<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 16, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT
AND POST-EFFECTIVE AMENDMENT NO. 1
UNDER
THE SECURITIES ACT OF 1933
------------------
THE DETROIT EDISON COMPANY
(EXACT NAME OF ISSUER AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C> <C>
MICHIGAN 2000 2ND AVENUE 38-0478650
(STATE OF INCORPORATION) DETROIT, MICHIGAN 48226-1279 (I.R.S. EMPLOYER IDENTIFICATION NO.)
(313) 235-8000
</TABLE>
(ADDRESS AND TELEPHONE NUMBER
OF PRINCIPAL EXECUTIVE OFFICES)
------------------
SUSAN M. BEALE
VICE PRESIDENT AND CORPORATE SECRETARY
THE DETROIT EDISON COMPANY
2000 2ND AVENUE
DETROIT, MICHIGAN 48226-1279
(313) 235-8000
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME
TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER IF THE EARLIER EFFECTIVE REGISTRATION STATEMENT IS
FOR THE SAME OFFERING. [ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [X]
------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------
- ----------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTERED PRICE PER OFFERING PRICE REGISTRATION
TO BE REGISTERED (1)(2)(3) UNIT (1)(2)(3) FEE
- ----------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities and Special Mandatory Purchase
Right(2).......................................... $300,000,000 100% $300,000,000 $88,600
- ----------------------------------------------------
- ----------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). The registration fee consists of $88,500 which
covers the initial offering of the Debt Securities of the registrant and
$100. In the event the Registrant elects to offer to the public Debt
Securities which shall subsequently be remarketed to the public, the
registration fee shall include such subsequent remarketings of such Debt
Securities purchased pursuant to the Special Mandatory Purchase Right.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement is a combined prospectus and also
relates to registration statement No. 33-53207 previously filed by the
Registrant on Form S-3 and declared effective on May 31, 1994. This
Registration Statement, which is a new registration statement, also
constitutes Post-Effective Amendment No. 1 to registration statement No.
33-53207, and such Post-Effective Amendment No. 1 shall hereafter become
effective concurrently with the effectiveness of this Registration
Statement and in accordance with Section 8(c) of the Securities Act of
1933. This Registration Statement and the registration statement amended
hereby are collectively referred to herein as the "Registration Statement."
A filing fee was paid to register the $64,877,700 million of Debt
Securities in Registration No. 33-53207 covered by the Prospectus included
herein.
(2) Subject to note (3) below, there are being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities
are being issued at an original issue discount, then the offering price
shall be in such greater principal amount as shall result in an aggregate
initial offering price not to exceed $364,877,700 less the dollar amount of
any securities previously issued hereunder. In the event the Registrant
elects to offer to the public Debt Securities which include any Special
Mandatory Purchase Right, no separate consideration shall be paid for such
mandatory purchase right.
(3) In no event will the aggregate initial offering price of all Debt Securities
issued from time to time pursuant to this Registration Statement exceed
$364,877,700 (including the $64,877,700 of Debt Securities registered
pursuant to registration statement No. 33-53207). Any Debt Securities
registered hereunder may be sold separately or as units with other Debt
Securities registered hereunder.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
SUPPLEMENT IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION. DATED OCTOBER 16, 1998.
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1998.
$100,000,000 [DETROIT EDISON LOGO]
THE DETROIT EDISON COMPANY
% Quarterly Income Debt Securities (QUIDS(SM))
(Junior Subordinated Deferrable Interest Debentures, Due 2028)
----------------------
This is an offering of % Quarterly Income Debt Securities ("QUIDS") to
be issued by Detroit Edison. The QUIDS will be general unsecured subordinated
obligations of Detroit Edison, subordinated in right of payment to approximately
$ billion of Detroit Edison's outstanding debt at September 30, 1998. The QUIDS
will mature on . Detroit Edison will pay interest on the QUIDS on
March 31, June 30, September 30 and December 31 of each year. The first such
payment will be .
Detroit Edison has the option to redeem the QUIDS (1) at any time on or
after , in whole or in part, or (2) at any time within 90 days after
the occurrence of certain tax events, in whole but not in part. If Detroit
Edison redeems the QUIDS, it will pay to holders of the QUIDS 100% of the
principal amount being redeemed, plus any interest accrued on the QUIDS to the
date the QUIDS are redeemed. Detroit Edison will issue the QUIDS only in
book-entry form in denominations of $25 and integral multiples of $25.
Detroit Edison intends to list the QUIDS on the New York Stock Exchange and
expects trading in the QUIDS on the New York Stock Exchange to begin within
thirty days after the original issue date. The QUIDS are expected to trade
"flat." This means that purchasers will not pay and sellers will not receive any
accrued and unpaid interest on the QUIDS that is not included in the trading
price.
See "Risk Factors" beginning on page S-2 to read about certain factors you
should consider before buying the QUIDS.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR PASSED UPON THE ADEQUACY
OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
<TABLE>
<CAPTION>
PER
QUIDS TOTAL
----- -----
<S> <C> <C>
Initial public offering price(1)............................ $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to Detroit Edison................ $ $
</TABLE>
- ----------------------
(1) The initial public offering price set forth above does not include accrued
interest, if any. Interest on the QUIDS will accrue from , 1998 and
must be paid by the purchaser if the QUIDS are delivered after ,
1998.
----------------------
The Underwriters are severally underwriting the QUIDS being offered. They
expect to deliver the QUIDS in book-entry form only through the facilities of
The Depository Trust Company in New York, New York on , 1998.
----------------------
QUIDS(SM) is a service mark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO. SALOMON SMITH BARNEY
MCDONALD & COMPANY
SECURITIES, INC.
RONEY CAPITAL MARKETS
A DIVISION OF FIRST CHICAGO CAPITAL MARKETS, INC.
SG COWEN
----------------------
Prospectus Supplement dated , 1998
<PAGE> 3
THE COMPANY
The Detroit Edison Company ("Detroit Edison" or the "Company") has been
incorporated in Michigan since 1967. The Company is a regulated public utility
that generates, purchases, transmits, distributes and sells electric energy in a
7,600 square mile area in Southeastern Michigan. The Company's service area
includes about 13% of Michigan's total land area and about half of its
population (approximately five million people). The Company's residential
customers reside in urban and rural areas, including an extensive shoreline
along the Great Lakes and connecting waters.
Detroit Edison's executive offices are located at 2000 2nd Avenue,
Detroit, Michigan 48226-1279. The telephone number is 313-235-8000.
RISK FACTORS
An investment in the QUIDS involves a number of risks, some of which
relate to the QUIDS and others of which relate to Detroit Edison. You should
carefully consider the following information about these risks, together with
the other information in this prospectus supplement and the accompanying
prospectus, before buying any QUIDS.
THE COMPANY MAY DEFER INTEREST PAYMENTS ON THE QUIDS FOR SUBSTANTIAL PERIODS,
BUT THE HOLDERS WOULD CONTINUE TO RECOGNIZE VALUE FOR TAX PURPOSES.
If no Indenture Event of Default has occurred and is continuing, which
means that the Company has performed all of its obligations with respect to the
QUIDS, including timely payment of principal and interest, the Company has the
right to extend the interest payment period on the QUIDS. The Company must give
prior notice of any extension by public announcement in accordance with the
rules of the New York Stock Exchange (the "NYSE"). The aggregate interest
payment period, as extended, must:
(1) end on an interest payment date, and
(2) not exceed 20 consecutive quarterly interest payment periods or extend
beyond the maturity of the QUIDS or any date on which any QUIDS are
fixed for redemption (each such extended period, a "Deferral Period").
No interest will be due and payable during a Deferral Period. However,
on the interest payment date occurring at the end of each Deferral
Period the Company will pay to the holders of record on the record
date for such interest payment date (regardless of who the holders of
record may have been on other dates during the Deferral Period) all
accrued and unpaid interest on the QUIDS, together with interest
thereon compounded quarterly at the rate of interest on the QUIDS.
If the Company exercises its right to extend the interest payment period,
the Company may not declare or pay dividends on, or redeem, purchase or acquire,
any shares of its preferred stock, preference stock, common stock or any other
equity securities of the Company ("Capital Stock") until deferred interest on
the QUIDS is paid in full, other than redemptions of any series of Capital Stock
of the Company pursuant to the terms of any sinking fund provisions with respect
thereto. In addition, during any Deferral Period, the Company may make any
advance or loan to, or purchase any securities of, or make any other investment
in, any affiliate of the Company, including DTE Energy, for the purpose of, or
to enable the payment of, directly or indirectly, dividends on any equity
securities of DTE Energy. See "The Company".
Upon the termination of any Deferral Period and the payment of all
interest then due, the Company may commence a new Deferral Period. Consequently,
there could be multiple Deferral Periods of varying lengths throughout the term
of the QUIDS. See
S-2
<PAGE> 4
"Description of the QUIDS -- Payment Deferral".
During any Deferral Period, holders of QUIDS will be required to treat
such QUIDS as reissued with original issue discount ("OID") at the beginning of
such Deferral Period and, under the OID rules, holders of the QUIDS would be
required to accrue income on the QUIDS for United States Federal income tax
purposes. As a result, a holder ordinarily would include such amounts in gross
income before it actually receives any cash attributable to that income. See
"United States Federal Income Tax Consequences -- United States Holders".
The Company has no current intention of exercising its right to extend an
interest payment period.
THE COMPANY'S DEFERRAL RIGHT AND THE TAX TREATMENT OF THE QUIDS COULD ADVERSELY
AFFECT MARKET PRICES FOR THE QUIDS
If the Company determines to extend an interest payment period, or if the
Company thereafter extends a Deferral Period, the market price of the QUIDS is
likely to be adversely affected. In addition, as a result of such rights, the
market price of the QUIDS may be more volatile than other debt instruments that
do not have such rights. A holder that disposes of its QUIDS during a Deferral
Period, therefore, may not receive the same return on its investment as a holder
that continues to hold its QUIDS.
A holder that disposes of its QUIDS prior to the record date for payment
of interest at the end of a Deferral Period will not receive cash from the
Company related to such interest because such interest will be paid to the
holder of record on such record date, regardless of who the holders of record
may have been on other dates during the Deferral Period. The extent to which
such a holder will receive a return on the QUIDS for the period it held such
QUIDS will depend on the market for the QUIDS at the time of such disposition.
See "United States Federal Income Tax Consequences -- United States Holders".
THE COMPANY'S OBLIGATIONS WILL BE
DEEPLY SUBORDINATED
The QUIDS are unsecured obligations of the Company. They will be
subordinate to all existing and future Senior Indebtedness (as hereinafter
defined) of the Company, but senior to all Capital Stock of the Company. On June
30, 1998, approximately $3.7 billion of such Senior Indebtedness was
outstanding. There are no terms in the QUIDS that limit the Company's ability to
incur additional indebtedness, including indebtedness that would rank equal to
or senior to the QUIDS. The Company has three other series of quarterly income
debt securities outstanding in the aggregate principal amount of approximately
$335 million which are of equal rank to the QUIDS. With respect to the QUIDS,
the Indenture (as hereinafter defined) does not contain any cross-defaults to
any other indebtedness of the Company, and therefore, a default with respect to,
or the acceleration of, any such indebtedness will not constitute an "Event of
Default" with respect to the QUIDS. As the QUIDS will be issued by the Company,
the QUIDS effectively will be subordinate to all obligations of the Company's
subsidiaries. See "Description of the QUIDS -- Subordination" and
"-- Subrogation".
LACK OF PRIOR MARKET FOR THE QUIDS AND TRADING CHARACTERISTICS OF THE QUIDS
Prior to this Offering, there has been no market for the QUIDS. The
Company expects that the QUIDS will be approved for listing on the NYSE. Trading
of the QUIDS on the NYSE is expected to begin within thirty-days after the
original issue date. However, a listing does not guarantee that a trading market
for the QUIDS will develop or, if a trading market for the QUIDS does develop,
the depth of that market. The QUIDS are expected to trade "flat". This means
that purchasers will not pay and sellers will not receive any accrued and unpaid
interest on the QUIDS that is not included in the trading price.
S-3
<PAGE> 5
TAX EVENT REDEMPTION
If a Tax Event (as defined in "Description of the QUIDS -- Tax Event
Redemption") occurs, 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.
UTILITY INDUSTRY AND ENVIRONMENTAL REGULATION MAY ADVERSELY AFFECT THE COMPANY'S
OPERATING RESULTS
The electric utility industry is facing serious issues as legislators and
regulators consider various proposals designed to reduce rates and promote
economic growth through competition and deregulation of generation assets.
Deregulation, cogeneration, independent power production, open access to
transmission lines, competitive bulk power supply markets, municipalization,
retail customer choice or open access and the unbundling of utility products and
services are issues under consideration.
The Company is participating at both the federal and state (Michigan)
levels in legislative and administrative proceedings attempting to make the
electric energy market competitive. These proceedings, which include matters
under appeal, are dealing with the effects of competition on both public
utilities and consumers. Issues under consideration include: (1) the recovery of
stranded costs (possibly including securitization) by public utilities now
recovering capital costs under traditional ratemaking principles, (2) retail
wheeling and open transmission access, and (3) revisions to (and the possible
repeal of all or portions of) various federal and state energy-related statutes,
as well as new implementing legislation. The Company is not able to predict the
outcome or timing of these proceedings.
The Company is subject to extensive environmental regulation. Additional
costs may result as the effects of various chemicals on the environment
(including nuclear waste) are studied and governmental regulations are developed
and implemented. In addition, the impact of proposed Environmental Protection
Agency ozone transport regulations and final new air quality standards relating
to particulate air pollution are unknown. The costs of future nuclear
decommissioning activities are the subject of increased regulatory attention.
Ownership of Fermi 2, a nuclear generating unit comprising 24% of the
Company's total assets and 11% of the Company's summer net rated capability,
subjects the Company to additional significant risks. Nuclear plants are highly
regulated by a number of governmental agencies concerned with public health and
safety and environmental protection. Consequently, Fermi 2 is subject to greater
scrutiny than a conventional fossil fueled plant.
LIEN ON THE COMPANY'S ASSETS
Substantially all of the Company's properties are subject to the lien of a
Mortgage and Deed of Trust, under which approximately $3.0 billion of General
and Refunding Mortgage Bonds were outstanding as of June 30, 1998.
S-4
<PAGE> 6
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,(A) YEAR ENDED DECEMBER 31,
--------------- ------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------ ------
(MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Summary:
Operating Revenues............ $1,893 $1,742 $3,657 $3,642 $3,636 $3,519 $3,555
Operating Income.............. 485 429 1,003 841 1,015 986 1,147
Net Income.................... 193 160 417 328 434 420 522
</TABLE>
- ---------------
(a) The Company's financial results for these interim periods are not
necessarily indicative of results that may be expected for any other interim
period or for the fiscal year.
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges* were as follows for the
respective periods indicated:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.23 3.24 2.71 3.21 3.13 3.25
</TABLE>
- ---------------
* For the purposes of computing this ratio, earnings represent net income
(including allowance for both borrowed & other funds used during construction,
"AFUDC", accretion income and deferred Fermi 2 depreciation, amortization and
return) before deducting income taxes and fixed charges. Fixed charges
represent total interest charges, interest factor of rents and amortization of
debt discount, premium and expense.
S-5
<PAGE> 7
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company at
June 30, 1998 and as adjusted to give effect to the issuance of the QUIDS
offered hereby.
