indenture. This Note shall not have the
benefit of the provisions of Article Four of the Original Indenture and shall
not have the benefit of, or be subject to, the other related provisions of the
Original Indenture relating to the grant of security, including (for avoidance
of doubt and not for purposes of limitation) the Granting Clause, the
definitions of "Deliverable Mortgage Bonds," "Deliverable Securities,"
"Designated Mortgage Bonds," "Grant," "Mortgage," "Mortgage
3
<PAGE> 19
Bonds," "Mortgage Trustee," "Previously Delivered Mortgage Bonds," and "Trust
Estate," Section 301(20), Sections 301 (a) (v), (ix), (x) and (xi), Sections 301
(b) (ii) and (iii), and Section 301 (d). In addition, the Events of Default set
forth in Sections 601(4) and 601 (8) of the Original Indenture shall not apply
to this Note. The omission by the Company to pay interest on this Note during a
Deferral Period as permitted by Section 204 of said Sixth Supplemental Indenture
shall not constitute an Event of Default under Section 601(l) of the Original
Indenture.
The Company shall have the right to redeem this Note at the option of
the Company, without premium or penalty, in whole or in part, at any time on or
after June 30, 2003 and prior to maturity at a redemption price equal to 100% of
the principal amount redeemed plus the accrued and unpaid interest thereon to
the date fixed for redemption. Any redemption pursuant to this paragraph will be
made upon not less than 30 nor more than 60 days notice. If the Notes are only
partially redeemed by the Company, the Notes will be redeemed pro rata or by lot
or by any other method utilized by the Trustee; provided that if, at the time of
redemption, the Notes are registered as a Global Note, the Depositary shall
determine by lot the principal amount of such Notes held by each Note holder to
be redeemed.
If a Tax Event (as hereinafter defined) has occurred and is continuing,
the Company shall have the right, within 90 days following the occurrence of
such Tax Event, to redeem the QUIDS, in whole but not in part, at a redemption
price equal to the aggregate principal amount of the QUIDS plus accrued and
unpaid interest to the date of redemption. "Tax Event" means that the Company
shall have received an opinion of counsel (which may be counsel to the Company
or an affiliate but not an employee thereof) experienced in such matters to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or as a result of any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of original issuance of the QUIDS, there is more than an
insubstantial risk that interest payable by the Company on the QUIDS is not, or
will not be, deductible by the Company for federal income tax purposes.
In the event of redemption of this Note in part only, a new Note or
Notes of this series for the unredeemed portion hereof will be issued in the
name of the registered holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Notes may be declared,
and upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth therein.
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<PAGE> 20
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the registered holders of not less than a majority
in aggregate principal amount of the outstanding Notes of each series affected
at the time, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the registered holders of the Notes;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Notes of any series, or reduce the principal amount
thereof, or reduce the rate of or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, without the
consent of the registered holder of each Note so affected or (ii) reduce the
aforesaid percentage of Notes, the registered holders of which are required to
consent to any such supplemental indenture, without the consent of the
registered holders of each Note then outstanding and affected thereby. The
Indenture also contains provisions permitting (i) the registered holders of at
least 66 2/3% in aggregate principal amount of the Notes of all series at the
time outstanding affected thereby, on behalf of the registered holders of the
Notes of such series, to waive compliance by the Company with certain provisions
of the Indenture and (ii) the registered holders of a majority in aggregate
principal amount of the Notes of all series at the time outstanding affected
thereby, on behalf of the registered holders of the Notes of such series, to
waive certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the registered bolder of this Note (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such registered
holder and upon all future registered holders and owners of this Note and of any
Note issued in exchange hereof or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the time and place and at the rate and in the coin or currency herein
prescribed.
The Company shall have the right at any time, on one or more occasions,
so long as an Event of Default has not occurred and is not continuing under the
Indenture with respect to the Notes, to extend any interest payment period on
this Note to a period not to exceed 20 consecutive quarterly interest payment
periods and, as a consequence, the quarterly interest payment on the Notes would
be deferred (but would continue to accrue with interest thereon compounded
quarterly at the rate of interest on the Notes, except as provided by law)
during any such Deferral Period (as defined in the Indenture). At the end of
each Deferral Period, the Company shall pay all interest then accrued and unpaid
(compounded quarterly, at the rate of interest on the Notes, except to the
extent provided by law) to the persons in whose name the QUIDS are registered on
the Record Date for such Deferral Period. In the event the Company exercises
this right, the Company shall not declare or pay any dividends on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
Capital Stock (as defined in the Indenture) or make any guarantee payments with
respect to the foregoing during such Deferral Period, other than redemptions of
any series of Capital Stock of the Company pursuant to the
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<PAGE> 21
terms of any sinking fund provisions with respect thereto. In addition, during
any Deferral Period, the Company may not (i) make any distributions, loans or
guarantees for the benefit of, (ii) purchase, defease, redeem or otherwise
acquire or retire for value any securities of or (iii) make any other investment
in any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company, for the purpose of, or to
enable the payment of, directly or indirectly, dividends on any equity security
of DTE Energy Company and its successors or assigns. During any Deferral Period,
the Company may continue to extend the interest payment period by extending the
Deferral Period, provided that the aggregate Deferral Period, as extended, must
end on an Interest Payment Date and in no event shall the aggregate Deferral
Period exceed 20 consecutive quarterly interest payment periods or extend beyond
the maturity of the Notes or any date on which any of the Notes are fixed for
redemption. No interest shall be due and payable on the Notes during a Deferral
Period except at the end thereof. The Company shall give the registered holders
of Notes notice of its election to defer interest payments or to extend the
Deferral Period ten Business Days prior to the earlier of (i) the next scheduled
quarterly payment date or (ii) the date the Company is required to give notice
of the record date of such related interest payment to the New York Stock
Exchange or other applicable self-regulatory organization or to the holders of
the Notes, but in any event not less than two Business Days prior to such record
date.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register of
the Company, upon surrender of this Note for registration of transfer at the
office or agency of the Company in any place where the principal of and any
interest on this Note are payable or at such other offices or agencies as the
Company may designate, duly endorsed by or accompanied by a written instrument
or instruments of transfer in form satisfactory to the Company and the Security
Registrar or any transfer agent duly executed by the registered holder hereof or
his or her attorney duly authorized in writing, and thereupon one or more new
Notes of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee, any paying agent and any Note Registrar may deem and treat
the registered holder hereof as the absolute owner hereof (whether or not this
Note shall be overdue and notwithstanding any notice of ownership or writing
hereon made by anyone other than the Note Registrar) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Note Registrar shall be affected by any notice to the
contrary.
The Notes of this series are issuable only in fully registered form
without coupons in denominations of $25 and any integral multiple thereof. This
Global Note is exchangeable for Notes in definitive form only under certain
limited circumstances set forth in the Indenture. Notes of this series so issued
are issuable only in registered form without coupons in
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<PAGE> 22
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, as requested by the registered
holder surrendering the same.
As set forth in, and subject to the provisions of, the Indenture, no
registered owner of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless (i) such
registered owner shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes of this series, (ii) the
registered owners of not less than 25% in principal amount of the outstanding
Notes of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, (iii) the
Trustee shall have failed to institute such proceeding within 60 days and (iv)
the Trustee shall not have received from the registered owners of a majority in
principal amount of the outstanding Notes of this series a direction
inconsistent with such request within such 60-day period; provided, however,
that such limitations do not apply to a suit instituted by the registered owner
hereof for the enforcement of payment of the principal of or any interest on
this Note on or after the respective due dates expressed herein, subject to
deferral as set forth herein.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE> 23
IN WITNESS WHEREOF, the Company has caused this Instrument to be
executed.
THE DETROIT EDISON COMPANY
By_____________________________
Attest:
By_______________________________________
[Corporate Seal]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within
mentioned Indenture.
BANKERS TRUST COMPANY
as Trustee
By__________________________
Authorized Signatory
Date:
8
<PAGE> 24
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
(Please insert Social Security or Other Identifying Number of Assignee)
________________________________________________________________________________
(Please print or type name and address, including zip code of assignee)
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorneys to transfer the within Note on the books of the
Issuer, with full power of substitution in the premises.
Dated:________________________
NOTICE: The signature of this assignment must correspond with the name as
written upon the face of the within Note in every particular, without alteration
or enlargement or any change whatever and NOTICE: Signature(s) must be
guaranteed by a financial institution that is a member of the Securities
Transfer Agents Medallion Program ("STAMP"), the Stock Exchange, Inc. Medallion
Signature Program ("MSP"). When assignment is made by a guardian, trustee,
executor or administrator, an officer of a corporation, or anyone in a
representative capacity, proof of his or her authority to act must accompany
this Note.
9
<PAGE> 1
EXHIBIT 4.194
FORM OF SUPPORT AGREEMENT
BETWEEN
DTE ENERGY COMPANY
AND
DTE CAPITAL CORPORATION
THIS SUPPORT AGREEMENT, dated as of June 16, 1998, is between DTE
ENERGY COMPANY, a Michigan corporation ("Parent"), and DTE CAPITAL CORPORATION,
a Michigan corporation ("Subsidiary").
WHEREAS, Parent is the owner of 100% of the outstanding common stock of
Subsidiary;
WHEREAS, Subsidiary intends to issue $100,000,000 aggregate principal
amount of debt securities (hereinafter referred to as the "Debt Securities," and
such amount and all interest and other amounts, if any, payable with respect
thereto being hereinafter collectively referred to as "Debt") to parties other
than Parent pursuant to the Indenture dated as of June 15, 1998 (as amended or
supplemented with respect to the Debt Securities, the "Indenture") between
Subsidiary and The Bank of New York (or any successor or replacement trustee),
as trustee (the "Trustee");
WHEREAS, Parent and Subsidiary desire to take certain actions to
enhance and maintain the financial condition of Subsidiary as hereinafter set
forth in order to enable Subsidiary and its subsidiaries to incur indebtedness
on more advantageous and reasonable terms; and
WHEREAS, the Lenders (as defined below) will rely upon this Agreement
in making loans or extending credit or otherwise acquiring Debt Securities of
Subsidiary.
NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Stock Ownership. During the term of this Agreement, Parent will own
directly or indirectly all of the voting common stock of Subsidiary and The
Detroit Edison Company ("DECO") now or hereafter issued and outstanding.
2. Negative Pledge. During the term of this Agreement, Parent will not
create or suffer to exist any lien, security interest or other charge of
encumbrance, upon or with respect to any voting common stock of DECO from time
to time owned directly or indirectly by Parent or
<PAGE> 2
any capital stock of Subsidiary from time to time owned directly or indirectly
by Parent, provided, however, that any restriction on the payment of dividends
by DECO or Subsidiary contained in any subordinated debt instrument, preferred
stock or preference stock of DECO or Subsidiary shall not constitute a lien,
security interest or other charge or encumbrance.
3. Liquidity Provision. If, during the term of this Agreement,
Subsidiary is unable to make timely payment on the relevant payment date of
interest, principal or premium, if any, on, or other amounts due in respect of,
all or any portion of the Debt Securities issued by it or related Debt, Parent
promptly shall provide to Subsidiary, at its request, such funds (in the form of
cash or liquid assets) in an amount sufficient to permit Subsidiary to make
timely payment on the relevant payment date in respect of such Debt as equity or
as a loan, as Parent shall determine in its sole discretion. If such funds are
advanced to Subsidiary as a loan, such loan shall be on such terms and
conditions, including maturity and rate of interest, as Parent and Subsidiary
shall agree. Notwithstanding the foregoing, any such loan shall be subordinated
to any and all debt of Subsidiary owing to any lender (including any Lender)
other than Parent. Each of the parties hereto acknowledges that Parent's
obligations hereunder do not constitute a guarantee by Parent of Debt of
Subsidiary. As used herein, the term "Lender" shall mean (i) any person, firm,
corporation or other entity to which Subsidiary is indebted for any Debt or
which is acting as the Trustee or a trustee or authorized representative on
behalf of such person, firm corporation or other entity or which is acting as
SPURS Agent (as defined in the Indenture), and (ii) Citicorp Securities, Inc.
and Salomon Brothers Inc, and their respective successors (the "Initial
Purchasers"), with respect to Debt owing by Subsidiary to the Initial Purchasers
in accordance with the terms of that certain Purchase Agreement, dated as of
June 16, 1998, relating to the Debt Securities; provided that, notwithstanding
the foregoing, the claims of the Initial Purchasers shall be subordinated to the
claims of the holders of the Debt Securities and the Insurer (as defined below)
hereunder.
4. Waivers. Parent hereby waives any failure or delay on the part of
Subsidiary in asserting or enforcing any of its rights or in making any claims
or demands hereunder. Subsidiary or any Lender may at any time, without Parent's
consent, without notice to Parent and without affecting or impairing
Subsidiary's or such Lender's rights or Parent's obligations hereunder, do any
of the following with respect to any Debt: (a) make changes, modifications,
amendments or alterations, by operation of law or otherwise, including, without
limitation, any changes in the rate of interest payable thereon or any changes
in the method of calculating the rate of interest payable thereon, (b) grant
renewals and extensions and extensions of time, for payment or otherwise, (c)
accept new or additional documents, instruments or agreements relating to or in
substitution of said Debt, or (d) otherwise handle the enforcement of their
respective rights and remedies in accordance with their business judgment.
5. Amendment; Suspension. This Agreement may be amended or terminated
at any time by written amendment or agreement signed by both parties; provided
that such amendment or termination does not adversely affect the rights of the
Initial Purchasers; and provided further, however, that except as set forth in
the next succeeding sentence, no amendment to the Agreement which adversely
affects the rights of Subsidiary or any Lender and no termination of
2
<PAGE> 3
this Agreement shall be effective as to Subsidiary or any Lender until such time
as all Debt owing to such Lender by Subsidiary on the date of such amendment or
termination shall have been paid in full, unless such Lender shall consent in
writing to the contrary. Notwithstanding the foregoing, (A) upon not less than
30 days prior notice to the applicable Remarketing Agent and the Trustee,
Subsidiary and Parent may amend this Agreement (subject to the proviso that such
amendment shall not adversely affect the rights of the Initial Purchasers) on
any Interest Rate Adjustment Date (as defined in the Indenture) for Debt
Securities, effective commencing on such Interest Rate Adjustment Date; provided
that such amendment shall not be applicable to such Debt Securities until after
the Debt Securities have been tendered for remarketing and successfully
remarketed on such Interest Rate Adjustment Date; and provided further that no
such amendment shall be of such nature as would require (i) registration or
re-registration of the Debt Securities under the Securities Act of 1933, as
amended (the "Securities Act"), unless Subsidiary has a registration statement
under the Securities Act effective with respect thereto or (ii) registration of
Subsidiary under the Investment Company Act of 1940, as amended, and (B)
Parent's obligations under this Agreement shall be suspended and shall be of no
force and effect as to the parties hereto and as to all Lenders if and for so
long as (i) Subsidiary shall have a long-term debt rating of not less than "A-"
from Standard & Poor's Ratings Services or its successor or a long-term debt
rating of not less than "A3" from Moody's Investors Service, Inc. or its
successor and (ii) Parent shall have submitted a written request to Subsidiary
that its obligations under this Agreement be so suspended (with a copy to the
Trustee, if applicable) and shall not have revoked such request in writing.
Parent covenants that it will revoke any such request to the extent that the
suspension of Parent's obligations under this Agreement has an adverse effect on
any debt rating of Subsidiary. For purposes of this Section 5, ratings shall be
based upon unsecured non-credit enhanced debt of Subsidiary.
6. Rights of Lenders. Subsidiary hereby assigns and pledges to the
Lenders, for the ratable benefit of each Lender (subject to the subordination of
claims of the Initial Purchasers pursuant to Section 3 hereof), Subsidiary's
right under Sections 1, 2, 3 and 4 of this Agreement, and, if Subsidiary fails
or refuses to take timely action to enforce its rights under Section 1, 2, 3 or
4 of this Agreement, any Lender may enforce such rights on behalf of Subsidiary
directly against Parent. Parent hereby consents to such assignment and pledge.
This assignment and pledge secures all obligations of Subsidiary under the Debt.
Subsidiary and Parent agree, for the benefit of the Lenders to execute and
deliver all further instruments and documents, and take all further action, that
the Lenders may request in order to perfect and protect any security interest
purported to be granted hereby or to enable the Lenders to enforce their rights
and remedies hereunder.
7. Parity. Parent's obligations hereunder shall be pari passu with
Parent's obligations under any existing as well as additional "make-well,"
"keep-well" or support agreements (that are not by their terms subordinated) as
are entered into between Parent and Subsidiary from time to time.
8. Notices. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement shall be in writing,
shall be given or
3
<PAGE> 4
made by United States first class mail, telex, facsimile transmission or hand
delivery, addressed as follows:
If to Parent: 2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer-Banking
If to Subsidiary: 2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer
9. Successors. This Agreement shall be binding upon the parties hereto
and their respective successors and assigns and is also intended for the benefit
of Lenders, and, notwithstanding that such Lenders are not parties hereto, each
Lender shall be entitled to the full benefits of this Agreement and to enforce
the covenants and agreements contained herein as set forth in Section 6. This
Agreement is not intended for the benefit of any person other than Lenders and
shall not confer or be deemed to confer upon any such person any benefits,
rights or remedies hereunder.
10. Governing Law. This Agreement shall be governed by the laws of the
State of New York.
11. Insurer Provisions. (a) Notwithstanding anything to the contrary
herein, if a Financial Guaranty Insurance Policy (hereinafter the "Policy")
issued by MBIA Insurance Corporation (the "Insurer") is in effect with respect
to any Debt Securities and the Insurer is not in default with respect to its
obligations under the Policy, the Insurer shall be deemed a Lender for all
purposes of this Agreement and shall possess the same rights, in all respects,
as any Lender under this Agreement for such time as the Policy is in effect and
the Insurer shall possess the exclusive right to exercise or direct the exercise
of the rights of all Lenders in accordance with the terms of this Agreement.
(b) For so long as the Policy is in effect or the Insurer is a holder
of any Debt Securities, this Agreement shall not be amended or terminated
without the prior written consent of the Insurer, and the Insurer's consent
shall be required for any action by the Subsidiary or Parent that would require
the Lenders' consent under the terms of this Agreement.
(c) Notwithstanding anything to the contrary herein, for so long as a
Policy is in effect or the Insurer is a holder of any Debt Securities, the
Parent's obligations hereunder shall not be suspended pursuant to Section 5 of
this Agreement.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be
duly executed as of the day and year first above written.
DTE ENERGY COMPANY
By:______________________________
Name:
Title:
DTE CAPITAL CORPORATION
By:______________________________
Name:
Title:
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EXHIBIT 4-196
DTE CAPITAL CORPORATION
TO
THE BANK OF NEW YORK
TRUSTEE
_________________
INDENTURE
DATED AS OF JUNE 15, 1998
_________________
DEBT SECURITIES
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Table of Contents
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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SECTION 101. Definitions.....................................................................................1
SECTION 102. Compliance Certificates and Opinions............................................................9
SECTION 103. Form of Documents Delivered to Trustee..........................................................9
SECTION 104. Acts of Holders................................................................................10
SECTION 105. Notices, Etc...................................................................................12
SECTION 106. Notice to Holders of Securities; Waiver........................................................13
SECTION 107. Language of Notice, Etc........................................................................14
SECTION 108. Trust Indenture Act............................................................................14
SECTION 109. Effect of Headings And Table of Contents.......................................................14
SECTION 110. Successors and Assigns.........................................................................14
SECTION 111. Separability Clause............................................................................14
SECTION 112. Benefits of Indenture..........................................................................14
SECTION 113. Governing Law..................................................................................14
SECTION 114. Legal Holidays.................................................................................14
SECTION 115. Corporate Obligation...........................................................................15
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally................................................................................15
SECTION 202. Form of Trustee's Certificate of Authentication................................................15
SECTION 203. Securities in Global Form......................................................................16
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited: Issuable in Series...........................................................17
SECTION 302. Denominations..................................................................................23
SECTION 303. Execution; Authentication; Delivery and Dating.................................................23
SECTION 304. Temporary Securities; Exchange of Temporary Securities.........................................24
SECTION 305. Registration...................................................................................25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons...................................28
SECTION 307. Payment of Interest; Interest Rights Preserved.................................................29
SECTION 308. Persons Deemed Owners..........................................................................30
SECTION 309. Cancellation...................................................................................31
SECTION 310. Computation of Interest........................................................................32
SECTION 311. Support Agreement..............................................................................32
SECTION 312. CUSIP Numbers..................................................................................32
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
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SECTION 401. Satisfaction and Discharge of Indenture........................................................32
SECTION 402. Application of Trust Money.....................................................................33
SECTION 403. Satisfaction, Discharge and Defeasance of Securities of any Series.............................34
SECTION 404. Reinstatement..................................................................................35
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default..............................................................................35
SECTION 502. Acceleration of Maturity: Rescission and Annulment.............................................37
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee................................38
SECTION 504. Trustee May File Proofs of Claim...............................................................39
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons.......................................................................40
SECTION 506. Application of Money Collected.................................................................40
SECTION 507. Limitation on Suits............................................................................40
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium, Interest and
Additional Amounts.............................................................................41
SECTION 509. Restoration of Rights and Remedies.............................................................41
SECTION 510. Rights and Remedies Cumulative.................................................................41
SECTION 511. Delay or Omission Not Waiver...................................................................42
SECTION 512. Control by Holders of Securities...............................................................42
SECTION 513. Waiver of Past Defaults........................................................................42
SECTION 514. Undertaking for Costs..........................................................................43
SECTION 515. Waiver of Stay or Extension Laws...............................................................43
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.............................................................................43
SECTION 602. Certain Rights of Trustee......................................................................44
SECTION 603. Not Responsible for Recitals or Issuance of Securities.........................................45
SECTION 604. May Hold Securities............................................................................45
SECTION 605. Money Held in Trust............................................................................45
SECTION 606. Compensation and Reimbursement.................................................................46
SECTION 607. Corporate Trustee Required; Eligibility........................................................46
SECTION 608. Disqualification, Conflicting Interests........................................................47
SECTION 609. Resignation and Removal; Appointment of Successor..............................................47
SECTION 610. Acceptance of Appointment by Successor.........................................................48
SECTION 611. Merger, Conversion, Consolidation or Succession to Business....................................49
SECTION 612. Preferential Collection of Claims Against the Company..........................................50
SECTION 613. Appointment of Authenticating Agent............................................................50
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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SECTION 701. Company to Furnish Trustee Names and Addresses of Holders......................................52
SECTION 702. Preservation of Information; Communications to Holders.........................................52
SECTION 703. Reports by Trustee.............................................................................52
SECTION 704. Reports by Company.............................................................................53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc...................................................................55
SECTION 802. Successor Person Substituted...................................................................56
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.............................................56
SECTION 902. Supplemental Indentures with Consent of Holders................................................58
SECTION 903. Execution of Supplemental Indentures...........................................................59
SECTION 904. Effect of Supplemental Indentures..............................................................59
SECTION 905. Conformity with Trust Indenture Act............................................................59
SECTION 906. Reference in Securities to Supplemental Indentures.............................................59
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.....................................................59
SECTION 1002. Maintenance of Office or Agency................................................................60
SECTION 1003. Money for Securities Payments to Be Held in Trust..............................................61
SECTION 1004. Additional Amounts.............................................................................62
SECTION 1005. Existence......................................................................................63
SECTION 1006. Payment of Taxes and Other Claims..............................................................63
SECTION 1007. Change in Nature of Business...................................................................63
SECTION 1008. Accounting Changes.............................................................................63
SECTION 1009. Statement by Officers as to Default............................................................63
SECTION 1010. Waiver of Certain Covenants....................................................................64
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.......................................................................64
SECTION 1102. Election to Redeem; Notice to Trustee..........................................................64
SECTION 1103. Selection by Trustee of Securities to Be Redeemed..............................................64
SECTION 1104. Notice of Redemption...........................................................................65
SECTION 1105. Deposit of Redemption Price....................................................................66
SECTION 1106. Securities Payable on Redemption Date..........................................................66
SECTION 1107. Securities Redeemed in Part....................................................................67
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ARTICLE TWELVE
SINKING FUNDS
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SECTION 1201. Applicability of Article.......................................................................67
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities..........................................68
SECTION 1203. Redemption of Securities for Sinking Fund......................................................68
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. Purposes for Which Meetings May Be Called......................................................68
SECTION 1302. Call, Notice and Place of Meetings.............................................................69
SECTION 1303. Persons Entitled to Vote at Meetings...........................................................69
SECTION 1304. Quorum; Action.................................................................................69
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment of Meetings............................70
SECTION 1306. Counting Votes and Recording Action of Meetings................................................71
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INDENTURE, dated as of June 15, 1998, between DTE CAPITAL CORPORATION,
a corporation duly organized and existing under the laws of the State of
Michigan (herein called the "Company"), having its principal office at 2000
Second Avenue, Detroit, Michigan 48226, and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (herein called the "Trustee"), the office of the
Trustee at which at the date hereof its corporate trust business is principally
administered being 101 Barclay Street, Floor 21W, New York, New York 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture (as hereinafter defined) to provide for the issuance from time to time
of its debt securities (herein called the "Securities"), to be issued in one or
more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (hereinafter defined) thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to themtherein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP, and, except as
otherwise herein expressly provided, the term "GAAP" with respect
to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States
of America at the date of such computation; and
(4) the words, "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
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Certain terms, used principally in certain Articles hereof, are
defined in those Articles.
"Accountant" means any Person engaged in the practice of accounting who
(except when this Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Company or an Affiliate of the Company.
"Act", when used with respect to any holder of a Security, has the
meaning specified in Section 104.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.
"Affiliate" of any specified Person means any other person on directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting Securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any person authorized by the Trustee
pursuant to Section 613 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published an Saturdays, Sundays or holidays,
and of general circulation in the place in which publication is required under
the terms hereof or under the terms of a Security or in the financial community
of such place. Where successive publications are required to be made in
Authorized Newspapers, the successive publications may be made in the same or in
different newspapers in the same city meeting the foregoing requirements and in
each case on any Business Day.
"Bearer Security" means any Security established pursuant to Section
201 which is payable to bearer including, without limitation, unless the context
otherwise indicates, a Security in temporary or permanent global bearer form.
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment, the State
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of Michigan or other location are authorized or obligated by or pursuant to law
or executive order to close.
"Cedel" means Cedel Bank, societe anonyme, a corporation organized
under the laws of the Grand Duchy of Luxembourg or, if any time after the
execution of this instrument Cedel is not existing and performing the duties now
being performed by it, then the successor Person performing such duties.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President, a
Vice President, its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Corporate Trust Office" means the principal office of the Trustee in
The City of New York, at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
that indicated in the introductory paragraph of this Indenture.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Debt" of any Person at any date of determination means, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases, (f) all
obligations, contingent or otherwise, of such Person in respect of acceptances,
letters of credit or similar extensions of credit, (g) all obligations of such
Person in respect of interest rate swap, cap or collar agreements, interest rate
future or option contracts, currency swap agreements, currency future or option
contracts and other similar agreements, (h) all Debt of others referred to in
clauses (a)
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through (g) above or clause (i) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
person through an agreement (1) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (2) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (3) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (4) otherwise to assure a creditor against loss, and (i) all Debt
referred to in clauses (a) through (h) above secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"DECO" means The Detroit Edison Company, a Michigan corporation and a
regulated public utility.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTE Energy" means DTE Energy Company, a Michigan corporation and an
exempt holding company under the Public Utility Holding Company Act of 1935, as
amended.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System, or, if at any time after the
execution of this instrument Morgan Guaranty Trust Company of New York, Brussels
Office, is not existing and performing the duties now being performed by it,
then the successor Person performing such duties.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Exchange Rate" has the meaning specified in Section 501.
"GAAP" means generally accepted accounting principles, as in effect
from time to time, as used in the United States applied on a consistent basis.
"Holder", when used with respect to any Security, means in the case of
a Registered Security the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
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"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Independent", when used with respect to any specified Person, means
such a Person who is in fact independent of the Company and any other obligor
upon the Securities, does not have any direct financial interest or any material
indirect financial interest in the Company or in any such other obligor or in an
Affiliate of the Company or such other obligor and is not connected with the
Company or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
Whenever it is herein provided that an opinion or certificate of any Independent
Person shall be furnished to the Trustee, such Person shall be appointed by
Company Order and approved by the Trustee in the exercise of reasonable care and
such opinion or certificate shall state that the signer has read this definition
and that the signer is Independent within the meaning thereof.
"Interest", when used with respect to an original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity and, with respect to any Security which provides for the
payment of Additional Amounts pursuant to Section 1004, includes such Additional
Amounts.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 506.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity, by
declaration of acceleration, upon any redemption or otherwise.
"Officers' Certificate" means a certificate signed by (i) the Chairman
of the Board, the President or a Vice President of the Company, and (ii) the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel who shall be
acceptable to the Trustee and, where applicable, the Company which counsel may
be counsel for or an employee of the Company.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
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"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Security Registrar
or Authenticating Agent or delivered to the Security Registrar or an
Authenticating Agent for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
thereto appertaining; provided, that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee or Authenticating Agent proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities (a) the principal amount
of an Original Issue Discount Security that shall be deemed to be Outstanding
shall be the principal amount thereof that would be due and payable as of the
date of such determination upon acceleration of the Maturity thereof pursuant to
Section 502, (b) the principal amount of a Security denominated in a foreign
currency shall be the U.S. dollar equivalent, determined on the date of original
issuance of such Security by the Company in good faith, of the principal amount
(or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent, determined on the date of original issuance of such Security, of the
amount determined as provided in (a) above) , of such Security, and (c)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver or upon any such determination as to the
presence of a quorum, only Securities which the Trustee knows to be so owned
shall be so disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person, including the Company, authorized by
the Company to pay the principal of (and premium, if any) or interest on any
Securities on behalf of the Company.
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"Person" means any individual, partnership, corporation (including a
business trust), joint-stock company, trust, unincorporated association, joint
venture, limited liability company or other entity or a government or any
political subdivision or agency thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the Corporate Trust Office of the Trustee or such place or places
specified in a supplemental indenture where, subject to the provisions of
Section 1002, the principal of (and premium, if any) and interest on the
Securities of that series are payable as specified in accordance with Section
301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Redemption Date", when used with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption by or pursuant
to this Indenture.
"Redemption Price", when used with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed pursuant
to this Indenture.
"Registered Security" means any Security established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date, if any,
specified in such Security as the "Regular Record Date".
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Division, Trustee Administration (or any
successor group of the Trustee), including any vice president, any assistant
vice president, the secretary, any assistant secretary, any trust officer or
assistant trust officer, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 305.
"Security Registrar" means the Person appointed by the Company to
register Registered Securities and transfers of Registered Securities as
provided in Section 305.
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"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means the date determined pursuant to
Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate is at the time directly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries.
"Support Agreement" means an agreement, by and between the Company and
DTE Energy, in support of any series of Debt Securities.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that Series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and any reference herein to the Trust Indenture Act or a particular
provision thereof shall mean such Act or provision, as the case may be, as
amended or replaced from time to time or as supplemented from time to time by
rule or regulations adopted by the Commission under or in furtherance of the
purposes of such Act or provision, as the case may be except as provided in
Section 905.
"United States" means the United States of America (including the
states thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"U.S. Depositary" or "Depositary" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depositary by the Company pursuant to Section 301, which must
be a clearing agency registered under the Exchange Act, and, if so provided
pursuant to Section 301 with respect to any Security, any successor to such
Person. If at any time there is more than one such Person, "U.S. Depositary" or
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"Depositary" shall mean, with respect to any Securities, the qualifying entity
which has been appointed with respect to such Securities.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company (i) to the Trustee to take any action
under any provision of this Indenture or (ii) to any Authenticating Agent to
authenticate Securities of any series upon original issuance, the Company shall
furnish to the Trustee or such Authenticating Agent (with a copy to the Trustee)
an Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and, in the case of
conditions precedent compliance with which is subject to verification by
Accountants, engineers, appraisers or other experts, a certificate or opinion of
an Accountant, engineer, appraiser or other expert (which Accountant, engineer,
appraiser or other expert shall be Independent if required by the Trust
Indenture Act) , except that in the case of any such application or request as
to which the furnishing of such documents is specifically required by. any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such covenant or condition has been complied with.
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SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing. If Securities of a
series are issuable as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders of such
series may, alternatively, be embodied in and evidenced by the record
of Holders of Securities of such series voting in favor thereof, either
in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities of such series duly called and held in accordance
with the provisions of Article Thirteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments and so voting at any
such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and
conclusive
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in favor of the Trustee and the Company, if made in the manner provided
in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 1306.
Without limiting the generality of this Section 104, unless
otherwise established in or pursuant to a Board Resolution or set forth
or determined in an Officers' Certificate, or established in one or
more indentures supplemental hereto, pursuant to Section 301, a Holder,
including a U.S. Depositary that is a Holder of a global Security, may
make, give or take, by a proxy, or proxies, duly appointed in writing,
any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken
by Holders, and a U.S. Depositary that is a Holder of a global Security
may provide its proxy or proxies to the beneficial owners of interests
in any such global Security through such U.S. Depositary's standing
instructions and customary practices.
The Trustee or the Company shall fix a record date, which
shall be not more than 60 days prior to the first solicitation of such
Holders, for the purpose of determining the Persons who are beneficial
owners of interest in any permanent global Security held by a U.S.
Depositary entitled under the procedures of such U.S. Depositary to
make, give or take, by a proxy or proxies duly appointed in writing,
any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken
by Holders. If such a record date is fixed, the Holders on such record
date or their duly appointed proxy or proxies, and only such Persons
shall be entitled to make, give or take such request, demand,
authorization, direction, notice, consent, waiver or other action,
whether or not such Holders remain Holders after such record date. No
such request, demand, authorization, direction, notice, consent, waiver
or other action shall be valid or effective if made, given or taken
more than 120 days after such record date.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity,
such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.
(c) The ownership, principal amount and serial numbers of
Registered Securities held by any Person, and the date of commencement
and the date of termination of holding the same, shall be proved by
the Security Register.
(d) The ownership, principal amount and serial numbers
of Bearer Securities held by any Person, and the date of holding the
same, may be proved by the production of such Bearer Securities
or by a certificate executed, as depositary, by any trust company,
bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had
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on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities,
if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such
ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the
same Bearer Security is produced, or (2) such Bearer Security is
produced to the Trustee by some other Person, or (3) such Bearer
Security is surrendered in exchange for a Registered Security, or (4)
such Bearer Security is no longer Outstanding. The ownership, principal
amount and serial numbers of Bearer Securities held by any Person, and
the date of holding the same, may also be proved in any other manner
which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may at its option, by
a Board Resolution, fix in advance a record date, which shall be not
more than 60 days prior to the first solicitation of such Holders, for
the determination of Holders of Registered Securities entitled to give
such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If
such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or
after such record date, but only the Holders of Registered Securities
of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind
every future Holder of the same Security and the Holder of every
Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon
such Security. Notices, Etc., to Trustee and Company.
SECTION 105. Notices, etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be made,
given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office and unless otherwise herein expressly provided,
any such document shall be deemed to be sufficiently made, given,
furnished or filed upon its receipt by a Responsible Officer of the
Trustee, or
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(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at the address of its principal office
specified in the first paragraph of this instrument, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at the address of such Holder as it appears in the Security
Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published on a Business Day in an Authorized Newspaper in
The City of New York and in such other city or cities as may be
specified in such Securities, at least twice, each such publication to
be not earlier than the earliest date, and not later than the latest
date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such
notice to Holders of Registered Securities by mail, then such
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
In any case where notice to Holders of Registered Securities is
given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a
Registered Security, shall affect the sufficiency of such notice
with respect to other Holders of Registered Securities or the
sufficiency of any notice to Holders of Bearer Securities given
as provided herein..
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
holders of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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SECTION 107. Language of Notice, Etc.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 108. Trust Indenture Act.
The parties hereto agree that this Indenture shall be subject to the
provisions of the Trust Indenture Act that are required to be part of an
Indenture to be qualified under the Trust Indenture Act, and that all provisions
which the Trust Indenture Act provides as automatically deemed to be included in
an indenture to be qualified thereunder shall be included herein. In the event
of any conflict between the provisions hereof and the provisions of the Trust
Indenture Act, the provisions of the Trust Indenture Act shall control.
SECTION 109. Effect of Headings And Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder and the Holders of Securities and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in such
state.
SECTION 114. Legal Holidays.
Except as specified pursuant to Section 301, in any case where any
Interest Payment Date, Redemption Date or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, or where any date on which notice
is required to be mailed or published shall
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not be a Business Day at the Corporate Trust Office, then (notwithstanding any
other provision of this Indenture or of the Securities or coupons other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu of this Section) payment of interest or principal
(and premium, if any) or mailing or publication of such notice need not be made
at such Place of Payment or at such Corporate Trust Office on such date, but may
be made, mailed or published on the next succeeding Business Day at such Place
of Payment or at such Corporate Trust Office with the same force and effect as
if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, or other required date for the mailing or publication of such notice,
as the case may be, and in the case of payment to be made on any such Security,
no interest shall accrue or be payable as a result of the making of such payment
after any such nominal date, provided such payment is made in full on such next
succeeding Business Day.
SECTION 115. Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Company or the Trustee or of any predecessor or successor of the
Company or the Trustee with respect to the Company's obligations on the
Securities or the obligations of the Company or the Trustee under this Indenture
or any certificate or other writing delivered in connection herewith or
therewith except as otherwise expressly provided in any such certificate or
other writing.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in such form
(including temporary or permanent global form) as shall be authorized by a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any Securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities or coupons, as evidenced by their execution of the Securities or
coupons.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities other than Bearer Securities in global form shall have interest
coupons attached.