<TABLE>
<CAPTION>
JUNE 30, 1998
-------------------------------------
ACTUAL AS ADJUSTED
--------------- ---------------
(MILLIONS)
<S> <C> <C> <C> <C>
Long-Term Debt........................................... $3,177 45.3%
Quarterly Income Debt Securities......................... 335 4.8
------ -----
Cumulative Preferred Stock Redeemable Solely at the
Option of the Company.................................. 48 0.7
Common Shareholder's Equity.............................. 3,453 49.2
------ -----
$7,013 100.0%
====== =====
</TABLE>
CERTAIN DEVELOPMENTS
ENVIRONMENTAL
As discussed in Part II, Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations in Detroit Edison's 1997 Annual
Report on Form 10-K, the Environmental Protection Agency ("EPA") issued ozone
transport regulations and final new air quality standards relating to ozone and
particulate air pollution. In September 1998, the EPA issued a State
Implementation Plan ("SIP") call, giving states a year to develop new
regulations to limit nitrogen oxide emissions because of their contribution to
ozone formation. The EPA draft proposal suggests most emission reductions should
come from utilities. If Michigan follows EPA's recommendations, it is estimated
that it will cost Detroit Edison more than $400 million to comply. Until the
state issues its regulations, it is impossible to predict the full impact of the
SIP call. Additional environmental costs would be expected to be recovered under
traditional ratemaking principles. However, Detroit Edison is unable to predict
what effect, if any, deregulation of the electric utility industry would have on
the recoverability of such environmental costs.
REGULATORY
As discussed in Notes 1 and 3 of the Notes to Consolidated Financial
Statements appearing in Detroit Edison's 1997 Annual Report on Form 10-K, the
Michigan Public Service Commission (MPSC) has established a capacity factor
performance standard which provides for the disallowance of net incremental
replacement power cost if Fermi 2 does not perform to certain operating
criteria. A disallowance will be imposed for the amount by which the Fermi 2
three-year rolling average capacity factor is less than the greater of either
the average of the top 50% of U.S. boiling water reactors or 50%. An estimate of
the incremental cost of replacement power is required in computing the reserve
for amounts due customers under this performance standard. At December 31, 1997
and 1996, Detroit Edison had accruals of $74 million and $72.9 million,
respectively, for the disallowances that are expected to be imposed by the MPSC.
Due primarily to an increase in the estimate of the incremental cost of
replacement power at September 30, 1998, Detroit Edison recorded an increase in
the Fermi 2 capacity factor performance standard accrual of $34 million ($22
million after-tax) or $0.15 per common share.
YEAR 2000
As discussed in Part II, Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations in Detroit Edison's 1997 Annual
Report on Form 10-K, DTE Energy and Detroit Edison have been involved in an
enterprise-wide
S-6
<PAGE> 8
program to address Year 2000 issues. A program office was established in
mid-1997 to implement a rigorous plan to address the impact of Year 2000 to
hardware and software systems, embedded systems (which include microprocessors
used in the production and control of electric power), and critical service
providers. The emphasis has been on mission critical systems that support core
business activities or processes. Core business activities and processes include
safety, environment and regulatory (Federal Energy Regulatory Commission and
Nuclear Regulatory Commission) compliance; product production and delivery;
revenue collection, employee and supplier payment; and financial asset
management.
The plan for addressing Year 2000 is divided into several phases including
raising general awareness of Year 2000 throughout the enterprise; maintaining an
inventory of systems and devices; performing an assessment of inventoried
systems and devices; performing compliance testing of suspect systems and
devices; remediation of non-compliant systems and devices through replace,
repair, retire, or identify an acceptable work around; testing and remediation
of systems and devices in an integrated environment; and preparing business
continuity plans.
The inventory and assessment of known systems and devices has been
completed. Compliance testing and remediation for mission critical and other
systems and devices are in process. Completion of remediation and integration
testing/remediation of mission critical systems is expected by the end of
calendar year 1999.
To support the program phases, the program office has been working with
major utility industry associations and organizations, customers and vendors to
gather and share information on Year 2000 issues. The program office has
contacted vendors critical to operations to determine their progress on Year
2000.
Based upon information to date, Detroit Edison anticipates that abnormal
operating conditions may be experienced within the Detroit Edison production,
transmission, and distribution systems as a result of Year 2000 conditions.
These conditions could result in temporary interruption of service to customers.
Abnormal operating conditions may also be experienced by its affiliates of a
magnitude not determined at this time. To address these issues, a business
continuity program is being developed to be operational in the fourth quarter of
1999. The business continuity program is expected to provide short and long-
term solutions to Year 2000 related issues.
Detroit Edison believes that with all Year 2000 modifications and business
continuity plans in place, the Year 2000 will not have a material effect on its
financial position, liquidity and results of operations. However, despite all
efforts, there can be no assurances that Year 2000 issues can be totally
eliminated. In addition, no assurances can be given that the systems of vendors,
interconnected utilities, and customers will not result in Year 2000 problems.
Detroit Edison currently estimates that Year 2000 costs will aggregate
between $50 and $75 million, with $13 million expended between January 1, 1998
and September 30, 1998. Operating cash flow is expected to be sufficient to pay
Year 2000 modification costs with no material impact on operating results or
cash flows.
S-7
<PAGE> 9
FORWARD-LOOKING STATEMENTS
Certain information presented or incorporated by reference in this
prospectus supplement and accompanying prospectus is based upon the expectations
of 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 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; (including proposed
regulations to limit nitrogen oxide emissions) and nuclear requirements, the
impact of FERC proceedings and regulations and the timely completion of Year
2000 modifications. While Detroit Edison believes that estimates given
accurately measure the expected outcome, actual results could vary materially
due to the variables mentioned as well as others.
DESCRIPTION OF THE QUIDS
GENERAL
The QUIDS will be a series of notes to be issued under the Note Indenture,
dated as of June 30, 1993, as supplemented, and as further supplemented by a
Seventh Supplemental Indenture dated as of , 1998 creating the QUIDS
(as supplemented, the "Indenture"), between the Company and Bankers Trust
Company, as trustee (the "Trustee"). The following statements with respect to
the QUIDS are summaries and are subject to the detailed provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
Indenture, a copy of the form of which has been filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the QUIDS and the
Indenture, including the definitions therein of certain terms capitalized and
not otherwise defined in this prospectus supplement. Wherever references are
made to particular provisions of the Indenture or terms defined therein, such
provisions or definitions are incorporated by reference as part of the
statements made and such statements are qualified in their entirety by such
references.
$410 million aggregate principal amount of the debt securities of the
Company previously issued under the Indenture are secured as to payment of
principal, interest and premium, if any, by the Company's General and Refunding
Mortgage Bonds pledged to the Trustee for the benefit of the holders of such
securities. The QUIDS offered hereby, as well as approximately $50 million, $185
million and $100 million aggregate principal amount of 8.5% QUIDS, 7.625% QUIDS
and 7.54% QUIDS, respectively, previously issued, will not, and do not, have the
benefit of any Mortgage Bonds or any other security.
The QUIDS
(1) will constitute an additional series of unsecured, subordinated debt
securities,
(2) will be subordinated to senior indebtedness of the Company, as described
herein,
(3) will be limited in aggregate principal amount to $100,000,000 and
(4) will mature on (the "Stated Maturity").
The annual interest requirement on the QUIDS will be $ .
The QUIDS will be issued only in book-entry form through the facilities of
DTC and will be in denominations of $25. Transfers or exchanges of beneficial
interests in the QUIDS may be effected only through records
S-8
<PAGE> 10
maintained by DTC or its nominee. Settlement
and secondary trading in the QUIDS will be in same-day funds. Payments of
principal and interest on the QUIDS will be made to DTC in immediately available
funds, as described in the prospectus. For a description of DTC and the specific
terms of the depository arrangements, see "DTC Book-Entry-Only System" in the
accompanying prospectus.
QUARTERLY PAYMENTS
Interest on the QUIDS will accrue from the date of original issuance at a
rate of % per annum and will be payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year (each an "Interest Payment
Date"), commencing , 1998 to the persons in whose names the QUIDS
are registered on the relevant record dates. The record date will be one
Business Day (as hereinafter defined) prior to the relevant Interest Payment
Dates (each a "Record Date"). The amount of interest payable on , 1998
to holders of QUIDS will be $ per $25 principal amount of QUIDS.
The amount of interest payable for 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. In the event that any date on
which interest is payable on the QUIDS is not a Business Day, then payment of
the amount payable on such date will be made on (1) the next succeeding day
which is a Business Day (and without interest or other payment in respect of any
such delay) with the same force and effect as if made on such date or (2) the
preceding Business Day if the succeeding Business Day would fall within a new
calendar year (and without reduction in amount due to such early payment) with
the same force and effect as if made on such date, subject, in each case, to
certain rights of deferral described below.
A "Business Day" shall mean any day other than a day on which banking
institutions in the State of New York or the State of Michigan are authorized or
obligated pursuant to law or executive order to close.
PAYMENT DEFERRAL
The Company shall have the right at any time, on one or more occasions, so
long as an Event of Default (as hereinafter defined) has not occurred and is not
continuing under the Indenture with respect to the QUIDS, to extend any interest
payment period on the QUIDS. However, the aggregate interest payment period, as
extended, must end on an interest payment date and must not exceed 20
consecutive quarterly interest payment periods or extend beyond the maturity of
the QUIDS or any date on which any QUIDS are fixed for redemption. As a
consequence, the quarterly interest payments on the QUIDS would be deferred (but
would continue to accrue with interest thereon at the rate of interest on the
QUIDS) during any such Deferral Period. At the end of each Deferral Period, the
Company shall pay all interest then accrued and unpaid (compounded quarterly).
If the Company exercises this right, 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 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 terms of any sinking fund
provisions with respect thereto. In addition, during any Deferral Period, the
Company may not make any advance or loan to, or purchase any securities of, or
make any other investment in, any affiliate of the Company, including DTE
Energy, for the purpose of, or to enable the payment of, directly or indirectly,
dividends on any equity securities of DTE Energy.
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
must not exceed 20 consecutive quarterly interest payment periods or extend
beyond the maturity of the QUIDS or any date on which the QUIDS are fixed for
redemption. The Company shall give the
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holders of QUIDS notice of its election to defer 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 NYSE 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.
The Company has no current intention of exercising its right to extend an
interest payment period.
Upon the termination of any Deferral Period and the payment of all
interest then due, the Company may commence a new Deferral Period. Consequently,
there could be multiple Deferral Periods of varying lengths throughout the term
of the QUIDS.
OPTIONAL REDEMPTION
The QUIDS will be redeemable at the option of the Company, in whole or in
part, at any time on or after , 2003 and prior to maturity, upon not
less than 30 nor more than 60 days' notice, at a redemption price equal to 100%
of the principal amount redeemed plus accrued and unpaid interest to the date
fixed for redemption.
TAX EVENT REDEMPTION
If a Tax Event (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 (the "Redemption Price").
"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 United States Federal income tax purposes.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to the QUIDS offered hereby:
(1) failure to pay any interest on the QUIDS when due, continued for 30 days;
(2) failure to pay principal on the QUIDS when due;
(3) failure to perform any other covenant or warranty of the Company in the
Indenture (other than a covenant or warranty included in the Indenture
solely for the benefit of a series of securities other than the QUIDS),
continued for 60 days after written notice as provided in the Indenture;
and
(4) certain events of bankruptcy, insolvency or reorganization involving the
Company. With respect to the QUIDS offered hereby, the Indenture does not
contain any cross-default to any other indebtedness of the Company, and
therefore, default with respect to, or an acceleration of, any such
indebtedness will not constitute an Event of Default with respect to the
QUIDS.
If an Event of Default with respect to the QUIDS occurs and is continuing,
either the Trustee or the holders of at least 25% in aggregate principal amount
of the outstanding QUIDS by notice as provided in the Indenture
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may declare the principal amount of the QUIDS to be due and payable immediately.
At any time after a declaration of acceleration has been made, but before a
judgment or decree for payment of money has been obtained by the Trustee, and
subject to applicable law and certain other provisions of the Indenture, the
holders of a majority in aggregate principal amount of the QUIDS may, under
certain circumstances, rescind and annul such acceleration.
The Indenture provides that within 90 days after the occurrence of any
Event of Default thereunder with respect to the QUIDS, the Trustee shall
transmit, in the manner set forth in the Indenture, notice of such Event of
Default to the holders of the QUIDS unless such Event of Default has been cured
or waived; provided, however, that except in the case of a default in the
payment of the principal of or interest on any QUIDS of such series, the Trustee
may withhold such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or responsible officers of the
Trustee has in good faith determined that the withholding of such notice is in
the interest of the holders of QUIDS.
If an Event of Default occurs and is continuing with respect to the QUIDS,
the Trustee may in its discretion proceed to protect and enforce its rights and
the rights of the holders of QUIDS by all appropriate judicial proceedings.
The Indenture includes a covenant that the Company will file annually with
the Trustee a certificate as to the Company's compliance with all conditions and
covenants of the Indenture.
The Indenture provides that, subject to the duty of the Trustee during any
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of QUIDS, unless such holders shall
have offered to the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee, and subject to applicable law and certain
other provisions of the Indenture, the holders of a majority in aggregate
principal amount of the outstanding QUIDS will 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 QUIDS.
SUBORDINATION
The payment of the principal of and interest on the QUIDS will be
expressly subordinated, to the extent and in the manner set forth in the
Indenture, in right of payment to the prior payment in full of all existing and
future Senior Indebtedness of the Company.
Upon (1) any acceleration of the principal amount due on the QUIDS or (2)
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 and premium, if any, and interest 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 would be entitled, except for the provisions of the Indenture, shall
(subject to the power of a court of competent jurisdiction to make other
equitable provision reflecting the rights conferred by the provisions of the
Indenture upon the Senior Indebtedness and the holders thereof with respect to
the 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
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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, after giving effect to any concurrent payments
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 the 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 the
Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for these purposes.
If any payment or distribution of assets of the Company of any kind or
character not permitted by the foregoing provisions, whether in cash, property
or securities, shall be received by the holders of QUIDS before all Senior
Indebtedness is paid in full, or provision made for such payment, in accordance
with its terms, 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.
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, (1) there shall exist a default in the payment of principal, premium,
if any, sinking fund or interest with respect to any Senior Indebtedness, or (2)
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
maturity thereof, and such event of default shall not have been cured or waived
or shall not have ceased to exist.
SUBROGATION
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 these provisions of the Indenture
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 in the Indenture 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
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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 therein prevent the holder of any
QUIDS from exercising all remedies otherwise permitted by applicable law upon
default under such QUIDS subject to the rights of the holders of Senior
Indebtedness to receive cash, property or securities of the Company otherwise
payable or deliverable to the holders of the QUIDS or to a representative of
such holders, on their behalf.
With respect to the QUIDS offered hereby, the term "Senior Indebtedness"
is defined in the Indenture as
(1) any Payment Obligation (as defined) of the Company in respect of any
Indebtedness, directly or indirectly, created, incurred or assumed for
borrowed money or 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;
(2) any Payment Obligation of the Company in respect of any lease that would
be required to be classified and accounted for as a capital lease;
(3) any Payment Obligation of the Company in respect of any interest rate
exchange agreement, currency exchange agreement or similar agreement 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;
(4) any Payment Obligation of the Company in respect of any agreement relating
to an acquisition (including a sale and buyback) or the lease (including a
sale and leaseback) of real or personal property and 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;
(5) any Payment Obligation of any Subsidiary (as defined in the Indenture) or
of others of the kind described in the preceding clauses (1) through (4)
assumed or guaranteed by the Company or for which the Company is otherwise
responsible or liable; and
(6) any amendment renewal, extension or refunding of any of the foregoing
Payment Obligations.
The term "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
excludes 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.
The Indenture does not restrict the amount of Senior Indebtedness that the
Company may incur.
CONCERNING THE TRUSTEE
Bankers Trust Company is the Trustee under the Indenture with respect to
both collateralized and uncollateralized notes, including the QUIDS. Bankers
Trust Company also serves as Trustee for the Company's Mortgage and Deed of
Trust with respect to General and Refunding Mortgage Bonds.
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UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary describes the material United States Federal income
tax consequences of the ownership of QUIDS as of the date hereof and sets forth
in full the opinion of Brown & Wood LLP, special tax counsel to the Company,
insofar as it relates to matters of law or legal conclusions. Except where
noted, it deals only with original purchasers that hold the QUIDS as capital
assets and does not deal with special situations, such as those of dealers in
securities or currencies, financial institutions, life insurance companies,
persons holding QUIDS as a part of a hedging or conversion transaction or a
straddle, United States Holders (as defined below) whose "functional currency"
is not the U.S. dollar, or Non-United States Holders (as defined below) who own
(actually or constructively) ten percent or more of the combined voting power of
all classes of voting stock of the Company, who are present in the United States
or who have any other special status with respect to the United States.
Furthermore, the discussion below is based upon the provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), and regulations, rulings and
judicial decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in Federal income tax consequences
different from those discussed below.
PERSONS CONSIDERING THE PURCHASE, OWNERSHIP OR DISPOSITION OF QUIDS SHOULD
CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES IN
LIGHT OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES ARISING UNDER
THE LAWS OF ANY OTHER TAXING JURISDICTION.
UNITED STATES HOLDERS
As used herein, a "United States Holder" of QUIDS means a holder that is a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, an 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 the
authority to control all substantial decisions of the trust. A "Non-United
States Holder" is a holder that is not a United States Holder.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under applicable Treasury regulations (the "Regulations"), if the terms
and conditions of a debt instrument make the likelihood that stated interest
will not be timely paid a "remote" contingency, such contingency will be ignored
in determining whether the debt instrument is issued with OID. The Company
believes that the likelihood of its exercising its option to defer payments of
interest on the QUIDS is remote, since exercising that option would prevent it
from declaring dividends on any class of its stock. Based on the foregoing, the
Company intends to take the position that the QUIDS were not issued with OID
and, accordingly, a United States Holder should include in gross income only
such United States Holder's pro rata share of stated interest on the QUIDS in
accordance with such United States Holder's method of tax accounting.
The Regulations have not yet been addressed in any rulings or other
published interpretations by the Internal Revenue Service (the "IRS").
Accordingly, it is possible the IRS could take the position that the likelihood
of deferral was not a remote contingency within the meaning of the Regulations.
Under the Regulations, if the Company were to exercise its option to defer
payments of interest after treating the QUIDS as issued without OID, the QUIDS
would be treated as reissued with OID at that time, and all stated interest (and
de minimis OID, if any) on the QUIDS would thereafter be treated as OID as long
as the QUIDS remained outstanding. In such event, all of a United States
Holder's income with respect to the QUIDS would be accounted for as OID on an
economic accrual basis regardless of such United States Holder's method of tax
accounting, and actual distributions of stated interest would not be
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includable in gross income. Consequently, a
United States Holder would be required to include OID in gross income even
though the Company would not make any actual cash payments during a Deferral
Period.
A United States Holder that disposed of QUIDS prior to the record date for
the payment of interest following a Deferral Period would include OID in gross
income but would not receive any cash related thereto from the Company. Any
amount of OID included in a United States Holder's gross income (whether or not
during a Deferral Period) would increase such United States Holder's tax basis
in its QUIDS, and the amount of interest not includable in gross income would
reduce such United States Holder's tax basis in its QUIDS.
SALE, EXCHANGE AND RETIREMENT OF THE QUIDS
Upon the sale, exchange or retirement of QUIDS, a United States Holder
will recognize gain or loss equal to the difference between the amount realized
upon the sale, exchange or retirement and the adjusted tax basis of the QUIDS. A
United States Holder's adjusted tax basis in QUIDS will, in general, be the
United States Holder's initial basis therefor, increased by any OID previously
included in income by the United States Holder and reduced by any cash payments
on the QUIDS. Such gain or loss will be capital gain or loss and will be
long-term capital gain or loss if at the time of sale, exchange or retirement,
the QUIDS have been held for more than one year. Under current law, net capital
gains of individuals are, under certain circumstances, taxed at lower rates than
items of ordinary income. The deductibility of capital losses is subject to
limitations.
NON-UNITED STATES HOLDERS
Under present United States federal income and estate tax law, and subject
to the discussion below concerning backup withholding:
(1) no withholding of United States Federal income tax will be required with
respect to the payment by the Company or any paying agent of principal or
interest (which for purposes of this discussion includes OID) on QUIDS
owned by a Non-United States Holder, provided
(A) the beneficial owner is not a controlled foreign corporation that is
related to the Company through stock ownership,
(B) the beneficial owner is not a bank whose receipt of interest on the
QUIDS is described in section 881(c)(3)(A) of the Code and
(C) either
(a) the beneficial owner certifies to the Company or its agent,
under the penalties of perjury, that it is not a U.S. person,
citizen or resident and provides its name and address, or
(b) a financial institution holding the QUIDS on behalf of the
beneficial owner certifies, under penalties of perjury, that
such statement has been received by it and furnishes the Company
or its agent with a copy thereof;
(2) no withholding of United States Federal income tax will be required with
respect to any gain or income realized by a Non-United States Holder upon
the sale, exchange or retirement of QUIDS; and
(3) QUIDS beneficially owned by an individual who at the time of death is a
Non-United States Holder will not be subject to United States Federal
estate tax as a result of such individual's death, provided that the
interest payments with respect to such QUIDS would not have been, if
received at the time of such individual's death, effectively connected
with the conduct of a trade or business by such individual in the United
States.
BACKUP WITHHOLDING AND
INFORMATION REPORTING
In general, information reporting requirements will apply to certain
payments of
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principal and interest paid and OID accrued, if any, on the QUIDS and to the
proceeds of sale of the QUIDS made to United States Holders other than certain
exempt recipients (such as corporations). United States Holders other than
exempt recipients generally will receive information returns on IRS Form
1099-OID stating the amount of OID, if any, accrued on the QUIDS each year. A 31
percent backup withholding tax will apply to payments described in the preceding
sentence if the United States Holder fails to provide a taxpayer identification
number or certification of foreign or other exempt status or fails to report in
full dividend and interest income.
No information reporting or backup withholding will be required with
respect to payments made by the Company or any paying agent to Non-United States
Holders if a statement described in (1)(C) under "Non-United States Holders" has
been received and the payor does not have actual knowledge that the beneficial
owner is a United States person.
Payments of the proceeds from the sale by a Non-United States Holder of
QUIDS made to or through a foreign office of a broker will not be subject to
information reporting or backup withholding, except that if the broker is, for
federal income tax purposes, a United States person, a controlled foreign
corporation or a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United States,
such payments will not be subject to backup withholding but may be subject to
information reporting. Such payment of the proceeds of the sale of QUIDS to or
through the United States office of a broker is subject to information reporting
and backup withholding unless the Non-United States Holder or the beneficial
owner certifies as to its non-United States status or otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules will be allowed as
a refund or a credit against such holder's U.S. federal income tax liability
provided the required information is furnished to the IRS.
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UNDERWRITING
The Company and the underwriters named below (the "Underwriters") have
entered into an underwriting agreement and a pricing agreement with respect to
the QUIDS. Subject to certain conditions, each Underwriter has severally agreed
to purchase the aggregate principal amount of QUIDS indicated in the following
table.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITERS OF QUIDS
------------ ----------------
<S> <C>
Goldman, Sachs & Co.....................................
Salomon Smith Barney Inc. ..............................
McDonald & Company Securities, Inc......................
Roney Capital Markets,
A Division of First Chicago Capital Markets, Inc. ....
SG Cowen Securities Corporation.........................
------------
Total................................................... $100,000,000
------------
</TABLE>
QUIDS sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. The Underwriters may sell QUIDS to securities dealers at a discount
from the initial public offering price of up to % of the principal amount of
the QUIDS. Securities dealers may resell any QUIDS purchased from the
Underwriters to certain other brokers or dealers at a discount from the initial
public offering price of up to % of the principal amount of the QUIDS. If all
the QUIDS are not sold at the initial public offering price, the Underwriters
may change the offering price and the other selling terms.
Prior to the Offering, there has been no public market for the QUIDS. The
QUIDS will be listed on the NYSE, and we expect trading in the QUIDS on the NYSE
to begin within thirty days after the original issue date. In order to meet one
of the requirements for listing the QUIDS, the Underwriters will undertake to
sell lots of 100 or more to a minimum of 400 beneficial holders.
The QUIDS are a new issue of securities with no established trading
market. The Underwriters have advised the Company that the Underwriters intend
to make a market in the QUIDS but are not obligated to do so and may discontinue
market making at any time without notice. Neither the Company nor the
Underwriters can assure you that the trading market for the QUIDS will be
liquid.
In connection with the Offering, the Underwriters may purchase and sell
QUIDS in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater total
principal amount of QUIDS than they are required to purchase in the Offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the QUIDS
while the Offering is in progress.
The Underwriters also may impose a penalty bid. This may occur when a
particular Underwriter repays to the Underwriters a portion of the underwriting
discount because the Underwriters have repurchased QUIDS sold by or for the
account of that Underwriter in stabilizing or short covering transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the QUIDS. As a result, the price of the QUIDS may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the Underwriters at any
time. These transactions may be effected on the NYSE, in the over-the-counter
market or otherwise.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
The Company expects to have an estimated $ of expenses in
connection with this Offering.
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LEGAL OPINIONS
The validity of the QUIDS will be passed upon for the Company by
Christopher C. Nern, Esq., Vice President and General Counsel of the Company,
and for the Underwriters by Brown & Wood LLP. Brown & Wood LLP, special tax
counsel to the Company, has passed upon certain United States federal income tax
considerations with respect to the QUIDS.
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The information contained in this prospectus is not complete and may be amended.
These securities may not be sold until the related registration statement filed
with the Securities and Exchange Commission or any applicable state securities
commission becomes effective. This prospectus is not an offer to sell nor is it
seeking an offer to buy these securities in any state where the offer or sale is
not permitted.
Subject to Completion. Dated October 16, 1998.
Prospectus
[DETROIT EDISON LOGO]
$364,877,700
THE DETROIT EDISON COMPANY
Debt Securities
----------------------
The Detroit Edison Company intends from time to time to issue up to
$364,877,700 of its Debt Securities in one or more series of
(1) senior Debt Securities which may be (A) General and Refunding Mortgage
Bonds, (B) other senior Debt Securities, including Remarketed Notes,
secured by Mortgage Bonds, or
(2) unsecured Debt Securities, which may be senior or subordinated.
We will provide the specific terms of these securities in supplements to
this prospectus. You should read this prospectus and the supplement carefully
before you invest.
This prospectus, appropriately supplemented, may also be delivered in
connection with any remarketing of Remarketed Notes.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
We may offer the securities directly or through underwriters, agents or
dealers. The supplement will provide the term of that plan of distribution.
"Plan of Distribution" below also provides more information on this topic.
----------------------
The date of this prospectus is , 1998.
<PAGE> 21
THE COMPANY
GENERAL
The Detroit Edison Company ("Detroit Edison" or the "Company"),
incorporated in Michigan since 1967, is a regulated public utility that
generates, purchases, transmits, distributes and sells electric energy in a
7,600 square mile area in southeastern Michigan. The Company's service area
includes about 13% of Michigan's total land area and about half of its
population (approximately five million people). The Company's residential
customers reside in urban and rural areas, including an extensive shoreline
along the Great Lakes and connecting waters.
WHERE YOU CAN FIND MORE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("1934 Act") and in accordance therewith files annual,
quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission ("SEC"). You may read and copy any document
we file at the SEC's Public Reference Rooms at 450 Fifth Street, N.W.,
Washington, D.C. 20549; 500 West Madison Street, Chicago, Illinois 60611 and 7
World Trade Center, New York, New York 10048. The public may obtain information
on the operation of the Public Reference Rooms by calling the SEC at
1-800-SEC-0330. Such material can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005. In addition, the
SEC maintains an Internet site that contains reports, proxy and other
information statements and other information regarding registrants such as the
Company, that file electronically with the SEC. The address of such Internet
site is http://www.sec.gov. The address of the Company's principal executive
offices and its telephone number are 2000 Second Avenue, Detroit, Michigan 48226
and (313) 235-8000.
The Company has filed with the SEC a Registration Statement under the
Securities Act of 1933 with respect to the securities offered hereby. This
prospectus does not contain all the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain portions of which have
been omitted pursuant to the rules and regulations of the SEC. The information
so omitted may be obtained from the SEC's principal office in Washington, D.C.
upon payment of the fees prescribed by the SEC.
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means we can disclose information to you by referring you to
those documents. Information incorporated by reference is part of this
prospectus. Later information filed with the SEC updates and supersedes this
prospectus.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this Offering is completed, or subsequent
to the date of the initial Registration Statement and prior to effectiveness of
the Registration Statement:
1. The Company's Annual Report on Form 10-K for the year ended December 31,
1997.
2. DTE Energy Company's definitive proxy statement, dated March 17, 1998, in
connection with its April 27, 1998 Annual Meeting of Common Stock
Shareholders.
3. The Company's Quarterly Reports on Form 10-Q for the quarters ended March
31 and June 30, 1998.
4. The Company's Current Report on Form 8-K dated October 14, 1998.
We will provide to each person, including any beneficial owner, to whom a
copy of this prospectus is delivered, a copy of any or all of the information
that has been incorporated by reference in this prospectus but not delivered
with this prospectus. We will deliver this information upon written or oral
request and provide this information at no cost to the requester. You should
direct your requests to
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<PAGE> 22
Susan M. Beale, Vice President and Corporate Secretary, The Detroit Edison
Company, 2000 Second Avenue, Detroit, Michigan 48226; (313) 235-8000. You may
also review the documents we have filed with the SEC at our web site at
www.detroitedison.com.
USE OF PROCEEDS
The Company is offering hereby a maximum of $364,877,700 aggregate
principal amount of its Debt Securities. Net proceeds from the sale of the Debt
Securities will be used to refund or replace funds utilized by the Company for
the purpose of meeting debt and preferred stock refundings (including optional
redemptions).
REGULATORY MATTERS
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. The Company has been voluntarily
participating in these efforts. Traditional utility services are being
unbundled, with many of such services becoming non-regulated, and a demand is
being created for new energy-related services.
There are ongoing Michigan legislative, judicial and administrative
proceedings considering the deregulation of the generation segment of the
Michigan electric public utility industry, among other things. The Company is
not able to predict the outcome or timing of these proceedings.
3
<PAGE> 23
RATIO OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges* were as follows for the
respective periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
SIX MONTHS ENDED --------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
- ---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
3.23 3.24 2.71 3.21 3.13 3.25
</TABLE>
- -------------------------
* For the purpose of computing this ratio, earnings represent net income
(including allowance for both borrowed and other funds used during
construction, "AFUDC", accretion income and deferred Fermi 2 depreciation,
amortization and return) before deducting income taxes and fixed charges.