The definitive Securities and coupons, if any, shall be printed,
typewritten, lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
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This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
The Bank of New York
as Trustee
By
__________________________________
Authorized Signatory
SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, then any such
Security shall represent such of the Outstanding Securities of such series as
shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
outstanding Securities represented thereby shall be made by the Security
Registrar in such manner and upon instructions given by such Person or Persons
as shall be specified in such Security or in a Company Order delivered to the
Security Registrar with such Security. Subject to the provisions of Section 303
and, if applicable, Section 304, the Trustee or Authenticating Agent shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified in such Security or
in a Company Order delivered pursuant to Section 303 or Section 304, as
applicable. If a Company Order pursuant to Section 303 or Section 304 has been,
or simultaneously is, delivered, any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Security Registrar the Security in
global form together with written instructions (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel) (a copy of
which instructions shall be delivered to the Trustee) with regard to the
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of (and premium,
if any) and interest on any Security in permanent global form shall be made to
the Holder thereof.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
or of the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Securities represented by a global Security (i) in the case of a
permanent global Security in registered form, the Holder of such permanent
global Security in registered form, or (ii) in the case of a permanent global
Security in Bearer form, the Person or Persons as may be specified pursuant to
Section 301.
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited: Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto:
(1) the title of the Securities of the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or
1107 and except for any Securities which, pursuant to Section 303, are
deemed never to have been authenticated and delivered hereunder)
(3) whether Securities of the series are to represent senior or
subordinated indebtedness of the Company;
(4) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities or both, whether Securities
of the series are to be issuable with or without coupons or both,
whether any Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series are to
be issuable in permanent global form and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange
such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 305, the name of the Depositary or the U.S. Depositary, as the
case may be, with respect to such global Security;
(5) (i) the Person to whom any interest on any Registered Security
of the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest,
(ii) the manner in which, or the Person to whom, any interest on any
Bearer Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and (iii) the extent to which, or the manner in
which, any interest payable on a temporary global Security on an
Interest Payment Date will be paid if other than in the manner
provided in Section 304;
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(6) the date or dates on which the principal (and
premium, if any) of the Securities of the series is payable or the
method of determination thereof;
(7) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method or methods, if any,
pursuant to which such rate or rates shall be determined, the date or
dates from which any such interest shall accrue or the method or
methods, if any, by which such dates are to be determined, the
Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date, if any, for any interest payable on any
Registered Securities on any Interest Payment Date whether and under
what circumstances Additional Amounts on such Securities or any of
them shall be payable, and the basis upon which interest shall be
calculated, if other than that of a 360-day year of twelve 30-day
months;
(8) the place or places where, subject to the provisions
of Section 1002, the principal of (and premium, if any) and
interest (including Additional Amounts) on Securities of the series
shall be payable, any Registered Securities of the series may be
surrendered for registration of transfer, Securities of the series
may be surrendered for exchange, notices and demands to or upon the
Company in respect of the Securities of the series and this Indenture
may be served and where notice to Holders pursuant to Section 106
will be published;
(9) whether the Securities of a series or any of them are
to be redeemable at the option of the Company and, if so, the date or
dates on which, the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option of the
Company;
(10) whether the Company is obligated to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the date or dates
on which, the period or period within which, the price or prices at
which and the terms and condition upon which Securities of the series
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation and any provision for the remarketing of the Securities of
the series so redeemed or purchased;
(11) the denominations in which any Registered Securities
of the series shall be issuable, if other than the denominations
provided in Section 302, and the denomination or denominations in
which any Bearer Securities of the series shall be issuable, if other
than the denominations provided in Section 302;
(12) if other than the principal amount thereof, the
portion of the principal amount of the Securities of the series or
any of them which shall be payable upon declaration of acceleration
of the Maturity thereof pursuant to Section 502 or the method by
which such portion is to be determined;
(13) if other than such coin or currency of the United
States of America is at the time of payment legal tender for payment
of public or private debts, the coin or currency, composite
currencies or currency unit or units in which payment of the
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principal of (and premium, if any) or interest, if any, on or any
Additional Amounts in respect of the Securities of the series or any
of them shall be payable;
(14) if the principal of (and premium, if any) or interest
on the Securities of the series are to be payable, at the election of
the Company or a Holder thereof, in a coin or currency, composite
currencies or currency unit or units other than that in which the
Securities are stated to be payable, the currency in which payment of
the principal of (and premium, if any) and interest on Securities of
such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(15) whether the amount of payments of principal of
(and premium, if any) or interest (including Additional Amounts), if
any, on the Securities of the series may be determined with reference
to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency
units, composite currencies, commodities, equity indices or other
indices), and, if so, the terms and conditions upon which and the
manner in which such amounts shall be determined and paid or payable;
(16) whether the principal of (and premium, if any)
or interest (including Additional Amounts), if any, on the
Securities of the series are to be payable, at the election of the
Company or any Holder thereof or otherwise, in a currency or
currencies, currency unit or units or composite currency or
currencies other than that in which such Securities or any of them
are denominated or stated to be payable, the period or periods
within which, and the other terms and conditions upon which, such
election, if any, may be made, and the time and manner of
determining the exchange rate between the currency or currencies,
currency unit or units or composite currency or currencies in
which such Securities or any of them are denominated or stated to be
payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities or any of
them are to be so payable;
(17) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to the
Securities of the series or any of them, whether or not such Events of
Default or covenants are consistent with the Events of Default or
covenants set forth herein;
(18) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and terms of such certificates, documents or conditions;
(19) with respect to any Securities that may be issued
in a private offering, the restrictions on transfer and legends
relating to such Securities of the series and whether Securities of
the series are entitled to registration or exchange rights;
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(20) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security
Registrar, Paying Agent and/or Authenticating Agent with respect to
the Securities of the series;
(21) whether the Securities or such series will be entitled to
the benefit of a Support Agreement between the Company and DTE Energy,
or other form of credit enhancement;
(22) whether any of the Securities of a series shall be issued
as Original Issue Discount Securities;
(23) whether a credit facility or other form of credit
support will apply to Securities of such series, which may be
different from any credit facility for any other series; and
(24) any other terms of the Securities of the series or any of
them (which terms shall not be inconsistent with the provisions of
this Indenture).
All Securities of any one series, and the coupons
appertaining to any Bearer Securities of such series, shall be
substantially identical except as to denomination and the rate or
rates of interest, if any, and Stated Maturity, the date from which
interest, if any, shall accrue and except as may otherwise be provided
by the Company in or pursuant to one or more Board Resolutions and set
forth in such Officers' Certificate or in any indenture or indentures
supplemental hereto pertaining to such series of Securities. All
Securities of any one series need not be issued at the same time and,
unless otherwise so provided by the Company, a series may be reopened
for issuances of additional Securities of such series or to establish
additional terms of such series of Securities.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
(including but not limited to such Board Resolution) shall be certified by the
Secretary or an Assistant Secretary of the Company or certified by Company Order
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate or Company Order setting forth the terms of the series.
The Trustee shall be entitled to receive the following only at or
before the issuance of the first Security of each series issued under this
Indenture:
(a) Opinion(s) of Counsel. Opinion(s) of Counsel (such counsel
being entitled to rely upon certificates, opinions or by Section
103 and, as to matters involving the laws of any state other than the
state in which such counsel is admitted to practice, upon an Opinion
of Counsel who shall be satisfactory to the Trustee) complying with
the requirement of Section 102, if applicable, containing such
qualifications and assumptions as may be appropriate in the
circumstances, and addressed to the Trustee substantially to the
effect that:
(i) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Michigan,
with corporate power and authority to own its properties and conduct
its business as currently conducted;
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(ii) the Indenture and, if applicable, any supplemental
indenture that is permitted by Sections 201 and 301 and which relates
to the series of Securities to which such opinion relates, have been
duly authorized, executed and delivered by the Company and constitute
the legal, valid and binding obligations of the Company, enforceable
(except for Section 111 of the Indenture as to which no opinion need
be expressed) in accordance with their terms (assuming the due
authorization, execution and delivery thereof by the Trustee), except
as such enforceability is subject to the effect of any applicable
bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(iii) the execution and delivery of the Indenture and, if
applicable, any supplemental indenture that is permitted by Sections
201 and 301 and which relates to the series of Securities to which
such opinion relates, do not and, assuming no change in the facts
existing on the date such opinion is rendered, the performance of and
compliance with the terms and provisions of the Indenture and, if
applicable, any such supplemental indenture, will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any existing statute, rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties or, to the best
of the knowledge of such counsel, any existing agreement or instrument
to which the Company is a party or by which the Company is bound or to
which any of the properties of the Company is subject, or the existing
charter or bylaws of the Company;
(iv) if applicable, the Indenture has been duly qualified
under the Trust Indenture Act.
(v) the series of Securities to which such opinion relates,
together with any coupons appertaining thereto, have been duly and
validly authorized by all necessary corporate action on the part of
the Company, and any such Security, when the terms thereof have been
established in accordance with the terms of the Indenture and when
such Security has been executed and authenticated in accordance with
the terms of the Indenture (assuming the due authentication, execution
and delivery thereof by the Trustee or any Authenticating Agent, which
fact counsel need not verify by an inspection of such Securities) and
delivered and paid for in accordance with the terms of any
underwriting agreement, agency agreement or other agreement providing
for the sale thereof, will constitute (assuming no change in the facts
or in the law and governmental rules and regulations, in either case
in existence on the date such Opinion of Counsel is rendered) the
legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except as such enforceability is subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
other law relating to or affecting creditors' rights generally and
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
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(vi) the forms and terms of the series of Securities to which
such opinion relates and any coupons related thereto have been
established in conformity with the provisions of this Indenture or, if
such forms and terms are being established pursuant to one or more
instruments being furnished to the Trustee concurrently with the
delivery of such opinion, such instruments conform to the requirements
of this Indenture;
(vii) all instruments furnished to the Trustee in connection
with the first issuance of Securities of the series to which such
opinion relates (which instrument shall be listed in such opinion)
conform to the requirements of this Indenture and, except for (a)
Securities of such series, together with any coupons appertaining
thereto, to be delivered for authentication subsequent to the date of
such opinion pursuant to Section 303, (b) the Company Order(s) to be
delivered subsequent to the date of such opinion pursuant to Sections
201, 301 or 303 and (c) any certificate required to be delivered
subsequent to the date of such opinion pursuant to paragraph (b) of
this Section 301 and (d) any other documents or items required to be
delivered subsequent to the date of such opinion pursuant to such
instruments, such instruments constitute all the documents required by
this Indenture to be delivered hereunder at or before the first
issuance of Securities of the series to which the opinion relates;
(viii) the Company has good and marketable title to all
properties standing of record in its name and improvements thereon,
subject to minor exceptions and minor defects, irregularities and
deficiencies which, in the opinion of the Company, do not materially
impair the use of such property for the purpose for which it is held
by the Company; and
(ix) if applicable, a registration statement relating to the
series of Securities to which such opinion relates has become
effective under the Securities Act, and, to the best of the knowledge
of such counsel, no stop order suspending the effectiveness of such
registration statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act.
(b) Officers' Certificate. An Officers' Certificate stating
that no Event of Default has occurred and is continuing, and the execution and
delivery of the Indenture will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, the articles of
incorporation or bylaws of the Company, or any order of any court or
administrative agency entered in any proceeding to which the Company is a
party or by which it is bound or to which it is subject; and
(c) Board Resolution. A Board Resolution authorizing this
Indenture and, if applicable, any supplemental indenture that is permitted by
Sections 201 and 301 and that relates to such series of Securities.
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SECTION 302. Denominations.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, any Registered Securities of a series denominated
in Dollars shall be issuable in denominations of $1,000 and any integral
multiple thereof and any Bearer Securities of a series denominated in Dollars
shall be issuable in the denomination of $5,000. Unless otherwise provided as
contemplated by Section 301 with respect to any series of Securities, any
Securities of a series denominated in a currency other than Dollars shall be
issuable in denominations that are the equivalent, as determined by the Company
by reference to the noon buying rate in The City of New York for cable transfers
for such currency, as such rate is reported or otherwise made available by the
Federal Reserve Bank of New York, on the applicable trade date for such
Securities, of $100,000 (rounded down to an integral multiple of 10,000 units of
such currency), and any larger amount that is, as nearly as is practicable, an
integral multiple of $1,000.
SECTION 303. Execution; Authentication; Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, its Treasurer, any Assistant Treasurer or
one of its Vice Presidents attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Coupons shall bear the facsimile signature of the Chairman
of the Board of the Company, its President, its Treasurer, any Assistant
Treasurer or one of its Vice Presidents, attested by its Secretary or one of its
Assistant Secretaries.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
coupons or did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee or
Authenticating Agent for authentication, together with a Company Order for the
authentication and delivery of such Securities and the Trustee or such
Authenticating Agent in accordance with the Company Order shall authenticate and
deliver such Securities; provided, however, that, in connection with its
original issuance, no Bearer Security shall be mailed or otherwise delivered to
any location in the United States; and provided further, that a Bearer Security
other than a temporary global Bearer Security may be delivered in connection
with its original issuance only if Cedel or Euroclear, as the case may be, shall
have furnished to the Security Registrar a certificate substantially to the
effect that the Person entitled to receive such Bearer Security shall have
furnished to Cedel or Euroclear, as the case may be, a certificate substantially
in the form set forth in Exhibit A to this Indenture or in such other form of
certificate as shall contain information then required by federal income tax
laws, dated no earlier than 15 days prior to the earlier of (i) the date on
which such Bearer Security is delivered and (ii) the date on which any temporary
Security first becomes exchangeable for such Bearer Security in accordance with
the terms of such temporary Security and this Indenture. A confirmation shall be
sent by the Company or an agent thereof to each purchaser of a Bearer Security.
If any Security shall be represented by a permanent global Bearer Security,
then, for
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<PAGE> 29
purposes of this Section 303 and Section 304, the notation of a
beneficial owner's interest therein upon original issuance of such Security or
upon exchange of a portion of a temporary global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Bearer Security. Except as permitted by
Section 306, the Trustee or Authenticating Agent shall not authenticate and
deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and cancelled.
The Trustee or any Authenticating Agent shall have the right to decline
to authenticate and deliver such Securities if the Trustee or such
Authenticating Agent, being advised by counsel, determines that such action may
not lawfully be taken or if the Trustee or such Authenticating Agent, in good
faith by its board of directors or trustees, executive committee or a trust
committee of directors or trustees and/or vice presidents, shall determine that
such action would expose the Trustee or such Authenticating Agent to personal
liability to existing Holders.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301. Each Security
will also bear an original issue date (the "Issue Date") which, with respect to
any Security (or portion thereof), shall mean the date of its original issuance
and shall be specified therein. The Issue Date shall remain the same for all
Securities subsequently issued upon transfer, exchange or substitution of
Securities, regardless of their dates of authentication.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee or any Authenticating Agent by manual signature,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Security Registrar for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) (a copy of which statement shall be delivered to the Trustee) stating
that such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities; Exchange of Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and, upon Company Order, the Trustee or an Authenticating
Agent, as the case may be, shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued, in registered form or,
if authorized, in bearer form with one or more coupons or without coupons, and
with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may
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<PAGE> 30
determine, as evidenced by their execution of such Securities. In the case of
any series issuable as Bearer Securities, such temporary Securities may be in
global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions thereof), if temporary Securities
of any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon surrender of
the temporary Securities of such series at the office or agency of the Company
maintained pursuant to Section 1002 in a Place of Payment for such series for
the purpose of exchanges of Securities of such series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
of any series (accompanied by any unmatured coupons appertaining thereto) the
Company shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like aggregate principal amount
of definitive Securities of authorized denominations of the same series
containing identical terms and provisions; provided, however, that no definitive
Bearer Security, except as provided pursuant to Section 301, shall be delivered
in exchange for a temporary Registered Security; and provided further, that a
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth in Section 303. Unless
otherwise specified as contemplated by Section 301 with respect to a temporary
global Security, until so exchanged the temporary Security of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 305. Registration. Registration of Transfer and Exchange.
The Company shall cause to be kept for each series of Securities at one
of the offices or agencies maintained pursuant to Section 1002 a register (each
such register being referred to herein as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and the registration of
transfers of Registered Securities. The Trustee is hereby appointed "Security
Registrar" for the purpose of registering Registered Securities and transfers
and exchanges of Registered Securities as herein provided; provided, that the
Company may, from time to time, designate (or change any designation of) any
other Person or Persons to act as Security Registrar or co-Security Registrars
with respect to the Securities of one or more series, with notice to the Trustee
and as provided in Section 106 to the Holders. At all reasonable times the
Security Register shall be open for inspection by the Company. In the event that
the Trustee shall not be the Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained pursuant to
Section 1002 for such purpose in a Place of Payment for such series, the Company
shall execute, and the Trustee or an Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series and of like tenor of any authorized
denominations and of a like aggregate principal amount and Stated Maturity.
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At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and Stated Maturity, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee or an Authenticating Agent shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
If specified as contemplated by Section 301 with respect to Securities
of any series, at the option of the Holder, Bearer Securities of any series may
be exchanged for Registered Securities of the same series and of like tenor, of
any authorized denominations and of a like aggregate principal amount and Stated
Maturity, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured coupons and all matured coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured coupon or coupons or matured coupon or coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face amount
of such missing coupon or coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee or an Authenticating Agent
if there is furnished to them such Security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that, except
as otherwise provided in Section 1002, interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside the United States. Notwithstanding the foregoing, in case
a Bearer Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series and of like tenor after
the close of business at such office or agency on (i) any Regular Record Date
and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee or an Authenticating Agent shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination as specified as contemplated by Section 301, then without
unnecessary delay but in any event not later than the earliest date on which
such interests may be
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so exchanged, the Company shall deliver to the Trustee or Authenticating Agent
definitive Securities in aggregate principal amount equal to the principal
amount of such permanent global Security, executed by the Company. On or after
the earliest date on which such interests may be so exchanged, such permanent
global Security shall be surrendered by the U.S. Depositary or such other
Depositary as shall be specified in the Company Order with respect thereto, to
the Trustee or an Authenticating Agent, as the Company's agent for such purpose,
to be exchanged, in whole or from time to time in part, for definitive
Securities without charge and the Trustee or Authenticating Agent shall
authenticate and deliver, in exchange for each portion of such permanent global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of such
permanent global Security to be exchanged which, unless the Securities of the
series are not issuable both as Bearer Securities and as Registered Securities,
as specified as contemplated by Section 301, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no such
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities of that series to be redeemed and ending on
the relevant Redemption Date; and provided further, that (unless otherwise
specified as contemplated by Section 301) no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Security
Registrar or any transfer agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar or any transfer agent duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
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Except as otherwise specified as contemplated by Section 301, the
Company shall not be required to (i) issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15
days before any selection of Securities of that series to be redeemed and ending
at the close of business on (A) if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if Securities of the series are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption, or, if Securities of the series are also issuable as Registered
Securities and there is no publication, the mailing of the relevant notice of
redemption, or (ii) register the transfer of or exchange any Registered Security
so selected for redemption, in whole or in part, except the unredeemed portion
of any Security being redeemed in part, (iii) exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged for
a Registered Security of the same series and of like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption or (iv)
issue, register the transfer of or exchange any Security which, in accordance
with its terms specified as contemplated by Section 301, has been surrendered
for repayment at the option of the Holder, except the portion, if any, of such
Security not repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or an Authenticating Agent, the
Company shall execute and the Trustee or such Authenticating Agent shall
authenticate and deliver in exchange therefor a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee or an
Authenticating Agent (i) evidence to their satisfaction of the destruction, loss
or theft of any Security or coupon and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee or such
Authenticating Agent that such Security or coupon has been acquired by a bona
fide purchaser, the Company shall execute and upon its request the Trustee or
such Authenticating Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to such
destroyed, lost or stolen Security or to the Security to which such destroyed,
lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security or coupon;
provided, however, that principal of (and premium, if any) and interest on
Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and unless
otherwise specified as contemplated by Section 301, any interest on Bearer
Securities shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
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<PAGE> 34
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or Authenticating
Agent) connected therewith.
Every new Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains shall constitute an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Security and its coupons,
if any, or the destroyed, lost or stolen coupon shall be at any time enforceable
by anyone, and any such new Security and coupons, if any, shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Securities of that series and of like tenor and their coupons, if any,
duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange of such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
Any interest on any Registered Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of
such Defaulted Interest. The Company shall, no less than 15 calendar
days prior to the date of the Special Record Date (fixed as set forth
below), notify the Trustee and the Paying Agent in writing of the
amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment, and at
the same time the Company shall deposit with the Paying Agent an amount
of
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money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Paying Agent for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Special Record Date for the payment of such
Defaulted Interest shall be the close of business on the tenth calendar
day prior to the date of the proposed payment. The Trustee shall in the
name and at the expense of the Company, cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first class postage prepaid, to each Holder of Registered
Securities of such series at the address of such Holder as it appears
in the Security Register, not less than 10 calendar days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange
for a Registered Security of such series after the close of business at
such office or agency on any Special Record Date and before the opening
of business at such office or agency an the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be
surrendered with the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of
payment in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such
coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
and the Paying Agent of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Paying Agent.
At the option of the Company, interest on the Registered Securities of
any series that bears interest may be paid by mailing a check to the address of
any Holder as such address shall appear in the Securities Register.
Subject to the foregoing provisions of this Section 307 and Section
305, each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections
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305 and 307) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and none of the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No owner of any beneficial interest in any global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such global Security, and such Depositary may be treated by the Company, the
trustee, and any agent of the Company or the trustee as the owner of such global
Security for all purposes whatsoever. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Security Registrar,
be delivered to the Security Registrar. All Registered Securities and matured
coupons so delivered shall be promptly cancelled by the Security Registrar. All
Bearer Securities and unmatured coupons so delivered shall be held by the
Security Registrar and, upon instruction of the Company, shall be cancelled or
held for reissuance. Bearer Securities and unmatured coupons held for reissuance
may be reissued only in replacement of mutilated, lost, stolen or destroyed
Bearer Securities of the same series and of like tenor or the related coupons
pursuant to Section 306. All Bearer Securities and unmatured coupons held by the
Security Registrar pending such cancellation or reissuance shall be deemed to be
delivered for cancellation for all purposes of this Indenture and the
Securities. The Company may at any time deliver to the Security Registrar for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever and may deliver to
the Security Registrar (or to any Person f or delivery to the Security
Registrar) for cancellation any Securities previously authenticated hereunder
which the Company has not issued and sold, and all Securities so delivered shall
be promptly cancelled by the Security Registrar. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Security Registrar shall be disposed of as
directed by the Company.
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SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. Support Agreement.
If so provided for in a supplemental indenture hereto with respect to a
series of Securities, Holders of such series of Securities and coupons and the
Trustee will be entitled to the benefits of a Support Agreement on the terms,
and subject to the conditions, set forth in such Support Agreement; it being
understood and agreed that such series of Securities, including any coupons
appertaining thereto, shall constitute Debt (as defined in any such Support
Agreement) for purposes of such Support Agreement.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for, and any right to receive Additional
Amounts, as provided in Section 1004), and the Trustee, at the expense of the
Company, when
(1) either
(A) all Securities theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer Securities surrendered
in exchange for Registered Securities and maturing after such
exchange, whose surrender is not required or has been waived
as provided in Section 305, (ii) Securities and coupons which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing
after the relevant Redemption Date, whose surrender has been
waived as provided in Section 1106, and (iv) Securities and
coupons for whose payment money has
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theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have
been delivered to the Security Registrar for cancellation; or
(B) all such Securities and, in the case of (i)
or (ii) below, any coupons appertaining thereto not
theretofore delivered to the Security Registrar for
cancellation
(i) have become due and payable; or
(ii) will become due and payable at their
Stated Maturity within one year; or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on such
Securities and coupons not theretofore delivered to the Security Registrar for
cancellation, for principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the rights, privileges and immunities of the Trustee under
Article Seven, the obligations of the Company to the Trustee under Section 606,
the obligations of the Trustee to any Authenticating Agent under Section 613
and, if money shall have been deposited with the Trustee pursuant to subclause
(B) of Clause (1) of this Section, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 501 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for the payment of which such money has been
deposited with the Trustee.
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SECTION 403. Satisfaction, Discharge and Defeasance of Securities of any
Series.
If this Section is specified, as contemplated by Section 301, to be
applicable to Securities of any series, the Company shall be deemed to have paid
and discharged the entire indebtedness on all the Outstanding Securities of any
such series and the Trustee, at the expense of the Company and upon Company
Request, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, if
(1) either
(A) with respect to all Outstanding Securities
of such series,
(i) the Company has deposited or caused to
be deposited with the Trustee as trust funds in trust
for the purpose an amount sufficient to pay and
discharge the entire indebtedness on all outstanding
Securities of such series for principal (and premium,
if any) and interest to the Stated Maturity or any
Redemption Date as contemplated by the penultimate
paragraph of this Section, as the case may be; or
(ii) the Company has deposited or caused to
be deposited with the Trustee as obligations in trust
for the purpose such amount of direct noncallable
obligations of, or noncallable obligations the
payment of principal of and interest on which is
fully guaranteed by, the United States of America, or
to the payment of which obligations or guarantees the
full faith and credit of the United States of America
is pledged, maturing as to principal and interest in
such amounts and at such times as will, without
consideration of any reinvestment thereof, be
sufficient to pay and discharge the entire
indebtedness on all out standing Securities of such
series for principal (and premium, if any) and
interest to the Stated Maturity or any Redemption
Date as contemplated by the penultimate paragraph of
this Section, as the case may be; or
(B) the Company has properly fulfilled such other
means of satisfaction and discharge as is specified, as contemplated
by Section 301, to be applicable to the Securities of such series; and
(2) the Company has paid or caused to be paid all other sums payable
with respect to the Outstanding Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all outstanding Securities of any such series have been complied
with.
Any deposits with the Trustee referred to in Section 403(l)(A) above
shall be irrevocable and shall be made under the terms of an escrow trust
agreement. If any Outstanding Securities of such series are to be redeemed prior
to their Stated Maturity, whether pursuant to any optional redemption provisions
or in accordance with any mandatory sinking fund requirements, the
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applicable escrow trust agreement shall provide therefor and the Company shall
make such arrangements as are satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
Upon the satisfaction of the conditions set forth in this Section with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided, that the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law or pursuant to Section 305 or 306.
SECTION 404. Reinstatement.
If the Trustee is unable to apply any money in accordance with Section
40l or Section 403 by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities and coupons, if any, of such series shall be
revived and reinstated as though no deposit had occurred pursuant to Section 401
or Section 403 until such time as the Trustee is permitted to apply all such
money in accordance with Section 401 or Section 403; provided, however, that if
the Company has made any payment of interest on or principal of (and premium, if
any, on) any Securities and coupons, if any, of such series because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such series of Securities and coupons, if any, to receive such
payment from the money held by the Trustee.
ARTICLE FIVE
REMEDIES
SECTIONS 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any of the following events (whatsoever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) unless
it is either inapplicable to a particular series or it is specifically deleted
or modified in or pursuant to the supplemental indenture or Board Resolution
establishing such series of Securities or in the form of Security for such
series:
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of such series when such
interest or Additional Amounts become due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or any premium, if any,
on) any Security of such series at its Maturity; or
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(3) default in the deposit of any sinking fund payment, when and as due by
the terms of a Security of that series; or
(4) default in the observance or performance of any covenant or
agreement on its part to be observed or performed contained in this Indenture
(other than a covenant or agreement a default in the performance of which is
elsewhere in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of one or more series of
Securities other than that series), and continuance of such default or breach
for a period of ten (10) days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the outstanding Securities
of that series a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) default in the observance or performance by DTE Energy of any
covenant or agreement contained in a Support Agreement, if any, with respect to
the Securities of such series; or
(6) any event of default by the Company, DTE Energy or any of their
respective Subsidiaries as defined in any mortgage, indenture or instrument
under which there may be issued, or by which there may be secured or evidenced,
any Debt of the Company, DTE Energy or any of their respective Subsidiaries, as
the case may be, whether such Debt now exists or shall hereafter be created,
resulting in such Debt in principal amount of at least $10,000,000 becoming or
being declared due and payable prior to the date on which it would otherwise
become due and payable, and such acceleration shall not be rescinded or annulled
within a period of 30 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the outstanding Securities
of that series a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(7) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company, DTE Energy or DECO
in an involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Company, DTE Energy or DECO bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company, DTE Energy or DECO
under any applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company, DTE Energy or DECO or of any substantial part the property of the
Company, DTE Energy or DECO, or ordering the winding up or liquidation of the
affairs of the Company, DTE Energy or DECO, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in
effect for a period of 90 consecutive days; or
(8) the commencement by the Company, DTE Energy or DECO of a voluntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
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reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company, DTE Energy
or DECO to the entry of a decree or order for relief in respect of it in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by the
Company, DTE Energy or DECO of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company, DTE Energy or DECO or of any substantial
part of their respective property, or the making by it of an assignment for the
benefit of creditors, or the admission by the Company, DTE Energy or DECO in
writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Company, DTE Energy or DECO in furtherance of
any such action;
(9) final judgment of money in excess of $10,000,000, singularly or
in the aggregate, shall be rendered against the Company, DTE Energy or
any of their respective Subsidiaries and shall remain undischarged for
a period (during which execution shall not be effectively stayed) of 10
days after such judgment becomes final; or
(10) DTE Energy shall, at any time, directly or indirectly cease to
hold 100% of the Voting Stock of the Company or DECO; or
(11) any other Event of Default provided in or pursuant to this
Indenture with respect to Securities of such series.
SECTION 502. Acceleration of Maturity: Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case either the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms of that series) of all of the Securities of that series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal amount (or
specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on and any Additional Amounts
payable in respect of all Securities of that series,
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(B) the principal of (and premium, if any, on) any
Securities of that series which has become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non payment of the principal of Securities
which has become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 613.
No such rescission shall affect any subsequent default or, impair any
right consequent thereon.
An Event of Default described in paragraph (7) or (8) of Section 501
shall cause the principal amount and accrued interest (or such lessor amount as
provided for in the Securities of such series) to become immediately due and
payable without any declaration or other act by the Trustee or any Holder.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in payment of any interest on or any
Additional Amounts payable in respect of any Security when such
interest or Additional Amounts become due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and payable on
such Securities and coupons for principal (and premium, if any) and interest or
Additional Amounts, if any, and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal (and premium, if
any) and on any overdue interest or any Additional Amounts, at the rate or rates
prescribed therefor in such Securities and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect
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the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor upon such Securities,
wherever situated.
If an Event of Default occurs and is continuing with respect to
Securities of any series, the Trustee may in its discretion proceed to protect
and enforce its rights, including the rights of the Holders of Securities of
such series and any related coupons, by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy including, without limitation, instituting a proceeding
prior to any declaration of acceleration of the Maturity of the Securities for
the collection of all amounts then due and unpaid on the Securities, prosecuting
such proceeding to final judgment or decree and collecting out of the property,
wherever situated, of the Company the moneys adjudged or decreed to be payable
in the manner provided by law.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, DTE Energy or DECO or any other
obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of any overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest and any
Additional Amounts owing and unpaid in respect of the
Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders of Securities and
coupons allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such Judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any
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Holder thereof or to authorize the Trustee to vote in respect of the claim of
any Holder of a Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest or any Additional Amounts, upon presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest or any Additional Amounts payable in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities and coupons for principal and any premium and
interest or any Additional Amounts, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made a written request to
the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture (including, without limitation, the provisions of Section 512)
to affect, disturb or prejudice the rights of any other of such Holders, or to
obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 305 and 307) any interest on or any Additional Amounts in
respect of such Security or payment of such coupon on the Stated Maturity or
Maturities expressed in such Security or coupon (or, in the case of redemption,
on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities and coupons shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series and any coupons appertaining thereto; provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
officers of the Trustee, determine that the action so directed would
involve the Trustee in personal liability.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to the Securities of such series and its consequences,
except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series or coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default with respect to such series arising therefrom shall be
deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
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SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder of any Security or coupon for the enforcement of the payment of the
principal of (or premium, if any) or interest on or any Additional Amounts in
respect of any Security or the payment of any coupon on or after the Stated
Maturity or Maturities expressed in such Security or coupon (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium, if any) or interest or
any Additional Amounts with respect to, any Security of such series, the Trustee
shall be protected in withholding such notice of and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event
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which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
SECTION 602. Certain Rights of Trustee.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not herein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section. Subject to the provisions of Sections
315(a) through 315(d) of the Trust Indenture Act:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or
Company Order or as otherwise expressly provided herein and any
resolution of the Board of Directors may be sufficiently evidenced
by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series or any
related coupons pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the
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Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of
the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon it
by this Indenture; and
(i) the Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or
powers if it shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) and in any coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and, if applicable, that the statements
made by it in a Statement of Eligibility on Form T-1 supplied to the Company are
true and accurate, subject to the qualifications set forth therein. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or other agent.
SECTION 605. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
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SECTION 606. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (premium, if any) or
interest, if any, on particular Securities.
The obligations of the Company under this Section to compensate and
indemnify the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness under this Indenture and shall survive the resignation
or removal of the Trustee, the satisfaction and discharge of this Indenture and
any rejection or termination of this Indenture under any applicable bankruptcy
law.
If the Trustee incurs expenses or renders services after an Event of
Default specified in Section 501(7) or (8) has occurred, those expenses
(including the reasonable charges and expenses of its agents and attorneys) and
its compensation for services shall be preferred over the status of the Holders
in any reorganization or similar proceeding and the parties hereto, and the
Holders, by their acceptance of the Securities, hereby agree that such expenses,
compensation and indemnity are intended to constitute expenses of administration
under any applicable bankruptcy law.
SECTION 607. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a corporation
permitted by Section 310(a)(1) and (5) of the Trust Indenture Act to act as
trustee under the Trust Indenture Act, and that has a combined capital, and
surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture
Act) of at least $50,000,000. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
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SECTION 608. Disqualification, Conflicting Interests.
If the Trustee has or shall acquire any conflicting interest, as
defined in Section 310(b) of the Trust Indenture Act, with respect to the
Securities of any series, the Trustee shall either eliminate such conflicting
interest or resign, to the extent and in the manner provided by, and subject to,
Section 310 of the Trust Indenture Act and this Indenture.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 610.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee
required by Section 610 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities
of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered
to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the obligations
imposed on it under Section 310(b) of the Trust Indenture Act after
written request therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section
607 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by Company Order may remove the Trustee
with respect to all Securities, or (ii) subject to Section 514, any Holder of a
Security who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated (including those who
have been Holders for less than six months), petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that or
those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor
Trustee or Trustees shall comply with the applicable requirements of
Section 610. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 610, become the successor Trustee with respect
to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee
with respect to the Securities of any series shall have been so
appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 610, any Holder of a
Security who has been a bona fide Holder of a Security of such series
for at least six months may, on behalf of himself and all others
similarly situated (including those who have been Holders for less than
six months), petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities
of any series by mailing written notice of such event by first class
mail, postage prepaid, to the Holders of Registered Securities, if any,
of such series as their names and addresses appear in the Security
Register and, if Securities of such series are issued as Bearer
Securities, by publishing notice of such event once in an Authorized
Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
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(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor Trustee
shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees as co-trustees of the same trust and that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective
to the extent provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that
or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section,
as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
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authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 612. Preferential Collection of Claims Against the Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of Section 311 of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor).
SECTION 613. Appointment of Authenticating Agent.
The Trustee may, with the consent of the Company, appoint an
Authenticating Agent or Authenticating Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, and if the Trustee is required to appoint one or more
Authenticating Agents with respect to any series of Securities, to authenticate
Securities of such series upon original issuance and to take such other actions
as are specified in Sections 303, 304 and 309, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Notwithstanding
anything to the contrary in this Section 613 or in any other Section of this
Indenture, an Authenticating Agent shall not be authorized to authenticate
Securities constituting the first issuance of Securities of any series until and
unless the requirements of Section 301 hereof have been, or are concurrently
therewith being, complied with.
Each Authenticating Agent shall be acceptable to the Company, and
except as specified by Section 301, each Authenticating Agent shall at all times
be a corporation that would be permitted by Section 310(a) (1) and (5) of the
Trust Indenture Act to be able to act as a trustee under an indenture qualified
under the Trust Indenture Act, is authorized under applicable law and by its
charter to act as such and that has a combined capital and surplus (computed in
accordance with Section 310(a) (2) of the Trust Indenture Act) of not less than
$50,000,000. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section. If the Authenticating Agent has or shall acquire any conflicting,
interest, as defined in Section 310(b) of the Trust Indenture Act, with respect
to Securities of any series, the Authenticating Agent shall take action as is
required pursuant to said Section 310(b).
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent; provided, that such corporation shall be otherwise
eligible under
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this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor. Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 606.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
The Bank of New York
as Trustee
__________________________________
As Authenticating Agent
By________________________________
Authorized Signatory
If all of the Securities of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested by the Company in writing (which writing
need not comply with Section 102 and need not be accompanied by an opinion of
Counsel), shall appoint in, accordance with this Section an Authenticating Agent
having an office in a Place of Payment designated by the Company with respect to
such series of Securities.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the
Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, on dates mutually acceptable to the Trustee
and the Company, a list, in such form as the Trustee may reasonably
require, the names and addresses of the Holders of Securities as of a
date mutually acceptable to the Trustee and the Company, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content, such list to be dated as of a date
not more than 15 days prior to the time such list is furnished;
notwithstanding the foregoing, so long as the Trustee is the Security Registrar
with respect to a particular series of Securities, no such list shall be
required to be furnished in respect of such series.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after June 15 of each year commencing with
the year following the first issuance of Securities pursuant to Section
301, if required by Section 313(a) of the Trust Indenture Act, the
Trustee shall transmit pursuant to Section 313(c) of
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the Trust Indenture Act, a brief report dated as of such June 15
with respect to any of the events specified in said Section 313(g)
which may have occurred since the later of the immediately preceding
June 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section
313(a) of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in
the manner and to the Persons required by Sections 313(c) and (d) of
the Trust Indenture Act.