Fixed charges represent total interest charges, interest factor of rents and
amortization of debt discount, premium and expense. See Note 1 of Notes to
Consolidated Financial Statements appearing in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 for a description of accretion
income and deferred Fermi 2 depreciation, amortization and return.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities, other than General and Refunding Mortgage Bonds, are
to be issued under an indenture dated as of June 30, 1993, as supplemented, and
Supplemental Indentures creating each applicable series of Debt Securities
between the Company and Bankers Trust Company, as trustee (the "Trustee")
(together, the "Indenture").
The General and Refunding Mortgage Bonds (the "Mortgage Bonds") are to be
issued under and secured by, the Mortgage and Deed of Trust dated as of October
1, 1924 between the Company and Bankers Trust Company, as trustee (the "Mortgage
Trustee"), as amended and supplemented by various supplemental indentures (the
"Mortgage") and as to be further amended and supplemented by one or more
supplemental indentures creating the Mortgage Bonds. Each series of secured
Remarketed Notes and any other Secured Debt Securities will be secured as to
payment of principal, interest and premium, if any, by Mortgage Bonds.
The Debt Securities to be offered by this prospectus are limited to
$364,877,700 aggregate initial offering price. However, the Indenture does not
limit the amount of securities which can be issued thereunder and provides that
additional securities of any series may be issued thereunder up to the aggregate
principal amount which may be authorized from time to time by the Company. See
"Provisions Applicable to General and Refunding Mortgage Bonds -- Issuance of
Additional Bonds" herein for information regarding limitations on the amount of
Mortgage Bonds issuable under the Mortgage.
Unless otherwise indicated herein or in the applicable prospectus
supplement, the Debt Securities will be issued in denominations of $1,000 and
integral multiples thereof.
Copies of the Indenture and the Mortgage are filed as exhibits to the
Registration Statement of which this prospectus is a part. The summaries herein
are summaries of certain provisions of the Indenture and the Mortgage and do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture and the Mortgage, including the
definition therein of certain terms. The following summaries set forth certain
general terms and provisions of the Debt Securities to which any prospectus
supplement may relate. The particular terms of the Debt Securities offered by
any prospectus supplement and the extent, if any, to which such general
provisions may apply to the Debt Securities so offered, will be described in the
prospectus supplement relating to such Debt Securities.
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<PAGE> 24
Unless otherwise specified herein or in the applicable prospectus
supplement, Debt Securities will be issued in fully registered book-entry form
and will be registered in the name of The Depository Trust Company, as
depositary ("DTC"), or its nominee. Interests in the Debt Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by DTC and its participants.
PROVISIONS APPLICABLE TO ALL DEBT SECURITIES
GENERAL
Reference is made to the prospectus supplement that accompanies this
prospectus for the following terms, to the extent permitted by the Indenture or
the Mortgage, as the case may be, and other information with respect to the Debt
Securities being offered thereby:
(1) the designation, aggregate principal amount and authorized denominations of
such Debt Securities;
(2) the percentage of their principal amount at which such Debt Securities will
be issued;
(3) the date (or the manner of determining or extending the date or dates) on
which the principal of such Debt Securities will be payable;
(4) the terms for conversion or exchange, if any, of the Debt Securities;
(5) the classification as Senior Debt Securities, including as Remarketed Notes
or Mortgage Bonds, or as Subordinated Debt Securities;
(6) whether such Debt Securities will be issued in fully registered form or in
bearer form or any combination thereof;
(7) whether such Debt Securities will be issued in the form of one or more
global securities and whether such global securities are to be issuable in
a temporary global form or permanent global form;
(8) if other than U.S. dollars, the currency or currencies or currency unit or
units for which Debt Securities may be denominated and purchased and the
currency or currencies or currency units in which principal, premium (if
any) and any interest may be payable;
(9) if the currency for which Debt Securities may be purchased or in which
principal, premium (if any) and any interest may be payable is at the
election of the Company or the purchaser, the manner in which such an
election may be made and the terms of such election;
(10) the rate or rates per annum at which such Debt Securities will bear
interest, if any, or the method of determination of such rate or rates;
(11) the dates on which such interest, if any, will be payable, or the method of
determining such dates;
(12) the option of the Company, if any, to defer interest payments, and the
terms and conditions of such interest deferral provisions;
(13) any mandatory or optional sinking fund, redemption or other similar terms;
(14) if the Debt Securities are Secured Securities, a ranking of such series
with other securities of the Company;
(15) any index or other method used to determine the amount of payments of
principal, premium (if any) and interest, if any, on such Debt Securities;
(16) if a trustee other than Bankers Trust Company of New York is named for such
Debt Securities, the name of such trustee; and
(17) any other specific terms of the Debt Securities.
All Debt Securities of any one series need not be issued at the same time
and all the Debt Securities of any one series need not bear interest at the same
rate or mature on the same date.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units or if the principal of, premium, if any, or interest, if any, on
any series of Debt Securities is payable in foreign currencies or foreign
5
<PAGE> 25
currency units, the restrictions, elections, tax consequences, specific terms
and other information with respect to such issue of Debt Securities and such
currencies or currency units will be set forth in an applicable prospectus
supplement relating thereto.
PROVISIONS APPLICABLE TO GENERAL AND REFUNDING MORTGAGE BONDS
GENERAL
The Mortgage Bonds, which may be issued hereunder or one of which may
secure the Company's obligations with respect to a series of Secured Debt
Securities, are to be issued under and secured by the Mortgage. A copy of the
Mortgage is filed as an exhibit to the Registration Statement of which this
prospectus is a part, and reference is hereby made to the Mortgage for full and
complete statements of the provisions thereof, including the definitions of
certain terms used, and for other information with respect to the Mortgage
Bonds.
The following statements concerning the Mortgage Bonds and the Mortgage
are brief summaries of certain provisions contained in the Mortgage. They do not
purport to be complete and are qualified in their entirety by reference to the
Mortgage as noted below.
SINKING FUND PROVISIONS AND COLLATERAL
The Mortgage contains no sinking fund or other similar restrictive
requirements.
The bonds of Series KKP No. 10-15, 1989 Series BP, 1989 Series BP No. 2,
1991 Series AP, 1991 Series BP, 1991 Series CP, 1991 Series DP, 1991 Series EP,
1991 Series FP, 1992 Series AP, 1992 Series BP, 1992 Series CP, 1993 Series AP,
1993 Series FP, 1993 Series IP, 1994 Series AP, 1994 Series BP, 1995 Series AP
and 1995 Series BP were issued as security for revenue bonds. The bonds of 1993
Series H, 1993 Series K and 1994 Series C were issued as security for the
Company's Remarketed Secured Notes 1993 Series A Due 2028, 1993 Series B due
2033, and 1994 Series C due 2034, respectively. Such bonds contain provisions
which correspond to the revenue bonds or notes they collateralize in respect of
principal amounts, interest rates, maturity dates and redemption. All payments
of interest on, and reductions of the principal amounts of, such revenue bonds
or notes will be credited as payments to, or will give rise to reductions of
principal amounts of, the corresponding bonds issued under the Mortgage.
FORM AND DENOMINATIONS OF MORTGAGE BONDS; BOOK-ENTRY BONDS
The Mortgage Bonds may be issued in whole or in part in the form of one or
more Global Securities that shall be deposited with, or on behalf of, DTC or
such other Depositary as may be specified, and registered in the name of a
nominee of the Depositary ("Book-Entry Bonds"). See "DTC Book-Entry Only
System." Otherwise, the Mortgage Bonds will be issued only in fully registered
form in denominations of $1,000 or any authorized multiple thereof. Mortgage
Bonds of any denomination will be exchangeable without charge (except for stamp
taxes and other governmental charges) for Mortgage Bonds of the same Series of
other denominations.
PRIORITY AND SECURITY
The Mortgage Bonds will rank equally as to security with all mortgage
bonds of all other Series outstanding under the Mortgage except insofar as any
sinking, improvement or analogous fund may be deemed to afford additional
security for the bonds of any Series and except that, as provided in Section 3
of Article VI of the Mortgage, the Mortgage Trustee may, when in possession
during a default, apply any residue of collections to payment of principal of
such bonds as are then due if all of the bonds have not become due.
The Company has good and marketable title to all properties standing of
record in its name (which include all of those properties, except pollution
control facilities standing in the names of certain municipalities which are
being sold to the Company pursuant to installment sales contracts and the
undivided ownership interest of the Michigan Public Power Agency in a portion of
the Belle River Power Plant, on which its principal plants,
6
<PAGE> 26
generating stations and substations are erected and on which its general office
and service buildings are constructed and all other important parcels of real
estate and improvements thereon), subject to the lien of the Mortgage and
subject to minor exceptions, defects, irregularities and deficiencies which, in
the opinion of the Company, do not materially impair the use of such property,
and has adequate rights to maintain and operate such of its transmission and
distribution facilities as are located on public or other property. The Mortgage
is a first lien (subject only to excepted encumbrances as described in the
Mortgage) on substantially all of the Company's properties and franchises and
will (subject to the necessity for particular filings and recordings in the case
of certain personal property) constitute a first lien on any such properties
hereafter acquired by the Company, except that (1) after-acquired property will
be subject to prior liens and encumbrances, if any, existing when acquired by
the Company, (2) the Mortgage will not become a lien upon after-acquired real
property in a new county until it has been duly filed and recorded, and (3) the
Mortgage may not be effective as to property acquired subsequent to the filing
of a bankruptcy proceeding with respect to the Company.
ISSUANCE OF ADDITIONAL BONDS
Additional bonds may be issued under the Mortgage (Article III) on the
basis of retirements of equal amounts of bonds or prior lien bonds; deposit of
cash with the Mortgage Trustee; and 60% of property additions; provided that (in
the case of the issue of bonds upon the basis of property additions or the
deposit of cash) the earnings of the Company (after all taxes) available for
interest and reserves, including depreciation, for any consecutive twelve-month
period within the immediately preceding fifteen months shall have been at least
one and three-quarters times the annual interest charges on all bonds then
outstanding under the Mortgage, all bonds then applied for, and all prior lien
bonds if there are any outstanding. Cash deposited with the Mortgage Trustee as
the basis for the issuance of additional bonds may be withdrawn by the Company
up to an amount equal to the aggregate principal amount of bonds to the
authentication and delivery of which the Company shall have become entitled on
the basis of property additions, or equal to the aggregate principal amount of
bonds theretofore authenticated and delivered under the Mortgage which are
delivered to the Mortgage Trustee for cancellation (Article III, Section 7).
At June 30, 1998, $1.6 billion of Mortgage Bonds could have been issued on
the basis of bond retirements.
RELEASE PROVISIONS
The Company may, in the ordinary course of business, use and consume
materials and equipment and may alter, repair, replace, change location or
position of and add to plants, buildings, machinery and other fixtures without
notice to the bondholders. Leases and contracts may be entered into, terminated
or altered, and materials, equipment and supplies may be sold, exchanged or
otherwise disposed of, free from the lien of the Mortgage, all in the ordinary
course of business (Article X, Sections 1 and 2); the Company may also surrender
or modify its franchises or sell or exchange any other part of its property upon
compliance with the Mortgage requirements (Article X, Sections 3 and 4; Article
XA, Section 2); and the Mortgage Trustee is required to report annually to the
bondholders with respect to any release, or release and substitution of property
(Article XII, Section 7).
MODIFICATION
The Mortgage and the rights and obligations of the Company and of the
bondholders may be modified with the consent of the Company and of the holders
of 85% of the principal amount of bonds outstanding; provided that no such
modification may permit any change in the terms of payment of principal or
interest of any bond without the consent of the holder thereof, nor permit the
creation of any lien ranking prior to or on a parity with the lien of the
Mortgage with respect to any property mortgaged thereunder, nor reduce the
percentage of bondholders necessary to consent to such modification
7
<PAGE> 27
(Article XV). The Mortgage also provides that the Company and the Mortgage
Trustee may enter into supplemental indentures for various purposes, adding to
or not detracting from the undertakings of the Company, and that any
supplemental indenture shall, insofar as may be required by the provisions of
the Trust Indenture Act of 1939 as then in effect, comply with the provisions of
that Act (Article XVI).
EVENTS OF DEFAULT AND REMEDIES
The following events of default are applicable to the Mortgage Bonds:
failure to pay interest when due on the Mortgage Bonds, continued for 90 days;
failure to pay principal of the Mortgage Bonds when due; failure to pay interest
on outstanding underlying or prior lien Mortgage Bonds when due, continued for
90 days; failure to pay principal on such bonds when due; failure to perform or
observe covenants, agreements or conditions contained in the Mortgage, continued
for 90 days after notice of default; and insolvency or adjudication of
bankruptcy or appointment of a receiver not revoked within 90 days (Article VI,
Section 2).
The Company is required to furnish to the Mortgage Trustee an opinion of
counsel as to recordation of each supplemental indenture and an annual opinion
as to recording, filing, re-recording and re-filing of the Mortgage and
supplements thereto (Article XA, Section 3). The Company is also required to
furnish to the Mortgage Trustee an annual certificate of its officers as to
compliance with certain provisions of the Mortgage (Article V, Section 19).
The holders of a majority in principal amount of the Mortgage Bonds have
the right to direct the method and place of conducting all proceedings for the
sale of the trust estate, foreclosure or appointment of a receiver or other
proceedings under the Mortgage (Article VI, Section 15); holders of not less
than a majority in principal amount, upon providing reasonable security and
indemnity to the Mortgage Trustee, can require the Mortgage Trustee to take
action toward the execution or enforcement of the trusts created by the Mortgage
(Article VI, Section 16; Article XII, Section 1(b)(8)).
PROVISIONS APPLICABLE TO ALL DEBT SECURITIES OTHER THAN MORTGAGE BONDS
The Debt Securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at the
time of issuance is below market rates. See "United States Federal Income Tax
Considerations" herein. Federal income tax consequences and special
considerations applicable to any such series may also be described in the
prospectus supplement relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. (Section 301) Debt Securities may be issued solely in fully
registered form without coupons ("Registered Securities"), solely in bearer form
with or without coupons ("Bearer Securities"), or both as Registered Securities
and Bearer Securities. (Section 301) Registered Securities may be exchangeable
for other Debt Securities of the same series, registered in the same name, for a
like aggregate principal amount in authorized denominations and will be
transferable at any time or from time to time at the aforementioned office. No
service charge will be made to the holder for any such exchange or transfer
except for any tax or governmental charge incidental thereto. If Debt Securities
of any series are issued as Bearer Securities, the prospectus supplement will
contain any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and, if permitted by
applicable laws and regulations, the terms upon which Registered Securities of
the series may be exchanged for Bearer Securities of the series, whether such
Debt Securities are to be issuable in permanent global form with or without
coupons and, if so, whether beneficial owners of interests in any such permanent
global security may exchange such interests for Debt Securities of such series
and the circumstances under which any such exchanges may occur.
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<PAGE> 28
Unless otherwise specified in the applicable prospectus supplement,
principal and interest, if any, on the Debt Securities offered thereby are to be
payable at the office or agency of the Company maintained for such purposes in
the city where the principal corporate trust office of the Trustee is located,
and will initially be the principal corporate trust office of the Trustee,
provided that payment of interest, if any, may be made (subject to collection)
at the option of the Company by check mailed to the persons in whose names the
Debt Securities are registered at the close of business on the day specified in
the prospectus supplement accompanying this prospectus.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities will be exchangeable for other Debt Securities of the same
series and of like tenor, of any authorized denominations and of a like
aggregate principal amount and Stated Maturity (as defined in the Indenture).
Debt Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Trustee or at the
office of any transfer agent designated by the Company for such purpose, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Such transfer or exchange will be effected upon the
books of the Trustee or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request.