SECTION 704. Reports by Company.
(a) The Company, pursuant to Section 314(a) of the Trust Indenture
Act, shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required
to file information, documents or reports pursuant to either of said
Sections, then it shall file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Exchange Act in respect of a Security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) unless the Company furnishes information to the Commission in
accordance with Rule 12g3-2(b) under or pursuant to Section 13 or 15(d)
of the Exchange Act, the Company shall promptly furnish or cause to be
furnished such information as is specified pursuant to Rule 144(d)(4)
under the Securities Act (or any successor provision thereto) to any
Holder or beneficial owner of a Security or to a prospective purchaser
of a Security who is designated by such Holder or beneficial owner and
is a qualified institutional buyer (as defined in Rule 144A), upon the
request of such Holder or beneficial owner or prospective purchaser, in
order to permit compliance by such Holder or beneficial owner with Rule
144A under the Securities Act.
(3) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations;
(4) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission; and
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(5) transmit within 30 days after June 15 of each year to the
Trustee, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer of the
Company as to his or her knowledge of such obligor's compliance with
all conditions and covenants under the Indenture as determined without
regard to any period of grace or requirement of notice provided under
the Indenture.
In addition, the Company shall furnish, or cause to be furnished, to
the Trustee:
(6) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a copy of the Consolidated (as
defined herein) balance sheet of the Company and its Subsidiaries, if
any, as of the end of such fiscal year and Consolidated statements of
income, cash flows and changes in shareholder's equity of the Company
and its Subsidiaries, if any, for such fiscal year, in each case
accompanied by an opinion by Deloitte & Touche LLP or other nationally
recognized firm of independent public accountants, in each case having
been prepared in accordance with GAAP;
(7) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the
Company, the unaudited Consolidated balance sheet of the Company and
its Subsidiaries, if any, as of the end of such quarter and unaudited
Consolidated statements of income, cash flows and changes in
shareholder's equity of the Company and its Subsidiaries, if any, for
such quarter and for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by a financial officer of the
Company as having been prepared in accordance with GAAP;
(8) as soon as available and in any event within 90 days after the
end of each fiscal year of DTE Energy, a copy of the annual report to
shareholders for such year for DTE Energy and its Subsidiaries,
containing the Consolidated balance sheet of DTE Energy and its
Subsidiaries as of the end of each fiscal year and Consolidated
statements of income, cash flows and changes in shareholders' equity of
DTE Energy and its Subsidiaries for such fiscal year, in each case
accompanied by an opinion by Deloitte & Touche LLP or other nationally
recognized firm of independent public accountants having been prepared
in accordance with GAAP;
(9) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of DTE
Energy, the unaudited Consolidated balance sheet of DTE Energy and its
Subsidiaries as of the end of such quarter and unaudited Consolidated
statements of income, cash flows and changes in shareholders' equity of
DTE Energy and its Subsidiaries for such quarter and for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter; and
(10) promptly after sending or filing thereof, copies of all other
reports and registration statements that the Company or any of its
Subsidiaries, if any, files with the Commission or any national
securities exchange.
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(11) as soon as possible, and in any event within five days after
the occurrence of each Event of Default (or an event that, with the
passage of time or the giving of notice, or both, would become an Event
of Default) continuing on the date of such statement, a statement of
the chief financial officer of the Company setting forth details of
such Event of Default or event and the action that the Company has
taken and proposes to take with respect thereto.
(b) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not merge or consolidate with or into any other
Person or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, or permit any of
its Subsidiaries to do so, and the Company shall not permit any Person to
consolidate into with or merge with the Company or any Subsidiary or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets to the Company or
any Subsidiary, unless:
(1) in case the Company or any Subsidiary shall consolidate with
or merge into another Person or convey, transfer or lease its
properties and assets as an entity or substantially as an entirety to
any Person, the Person formed by such consolidation or into which the
Company or any Subsidiary is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of
the Company or any Subsidiary as an entity or substantially as an
entirety shall be a [corporation, partnership or trust,] shall be
organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest (including all Additional
Amounts, if any, payable pursuant to Section 1004) on all the
Securities and the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(2) at the time of such proposed transaction and immediately after
giving effect to such transaction and treating any indebtedness which
becomes an obligation of the Company or a Subsidiary as a result of
such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing; and
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(3) the Company or the successor Person shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
Article Nine and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Person Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company as an entity or substantially as an entirety in
accordance with Section 801, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities and coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating
that such covenants are expressly being included solely for the benefit
of such series) or to surrender any right or power herein conferred
upon the Company with respect to all or any series of the Securities;
or
(3) to add any additional Events of Default with respect to all or
any series of the Securities (and, if such Event of Default is
applicable to less than all series of Securities, specifying the series
to which such Event of Default is applicable); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of principal of (or
premium, if any) or interest on Bearer Securities, to permit Bearer
Securities to be issued in exchange for Registered Securities,
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to permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit or facilitate
the issuance of Securities in uncertificated form; provided, that any
such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material
respect; or
(5) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 610(b); or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make or amend any other provisions with respect to
matters or questions arising under this Indenture; provided, that such
other provisions as may be made shall not adversely affect the
interests of the Holders of Securities of any series or any related
coupons in any material respect; or
(8) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary or helpful to effect the
qualification of the Indenture under the Trust Indenture Act and to
modify, eliminate or add to the provisions of this Indenture to such
extent as shall be necessary or helpful to conform to any mandatory or
optional provisions of the Trust Indenture Act as the same may from
time to time be amended; or
(9) to add to, delete from or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(10) to modify, eliminate or add to the provisions of any Security
to allow for such Security to be held in certificated form by the
Holder thereof; or
(11) to secure the Securities of the applicable series; or
(12) to amend or supplement any provision contained herein or in
any supplemental indenture, provided that no such amendment or
supplement shall adversely affect the interests of the Holders of any
Securities then Outstanding in any material respect; or
(13) to modify, delete or add to any of the provisions of this
Indenture other than as contemplated by clauses (1) through (10) of
this Section, provided that any such modification, deletion or addition
shall become effective only with respect to series of Securities
established pursuant to Section 301 after the effective date of such
modification, deletion or addition.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series and any related coupons under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,
(1)change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or change any obligation of the
Company to pay Additional Amounts pursuant to Section 1004 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or
reduce the amount of the principal of an original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change
the Place of Payment, coin or currency in which any Security or any
premium or any interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date); or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or reduce the requirements of Section
1304 for quorum or voting; or
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 1002(2);
or
(4) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
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It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 315 of the Trust Indenture Act) shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties, immunities or liabilities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Company, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated delivered by the
Trustee or an Authenticating Agent in exchange for Outstanding Securities of
such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on or any Additional Amounts payable in respect of the
Securities of that series in accordance with the terms of the Securities, any
coupons appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities; any
interest due on and any Additional Amounts payable in respect of Bearer
Securities other than Additional Amounts, if
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any, payable as provided in Section 1004 in respect of principal of (or premium,
if any, on) such Security shall be payable only upon presentation and surrender
of the several coupons for such interest installments as are evidenced thereby
as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for such series (but
not Bearer Securities, except as otherwise provided below, unless such Place of
Payment is located outside the United States) an office or agency where
Securities of that series may be presented or surrendered for payments, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. If Securities of a
series are issuable as Bearer Securities, the Company will maintain, subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Securities of that
series pursuant to Section 1004); provided, however, that if the Securities of
that series are listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland, the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United States,
as the case may be, so long as the Securities of that series are listed on such
exchange. The Company will give prompt written notice to the Trustee and the
Holders of such series of the location, and any change in the location, of any
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency in respect of any series of Securities or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders of Securities of that series may be made and notices and demands may
be made or served at the Corporate Trust Office of the Trustee, except that
Bearer Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1004) at the place
specified for that purpose pursuant to Section 301, and the Company hereby
appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands.
Except as otherwise specified or contemplated by Section 301, no
payment of principal, premium or interest on Bearer Securities shall be made at
any office or agency of the Company in the United States or by check mailed to
any address in the United States or by transfer to an account maintained with a
bank located in the United States; provided, however, that, if the Securities of
a series are denominated and payable in Dollars, payment of principal of (and
premium, if any) and interest on any Bearer Security (including any Additional
Amounts payable on Securities of such series pursuant to Section 1004) shall be
made at the office of the Company's Paying Agent in the Borough of Manhattan,
The City of New York, if (but only if) payment in Dollars of the full amount of
such principal, premium, interest or Additional Amounts, as the case may be, at
all offices or agencies outside the United States maintained for that purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee and the Holders of such series of any such designation or rescission and
of any change in the location of any such other office or agency. Unless
otherwise specified as contemplated by Section 301, the Company hereby
designates as the Place of Payment for each series the Corporate Trust Office.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on any Securities of that series, deposit with
a Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1)hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal of (and premium, if any) or interest on the
Securities of that series and, if so, the amount of such defaulted
payment; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were
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held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Except as otherwise provided hereby or pursuant hereto, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest or
Additional Amounts on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense and at the direction of the Company cause to be published
once, in an Authorized Newspaper in each Place of Payment, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto Additional Amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of or any premium or interest on, or in respect of, any Security of
any series or payment of any related coupon or the net proceeds received on the
sale or exchange of any Security of any series, such mention shall be deemed to
include mention of the payment of Additional Amounts provided for in this
Section to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of Additional Amounts (if applicable) in any
provisions hereof shall not be construed as excluding Additional Amounts in
those provisions hereof where such express mention is not made.
Except as otherwise provided herein or pursuant hereto, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the principal Paying Agent or Paying Agents, if other than the
Trustee, with an Officers Certificate instructing the Trustee and such Paying
Agent or Paying Agents whether such payment of principal of and any premium or
interest on the Securities of that series shall be made to Holders of Securities
of that series or any related coupons who are United States Aliens without
withholding for or on account of any tax, assessment or other governmental
charge described in the Securities of that series. If any such withholding shall
be required, then such Officers' Certificate shall specify by country the
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amount, if any, required to be withheld on such payments to such Holders of
Securities or coupons and the Company will pay to such Paying Agent the
Additional Amounts required by this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against any
loss, liability or expense reasonably incurred without negligence or bad faith
on their part arising out of or in connection with actions taken or omitted by
any of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Company and the
Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Change in Nature of Business.
The Company will not make any material change in the nature of its
business as carried on at the date of the issuance of the Securities.
SECTION 1008. Accounting Changes.
The Company will not make or permit, or permit any of its Subsidiaries
to make or permit, any change in accounting policies or reporting practices,
except as required or permitted by GAAP.
SECTION 1009. Statement by Officers as to Default .
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company (which as of the date hereof ends on December
31 of each year) ending after the date hereof so long as any Security is
outstanding hereunder, an Officers' Certificate, stating that in the course of
the performance by the signers of their duties as such officers of the Company
or Company Agent(s) they would normally obtain knowledge of any default by the
Company in the performance or fulfillment of any covenant, agreement or
condition contained in this Indenture, and stating whether or not they have
obtained knowledge of any such default existing on the date
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of such statement and, if so, specifying each such default of which the signers
have knowledge and the nature thereof.
SECTION 1010. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1001 to 1008, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least 66-2/3% in principal amount of the outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise provided herein or therein pursuant hereto) in accordance with this
Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by either a Board Resolution or an Officers' Certificate. In the case
of any redemption at the election of the Company of less than all the Securities
of any series, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed. In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or (ii)
pursuant to an election of the Company which is subject to a condition specified
in the terms of such Securities, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series with identical terms and
conditions are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series not previously called for redemption,
by lot or by such other method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Registered Securities of such
series of a denomination larger than the minimum authorized denomination for
Securities of that series. Notwithstanding the preceding
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sentence, if the list of Holders of Securities of any series to be redeemed is
maintained by computer or other data processing equipment by a Security
Registrar, a Paying Agent or another Person authorized to maintain such a list
under this Indenture, the Trustee may, and if reasonably requested by the
Company shall, utilize the computer or data processing equipment of such
Security Registrar, Paying Agent or other authorized Person for the purpose of
determining by lot or by such other method as the Trustee shall deem fair and
appropriate the Securities to be redeemed. No partial redemption shall reduce
the portion of the principal amount of a Registered Security of a series not
redeemed to less than the minimum denominations for a Security of such series
established herein pursuant hereto.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date unless a shorter period is specified
pursuant to Section 301 with respect to the Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to
be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon and Additional Amounts, if any,
will cease to accrue on and after said date,
(5) the place or places where such Securities, together in the
case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the
case, and
(7) The CUSIP numbers of the Securities to be so redeemed.
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A notice of redemption published as contemplated by Section 106
need not identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company, in which event the
Company shall provide the Trustee with the information required by Clauses (1)
through (6) above.
If at the time notice of redemption shall be given the Company shall
not have deposited with a Paying Agent and/or irrevocably directed the Trustee
or a Paying Agent to apply, from money held by it available to be used for the
redemption of Securities which are to be redeemed, an amount in cash sufficient
to redeem all of the Securities called for redemption, including accrued
interest and Additional Amounts to the Redemption Date, such notice shall state
that it is subject to the receipt of the redemption monies by the Trustee or a
Paying Agent on or before the Redemption Date and such notice shall be of no
effect unless such monies are so received before such date.
SECTION 1105. Deposit of Redemption Price.
On or before any Redemption Date, the Company shall deposit with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money sufficient to
pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on and any Additional Amounts with
respect thereto, all the Securities which are to be redeemed on that date The
Paying Agent shall provide notice to the Trustee of such deposit.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid if required
pursuant to the terms of the Securities being redeemed, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest (and
any Additional Amounts) to the Redemption Date; provided, however, that
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided, further,
that, unless otherwise specified as contemplated by Section 301, installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
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If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee or Authenticating
Agent if there be furnished to them such Security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or Authenticating Agent
or any paying Agent any such missing coupon in respect of which a deduction
shall have been made from the Redemption Price, such Holder shall be entitled to
receive the amount so deducted; provided, however, that interest represented by
coupons shall be payable only at an office or agency located outside the United
states (except as otherwise provided in Section 1002) and, unless otherwise
specified as contemplated by Section 301, only upon presentation and surrender
of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Security
Registrar so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Security Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee or Authenticating Agent shall authenticate and
deliver to the Holder of such Security without service charge, a new Registered
Security or Securities of the same series and of like tenor, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depositary
or other Depositary for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
Unredeemed portion of the principal of the Security in global form so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series
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is herein referred to as an "optional sinking fund payment". If provided for by
the terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided, that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Security Registrar at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee a Company
Order specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 1202 and will also deliver to the Security Registrar
any Securities to be so delivered. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in or permitted by
Section 1103 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 1104.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1301. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any or all series may be called
at any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
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SECTION 1302. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1301, to
be held at such time and at such place in the Borough of Manhattan, The
City of New York, or if the Securities of such series are issued as
Bearer Securities, in London as the Trustee shall determine. Notice of
every meeting of Holders of Securities of any series, setting forth the
time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 20 nor more than 180 days prior
to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal
amount of the outstanding Securities of any series shall have requested
the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 1301, by written request
setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 20 days after receipt of such
request or shall not thereafter proceed to cause the meeting to be held
as provided herein, then the Company or the Holders of Securities of
such series in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City
of New York, or in London, as the case may be, for such meeting and may
call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
SECTION 1303. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1304. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver which
this Indenture expressly provides may be given by the Holders of not less than
66-2/3% in aggregate principal amount of the Outstanding Securities of a series,
the Persons entitled to vote 66-2/3% in aggregate principal amount of the
Outstanding Securities of such series shall constitute a quorum. In the absence
of a quorum within 30 minutes of the time appointed for any such meeting, the
meeting shall, if convened at the request of Holders of Securities of such
series, be dissolved. In any other case, the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such
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adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1302(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the aggregate principal amount
of the outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Securities of that
series; provided, however, that, except as limited by the proviso to Section
902, any resolution with respect to any consent or waiver which this Indenture
expressly provides may be given by the Holders of not less than 66-2/3% in
aggregate principal amount of the outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly convened and at which a quorum
is present as aforesaid only by the affirmative vote of the Holders of 66-2/3%
in aggregate principal amount of the outstanding Securities of that series; and
provided, further, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in aggregate principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative vote
of the Holders of such specified percentage in aggregate principal amount of the
Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of a series and the related coupons,
whether or not present or represented at the meeting.
SECTION 1305. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities of a series in regard to proof
of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of
votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning
the conduct of the meeting as it shall deem appropriate. Except as
otherwise permitted or required by any such regulations, the holding of
Securities shall be proved in the manner specified in Section 104 and
the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the
proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments
appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 104 or other proof.
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(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders of Securities as provided in
Section 1302(b), in which case the Company or the Holders of Securities
of the series calling the meeting, as the case may be, shall appoint a
temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the Persons entitled to vote a
majority in aggregate principal amount of the Outstanding Securities of
such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series and
each proxy shall be entitled to one vote for each $1,000 principal
amount of the Outstanding Securities of such series held or represented
by him; provided, however, that no vote shall be cast or counted at any
meeting in respect of any Security challenged as not outstanding and
ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder
of a Security of such series or as a proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1302 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities of such series
represented at the meeting; and the meeting may be held as so adjourned
without further notice.
SECTION 1306. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to such record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that such a notice was given as provided in Section 1302 and, if
applicable, Section 1304. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested, all as of the day and year first above written.
DTE CAPITAL CORPORATION
By:
__________________________________
Name: Christopher C. Arvani
Title: Assistant Treasurer
Attest:
THE BANK OF NEW YORK
By:
__________________________________
Name:
Title:
Attest:
72
<PAGE> 78
STATE OF MICHIGAN )
: ss.:
COUNTY OF WAYNE )
On the day of , 1998, before me personally came , to me
known, who., being by me duly sworn, did depose and say that he is of
DTE CAPITAL CORPORATION, one of the corporations described in and which
executed the foregoing instrument and that he signed his name thereto by like
authority.
________________________________
Notary Public, State of Michigan
My Commission Expires
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the [ ]th day of [ ] , 1998, before me personally came [ ],
to me known, who., being by me duly sworn, did depose and say that she is [ ]
of THE BANK OF NEW YORK, one of the corporations described in and which
executed the foregoing instrument and that she signed her name thereto by like
authority.
________________________________
Notary Public, State of New York
Commission Expires
73
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EXHIBIT A
[FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY]
CERTIFICATE
DTE CAPITAL CORPORATION
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that the above-captioned Securities are not being
acquired by or on behalf of a United States person or for offer to resell or for
resale to a United States person or any person inside the United States or, if a
beneficial interest in the Securities is being acquired by or on behalf of a
United States person or any person inside the United States, that such United
States person is a financial institution within the meaning of Section
1.165-12(c)(1)(v) of the United States Treasury regulations which agrees to
comply with the requirements of Section 165 (j) (3) (A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder and
which is not purchasing for offer to resell or for resale inside the United
States.
As used herein, "United States person" means any citizen or resident of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate the income of
which is subject to United States Federal income taxation regardless of its
source or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States persons have authority to control all substantial decisions of the trust,
and "United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Securities in bearer form as to all of such Securities.
This certificate excepts and does not relate to U.S. $ principal
amount of the above-captioned Securities appearing in your books as being held
for our account as to which we are not able to certify as to the matters set
forth herein and as to which we understand exchange and delivery of definitive
Securities cannot be made until we are able so to certify.
<PAGE> 80
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:_______________, 19__
[To be dated on or after
_______________, 19____(the date
determined as provided in Section
303 of the Indenture)]
[Name of Person Entitled to
Receive Bearer Security]
_____________________________________
(Authorized Signatory]
Name:
Title:
2
<PAGE> 1
EXHIBIT 4-197
================================================================================
DTE CAPITAL CORPORATION
AND
THE BANK OF NEW YORK
Trustee
------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of June 15, 1998
Supplementing the Indenture
Dated as of June 15, 1998
--------------
$100,000,000
Remarketed Notes, Series A due 2038
================================================================================
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of the 15th day of
June, 1998, between DTE CAPITAL CORPORATION, a corporation organized and
existing under the laws of the State of Michigan (the "Company"), and THE BANK
OF NEW YORK, a New York banking corporation, having its principal office in The
City of New York, New York, as trustee (the "Trustee");
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an Indenture dated as of June 15, 1998 (the "Original Indenture"
and, together with this First Supplemental Indenture, the "Indenture") providing
for the issuance by the Company from time to time of its debt securities to be
issued in one or more series (in the Original Indenture and herein called the
"Securities"); and
WHEREAS, the Company, in the exercise of the power and
authority conferred upon and reserved to it under the provisions of the Original
Indenture, including Section 901 thereof, and pursuant to appropriate
resolutions of the Board of Directors, has duly determined to make, execute and
deliver to the Trustee this First Supplemental Indenture to the Original
Indenture as permitted by Sections 201 and 301 of the Original Indenture in
order to establish the form or terms of, and to provide for the creation and
issue of, a series of Securities under the Original Indenture in the aggregate
principal amount of up to $100,000,000; and
WHEREAS, all things necessary to make the Securities, when
executed by the Company and authenticated and delivered by the Trustee or any
Authenticating Agent and issued upon the terms and subject to the conditions
hereinafter and in the Original Indenture set forth against payment therefor,
the valid, binding and legal obligations of the Company and to make this First
Supplemental Indenture a valid, binding and legal agreement of the Company, have
been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH
that, in order to establish the terms of a series of Securities, and for and in
consideration of the premises and of the covenants contained in the Original
Indenture and in this First Supplemental Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions. Each capitalized term that is used
herein and is defined in the Original Indenture shall have the meaning specified
in the Original Indenture unless such term is otherwise defined herein.
"Administrative Agent" means the entity designated as such in
the applicable Standby Note Purchase Agreement, if any.
2
<PAGE> 3
"Base Rate" means the interest rate established by the SPURS
Agent, after consultation with the Company, as the applicable "Base Rate" at or
prior to the commencement of the SPURS Mode and set forth on Annex A to the
applicable Note.
"Beneficial Owner" means, for Notes in book-entry form, the
person who acquires an interest in the Notes which is reflected on the records
of DTC through its participants.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions located in the State
of Michigan or in the state in which the principal corporate trust office of the
Trustee is located, are authorized or obligated by or pursuant to law or
executive order to close; provided, however, that with respect to Notes in the
Long Term Rate Mode or the SPURS Mode as to which LIBOR is an applicable
Interest Rate Basis, such day is also a London Business Day (as hereinafter
defined). "London Business Day" means (i) if the Index Currency (as hereinafter
defined) is other than European Currency Units ("ECU"), any day on which
dealings in such Index Currency are transacted in the London interbank market or
(ii) if the Index Currency is ECU, any day that does not appear as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on the page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market.
"Calculation Agent" has the meaning specified in Section 204
hereof.
"Calculation Date" has the meaning set forth in Section 204
hereof.
"CD Rate" has the meaning specified in Section 204 hereof.
"Commercial Paper Term Mode" means, with respect to any Note,
the Interest Rate Mode in which the interest rate on such Note is reset on a
periodic basis which shall not be less than one calendar day nor more than 364
consecutive calendar days and interest is paid as provided for such Interest
Rate Mode in Section 204 hereof.
"Commercial Paper Term Period" means an Interest Rate Period
of not less than one year nor more than 364 consecutive calendar days, as
determined by the Company, or if not so determined, by the Remarketing Agent.
"Conversion Date" has the meaning set forth in Section 205(d)
hereof.
"Conversion Notice" means a notice, promptly confirmed in
writing in substantially the form of Exhibit H hereto (which includes facsimile
or appropriate electronic media) from the Company, that sets forth applicable
Note to which it relates, the new Interest Rate Mode (if applicable), the new
Interest Rate Period, the Conversion Date, and with respect to any Long Term
Rate Period, any optional redemption or repayment terms for such Note.
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"Determination Date" means the third Business Day preceding
the applicable SPURS Remarketing Date.
"DTC" has the meaning specified in Section 203 hereof.
"DTE Energy" means DTE Energy Company, a Michigan corporation
and the owner, directly or indirectly, of 100% of the outstanding common stock
of the Company.
"Floating Interest Rate Notice" has the meaning specified in
Section 204 hereof. The form of Floating Rate Interest Notice is set forth as
Exhibit G to this First Supplemental Indenture.
"Floating Rate Maximum Interest Rate" and "Floating Rate
Minimum Interest Rate" have the respective meanings specified in Section 204
hereof.
"Index Maturity" means the period to maturity of the
instrument or obligation with respect to which the related Interest Rate Basis
or Bases will be calculated.
"Initial Interest Rate" means the annual rate of interest
applicable to the Notes during the Initial Interest Rate Period.
"Initial Interest Rate Adjustment Date" means June 15, 2003.
"Initial Interest Rate Period" means the period commencing on
the date of issuance for the Notes and ending on the Business Day immediately
preceding the Initial Interest Rate Adjustment Date.
"Insurer" means, with respect to the Initial Interest Rate
Period, MBIA Insurance Corporation, and, with respect to any subsequent Interest
Rate Period, such issuer of a financial guaranty insurance policy as may be
purchased by the Company from time to time.
"Interest Determination Date" has the meaning specified in
Section 204 hereof.
"Interest Rate Adjustment Date" means, for a particular
Interest Rate Period in any Interest Rate Mode, each date, which shall be a
Business Day, on which interest and, in the case of a floating interest rate,
the Spread (if any) and the Spread Multiplier (if any) on the Notes subject
thereto commences to accrue at the rate determined and announced by the
applicable Remarketing Agent for such Interest Rate Period and for Notes bearing
interest at the Initial Interest Rate (as hereinafter defined), the Business Day
following the expiration of the Initial Interest Rate Period (as hereinafter
defined).
"Interest Rate Basis" has the meaning specified in Section 204
hereof.
"Interest Rate Mode" means the mode in which the Interest Rate
on a Note is being determined, i.e., the Commercial Paper Term Mode, the Long
Term Rate Mode or the SPURS Mode.
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<PAGE> 5
"Interest Rate Period" means, with respect to any Note in the
Commercial Paper Mode or Long Term Rate Mode, the period of time commencing on
the Interest Rate Adjustment Date to, but not including, the immediately
succeeding Interest Rate Adjustment Date during which such Note bears interest
at a particular fixed interest rate or floating interest rate, and with respect
to any Note in the SPURS Mode, a SPURS Rate Period.
"Interest Reset Date", "Initial Interest Reset Date" and
"Interest Reset Period" have the respective meanings specified in Section 204
hereof.
"Liquidity Provider" means, any bank or other credit provider
whose obligations such as those under the applicable Standby Note Purchase
Agreement with respect to any Notes are exempt from registration under the
Securities Act of 1933, as amended, with long term senior debt ratings from
Standard & Poor's Ratings Services and Moody's Investors Service, Inc. at least
equal to those of the Company as of the date of the Standby Note Purchase
Agreement, and a minimum combined capital and surplus of at least $50,000,000,
that has entered into a Standby Note Purchase Agreement with the Company for the
purpose of purchasing unremarketed Notes on any Interest Rate Adjustment Date.
"Long Term Rate Mode" means, with respect to any Note, the
Interest Rate Mode in which the interest rate on such Note is reset in a Long
Term Rate Period and interest is paid as provided for such Interest Rate Mode in
Section 204 hereof.
"Long Term Rate Period" means, with respect to any Note, any
period of more than 364 days and not exceeding the remaining term to the Stated
Maturity of such Note.
"Notes" or "Note" have the meaning specified in Section 201.
"Notification Date" means the Business Day not later than ten
(10) days prior to the applicable SPURS Remarketing Date on which the SPURS
Agent gives notice to the Company and the Trustee of its intention to purchase
the Notes for remarketing.
"Optional Redemption" means the redemption of any Note prior
to its maturity at the option of the Company as described herein.
"Optional Redemption Price" has the meaning set forth in
Section 304(c) hereof.
"Policy" means, with respect to the Initial Interest Rate
Period, the financial guaranty insurance policy issued by MBIA Insurance
Corporation and attached as Exhibit F hereto, and, with respect to any
subsequent Interest Rate Period, such financial guaranty insurance policy as may
be purchased by the Company from an Insurer from time to time.
"Principal Financial Center" means the capital city of the
country issuing the Index Currency, except that with respect to United States
dollars, Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss
francs and ECUs, the Principal Financial Center shall be The City of New York,
Sydney, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
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"Remarketing Agent" means such agent or agents, including any
standby remarketing agent (each a "Standby Remarketing Agent"), as the Company
may appoint from time to time for the purpose of remarketing of the Notes, as
set forth in the remarketing agreement which the Company shall enter into prior
to the remarketing of such Notes.
"Special Interest Rate" means the rate of interest equal to
the rate per annum announced by Citibank, N.A., or such other nationally
recognized bank located in the United States as the Company may select, as its
prime lending rate.
"Special Mandatory Purchase" means the obligation of the
Company (or, if applicable, a Liquidity Provider) to purchase Notes not
successfully remarketed by the Remarketing Agent and the applicable Standby
Remarketing Agent(s) by 12:00 o'clock noon, New York City time, on any Interest
Rate Adjustment Date.
"Spread" means, with respect to any Note, the number of basis
points to be added to or subtracted from the related Interest Rate Basis or
Bases applicable to an Interest Rate Period for such Note.
"Spread Multiplier" means the percentage of the related
Interest Rate Basis or Bases applicable to an Interest Rate Period by which such
Interest Rate Basis or Bases will be multiplied to determine the applicable
interest rate from time to time for an Interest Rate Period.
"SPURS Agent" means such Remarketing Agent as the Company may
appoint from time to time for the purpose of remarketing Notes in the SPURS
Mode.
"SPURS Mode" means, with respect to any Note, the Interest
Rate Mode in which such Note shall bear interest and be subject to remarketing
as "Structured PUtable Remarketable Securities" ("SPURS") as provided for in
Article Three hereof.
"SPURS Rate Period" means an Interest Rate Period for any Note
in the SPURS Mode established by the Company as a period of more than 364 days
and not exceeding the remaining term to the Stated Maturity of such Note;
provided, however, that such Interest Rate Period must end on the day prior to
an Interest Payment Date for such Note. The SPURS Rate Period shall consist of
the period to and excluding the SPURS Remarketing Date and the period from and
including the SPURS Remarketing Date to but excluding the next succeeding
Interest Rate Adjustment Date.
"SPURS Remarketing Agreement" shall mean the agreement dated
as of the Interest Rate Adjustment Date commencing the applicable SPURS Rate
Period which sets forth the rights and obligations of the Company and the
applicable SPURS Agent with respect to the remarketing of the SPURS.
"SPURS Remarketing Date" means the date designated by the
applicable SPURS Agent after consultation with the Company, upon which the
applicable SPURS Agent may elect to remarket the Notes at the SPURS Interest
Rate.
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"Standby Note Purchase Agreement" means the agreement, which
the Company may, at its option, enter into from time to time with a Liquidity
Provider for the purpose of purchasing unremarketed Notes.
"Weekly Rate Period" means a Commercial Paper Term Period with
an Interest Rate Period of generally seven days.
Section 102. Section References. Each reference to a
particular section set forth in this First Supplemental Indenture shall, unless
the context otherwise requires, refer to this First Supplemental Indenture.
ARTICLE TWO
TITLE, RANKING AND TERMS OF THE NOTES
Section 201. Title and Ranking of the Notes. This First
Supplemental Indenture hereby establishes a series of senior Securities
designated as the "Remarketed Notes, Series A due 2038" of the Company (referred
to herein as the "Notes"), and shall rank equally with each other and all other
senior and unsubordinated indebtedness of the Company. For purposes of the
Original Indenture, the Notes shall constitute a single series of Securities.
Section 202. Variations in Terms of Notes. Subject to the
terms and conditions set forth in the Original Indenture and in this First
Supplemental Indenture, the terms of any particular Note may vary from the terms
of any other Note as contemplated by Section 301. of the Original Indenture, and
the terms for a particular Note will be set forth in such Note as delivered to
the Trustee or an Authenticating Agent for authentication pursuant to Section
303. of the Original Indenture.
Section 203. Amount and Denominations; DTC. The aggregate
principal amount of Notes that may be issued under this First Supplemental
Indenture is limited to $100,000,000.
The Notes shall be issuable only in fully registered form
and will initially be registered in the name of The Depository Trust Company,
as depositary ("DTC"), or its nominee who is hereby designated as "U.S.
Depositary" under the Original Indenture. The authorized denominations of Notes
shall be $100,000 and integral multiples of $1,000 in excess thereof.
Section 204. Interest, Interest Rates and Interest Rate Modes.
The Notes will initially bear interest at the Initial Interest Rate as set forth
on Annex A thereof for the Initial Interest Rate Period. Thereafter, each Note
at the option of the Company will bear interest in the Commercial Paper Term
Mode, the Long Term Rate Mode or the SPURS Mode. Each Note may bear interest for
designated Interest Rate Periods in the same or a different Interest Rate Mode
from other Notes. The interest rate for the Notes will be established
periodically as described herein by the applicable Remarketing Agent.
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<PAGE> 8
Interest will be payable on any Note at Maturity and (i) in
the Initial Interest Rate Period, on the date or dates set forth on Annex A
thereto; (ii) for any Interest Rate Period in the Commercial Paper Term Mode, on
the Interest Rate Adjustment Date commencing the next succeeding Interest Rate
Period for such Note and on such other dates (if any) as will be established
upon conversion of such Note to the Commercial Paper Term Mode or upon
remarketing of the Note in a new Interest Rate Period in the Commercial Paper
Term Mode and set forth in the applicable Note; and (iii) in the Long Term Rate
Mode or SPURS Mode, no less frequently than semiannually on such dates as will
be established upon conversion of such Note to the Long Term Rate Mode or the
SPURS Mode (or upon remarketing of the Note in a new Interest Rate Period in the
Long Term Rate Mode or the SPURS Mode, as the case may be) and set forth in the
applicable Note in the case of a fixed interest rate, or as described below
under "Floating Interest Rates" in the case of a floating interest rate, and on
the Interest Rate Adjustment Date commencing the next succeeding Interest Rate
Period. Such interest will be payable to the Holder thereof as of the related
Record Date, which, for any Note (x) in the Initial Interest Rate Period, is the
date or dates set for therein; (y) in the Commercial Paper Term Mode, is the
Business Day prior to the related Interest Payment Date; and (z) bearing
interest in the Long Term Rate Mode or the SPURS Mode, is 15 days prior to the
related Interest Payment Date. Except as provided below under "Floating Interest
Rates," if any Interest Payment Date would otherwise be a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, and no interest will accrue on such payment for the
period from and after such Interest Payment Date to the date of such payment on
the next succeeding Business Day. Interest on Notes bearing interest in the
Commercial Paper Term Mode or at a floating interest rate during an Interest
Rate Period in the Long Term Rate Mode or the SPURS Mode will be computed on the
basis of actual days elapsed over 360; provided that, if an applicable Interest
Rate Basis is the CMT Rate or Treasury Rate (each as defined below), interest
will be computed on the basis of actual days elapsed over the actual number of
days in the year. Interest on Notes bearing interest at a fixed rate in the Long
Term Rate Mode or SPURS Mode will be computed on the basis of a year of 360 days
consisting of twelve 30-day months. Interest on Notes at the Initial Interest
Rate will be computed on the basis of a year of 360 days consisting of twelve
30-day months.
Determination of Interest Rates.
General. The interest rate and, in the case of a floating interest
rate, the Spread (if any) and the Spread Multiplier (if any) for any Note will
be established by the applicable Remarketing Agent in a remarketing as described
in Section 207 hereof or otherwise not later than each Interest Rate Adjustment
Date for such Note as the minimum rate of interest and, in the case of a
floating interest rate, Spread (if any) and Spread Multiplier (if any) necessary
in the judgment of such Remarketing Agent to produce a par bid in the secondary
market for such Note on the date the interest rate is established. Such rate
will be effective for the next succeeding Interest Rate Period for such Note
commencing on such Interest Rate Adjustment Date.
In the event that (i) the applicable Remarketing Agent has
been removed or has resigned and no successor has been appointed, or (ii) such
Remarketing Agent has failed to announce the appropriate interest rate, Spread,
if any, or Spread Multiplier, if any, as the case
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<PAGE> 9
may be, on the Interest Rate Adjustment Date for any Note for whatever reason,
or (iii) the appropriate interest rate, Spread, if any, or Spread Multiplier, if
any, as the case may be, or Interest Rate Period cannot be determined for any
Note for whatever reason, then such Note shall be automatically converted to the
Commercial Paper Term Mode with a Weekly Rate Period, determined as provided
below under "Interest Rate Modes - Commercial Paper Term Period", and the rate
of interest thereon shall be equal to the Special Interest Rate.
The Trustee shall, upon request of any Beneficial Owner of a
Note, advise such Beneficial Owner or the applicable Remarketing Agent of the
interest rate and, in the case of a floating interest rate, the Interest Rate
Basis or Bases, Spread (if any) and Spread Multiplier (if any), and in each case
the other terms applicable to such Beneficial Owner's Notes for the next
Interest Rate Period. Neither the Trustee nor the Company will otherwise be
required to advise Beneficial Owners of the applicable interest rate. The
interest rate and other terms announced by the Remarketing Agent, absent
manifest error, will be binding and conclusive upon the Beneficial Owners, the
Company and the Trustee.
Floating Interest Rates.
While any Note bears interest in the Long Term Rate Mode or
the SPURS Mode (with respect to the period from, and including, the Interest
Rate Adjustment Date commencing such period to, but excluding, the SPURS
Remarketing Date), the Company may elect a floating interest rate by providing
notice, which will be in or promptly confirmed in writing (which includes
facsimile or appropriate electronic media), received by the Trustee and the
Remarketing Agent for such Note (the "Floating Interest Rate Notice") not less
than ten (10) days prior to the Interest Rate Adjustment Date for such Long Term
Rate Period or SPURS Rate Period. The Floating Interest Rate Notice must
identify by CUSIP number or otherwise the portion of the Note to which it
relates and state the Interest Rate Period (or portion thereof, in the case of
the SPURS Mode) therefor to which it relates. Each Floating Interest Rate Notice
must also state the Interest Rate Basis or Bases, the Initial Interest Reset
Date, the Interest Reset Period and Dates, the Interest Payment Period and
Dates, the Index Maturity and the Floating Rate Maximum Interest Rate and/or
Floating Rate Minimum Interest Rate, if any. If one or more of the applicable
Interest Rate Bases is LIBOR or the CMT Rate, the Floating Interest Rate Notice
shall also specify the Index Currency and Designated LIBOR Page or the
Designated CMT Maturity Index and Designated CMT Telerate Page, respectively.
If any Note bears interest at a floating rate in a Long Term Rate
Period or SPURS Rate Period, such Note shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a) plus
or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if
any, specified by the Remarketing Agent, in the case of a Long Term Rate Period,
or the SPURS Agent, in the case of a SPURS Rate Period, and recorded in Annex A
to such Note. Commencing on the Interest Rate Adjustment Date for such Interest
Rate Period, the rate at which interest on such Note shall be payable shall be
reset as of each Interest Reset Date during such Interest Rate Period specified
in the applicable Floating Interest Rate Notice.
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The applicable floating interest rate on any Note during any Interest
Rate Period will be determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases, which may include (i) the CD Rate, (ii) the CMT
Rate, (iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime Rate, (vi) the
Treasury Rate, or (vii) such other Interest Rate Basis or interest rate formula
as may be specified in the applicable Floating Interest Rate Notice (each, an
"Interest Rate Basis").
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the interest rate with respect to each Interest Rate Basis will be
determined in accordance with the applicable provisions below. Except as set
forth above or in the applicable Floating Interest Rate Notice, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date immediately
preceding such Interest Reset Date or (ii) if such day is not an Interest Reset
Date, the interest rate determined as of the Interest Determination Date
immediately preceding the most recent Interest Reset Date. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date will be postponed to the next succeeding Business Day, unless LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, in which case such Interest Reset Date will be the
immediately preceding Business Day. In addition, if the Treasury Rate is an
applicable Interest Rate Basis and the Interest Determination Date would
otherwise fall on an Interest Reset Date, then such Interest Reset Date will be
postponed to the next succeeding Business Day.
The applicable Floating Interest Rate Notice will specify whether the
rate of interest will be reset daily, weekly, monthly, quarterly, semiannually
or annually or on such other specified basis (each, an "Interest Reset Period")
and the dates on which such rate of interest will be reset (each, an "Interest
Reset Date"). Unless otherwise specified in the applicable Floating Interest
Rate Notice, the Interest Reset Dates will be, in the case of a floating
interest rate which resets: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (unless the Treasury Rate is an applicable Interest Rate
Basis, in which case the Tuesday of each week except as described below); (iii)
monthly, the third Wednesday of each month; (iv) quarterly, the third Wednesday
of March, June, September and December of each year, (v) semiannually, the third
Wednesday of the two months specified in the applicable Floating Interest Rate
Notice; and (vi) annually, the third Wednesday of the month specified in the
applicable Floating Interest Rate Notice.
The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date will be the rate determined as of the
applicable Interest Determination Date. The "Interest Determination Date" with
respect to the CD Rate, the CMT Rate, the Federal Funds Rate and the Prime Rate
will be the second Business Day immediately preceding the applicable Interest
Reset Date; and the "Interest Determination Date" with respect to LIBOR shall be
the second London Business Day immediately preceding the applicable Interest
Reset Date, unless the Index Currency is British pounds sterling, in which case
the "Interest Determination Date" will be the applicable Interest Reset Date.
The "Interest Determination Date" with respect to the Treasury Rate shall be the
day in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is
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<PAGE> 11
a legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday. If the interest rate of any Note is a floating
interest rate determined with reference to two or more Interest Rate Bases
specified in the applicable Floating Interest Rate Notice, the "Interest
Determination Date" pertaining to the Note shall be the most recent Business Day
which is at least two Business Days prior to the applicable Interest Reset Date
on which each Interest Rate Basis is determinable. Each Interest Rate Basis
shall be determined as of such date, and the applicable interest rate shall take
effect on the related Interest Reset Date.
Either or both of the following may also apply to the floating interest
rate on any Note for an Interest Rate Period: (i) a floating rate maximum
interest rate, or ceiling, that may accrue during any Interest Reset Period (the
"Floating Rate Maximum Interest Rate") and (ii) a floating rate minimum interest
rate, or floor, that may accrue during any Interest Reset Period (the "Floating
Rate Minimum Interest Rate"). In addition to any Floating Rate Maximum Interest
Rate that may apply, the interest rate on any Note will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States laws of general application.
Except as provided below or in the applicable Floating Interest Rate
Notice, interest will be payable, in the case of floating interest rates which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Floating Interest Rate Notice; (ii) quarterly, on
the third Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Floating Interest Rate Notice; and (iv) annually, on the third
Wednesday of the month of each year specified in the applicable Floating
Interest Rate Notice and, in each case, on the Business Day immediately
following the applicable Long Term Rate Period or SPURS Rate Period, as the case
may be. If any Interest Payment Date for the payment of interest at a floating
rate (other than following the end of the applicable Long Term Rate Period or
SPURS Rate Period, as the case may be) would otherwise be a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, except that if LIBOR is an applicable Interest Rate
Basis and such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day.
All percentages resulting from any calculation of floating interest
rates will be rounded to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all
amounts used in or resulting from such calculation will be rounded, in the case
of United States dollars, to the nearest cent or, in the case of a foreign
currency or composite currency, to the nearest unit (with one-half cent or unit
being rounded upwards).
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Accrued floating rate interest will be calculated by multiplying the
principal amount of the applicable Note by an accrued interest factor. Such
accrued interest factor will be computed by adding the interest factor
calculated for each day in the applicable Interest Reset Period. Unless
otherwise specified in the applicable Floating Interest Rate Notice, the
interest factor for each such day will be computed by dividing the interest rate
applicable to such day by 360, if an applicable Interest Rate Basis is the CD
Rate, the Federal Funds Rate, LIBOR or the Prime Rate, or by the actual number
of days in the year if an applicable Interest Rate Basis is the CMT Rate or the
Treasury Rate. Unless otherwise specified in the applicable Floating Interest
Rate Notice, if the floating interest rate is calculated with reference to two
or more Interest Rate Bases, the interest factor will be calculated in each
period in the same manner as if only one of the applicable Interest Rate Bases
applied as specified in the applicable Floating Interest Rate Notice.
Unless otherwise specified in the applicable Floating Interest Rate
Notice, The Bank of New York will be the "Calculation Agent." For any Remarketed
Note bearing interest at a floating rate, the applicable Remarketing Agent will
determine the interest rate in effect from the Interest Rate Adjustment Date for
such Remarketed Note to the Initial Interest Reset Date. The Calculation Agent
will determine the interest rate in effect for each Interest Reset Period
thereafter. Upon request of the Beneficial Owner of a Note, after any Interest
Rate Adjustment Date, the Calculation Agent or the Remarketing Agent shall
disclose the interest rate and, in the case of a floating interest rate,
Interest Rate Basis or Bases, Spread (if any) and Spread Multiplier (if any),
and in each case the other terms applicable to such Note then in effect and, if
determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date with respect to
such Note. Except as described herein with respect to a Note earning interest at
floating rates, no notice of the applicable interest rate, Spread (if any) or
Spread Multiplier (if any) shall be sent to the Beneficial Owner of any Note.
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the "Calculation Date", if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
CD Rate. If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "CD Rate," the CD Rate means
with respect to any Interest Determination Date relating to a Note for which the
interest rate is determined with reference to the CD Rate (a "CD Rate Interest
Determination Date"), the rate on such date for negotiable United States dollar
certificates of deposit having the Index Maturity specified in the applicable
Floating Interest Rate Notice as published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication ("H.15(519)") under the heading "CDs
(Secondary Market)," or, if not published by 3:00 p.m., New York City time, on
the related Calculation Date, the rate on such CD Rate Interest Determination
Date for negotiable United States dollar certificates of deposit of the Index
Maturity specified in the applicable Floating Interest Rate Notice as published
by the Federal Reserve Bank of New York in its daily statistical release
"Composite 3:30 P.M. Quotations for
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<PAGE> 13
United States Government Securities" or any successor publication ("Composite
Quotations") under the heading "Certificates of Deposit." If such rate is not
yet published in either H.15(519) or Composite Quotations by 3:00 p.m., New York
City time, on the related Calculation Date, then the CD Rate on such CD Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the secondary market offered rates as of 10:00 a.m.,
New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers in negotiable United States dollar certificates
of deposit in The City of New York (which may include the Remarketing Agent or
its affiliates) selected by the Calculation Agent, after consultation with the
Company, for negotiable United States dollars certificates of deposit of major
United States money center banks for negotiable certificates of deposit with a
remaining maturity closest to the Index Maturity specified in the applicable
Floating Interest Rate Notice in an amount that is representative for a single
transaction in that market at that time; provided, however, that if the dealers
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, the CD Rate determined as of such CD Rate Interest Determination Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
CMT Rate. If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "CMT Rate," the CMT Rate means,
with respect to any Interest Determination Date relating to a Note for which the
interest is determined with reference to the CMT Rate (a "CMT Rate Interest
Determination Date"), the rate displayed on the Designated CMT Telerate Page (as
defined below) under the caption "...Treasury Constant Maturities...Federal
Reserve Board Release H.15...Mondays Approximately 3:45 P.M.," under the column
for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified in the Floating Interest Rate Notice,
for the week or the month, as applicable, ended immediately preceding the week
in which the related CMT Rate Interest Determination Date occurs. If such rate
is no longer displayed on the relevant page or is not displayed by 3:00 p.m.,
New York City time, on the related Calculation Date, then the CMT Rate for such
CMT Rate Interest Determination Date will be such treasury constant maturity
rate for the Designated CMT Maturity Index as published in H.15(519). If such
rate is no longer published or is not published by 3:00 p.m., New York City
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 p.m., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 p.m., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York (which may include the Remarketing
Agent or its
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affiliates) selected by the Calculation Agent after consultation
with the Company (from five such Reference Dealers selected by the Calculation
Agent, after consultation with the Company, and eliminating the highest
quotation (or, in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)), for the most
recently issued direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately the Designated CMT
Maturity Index and a remaining term to maturity of not less than such Designated
CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain
three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on such CMT Rate
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent, after
consultation with the Company, and eliminating the highest quotation (or, in the
event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least U.S.$100 million. If three or four
(and not five) of such Reference Dealers are quoting as described above, then
the CMT Rate will be based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference Dealers so selected by the
Calculation Agent, after consultation with the Company, are quoting as mentioned
herein, the CMT Rate determined as of such CMT Rate Interest Determination Date
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent, after consultation with
the Company, will obtain from five Reference Dealers quotations for the Treasury
Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones
Markets Limited (or any successor service) on the page specified in the
applicable Floating Interest Rate Notice (or any other page as may replace such
page on such service for the purpose of displaying Treasury Constant Maturities
as reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Floating Interest Rate Notice, the Designated CMT Telerate Page shall
be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in the applicable Floating Interest Rate Notice with respect to
which the CMT Rate will be calculated. If no such maturity is specified in the
applicable Floating Interest Rate Notice, the Designated CMT Maturity Index
shall be 2 years.
Federal Funds Rate. If an Interest Rate Basis for any Note is specified
in the applicable Floating Interest Rate Notice as the "Federal Funds Rate," the
Federal Funds Rate means, with
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respect to any Interest Determination Date relating to a Note for which
the interest rate is determined with reference to the Federal Funds Rate (a
"Federal Funds Rate Interest Determination Date"), the rate on such date for
United States dollar federal funds as published in H.15(519) under the heading
"Federal Funds (Effective)" or, if not published by 3:00 p.m., New York City
time, on the Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If such rate is not published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date shall be calculated by the Calculation Agent and
will be the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of federal
funds transactions in The City of New York (which may include the Remarketing
Agent or its affiliates) selected by the Calculation Agent after consultation
with the Company, prior to 9:00 a.m., New York City time, on such Federal Funds
Rate Interest Determination Date; provided, however, that if the brokers so
selected by the Calculation Agent are not quoting as mentioned in this sentence,
the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal
Funds Rate Interest Determination Date.
LIBOR. If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as "LIBOR," LIBOR means the rate
determined by the Calculation Agent as of the applicable Interest Determination
Date (a "LIBOR Interest Determination Date") in accordance with the following
provisions:
(i) if (a) "LIBOR Reuters" is specified in the applicable
Floating Interest Rate Notice, the arithmetic mean of the offered rates (unless
the Designated LIBOR Page (as defined below) by its terms provides only for a
single rate, in which case such single rate will be used) for deposits in the
Index Currency having the Index Maturity specified in the applicable Floating
Interest Rate Notice, commencing on the applicable Interest Reset Date, that
appear (or, if only a single rate is required as aforesaid, appears) on the
Designated LIBOR Page as of 11:00 a.m., London time, on such LIBOR Interest
Determination Date, or (b) "LIBOR Telerate" is specified in the applicable
Floating Interest Rate Notice, or if neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified in the applicable Floating Interest Rate Notice as the
method for calculating LIBOR, the rate for deposits in the Index Currency
having the Index Maturity specified in the applicable Floating Interest Rate
Notice, commencing on such Interest Reset Date, that appears on the Designated
LIBOR Page as of 11:00 a.m., London time, on such LIBOR Interest Determination
Date. If fewer than two such offered rates appear, or if no such rate appears,
as applicable, LIBOR on such LIBOR Interest Determination Date shall be
determined in accordance with the provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on
which fewer than two offered rates appear, or no rate appears, as the case may
be, on the Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent shall request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity
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specified in the applicable Floating Interest Rate Notice, commencing
on the applicable Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for a single
transaction in such Index Currency in such market at such time. If at least two
such quotations are so provided, then LIBOR on such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in
the applicable Principal Financial Center, on such LIBOR Interest Determination
Date by three major banks in such Principal Financial Center selected by the
Calculation Agent, after consultation with the Company, for loans in the Index
Currency to leading European banks, having the Index Maturity specified in the
applicable Floating Interest Rate Notice and in a principal amount that is
representative for a single transaction in such Index Currency in such market at
such time; provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR determined as of such
LIBOR Interest Determination Date shall be LIBOR in effect on such LIBOR
Interest Determination Date.
"Index Currency" means the currency or composite currency specified in
the applicable Floating Interest Rate Notice as to which LIBOR shall be
calculated. If no such currency or composite currency is specified in the
applicable Floating Interest Rate Notice, the Index Currency shall be United
States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in
the applicable Floating Interest Rate Notice, the display on the Reuter Monitor
Money Rates Service (or any successor service) on the page specified in such
Floating Interest Rate Notice (or on any other page as may replace such page on
such service) for the purpose of displaying the London interbank rates of major
banks for the Index Currency, or (b) if "LIBOR Telerate" is specified in the
applicable Floating Interest Rate Notice or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified in the applicable Floating Interest Rate Notice as the
method for calculating LIBOR, the display on the Dow Jones Markets Limited (or
any successor service) on the page specified in such Floating Interest Rate
Notice (or on any other page as may replace such page on such service) for the
purpose of displaying the London interbank rates of major banks for the Index
Currency.
Prime Rate. If an Interest Rate Basis for any Note is specified in the
applicable Floating Interest Rate Notice as the "Prime Rate," the Prime Rate
means, with respect to any Interest Determination Date relating to a Note for
which the interest rate is determined with reference to the Prime Rate (a "Prime
Rate Interest Determination Date"), the rate on such date as such rate is
published in H.15(519) under the heading "Bank Prime Loan." If such rate is not
published prior to 3:00 p.m., New York City time, on the related Calculation
Date, then the Prime Rate shall be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen U.S. PRIME 1
Page (as defined below) as such bank's prime rate or base lending rate as in
effect for such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen U.S. PRIME 1 Page for such Prime Rate
Interest Determination Date, the Prime Rate shall be the arithmetic mean of the
prime rates quoted on the basis of the
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actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by four major
money center banks (which may include The Bank of New York) in The City of New
York selected by the Calculation Agent, after consultation with the Company. If
fewer than four such quotations are so provided, the Prime Rate shall be the
arithmetic mean of four prime rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date as furnished in The City of New York by
the major money center banks, if any, that have provided such quotations and by
as many substitute banks or trust companies (which may include The Bank of New
York) as necessary in order to obtain four such prime rate quotations, provided
such substitute banks or trust companies are organized and doing business under
the laws of the United States, or any State thereof, have total equity capital
of at least U.S.$500 million and are each subject to supervision or examination
by Federal or State authority, selected by the Calculation Agent, after
consultation with the Company, to provide such rate or rates; provided, however,
that if the banks or trust companies so selected by the Calculation Agent are
not quoting as mentioned in this sentence, the Prime Rate determined as of such
Prime Rate Interest Determination Date will be the Prime Rate in effect on such
Prime Rate Interest Determination Date.
"Reuters Screen U.S. PRIME 1 Page" means the display designated as page
"U.S. PRIME 1" on the Reuter Monitor Money Rates Service (or any successor
service) on the U.S. PRIME 1 Page (or such other page as may replace the U.S.
PRIME 1 page on that service) for the purpose of displaying prime rates or base
lending rates of major United States banks).
Treasury Rate. If an Interest Rate Basis for any Note is specified in
the applicable Floating Interest Rate Notice as the "Treasury Rate," the
Treasury Rate means, with respect to any Interest Determination Date relating to
a Note for which the interest rate is determined with reference to the Treasury
Rate (a "Treasury Rate Interest Determination Date"), as the rate from the
auction held on such Treasury Rate Interest Determination Date (the "Auction")
of direct obligations of the United States ("Treasury Bills") having the Index
Maturity specified in the applicable Floating Interest Rate Notice, as such rate
is published in H.15(519) under the heading "Treasury bills-auction average
(investment)" or, if not published by 3:00 p.m., New York City time, on the
related Calculation Date, the auction average rate of such Treasury Bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of Treasury. In the event that the results of the Auction of
Treasury Bills having the Index Maturity specified in the applicable Floating
Interest Rate Notice are not reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent, and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers (which may include the Remarketing
Agent or its affiliates) selected by the Calculation Agent, after consultation
with the Company, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified in the applicable Floating Interest Rate
Notice; provided, however, that if the dealers so selected by the
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Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate determined as of such Treasury Rate Interest Determination Date
will be the Treasury Rate in effect on such Treasury Rate Interest Determination
Date.
Interest Rate Modes.
Commercial Paper Term Mode. The Interest Rate Period for any
Note in the Commercial Paper Term Mode shall be a period of not less than one
nor more than 364 consecutive calendar days, as determined by the Company (as
described below in Section 205) or, if not so determined, by the Remarketing
Agent for (a "Commercial Paper Term Period") such Note (in its best judgment in
order to obtain the lowest interest cost for such Note). Each Commercial Paper
Term Period will commence on the Interest Rate Adjustment Date therefor and end
on the day preceding the date specified by such Remarketing Agent as the first
day of the next Interest Rate Period for such Note. A "Weekly Rate Period" is a
Commercial Paper Term Period and will be a period of seven days commencing on
any Interest Rate Adjustment Date and ending on the day preceding the first day
of the next Interest Rate Period for such Note. The interest rate for any
Commercial Paper Term Period relating to a Note will be determined not later
than 11:50 a.m., New York City time, on the Interest Rate Adjustment Date for
such Note (subject to Section 207), which is the first day of each Interest Rate
Period for such Note.
Long Term Rate Mode. The Interest Rate Period for any Note in
the Long Term Rate Mode will be established by the Company (as described in
Section 205 below) as a period of more than 364 days and not exceeding the
remaining term to the Stated Maturity of such Note; provided, however, that such
Interest Rate Period must end on the day prior to an Interest Payment Date for
such Note; and provided further that, if so provided in a Note in the Long Term
Rate Mode and specified at the time of remarketing into a Long Term Rate Period,
the Company may shorten the Interest Rate Period and provide for payment of a
premium, if any, in respect thereof for any such Note upon written notice to the
Remarketing Agent and the Trustee not less than thirty (30) days prior to the
date upon which such shortened Interest Rate Period shall expire. Promptly upon
receipt of such notice and, in any case, not later than the close of business on
such date, the Trustee will transmit such information to DTC in accordance with
DTC's procedures as in effect from time to time. In such case, the next Interest
Rate Adjustment Date otherwise set forth in such Note shall instead be the
Business Day immediately following the expiration of such Interest Rate Period.
The interest rate, or Spread (if any) and Spread Multiplier (if any) for any
Note in the Long Term Rate Mode will be determined not later than 11:50 a.m.,
New York City time, on the Interest Rate Adjustment Date for such Notes (subject
to Section 207), which is the first day of the Interest Rate Period for such
Note.
If any Note is subject to early remarketing as provided above, the
Interest Rate Period may be shortened by the Company to end on any date on or
after the Initial Early Remarketing Date, if any, specified in the Note, upon
prior written notice as provided above. On or after the Initial Early
Remarketing Date, if any, on the Interest Rate Adjustment Date relating to such
shortened Interest Rate Period for such Note, the Company will pay a premium to
the tendering Beneficial Owner of the Note, together with accrued interest, if
any, thereon at the applicable rate payable to such Interest Rate Adjustment
Date. Unless otherwise specified in the Note, the
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premium shall be an amount equal to the Initial Early Remarketing
Premium specified therein (as adjusted by the Annual Early Remarketing Premium
Percentage Reduction specified therein, if applicable), multiplied by the
principal amount of the Note subject to early remarketing. The Initial Early
Remarketing Premium, if any, shall decline at each anniversary of the Initial
Early Remarketing Date by an amount equal to the applicable Annual Early
Remarketing Premium Percentage Reduction, if any, specified in the Note until
the premium is equal to 0.
SPURS Mode. So long as any Notes are in the SPURS Mode, the provisions
set forth in Article Two applicable to the remarketing of Notes generally shall
apply to such Notes only to the extent expressly provided in Article Three.
The Interest Rate Period for any Note in the SPURS Mode will be
established by the Company (as described in Section 205 below) as a period of
more than 364 days and not exceeding the remaining term to the Stated Maturity
of such Note; provided, however, that such Interest Rate Period must end on the
day prior to an Interest Payment Date for such Note. The SPURS Rate Period shall
consist of the period from and including the Interest Rate Adjustment Date
commencing such Interest Rate Period to and excluding the SPURS Remarketing Date
and the period from and including the SPURS Remarketing Date to, but excluding,
the next succeeding Interest Rate Adjustment Date, as described in Article Three
and subject to the conditions therein and otherwise herein described. The
interest rate and, in the case of a floating interest rate, the Spread, if any,
and the Spread Multiplier, if any, to the SPURS Remarketing Date for any Note in
the SPURS Mode will be determined not later than 11:50 a.m., New York City time,
on the Interest Rate Adjustment Date for such Note, which for the SPURS Mode is
the first day of the Interest Rate Period for such Note.
Section 205. Conversion. The Company may change the Interest
Rate Mode at its option in the manner described below.
(a) Conversion Between Commercial Paper Term Periods. Each
Note in Commercial Paper Term Period may be remarketed into the same Interest
Rate Period or converted at the option of the Company to a different Commercial
Paper Term Period on any Interest Rate Adjustment Date for such Note upon
receipt by the applicable Remarketing Agent and the Trustee of a Conversion
Notice prior to 9:30 a.m., New York City time, or the remarketing of such Note,
whichever later occurs, on such Interest Rate Adjustment Date.
(b) Conversion from the Commercial Paper Term Mode to the Long
Term Rate Mode or the SPURS Mode. Each Note in the Commercial Paper Term may be
converted at the option of the Company to the Long Term Rate Mode or the SPURS
Mode on any Interest Rate Adjustment Date upon receipt not less than ten days
prior to such Interest Rate Adjustment Date by the applicable Remarketing Agent
and the Trustee of a Conversion Notice from the Company.
(c) Conversion Between Long Term Rate Periods or from the Long
Term Rate Mode or the SPURS Mode to the Commercial Paper Term Mode or the SPURS
Mode. Each Note in a Long Term Rate Period may be remarketed into the same
Interest Rate Period or converted at the option of the Company to a different
Long Term Rate Period or from the Long
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Term Rate Mode to the Commercial Paper Term Mode or the SPURS Mode, or from the
SPURS Mode to a different SPURS Mode or to the Long Term Rate Mode or the
Commercial Paper Term Mode, on any Interest Rate Adjustment Date for such Note
upon receipt by the Trustee and the Remarketing Agent of a Conversion Notice
from the Company not less than ten days prior to such Interest Rate Adjustment
Date.
(d) Conversion Notice. Each Conversion Notice must state each
Note to which it relates and the new Interest Rate Mode (if applicable), the new
Interest Rate Period, the Conversion Date and, with respect to any Long Term
Rate Period, any optional redemption or repayment terms for each such Note. If
the Company revokes a Conversion Notice or the Trustee and the Remarketing Agent
fail to receive a Conversion Notice from the Company by the specified date in
advance of the Interest Rate Adjustment Date for a Note, the Note shall be
converted automatically to a Weekly Rate Period.
(e) Revocation or Change of Conversion Notice or Floating
Interest Rate Notice. The Company may, upon written notice received by the
Trustee, the applicable Remarketing Agent, revoke any Conversion Notice or
Floating Interest Rate Notice or change the Interest Rate Mode to which such
Conversion Notice relates or change any Floating Interest Rate Notice up to 9:30
a.m., New York City time, on the Conversion Date, subject to the provisions of
subsection (f) below.
(f) Limitation on Conversion, Change of Conversion Notice or
Floating Interest Rate Notice and Revocation. Notwithstanding the foregoing
subsections (a), (b), (c), (d) and (e) the Company may not, without the consent
of the applicable Remarketing Agent, convert any Note or revoke or change any
Conversion Notice or Floating Interest Rate Notice at or after the time at which
such Remarketing Agent has determined the interest rate, or Spread (if any) and
Spread Multiplier (if any), for any Note being remarketed (i.e., the time at
which such Note has been successfully remarketed, subject to settlement on the
related Interest Rate Adjustment Date). The Remarketing Agent will advise the
Company of indicative rates from time to time, or at any time upon the request
of the Company, prior to making such determination of the interest rate, Spread
or Spread Multiplier, as the case may be.
Section 206. Mandatory Tender of Notes. Each Note will be
automatically tendered for purchase, or deemed tendered for purchase, on each
Interest Rate Adjustment Date relating thereto. Notes will be purchased on the
Interest Rate Adjustment Date relating thereto as described in Section 207.
hereof.
Section 207. Remarketing. The interest rate on each Note will
be established from time to time by each Remarketing Agent responsible for the
remarketing thereof in accordance with the following procedures:
(a) Interest Rate Adjustment Date; Determination of Interest
Rate. By 11:00 a.m., New York City time, on the Interest Rate Adjustment Date
for any Note, the applicable Remarketing Agent will determine the interest rate
for such Note being remarketed to the nearest one hundred-thousandth (0.00001)
of one percent per annum for the next Interest Rate Period in
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the case of a fixed interest rate, and the Spread (if any) and Spread Multiplier
(if any) in the case of a floating interest rate; provided, that between 11:00
a.m., New York City time, and 11:50 a.m., New York City time, the Remarketing
Agent and the Standby Remarketing Agent(s), if any, shall use their reasonable
efforts to determine the interest rate for any Notes not successfully remarketed
as of the applicable deadline specified in this paragraph. In determining the
applicable interest rate for such Note and other terms, such Remarketing Agent
will, after taking into account market conditions as reflected in the prevailing
yields on fixed and variable rate taxable debt securities, (i) consider the
principal amount of all Notes tendered or to be tendered on such date and the
principal amount of such Notes prospective purchasers are or may be willing to
purchase and (ii) contact, by telephone or otherwise, prospective purchasers and
ascertain the interest rates therefor at which they would be willing to hold or
purchase such Notes.
(b) Notification of Results; Settlement. By 12:30 p.m., New
York City time, on the Interest Rate Adjustment Date for any Notes, the
applicable Remarketing Agent will notify the Company and the Trustee in writing
(which may include facsimile or other electronic transmission), of (i) the
interest rate or, in the case of a floating interest rate, the initial interest
rate, the Spread and Spread Multiplier and the Initial Interest Reset Date,
applicable to such Notes for the next Interest Rate Period, (ii) the Interest
Rate Adjustment Date, (iii) the Interest Payment Dates, for any Notes in the
Commercial Paper Term Mode (if other than the Interest Rate Adjustment Date),
the Long Term Rate Mode or the SPURS Mode, (iv) the optional redemption terms,
if any, and early remarketing terms, if any, in the case of a remarketing into a
Long Term Rate Period, (v) the aggregate principal amount of tendered Notes and
(vi) the aggregate principal amount of such tendered Notes which such
Remarketing Agent was able to remarket, at a price equal to 100% of the
principal amount thereof plus accrued interest, if any. Immediately after
receiving such notice, and in any case, not later than 1:30 p.m. New York City
time, the Trustee will transmit such information and any other settlement
information required by DTC to DTC in accordance with DTC's procedures as in
effect from time to time.
By telephone at approximately 1:00 p.m., New York City time,
on such Interest Rate Adjustment Date, the applicable Remarketing Agent will
advise each purchaser of such Notes (or the DTC participant of each such
purchaser who it is expected in turn will advise such purchaser) of the
principal amount of such Notes that such purchaser is to purchase.
Each purchaser of Notes in a remarketing will be required to
give instructions to its DTC participant to pay the purchase price therefor in
same day funds to the applicable Remarketing Agent against delivery of the
principal amount of such Notes by book-entry through DTC by 3:00 p.m., New York
City time, on the Interest Rate Adjustment Date.
All tendered Notes will be automatically delivered to the
account of the Trustee (or such other account meeting the requirements of DTC's
procedures as in effect from time to time), by book-entry through DTC against
payment of the purchase price or redemption price therefor, on the Interest Rate
Adjustment Date relating thereto.
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The applicable Remarketing Agent will make, or cause the
Trustee to make, payment to the DTC participant of each tendering Beneficial
Owner of Notes subject to a remarketing, by book-entry through DTC by the close
of business on the Interest Rate Adjustment Date against delivery through DTC of
such Beneficial Owner's tendered Notes, of the purchase price for tendered Notes
that have been sold in the remarketing. If any such Notes were purchased
pursuant to a Special Mandatory Purchase, subject to receipt of funds from the
Company or the Liquidity Provider, if any, as the case may be, the Trustee will
make such payment of the purchase price of such Notes plus accrued interest, if
any, to such date.
The transactions described above for a remarketing of any
Notes will be executed on the Interest Rate Adjustment Date for such Notes
through DTC in accordance with the procedures of DTC, and the accounts of the
respective DTC participants will be debited and credited and such Notes
delivered by book-entry as necessary to effect the purchases and sales thereof,
in each case as determined in the related remarketing.
Except as otherwise set forth in Section 208 hereof, any Notes
tendered in a remarketing will be purchased solely out of the proceeds received
from purchasers of such Notes in such remarketing, and none of the Trustee, the
applicable Remarketing Agent, any Standby Remarketing Agent or the Company will
be obligated to provide funds to make payment upon any Beneficial Owner's tender
in a remarketing.
Although tendered Notes will be subject to purchase by a
Remarketing Agent in a remarketing, such Remarketing Agent and any Standby
Remarketing Agent will not be obligated to purchase any such Notes.
The settlement and remarketing procedures described above,
including provisions for payment by purchasers of tendered Notes or for payment
to selling Beneficial Owners of tendered Notes, may be modified to the extent
required by DTC. In addition, each Remarketing Agent may, without the consent of
the Holders of the Notes, modify the settlement and remarketing procedures set
forth above in order to facilitate the settlement and remarketing process.
As long as DTC's nominee holds the certificates representing
the Notes in the book-entry system of DTC, no certificates for such Notes will
be delivered by any selling Beneficial Owner to reflect any transfer of Notes
effected in any remarketing.
The Trustee shall confirm to DTC the interest rate for the
following Interest Rate Period in accordance with DTC's procedures as in effect
from time to time.
The interest rate announced by the applicable Remarketing
Agent, absent manifest error, shall be binding and conclusive upon the
Beneficial Owners, the Company and the Trustee.
(c) Failed Remarketing. Notes not successfully remarketed will
be subject to Special Mandatory Purchase by the Company (a "Special Mandatory
Purchase"). The obligation of the Company to effect a Special Mandatory Purchase
of the Notes (the "Special Mandatory
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Purchase Right") can be satisfied either directly by the Company or through a
Liquidity Provider. By 12:00 o'clock noon, New York City time, on any Interest
Rate Adjustment Date, the applicable Remarketing Agent will notify the Liquidity
Provider, if any, the Trustee and the Company by telephone or facsimile,
confirmed in writing, of the principal amount of Notes that such Remarketing
Agent and the applicable Standby Remarketing Agent, if any, were unable to
remarket on such date. In the event that the Company has entered into a Standby
Note Purchase Agreement which is in effect on such date, such notice will
constitute a demand for the benefit of the Company to the Liquidity Provider to
purchase such unremarketed Notes at a price equal to the outstanding principal
amount thereof pursuant to the terms of such Standby Note Purchase Agreement. If
a Standby Note Purchase Agreement is not in effect on such date, or if the
Liquidity Provider fails to advance funds under the Standby Note Purchase
Agreement, the Company hereby agrees to purchase such unremarketed Notes. In
each case the Company will pay all accrued and unpaid interest, if any, on
unremarketed Notes to such Interest Rate Adjustment Date. Payment of the
principal amount of unremarketed Notes by the Company or the Liquidity Provider,
as the case may be, and payment of accrued and unpaid interest, if any, by the
Company, shall be made by deposit of same-day funds with the Trustee (or such
other account meeting the requirements of DTC's procedures as in effect from
time to time) irrevocably in trust for the benefit of the Beneficial Owners of
Notes subject to Special Mandatory Purchase by 3:00 p.m., New York City time, on
such Interest Rate Adjustment Date.
Section 208. Purchase and Redemption of Notes.
(a) Special Mandatory Purchase. If by 12:00 o'clock noon, New
York City time, on any Interest Rate Adjustment Date for any Notes, the
applicable Remarketing Agent and the applicable Standby Remarketing Agent(s)
have not remarketed all such Notes, the Notes that are unremarketed are subject
to Special Mandatory Purchase. Either the Company or, subject to the terms and
conditions of a Standby Note Purchase Agreement, if any, which may be in effect
on such date, the Liquidity Provider (if any), will deposit same-day funds in
the account of the Trustee (or such other account meeting the requirements of
DTC's procedures as in effect from time to time) irrevocably in trust for the
benefit of the Beneficial Owners of Notes subject to Special Mandatory Purchase
by 3:00 p.m., New York City time, on such Interest Rate Adjustment Date. Such
funds shall be in an amount sufficient to pay the aggregate purchase price of
such unremarketed Notes, equal to 100% of the principal amount thereof. In the
event a Standby Note Purchase Agreement is in effect but the Liquidity Provider
shall fail to advance funds for whatever reason thereunder, the Company hereby
agrees to purchase such unremarketed Notes on such Interest Rate Adjustment
Date. The Company hereby agrees to pay the accrued interest, if any, on such
Notes by depositing sufficient same-day funds therefor in the account of the
Trustee (or such other account meeting the requirements of DTC's procedures as
in effect from time to time) by 3:00 p.m., New York City time, on such Interest
Rate Adjustment Date.
Failure by the Company to purchase Notes pursuant to a Special
Mandatory Purchase in the manner provided in the Notes will constitute an Event
of Default under the Original Indenture in which event the date of such failure
shall constitute a date of Maturity for such Notes and the principal amount
thereof may be declared due and payable in the manner and with
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the effect provided for in the Original Indenture. Following such
failure to pay pursuant to a Special Mandatory Purchase, such Notes will bear
interest at the Special Interest Rate as provided for in Section 204 hereof.
If the Company enters into a Standby Note Purchase Agreement
with a Liquidity Provider, Notes purchased by the Liquidity Provider ("Purchased
Notes") shall bear interest at the rates and be payable on the dates as may be
agreed upon by the Company and the Liquidity Provider. Upon purchase of any Note
by the Liquidity Provider, all interest accruing thereon from the last date for
which interest was paid shall accrue for the benefit of and be payable to the
Liquidity Provider. Unless an event of default under the Standby Note Purchase
Agreement occurs, the applicable Remarketing Agent shall continue its
remarketing efforts with respect to Purchased Notes until the earlier to occur
of a successful remarketing of such Purchased Notes or the expiration of the
Standby Note Purchase Agreement. In the event the Liquidity Provider holds
Purchased Notes on the date the Standby Note Purchase Agreement expires, the
Company will be required to purchase such Notes on such date at a purchase price
equal to the principal amount thereof plus accrued interest thereon to the
purchase date. Such Notes will remain outstanding and enjoy the benefits of the
Original Indenture and this First Supplemental Indenture until such time as the
Company delivers the Notes to the Trustee for cancellation.