(Section 305)
In the event of any redemption of Debt Securities, the Company shall not
be required to: (i) issue, register the transfer of or exchange such Debt
Securities during a period beginning at the opening of business 15 days before
any selection of such Debt Securities to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption; or (ii)
register the transfer of or exchange any such Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any such Debt Security
being redeemed in part. (Section 305)
SATISFACTION AND DISCHARGE
The Company shall be deemed to have paid and discharged the indebtedness
on all the Debt Securities of a series and the Trustee shall execute instruments
acknowledging the satisfaction and discharge of such indebtedness and, if
applicable, shall pay, or assign or transfer and deliver to the Company the
related Mortgage Bond which has been held as security for the Debt Securities of
such series if (1) (i) the Company has deposited or caused to be deposited with
the Trustee an amount sufficient to pay and discharge the entire indebtedness on
all outstanding Debt Securities of such series for principal (and premium, if
any) and interest to the Stated Maturity or any Redemption Date, as the case may
be; or (ii) the Company has deposited or caused to be deposited with the Trustee
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 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 outstanding Debt
Securities of such series for principal (and premium, if any) and interest to
the Stated Maturity or any Redemption Date, as the case may be; and (2) the
Company has paid or caused to be paid all other sums payable with respect to the
Debt Securities of such series. (Section 503)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to the Debt Securities of any series: (a) failure to
pay any interest on any Debt Security of such series when due, continued for 30
days; (b) failure to pay principal of (or premium, if any) on the Debt
Securities of such series when due; (c) failure to perform any other covenant or
warranty of the Company in the Indenture (other than a covenant or warranty
included in the Indenture solely for the benefit of a series of securities other
than the Debt Securities), continued for 60 days after written notice as
provided in the Indenture; and
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<PAGE> 29
(d) certain events of bankruptcy, insolvency or reorganization involving the
Company. (Section 601)
If an Event of Default with respect to the Debt Securities of any series
occurs and is continuing, either the Trustee or the holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of such series by
notice as provided in the Indenture may declare the principal amount of such
Debt Securities to be due and payable immediately. At any time after a
declaration of acceleration has been made, but before a judgment or decree for
payment of money has been obtained by the Trustee, and subject to applicable law
and certain other provisions of the Indenture, the holders of a majority in
aggregate principal amount of the Debt Securities of such series may, under
certain circumstances, rescind and annul such acceleration. (Section 602)
The Indenture provides that within 90 days after the occurrence of any
Event of Default thereunder with respect to the Debt Securities of any series,
the Trustee shall transmit, in the manner set forth in the Indenture, notice of
such Event of Default to the holders of the Debt Securities of such series
unless such Event of Default has 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 on any Debt Security of such series, the Trustee may
withhold such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee has in good faith determined that the withholding of such notice is in
the interest of the holders of Debt Securities of such series. (Section 701)
If an Event of Default occurs and is continuing with respect to the Debt
Securities of any series, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of Debt Securities of such
series by all appropriate judicial proceedings. (Section 603)
The Indenture provides that, subject to the duty of the Trustee during any
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the holders of Debt Securities, unless such
holders shall have offered to the Trustee reasonable indemnity. (Section 702)
Subject to such provisions for the indemnification of the Trustee, and subject
to applicable law and certain other provisions of the Indenture, the holders of
a majority in aggregate principal amount of the outstanding Debt Securities of a
series will 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 Debt Securities of such
series. (Section 612)
MODIFICATION AND WAIVER
Modification and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series affected
thereby; provided, however, that no such modification or amendment may, without
the consent of the holder of each Debt Security effected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Securities,
(2) reduce the principal amount of, or premium or interest on, any Debt
Securities,
(3) change the coin or currency in which any Debt Securities or any premium or
any interest thereon is payable,
(4) impair the right to institute suit for the enforcement of any payment on
or after the Stated Maturity of any Debt Securities (or, in the case of
redemption, on or after the Redemption Date),
(5) reduce the percentage and principal amount of the outstanding Debt
Securities, the consent of whose holders is required in order to take
certain actions,
(6) change any obligation of the Company to maintain an office or agency in
the
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<PAGE> 30
places and for the purposes required by the Indenture, or
(7) modify any of the above provisions.(Section 1002)
The holders of at least 66 2/3% in aggregate principal amount of Debt
Securities of any series may, on behalf of the holders of all Debt Securities of
such series, waive compliance by the Company with certain restrictive provisions
of the Indenture. (Section 1109) The holders of not less than a majority in
aggregate principal amount of Debt Securities of any series may, on behalf of
all holders of Debt Securities of such series, waive any past default and its
consequences under the Indenture with respect to the Debt Securities of such
series, except a default (a) in the payment of principal of (or premium, if any)
or any interest on any Debt Security of such series, or (b) in respect of a
covenant or provision of the Indenture that cannot be modified or amended
without the consent of the holder of each Debt Security of such series. (Section
613)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may, without the consent of the holders of the Debt
Securities, consolidate or merge with or into, or convey, transfer or lease its
properties and assets substantially as an entirety to, any Person that is a
corporation, partnership or trust organized and validly existing under the laws
of any domestic jurisdiction, or may permit any such Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, provided that any successor Person
assumes the Company's obligations on the Debt Securities and under the
Indenture, that after giving effect to the 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 that certain other
conditions are met. (Section 901)
CONCERNING THE TRUSTEE
Bankers Trust Company is the Trustee under the Indenture. Bankers Trust
Company also serves as Mortgage Trustee under the Mortgage.
PROVISIONS APPLICABLE TO REMARKETED NOTES
The following sets forth the general terms of Debt Securities subject to
remarketing as described below ("Remarketed Notes").
SECURITY
Unless otherwise set forth in the applicable prospectus supplement, each
series of Remarketed Notes will be secured as to payment of principal, interest
and premium, if any, by Mortgage Bonds, pledged to the Trustee for the benefit
of the holders of the Remarketed Notes. See "-- Security; Pledge of Mortgage
Bond" and "Provisions Applicable to General and Refunding Mortgage Bonds."
INTEREST
GENERAL. The Remarketed Notes will initially bear interest at the rate per
annum set forth on the cover page of the applicable prospectus supplement (the
"Initial Interest Rate") for the period (the "Initial Interest Rate Period")
ending on the Business Day immediately preceding the date set forth thereon (the
"Initial Interest Rate Adjustment Date"). On and after the Initial Interest Rate
Adjustment Date, each Remarketed Note at the option of the Company will bear
interest for designated periods (each, an "Interest Rate Period") in the
Commercial Paper Term Mode (as defined below), the Long Term Rate Mode (as
defined below) or the SPURS Mode (as defined below and, together with the
Commercial Paper Term Mode and the Long Term Rate Mode, the "Interest Rate
Modes"). Each Remarketed Note may bear interest in the same or a different
Interest Rate Mode as other Remarketed Notes.
The interest rate for the Remarketed Notes will be established
periodically as described herein by a remarketing agent selected by the Company
(each, a "Remarketing Agent"). The Company also may appoint one or more standby
remarketing agents for any Remarketing Agent (each, a "Standby Remarketing
Agent") on the
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terms described herein and the applicable prospectus supplement.
Unless otherwise specified in the applicable prospectus supplement,
interest will be payable on any Remarketed Note at maturity and (a) in the
Initial Interest Rate Period, on the date or dates set forth in the applicable
prospectus supplement; (b) 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 Remarketed Note and on such other dates (if any)
as will be established upon conversion of such Remarketed Note to the Commercial
Paper Term Mode or upon remarketing of the Remarketed Note in a new Interest
Rate Period in the Commercial Paper Term Mode; and (iii) in the Long Term Rate
Mode or the SPURS Mode, no less frequently than semiannually on such dates as
will be established upon conversion of such Remarketed Note to the Long Term
Rate Mode or the SPURS Mode (or upon remarketing of the Remarketed 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 Remarketed 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 (each such date, an "Interest Payment
Date").
Interest will be payable to the holder thereof as of the related Record
Date (the "Record Date"), which, for any Remarketed Note (x) in the Initial
Interest Rate Period, is the date or dates set forth in the applicable
prospectus supplement, (y) in the Commercial Paper Term Mode, is the Business
Day (as defined below) 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. 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 the Remarketed Notes bearing interest at the Initial Interest
Rate will be computed on the basis set forth in the applicable prospectus
supplement. Interest on Remarketed 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 (as defined below) 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 Remarketed Notes bearing interest
at a fixed rate 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.
As used herein, "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
Remarketed Notes in the Long Term Rate Mode or the SPURS Mode as to which LIBOR
(as defined below) 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.
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DETERMINATION OF INTEREST RATES. The interest rate and, in the case of a
floating interest rate, the Spread (as defined below), if any, and the Spread
Multiplier (as defined below), if any, for any Remarketed Note will be
established by the applicable Remarketing Agent in a remarketing (as described
below) or otherwise not later than the first day of each succeeding Interest
Rate Period for such Remarketed Note, which must be a Business Day (each, an
"Interest Rate Adjustment Date"), and 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 Remarketing Agent to produce a par
bid in the secondary market for such Remarketed Note on the date the interest
rate is established. Such rate will be effective for the next succeeding
Interest Rate Period for such Remarketed 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 may be, on the Interest Rate Adjustment Date for
any Remarketed 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 Remarketed Note for whatever reason,
then the next succeeding Interest Rate Period for such Remarketed Note will be
automatically converted to a Weekly Rate Period (a Commercial Paper Term Period
described below), and the rate of interest thereon will be 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 (such rate of interest being referred to herein as the "Special Interest
Rate").
The interest rate on the Remarketed Notes will not exceed the "Maximum
Rate," which is defined to mean that rate of interest equal to 15% per annum or
such higher rate as may be established from time to time by the Board of
Directors of the Company.
The Trustee will, upon request of any Beneficial Owner of a Remarketed
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 Remarketed 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.
INTEREST RATE MODES
The times specified below are subject to extension pursuant to standby
remarketing arrangements, if any, as provided herein and in the applicable
prospectus supplement. See "Remarketing -- Interest Rate Adjustment Date;
Determination of Interest Rate" below.
COMMERCIAL PAPER TERM MODE. As used herein, "Commercial Paper Term Mode"
means, with respect to any Remarketed Note, the Interest Rate Mode in which the
interest rate on such Remarketed 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 above under
"Interest -- General." The Interest Rate Period for any Remarketed Note in the
Commercial Paper Term Mode will be a period of not less than one nor more than
364 consecutive calendar days (a "Commercial Paper Term Period"), as determined
by the Company (as described below under "Conversion") or, if not so determined,
by the Remarketing Agent for such Remarketed Note (in its best judgment in order
to obtain the lowest interest cost for such Remarketed 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
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next Interest Rate Period for such Remarketed 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 Remarketed Note. The interest rate for
any Commercial Paper Term Period relating to a Remarketed Note will be
determined not later than 11:50 a.m., New York City time, on the Interest Rate
Adjustment Date for such Remarketed Note, which is the first day of each
Interest Rate Period for such Remarketed Note.
LONG TERM RATE MODE. As used herein, "Long Term Rate Mode" means, with
respect to any Remarketed Note, the Interest Rate Mode in which the interest
rate on such Remarketed Note is reset in a Long Term Rate Period and interest is
paid as provided for such Interest Rate Mode above under "Interest -- General"
or below under "Floating Interest Rates." The Interest Rate Period for any
Remarketed Note in the Long Term Rate Mode will be established by the Company
(as described below under "Conversion") as a period of more than 364 days and
not exceeding the remaining term to the Stated Maturity Date (as defined below)
of such Remarketed Note (a "Long Term Rate Period"); provided, however, that
such Interest Rate Period must end on the day prior to an Interest Payment Date
for such Remarketed Note; and provided further that, if so provided in a
Remarketed 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 in the manner described in the next succeeding paragraph and provide
for payment of a premium, if any, in respect thereof for any such Remarketed
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 the 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 shall 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
Remarketed 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
Remarketed Note, which is the first day of each Interest Rate Period for such
Remarketed Note.
If any Remarketed 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 Remarketed
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 Remarketed Note, the Company will pay a
premium to the tendering Beneficial Owner of the Remarketed Note, together with
accrued interest, if any, thereon at the applicable rate payable to such
Interest Rate Adjustment Date. Unless otherwise specified in the Remarketed
Note, the premium will 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 Remarketed Note subject to early remarketing. The
Initial Early Remarketing Premium, if any, will 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
Remarketed Note until the premium is equal to 0.
SPURS MODE. As used herein, "SPURS Mode" means, with respect to any
Remarketed Note, the Interest Rate Mode in which the Remarketed Notes shall bear
interest and be subject to remarketing as "Structured Putable Remarketable
Securities" ("SPURS") by a remarketing agent selected by the Company (the "SPURS
Agent") as described under "SPURS Mode" below. So long as any Remarketed Notes
are in the
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SPURS Mode, the provisions set forth herein
applicable to the remarketing of Remarketed Notes generally shall apply to such
Remarketed Notes only to the extent expressly provided under "SPURS Mode" below.
The Interest Rate Period for any Remarketed Note in the SPURS Mode will be
established by the Company (as described below under "Conversion") as a period
of more than 364 days and not exceeding the remaining term to the Stated
Maturity Date of such Remarketed Note (a "SPURS Rate Period"); provided,
however, that such Interest Rate Period must end on the day prior to an Interest
Payment Date for such Remarketed Note. The SPURS Rate Period shall consist of
the period to and excluding the SPURS Remarketing Date (as defined below) and
the period from and including the SPURS Remarketing Date to but excluding the
next succeeding Interest Rate Adjustment Date, as described below under "SPURS
Mode" 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
Remarketed 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 Remarketed
Note, which for the SPURS Mode is the first day of each Interest Rate Period for
such Remarketed Note.
CONVERSION
The Company may change the Interest Rate Mode or Interest Rate Period at
its option in the manner described below.
CONVERSION BETWEEN COMMERCIAL PAPER TERM PERIODS. Each Remarketed Note in
a 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 upon receipt by the Remarketing
Agent and the Trustee of a notice, which will be in or promptly confirmed in
writing (which includes facsimile or appropriate electronic media), from the
Company (a "Conversion Notice") prior to 9:30 a.m., New York City time, or the
remarketing of such Remarketed Note, whichever later occurs, on such Interest
Rate Adjustment Date.
CONVERSION FROM THE COMMERCIAL PAPER TERM MODE TO THE LONG TERM RATE MODE
OR THE SPURS MODE. Each Remarketed Note in the Commercial Paper Term Mode 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 Remarketing Agent and the
Trustee of a Conversion Notice from the Company.
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
Remarketed Note in a Long Term Rate Period may be remarketed in the same
Interest Rate Period or converted at the option of the Company to a different
Long Term Rate Period or from the Long 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 Remarketed Note upon receipt by the Trustee and
the Remarketing Agent for such Remarketed Note of a Conversion Notice from the
Company not less than ten days prior to such Interest Rate Adjustment Date.
CONVERSION NOTICE. Each Conversion Notice must state each Remarketed Note
to which it relates and the new Interest Rate Mode (if applicable), the new
Interest Rate Period, the date of the applicable conversion (the "Conversion
Date") and, with respect to any Long Term Rate Period, any optional redemption
or repayment terms for each such Remarketed 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 Remarketed Note, the Remarketed Note shall
be converted automatically to the Weekly Rate Period.
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REVOCATION OR CHANGE OF CONVERSION NOTICE OR FLOATING INTEREST RATE
NOTICE. The Company may, upon written notice received by the Trustee and the
applicable Remarketing Agent, revoke any Conversion Notice or Floating Interest
Rate Notice (as defined herein) 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 limitation set
forth in the next paragraph.
LIMITATION ON CONVERSION, CHANGE OF CONVERSION NOTICE OR FLOATING INTEREST
RATE NOTICE AND REVOCATION. Notwithstanding the foregoing, the Company may not,
without the consent of the applicable Remarketing Agent, convert any Remarketed
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 Remarketed Note
being remarketed (i.e., the time at which such Remarketed Note has been
successfully remarketed, subject to settlement on the related Interest Rate
Adjustment Date). The Remarketing Agent may 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.
TENDER OF REMARKETED NOTES
Each Remarketed Note will be automatically tendered for purchase, or
deemed tendered for purchase, on each Interest Rate Adjustment Date relating
thereto. Remarketed Notes will be purchased on the Interest Rate Adjustment Date
relating thereto as described below.
REMARKETING
When any Remarketed Note is tendered for remarketing, the Remarketing
Agent therefor will use its reasonable efforts to remarket such Remarketed Note
on behalf of the Beneficial Owner thereof at a price equal to 100% of the
principal amount thereof. The Remarketing Agent may purchase tendered Remarketed
Notes for its own account in a remarketing, but will not be obligated to do so.
The Company may offer to purchase Remarketed Notes in a remarketing, provided
that the interest rate established with respect to Remarketed Notes in such
remarketing is not different from the interest rate that would have been
established if the Company had not purchased such Remarketed Notes. Any
Remarketed Notes for which the Company shall have given a notice of redemption
to the Trustee and the Remarketing Agent will not be considered in a
remarketing.
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
Remarketed Note, the applicable Remarketing Agent will determine the interest
rate for such Remarketed Note being remarketed 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, will use their
reasonable efforts to determine the interest rate for any Remarketed Notes not
successfully remarketed as of the applicable deadline specified in this
paragraph. In determining the applicable interest rate for such Remarketed 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 Remarketed
Notes tendered or to be tendered on such date and the principal amount of such
Remarketed 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 such Remarketed Notes.
NOTIFICATION OF RESULTS; SETTLEMENT. By 12:30 p.m., New York City time, on
the Interest Rate Adjustment Date for any Remarketed Notes, the applicable
Remarketing Agent will
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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 (as defined herein), applicable
to such Remarketed Notes for the next Interest Rate Period, (ii) the Interest
Rate Adjustment Date, (iii) the Interest Payment Dates, for any Remarketed 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
Remarketed Notes on such date and (vi) the aggregate principal amount of such
tendered Remarketed 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 Remarketed 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 Remarketed Notes that such purchaser is to purchase.
Each purchaser of Remarketed 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 Remarketed Notes by book-entry through DTC by 3:00
p.m., New York City time, on the Interest Rate Adjustment Date.
All tendered Remarketed 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.
The applicable Remarketing Agent will make, or cause the Trustee to make,
payment to the DTC participant of each tendering Beneficial Owner of Remarketed
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 Remarketed Notes, of the purchase price for
tendered Remarketed Notes that have been sold in the remarketing. If any such
Remarketed Notes were purchased pursuant to a Special Mandatory Purchase,
subject to receipt of funds from the Company or the Liquidity Provider (as
defined below), if any, as the case may be, the Trustee will make such payment
of the purchase price of such Remarketed Notes plus accrued interest, if any, to
such date.
The transactions described above for a remarketing of any Remarketed Notes
will be executed on the Interest Rate Adjustment Date for such Remarketed 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 Remarketed
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 below under "Purchase and Redemption of
Remarketed Notes," any Remarketed Notes tendered in a remarketing will be
purchased solely out of the proceeds received from purchasers of such Remarketed
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 Remarketed Notes will be subject to purchase by a
Remarketing Agent in a remarketing, such Remarketing Agent and any Standby
Remarketing Agent
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will not be obligated to purchase any such
Remarketed Notes.
The remarketing procedures set forth above will apply to all Remarketed
Notes except to the extent otherwise indicated in the applicable prospectus
supplement for such Remarketed Notes. The settlement and remarketing procedures
described above, including provisions for payment by purchasers of tendered
Remarketed Notes or for payment to selling Beneficial Owners of tendered
Remarketed Notes, may be modified to the extent required by DTC. In addition,
each Remarketing Agent may, without the consent of holders, 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
Remarketed Notes in the book-entry system of DTC, no certificates for such
Remarketed Notes will be delivered by any selling Beneficial Owner to reflect
any transfer of Remarketed Notes effected in any remarketing.
FAILED REMARKETING. Unless otherwise provided in the applicable prospectus
supplement, Remarketed 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
Remarketed Notes (the "Special Mandatory 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 Remarketed 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
Remarketed 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
has agreed in the Indenture to purchase such unremarketed Remarketed Notes. In
each case the Company will pay all accrued and unpaid interest, if any, on
unremarketed Remarketed Notes to such Interest Rate Adjustment Date. Payment of
the principal amount of unremarketed Remarketed Notes by the Company or the
Liquidity Provider (if any), as the case may be, and payment of accrued and
unpaid interest, if any, by the Company, will 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 Remarketed Notes subject to Special Mandatory
Purchase by 3:00 p.m., New York City time, on such Interest Rate Adjustment
Date.
THE REMARKETING AGENT. The Company and the Remarketing Agent for
Remarketed Notes will enter into a Remarketing Agreement, a form of which has
been filed as an exhibit to the Registration Statement of which this prospectus
is a part. The summaries below are summaries of certain provisions of the form
of Remarketing Agreement and do not purport to be complete and are subject to,
and qualified in their entirety by, the provisions of the Remarketing Agreement.
For its services in determining the interest rate and remarketing
Remarketed Notes, the Remarketing Agent will receive from the Company a fee to
be determined at the time of execution of the Remarketing Agreement. The
Remarketing Agent may pay to selected broker-dealers, including any Standby
Remarketing Agent, a portion of any fees it receives from the Company for its
services as Remarketing Agent reflecting Remarketed Notes sold through such
broker-dealers to purchasers in remarketings.
The Company will agree to indemnify the Remarketing Agent and the Standby
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Remarketing Agent against certain liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Act"), arising out of or in connection
with its duties under the Remarketing Agreement.
The Remarketing Agreement will provide that the Company may in its
absolute discretion replace the Remarketing Agent by giving 30 days prior notice
to the Remarketing Agent and the Trustee, such replacement to be effective upon
the Company's appointment of a successor to perform the services of the
Remarketing Agent under the Remarketing Agreement. The Remarketing Agreement
will also provide that the Company reserves the right to appoint or replace any
Standby Remarketing Agent at any time.
The Remarketing Agreement will also provide that the Remarketing Agent or
any Standby Remarketing Agent may resign at any time as Remarketing Agent, such
resignation to be effective 30 days after the delivery to the Company and the
Trustee of notice of such resignation. In such case, it shall be the sole
obligation of the Company to appoint a successor Remarketing Agent.
PURCHASE AND REDEMPTION OF
REMARKETED NOTES
SPECIAL MANDATORY PURCHASE. Unless otherwise provided in the applicable
prospectus supplement, if by 12:00 o'clock noon, New York City time, on any
Interest Rate Adjustment Date for any Remarketed Notes, the applicable
Remarketing Agent and the applicable Standby Remarketing Agent(s) have not
remarketed all such Remarketed Notes, the Remarketed Notes that have not been
remarketed 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 Remarketed
Notes subject to Special Mandatory Purchase by 3:00 p.m., New York City time, on
such Interest Rate Adjustment Date. Such funds will be in an amount sufficient
to pay the aggregate purchase price of such unremarketed Remarketed 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 Remarketed Notes on such Interest Rate Adjustment Date. The Company
has agreed in the Indenture to pay the accrued interest, if any, on such
Remarketed Notes by 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 Remarketed Notes pursuant to a Special
Mandatory Purchase in the manner provided in the Remarketed Notes will
constitute an Event of Default under the Indenture in which event the date of
such failure shall constitute a date of Maturity for such Remarketed Notes and
the principal thereof 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, such Remarketed Notes will bear interest at the
Special Interest Rate as provided above under "Interest -- Determination of
Interest Rates."
If the Company enters into a Standby Note Purchase Agreement with a
Liquidity Provider, Remarketed Notes purchased by the Liquidity Provider
("Purchased Notes") will 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 Remarketed Note by the Liquidity Provider, all interest accruing thereon
from the last date for which interest was paid will 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 will
continue its remarketing efforts with respect to Purchased Notes until the
earlier to occur of a successful remarketing of such Purchased Notes or the
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<PAGE> 39
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 Remarketed Notes on such
date at a purchase price equal to the principal amount thereof plus accrued
interest thereon to the purchase date. Such Remarketed Notes will remain
outstanding and enjoy the benefits of the Indenture until such time as the
Company delivers the Remarketed Notes to the Trustee for cancellation.
OPTIONAL REDEMPTION ON ANY INTEREST RATE ADJUSTMENT DATE. Each Remarketed
Note will be subject to redemption at the option of the Company in whole or in
part on any Interest Rate Adjustment Date relating thereto without notice to the
holders thereof at a redemption price equal to the aggregate principal amount of
such Remarketed Notes to be redeemed plus accrued interest thereon to the
redemption date.
REDEMPTION WHILE REMARKETED NOTES ARE IN THE LONG TERM RATE MODE. Any
Remarketed 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.
ALLOCATION. Except in the case of a Special Mandatory Purchase, if the
Remarketed Notes are to be redeemed in part, DTC, after receiving notice of
redemption specifying the aggregate principal amount of Remarketed Notes to be
so redeemed, will determine by lot (or otherwise in accordance with the
procedures of DTC) the principal amount of such Remarketed 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 Remarketed Notes are to be redeemed. Each
such DTC participant, upon receipt of such notice, will in turn determine the
principal amount of Remarketed Notes to be redeemed from the accounts of the
Beneficial Owners of such Remarketed Notes for which it serves as DTC
participant, and give notice of such determination to the Remarketing Agent.
SPURS MODE
Except as otherwise specified in the applicable prospectus supplement, if
so designated by the Company prior to commencement of an Interest Rate Period in
accordance with the procedures described above under "Conversion," during such
period the Remarketed Notes shall bear interest and be subject to remarketing by
the SPURS Agent designated by the Company as described below.
GENERAL
Each Remarketed Note in the SPURS Mode will 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. 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 bid in the secondary market for such Remarketed
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. If the SPURS Agent elects to remarket the Remarketed Notes, except in
the limited circumstances described herein, (i) the Remarketed Notes will be
subject to mandatory tender to the SPURS Agent at 100% of the principal amount
thereof for remarketing on the SPURS Remarketing Date, on the terms and subject
to the conditions described herein, and (ii) from, and including, the SPURS
Remarketing Date to, but excluding, the next succeeding Interest Rate Adjustment
Date, the Remarketed Notes will bear interest at the rate determined by the
SPURS Agent in accordance with the procedures set forth below (the "SPURS
Interest Rate"). See "-- Tender; Remarketing" below.
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<PAGE> 40
Under the circumstances described below, the Remarketed Notes are subject
to remarketing in a new Interest Rate Mode or repurchase by the Company on the
SPURS Remarketing Date. See "Conversion or Redemption Following Election by the
SPURS Agent to Remarket" below. If the SPURS Agent does not elect to purchase
the Remarketed Notes for remarketing on the SPURS Remarketing Date or if the
SPURS Agent gives notice of its election to remarket the Remarketed Notes but
for any reason does not purchase all tendered Notes on the SPURS Remarketing
Date, then as of such date the Remarketed 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 Term Mode or the Long
Term Rate Mode or a new SPURS Mode established by the Company in accordance with
the procedures described above under "Conversion;" 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 Remarketed Notes for remarketing on the SPURS
Remarketing Date or fails to so purchase, as the case may be.
TENDER; REMARKETING
The following description sets forth the terms and conditions of the
remarketing of the Remarketed Notes, in the event that the SPURS Agent elects to
purchase the Remarketed Notes and remarkets the Remarketed Notes on the SPURS
Remarketing Date.
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 Remarketed Notes for
remarketing (the "Notification Date"), each Remarketed Note will be
automatically tendered, or deemed tendered, to the SPURS Agent for remarketing
at the SPURS Interest Rate on the SPURS Remarketing Date, except in the
circumstances described under "General" above. The purchase price for the
tendered Remarketed Notes to be paid by the SPURS Agent will equal 100% of the
principal amount thereof. See "Notification of Results; Settlement" below. When
the Remarketed Notes are tendered for remarketing, the SPURS Agent may remarket
the Remarketed 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 Remarketed Notes will bear interest at the SPURS Interest Rate. If the
SPURS Agent elects to remarket the Remarketed Notes, the obligation of the SPURS
Agent to purchase the Remarketed Notes on the SPURS Remarketing Date is subject,
among other things, to 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
the Remarketed Notes shall have occurred and be continuing.
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 will 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 Remarketed Notes. 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 Remarketed Notes, the Company and the
Trustee.
The "Applicable Spread" will be the lowest bid indication, expressed as a
spread (in the form of a percentage or in basis
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<PAGE> 41
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 Remarketed 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
Rate Adjustment Date of the Remarketed 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 described above, then the Applicable
Spread shall be the lowest of such bid indications obtained as described above.
"Dollar Price" means, with respect to the Remarketed 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 semiannual 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" means, with respect to the SPURS Remarketing Date, the
rate per annum equal to the semiannual 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" means 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 of the Remarketed 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 five
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 Bridge Telerate, Inc. (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 Bridge Telerate, Inc..
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer (as defined below) 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 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 Dealer as shall
be appointed by the SPURS Agent after consultation with the Company.
"Remaining Scheduled Payments" means, with respect to the Remarketed
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 Rate Adjustment
Date, as determined by the SPURS Agent.
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<PAGE> 42
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 Remarketed Notes on the SPURS Remarketing
Date, the SPURS Agent will 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 Remarketed Notes will 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 Remarketed Notes
on the SPURS Remarketing Date, the SPURS Agent will make or cause the Trustee to
make payment to the DTC participant of each tendering Beneficial Owner of
Remarketed 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 Remarketed Notes, of 100% of the principal amount of the tendered
Remarketed Notes that have been purchased for remarketing by the SPURS Agent. If
the SPURS Agent does not purchase all of the Remarketed Notes on the SPURS
Remarketing Date, the Company may attempt to convert the Remarketed Notes to a
new Interest Rate Mode; the interest rate will be determined as provided above
in "Interest -- Determination of Interest Rates;" and settlement will be
effected as described above under "Remarketing -- Notification of Results;
Settlement" or "-- Failed Remarketing," as the case may be. In any case, the
Company will make or cause the Trustee to make payment of interest to each
Beneficial Owner of Remarketed Notes due on the SPURS Remarketing Date by
book-entry through DTC by the close of business on the SPURS Remarketing Date.
The transactions described above will 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 Remarketed
Notes delivered by book-entry as necessary to effect the purchases and sales
thereof.