(b) Optional Redemption on any Interest Rate Adjustment Date.
Each Note is subject to redemption at the option of the Company in whole or in
part on any Interest Rate Adjustment Date, without notice to the Holders
thereof, at a redemption price equal to the aggregate principal amount of such
Notes to be redeemed plus accrued interest thereon to the redemption date.
(c) Redemption While Notes are in the Long Term Rate Mode. Any
Notes in the Long Term Rate Mode are subject to redemption at the option of the
Company at the times and upon the terms specified at the time of conversion to
or within such Long Term Rate Mode.
(d) Notice of Redemption. In the case of any Note being
redeemed on an Interest Rate Adjustment Date therefor, the Company shall give
the applicable Remarketing Agent and the Trustee written notice of such
redemption prior to the time the interest rate applicable to the next Interest
Rate Period for such Note is established by such Remarketing Agent. In any other
case, the Company shall give the Remarketing Agents and the Trustee written
notice of redemption of any Note at least two Business Days prior to the date
notice is required to be given to Holders. In addition, the Company shall give
each Remarketing Agent with respect to any Note being repaid at the option of
the Holder thereof and the Trustee notice as soon as practicable, and in any
event not later than twelve Business Days prior to the next succeeding Interest
Rate Adjustment Date therefor of each such Note which will be repaid by the
Company at the option of the Holder thereof on or prior to such Interest Rate
Adjustment Date. Each Remarketing Agent's obligation to remarket any Note shall
terminate immediately upon receipt by it from the Company of any notice of
redemption or repayment thereof.
(e) Allocation. Except in the case of a Special Mandatory
Purchase, if the Notes are to be redeemed in part, DTC, after receiving notice
of redemption specifying the
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aggregate principal amount of Notes to be so redeemed, will determine
by lot (or otherwise in accordance with the procedures of DTC) the principal
amount of such Notes to be redeemed from the account of each DTC participant.
After making its determination as described above, DTC will give notice of such
determination to each DTC participant from whose account such Notes are to be
redeemed. Each such DTC participant, upon receipt fo such notice, will in turn
determine the principal amount of Notes to be redeemed from the accounts of the
Beneficial Owners of such Notes for which it serves as DTC participant, and
give notice of such determination to the Remarketing Agent.
Section 209. Form and Other Terms of the Notes.
(a) Attached hereto as Exhibit A is the form of Note, which
form is hereby established as the form in which Notes may be issued bearing
interest at the Initial Interest Rate or in the Commercial Paper Term Mode, the
Long Term Rate Mode or the SPURS Mode. Annex A to Exhibit A is deemed to be a
part of such Note and such Annex may be changed upon the mutual agreement of the
Company and the Trustee to reflect changes occasioned by remarketings. The Notes
will initially bear legends indicating that they have not been registered under
the Securities Act of 1933, as amended, and restricting transfers thereof.
(b) Attached hereto as Exhibit B is a form of Liquidity
Provider Note, which form is hereby established as a form in which Notes held by
the Liquidity Provider may be issued. The form of Liquidity Provider Note may be
amended to reflect changes occasioned by remarketings upon the mutual agreement
of the Company and the Trustee, but only with the consent of the applicable
Administrative Agent.
(c) Subject to (a) and (b) above, any Note may be issued in
such other form as may be provided by, or not inconsistent with, the terms of
the Original Indenture and this First Supplemental Indenture.
ARTICLE THREE
THE SPURS MODE
Section 301. Applicability of Article. The provisions of this
Article Three shall apply to any Note in the SPURS Mode. To the extent that any
provision of this Article Three conflicts with any provision of Article Two, the
provisions set forth in this Article Three shall govern.
Section 302. Interest To Remarketing Date. Each Note in the
SPURS Mode shall bear interest at the annual interest rate established by the
SPURS Agent from, and including the Interest Rate Adjustment Date commencing the
Interest Rate Period for the SPURS Mode to, but excluding, the date (the "SPURS
Remarketing Date") designated at such time by the SPURS Agent after consultation
with the Company and set forth in Annex A to the applicable Note. Such interest
rate will be the minimum rate of interest and, in the case of a floating
interest rate, Spread (if any) and Spread Multiplier (if any) necessary in the
judgment of such SPURS Agent
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to produce a par bid in the secondary market for such Note on the date
the interest rate is established. The designated SPURS Remarketing Date shall
be an Interest Payment Date within such Interest Rate Period.
Section 303. Tender; Remarketing. The SPURS Agent's
obligations set forth herein shall be performed pursuant to the SPURS
Remarketing Agreement.
(a) Mandatory Tender. Provided that the SPURS Agent gives
notice to the Company and the Trustee on a Business Day not later than ten (10)
days prior to the SPURS Remarketing Date of its intention to purchase the Notes
for remarketing (the "Notification Date"), each Note shall be automatically
tendered, or deemed tendered, to the SPURS Agent for remarketing on the SPURS
Remarketing Date, except in the circumstances set forth in Section 304. The
purchase price for the tendered Notes to be paid by the SPURS Agent shall equal
100% of the principal amount thereof. When the Notes are tendered for
remarketing, the SPURS Agent may remarket the Notes for its own account at
varying prices to be determined by the SPURS Agent at the time of each sale.
From, and including, the SPURS Remarketing Date to, but excluding, the next
succeeding Interest Rate Adjustment Date, the Notes shall bear interest at the
SPURS Interest Rate. If the SPURS Agent elects to remarket the Notes, the
obligation of the SPURS Agent to purchase the Notes on the SPURS Remarketing
Date is subject to, among other things, the conditions specified in the
applicable SPURS Remarketing Agreement. If the SPURS Agent for any reason does
not purchase all tendered Notes on the SPURS Remarketing Date or if the SPURS
Agent gives notice of its intention to remarket the Notes but for any reason
does not purchase all tendered Notes on the SPURS Remarketing Date, then as of
such date the Notes will cease to be in the SPURS Mode, the SPURS Remarketing
Date will constitute an Interest Rate Adjustment Date, and the Notes may be
subject to remarketing on such date by a Remarketing Agent appointed by the
Company in the Commercial Paper Mode or the Long Term Rate Mode or a new SPURS
Mode established by the Company in accordance with the procedures set forth in
Section 205 hereof, provided that, in such case, the notice period required for
conversion shall be the lesser of ten (10) days and the period commencing the
date that the SPURS Agent notifies the Company that it will not purchase the
Notes for remarketing on the SPURS Remarketing Date or fails to so purchase, as
the case may be.
(b) Remarketing. The SPURS Interest Rate shall be established
by the SPURS Agent in accordance with the following procedures:
(i) The SPURS Interest Rate. Subject to the SPURS Agent's
election to remarket the Notes as provided in subsection (a) above, the SPURS
Interest Rate shall be determined by the SPURS Agent by 3:30 p.m., New York City
time, on the third Business Day preceding the SPURS Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and shall be equal to the Base Rate established by the SPURS
Agent, after consultation with the Company, at or prior to the commencement of
the SPURS Mode (the "Base Rate"), plus the Applicable Spread (as defined below),
which will be based on the Dollar Price (as defined below) of the Notes.
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The "Applicable Spread" will be the lowest bid indication,
expressed as a spread (in the form of a percentage or in basis points) above the
Base Rate, obtained by the SPURS Agent on the Determination Date from the bids
quoted by up to five Reference Corporate Dealers (as defined below) for the full
aggregate principal amount of the Notes at the Dollar Price, but assuming (i) an
issue date equal to the SPURS Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the next succeeding
Interest Adjustment Date of the Notes and (iii) a stated annual interest rate,
payable semiannually on each Interest Payment Date, equal to the Base Rate plus
the spread bid by the applicable Reference Corporate Dealer. If fewer than five
Reference Corporate Dealers bid as set forth in this subsection (b)(i) of
Section 303, then the Applicable Spread shall be the lowest of such bid
indications obtained as set forth in this subsection (b)(i) of Section 303. The
SPURS Interest Rate announced by the SPURS Agent, absent manifest error, shall
be binding and conclusive upon the Beneficial Owners and Holders of the Notes,
the Company and the Trustee.
"Dollar Price" shall mean, with respect to the Notes, the
present value determined by the SPURS Agent, as of the SPURS Remarketing Date,
of the Remaining Scheduled Payments (as defined below) discounted to the SPURS
Remarketing Date, on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months), at the Treasury Rate (as defined below).
"Reference Corporate Dealers" means such Reference Corporate
Dealers as shall be appointed by the SPURS Agent after consultation with the
Company.
"Treasury Rate" shall mean, with respect to the SPURS
Remarketing Date, the rate per annum equal to the semi-annual equivalent yield
to maturity or interpolated (on a day count basis) yield to maturity of the
Comparable Treasury Issues (as defined below), assuming a price for the
Comparable Treasury Issues (expressed as a percentage of its principal amount),
equal to the Comparable Treasury Price (as defined below) for such SPURS
Remarketing Date.
"Comparable Treasury Issues" shall mean the United States
Treasury security or securities selected by the SPURS Agent as having an actual
or interpolated maturity or maturities comparable or applicable to the remaining
term to the next succeeding Interest Adjustment Date of the Notes being
purchased.
"Comparable Treasury Price" means, with respect to the SPURS
Remarketing Date, (a) the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) on the
Determination Date, as set forth on "Telerate Page 500" (or such other page as
may replace Telerate Page 500) or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such Determination Date,
(i) the average of the Reference Treasury Dealer Quotations (as defined below)
for such SPURS Remarketing Date, after excluding the highest and lowest of such
Reference Treasury Dealer Quotations, or (ii) if the SPURS Agent obtains fewer
than four such Reference Treasury Dealer Quotations, the average of all such
Reference Treasury Dealer Quotations. "Telerate Page 500" means the display
designated as "Telerate Page 500" on Dow Jones Markets Limited (or such
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other page as may replace Telerate Page 500 on such service) or such other
service displaying the offer prices specified in (a) above as may replace Dow
Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and the SPURS Remarketing Date, the offer prices
for the Comparable Treasury Issues (expressed in each case as a percentage of
its principal amount) quoted in writing to the SPURS Agent by such Reference
Treasury Dealer by 3:30 p.m. New York City time, on the Determination Date.
"Reference Treasury Dealer" means such Reference Treasury
Dealers as shall be appointed by the SPURS Agent after consultation with the
Company.
"Remaining Scheduled Payments" shall mean, with respect to the
Notes, the remaining scheduled payments of the principal thereof and interest
thereon, calculated at the Base Rate only, that would be due after the SPURS
Remarketing Date to and including the next succeeding Interest Adjustment Date
as determined by the SPURS Agent.
(ii) Notification of Results; Settlement. Provided the SPURS
Agent has previously notified the Company and the Trustee on the Notification
Date of its intention to purchase all tendered Notes on the SPURS Remarketing
Date, the SPURS Agent shall notify the Company, the Trustee and DTC by
telephone, confirmed in writing, by 4:00 p.m., New York City time, on the
Determination Date, of the SPURS Interest Rate.
All of the tendered Notes shall be automatically delivered to
the account of the Trustee, by book-entry through DTC pending payment of the
purchase price therefor, on the SPURS Remarketing Date.
In the event that the SPURS Agent purchases the tendered Notes
on the SPURS Remarketing Date, the SPURS Agent shall make or cause the Trustee
to make payment to the DTC Participant of each tendering Beneficial Owner of
Notes, by book-entry through DTC by the close of business on the SPURS
Remarketing Date against delivery through DTC of such Beneficial Owner's
tendered Notes, of 100% of the principal amount of the tendered Notes that have
been purchased for remarketing by the SPURS Agent. If the SPURS Agent does not
purchase all of the Notes on the SPURS Remarketing Date, the Company may attempt
to convert the Notes to a new Interest Rate Mode; the interest will be
determined as provided above in Section 204 and settlement will be effected as
described above in Section 207(b) or Section 207(c), as the case may be. In any
case, the Company shall make or cause the Trustee to make payment of interest to
each Beneficial Owner of Notes due on the SPURS Remarketing Date by book-entry
through DTC by the close of business on the SPURS Remarketing Date.
The transactions set forth in this Section 303 shall be
executed on the SPURS Remarketing Date through DTC in accordance with the
procedures of DTC, and the accounts of the respective DTC participants will be
debited and credited and the Notes delivered by book-entry as necessary to
effect the purchases and sales thereof.
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Transactions involving the sale and purchase of Notes
remarketed by the SPURS Agent on and after the SPURS Remarketing Date will
settle in immediately available funds through DTC's Same-Day Funds Settlement
System.
The tender and settlement procedures set forth above,
including provisions for payment by purchasers of Notes in the remarketing or
for payment to selling Beneficial Owners of tendered Notes, may be modified to
the extent required by DTC or to the extent required to facilitate the tender
and remarketing of Notes in certificated form, if the book-entry system is no
longer available for the Notes at the time of the remarketing. In addition, the
SPURS Agent may, without the consent of the Holders of the Notes, modify the
settlement procedures set forth above in order to facilitate the tender and
settlement process.
As long as DTC's nominee holds the certificates representing
any Notes in the book-entry system of DTC, no certificates for such Notes will
be delivered by any selling Beneficial Owner to reflect any transfer of such
Notes effected in the remarketing.
Section 304. Conversion or Redemption Following Election by
the SPURS Agent to Remarket.
(a) If the SPURS Agent elects to remarket the Notes on the
SPURS Remarketing Date, the Notes will be subject to mandatory tender to the
SPURS Agent for remarketing on such date, in each case subject to the conditions
set forth in Section 303 hereof and to the Company's right to either convert the
Notes to a new Interest Rate Mode on the SPURS Remarketing Date or to redeem the
Notes from the SPURS Agent, in each case as described in the next sentence. The
Company will notify the SPURS Agent and the Trustee, not later than the Business
Day immediately preceding the Determination Date, if the Company irrevocably
elects to exercise its right to either convert the Notes to a new Interest Rate
Mode, or to redeem the Notes, in whole but not in part, from the SPURS Agent at
the Optional Redemption Price, in each case on the SPURS Remarketing Date.
(b) In the event that the Company irrevocably elects to
convert the Notes to a new Interest Rate Mode, then as of the SPURS Remarketing
Date the Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date
will constitute an Interest Rate Adjustment Date, and the Notes will be subject
to remarketing on such date by a Remarketing Agent appointed by the Company in
the Commercial Paper Term Mode or the Long Term Rate Mode or a new SPURS Mode
established by the Company in accordance with the set forth in Section 205
above; provided that in such case, the notice period required for conversion
shall be the period commencing the Business Day immediately preceding the
Determination Date. In such case, the Company shall pay to the SPURS Agent the
excess of the Dollar Price of the Notes over 100% of the principal amount of the
Notes in same-day funds by wire transfer to an account designated by the SPURS
Agent on the SPURS Remarketing Date.
(c) In the event that the Company irrevocably elects to redeem
the Notes, the "Optional Redemption Price" shall be the greater of (i) 100% of
the principal amount of the Notes and (ii) the Dollar Price, plus in either case
accrued and unpaid interest from the SPURS
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Remarketing Date on the principal amount being redeemed to the date of
redemption. If the Company elects to redeem the Notes, it shall pay the
redemption price therefor in same-day funds by wire transfer to an account
designated by the SPURS Agent on the SPURS Remarketing Date.
(d) If notice has been given as provided in the Original
Indenture and funds for the redemption of any Notes called for redemption shall
have been made available on the redemption date referred to in such notice, such
Notes shall cease to bear interest on the date fixed for such redemption
specified in such notice and the only right of the SPURS Agent from and after
the redemption date shall be to receive payment of the Optional Redemption Price
upon surrender of such Notes in accordance with such notice.
ARTICLE FOUR
ADDITIONAL EVENT OF DEFAULT
With respect to the Notes, the following will be an additional
Event of Default to follow subsection (11) under Section 501 of the Indenture:
(12) default in the performance of the Company's
obligation to purchase Notes held by the Liquidity Provider
under the terms of the Standby Note Purchase Agreement, if
any, and continuance of such default for a period of 60 days
after there has been given, by registered or certified mail,
to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice
specifying such default and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder.
ARTICLE FIVE
ADDITIONAL COVENANT
With respect to the Notes, the following covenant shall
replace, and hereby supersedes, the provisions of Section 801 of the Original
Indenture in their entirety:
"SECTION 801. Company May Consolidate, Etc., Only on Certain Terms
The Company will not merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or permit any of its Subsidiaries to
do so, except that any Subsidiary of the Company may merger or consolidate with
or into any other Subsidiary of the Company, and except that any Subsidiary of
the Company may merge into or dispose of assets to the Company, provided, in
each case, that no
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Event of Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom."
ARTICLE SIX
AUTHENTICATION AND DELIVERY OF THE NOTES
Section 601. Authentication and Delivery. As provided in and
pursuant to Section 303. of the Original Indenture, each time that the Company
delivers Notes to the Trustee or Authenticating Agent for authentication, the
Company shall deliver a Supplemental Company Order in the form of Exhibit C to
this First Supplemental Indenture for the authentication and delivery of such
Notes and the Trustee or such Authenticating Agent shall authenticate and
deliver such Notes.
ARTICLE SEVEN
THE SUPPORT AGREEMENT
Section 701. The Support Agreement. The Notes shall be
entitled to the benefit of that certain support agreement (the "Support
Agreement"), dated as of June 16, 1998, by and between the Company and DTE
Energy. The form of Support Agreement is attached as Exhibit D hereto. The
Company has assigned and pledged its rights under the Support Agreement to the
Lenders (as defined therein), pursuant to the terms and conditions of that
certain collateral assignment agreement (the "Collateral Assignment Agreement"),
dated as of June 16, 1998, by and between the Company and the Lenders. The form
of Collateral Assignment Agreement is attached as Exhibit E hereto. The
foregoing are subject to amendment or termination in accordance with the terms
of the Support Agreement or, as the case may be, the Collateral Assignment
Agreement.
ARTICLE EIGHT
INSURANCE PROVISIONS
Section 801. Applicability of Article. During the Initial
Interest Rate Period, the Notes shall be entitled to the benefit of a Policy
issued by the Insurer. The form of Policy with respect to the Initial Interest
Rate Period is attached as Exhibit F hereto. The provisions of this Article
Eight shall be applicable to the Notes for the Initial Interest Rate Period and
any subsequent Interest Rate Period so long as a Policy is in effect with
respect to the Notes and the Insurer is not in default of its obligation to make
payments thereunder.
Section 802. Rights of Insurer Controlling. Anything herein or
under the Original Indenture to the contrary notwithstanding, if a Policy is in
effect with respect to the Notes and the Insurer is not in default of its
obligation to make payments thereunder, the Insurer shall be deemed to be the
Holder of all Notes then Outstanding for all purposes under the
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Indenture and shall have the exclusive right to exercise or direct the
exercise of remedies on behalf of the Holders of the Notes in accordance with
the terms of the Indenture following an Event of Default, and the principal of
all such Notes Outstanding may not be declared to be due and payable
immediately without the prior written consent of the Insurer.
Section 803. Payments Under the Policy in Respect of the
Initial Interest Rate Period. (a) If, as of the opening of business on any
Interest Payment Date in the Initial Interest Rate Period, through and including
the Initial Interest Rate Adjustment Date, the Trustee has not received payments
from the Company pursuant to this First Supplemental Indenture (and after making
demand from DTE Energy pursuant to the Support Agreement) in such amounts so
that sufficient moneys are available under this First Supplemental Indenture to
pay all interest due on the Notes on such Interest Payment Date, the Trustee
shall promptly notify the Insurer or its designee by telephone, confirmed in
writing by registered or certified mail, of the amount of the deficiency.
(b) If, as of 3:00 p.m. New York City time, on the Initial
Interest Rate Adjustment Date in the event of a Special Mandatory Purchase, the
Trustee has not received payments from the Company pursuant to this First
Supplemental Indenture (and after making demand from DTE Energy pursuant to the
Support Agreement) in such amounts so that sufficient moneys are available under
this First Supplemental Indenture to pay 100% of the aggregate principal amount
of the Notes subject to Special Mandatory Purchase on the Initial Interest Rate
Adjustment Date, the Trustee shall promptly notify the Insurer or its designee
by telephone, confirmed in writing by registered or certified mail, of the
amount of the deficiency.
(c) If the deficiency in clause (a) or (b) is made up in whole
or in part on the applicable payment or purchase date, the Trustee shall so
notify the Insurer or its designee.
(d) In addition, if the Trustee has notice that any of the
Holders have been required to disgorge payments on Notes as described in clauses
(a) or (b) to the Company or to a trustee in bankruptcy for creditors or others
pursuant to a final judgment by a court of competent jurisdiction that such
payment constitutes a voidable preference to such Holders within the meaning of
any applicable bankruptcy laws, then the Trustee shall notify the Insurer or its
designee of such fact by telephone, confirmed in writing by registered or
certified mail.
(e) The Trustee is hereby irrevocably designated, appointed,
directed and authorized to act as attorney-in-fact for Holders of the Notes as
follows:
If and to the extent there is a deficiency in amounts required
to pay interest on the Notes, the Trustee shall (A) execute and deliver to State
Street Bank and Trust Company, N.A., or its successors under the Policy (the
"Insurance Paying Agent"), in form provided by the Insurance Paying Agent, an
instrument appointing the Insurer as agent for such Holders in any legal
proceeding related to the payment of such interest and an assignment to the
Insurer of the claims for interest to which such deficiency relates and which
are paid by the Insurer, (B) receive as designee of the respective Holders in
accordance with the tenor of the Policy payment from
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the Insurance Paying Agent with respect to the claims for interest so
assigned and (C) disburse the same at the written direction of the Insurance
Paying Agent to such respective Holders;
(f) Irrespective of whether any such assignment is executed
and delivered, the Company and the Trustee hereby agree for the benefit of the
Insurer that:
(i) they recognize that to the extent the Insurer makes
payments, directly or indirectly (as by paying through the
Trustee), on account of interest on the Notes, the Insurer
will be subrogated to the rights of such Holders to receive
the amount of such interest from the Company, with interest
thereon as provided and solely from the sources stated in this
First Supplemental Indenture and the Notes; and
(ii) they will accordingly pay to the Insurer the amount
of such interest (including interest recovered under
subparagraph (ii) of the first paragraph of the Policy, which
interest shall be deemed past due and not to have been paid),
with interest thereon as provided in this Indenture and the
Note, but only from the sources and in the manner provided
herein for the payment of interest on the Notes to Holders and
will otherwise treat the Insurer as the owner of such rights
to the amount of such interest.
(g) On the date of purchase, the Company shall execute and the
Trustee shall authenticate and make available for delivery to the Insurer or the
Insurer's designee all Notes purchased with the proceeds under the Policy which
Notes shall be registered and made available in the name of or as directed in
writing by the Insurer.
(h) Payments with respect to claims for interest on and
principal of Notes disbursed by the Trustee from proceeds of the Policy shall
not be considered to discharge the obligation of the Company with respect to
such Notes, and the Insurer shall become the owner of such unpaid Notes and
claims for interest in accordance with the tenor of the assignment made to it
under the provisions of this section.
Section 804. Payments Under a Policy in Respect of Subsequent
Interest Rate Periods. Except as otherwise provided in an amendment or
supplement to this First Supplemental Indenture on or prior to commencement of a
subsequent Interest Rate Period, so long as a Policy is in effect with respect
to the Notes and the Insurer is not in default of its obligations to make
payments thereunder, the provisions of Section 803 shall apply to each such
Interest rate Period, except that provisions in this Article Eight applicable to
the "Initial Interest Rate Period" shall apply to such Interest Rate Period, and
provisions in this Article Eight applicable to the "Initial Interest Rate
Adjustment Date" shall apply to the Interest Rate Adjustment Date immediately
succeeding such Interest Rate Period.
Section 805. Amendments. Copies of any amendments made to the
documents executed in connection with the issuance of the Notes which are
consented to by the Insurer shall be sent at the expense of the Company to the
rating agencies then rating the Notes.
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<PAGE> 34
Section 806. Notice of Defaults. Notwithstanding Section 601
of the Original Indenture, the Insurer is to receive from the Trustee prompt
notice of all defaults of which the Trustee has actual knowledge.
Section 807. Company Acting as Paying Agent. Notwithstanding
anything to the contrary in the Indenture, so long as a Policy is in effect or
the Insurer is the Holder of Notes, the Company shall not act as its own Paying
Agent.
Section 808. Redemption of Insurer Notes. Notwithstanding
Section 1103 of the Original Indenture, all Notes of which the Insurer is the
Holder shall be redeemed prior to any other Notes.
Section 809. Change in Trustee. The Insurer shall receive
notice of the resignation or removal of the Trustee and the appointment of a
successor thereto.
Section 810. Effect of Amendments. In determining whether any
amendments or supplement to the Indenture may be made without the consent of the
Holders or in determining whether any action should be taken the effect of such
action on the rights of the Holders shall be considered as if the Policy were
not in effect.
Section 811. Copies of Financial Statements. The Insurer shall
receive a copy of all financial statements and reports to be delivered to the
Trustee pursuant to Section 704 of the Original Indenture at the time such
financial statements and reports are delivered to the Trustee. The address of
the initial Insurer is MBIA Insurance Corporation, 113 King Street, Armonk, New
York 10504, Attention: Insured Portfolio Management--PF.
Section 812. Defeasance. Notwithstanding Section 403 of the
Original Indenture, for so long as the Policy in effect and the Insurer is not
in default of its obligation to make payments thereunder, the Company shall not
exercise its rights to satisfy and discharge the entire indebtedness on the
Notes without the consent of the Insurer, which consent shall not be
unreasonably withheld.
Section 813. Notices to Holders. Any notice, certificate or
report that is required to be given to a Holder of the Notes or to the Trustee
pursuant to the Indenture shall also be provided by the Company to the Insurer.
All notices, certificates or reports required to be given to the Insurer shall
be in writing and shall be sent by registered or certified mail to such address
as shall be designated in writing by the Insurer from time to time.
Section 814. Third Party Beneficiary. Notwithstanding Section
112 of the Original Indenture, so long as the Policy in effect and the Insurer
is not in default of its obligation to make payments thereunder, the Insurer is
an express third-party beneficiary of the Indenture.
ARTICLE NINE
AMENDMENTS
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<PAGE> 35
Section 901. Notwithstanding anything herein or in the
Original Indenture to the contrary, this First Supplemental Indenture and the
Original Indenture (in the case of the Original Indenture, with respect to any
amendment of or affecting the Notes or the Insurer) may be amended at any time
in accordance with the provisions of Article Nine of the Original Indenture, but
subject to the consent of the Insurer (which consent shall not be unreasonably
withheld) so long as the Policy is in effect and the Insurer is not in default
of its obligation to make payments under the Policy.
ARTICLE TEN
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect
of, and shall not be responsible in any manner whatsoever for and in respect of,
the validity or sufficiency of this First Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Except as expressly amended hereby, the Original Indenture
shall continue in full force and effect in accordance with the provisions
thereof and the Original Indenture is in all respects hereby ratified and
confirmed. This First Supplemental Indenture and all its provisions shall be
deemed a part of the Original Indenture in the manner and to the extent herein
and therein provided.
This First Supplemental Indenture shall be governed by, and
construed in accordance with, the laws of the State of New York.
This First Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
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<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
DTE CAPITAL CORPORATION
Name:
Title:
ATTEST:
By:
______________
THE BANK OF NEW YORK,
as Trustee
Name:
Title:
ATTEST:
By:
______________
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<PAGE> 37
STATE OF MICHIGAN )
) :
COUNTY OF WAYNE )
On the __th day of June ____, 1998, before me personally came_____, to me known,
who, being by me duly sworn, did depose and say that he is Assistant Treasurer
of DTE CAPITAL CORPORATION, one of the corporations described in and which
executed the foregoing instrument and he signed his name thereto by like
authority.
Notary Public, State of
Michigan
[Notarial Seal]
STATE OF NEW YORK )
) :
COUNTY OF )
On the _____ day of June ____, 1998, before me personally came_____, to me
known, who, being by me duly sworn, did depose and say that she is
_____________ of THE BANK OF NEW YORK, one of the corporations described in and
which executed the foregoing instrument and she signed his name thereto by like
authority.
Notary Public, State of
New York
[Notarial Seal]
37
<PAGE> 38
EXHIBIT A
FORM OF NOTE
(Attached)
38
<PAGE> 39
THIS CERTIFICATE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE
COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) IN A TRANSACTION
OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UPON
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
39
<PAGE> 40
SATISFACTORY TO THE COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE
BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
THE HOLDER OF THIS NOTE (A) IS NOT ITSELF, AND IS NOT ACQUIRING THIS
NOTE WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I
OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY (A "PLAN ASSET ENTITY") OR (B) (1) IS ITSELF, OR IS ACQUIRING THIS
NOTE WITH THE ASSETS OF, AN "INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b)
OF PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE
MEANING OF PART V(a) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14)
WHICH HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR SUCH FUND TO PURCHASE
THIS NOTE, UNDER CIRCUMSTANCES SUCH AS PTCE 84-14 IS APPLICABLE TO THE PURCHASE
AND HOLDING OF THIS NOTE, (2) IS ITSELF, OR IS ACQUIRING THIS NOTE WITH THE
ASSETS OF, A PLAN MANAGED BY AN "IN-HOUSE ASSET MANAGER" (WITHIN THE MEANING OF
PART IV(a) OF PTCE 96-23) WHICH HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR
SUCH PLAN TO PURCHASE THIS NOTE, UNDER CIRCUMSTANCES SUCH THAT PTCE 96-23 IS
APPLICABLE TO THE PURCHASE AND HOLDING OF THIS NOTE, (3) IS AN INSURANCE COMPANY
POOLED SEPARATE ACCOUNT PURCHASING THIS NOTE PURSUANT TO PART I OF PTCE 90-1, OR
A BANK COLLECTIVE INVESTMENT FUND PURCHASING THIS NOTE PURSUANT TO SECTION I OF
PTCE 91-38, AND IN EITHER CASE, NO PLAN OWNS MORE THAN 10% OF THE ASSETS OF SUCH
ACCOUNT OR COLLECTIVE FUND (WHEN AGGREGATED WITH OTHER PLANS OF THE SAME
EMPLOYER (OR ITS AFFILIATES) OR EMPLOYEE ORGANIZATION) OR (4) IS AN INSURANCE
COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT TO PURCHASE THIS NOTE PURSUANT
TO PART I OF PTCE 95-60, IN WHICH CASE THE RESERVES AND LIABILITIES FOR THE
GENERAL ACCOUNT CONTRACTS HELD BY OR ON BEHALF OF ANY PLAN, TOGETHER WITH ANY
OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR ITS AFFILIATES) OR EMPLOYEE
ORGANIZATION, DO NOT EXCEED 10% OF THE TOTAL RESERVES AND LIABILITIES OF THE
INSURANCE COMPANY GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES),
PLUS SURPLUS AS SET FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONS
ANNUAL STATEMENT FILED WITH THE STATE OF DOMICILE OF THE INSURER.
40
<PAGE> 41
No:
DTE CAPITAL CORPORATION
REMARKETED NOTE, SERIES A DUE 2038
THIS NOTE SHALL NOT BE VALID FOR ANY PURPOSE UNLESS PRESENTED TOGETHER
WITH ANNEX A HERETO (INCLUDING ANY CONTINUATION THEREOF). REFERENCE IS MADE TO
ANNEX A FOR CERTAIN TERMS OF THIS NOTE.
DTE CAPITAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Michigan (the "Company"), for value received
hereby promises to pay to CEDE & CO., or registered assigns, the principal sum
specified in Annex A on June 15, 2038 (the "Stated Maturity"), upon the
presentation and surrender hereof at the principal corporate trust office of The
Bank of New York, or its successor in trust (the "Trustee") or such other office
as the Trustee has designated in writing, and to pay interest on the unpaid
principal balance hereof from, and including, the Original Issue Date specified
in Annex A to, but excluding, the Initial Interest Rate Adjustment Date
specified in Annex A (the "Initial Interest Rate Period") at the Initial
Interest Rate specified therein payable on the related Interest Payment Date or
Dates specified in Annex A, to the person in whose name this Note is registered
at the close of business on the related Record Date. From and after the Initial
Interest Rate Adjustment Date, this Note will bear interest in either the
Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode, in each
case as provided in this Note and set forth in Annex A, and interest will be
payable on the Interest Payment Dates to the person in whose name this Note is
registered at the close of business on the related Record Date as provided below
or as set forth in Annex A. In each case, payments shall be made in accordance
with the provisions hereof and Annex A, including any additional terms specified
in Annex A, until the principal hereof is paid or duly made available for
payment. References herein to "this Note", "hereof", "herein" and comparable
terms shall include Annex A.
So long as this Note bears interest in the Commercial Paper Term Mode,
interest will be payable on the Interest Rate Adjustment Date which commences
the next succeeding Interest Rate Period for this Note and on such other dates
(if any) as will be established by the Company and set forth in Annex A upon
conversion of this Note to the Commercial Paper Term Mode or upon remarketing of
this Note in a new Interest Rate Period in the Commercial Paper Term Mode. So
long as this Note bears interest in the Long Term Rate Mode or the SPURS Mode,
interest will be payable no less frequently than semiannually on such dates as
will be established by the Company and set forth in Annex A upon conversion of
this Note to the Long Term Rate Mode or the SPURS Mode (or upon remarketing of
this Note in a new Interest Rate Period in the Long Term Rate Mode or the SPURS
Mode, as the case may be) in the case of a fixed interest rate, or as set forth
below under "Interest Rate" in the case of a floating interest rate and on the
Interest Rate Adjustment Date commencing the next succeeding Interest Rate
Period. Such interest will be payable to the Holder hereof as of the related
Record Date, which, so long as this
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<PAGE> 42
Note bears interest (i) in the Initial Interest Rate Period, are the
dates specified in Annex A; (ii) in the Commercial Paper Term Mode, is the
Business Day prior to the related Interest Payment Date; and (iii) in the Long
Term Rate Mode or the SPURS Mode, is 15 days prior to the related Interest
Payment Date. Except as provided below under "Interest Rate-Floating Interest
Rates," if any Interest Payment Date would otherwise be a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, and no interest will accrue on such payment for the
period from and after such Interest Payment Date to the date of such payment on
the next succeeding Business Day. Interest on this Note while bearing interest
in the Commercial Paper Term Mode or at a floating interest rate during a Long
Term Rate Period or a SPURS Rate Period will be computed on the basis of actual
days elapsed over 360; provided that, if an applicable Interest Rate Basis is
the CMT Rate or Treasury Rate (each as defined below), interest will be
computed on the basis of actual days elapsed over the actual number of days in
the year. Interest on this Note while bearing interest in the Long Term Rate
Mode or the SPURS Mode will be computed on the basis of a year of 360 days
consisting of twelve 30-day months. Interest on this Note while bearing
interest at the Initial Interest Rate will be computed on the basis a year of
360 days consisting of twelve 30-day months.
Payment of the principal of and interest on this Note will be made at
the office or agency maintained for that purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that payment of interest may be made at the option of
the Company by check mailed to the person in whose name this Note is registered
at the close of business on the related Record Date.
This Note is one of a duly authorized series of Securities of the
Company (herein called the "Notes") issued and to be issued under an Indenture,
dated as of June 15, 1998, as supplemented by the First Supplemental Indenture,
dated as of June 15, 1998 (as further amended or supplemented, the "Indenture"),
between the Company and the Trustee, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the registered owners of the Notes and of the terms upon which
the Notes are, and are to be, authenticated and delivered.
This Note is entitled to the benefit of that certain support agreement
(the "Support Agreement"), dated as of June 16, 1998, by and between the Company
and DTE Energy Company, the owner, directly or indirectly, of 100% of the
outstanding common stock of the Company and that certain assignment and pledge
of the Company's rights under the Support Agreement to the Lenders (as defined
in the Support Agreement), pursuant to the terms and conditions of the
collateral assignment agreement (the "Collateral Assignment Agreement"), dated
as of June 16, 1998, by and between the Company and the Lenders, subject in each
case to amendment or termination of the Support Agreement or, as the case may
be, the Collateral Assignment Agreement, in accordance with their respective
terms. In addition, if a Policy (as defined below) is in effect with respect to
any Interest Rate Period, this Note shall be entitled to the benefit of such
Policy for such Interest Rate Period to the extent and subject to the conditions
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<PAGE> 43
set forth in the First Supplemental Indenture, as then amended. . A copy of the
Policy is on file at the office of the Trustee.
DEFINITIONS
The following terms, as used herein, have the following meanings unless
the context or use clearly indicates another or different meaning or intent:
"Applicable Spread" means the lowest bid indication, expressed as a
spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the SPURS Agent on the Determination Date from the bids quoted by up
to five Reference Corporate Dealers for the full aggregate principal amount of
this Note at the Dollar Price, but assuming (i) an issue date equal to the SPURS
Remarketing Date, with settlement on such date without accrued interest, (ii) a
maturity date equal to the next succeeding Interest Rate Adjustment Date and
(iii) a stated annual interest rate, payable semiannually on each Interest
Payment Date, equal to the Base Rate plus the spread bid by the applicable
Reference Corporate Dealer. If fewer than five Reference Corporate Dealers bid
as set forth herein, then the Applicable Spread shall be the lowest of such bid
indications obtained.
"Base Rate" means the interest rate established by the SPURS Agent,
after consultation with the Company, as the applicable "Base Rate" at or prior
to the commencement of the SPURS Mode and set forth on Annex A hereto.