Transactions involving the sale and purchase of Remarketed 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 described above, including provisions
for payment by purchasers of Remarketed Notes in the remarketing or for payment
to selling Beneficial Owners of tendered Remarketed Notes, may be modified to
the extent required by DTC or to the extent required to facilitate the tender
and remarketing of Remarketed Notes in certificated form, if the book-entry
system is no longer available for the Remarketed Notes at the time of the
remarketing. In addition, the SPURS Agent may, in accordance with the terms of
the Indenture, modify the tender and 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
Remarketed Notes in the book-entry system of DTC, no certificates for such
Remarketed Notes will be delivered by any selling Beneficial Owner to reflect
any transfer of such Remarketed Notes effected in the remarketing. In addition,
under the terms of the Remarketed Notes and the SPURS Remarketing Agreement
(described below), the Company will agree that, notwithstanding any provision to
the contrary set forth in the Indenture, (i) it will use its best efforts to
maintain the Remarketed Notes in book-entry form with DTC or any successor
thereto and to appoint a successor depositary to the extent necessary to
maintain the Remarketed Notes in book-entry form, and (ii) it will waive any
discretionary right it otherwise has under the Indenture to cause the Remarketed
Notes to be issued in certificated form.
THE SPURS AGENT. If the Remarketed Notes are to be remarketed in the SPURS
Mode, the Company and the SPURS Agent will enter into a SPURS Remarketing
Agreement (a "SPURS Remarketing Agreement"),
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<PAGE> 43
the general terms and provisions of which are summarized below.
Except as otherwise provided at the time of remarketing in the SPURS Mode,
the SPURS Agent will not receive any fees or reimbursement of expenses from the
Company in connection with the remarketing in the SPURS Mode.
The Company will agree to indemnify the SPURS Agent against certain
liabilities, including liabilities under the Securities Act, arising out of or
in connection with its duties under the SPURS Remarketing Agreement.
In the event that the SPURS Agent elects to remarket the Remarketed Notes
as described herein, the obligation of the SPURS Agent to purchase Remarketed
Notes from tendering Beneficial Owners of Remarketed Notes will be subject to
several conditions precedent set forth in the SPURS Remarketing Agreement,
including 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 the Remarketed Notes
shall have occurred and be continuing. In addition, the SPURS Remarketing
Agreement will provide for the termination thereof, or redetermination of the
SPURS Interest Rate, by the SPURS Agent on or before the SPURS Remarketing Date,
upon the occurrence of certain events as set forth in the SPURS Remarketing
Agreement.
No holder or Beneficial Owner of any Remarketed Notes shall have any
rights or claims under the SPURS Remarketing Agreement or against the SPURS
Agent as a result of the SPURS Agent not purchasing such Remarketed Notes.
The SPURS Remarketing Agreement will also provide that the SPURS Agent may
resign at any time as SPURS Agent, such resignation to be effective 10 days
after the delivery to the Company and the Trustee of notice of such resignation.
In such case, it shall be the sole obligation of the Company to appoint a
successor SPURS Agent.
The SPURS Agent, in its individual or any other capacity, may buy, sell,
hold and deal in any of the Remarketed Notes. The SPURS Agent may exercise any
vote or join in any action which any Beneficial Owner of Remarketed Notes may be
entitled to exercise or take with like effect as if it did not act in any
capacity under the SPURS Remarketing Agreement. The SPURS Agent, in its
individual capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company as freely as if
did not act in any capacity under the SPURS Remarketing Agreement.
CONVERSION OR REDEMPTION FOLLOWING ELECTION BY THE SPURS AGENT TO REMARKET
If the SPURS Agent elects to remarket the Remarketed Notes on the SPURS
Remarketing Date, the Remarketed Notes will be subject to mandatory tender to
the SPURS Agent for remarketing on such date, in each case subject to the
conditions described above under "Tender; Remarketing" and to the Company's
right to either convert the Remarketed Notes to a new Interest Rate Mode on the
SPURS Remarketing Date or to redeem the Remarketed 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 Remarketed Notes to a new Interest Rate Mode, or
to redeem the Remarketed 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 the Remarketed
Notes to a new Interest Rate Mode, then as of the SPURS Remarketing Date the
Remarketed Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date
will constitute an Interest Rate Adjustment Date, and the Remarketed Notes will
be subject to
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<PAGE> 44
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 described above
under "Conversion", 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 Remarketed Notes over 100% of the
principal amount of the Remarketed Notes 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 the Remarketed
Notes, the "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the Remarketed Notes 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 the Remarketed 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.
FLOATING INTEREST RATES
While any Remarketed 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 Remarketed Note (the "Floating Interest Rate Notice") not less than ten
(10) days prior to the Interest Rate Adjustment Date for such Long Term Rate or
SPURS Rate Period. The Floating Interest Rate Notice must identify by CUSIP
number or otherwise the portion of the Remarketed 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 (as defined below) and the Floating Rate Maximum Interest Rate
(as defined below) and/or Floating Rate Minimum Interest Rate (as defined
below), if any. If one or more of the applicable Interest Rate Bases is LIBOR or
the CMT Rate, the Floating Interest Rate Notice will also specify the Index
Currency and Designated LIBOR Page or the Designated CMT Maturity Index and
Designated CMT Telerate Page, respectively, as such terms are defined below.
If any Remarketed Note bears interest at a floating rate in a Long Term
Rate or SPURS Rate Period, such Note will 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. Commencing on the Interest
Rate Adjustment Date for such Interest Rate Period, the rate at which interest
on such Remarketed Note will be payable will be reset as of each Interest Reset
Date during such Interest Rate Period specified in the applicable Floating
Interest Rate Notice.
The "Spread" is 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 Remarketed Note. The "Spread Multiplier" is the percentage of
the related Interest Rate Basis or Bases applicable to such 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 Rate Period or
SPURS Rate Period, as the case may be. The "Index Maturity" is 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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The applicable floating interest rate on any Remarketed 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 will be (i) if such day is an Interest Reset Date,
the interest rate determined as of the Interest Determination Date (as
hereinafter defined) 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 will 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 will 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"
will be such preceding Friday. If the interest rate of any Remarketed 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 Remarketed Note will be the most recent
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<PAGE> 46
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 will be determined as of such date, and the applicable
interest rate will take effect on the related Interest Reset Date.
Either or both of the following may also apply to the floating interest
rate on any Remarketed 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 Remarketed
Note will in no event be higher than the Maximum Rate or 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 the applicable Remarketed 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, Bankers Trust Company 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
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for each Interest Reset Period thereafter. Upon request of the Beneficial Owner
of a Remarketed Note, after any Interest Rate Adjustment Date, the Calculation
Agent or the Remarketing Agent will 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
Remarketed 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 Remarketed Note. Except as described
herein with respect to a Remarketed Note earning interest at floating rates, no
notice of the applicable interest rate, Spread (if any) or Spread Multiplier (if
any) will be sent to the Beneficial Owner of any Remarketed 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 Remarketed 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 Remarketed
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 H.15(519) (as
hereinafter defined) 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 in H.15 Daily Update (as hereinafter
defined), or such other recognized electronic source used for the purpose of
displaying such rate under the caption "CDs (Secondary Market)". If such rate is
not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source 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.
"H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world-wide-web site of the Board of Governors of the Federal Reserve System
at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or
publication.
CMT Rate. If an Interest Rate Basis for any Remarketed 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 Remarketed
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
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<PAGE> 48
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 7051, 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 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
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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 Bridge Telerate, Inc.
(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 Remarketed 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 a Remarketed 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)" as
such rate is displayed on Bridge Telerate, Inc. (or any successor service) on
page 120 ("Telerate Page 120") or, if such rate does not appear on Telerate Page
120 or is 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 H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the heading "Federal Funds
(Effective)." If such rate does not appear on Telerate Page 120 or is not yet
published in H.15(519), H.15 Daily Update or another recognized electronic
source 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
will 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 Remarketed 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 defined below) 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
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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 will 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
will 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 banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined as of such LIBOR Interest Determination Date
will 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 will be calculated.
If no such currency or composite currency is specified in the applicable
Floating Interest Rate Notice, the Index Currency will be United States dollars.
"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 will be The City of New York, Sydney,
Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
"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 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 Bridge Telerate, Inc. (or any
successor service) on the page specified in such Floating Interest Rate Notice
(or 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.
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Prime Rate. If an Interest Rate Basis for any Remarketed Note is specified
in the applicable Floating Interest Rate Notice as the "Prime Rate," Prime Rate
means, with respect to any Interest Determination Date relating to a Remarketed
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" or, if not
published prior to 3:00 p.m., New York City time, on the related Calculation
Date, the rate on such Prime Rate Interest Determination Date as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "Bank Prime Loan." If such
rate is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 P.M., New York City time, on the related Calculation
Date, then the Prime Rate will 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 will 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 will 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 on the Reuter Monitor
Money Rates Service (or any successor service) on the "USPRIME1" page (or such
other page as may replace the USPRIME1 page on such 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 Remarketed Note is
specified in the applicable Floating Interest Rate Notice as the "Treasury
Rate," Treasury Rate means, with respect to any Interest Determination Date
relating to a Remarketed 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 under the caption "AVGE INVEST YIELD" on the display on Bridge
Telerate, Inc. (or any successor service) on page 56 or page 57 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 the 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
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such Auction is held, then the Treasury Rate
will be the rate (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) on such Treasury Rate
Interest Determination Date of Treasury Bills having the Index Maturity
specified in the applicable Floating Interest Rate Notice as published in
H.15(519) under the caption "U.S. Government Securities/Treasury Bills/Secondary
Market" or, if not yet published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on such Treasury Rate Interest Determination
Date of such Treasury Bills as published in H.15 Daily Update, or such other
recognized electronic source used for the purpose of displaying such rate, under
the caption "U.S. Government Securities/Treasury Bills/Secondary Market." If
such rate is not yet published in H.15(519), H.15 Daily Update or another
recognized electronic source, then the Treasury Rate will be calculated by the
Calculation Agent and will 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.
SECURITY; PLEDGE OF MORTGAGE BONDS
Unless otherwise set forth in the applicable prospectus supplement, each
series of Remarketed Notes will be secured as to payment of principal, interest
and premium, if any, as set forth below.
GENERAL. In order to secure the obligation of the Company to pay the
principal of (and premium, if any) and interest on the Remarketed Notes of each
series, the Company will issue and deliver to and pledge with the Trustee its
Mortgage Bond. (Section 401) The aggregate principal amount of the Remarketed
Notes outstanding and maximum aggregate amount of premium thereon, if any, will
not exceed the aggregate principal amount of the related Mortgage Bonds pledged
with and held by the Trustee. The Mortgage Bonds will bear interest at times and
in amounts sufficient to provide for the payment of interest on the related
Remarketed Notes and also will be redeemed at times and in amounts that
correspond to the required payments of principal of and any premium on the
related Remarketed Notes. Payments on the Remarketed Notes will satisfy payment
obligations on the underlying Mortgage Bonds. The Mortgage Bonds will be secured
by a first mortgage lien on certain property owned by the Company and will rank
on a parity with all other general and refunding mortgage bonds of the Company.
As of September 30, 1998, the Company had outstanding approximately $3.0 billion
aggregate principal amount of General and Refunding Mortgage Bonds. See
"Provisions Applicable to General and Refunding Mortgage Bonds."
SATISFACTION OF PAYMENT OBLIGATION ON MORTGAGE BOND. The interest rate on
the Mortgage Bond will be equal to the aggregate interest due on the related
Remarketed Notes. The Indenture provides that the obligation of the Company to
make any payment of the principal of (and premium, if any) or interest on the
Mortgage Bond will be deemed to have been satisfied and discharged to the extent
that at the time any such payment shall be due, the then due principal of (and
premium, if any) or interest on the related Remarketed Notes, shall have been
paid, deemed to have been paid or otherwise satisfied and discharged. In
addition, such obligation to make any payment of the principal of (and premium,
if any) or interest on the Mortgage Bond at any time shall be deemed to have
been satisfied and discharged to the extent that the amount of
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the Company's obligation to make any
payment of the principal of (and premium, if any) or interest on the Mortgage
Bond exceeds the obligation of the Company at that time to make any payment of
the principal of (and premium, if any) or interest on the related Remarketed
Notes.
REDEMPTION OF MORTGAGE BOND. The Company covenants and agrees in the
Indenture that upon the required payment of principal or premium, if any,
becoming due and payable with respect to any Remarketed Notes, it will redeem
the related Mortgage Bond in an aggregate principal amount equal to the amount
becoming due and payable on such Remarketed Notes, plus accrued interest;
provided, however, that the Company's obligation to redeem such Mortgage Bond
will be fully or partially deemed to have been satisfied and discharged to the
extent that at the time any such payment shall be due, the then due aggregate
principal amount of the Remarketed Notes, plus the aggregate amount of any
premium on, or accrued interest to the redemption date for, such Remarketed
Notes shall have been fully or partially paid, deemed to have been paid or
otherwise satisfied and discharged. Except for such redemption, the Company
covenants that it will not redeem the Mortgage Bond or take any action that will
result in the Mortgage Trustee or the Company incurring an obligation to redeem
the Mortgage Bond. (Section 404)
SURRENDER AND EXCHANGE OF MORTGAGE BONDS. The Trustee will surrender to
the Mortgage Trustee for cancellation the Mortgage Bonds in an aggregate
principal amount equal to the aggregate principal amount of any other Mortgage
Bond delivered to and pledged with the Trustee pursuant to the Indenture in
exchange therefor; provided that the Mortgage Bonds so delivered to and pledged
with the Trustee contain no provisions that would impair the benefit of the lien
of the Mortgage in favor of the holders of the related Remarketed Notes.
(Section 406(c))
EVENTS OF DEFAULT
In addition to the Events of Default set forth above under "Provisions
Applicable to All Debt Securities Other than Mortgage Bonds -- Events of
Default", any one of the following events will constitute an Event of Default
under the Indenture with respect to the Remarketed Notes of any series: (a)
failure by the Company to comply with the provisions of the Indenture relating
to the pledge of the Mortgage Bonds in respect of such series or to the
provisions of such Mortgage Bonds; (b) failure by the Company to purchase
Remarketed Notes of such series held by the Liquidity Provider pursuant to the
Standby Note Purchase Agreement, if any, continued for 60 days after written
notice as provided in the Indenture; and (c) the occurrence of a "default" as
such term is defined in the Mortgage. (Section 601)
The Indenture provides that within 90 days after the occurrence of any
Event of Default thereunder with respect to the Remarketed Notes of any series,
the Trustee shall transmit, in the manner set forth in the Indenture, notice of
such Event of Default to the holders of the Remarketed Notes of such series
unless such Event of Default has 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 on any such Remarketed Note of such series or a failure by
the Company to comply with the provisions of the Indenture relating to the
Mortgage Bonds or to the provisions of such Mortgage Bonds, the Trustee may
withhold such notice if and so long as the board of directors, the executive
committee or a trust committee of directors or Responsible Officers of the
Trustee has in good faith determined that the withholding of such notice is in
the interest of the holders of Remarketed Notes of such series; and provided,
further, that in the case of any default referred to in clause (a) of the
preceding paragraph with respect to the Remarketed Notes of such series, no such
notice to holders shall be given until at least 60 days after the occurrence
thereof. (Section 701)
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If an Event of Default occurs and is continuing with respect to the
Remarketed Notes of any series, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the holders of Remarketed Notes
of such series by all appropriate judicial proceedings, including the rights of
the Trustee as the holder of the related Mortgage Bonds; provided, however, that
the Trustee shall not have the power to sell the related Mortgage Bonds.
(Section 603)
MODIFICATION AND WAIVER
In addition to the provisions set forth above under "Provisions Applicable
to All Debt Securities Other than Mortgage Bonds -- Modification and Waiver," no
modification or amendment to the Indenture may, without the consent of each
holder of Remarketed Notes of the Series affected thereby, modify or change the
provisions of the Indenture relating to the pledge of the Mortgage Bond relating
to any Remarketed Note or modify or change the provisions of the Mortgage or the
related Mortgage Bond in a manner that is adverse to holders of any Remarketed
Notes of such Series. (Section 1002)
THE STANDBY NOTE PURCHASE AGREEMENT
In order to fulfill its obligations under the Special Mandatory Purchase
Right, the Company may from time to time, at its option, enter into a Standby
Note Purchase Agreement (the "Standby Note Purchase Agreement") with one or more
banks or other credit providers (referred to individually and collectively
herein as the "Liquidity Provider"), each of which, unless otherwise provided in
the applicable Prospectus Supplement, has (i) obligations such as those under
the Standby Note Purchase Agreement that are exempt from registration under the
Securities Act, (ii) long term senior debt ratings by 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 (iii) minimum
combined capital and surplus of at least $50,000,000.
The Company will retain the right to replace or add Liquidity Providers at
any time. Purchasers of the Remarketed Notes should not rely upon the presence
of Liquidity Providers in making an investment decision regarding the Remarketed
Notes.
Beneficial Owners of the Remarketed Notes will receive amounts advanced by
the Liquidity Provider to the Remarketing Agent pursuant to any Standby Note
Purchase Agreement in payment of the purchase price for Remarketed Notes subject
to a Special Mandatory Purchase. See "-- Purchase and Redemption of Remarketed
Notes -- Special Mandatory Purchase." Pursuant to the Standby Note Purchase
Agreement, if any, the Liquidity Provider will be obligated, upon receipt of an
appropriate demand for payment from the Remarketing Agent and so long as the
Company is in compliance with the terms and conditions thereof, to purchase
unremarketed Remarketed Notes in any Special Mandatory Purchase at a price equal
to 100% of the outstanding principal amount thereof. Any such purchase will be
effected upon the Liquidity Provider's receipt of notification of a failed
remarketing not later than 12:00 o'clock noon, New York City time, on the date
of the Special Mandatory Purchase by the deposit of same-day funds by the
Liquidity Provider with the Remarketing Agent not later than 3:00 p.m., New York
City time on such date. See "-- Purchase and Redemption of Remarketed Notes."
Notwithstanding the existence of the Standby Note Purchase Agreement, if any,
the Company will be responsible for paying the accrued interest, if any, on any
unremarketed Remarketed Notes by depositing sufficient same-day funds therefor
with the Remarketing Agent not later than 3:00 p.m., New York City time, on the
applicable date of Special Mandatory Purchase.
The Liquidity Provider's obligation to advance funds will be subject to
conditions specified in the Standby Note Purchase Agreement. Unless otherwise
indicated in the applicable prospectus supplement, such conditions include:
receipt by the Liquidity Provider of various documents, certificates and
opinions from the Company; the continued accuracy of representations and
warranties (other than with respect to material adverse
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change and litigation) made by the Company in the Standby Note Purchase
Agreement; that no event has occurred and is continuing which would constitute
an Event of Default under the Standby Note Purchase Agreement (such events
include failure by the Company to pay amounts owing under the Standby Note
Purchase Agreement, inaccuracy of representations and warranties when made,
failure to perform covenants under the Standby Note Purchase Agreement, failure
to pay any debt owing by the Company in excess of $10,000,000, certain events of
bankruptcy or insolvency of the Company, an Event of Default under the Indenture
or failure to maintain the security interest thereunder and the
non-enforceability of certain related documents); and receipt by the Liquidity
Provider of a properly completed notice of a failed remarketing and a borrowing
request from the Remarketing Agent.
The Company may indemnify a Liquidity Provider against certain liabilities
arising out of or in connection with its duties under the Standby Note Purchase
Agreement. A form of the Standby Note Purchase Agreement has been filed as an
exhibit to the Registration Statement of which this prospectus forms a part. The
summaries of certain provisions of any Standby Note Purchase Agreement do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of such Standby Note Purchase Agreement.
PROVISIONS APPLICABLE TO SUBORDINATED DEBT SECURITIES
GENERAL
Subordinated Debt Securities will be issued under the Indenture and will
rank equally ("pari passu") with certain other subordinated debt of the Company
that may be outstanding from time to time and will rank junior to all Senior
Indebtedness of the Company (including any Senior Debt Securities) that may be
outstanding from time to time.
SUBORDINATION
The payment of the principal of (and premium, if any) and interest on the
Subordinated Debt Securities is expressly subordinated, to the extent and in the
manner set forth in the Indenture, in right of payment to the prior payment in
full of all Senior Indebtedness of the Company. (Section 401 of the Supplemental
Indenture Creating Subordinated Debt Securities).
Upon (i) any acceleration of the principal amount due on the Subordinated
Debt Securities 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 and
premium, if any, and interest 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, premium, if any, or interest on the indebtedness evidenced by the
Subordinated Debt Securities, 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 Subordinated Debt Securities would be entitled, except
for the provisions of the Indenture, shall (subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the rights
conferred by the provisions of the Subordinated Debt Securities upon the Senior
Indebtedness and the holders thereof with respect to the Subordinated Debt
Securities 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 Subordinated Debt Securities 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,
after giving effect to
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any concurrent payments 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 Subordinated Debt Securities. The consolidation of
the Company with or the 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 the Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for these
purposes.
In the event that any payment or distribution of assets of the Company of
any kind or character not permitted by the foregoing provisions, whether in
cash, property or securities, shall be received by the Holders of Subordinated
Debt Securities before all Senior Indebtedness is paid in full, or provision
made for such payment, in accordance with its terms, 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.
No payment on account of principal of, premium, if any, sinking funds or
interest on the Subordinated Debt Securities 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, premium, if any, sinking funds or interest on
the Subordinated Debt Securities 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 or
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 maturity thereof, and such event of default
shall not have been cured or waived or shall not have ceased to exist.
SUBROGATION
From and after the payment in full of all Senior Indebtedness, the Holders
of the Subordinated Debt Securities (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 Subordinated Debt Securities 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 Subordinated Debt Securities 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 Subordinated Debt Securities, shall, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the Holders of the Subordinated Debt Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness, it being understood
that these provisions of the Indenture are and are intended solely for the
purpose of defining the relative rights of the Holders of the Subordinated Debt
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand, and nothing contained in the Indenture is intended to or shall
impair as between the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Subordinated
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Debt Securities, the obligation of the Company, which is unconditional and
absolute, to pay to the Holders of the Subordinated Debt Securities the
principal of and interest on the Subordinated Debt Securities 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 Subordinated Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything therein prevent the Holder of any Subordinated Debt Security from
exercising all remedies otherwise permitted by applicable law upon default under
such Subordinated Debt Security subject to the rights of the holders of Senior
Indebtedness to receive cash, property or securities of the Company otherwise
payable or deliverable to the Holders of the Subordinated Debt Securities or to
a representative of such Holders, on their behalf.
Except as provided in the applicable prospectus supplement and
supplemental indenture, the term "Senior Indebtedness" is defined in the
Indenture as indebtedness incurred by the Company for money borrowed whether
outstanding on the date hereof or incurred in the future, all deferrals,
renewals or extensions of any such indebtedness and all evidences of
indebtedness issued in exchange for any such indebtedness and guarantees by the
Company of the foregoing items of indebtedness for money borrowed by persons
other than the Company and all obligations as lessee under any and all leases of
property, equipment and other assets required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, unless, in
any such case, such indebtedness, guarantee or obligation provides by its terms
that it shall not constitute Senior Indebtedness.
If Subordinated Debt Securities are issued under the Indenture, the
aggregate principal amount of Senior Indebtedness outstanding as of a recent
date will be set forth in the Prospectus Supplement. The Indenture does not
restrict the amount of Senior Indebtedness that the Company may incur.
DTC BOOK-ENTRY-ONLY SYSTEM
Upon issuance, the Debt Securities will be represented by a global
security or securities (the "Global Security"). The Global Security representing
the Debt Securities will be deposited with, or on behalf of, DTC. Upon the
issuance of such Global Security, DTC or its nominee will credit the accounts of
persons held with it with the respective principal or face amounts of the Debt
Securities represented by such Global Security. Ownership of beneficial
interests in such Global Security will be limited to persons that have accounts
with DTC ("participants") or persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by DTC. Ownership of beneficial interests in
such Global Security by persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant will be
effected only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to acquire or transfer beneficial interests in such Global
Security.
Payment of principal of and interest on the Debt Securities will be made
to DTC or its nominee, as the case may be, as the sole registered owner and
holder of the Global Security for all purposes under the Indenture. Neither the
Company, the Trustee nor, in the case of any series of Remarketed Notes, the
Remarketing Agent nor any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of DTC's records relating to or
payments made on account of beneficial ownership interests in such Global
Security or for maintaining, supervising or reviewing any of DTC's records
relating to such beneficial ownership interests.
The Company has been advised by DTC that upon receipt of any payment of
principal of or interest on any Global Security, DTC will immediately credit, on
its book-entry
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registration and transfer system, the accounts of participants with payments in
amounts proportionate to their respective beneficial interests in the principal
or face amount of such Global Security as shown on the records of DTC. Payments
by participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices as is now the case with securities held for customer
accounts registered in "street name" and will be the sole responsibility of such
participants.
The Global Security may not be transferred except as a whole by DTC to a
nominee of DTC. The Global Security representing the Debt Securities is
exchangeable for certificated Debt Securities only if (x) DTC notifies the
Company that it is unwilling or unable to continue as DTC for such Global
Security or if at any time DTC ceases to be a clearing agency registered under
the 1934 Act and the Company fails within 90 days thereafter to appoint a
successor, (y) the Company in its sole discretion determines that such Global
Security shall be exchangeable or (z) there shall have occurred and be
continuing an Event of Default (as defined in the Indenture) or an event which
with the giving of notice or lapse of time or both, would constitute an Event of
Default with respect to the Debt Securities represented by such Global Security.
In such event, the Company will issue Debt Securities in certificated form in
exchange for such Global Security. In any such instance, an owner of a
beneficial interest in the Global Security will be entitled to physical delivery
in certificated form of Debt Securities equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Debt Securities so issued in certificated form will be issued in denominations
of $1,000 or any larger amount that is an integral multiple thereof, and will be
issued in registered form only, without coupons. Subject to the foregoing,
neither Global Security is exchangeable, except for a Global Security of Debt
Securities of like denomination to be registered in the name of DTC or its
nominee.
So long as DTC, or its nominee, is the registered owner of a Global
Security, or such nominee, as the case may be, will be considered the sole owner
or holder of the Debt Securities represented by such Global Security for the
purposes of receiving payment on such Debt Securities, receiving notices and for
all other purposes under the Indenture and such Debt Securities. Beneficial
interests in any series of Debt Securities will be evidenced only by, and
transfer thereof will be effected only through, records maintained by DTC and
its participants. Except as provided herein, owners of beneficial interests in
any Global Security will not be entitled to and will not be considered the
holders thereof for any purposes under the Indenture. Accordingly, each person
owning a beneficial interest in such Global Security must rely on the procedures
of DTC, and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a Holder under the Indenture. DTC will not consent or vote with respect to
the Global Security representing a series of Debt Securities. Under its usual
procedures, DTC mails an Omnibus Proxy to the Company as soon as possible after
the applicable record date. The Omnibus Proxy assigns Cede & Co.'s (DTC's
partnership nominee) consenting or voting rights to those participants to whose
accounts the Debt Securities of a series are credited on the applicable record
date (identified in a listing attached to the Omnibus Proxy).
DTC has advised the Company that DTC is a limited-purpose trust company
organized under New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered under the 1934 Act. DTC was created to
hold the securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's
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participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations some of whom (and/or their
representatives) own DTC. Access to DTC's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
SAME-DAY SETTLEMENT AND PAYMENT
Unless otherwise indicated in the applicable prospectus supplement,
settlement for the Debt Securities will be made by a purchaser in immediately
available funds. While the Debt Securities are in the book-entry-only system
described above, all payments of principal and interest will be made by the
Trustee or, in the case of any series of Remarketed Notes, the Remarketing Agent
on behalf of the Company to DTC in immediately available funds.
The Debt Securities will trade in DTC's Same-Day Fund Settlement System
until maturity or until such debt securities are issued in definitive form, and
secondary market trading activity in the Debt Securities will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
the trading activity in the Debt Securities.
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary, which is based upon the advice of Brown & Wood LLP,
special tax counsel to the Company, whose opinion is set forth herein, of the
material United States Federal income tax consequences of the purchase,
ownership and disposition of the Debt Securities is based upon laws,
regulations, rulings and decisions now in effect (or, in the case of certain
regulations, in proposed form), all of which are subject to change (including
changes in effective dates) or possible differing interpretations. It deals only
with Debt Securities held as capital assets and does not purport to deal with
persons in special tax situations, such as financial institutions, insurance
companies, regulated investment companies, dealers in securities or currencies,
non-U.S. Holders, persons holding Debt Securities as a hedge against currency
risks or as a position in a "straddle" for tax purposes, or persons whose
functional currency is not the United States dollar. It also does not deal with
holders other than original purchasers (except where otherwise specifically
noted). Persons considering the purchase of the Debt Securities should consult
their own tax advisors concerning the application of United States Federal
income tax laws to their particular situations as well as any consequences of
the purchase, ownership and disposition of the Debt Securities arising under the
laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Debt
Security that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, (iii) an estate the income of which is
subject to United States Federal income taxation regardless of its source, (iv)
a trust if a court within the United States is able to exercise primary
supervision of the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust, or
(v) any other person whose income or gain in respect of a Debt Security is
effectively connected with the conduct of a United States trade or business. As
used herein, the term "non-U.S. Holder" means a holder of a Debt Security that
is not a U.S. Holder.
U.S. HOLDERS
Payments of Interest. Payment of interest on a Debt Security generally
will be taxable to a U.S. Holder as ordinary interest income at the time such
payments are accrued or are
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received (in accordance with the U.S. Holder's regular method of tax
accounting).
Original Issue Discount. The following summary is a general discussion of
the United States Federal income tax consequences to U.S. Holders of the
purchase, ownership and disposition of Debt Securities issued with original
issue discount ("Discount Debt Securities"). The following summary is based upon
final Treasury regulations (the "OID Regulations") released by the Internal
Revenue Service ("IRS") on January 27, 1994, as amended on June 11, 1996, under
the original issue discount provisions of the Code.
For United States Federal income tax purposes, original issue discount is
the excess of the stated redemption price at maturity of a Debt Security over
its issue price, if such excess equals or exceeds a de minimis amount (generally
1/4 of 1% of the Debt Security's stated redemption price at maturity multiplied
by the number of complete years to its maturity from its issue date or, in the
case of a Debt Security providing for the payment of any amount other than a
qualified stated interest (as defined below) prior to maturity, multiplied by
the weighted average maturity of such Debt Security). The issue price of each
Debt Security in an issue of Debt Securities equals the first price at which a
substantial amount of such Debt Securities has been sold (ignoring sales to bond
houses, brokers, or similar persons or organizations acting in the capacity of
underwriters, placement agents, or wholesalers). The stated redemption price at
maturity of a Debt Security is the sum of all payments provided by the Debt
Security other than "qualified stated interest" payments. The term "qualified
stated interest" generally means stated interest that is unconditionally payable
in cash or property (other than debt instruments of the Company) at least
annually at a single fixed rate. In addition, under the OID Regulations, if a
Debt Security bears interest for one or more accrual periods at a rate below the
rate applicable for the remaining term of such Debt Security (e.g., Debt
Securities with teaser rates or interest holidays), and if the greater of either
the resulting foregone interest on such Debt