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions located in the State of
Michigan or in the state in which the principal corporate trust office of the
Trustee is located, are authorized or obligated by or pursuant to law or
executive order to close; provided, however, that with respect to Notes in the
Long Term Rate Mode or the SPURS Mode as to which LIBOR is an applicable
Interest Rate Basis, such day is also a London Business Day (as hereinafter
defined). "London Business Day" means (i) if the Index Currency (as hereinafter
defined) is other than European Currency Units ("ECU"), any day on which
dealings in such Index Currency are transacted in the London interbank market or
(ii) if the Index Currency is ECU, any day that does not appear as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on the page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market.
"Commercial Paper Term Mode" means, with respect to this Note, the
Interest Rate Mode in which the interest rate on this Note is reset on a
periodic basis which shall not be less than one calendar day nor more than 364
consecutive calendar days and interest is paid as provided for such Interest
Rate Mode as set forth herein.
"Commercial Paper Term Period" shall mean the Interest Rate Period for
this Note in the Commercial Paper Term Mode that is a period of not less than
one or more than 364 consecutive calendar days, as determined by the Company (as
described below under "Conversion") or, if not
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<PAGE> 44
so determined, by the Remarketing Agent for this Note (in its best
judgment in order to obtain the lowest interest cost for this Note). The
interest rate for any Commercial Paper Term Period relating to this Note will
be determined not later than 11:50 a.m., New York City time, on the Interest
Rate Adjustment Date for this Note, which is the first day of each Interest
Rate Period for this Note. Each Commercial Paper Term Period shall commence on
the Interest Rate Adjustment Date therefor and end on the day preceding the
date specified by such Remarketing Agent as the first day of the next Interest
Rate Period for this Note.
"Comparable Treasury Issues" shall mean the United States Treasury
security or securities selected by the SPURS Agent as having an actual or
interpolated maturity or maturities comparable or applicable to the remaining
term to the next succeeding Interest Rate Adjustment Date.
"Comparable Treasury Price" shall mean, with respect to the SPURS
Remarketing Date, (a) the offer prices for the Comparable Treasury Issues
(expressed in each case as a percentage of its principal amount) on the
Determination Date, as set forth on "Telerate Page 500" (or such other page as
may replace Telerate Page 500) or (b) if such page (or any successor page) is
not displayed or does not contain such offer prices on such Determination Date,
(i) the average of the Reference Treasury Dealer Quotations for such SPURS
Remarketing Date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (ii) if the SPURS Agent obtains fewer than four
such Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations. "Telerate Page 500" shall mean the display
designated as "Telerate Page 500" on Dow Jones Markets Limited (or such other
page as may replace Telerate Page 500 on such service) or such other service
displaying the offer prices specified in (a) above as may replace Dow Jones
Markets Limited.
"Determination Date" means the third Business Day preceding the
applicable SPURS Remarketing Date.
"Dollar Price" shall mean the present value determined by the SPURS
Agent, as of the SPURS Remarketing Date, of the Remaining Scheduled Payments
discounted to the SPURS Remarketing Date, on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months), at the Treasury Rate.
"DTC" or the "Depositary" shall mean The Depository Trust Company, or
its nominee.
"Floating Interest Rate Notice" has the meaning specified under
"Interest Rate - (c) Floating Interest Rates" below. The form of Floating Rate
Interest Notice is set forth as Exhibit G to the First Supplemental Indenture.
"Floating Rate Maximum Interest Rate" and "Floating Rate Minimum
Interest Rate" have the respective meanings specified under "Interest Rate - (c)
Floating Interest Rates" below.
"Index Maturity" means the period to maturity of the instrument or
obligation with respect to which the related Interest Rate Basis or Bases will
be calculated.
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<PAGE> 45
"Initial Interest Rate" means the annual rate of interest applicable to
this Note during the Initial Interest Rate Period.
"Initial Interest Rate Adjustment Date" means June 15, 2003.
"Initial Interest Rate Period" means the period commencing on the date
of issuance for this Note and ending on the Business Day immediately preceding
the Initial Interest Rate Adjustment Date.
"Insurer" means, with respect to the Initial Interest Rate Period, MBIA
Insurance Corporation, and, with respect to any subsequent Interest Rate Period,
such issuer of a financial guaranty policy as may be purchased by the Company
from time to time.
"Interest Determination Date" has the meaning specified under "Interest
Rate - (c) Floating Interest Rates" below.
"Interest Rate Adjustment Date" means for a particular Interest Rate
Period in any Interest Rate Mode, each date, which shall be a Business Day, on
which interest and, in the case of a floating interest rate, the Spread (if any)
and the Spread Multiplier (if any) on this Note commences to accrue at the rate
determined and announced by the applicable Remarketing Agent for such Interest
Rate Periods, and if this Note is bearing interest at the Initial Interest Rate,
the Business Day following the expiration of the Initial Interest Rate Period.
"Interest Rate Basis" has the meaning specified under "Interest Rate -
(c) Floating Interest Rates" below.
"Interest Rate Mode" means the mode in which the Interest Rate on this
Note is being determined, i.e., the Commercial Paper Term Mode, the Long Term
Rate Mode, or the SPURS Mode.
"Interest Rate Period" means, with respect to the Commercial Paper Term
Mode or the Long Term Rate Mode, the period of time commencing on the Interest
Rate Adjustment Date to, but not including, the immediately succeeding Interest
Rate Adjustment Date during which this Note bears interest at a particular fixed
interest rate or floating interest rate, and, with respect to an Interest Rate
Period for this Note in the SPURS Mode, a SPURS Rate Period. So long as this
Note bears interest in the Long Term Rate Mode, if so provided in Annex A at
"Interest Rate Period Adjustment" and if specified by the Company at the time of
remarketing into such Long Term Rate Period, the Company may shorten the
Interest Rate Period and provide for payment of a premium in respect thereof for
this Note upon written notice to the Remarketing Agent and the Trustee not less
than thirty (30) days prior to the date upon which such shortened Interest Rate
Period shall expire. Promptly upon receipt of such notice and, in any case, not
later than the close of business on such date, the Trustee will transmit such
information to DTC in accordance with DTC's procedures as in effect from time to
time. In such case, the next Interest Rate Adjustment Date otherwise set forth
in Annex A shall instead be the date upon which such Interest Rate Period shall
expire.
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<PAGE> 46
If this Note is subject to early remarketing as provided above, the
Interest Rate Period may be shortened by the Company on any date on and after
the Initial Early Remarketing Date, if any, specified in Annex A, upon prior
written notice as provided above. On and after the Initial Early Remarketing
Date, if any, on the Interest Rate Adjustment Date relating to such shortened
Interest Rate Period for this Note, the Company will pay a premium to the
tendering beneficial owner of this Note, together with accrued interest, if any,
hereon at the applicable rate payable to such Interest Rate Adjustment Date.
Unless otherwise specified in Annex A, the premium shall be an amount equal to
the Initial Early Remarketing Premium specified in Annex A, the premium shall be
an amount equal to the Initial Early Remarketing Premium specified in Annex A
(as adjusted by the Annual Early Remarketing Premium Percentage Reduction, if
applicable), multiplied by the principal amount of this Note subject to early
remarketing. The Initial Early Remarketing Premium, if any, shall decline at
each anniversary of the Initial Early Remarketing Date by an amount equal to the
applicable Annual Early Remarketing Premium Percentage Reduction, if any,
specified in Annex A until the premium is equal to 0.
"Interest Reset Date", "Initial Interest Reset Date" and "Interest
Reset Period" have the respective meanings specified under "Interest Rate - (c)
Floating Interest Rates" below.
"Liquidity Provider" means, any bank or other credit provider whose
obligations such as those under the applicable Standby Note Purchase Agreement
with respect to any Notes are exempt from registration under the Securities Act
of 1933, as amended, with long term senior debt ratings from Standard & Poor's
Ratings Services and Moody's Investors Service, Inc. at least equal to those of
the Company as of the date of the Standby Note Purchase Agreement, and a minimum
combined capital and surplus of at least $50,000,000, that has entered into a
Standby Note Purchase Agreement with the Company for the purpose of purchasing
unremarketed Notes on any Interest Rate Adjustment Date.
"Long Term Rate Mode" means, with respect to this Note, the Interest
Rate Mode in which the interest rate on this Note is reset in a Long Term Rate
Period and interest is paid as provided for such Interest Rate Mode as set forth
herein.
"Long Term Rate Period" means any period of more than 364 days and not
exceeding the remaining term to the Stated Maturity of this Note.
"Notification Date" means the Business Day not later than ten (10) days
prior to the applicable SPURS Remarketing Date on which the SPURS Agent gives
notice to the Company and the Trustee of its intention to purchase this Note for
remarketing.
"Optional Redemption" means the redemption of this Note prior to its
maturity at the option of the Company as described herein.
"Policy" means, with respect to the Initial Interest Rate Period, the
financial guaranty insurance policy issued by MBIA Insurance Corporation and
attached as Exhibit F to the First Supplemental Indenture, and, with respect to
any subsequent Interest Rate Period, such financial guaranty insurance policy as
may be purchased by the Company from time to time.
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<PAGE> 47
"Principal Financial Center" means the capital city of the country
issuing the Index Currency, except that with respect to United States dollars,
Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs
and ECUs, the Principal Financial Center shall be The City of New York, Sydney,
Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
"Reference Corporate Dealers" means such Reference Corporate Dealers as
shall be appointed by the SPURS Agent after consultation with the Company.
"Reference Treasury Dealer" shall mean such Reference Treasury Dealers
as shall be appointed by the SPURS Agent after consultation with the Company.
"Reference Treasury Dealer Quotations" shall mean, with respect to each
Reference Treasury Dealer and the SPURS Remarketing Date, the offer prices for
the Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted in writing to the SPURS Agent by such Reference
Treasury Dealer by 3:30 p.m. New York City time, on the Determination Date.
"Remaining Scheduled Payments" shall mean with respect to this Note
the remaining scheduled payments of the principal hereof and interest hereon,
calculated at the Base Rate only, that would be due after the SPURS Remarketing
Date to and including the next succeeding Interest Rate Adjustment Date as
determined by the SPURS Agent.
"Remarketing Agent" means such Remarketing Agent or agent, including
any standby Remarketing Agent (each a "Standby Remarketing Agent"), appointed by
the Company from time to time, for this Note.
"Special Interest Rate" means the rate of interest equal to the rate
per annum announced by Citibank, N.A., or such other nationally recognized bank
located in the United States as the Company may select, as its prime lending
rate.
"Special Mandatory Purchase" means the obligation of the Company (or,
if applicable, a Liquidity Provider) to purchase Notes not successfully
remarketed by the Remarketing Agent and the applicable Standby Remarketing
Agent(s) by 12:00 o'clock noon, New York City time, on any Interest Rate
Adjustment Date.
"Spread" means the number of basis points to be added to or subtracted
from the related Interest Rate Basis or Bases applicable to an Interest Rate
Period, as the case may be, for this Note.
"Spread Multiplier" means the percentage of the related Interest Rate
Basis or Bases applicable to an Interest Rate Period by which such Interest Rate
Basis or Bases will be multiplied to determine the applicable interest rate from
time to time for such Long Term Interest Rate Period, as the case may be.
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<PAGE> 48
"SPURS Interest Rate" means the rate equal to the Base Rate established
by the SPURS Agent, after consultation with the Company, at or prior to the
commencement of the SPURS Mode plus the Applicable Spread, which will be based
on the Dollar Price.
"SPURS Mode" means the Interest Rate Mode in which this Note shall bear
interest and be subject to remarketing as "Structured PUtable Remarketable
Securities" ("SPURS").
"SPURS Rate Period" means an Interest Rate Period in the SPURS Mode
established by the Company as a period of more than 364 days and not exceeding
the remaining term to the Stated Maturity of this Note; provided, however, that
such Interest Rate Period must end on the day prior to an Interest Payment Date
for this Note. The SPURS Rate Period shall consist of the period to and
excluding the SPURS Remarketing Date and the period from and including the SPURS
Remarketing Date to but excluding the next succeeding Interest Rate Adjustment
Date.
"SPURS Remarketing Agreement" shall mean the agreement dated as of the
Interest Rate Adjustment Date commencing the applicable SPURS Rate Period which
sets forth the rights and obligations of the Company and the applicable SPURS
Agent with respect to the remarketing of Notes in the SPURS Mode.
"SPURS Remarketing Date" means the date designated by the applicable
SPURS Agent, after consultation with the Company, within the SPURS Rate Period
on which the applicable SPURS Agent may elect to remarket the Note at the SPURS
Interest Rate.
"Standby Note Purchase Agreement" means the agreement, which the
Company may, at its option, enter into from time to time with a Liquidity
Provider for the purpose of purchasing unremarketed Notes.
"Treasury Rate" shall mean, with respect to the SPURS Remarketing Date,
the rate per annum equal to the semi-annual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable Treasury
Issues, assuming a price for the Comparable Treasury Issues (expressed as a
percentage of its principal amount), equal to the Comparable Treasury Price for
such SPURS Remarketing Date.
"Weekly Rate Period" means a Commercial Paper Term Period with an
Interest Rate Period of generally seven days.
INTEREST RATE
(a) Initial Interest Rate. From the Original Issue Date set forth in
Annex A to the Initial Interest Rate Adjustment Date set forth in Annex A, this
Note will bear interest at the Initial Interest Rate specified therein.
Thereafter, this Note will bear interest in the Commercial Paper Term Mode, the
Long Term Rate Mode or the SPURS Mode.
(b) Interest Rates. The interest rate and, in the case of a floating
interest rate, the Spread (if any) and the Spread Multiplier (if any) for this
Note will be announced by the Remarketing Agent on or prior to the Interest Rate
Adjustment Date for the next succeeding
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<PAGE> 49
Interest Rate Period and will be the minimum interest rate per annum
and, in the case of a floating interest rate, the Spread (if any) and the
Spread Multiplier (if any) necessary, during the Interest Rate Period
commencing on such Interest Rate Adjustment Date, in the judgment of the
Remarketing Agent, to produce a par bid in the secondary market for this Note
on the date the interest rate is established. Such rate will be effective for
the next succeeding Interest Rate Period for this Note commencing on such
Interest Rate Adjustment Date.
(c) Floating Interest Rates. While this Note bears interest in the Long
Term Rate Mode or the SPURS Mode (with respect to the period from, and
including, the Interest Rate Adjustment Date commencing such period to, but
excluding, the SPURS Remarketing Date), the Company may elect a floating
interest rate by providing notice, which will be in or promptly confirmed in
writing (which includes facsimile or appropriate electronic media), received by
the Trustee and the Remarketing Agent for this Note (the "Floating Interest Rate
Notice") not less than ten (10) days prior to the Interest Rate Adjustment Date
for such Long Term Rate Period or SPURS Rate Period. The Floating Interest Rate
Notice must identify by CUSIP number or otherwise the portion of this Note to
which it relates and state the Interest Rate Period (or portion thereof, in the
case of the SPURS Mode) therefor to which it relates. Each Floating Interest
Rate Notice must also state the Interest Rate Basis or Bases, the Initial
Interest Reset Date, the Interest Reset Period and Dates, the Interest Payment
Period and Dates, the Index Maturity, the Floating Rate Maximum Interest Rate
and/or Floating Rate Minimum Interest Rate, if any, and the Day Count
Convention. If one or more of the applicable Interest Rate Bases is LIBOR or the
CMT Rate, the Floating Interest Rate Notice shall also specify the Index
Currency and Designated LIBOR Page or the Designated CMT Maturity Index and
Designated CMT Telerate Page, respectively.
If this Note bears interest at a floating rate in a Long Term Rate
Period or a SPURS Rate Period, this Note shall bear interest at the rate
determined by reference to the applicable Interest Rate Basis or Bases (a) plus
or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if
any, specified by the Remarketing Agent, in the case of a Long Term Rate Period,
or the SPURS Agent in the case of a SPURS Rate Period, and recorded in Annex A
to this Note. Commencing on the Interest Rate Adjustment Date for such Interest
Rate Period, the rate at which interest on this Note shall be payable shall be
reset as of each Interest Reset Date during such Interest Rate Period specified
in the applicable Floating Interest Rate Notice.
The applicable floating interest rate on this Note during any Interest
Rate Period will be determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases, which may include (i) the CD Rate, (ii) the CMT
Rate, (iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime Rate, (vi) the
Treasury Rate, or (vii) such other Interest Rate Basis or interest rate formula
as may be specified in the applicable Floating Interest Rate Notice (each, an
"Interest Rate Basis").
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the interest rate with respect to each Interest Rate Basis will be
determined in accordance with the applicable provisions below. Except as set
forth above or in the applicable Floating Interest Rate Notice, the interest
rate in effect on each day shall be (i) if such day is an Interest Reset Date,
the interest
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<PAGE> 50
rate determined as of the Interest Determination Date immediately
preceding such Interest Reset Date or (ii) if such day is not an Interest Reset
Date, the interest rate determined as of the Interest Determination Date
immediately preceding the most recent Interest Reset Date. If any Interest Reset
Date would otherwise be a day that is not a Business Day, such Interest Reset
Date will be postponed to the next succeeding Business Day, unless LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, in which case such Interest Reset Date will be the
immediately preceding Business Day. In addition, if the Treasury Rate is an
applicable Interest Rate Basis and the Interest Determination Date would
otherwise fall on an Interest Reset Date, then such Interest Reset Date will be
postponed to the next succeeding Business Day.
The applicable Floating Interest Rate Notice will specify whether the
rate of interest will be reset daily, weekly, monthly, quarterly, semiannually
or annually or on such other specified basis (each, an "Interest Reset Period")
and the dates on which such rate of interest will be reset (each, an "Interest
Reset Date"). Unless otherwise specified in the applicable Floating Interest
Rate Notice, the Interest Reset Dates will be, in the case of a floating
interest rate which resets: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (unless the Treasury Rate is an applicable Interest Rate
Basis, in which case the Tuesday of each week except as described below); (iii)
monthly, the third Wednesday of each month; (iv) quarterly, the third Wednesday
of March, June, September and December of each year, (v) semiannually, the third
Wednesday of the two months specified in the applicable Floating Interest Rate
Notice; and (vi) annually, the third Wednesday of the month specified in the
applicable Floating Interest Rate Notice.
The interest rate applicable to each Interest Reset Period commencing
on the related Interest Reset Date will be the rate determined as of the
applicable Interest Determination Date. The "Interest Determination Date" with
respect to the CD Rate, the CMT Rate, the Federal Funds Rate and the Prime Rate
will be the second Business Day immediately preceding the applicable Interest
Reset Date; and the "Interest Determination Date" with respect to LIBOR shall be
the second London Business Day immediately preceding the applicable Interest
Reset Date, unless the Index Currency is British pounds sterling, in which case
the "Interest Determination Date" will be the applicable Interest Reset Date.
The "Interest Determination Date" with respect to the Treasury Rate shall be the
day in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday. If the interest rate of this Note is a floating
interest rate determined with reference to two or more Interest Rate Bases
specified in the applicable Floating Interest Rate Notice, the "Interest
Determination Date" pertaining to this Note shall be the most recent Business
Day which is at least two Business Days prior to the applicable Interest Reset
Date on which each Interest Rate Basis is determinable. Each Interest Rate Basis
shall be determined as of such date, and the applicable interest rate shall take
effect on the related Interest Reset Date.
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<PAGE> 51
Either or both of the following may also apply to the floating interest
rate on this Note for an Interest Rate Period: (i) a floating rate maximum
interest rate, or ceiling, that may accrue during any Interest Reset Period (the
"Floating Rate Maximum Interest Rate") and (ii) a floating rate minimum interest
rate, or floor, that may accrue during any Interest Reset Period (the "Floating
Rate Minimum Interest Rate"). In addition to any Floating Rate Maximum Interest
Rate that may apply, the interest rate on this Note will in no event be higher
than the maximum rate permitted by New York law, as the same may be modified by
United States laws of general application.
Except as provided below or in the applicable Floating Interest Rate
Notice, interest will be payable, in the case of floating interest rates which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year, as
specified in the applicable Floating Interest Rate Notice; (ii) quarterly, on
the third Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Floating Interest Rate Notice; and (iv) annually, on the third
Wednesday of the month of each year specified in the applicable Floating
Interest Rate Notice and, in each case, on the Business Day immediately
following the applicable Long Term Rate Period or SPURS Rate Period, as the case
may be. If any Interest Payment Date for the payment of interest at a floating
rate (other than following the end of the applicable Long Term Rate Period or
SPURS Rate Period, as the case may be) would otherwise be a day that is not a
Business Day, such Interest Payment Date will be postponed to the next
succeeding Business Day, except that if LIBOR is an applicable Interest Rate
Basis and such Business Day falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding Business Day.
All percentages resulting from any calculation of floating interest
rates will be rounded to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards (e.g.,
9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all
amounts used in or resulting from such calculation will be rounded, in the case
of United States dollars, to the nearest cent or, in the case of a foreign
currency or composite currency, to the nearest unit (with one-half cent or unit
being rounded upwards).
Accrued floating rate interest will be calculated by multiplying the
principal amount of this Note by an accrued interest factor. Such accrued
interest factor will be computed by adding the interest factor calculated for
each day in the applicable Interest Reset Period. Unless otherwise specified in
the applicable Floating Interest Rate Notice, the interest factor for each such
day will be computed by dividing the interest rate applicable to such day by
360, if an applicable Interest Rate Basis is the CD Rate, the Federal Funds
Rate, LIBOR or the Prime Rate, or by the actual number of days in the year if an
applicable Interest Rate Basis is the CMT Rate or the Treasury Rate. Unless
otherwise specified in the applicable Floating Interest Rate Notice, if the
floating interest rate is calculated with reference to two or more Interest Rate
Bases, the interest factor will be calculated in each period in the same manner
as if only one of the applicable Interest Rate Bases applied as specified in the
applicable Floating Interest Rate Notice.
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<PAGE> 52
Unless otherwise specified in the applicable Floating Interest Rate
Notice, The Bank of New York will be the "Calculation Agent." If this Note is
bearing interest at a floating rate, the applicable Remarketing Agent will
determine the interest rate in effect from the Interest Rate Adjustment Date to
the Initial Interest Reset Date. The Calculation Agent will determine the
interest rate in effect for each Interest Reset Period thereafter. Upon request
of the beneficial owner of this Note, after any Interest Rate Adjustment Date,
the Calculation Agent or the Remarketing Agent shall disclose the interest rate
and, in the case of a floating interest rate, Interest Rate Basis or Bases,
Spread (if any) and Spread Multiplier (if any), and in each case the other terms
applicable to this Note then in effect and, if determined, the interest rate
that will become effective as a result of a determination made for the next
succeeding Interest Reset Date with respect to this Note. Except as described
herein, no notice of the applicable interest rate, Spread (if any) or Spread
Multiplier (if any) shall be sent to the beneficial owner of this Note.
Unless otherwise specified in the applicable Floating Interest Rate
Notice, the "Calculation Date", if applicable, pertaining to any Interest
Determination Date will be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
CD Rate. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as the "CD Rate," the CD Rate means
with respect to any Interest Determination Date relating to this Note for which
the interest rate is determined with reference to the CD rate (a "CD Rate
Interest Determination Date"), the rate on such date for negotiable United
States dollar certificates of deposit having the Index Maturity specified in the
applicable Floating Interest Rate Notice as published by the Board of Governors
of the Federal Reserve System in "Statistical Release H.15(519), Selected
Interest Rates" or any successor publication ("H.15(519)") under the heading
"CDs (Secondary Market)," or, if not published by 3:00 p.m., New York City time,
on the related Calculation Date (as defined above), the rate on such CD Rate
Interest Determination Date for negotiable United States dollar certificates of
deposit of the Index Maturity specified in the applicable Floating Interest Rate
Notice as published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for United States Government
Securities" or any successor publication ("Composite Quotations") under the
heading "Certificates of Deposit." If such rate is not yet published in either
H.15(519) or Composite Quotations by 3:00 p.m., New York City time, on the
related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York
City time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers in negotiable United States dollar certificates of deposit in The City
of New York (which may include the Remarketing Agent or its affiliates) selected
by the Calculation Agent, after consultation with the Company, for negotiable
United States dollars certificates of deposit of major United States money
market banks for negotiable certificates of deposit with a remaining maturity
closest to the Index Maturity specified in the applicable Floating Interest Rate
Notice in an amount that is representative for a single transaction in that
market at that time; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined as of such CD Rate
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<PAGE> 53
Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as the "CMT Rate," the CMT Rate means,
with respect to any Interest Determination Date relating to this Note for which
the interest rate is determined with reference to the CMT Rate (a "CMT Rate
Interest Determination Date"), the rate displayed on the Designated CMT Telerate
Page (as defined below) under the caption "...Treasury Constant
Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45
P.M.," under the column for the Designated CMT Maturity Index (as defined below)
for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the weekly or monthly average, as specified in the Floating Interest Rate
Notice, for the week or the month, as applicable, ended immediately preceding
the week or the month, as applicable, in which the related CMT Rate Interest
Determination Date occurs. If such rate is no longer displayed on the relevant
page or is not displayed by 3:00 p.m., New York City time, on the related
Calculation Date, then the CMT Rate for such CMT Rate Interest Determination
Date will be such treasury constant maturity rate for the Designated CMT
Maturity Index as published in H.15(519). If such rate is no longer published or
is not published by 3:00 p.m., New York City time, on the related Calculation
Date, then the CMT Rate on such CMT Rate Interest Determination Date will be
such treasury constant maturity rate for the Designated CMT Maturity Index (or
other United States Treasury rate for the Designated CMT Maturity Index) for the
CMT Rate Interest Determination Date with respect to such Interest Reset Date as
may then be published by either the Board of Governors of the Federal Reserve
System or the United States Department of the Treasury that the Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in H.15(519). If such information is
not provided by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate on the CMT Rate Interest Determination Date will be calculated
by the Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side prices as of
approximately 3:30 p.m., New York City time, on such CMT Rate Interest
Determination Date reported, according to their written records, by three
leading primary United States government securities dealers (each, a "Reference
Dealer") in The City of New York (which may include the Remarketing Agent or its
affiliates) selected by the Calculation Agent after consultation with the
Company (from five such Reference Dealers selected by the Calculation Agent,
after consultation with the Company, and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent is unable to obtain three such Treasury
Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will
be calculated by the Calculation Agent and will be a yield to maturity based on
the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 p.m., New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from five
such Reference Dealers selected by the Calculation Agent, after consultation
with the
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<PAGE> 54
Company, and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least U.S.$100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers so selected by the
Calculation Agent, after consultation with the Company, are quoting as mentioned
herein, the CMT Rate determined as of such CMT Rate Interest Determination Date
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the second
preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the Calculation Agent, after consultation with
the Company, will obtain from five References Dealers quotations for the
Treasury Note with the shorter remaining term to maturity.
"Designated CMT Telerate Page" means the display on the Dow Jones
Markets Limited (or any successor service) on the page specified in the
applicable Floating Interest Rate Notice (or any other page as may replace such
page on that service for the purpose of displaying Treasury Constant Maturities
as reported in H.15(519)) for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Floating Interest Rate Notice, the Designated CMT Telerate Page shall
be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30
years) specified in the applicable Floating Interest Rate Notice with respect to
which the CMT Rate will be calculated. If no such maturity is specified in the
applicable Floating Interest Rate Notice, the Designated CMT Maturity Index
shall be 2 years.
Federal Funds Rate. If an Interest Rate Basis for this Note is
specified in the applicable Floating Interest Rate Notice as the "Federal Funds
Rate," the Federal Funds Rate means, with respect to any Interest Determination
Date relating to this Note for which the interest rate is determined with
reference to the Federal Funds Rate (a "Federal Funds Rate Interest
Determination Date"), the rate on such date for United States dollar federal
funds as published in H.15(519) under the heading "Federal Funds (Effective)"
or, if not published by 3:00 p.m., New York City time, on the Calculation Date,
the rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate". If such
rate is not published in either H.15(519) or Composite Quotations by 3:00 p.m.,
New York City time, on the related Calculation Date, then the Federal Funds Rate
on such Federal Funds Rate Interest Determination Date shall be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight United States dollar federal funds arranged by three
leading brokers of federal funds transactions in The City of New York (which may
include the Remarketing Agent or its affiliates) selected by the Calculation
Agent after consultation with the Company, prior to 9:00 a.m., New York City
time,
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<PAGE> 55
on such Federal Funds Rate Interest Determination Date; provided, however,
that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this sentence, the Federal Funds Rate determined as of such Federal
Funds Rate Interest Determination Date will be the Federal Funds Rate in effect
on such Federal Funds Rate Interest Determination Date.
LIBOR. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as "LIBOR," LIBOR means the rate
determined by the Calculation Agent as of the applicable Interest Determination
Date (a "LIBOR Interest Determination Date"), in accordance with the following
provisions:
(i) if (a) "LIBOR Reuters" is specified in the applicable Floating
Interest Rate Notice, the arithmetic mean of the offered rates (unless the
Designated LIBOR Page (as defined below) by its terms provides only for a single
rate, in which case such single rate will be used) for deposits in the Index
Currency having the Index Maturity specified in the applicable Floating Interest
Rate Notice, commencing on the applicable Interest Reset Date, that appear (or,
if only a single rate is required as aforesaid, appears) on the Designated LIBOR
Page as of 11:00 a.m., London time, on such LIBOR Interest Determination Date,
or (b) "LIBOR Telerate" is specified in the applicable Floating Interest Rate
Notice, or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable Floating Interest Rate Notice as the method for calculating LIBOR,
the rate for deposits in the Index Currency having the Index Maturity specified
in the applicable Floating Interest Rate Notice, commencing on such Interest
Reset Date, that appears on the Designated LIBOR Page as of 11:00 a.m., London
time, on such LIBOR Interest Determination Date. If fewer than two such offered
rates appear, or if no such rate appears, as applicable, LIBOR on such LIBOR
Interest Determination Date shall be determined in accordance with the
provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
shall request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, after
consultation with the Company, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity specified in the applicable Floating Interest Rate Notice, commencing
on the applicable Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 a.m., London time, on such LIBOR Interest
Determination Date and in a principal amount that is representative for a single
transaction in such Index Currency in such market at such time. If at least two
such quotations are so provided, then LIBOR on such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 a.m., in
the applicable Principal Financial Center, on such LIBOR Interest Determination
Date by three major banks in such Principal Financial Center selected by the
Calculation Agent, after consultation with the Company, for loans in the Index
Currency to leading European banks, having the Index Maturity specified in the
applicable Floating Interest Rate Notice and in a principal amount that is
representative for a single transaction in such Index Currency in such market at
such time; provided, however, that if the
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<PAGE> 56
banks so selected by the Calculation Agent are not quoting as mentioned
in this sentence, LIBOR determined as of such LIBOR Interest Determination
Date shall be LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified in
the applicable Floating Interest Rate Notice as to which LIBOR shall be
calculated. If no such currency or composite currency is specified in the
applicable Floating Interest Rate Notice, the Index Currency shall be United
States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in
the applicable Floating Interest Rate Notice, the display on the Reuter Monitor
Money Rates Service (or any successor service) on the page specified in such
Floating Interest Rate Notice (or on any other page as may replace such page on
such service) for the purpose of displaying the London interbank rates of major
banks for the Index Currency, or (b) if "LIBOR Telerate" is specified in the
applicable Floating Interest Rate Notice or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified in the applicable Floating Interest Rate Notice as the
method for calculating LIBOR, the display on the Dow Jones Markets Limited (or
any successor service) on the page specified in such Floating Interest Rate
Notice (or on any other page as may replace such page on such service) for the
purpose of displaying the London interbank rates of major banks for the Index
Currency.
Prime Rate. If an Interest Rate Basis for this Note is specified in the
applicable Floating Interest Rate Notice as the "Prime Rate," the Prime Rate
means, with respect to any Interest Determination Date relating to this Note for
which the interest rate is determined with reference to the Prime Rate (a "Prime
Rate Interest Determination Date"), the rate on such date as such rate is
published in H.15(519) under the heading "Bank Prime Loan." If such rate is not
published prior to 3:00 p.m., New York City time, on the related Calculation
Date, then the Prime Rate shall be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen U.S. PRIME 1
Page (as defined below) as such bank's prime rate or base lending rate as in
effect for such Prime Rate Interest Determination Date. If fewer than four such
rates appear on the Reuters Screen U.S. PRIME 1 Page for such Prime Rate
Interest Determination Date, the Prime Rate shall be the arithmetic mean of the
prime rates quoted on the basis of the actual number of days in the year divided
by a 360-day year as of the close of business on such Prime Rate Interest
Determination Date by four major money center banks (which may include The Bank
of New York) in The City of New York selected by the Calculation Agent, after
consultation with the Company. If fewer than four such quotations are so
provided, the Prime Rate shall be the arithmetic mean of four prime rates quoted
on the basis of the actual number of days in the year divided by a 360-day year
as of the close of business on such Prime Rate Interest Determination Date as
furnished in The City of New York by the major money center banks, if any, that
have provided such quotations and by as many substitute banks or trust companies
(which may include The Bank of New York) as necessary in order to obtain four
such prime rate quotations, provided such substitute banks or trust companies
are organized and doing business under the laws of the United States, or any
State thereof, have total equity capital of at least U.S.$500 million and are
each subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent, after consultation with the Company, to
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provide such rate or rates; provided, however, that if the banks or trust
companies so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Prime Rate determined as of such Prime Rate Interest
Determination Date will be the Prime Rate in effect on such Prime Rate Interest
Determination Date.
"Reuters Screen U.S. PRIME 1 Page" means the display designated as page
"U.S. PRIME 1" on the Reuter Monitor Money Rates Service (or any successor
service) on the U.S. PRIME 1 Page (or such other page as may replace the U.S.
PRIME 1 page on that service) for the purpose of displaying prime rates or base
lending rates of major United States banks.
Treasury Rate. If an Interest Rate Basis for this Note is specified in
the applicable Floating Interest Rate Notice as the "Treasury Rate," the
Treasury Rate means, with respect to any Interest Determination Date relating to
this Note for which the interest rate is determined with reference to the
Treasury Rate (a "Treasury Rate Interest Determination Date"), as the rate from
the auction held on such Treasury Rate Interest Determination Date (the
"Auction") of direct obligations of the United States ("Treasury Bills") having
the Index Maturity specified in the applicable Floating Interest Rate Notice, as
such rate is published in H.15(519) under the heading "Treasury bills-auction
average (investment)" or, if not published by 3:00 p.m., New York City time, on
the related Calculation Date, the auction average rate of such Treasury Bills
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) as otherwise announced by the United
States Department of Treasury. In the event that the results of the Auction of
Treasury Bills having the Index Maturity specified in the applicable Floating
Interest Rate Notice are not reported as provided above by 3:00 p.m., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent, and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366
days, as applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 p.m., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers (which may include the Remarketing
Agent or its affiliates) selected by the Calculation Agent, after consultation
with the Company, for the issue of Treasury Bills with a remaining maturity
closest to the Index Maturity specified in the applicable Floating Interest Rate
Notice; provided, however, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.
(d) Failure of Remarketing Agent or Agents to Announce Interest. In the
event that (i) the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or (ii) the Remarketing Agent has failed to
announce the appropriate interest rate, Spread, if any, or Spread Multiplier, if
any, as the case may be, on an Interest Rate Adjustment Date for whatever
reason, or (iii) the appropriate interest rate, Spread, if any, or Spread
Multiplier, if any, as the case may be, or Interest Rate Period cannot be
determined for whatever reason, then this Note shall be automatically converted
to a Weekly Rate Period, and the rate of interest hereon shall be equal to the
Special Interest Rate.
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(e) Notice of Interest Rate, Binding Effect. On each Interest Rate
Adjustment Date of this Note, the Remarketing Agent or the SPURS Agent, as the
case may be, will notify the Company and the Trustee of the interest rate,
Spread, if any, or Spread Multiplier, if any, as the case may be, to be borne by
this Note for the following Interest Rate Period. After such Interest Rate
Adjustment Date, any beneficial owner of this Note may contact the Trustee or
the Remarketing Agent in order to be advised of the applicable interest rate
and, in the case of a floating interest rate, the Spread (if any) and the Spread
Multiplier (if any). Immediately upon receipt of such notice, the Trustee will
transmit such information to DTC in accordance with DTC's procedures as in
effect from time to time and note such rate in Annex A. The Trustee shall
confirm to DTC the interest rate for the following Interest Rate Period in
accordance with DTC's procedures as in effect from time to time. No notice of
the applicable interest rate will be sent to the beneficial owner of this Note.
The interest rate announced by the Remarketing Agent, absent manifest
error, is binding and conclusive upon the beneficial owner of this Note, the
Company and the Trustee.
(f) Conversion. This Note may be converted at the option of the Company
to the Commercial Paper Term Mode, Long Term Rate Mode or SPURS Mode on any
Interest Rate Adjustment Date for this Note in accordance with the procedures
set forth in the Indenture, and will be subject to mandatory tender by the
beneficial owner hereof as described herein on such Interest Rate Adjustment
Date. The beneficial owner of this Note will be deemed to have tendered such
Note as of the Interest Rate Adjustment Date upon which such conversion occurs
and will not be entitled to further accrual of interest on this Note after such
date.
TENDER
This Note will be automatically tendered for purchase, or deemed
tendered for purchase by the beneficial owner hereof, on each Interest Rate
Adjustment Date relating hereto. Notes will be purchased on such Interest Rate
Adjustment Date in accordance with the procedures set forth in "Remarketing and
Settlement" or, as the case may be, "SPURS Mode" below.
REMARKETING AND SETTLEMENT
Interest Rate Adjustment Date; Determination of Interest Rate. By 11:00
a.m., New York City time on each Interest Rate Adjustment Date for this Note,
the applicable Remarketing Agent will determine the interest rate hereon to the
nearest one hundred-thousandth (0.00001) of one percent per annum for the next
Interest Rate Period in the case of a fixed interest rate, and the Spread (if
any) and Spread Multiplier (if any) in the case of a floating interest rate;
provided, that between 11:00 a.m., New York City time and 11:50 a.m., New York
City time, the Remarketing Agent and the Standby Remarketing Agent(s), if any,
shall use their reasonable efforts to determine the interest rate for this Note
if it is not successfully remarketed as of the applicable deadline specified in
this paragraph. In determining the applicable interest rate for this Note and
other terms, the Remarketing Agent will, after taking into account market
conditions as reflected in the prevailing yields on fixed and variable rate
taxable debt securities, (i) consider the principal amount of all Notes tendered
or to be tendered on such date and the
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principal amount of such Notes prospective purchasers are or may be
willing to purchase and (ii) contact, by telephone or otherwise, prospective
purchasers and ascertain the interest rates or the Spread or Spread Multiplier
therefor at which they would be willing to hold or purchase this Note.
Notification of Results; Settlement. By 12:30 p.m., New York City time,
on each Interest Rate Adjustment Date for this Note, the applicable Remarketing
Agent will notify the Company and the Trustee in writing (which may include
facsimile or other electronic transmission), of (i) the interest rate or, in the
case of a floating interest rate, the initial interest rate, the Spread and
Spread Multiplier and the Initial Interest Reset Date, applicable to this Note
for the next Interest Rate Period, (ii) the Interest Rate Adjustment Date, (iii)
the Interest Payment Dates, if this Note will then be in the Commercial Paper
Term Mode (if other than the Interest Rate Adjustment Date), the Long Term Rate
Mode or the SPURS Mode, (iv) the optional redemption terms, if any, and early
remarketing terms, if any, in the case of remarketing into a Long Term Rate
Period, (v) the aggregate principal amount of all Notes tendered for remarketing
on such date, and (vi) the aggregate principal amount of such tendered Notes
which such Remarketing Agent was able to remarket, at a price equal to 100% of
the principal amount thereof plus accrued interest, if any. Immediately after
receiving such notice and, in any case, not later than 1:30 p.m., New York City
time, the Trustee will transmit such information and any other settlement
information required by DTC to DTC in accordance with DTC's procedures as in
effect from time to time.
By telephone at approximately 1:00 p.m., New York City time, on such
Interest Rate Adjustment Date, the applicable Remarketing Agent will advise the
purchaser of this Note (or the DTC participant of each such purchaser who it is
expected in turn will advise such purchaser) of the principal amount of such
Notes that such purchaser is to purchase.
The purchaser of this Note in a remarketing will be required to give
instructions to its DTC participant to pay the purchase price therefor in same
day funds to the applicable Remarketing Agent against delivery of the principal
amount of this Note by book-entry through DTC by 3:00 p.m., New York City time,
on the Interest Rate Adjustment Date.
When tendered, or deemed tendered, this Note will be automatically
delivered to the account of the Trustee (or such other account meeting the
requirements of DTC's procedures as in effect from time to time), by book-entry
through DTC against payment of the purchase price or redemption price herefor,
on the Interest Rate Adjustment Date relating hereto.
The applicable Remarketing Agent will make, or cause the Trustee to
make, payment to the DTC participant of the tendering beneficial owner hereof
subject to a remarketing, by book-entry through DTC by the close of business on
the related Interest Rate Adjustment Date against delivery through DTC of the
beneficial owner's tendered Note, of the purchase price for this Note. If this
Note was purchased pursuant to a Special Mandatory Purchase, subject to receipt
of funds from the Company or the Liquidity Provider (if any), as the case may
be, the Trustee will make such payment of the purchase price for this Note plus
accrued interest, if any, to such date.
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The transactions described above for a remarketing of this Note will be
executed on each Interest Rate Adjustment Date for this Note through DTC in
accordance with the procedures of DTC, and the accounts of the respective DTC
participants will be debited and credited and this Note will be delivered by
book-entry as necessary to effect the purchases and sales hereof, in each case
as determined in the related remarketing.
Except as otherwise set forth below, the purchase price for this Note
to the tendering beneficial owner shall be paid solely out of the proceeds
received from a purchaser of this Note in such remarketing, and neither the
Trustee, the applicable Remarketing Agent, any Standby Remarketing Agent(s) nor
the Company (except as set forth below) will be obligated to provide funds to
make payment upon any beneficial owner's tender of this Note in a remarketing.
The tender and settlement procedures described above, including
provisions for payment by purchasers of this Note or for payment to the selling
beneficial owners of this Note, may be modified to the extent required by DTC.
In addition, each Remarketing Agent may, without the consent of the Holders of
the Notes, modify the tender and settlement procedures set forth above in order
to facilitate the settlement and remarketing process.
As long as DTC's nominee holds the certificates representing this Note
in the book-entry system of DTC, no certificates for this Note will be delivered
by any selling beneficial owner to reflect any transfer of this Note effected in
any remarketing.
Failed Remarketing. If this Note is not successfully remarketed, this
Note shall be subject to Special Mandatory Purchase by the Company (a "Special
Mandatory Purchase"). The obligation of the Company to effect a Special
Mandatory Purchase can be satisfied either directly by the Company or through a
Liquidity Provider. By 12:00 o'clock noon, New York City time, on any Interest
Rate Adjustment Date for this Note, the applicable Remarketing Agent will notify
the Liquidity Provider, if any, the Trustee and the Company by telephone or
facsimile, confirmed in writing, if it, or the Standby Remarketing Agent or
Agents were unable to remarket all or a portion of the principal amount of this
Note on such date. In the event that the Company has entered into a Standby Note
Purchase Agreement which is in effect on such date, such notice will constitute
a demand for the benefit of the Company to the Liquidity Provider, if any, to
purchase this Note at a price equal to the outstanding principal amount hereof
pursuant to the terms of such Standby Note Purchase Agreement. If a Standby Note
Purchase Agreement is not in effect on such date, or if the Liquidity Provider
fails to advance funds under the Standby Note Purchase Agreement, the Company
hereby agrees to purchase this Note. In each case, the Company will pay all
accrued and unpaid interest, if any, on this Note to such Interest Rate
Adjustment Date. Payment of the principal amount of this Note by the Company or
the Liquidity Provider, as the case may be, and payment of accrued and unpaid
interest, if any, by the Company, shall be made by deposit of same-day funds in
the account of the Trustee (or such other account meeting the requirements of
DTC's procedures as in effect from time to time) irrevocably in trust for the
benefit of the beneficial owners of this Note subject to Special Mandatory
Purchase by 3:00 p.m., New York City time, on the related Interest Rate
Adjustment Date.
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TRANSFER OR EXCHANGE
As provided in the Indenture and subject to certain limitations set
forth therein and herein, the transfer of this Note is registrable in the
Security Register, upon surrender of this Note for registration of transfer at
the office or agency of the Company in any place where the principal of and
premium, if any, and any interest on this Note are payable or at such other
offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in the form attached hereto, the
Company and the Security Registrar or any transfer agent duly executed, by the
registered owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Notes are issuable only in fully registered form in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations set forth therein and herein,
this Note is exchangeable for a like aggregate principal amount of Notes of this
series and of like tenor of any authorized denomination, as requested by the
registered owner surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of this Note, but, subject to certain limitations set forth in the
Indenture, the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
Subject to the terms of the Indenture, prior to due presentment of this
Note for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note is
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
REDEMPTION AND ACCELERATION
Special Mandatory Purchase. If by 12:00 o'clock noon, New York City
time, on any Interest Rate Adjustment Date for this Note, the applicable
Remarketing Agent and the applicable Standby Remarketing Agent(s) have not
remarketed this Note, this Note shall be subject to Special Mandatory Purchase.
Either the Company or, subject to the terms and conditions of a Standby Note
Purchase Agreement, if any, which may be in effect on such date, the Liquidity
Provider (if any), will deposit same-day funds in the account of the Trustee (or
such other account meeting the requirements of DTC's procedures as in effect
from time to time) irrevocably in trust for the benefit of the beneficial owners
of this Note subject to Special Mandatory Purchase by 3:00 p.m., New York City
time, on such Interest Rate Adjustment Date. Such funds shall be in an amount
sufficient to pay the aggregate purchase price of this Note, equal to 100% of
the principal amount thereof. In the event a Standby Note Purchase Agreement is
in effect but the Liquidity Provider shall fail to advance funds for whatever
reason thereunder, the Company hereby agrees to purchase this Note on such
Interest Rate Adjustment Date. The Company has agreed in the Indenture to pay
the accrued interest, if any, on this Note by
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depositing sufficient same-day funds therefor with the Trustee (or such
other account meeting the requirements of DTC's procedures as in effect from
time to time) by 3:00 p.m., New York City time, on such Interest Rate
Adjustment Date.
Failure by the Company to purchase this Note pursuant to a Special
Mandatory Purchase in the manner provided in this Note will constitute an Event
of Default under the Indenture in which event the date of such failure shall
constitute a date of Maturity for this Note and the principal hereof may be
declared due and payable in the manner and with the effect provided in the
Indenture. Following such failure to pay pursuant to a Special Mandatory
Purchase, this Note will bear interest at the Special Interest Rate as provided
above under "Interest."
Optional Redemption on any Interest Rate Adjustment Date. This Note is
subject to Optional Redemption, at the direction of the Company and without
notice to the Holders, on any Interest Rate Adjustment Date relating hereto, in
whole or in part, at a redemption price equal to 100% of the principal amount to
be redeemed plus accrued and unpaid interest to the date set for redemption (the
"Redemption Date").
Optional Redemption While This Note is in the Long Term Rate Mode. So
long as this Note bears interest in the Long Term Rate Mode, this Note is
subject to Optional Redemption at the written direction of the Company if so
specified at the time of conversion to or within such Long Term Rate Mode (a)
commencing on the Commencement Date, if any, specified in Annex A, in whole or
in part at any time, at the applicable redemption prices for any Redemption Date
(dates inclusive) (i) from the Commencement Date to but not including the first
anniversary of the Commencement Date, (ii) from the first anniversary of the
Commencement Date to but not including the second anniversary of the
Commencement Date, and (iii) from the second anniversary of the Commencement
Date and thereafter (expressed as percentage of the principal amount so
redeemed) set forth in Annex A, plus accrued interest to the Redemption Date or
(b) otherwise as set forth in Annex A.
Notice of redemption shall be given by mail to the registered owner of
this Note, 30 days prior to the Redemption Date, all as provided in the
Indenture. As provided in the Indenture, notice of redemption as aforesaid may
state that such redemption shall be conditioned upon the receipt by the Trustee
of the redemption monies on or before the date fixed for such redemption; a
notice of redemption so conditioned shall be of no force or effect if such money
is not so received.
The Company shall not be required to (a) issue, register the transfer
of or exchange Notes of this series during a period beginning at the opening of
business 15 days before any selection of Notes of this series to be redeemed and
ending at the close of business on the day of the mailing of the relevant notice
of redemption or (b) register the transfer of or exchange any Notes selected for
redemption, in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
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In the event of redemption of this Note in part only, a new Note or
Notes of this series, of like tenor, for the unredeemed portion hereof will be
issued in the name of the registered owner hereof upon the cancellation hereof.
Allocation. Except in the case of a Special Mandatory Purchase, if this
Note is to be redeemed in part, DTC, after receiving notice of redemption
specifying the aggregate principal amount of this Note to be so redeemed, will
determine by lot (or otherwise in accordance with the procedures of DTC) the
principal amount of this Note to be redeemed from the account of each DTC
participant. After making its determination as described above, DTC will give
notice of such determination to each DTC participant from whose account this
Note is to be redeemed. Each such DTC participant, upon receipt of such notice,
will in turn determine the principal amount of this Note to be redeemed from the
accounts of the beneficial owners of this Note for which it serves as DTC
participant, and give notice of such determination to the Remarketing Agent.
Acceleration. If any Event of Default with respect to the Notes shall
occur and be continuing, the principal of the Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
SPURS MODE
Notwithstanding anything herein to the contrary, the provisions of this
section shall apply to this Note upon conversion to the SPURS Mode, and shall
supersede any conflicting provisions of general applicability contained
elsewhere herein, during the period from, and including, the Interest Rate
Adjustment Date beginning a SPURS Rate Period to, but excluding, the next
succeeding Interest Rate Adjustment Date (or if the SPURS Agent does not elect
to purchase this Note on the SPURS Remarketing Date designated for such SPURS
Mode or if after electing to so purchase this Note the SPURS Agent fails for any
reason to so purchase this Note, to the SPURS Remarketing Date).
(a) Interest To SPURS Remarketing Date. The Interest Rate Period for
this Note in the SPURS Mode will be established by the Company (as described in
"Interest Rate" above) as a period of more than 364 days and not exceeding the
remaining term to the Stated Maturity of this Note; provided, however, that such
Interest Rate Period must end on the day prior to an Interest Payment Date for
this Note. The SPURS Rate Period shall consist of the period from and including
the Interest Rate Adjustment Date commencing such Interest Rate Period to and
excluding the date (the "SPURS Remarketing Date") designated at such time by the
SPURS Agent after consultation with the Company and set forth in Annex A hereto.
The interest rate and, in the case of a floating interest rate, the Spread, if
any, and the Spread Multiplier, if any, to the SPURS Remarketing Date for this
Note in the SPURS Mode will be determined not later than 11:50 a.m., New York
City time, on the Interest Rate Adjustment Date for this Note, which for the
SPURS Mode is the first day of the SPURS Rate Period for this Note. Such
interest rate will be the minimum rate of interest and, in the case of a
floating interest rate, Spread (if any) and Spread Multiplier (if any) necessary
in the judgment of such SPURS Agent to produce a par
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bid in the secondary market for this Note on the date the interest is
established. The designated SPURS Remarketing Date shall be an Interest Payment
Date within such Interest Rate Period.
(b) Mandatory Tender. Provided that the SPURS Agent gives notice to the
Company and the Trustee on a Business Day not later than ten (10) days prior to
the SPURS Remarketing Date of its intention to purchase this Note for
remarketing (the "Notification Date"), this Note shall be automatically
tendered, or deemed tendered, to the SPURS Agent for purchase on the SPURS
Remarketing Date, except in the circumstances described in "Redemption" below,
for 100% of the principal amount hereof. Upon tender, the SPURS Agent may
remarket this Note for its own account at varying prices to be determined by the
SPURS Agent at the time of such sale. From, and including, the SPURS Remarketing
Date to, but excluding, the next succeeding Interest Rate Adjustment Date, this
Note shall bear interest at the SPURS Interest Rate. If the SPURS Agent elects
to remarket this Note, the obligation of the SPURS Agent to purchase this Note
on the SPURS Remarketing Date is subject to, among other things, the conditions
that, since the Notification Date, no material adverse change in the condition
of the Company and its subsidiaries, considered as one enterprise, shall have
occurred and that no Event of Default (as defined in the Indenture), or any
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default, with respect to this Note shall have occurred
and be continuing.
(c) Remarketing; Establishing the SPURS Interest Rate. Subject to the
SPURS Agent's election to remarket this Note, the SPURS Interest Rate shall be
determined by the SPURS Agent by 3:30 p.m., New York City time, on the third
Business Day immediately preceding the SPURS Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and shall be equal to the Base Rate established by the SPURS
Agent, after consultation with the Company, at or prior to the commencement of
the SPURS Mode (the "Base Rate") plus the Applicable Spread, which shall be
based on the Dollar Price of this Note as of the SPURS Remarketing Date.
(d) Notification of Results; Settlement. Provided the SPURS Agent has
previously notified the Company and the Trustee on the Notification Date of its
intention to purchase this Note on the SPURS Remarketing Date, the SPURS Agent
shall notify the Company, the Trustee and DTC by telephone, confirmed in
writing, by 4:00 p.m., New York City time, on the Determination Date, of the
SPURS Interest Rate, and this Note shall be automatically delivered to the
account of the Trustee, by book-entry through DTC pending payment of the
purchase price therefor, on the SPURS Remarketing Date.
In the event that the SPURS Agent purchases this Note on the SPURS
Remarketing Date, the SPURS Agent shall make or cause the Trustee to make
payment to the DTC participant of each tendering beneficial owner hereof, by
book-entry through DTC by the close of business on the SPURS Remarketing Date
against delivery through DTC of such beneficial owner's interest herein, of 100%
of the principal amount for this Note. If the SPURS Agent does not purchase this
Note on the SPURS Remarketing Date, the Company may attempt to convert this Note
to a new Interest Rate Mode; the interest rate will be determined as provided
above in "Interest Rate" and settlement will be effected as described under
"Remarketing and Settlement" above. In any
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case, the Company shall make or cause the Trustee to make payment of
interest to each beneficial owner of this Note due on the SPURS Remarketing
Date by book-entry through DTC by the close of business on the SPURS
Remarketing Date.
The transactions set forth above shall be executed on the SPURS
Remarketing Date through DTC in accordance with the procedures of DTC, and the
accounts of the respective DTC participants shall be debited and credited and
this Note shall be delivered by book-entry as necessary to effect the purchases
and sales thereof.
Transactions involving the sale and purchase of Notes remarketed by the
SPURS Agent on and after the SPURS Remarketing Date will settle in immediately
available funds through DTC's Same-Day Funds Settlement System.
The tender and settlement procedures set forth above, including
provisions for payment by purchasers of this Note in the remarketing or for
payment to selling beneficial owners of this Note, may be modified to the extent
required by DTC or to the extent required to facilitate the tender and
remarketing of this Note in certificated form, if the book-entry system is no
longer available for this Note at the time of the remarketing. In addition, the
SPURS Agent may, without the consent of the Holders of the Notes, modify the
settlement procedures set forth above in order to facilitate the tender and
settlement process.
As long as DTC's nominee holds the certificates representing this Note
in the book-entry system of DTC, no certificates for this Note shall be
delivered by any selling beneficial owner to reflect any transfer of such Notes
effected in the remarketing.
(e) Conversion or Redemption Following Election by the SPURS Agent to
Remarket. If the SPURS Agent elects to remarket this Note on the SPURS
Remarketing Date, this Note will be subject to a mandatory tender to the SPURS
Agent for remarketing on such date, in each case subject to the conditions set
forth above and to the Company's right to either convert this Note to a new
Interest Rate Mode on the SPURS Remarketing Date or to redeem this Note from the
SPURS Agent, in each case as described in the next sentence. The Company will
notify the SPURS Agent and the Trustee, not later than the Business Day
immediately preceding the Determination Date, if the Company irrevocably elects
to exercise its right to either convert the Notes to a new Interest Rate Mode,
or to redeem the Notes, in whole but not in part, from the SPURS Agent at the
Optional Redemption Price, in each case on the SPURS Remarketing Date.
In the event that the Company irrevocably elects to convert this Note
to a new Interest Rate Mode, then as of the SPURS Remarketing Date the Notes
will cease to be in the SPURS Mode, the SPURS Remarketing Date will constitute
an Interest Rate Adjustment Date, and this Note will be subject to remarketing
on such date by a Remarketing Agent appointed by the Company in the Commercial
Paper Term Mode or the Long Term Rate Mode or a new SPURS Mode established by
the Company in accordance with the procedures set forth herein; provided that in
such case, the notice period required for conversion shall be the period
commencing the Business Day immediately preceding the Determination Date. In
such case, the Company shall pay to the SPURS Agent the excess of the Dollar
Price of this Note over 100% of the principal
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amount of this Note in same-day funds by wire transfer to an account designated
by the SPURS Agent on the SPURS Remarketing Date.
In the event that the Company irrevocably elects to redeem this Note,
the "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of this Note and (ii) the Dollar Price, plus in either case
accrued and unpaid interest from the SPURS Remarketing Date on the principal
amount being redeemed to the date of redemption. If the Company elects to redeem
this Note, it shall pay the redemption price therefor in same-day funds by wire
transfer to an account designated by the SPURS Agent on the SPURS Remarketing
Date.
If notice has been given as provided in the Indenture and funds for the
redemption of any Notes called for redemption shall have been made available on
the redemption date referred to in such notice, this Note shall cease to bear
interest on the date fixed for such redemption specified in such notice and the
only right of the SPURS Agent from and after the redemption date shall be to
receive payment of the Optional Redemption Price upon surrender of this Note in
accordance with such notice.
OTHER PROVISIONS
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the registered owners of the securities of each series
thereunder to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the registered owners of not less than a majority in
principal amount of such securities then Outstanding of each series to be
affected. The Indenture also contains provisions permitting the registered
owners of specified percentages in principal amount of the securities of each
series thereunder at the time Outstanding, on behalf of the registered owners of
all securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the registered owner of this
Note shall be conclusive and binding upon such registered owner and upon all
future registered owners of this Note issued upon the registration of transfer
hereof or in exchange for or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
As set forth in, and subject to the provisions of, the Indenture, no
registered owner of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless (i) such
registered owner shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes of this series, (ii) the
registered owners of not less than 25% in principal amount of the Outstanding
Notes of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, (iii) the
Trustee shall have failed to institute such proceeding within 60 days and (iv)
the Trustee shall not have received from the registered owners of a majority in
principal amount of the Outstanding Notes of this series a direction
inconsistent with such request within such 60 day period; provided, however,
that such limitations do not apply to a suit instituted by the registered owner
hereof for the enforcement of payment of the principal of
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<PAGE> 67
and premium, if any, or any interest on this Note on or after the respective
due dates expressed herein.
Notwithstanding anything to the contrary contained herein, if a Policy
is in effect with respect to this Note and the Insurer is not in default of its
obligations to make payments thereunder, the Insurer shall be deemed to be the
Holder of this Note for all purposes under the Indenture and shall have the
exclusive right to exercise or direct the exercise of remedies on behalf of the
Holders of this Note in accordance with the terms of the Indenture following an
Event of Default, and the principal of this Note may not be declared due and
payable immediately without the prior written consent of the Insurer.
No reference to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and premium, if any, and any interest
including additional amounts, on this Note at the times, places and rate, and in
the coin or currency, herein prescribed.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are not defined herein and which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
This Note shall not be valid or become obligatory for any purpose until
the Trustee's Certificate of Authentication hereon shall have been executed by
the Trustee.
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IN WITNESS WHEREOF, DTE CAPITAL CORPORATION has caused this instrument
to be duly executed.
DTE CAPITAL CORPORATION
_________________________________________
Name:
Title:
Attest:
By __________________________
Name:
Title:
This is one of the Notes of the series designated herein, referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By _______________________________
Authorized Signatory
Date:
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ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER
To assign this Note fill in the form below:
(I) or (we) assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax identification number, if any)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
Your signature:________________________________________________________
(Sign exactly as your name appears on the other side
of this Note)
Date:_____________________________________________
Signature Guarantee:*_____________________________
In connection with any transfer of any of the Notes evidenced by this
certificate occurring prior to the date that is two years (or such shorter
period as may then be applicable under Rule 144(k) of the United States
Securities Act or 1933, as amended (the "Securities Act") (or any successor
provision)) after the later of the date of original issuance of such Notes and
the last date, if any, on which this Note is owned by the Company or any
Affiliate (as defined in the Indenture) of the Company, the undersigned confirms
that this Note is being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company or a Subsidiary thereof; or
(2) [ ] pursuant to and in compliance with Rule 144A under the
Securities Act; or
(3) [ ] pursuant to Rule 144 under the Securities Act; or
(4) [ ] pursuant to an effective registration statement under the
Securities Act; or
(5) [ ] pursuant to another available exemption from
the registration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
this Note in the name of any person other than the registered Holder thereof;
provided, however, that if box (5) is checked, the Trustee (as instructed by the
Company) and the Company may require, prior to registering any transfer of
______________________
* Signature must be guaranteed by a commercial bank, trust company or member
firm or a major stock exchange.
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<PAGE> 70
this Note, such certifications, legal opinions or other information
as the Company has reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
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<PAGE> 71
ANNEX A(1)
DTE CAPITAL CORPORATION
Remarketed Notes, Series A due 2038
Initial Interest Rate Period
CUSIP Number: 23333MAA9
Principal Amount: $100,000,000
Original Issue Date: June 23, 1998
Issue Price: 100%
Stated Maturity: June 15, 2038
Initial Interest Rate: 6.17% per annum
Interest Payment Dates: June 15 and December 15, commencing December 15, 1998
Record Dates: 15 days prior to the related Interest Payment Date
Initial Interest Rate
Adjustment Date: June 15, 2003
Subsequent Interest Rate Period(s):
CUSIP Number:
Principal Amount:
Interest Rate Adjustment Date:
Record Date(s):
Interest Payment Date(s):
________________________
(1) Trustee may complete this Annex A or attach a copy of the applicable
Conversion Notice or Floating Interest Rate Notice from the Company, or
notice from the applicable Remarketing Agent containing all of the
applicable terms set forth herein, as Annex A.
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Interest Rate Mode:
[ ] Commercial Paper Term Mode
[ ] Long Term Rate Mode
[ ] SPURS Mode
[ ] SPURS Agent: _____________
[ ] Base Rate: _________________
[ ] SPURS Remarketing Date: ________________
[ ] Reference Corporate Dealers:
[ ] Reference Treasury Dealer: ________________
[ ] SPURS Interest Rate: ___________
Interest Rate:
[ ] Fixed Rate:
[ ] Floating Rate:
Calculation Agent (if other than The Bank of New York):
Initial Interest Rate to Initial Interest Reset Date:
Interest Rate Basis(es):
[ ] CD Rate
Index Maturity:
[ ] CMT Rate
Index Maturity:
Designated CMT Telerate Page:
[ ] Commercial Paper Rate
Index Maturity:
[ ] Federal Funds Rate
[ ] LIBOR
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[ ] LIBOR Reuters
Index Currency:
Index Maturity:
[ ] LIBOR Telerate
Index Currency:
Index Maturity:
[ ] Prime Rate
[ ] Treasury Rate
Index Maturity:
Spread (+/-):
Spread Multiplier:
Floating Rate Maximum Interest Rate:
Floating Rate Minimum Interest Rate:
Initial Interest Reset Date:
Interest Reset Date:
Interest Reset Period(s):
Day Count Convention:
[ ] Actual/360
[ ] Actual/Actual
[ ] 30/360
Applicable Interest Rate Basis:
Optional Redemption Provisions (Long Term Rate Mode):
Commencement Dates:
Redemption Price: (i) __________________%
(ii) __________________%
(iii) __________________%
Other or Alternative Terms of Optional Repayment:
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Early Remarketing Provisions (Long Term Rate Mode):
Initial Early Remarketing Date: _________________
Initial Early Remarketing Premium: ______________
Annual Early Remarketing Premium Percentage Reduction: _____________
Other or Alternative Terms of Early Remarketing:
Other Provisions:
_________________________________________________________
_________________________________________________________
_________________________________________________________
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<PAGE> 75
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at the office of
The Bank of New York, New York, New York.
MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of
the premium and subject to the terms of this policy, hereby unconditionally and
irrevocably guarantees to any owner, as hereinafter defined, of the following
described obligations, the full and complete payment required to be made by or
on behalf of the Issuer to The Bank of New York or its successor (the "Paying
Agent") of an amount equal to (i) the principal of the Obligations (as that term
is defined below) on the initial mandatory tender date of June 15, 2003 and
interest on the Obligations as such payments become due on and prior to such
initial mandatory tender date but shall not be so paid (except that in the event
of any acceleration of the due date of such principal by reason of mandatory or
optional redemption, or acceleration resulting from default or otherwise, the
payments guaranteed hereby shall be made in such amounts and at such times as
such payments of principal would have been due had there not been any such
acceleration); and (ii) the reimbursement of any such payment which is
subsequently recovered from any owner pursuant to a final judgment by a court of
competent jurisdiction that such payment constitutes an avoidable preference to
such owner within the meaning of any applicable bankruptcy law. The amounts
referred to in clauses (i) and (ii) of the preceding sentence shall be referred
to herein collectively as the "Insured Amounts." "Obligations" shall mean:
$100,000,000
DTE Capital Corporation Remarketed Notes,
Series A due on the initial interest rate adjustment date of June 15, 2003
Upon receipt of telephonic or telegraphic notice, such notice subsequently
confirmed in writing by registered or certified mail, or upon receipt of written
notice by registered or certified mail, by the Insurer from the Paying Agent or
any owner of an Obligation the payment of an Insured Amount for which is then
due, that such required payment has not been made, the Insurer on the due date
of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with
State Street Bank and Trust Company, N.A., in New York, New York, or its
successor, sufficient for the payment of any such Insured Amounts which are then
due. Upon presentment and surrender of such Obligations or presentment of such
other proof of ownership of the Obligations, together with any appropriate
instruments of assignment to evidence the assignment of the Insured Amounts due
on the Obligations as are paid by the Insurer, and appropriate instruments to
effect the appointment of the Insurer as agent for such owners of the
Obligations in any legal proceeding related to payment of Insured Amounts on the
Obligations, such instruments being in a form satisfactory to State Street Bank
and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall
disburse to such owners, or the Payment Agent payment of the Insured Amounts due
on such Obligations, less any amount held by the Paying Agent for the payment of
such Insured Amounts and legally available therefor. This policy does not insure
against loss of any prepayment premium which may at any time be payable with
respect to any Obligation.
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<PAGE> 76
As used herein, the term "owner" shall mean the registered owner of any
Obligation as indicated in the books maintained by the Paying Agent, the Issuer,
or any designee of the Issuer for such purpose. The term owner shall not include
the Issuer or any party whose agreement with the Issuer constitutes the
underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices
located at 113 King Street, Armonk, New York 10504 and such service of process
shall be valid and binding.
This policy is non-cancelable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the
Obligations.
This policy is not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law.
MBIA INSURANCE COPRORATION
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<PAGE> 77
EXHIBIT B
FORM OF LIQUIDITY PROVIDER NOTE
(Attached)
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<PAGE> 78
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY . UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
LIQUIDITY PROVIDER NOTE
No. $____________
DTE CAPITAL CORPORATION
REMARKETED NOTES,
SERIES A DUE 2038
Facility
Expiration Date of Original
Date Maturity Issue Date CUSIP
June 15, 2038
DTE CAPITAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Michigan (the "Company"), for value received
hereby promises to pay to _______________________ or registered assigns, the
principal sum of $________________ on
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June 15, 2038, upon the presentation and surrender hereof at the
principal office of The Bank of New York, or its successor in trust (the
"Trustee"), and to pay interest on the unpaid principal balance hereof from the
Original Issue Date specified above or such date to which interest has been
paid or duly provided for, until such principal balance has been paid in full,
at such interest rates, and payable at such times, as are specified in the
applicable Standby Note Purchase Agreement and are notified to the Trustee by
the Administrative Agent under such Standby Note Purchase Agreement. Payment of
the principal of and interest on this Note will be made at the office or agency
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the person in whose name this Note is registered at the close
of business on the Record Date.
This Note is one of a duly authorized series of Securities of the
Company (the "Notes"), issued and to be issued under an Indenture, dated as of
June 15, 1998, as amended and supplemented by the First Supplemental Indenture,
dated as of June 15, 1998 (together, the "Indenture"), between the Company and
the Trustee, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
registered owners of the Notes and of the terms upon which the Notes are, and
are to be authenticated and delivered.
This Note is entitled to the benefit of that certain support agreement
(the "Support Agreement"), dated as of June 16, 1998, by and between the Company
and DTE Energy Company, the owner, directly or indirectly, of 100% of the
outstanding common stock of the Company and that certain assignment and pledge
of the Company's rights under the Support Agreement to the Lenders (as defined
in the Support Agreement), pursuant to the terms and conditions of the
collateral assignment agreement (the "Collateral Assignment Agreement"), dated
as of June 16, 1998, by and between the Company and the Lenders, subject in each
case to amendment or termination of the Support Agreement or, as the case may
be, the Collateral Assignment Agreement, in accordance with their respective
terms.
REMARKETING, TENDER AND SETTLEMENT
In the event of a successful remarketing, this Note will automatically
be tendered for purchase, or deemed tendered for purchase, by the beneficial
owner hereof on the day set forth in a notice by the applicable Remarketing
Agent to the Company, the Liquidity Provider and the Trustee (the "Tender
Date"). The applicable Remarketing Agent will make payment to the DTC
participant of the tendering beneficial owner hereof subject to a remarketing,
by book-entry through DTC by the close of business on such Tender Date against
delivery through DTC of the beneficial owner's tendered Note, of the purchase
price for this Note, plus accrued interest, if any, to such date.
The transactions described above for a remarketing of this Note will be
executed through DTC in accordance with the procedures of DTC, and the accounts
of the respective DTC
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<PAGE> 80
participants will be debited and credited and this Note will be
delivered by book-entry as necessary to effect the purchases and sales hereof,
in each case as determined in the related remarketing.
The purchase price for this Note to the beneficial owner hereof shall
be paid solely out of the proceeds received from a purchaser of this Note in
such remarketing and neither the Remarketing Agent nor the Company will be
obligated to provide funds to make payment upon any beneficial owner's tender of
this Note in a remarketing.
The settlement procedures described above, including provisions for
payment by purchasers of this Note or for payment to the beneficial owner of
this Note, may be modified to the extent required by DTC. In addition, the
Remarketing Agent may, in accordance with the terms of the Indenture, modify the
settlement procedures set forth above in order to facilitate the settlement
process.
As long as DTC's nominee holds the certificates representing this Note
in the book-entry system of DTC, no certificates for this Note will be delivered
by the beneficial owner hereof to reflect any transfer of this Note effected in
any remarketing.
TRANSFER OR EXCHANGE
As provided in the Indenture and subject to certain limitations set
forth therein and herein, the transfer of this Note is registrable in the
Security Register, upon surrender of this Note for registration of transfer at
the office or agency of the Company in any place where the principal of and
premium, if any, and any interest on this Note are payable or at such other
offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to, the
Company and the Security Register or any transfer agent duly executed, by the
registered owner hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount will be issued to the
designated transferee or transferees.
The Notes are issuable only in fully registered form in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. As provided in
the Indenture and subject to certain limitations therein set forth, this Note is
exchangeable for a like aggregate principal amount of Notes of this series and
of like tenor of any authorized denomination, as requested by the registered
owner surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of this Note, but, subject to certain limitations set forth in the
Indenture, the Company may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
Subject to the terms of the Indenture, prior to due presentment of this
Note for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes,
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<PAGE> 81
whether or not this Note is overdue, and neither the company, the Trustee nor
any such agent shall be affected by notice to the contrary.
ACCELERATION
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and to the effect provided in the Indenture.
OTHER PROVISIONS
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the registered owners of the securities of each series
thereunder to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the registered owners of not less than a majority in
principal amount of such securities then Outstanding of each series to be
affected. The Indenture also contains provisions permitting the registered
owners of specified percentages in principal amount of the securities of each
series thereunder at the time Outstanding, on behalf of the registered owners of
all securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the registered owner of this
Note shall be conclusive and binding upon such registered owner and upon all
future registered owners of this Note issued upon the registration of transfer
hereof or in exchange for or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
As set forth in, and subject to the provisions of, the Indenture, no
registered owner of any Note will have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless (i) such
registered owner shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to the Notes of this series, (ii) the
registered owners of not less than 25% in principal amount of the Outstanding
Notes of this series shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, (iii) the
Trustee shall have failed to institute such proceeding within 60 days and (iv)
the Trustee shall not have received from the registered owners of a majority in
principal amount of the Outstanding Notes of this series a direction
inconsistent with such request within such 60-day period; provided, however,
that such limitations do not apply to a suit instituted by the registered owner
hereof for the enforcement of payment of the principal of and premium, if any,
or any interest on this Note on or after the respective due dates expressed
herein.
No reference to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and premium, if any, and any interest
on this Note at the times, places and rate, and in the coin or currency, herein
prescribed.
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The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Note shall not be valid or become obligatory for any purpose until
the Trustee's Certificate of Authentication hereon shall have been executed by
the Trustee.
IN WITNESS WHEREOF, DTE CAPITAL CORPORATION has caused this instrument
to be duly executed.
DTE CAPITAL CORPORATION
By: _______________________________
Attest:
By:____________________________
This Note is one of the Notes of the series designated herein, referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
By: ________________________________
Authorized Signatory
Date:
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
____________________________________________________________________________|
Please insert Social Security or Other Identifying Number of Assignee
____________________________________________________________________________
(please print or type name and address of transferee)
the within Note and all rights thereunder and does hereby irrevocably constitute
and appoint ________________ attorney to transfer the within Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _________________________________ ________________________________
In the presence of:
________________________________________________________________________________
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Note in every particular, without alteration
or enlargement or any change whatever. When assignment is made by a guardian,
trustee, executor or administrator, an officer of a corporation, or anyone in a
representative capacity, proof of his authority to act must accompany the Note.
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EXHIBIT C
DTE CAPITAL CORPORATION
REMARKETED NOTES, SERIES A DUE 2038
SUPPLEMENTAL COMPANY ORDER
Pursuant to Article Six of the First Supplemental Indenture,
dated as of June 15, 1998, to the Indenture, dated as of June 15, 1998, as
amended, you are instructed to prepare and authenticate a Note, of the series
identified above, in the principal amount of $____________. The Note is being
delivered in exchange for issued and outstanding Notes of the series identified
above.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day
of June __, 1998.
___________________________
Christopher C. Arvani
Assistant Treasurer
DTE Capital Corporation
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EXHIBIT D
[FORM OF SUPPORT AGREEMENT]
(Attached)
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<PAGE> 86
[FORM OF SUPPORT AGREEMENT]
BETWEEN
DTE ENERGY COMPANY
AND
DTE CAPITAL CORPORATION
THIS SUPPORT AGREEMENT, dated as of June 16, 1998, is between DTE
ENERGY COMPANY, a Michigan corporation ("Parent"), and DTE CAPITAL CORPORATION,
a Michigan corporation ("Subsidiary").
WHEREAS, Parent is the owner of 100% of the outstanding common
stock of Subsidiary;
WHEREAS, Subsidiary intends to issue $100,000,000 aggregate
principal amount of debt securities (hereinafter referred to as the "Debt
Securities," and such amount and all interest and other amounts, if any, payable
with respect thereto being hereinafter collectively referred to as "Debt") to
parties other than Parent pursuant to the Indenture dated as of June 15, 1998
(as amended or supplemented with respect to the Debt Securities, the
"Indenture") between Subsidiary and The Bank of New York (or any successor or
replacement trustee), as trustee (the "Trustee");
WHEREAS, Parent and Subsidiary desire to take certain actions to
enhance and maintain the financial condition of Subsidiary as hereinafter set
forth in order to enable Subsidiary and its subsidiaries to incur indebtedness
on more advantageous and reasonable terms; and
WHEREAS, the Lenders (as defined below) will rely upon this
Agreement in making loans or extending credit or otherwise acquiring Debt
Securities of Subsidiary.
NOW THEREFORE, in consideration of the premises, and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Stock Ownership. During the term of this Agreement, Parent
will own directly or indirectly all of the voting common stock of Subsidiary and
The Detroit Edison Company ("DECO") now or hereafter issued and outstanding.
2. Negative Pledge. During the term of this Agreement, Parent
will not create or suffer to exist any lien, security interest or other charge
of encumbrance, upon or with respect to any voting common stock of DECO from
time to time owned directly or indirectly by Parent or any capital stock of
Subsidiary from time to time owned directly or indirectly by Parent,
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<PAGE> 87
provided, however, that any restriction on the payment of dividends by
DECO or Subsidiary contained in any subordinated debt instrument, preferred
stock or preference stock of DECO or Subsidiary shall not constitute a lien,
security interest or other charge or encumbrance.
3. Liquidity Provision. If, during the term of this Agreement,
Subsidiary is unable to make timely payment on the relevant payment date of
interest, principal or premium, if any, on, or other amounts due in respect of,
all or any portion of the Debt Securities issued by it or related Debt, Parent
promptly shall provide to Subsidiary, at its request, such funds (in the form of
cash or liquid assets) in an amount sufficient to permit Subsidiary to make
timely payment on the relevant payment date in respect of such Debt as equity or
as a loan, as Parent shall determine in its sole discretion. If such funds are
advanced to Subsidiary as a loan, such loan shall be on such terms and
conditions, including maturity and rate of interest, as Parent and Subsidiary
shall agree. Notwithstanding the foregoing, any such loan shall be subordinated
to any and all debt of Subsidiary owing to any lender (including any Lender)
other than Parent. Each of the parties hereto acknowledges that Parent's
obligations hereunder do not constitute a guarantee by Parent of Debt of
Subsidiary. As used herein, the term "Lender" shall mean (i) any person, firm,
corporation or other entity to which Subsidiary is indebted for any Debt or
which is acting as the Trustee or a trustee or authorized representative on
behalf of such person, firm corporation or other entity or which is acting as
SPURS Agent (as defined in the Indenture), and (ii) Citicorp Securities, Inc.
and Salomon Brothers Inc, and their respective successors (the "Initial
Purchasers"), with respect to Debt owing by Subsidiary to the Initial Purchasers
in accordance with the terms of that certain Purchase Agreement, dated as of
June 16, 1998, relating to the Debt Securities; provided that, notwithstanding
the foregoing, the claims of the Initial Purchasers shall be subordinated to the
claims of the holders of the Debt Securities and the Insurer (as defined below)
hereunder.
4. Waivers. Parent hereby waives any failure or delay on the part
of Subsidiary in asserting or enforcing any of its rights or in making any
claims or demands hereunder. Subsidiary or any Lender may at any time, without
Parent's consent, without notice to Parent and without affecting or impairing
Subsidiary's or such Lender's rights or Parent's obligations hereunder, do any
of the following with respect to any Debt: (a) make changes, modifications,
amendments or alterations, by operation of law or otherwise, including, without
limitation, any changes in the rate of interest payable thereon or any changes
in the method of calculating the rate of interest payable thereon, (b) grant
renewals and extensions and extensions of time, for payment or otherwise, (c)
accept new or additional documents, instruments or agreements relating to or in
substitution of said Debt, or (d) otherwise handle the enforcement of their
respective rights and remedies in accordance with their business judgment.
5. Amendment; Suspension. This Agreement may be amended or
terminated at any time by written amendment or agreement signed by both parties;
provided that such amendment or termination does not adversely affect the rights
of the Initial Purchasers; and provided further, however, that except as set
forth in the next succeeding sentence, no amendment to the Agreement which
adversely affects the rights of Subsidiary or any Lender and no termination of
this Agreement shall be effective as to Subsidiary or any Lender until such time
as all Debt owing to such Lender by Subsidiary on the date of such amendment or
termination shall have
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been paid in full, unless such Lender shall consent in writing to the
contrary. Notwithstanding the foregoing, (A) upon not less than 30 days prior
notice to the applicable Remarketing Agent and the Trustee, Subsidiary and
Parent may amend this Agreement (subject to the proviso that such amendment
shall not adversely affect the rights of the Initial Purchasers) on any
Interest Rate Adjustment Date (as defined in the Indenture) for Debt
Securities, effective commencing on such Interest Rate Adjustment Date;
provided that such amendment shall not be applicable to such Debt Securities
until after the Debt Securities have been tendered for remarketing and
successfully remarketed on such Interest Rate Adjustment Date; and provided
further that no such amendment shall be of such nature as would require (i)
registration or re-registration of the Debt Securities under the Securities Act
of 1933, as amended (the "Securities Act"), unless Subsidiary has a
registration statement under the Securities Act effective with respect thereto
or (ii) registration of Subsidiary under the Investment Company Act of 1940, as
amended, and (B) Parent's obligations under this Agreement shall be suspended
and shall be of no force and effect as to the parties hereto and as to all
Lenders if and for so long as (i) Subsidiary shall have a long-term debt rating
of not less than "A-" from Standard & Poor's Ratings Services or its successor
or a long-term debt rating of not less than "A3" from Moody's Investors
Service, Inc. or its successor and (ii) Parent shall have submitted a written
request to Subsidiary that its obligations under this Agreement be so suspended
(with a copy to the Trustee, if applicable) and shall not have revoked such
request in writing. Parent covenants that it will revoke any such request to
the extent that the suspension of Parent's obligations under this Agreement has
an adverse effect on any debt rating of Subsidiary. For purposes of this
Section 5, ratings shall be based upon unsecured non-credit enhanced debt of
Subsidiary.
6. Rights of Lenders. Subsidiary hereby assigns and pledges to
the Lenders, for the ratable benefit of each Lender (subject to the
subordination of claims of the Initial Purchasers pursuant to Section 3 hereof),
Subsidiary's right under Sections 1, 2, 3 and 4 of this Agreement, and, if
Subsidiary fails or refuses to take timely action to enforce its rights under
Section 1, 2, 3 or 4 of this Agreement, any Lender may enforce such rights on
behalf of Subsidiary directly against Parent. Parent hereby consents to such
assignment and pledge. This assignment and pledge secures all obligations of
Subsidiary under the Debt. Subsidiary and Parent agree, for the benefit of the
Lenders to execute and deliver all further instruments and documents, and take
all further action, that the Lenders may request in order to perfect and protect
any security interest purported to be granted hereby or to enable the Lenders to
enforce their rights and remedies hereunder.
7. Parity. Parent's obligations hereunder shall be pari passu
with Parent's obligations under any existing as well as additional "make-well,"
"keep-well" or support agreements (that are not by their terms subordinated) as
are entered into between Parent and Subsidiary from time to time.
8. Notices. Any notice, instruction, request, consent, demand or
other communication required or contemplated by this Agreement shall be in
writing, shall be given or made by United States first class mail, telex,
facsimile transmission or hand delivery, addressed as follows:
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If to Parent: 2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer-Banking
If to Subsidiary: 2000 2nd Avenue
Detroit, Michigan 48226-1279
Attention: Assistant Treasurer
9. Successors. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and is also intended for the
benefit of Lenders, and, notwithstanding that such Lenders are not parties
hereto, each Lender shall be entitled to the full benefits of this Agreement and
to enforce the covenants and agreements contained herein as set forth in Section
6. This Agreement is not intended for the benefit of any person other than
Lenders and shall not confer or be deemed to confer upon any such person any
benefits, rights or remedies hereunder.
10. Governing Law. This Agreement shall be governed by the laws
of the State of New York.
11. Insurer Provisions. (a) Notwithstanding anything to the
contrary herein, if a Financial Guaranty Insurance Policy (hereinafter the
"Policy") issued by MBIA Insurance Corporation (the "Insurer") is in effect with
respect to any Debt Securities and the Insurer is not in default with respect to
its obligations under the Policy, the Insurer shall be deemed a Lender for all
purposes of this Agreement and shall possess the same rights, in all respects,
as any Lender under this Agreement for such time as the Policy is in effect and
the Insurer shall possess the exclusive right to exercise or direct the exercise
of the rights of all Lenders in accordance with the terms of this Agreement.
(b) For so long as the Policy is in effect or the Insurer is a holder of
any Debt Securities, this Agreement shall not be amended or terminated without
the prior written consent of the Insurer, and the Insurer's consent shall be
required for any action by the Subsidiary or Parent that would require the
Lenders' consent under the terms of this Agreement.
(c) Notwithstanding anything to the contrary herein, for so long as a
Policy is in effect or the Insurer is a holder of any Debt Securities, the
Parent's obligations hereunder shall not be suspended pursuant to Section 5 of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement
to be duly executed as of the day and year first above written.
DTE ENERGY COMPANY
By:______________________________
Name:
Title:
DTE CAPITAL CORPORATION
By:______________________________
Name:
Title:
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EXHIBIT E
[FORM OF COLLATERAL ASSIGNMENT AGREEMENT]
(Attached)
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COLLATERAL ASSIGNMENT AGREEMENT dated as of June 16, 1998, made by DTE
CAPITAL CORPORATION, a Michigan corporation (the "Grantor"), to the Lenders (as
defined in the Support Agreement (as hereinafter defined)).
PRELIMINARY STATEMENTS:
(1) the Grantor and The Bank of New York, as trustee (the "Trustee")
have entered into an Indenture dated as of June 15, 1998 (the "Original
Indenture") pursuant to which the Grantor may issue its debt securities from
time to time. The Grantor and the Trustee have also entered into a supplemental
indenture (together with the Original Indenture, and as it may hereafter be
amended or otherwise modified from time to time, being the "Indenture") pursuant
to the terms of which the Grantor has agreed to issue $100,000,000 Remarketed
Notes, Series A due 2038 (the "Debt Securities").
(2) the Grantor and the Initial Purchasers (as defined in the Support
Agreement) have entered into a Purchase Agreement, dated as of June 16, 1998,
relating to the issuance and sale of the Debt Securities by the Company.
(3) the Grantor has entered into a support agreement, dated as of June
16, 1998 (the "Support Agreement") with DTE Energy Company, a Michigan
corporation and the parent of the Grantor (the "Parent"), to provide for support
with respect to payments due by the Grantor on the Debt Securities and related
Debt (as defined in the Support Agreement) to the Lenders, and the Grantor
desires to grant the assignment and security interest contemplated by this
Agreement in accordance with the Support Agreement. Terms defined in the Support
Agreement and not otherwise defined herein are used herein as therein defined.
(4) the Grantor and the Lenders wish to set forth their respective
understandings as to the enforcement of the Lenders rights hereunder relating to
the Collateral (as defined below).
NOW, THEREFORE, in consideration of the premises, and subject to the
terms and conditions set forth herein, the Grantor hereby agrees with the
Lenders as follows:
Section 1. Collateral Assignment. The Grantor hereby assigns to the
Lenders for their ratable benefit, and hereby grants to the Lenders for their
ratable benefit a security interest in, all of the Grantor's right, title and
interest in and to the following (the "Collateral"): the Support Agreement as it
may be amended or otherwise modified from time to time) (the "Assigned
Agreement"), including, without limitation, (i) all rights of the Grantor to
receive moneys due and to become due under or pursuant to the Assigned
Agreement, (ii) all rights of the Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreement, (iii)
claims of the Grantor for damages arising out of or for breach of or default
under the Assigned Agreement, (iv) the right of the Grantor to terminate the
Assigned Agreement, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder, and (v) all proceeds of any and all
of the foregoing Collateral, subject, in each case, to the subordination
provisions set forth in Section 15 hereof.
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Section 2. Security for Obligations. This Agreement secures the payment
of all obligations of the Grantor now or hereafter existing under the Debt
Securities or related Debt, whether for principal, interest, premium, fees,
expenses or otherwise, and all obligations of the Grantor now or hereafter
existing under this Agreement (all such obligations of the Grantor being the
"Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Obligations and
would be owed by the Grantor to the Lenders but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Grantor.
Section 3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by any Lender of any of the
rights hereunder shall not release the Grantor from any of its duties or
obligations under the Debt Securities, and the contracts and agreements included
in the Collateral, and (c) no Lender shall have any obligation or liability
under the Debt Securities, or the contracts and agreements included in the
Collateral, by reason of this Agreement, nor shall any Lender be obligated to
perform any of the obligations or duties of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Section 4. Representations and Warranties. The Grantor represents and
warrants as follows:
(a) The Assigned Agreement, a true and complete
copy of which has been furnished to the Lenders, has been duly
authorized, executed and delivered by all parties thereto, has not
been amended or otherwise modified except as permitted by Section
7, is in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms. There
exists no default under the Assigned Agreement by any party
thereto.
(b) The chief place of business and chief
executive office of the Grantor and the office where the Grantor
keeps it records concerning the Collateral are located at its
address specified in Section 12. None of the Collateral is
evidenced by a promissory note or other instrument (it being
understood that the Assigned Agreement does not constitute a
promissory note or other instrument).
(c) The Grantor is the legal and the beneficial
owner of the Collateral free and clear of any lien, security
interest, option or other charge or encumbrance except for the
security interest created by this Agreement. No effective financing
statement or other document similar in effect covering all or any
part of the Collateral is on file in any recording office, except
such as may have been filed in favor of the Lenders relating to
this Agreement. The Grantor has no trade names but is known from
time to time as a DTE Energy Company.
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(d) This Agreement creates a valid and perfected
first priority security interest in the Collateral, securing the
payment of the Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security
interest have been duly taken.
(e) No consent of any other person or entity and
no authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is
required (i) for the grant by the Grantor of the assignment and
security interest granted hereby or for the execution, delivery or
performance of this Agreement by the Grantor, (ii) for the
perfection or maintenance of the assignment and security interest
created hereby (including the first priority nature of such
assignment and security interest) or (iii) for the exercise by any
Lender of its rights and remedies hereunder.
(f) There are no conditions precedent to the
effectiveness of this Agreement that have not been satisfied or
waived.
(g) The Grantor has, independently and without
reliance upon any Lender and based on such documents and
information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
Section 5. Further Assurances. (a) The Grantor agrees that from time to
time, at the expense of the Grantor, the Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or any Lender may reasonably request, in order to
perfect and protect the assignment and security interest granted or purported to
be granted hereby or to enable the Lenders for their ratable benefit to exercise
and enforce their rights and remedies, hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Grantor will execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as the
Lenders may reasonably request, in order to perfect and preserve the assignment
and security interest granted or purported to be granted hereby.
(b) The Grantor hereby authorizes the Lenders to
file one or more financing or continuation statements, and
amendments thereto, relating to all or any part of the Collateral
without the signature of the Grantor where permitted by law. A
photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
Section 6. Place of Perfection: Records. The Grantor shall keep its
chief place of business and chief executive office and the office where it keeps
its records concerning the Collateral at the location therefor specified in
Section 4(b) or, upon 30 days' prior written notice to the Lenders, at any other
locations in a jurisdiction where all action required by Section 5 shall have
been taken with respect to the Collateral. The Grantor will hold and preserve
such records
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and will permit representatives of the Lenders at any time during normal
business hours to inspect and make abstracts from such records.
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Section 7. As to the Assigned Agreement.
(a) The Grantor shall at its expense:
(i) perform and observe all the terms and provisions of the
Assigned Agreement to be performed or observed by it, maintain the
Assigned Agreement in full force and effect, enforce the Assigned
Agreement in accordance with its terms, and take all such action to
such end as may be from time to time reasonably requested by the
Lenders.
(ii)furnish to the Lenders promptly upon receipt thereof
copies of all notices, requests and other documents received by the
Grantor under or pursuant to the Assigned Agreement, and from time to
time (A) furnish to the Lenders such information and reports regarding
the Collateral as the Lenders may reasonably request and (B) upon
request of the Lenders make to any other party to the Assigned
Agreement such demands and requests for information and other reports
or for the action as the Grantor is entitled to make thereunder.
(b) The Grantor shall not:
(i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral, or create or permit to exist any lien, security interest,
option or other charge or encumbrance upon or with respect to any of
the Collateral, except for the assignment and security interest under
by this Agreement.
(ii)cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof, other than in
accordance with the terms thereof;
(iii) amend or otherwise modify the Assigned Agreement or give
any consent, waiver or approval thereunder, other than in accordance
with the terms thereof;
(iv)waive any default under or breach of the Assigned
Agreement; or
(v) take any other action in connection with the Assigned
Agreement which would impair the value of the interest or rights of the
Grantor thereunder or which would impair the interest or rights of the
Lenders.
Section 8. Payments Under the Assigned Agreement.
(a) The Grantor agrees, and has effectively so
instructed the Parent that upon the occurrence and during the
continuance of an Event of Default (as defined in the Indenture) or
any event that, with the passage of time or the giving of notice,
or both, would become an Event of Default, subject to the
subordination provision set forth in Section 15, all payments due
or to become due under or in connection with the Assigned Agreement
shall be made directly to the Lenders, as applicable, at their
respective addresses set forth in Section 12.
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(b) All moneys received or collected pursuant to
subsection (a) above shall be applied ratably to the Obligations
owed to the Lenders in accordance with the terms hereof.
Section 9. Lenders May Perform; Expenses (a) If the Grantor fails to
perform any agreement contained herein, any Lender may itself perform, or cause
performance of, such agreement, and the reasonable expenses of such Lender
incurred in connection therewith shall be payable by the Grantor under (b)
below.
(b) The Grantor will, upon demand, pay to the
applicable Lender (in the case of the holders of the Debt
Securities, the Trustee) the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which such Lender may incur in
connection with (1) the administration of this Agreement, (2) the
custody or preservation of, or the sale of, collection from or
other realization upon, any of the Collateral, (3) the exercise or
enforcement of any rights of such Lender hereunder or (4) the
failure by the Grantor to perform or observe any of the provisions
hereof.
Section 10. Remedies. If any Event of Default, or any event that, with
the passage of time or the giving of notice, or both, would become an Event of
Default, shall have occurred and be continuing:
(a) The Lenders may exercise any and all rights
and remedies of the Grantor under or in connection with the
Assigned Agreement or otherwise in respect of the Collateral,
including, without limitation, any and all rights of the Grantor to
demand or otherwise require payment of any amount under, or
performance of any provision of, the Assigned Agreement.
(b) All payments received by the Grantor under or
in connection with the Assigned Agreement or otherwise in respect
of the Collateral shall be received in trust for the ratable
benefit of the Lenders in accordance with the terms hereof, shall
be segregated from other funds of the Grantor and shall be
forthwith paid over to the Lenders in the same form as so received
(with any necessary endorsement).
(c) The Lenders may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of
a secured party on default under the Uniform Commercial Code in
effect in the State of New York at that time (the "Code") (whether
or not the Code applies to the affected Collateral).
Section 11. Amendments; Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by the Grantor herefrom shall in
any event be effective unless the same shall be in writing and signed by the
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
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Section 12. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telex or cable
communication) and mailed, telecopied, telexed, cabled or delivered to:
if to the Grantor, at the following address:
DTE Capital Corporation
2000 2nd Avenue
Detroit, MI 48226
Attention: Corporate Secretary
if to the Trustee or to the holders of the Debt Securities, at its
address specified for the Trustee in the Indenture;
if to the Insurer (as defined in the Indenture), at the following
address:
MBIA Insurance Corporation
113 King Street
Armonk, NY 10504
Attn: Insured Portfolio Management -PF
if to the Initial Purchasers at the following addresses:
Citicorp Securities, Inc.
399 Park Avenue
New York, NY 10043
Attn: Syndicate Desk
Salomon Smith Barney
Seven World Trade Center
New York, NY 10048
Attn: Howard L. Hiller
or, as to any party, at such other address as shall be designated by such party
in a written notice to each other Lender. All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in
the mails or telecopied, respectively.
Section 13. Continuing Assignment and Security Interest; Assignments
under the Indenture. This Agreement shall create a continuing assignment of and
security interest in the Collateral and shall (i) remain in full force and
effect until the payment in full of the Obligations
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and all other amounts payable under this Agreement, (ii) be binding
upon the Grantor, its successors and assigns, and (iii) inure to the benefit of
the Lenders and their respective successors, transferees and assigns. Upon the
earlier of the payment in full of the Obligations and all other amounts payable
under this Agreement or the termination of the Support Agreement in accordance
with its terms, the security interest granted hereby shall terminate and all
rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Lenders will, at the Grantor's expense, execute and deliver to
the Grantor such documents as the Grantor shall reasonably request to evidence
such termination.
Section 14. Trustee Provisions.
(a) Trustee Appointed Attorney-in-Fact. The
Grantor hereby appoints the Trustee, as the Grantor's
attorney-in-fact to administer all matters concerning the rights of
the holders of the Debt Securities, as Lenders, with full authority
in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time to take any action and to
execute any instrument which is necessary or advisable or which the
Trustee may deem necessary or advisable to accomplish the purposes
of this Agreement with respect to the interests of the holders of
the Debt Securities hereunder, including, without limitation:
(i) to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under on connection with the Collateral;
(ii) to receive, indorse and collect any drafts or other
instruments or documents in connection therewith; and
(iii) to file any claims or take any action or institute any
proceedings which is necessary or desirable or which the Trustee may
deem necessary or desirable for the collection of any of the Collateral
or otherwise to enforce compliance with the terms and conditions of the
Assigned Agreement or the rights of the holders of the Debt Securities
with respect to any of the Collateral.
(b) Payments Received By Trustee. All payments
made under or in connection with the Assigned Agreement or
otherwise in respect of the Collateral, and all cash proceeds in
respect of any sale of, collection from, or other realization upon
all or any part of the Collateral, received by the Trustee for the
benefit of the holders of the Debt Securities shall be applied by
the Trustee in accordance with the terms of the Indenture. Any
surplus of such payments or cash proceeds held by the Trustee and
the remaining after payment in full of all the Obligations shall be
paid over to the Grantor.
(c) The Trustee's Duties. The Trustee shall act on
behalf of the holders of the Debt Securities hereunder in
accordance with the same standard of care as under the Indenture.
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(d) Indemnity and Expenses. The Grantor agrees to
indemnify the Trustee from and against any and all claims, losses
and liabilities (including reasonable attorneys' fees and expenses)
growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except claims, losses
or liabilities resulting solely from the Trustee's own negligence
or willful misconduct.
Section 15. Initial Purchasers' Provisions. Each Initial Purchaser is a
Lender for all purposes of this Agreement as to any amounts owing to such
Initial Purchaser in accordance with the terms of the Purchase Agreement (as
defined in the Support Agreement) and shall possess the same rights, in all
respects, as any Lender under this Agreement, except that (i) for so long as the
Policy (as defined in the Indenture) in respect of the Initial Interest Rate
Period (as defined in the Indenture) is in effect and the Insurer is not in
default of its payment obligations thereunder, the Insurer shall be entitled to
exercise or direct the exercise of the rights of the Initial Purchasers, as
Lenders, in accordance with Section 16 hereof, and (ii) the claims of the
Initial Purchasers with respect to the Collateral shall be subordinated to the
claims of the holders of the Debt Securities and, for so long as the Policy is
in effect and the Insurer is not in default of its payment obligations
thereunder, the Insurer. Subject only to the foregoing and notwithstanding any
other provision herein, including, without limitation, Section 14 hereof, the
Initial Purchasers, as Lenders, may act hereunder in their own behalf.
Section 16. Insurer Provisions. (a) Notwithstanding anything to the
contrary herein, if a Policy issued by an Insurer is in effect with respect to
any Debt Securities and the Insurer is not in default with respect to its
obligations under the Policy, the Insurer shall be deemed a Lender for all
purposes of this Agreement and shall possess the same rights, in all respects,
as any Lender under this Agreement for such time as the Policy is in effect and
the Insurer shall possess the exclusive right to exercise or direct the exercise
of the rights of all Lenders in accordance with the terms of this Agreement.
(b) For so long as the Policy is in effect or the Insurer is a holder
of any Debt Securities, the Insurer's consent shall be required for any action
by the Grantor that would require the Lenders' consent under the terms of this
Agreement.
Section 17. Governing Law; Terms. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, except to
the extent that the validity or perfection of the assignment and security
interest hereunder, or remedies hereunder, in respect of any particular
Collateral are governed by the laws of a jurisdiction other than the State of
New York. Unless otherwise defined herein, terms used in Article 9 of the Code
are used herein as therein defined.
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IN WITNESS WHEREOF, each of the Grantor and the other parties
indicated below has caused this Agreement to be duly executed and delivered by
its officer thereunto duly authorized as of the date first above written.
DTE CAPITAL CORPORATION
By: ________________________________
Title:
THE BANK OF NEW YORK, as Trustee
By: ________________________________
Authorized Signatory
MBIA INSURANCE CORPORATION
By: ________________________________
Title:
CITICORP SECURITIES, INC.
Consented to as of the date By: ________________________________
first above written: Title:
DTE ENERGY COMPANY SALOMON BROTHERS INC
By: ________________________________ By: ________________________________
Title: Title:
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102
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EXHIBIT F
[FORM OF POLICY]
(Attached)
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EXHIBIT G
[DTE Capital Corporation Letterhead]
FLOATING INTEREST RATE NOTICE
[Date]
To: [Remarketing Agent(s)]
[Address]
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5915
Re: Remarketed Notes, Series A due 2038 (the "Notes")
Ladies and Gentlemen:
This Floating Interest Rate Notice relates to (i) $____________________
principal amount of the Notes (CUSIP No. ____________) and (ii) the proposed
[Long Term Rate Period] [SPURS Rate Period] of the Note (the "Interest Rate
Period") commencing on ______________ and ending on ___________. Capitalized
terms used and not otherwise defined herein shall have their respective meanings
assigned to them in the Notes.
We hereby notify you that the above-referenced Notes will bear the
following floating rate terms during the Interest Rate Period specified above:
1. The Interest Rate Basis(es) shall be:
[ ] CD Rate, where the Index Maturity will be _______________;
[ ] CMT Rate, where the Designated CMT Maturity Index will be
______________, and the Designated CMT Telerate Page will be
_______________;
[ ] Federal Funds Rate;
104
<PAGE> 105
[ ] LIBOR Reuters, where the Index Currency will be __________,
and the Designated LIBOR Page will be ____________;
[ ] LIBOR Telerate, where the Index Currency will be __________,
and the Designated LIBOR Page will be ____________;
[ ] Prime Rate;
[ ] Treasury Rate ____________.
2. The floating interest rate will be reset as follows:
[ ] Initial Interest Reset Date will be _____________;
[ ] Interest Reset Dates will be _____________;
[ ] Interest Reset Period will be ______________.
3. The interest will be paid as follows:
[ ] Interest Payment Dates will be _____________;
[ ] Interest Payment Period will be _____________;
[ ] Index Maturity will be _____________;
[ ] Floating Rate Maximum Interest Rate will be _____________;
[ ] Floating Rate Minimum Interest Rate will be ______________.
4. Day Count Convention:
[ ] Actual/360 _____________;
[ ] Actual/Actual _____________;
[ ] 30/360.
Applicable Interest Rate Basis:
5. Other terms: [ ]
105
<PAGE> 106
Each Beneficial Owner of the Note will be deemed to have tendered such
Note as of the Interest Rate Adjustment Date and will not be entitled to further
accrual of interest after the Interest Rate Adjustment Date.
DTE CAPITAL CORPORATION
By: ____________________________
Name:
Title:
106
<PAGE> 107
EXHIBIT H
[FORM OF CONVERSION NOTICE]
(Attached)
107
<PAGE> 108
[DTE Capital Corporation Letterhead]
CONVERSION NOTICE
[Date]
To: [Remarketing Agent(s)]
THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, New York 10286
Attn: Jason Gregory
Re: Remarketed Notes, Series A due 2038
Dear Sirs:
This Conversion Notice relates to $ ______ principal amount of the
Remarketed Notes (CUSIP No. ________), (the "Notes"). Capitalized terms used and
not otherwise defined herein shall have their respective meanings assigned to
them in the Notes.
We hereby notify you each of the following, to become effective for the
Interest Rate Period commencing on _____________ (the "Conversion Date"):
Interest Rate Mode:
[ ] Commercial Paper Term Mode
[ ] Long Term Rate Mode
[ ] SPURS Mode
[ ] SPURS Agent: _____________
[ ] Base Rate: _________________
[ ] SPURS Remarketing Date: ________________
[ ] Reference Corporate Dealers:
[ ] Reference Treasury Dealer: ________________
[ ] Interest Rate Period: ___________
108
<PAGE> 109
[ ] Interest Rate Adjustment Date: _______________
[ ] Optional Redemption Provisions (Long Term Rate Mode):
[ ] Commencement Date:
[ ] Redemption Price: (i) __________________%
(ii) __________________%
(iii) __________________%
[ ] Other or Alternative Terms of Optional Redemption:
[ ] Early Remarketing Provisions (Long Term Rate Mode):
[ ] Initial Early Remarketing Date: _________________
[ ] Initial Early Remarketing Premium: ______________
[ ] Annual Early Remarketing Premium Percentage
Reduction: __________
[ ] Other or Alternative Terms of Early
Remarketing: _____________
Each beneficial owner of the Notes will be deemed to have tendered such
Notes as of the Conversion Date and will not be entitled to further accrual of
interest after the Conversion Date.
DTE CAPITAL CORPORATION
By:_____________________________________
Name:
Title:
109
<PAGE> 1
EXHIBIT 10.26
[DETROIT EDISON LOGO]
April 6, 1998
Ms. Lynne Halpin
21109 Brush Road
Los Gatos, California 95033
Dear Lynne:
Pursuant to approval by the Board of Directors, I am pleased to offer you
employment in the position of Vice President and Chief Information Officer at
an annual salary of $215,000.
Upon employment, you will be eligible for the benefits described in the Benefit
Highlights brochure enclosed, as well as the perquisites described on a
separate listing also enclosed. In addition, you will receive the following:
- You will receive an immediate annual benefit of three (3) weeks vacation
for 1998.
- You will be paid an amount (considered imputed income to be grossed up
for taxes) to cover the premium for three (3) months health care coverage
under the Company's plan.
- You will receive a signing bonus of $35,000.
- You will be eligible for relocation assistance that will include interim
living for 45 days, moving your household goods, assistance in selling
your home, and you will receive $18,000 to offset your living expenses
(all to be grossed up for taxes).
Subject to the approval of the Special Committee on Compensation of the Board
of Directors, you will be granted the following shares of stock pursuant to our
Long-Term Incentive Plan:
- 2,000 shares of restricted stock (without performance measures) with a
vesting period of four (4) years from the date of grant.
- 10,000 shares of nonqualified stock options (25 percent of the shares
vest annually from the date of grant).
<PAGE> 2
Ms. Lynne Halpin
April 6, 1998
Page 2
This offer is subject to successful completion of a pre-employment physical
examination, a review of references, and completion of our employment history
form.
Please contact me at (313) 235-8610 after you have completed your review of
this offer of employment. I hope to hear from you soon.
Sincerely,
Sandea J. Miller
/smh
Attachments
ACCEPTED:
/s/ Lynne Halpin 4/7/98
- -----------------------------------
Lynne Halpin Date
<PAGE> 1
EXHIBIT 11-12
DTE ENERGY COMPANY
BASIC AND DILUTED EARNINGS PER SHARE
OF COMMON STOCK
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30, 1998 June 30, 1998
-------------- -------------
(Thousands, except per share amounts)
<S> <C> <C>
BASIC:
Net Income........................................................$ 100,194 $ 204,600
Weighted average number of common
shares outstanding (a).......................................... 145,075 145,079
Earnings per share of Common Stock
based on weighted average number
of shares outstanding...........................................$ 0.69 $ 1.41
DILUTED:
Net Income........................................................$ 100,194 $ 204,600
Weighted average number of common
shares outstanding (a).......................................... 145,075 145,079
Incremental shares from assumed exercise
of options...................................................... 97 84
-------------- ------------
145,172 145,163
============== ============
Earnings per share of Common Stock
assuming exercise of options....................................$ 0.69 $ 1.41
</TABLE>
- ---------------------------------
(a) Based on a daily average.
<PAGE> 1
EXHIBIT 12-12
THE DETROIT EDISON COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
Six
Months Year Ended December 31
Ended -------------------------------
6/30/98 1997 1996 1995
--------- --------- --------- ---------
(Millions, except for ratio)
<S> <C> <C> <C> <C>
Net income $ 193 $ 417 $ 328 $ 434
--------- --------- --------- ---------
Taxes based on income:
Current income taxes 144 308 224 221
Deferred taxes - net 9 (6) 16 79
Investment tax credit adjustments - net (7) (14) (15) (17)
Municipal and state 2 4 3 3
--------- --------- --------- ---------
Total taxes based on income 148 292 228 286
--------- --------- --------- ---------
Fixed charges:
Interest on long-term debt 126 262 275 275
Amortization of debt discount, premium
and expense 5 11 12 11
Other interest 5 9 4 10
Interest factor of rents 17 34 34 29
--------- --------- --------- ---------
Total fixed charges 153 316 325 325
--------- --------- --------- ---------
Earnings before taxes based on income
and fixed charges $ 494 $ 1,025 $ 881 $ 1,045
========= ========= ========= =========
Preferred stock dividends $ 5 $ 12 $ 16 $ 28
Dividends meeting requirement of
IRC Section 247 2 4 4 4
Percent deductible for income tax purposes 40.00% 40.00% 40.00% 40.00%
Amount deductible 1 2 2 2
Amount not deductible 4 10 14 26
Ratio of pretax income to net income 1.76 1.70 1.70 1.66
Dividend factor for amount not deductible 7 17 24 43
Amount deductible 1 2 2 2
--------- --------- --------- ---------
Total preferred stock dividend factor 8 19 26 45
Total fixed charges 153 316 325 325
--------- --------- --------- ---------
Total fixed charges and preferred
stock dividends $ 161 $ 335 $ 351 $ 370
========= ========= ========= =========
Ratio of earnings to fixed charges and
preferred stock dividends 3.07 3.06 2.51 2.82
</TABLE>
<PAGE> 1
EXHIBIT 15-8
DTE Energy Company and
The Detroit Edison Company
Detroit, Michigan
We have made reviews, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of DTE Energy Company and subsidiaries and The Detroit Edison
Company and subsidiaries for the periods ended June 30, 1998 and 1997, as
indicated in our report dated July 27, 1998. Because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998, is
incorporated by reference in the following Registration Statements:
FORM REGISTRATION NUMBER
DTE Energy Company
Form S-3 33-57545
Form S-8 333-00023
Form S-8 333-47247
The Detroit Edison Company
Form S-3 33-53207
Form S-3 33-64296
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
Deloitte and Touche
Detroit, Michigan
July 27, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000936340
<NAME> DTE ENERGY COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 94
<SECURITIES> 0
<RECEIVABLES> 588
<ALLOWANCES> 20
<INVENTORY> 335
<CURRENT-ASSETS> 1,178
<PP&E> 15,625
<DEPRECIATION> 6,728
<TOTAL-ASSETS> 11,595
<CURRENT-LIABILITIES> 1,460
<BONDS> 3,835
0
48
<COMMON> 1,951
<OTHER-SE> 1,662
<TOTAL-LIABILITY-AND-EQUITY> 11,595
<SALES> 0
<TOTAL-REVENUES> 2,009
<CGS> 0
<TOTAL-COSTS> 1,528
<OTHER-EXPENSES> 5
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 153
<INCOME-PRETAX> 318
<INCOME-TAX> 113
<INCOME-CONTINUING> 205
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 205
<EPS-PRIMARY> 1.41
<EPS-DILUTED> 1.41
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000028385
<NAME> THE DETROIT EDISION COMPANY
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 13
<SECURITIES> 0
<RECEIVABLES> 550
<ALLOWANCES> 20
<INVENTORY> 318
<CURRENT-ASSETS> 912
<PP&E> 15,307
<DEPRECIATION> 6,712
<TOTAL-ASSETS> 10,759
<CURRENT-LIABILITIES> 1,142
<BONDS> 3,512
0
48
<COMMON> 1,951
<OTHER-SE> 1,502
<TOTAL-LIABILITY-AND-EQUITY> 10,759
<SALES> 0
<TOTAL-REVENUES> 1,893
<CGS> 0
<TOTAL-COSTS> 1,408
<OTHER-EXPENSES> 10
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 136
<INCOME-PRETAX> 339
<INCOME-TAX> 146
<INCOME-CONTINUING> 193
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 193
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
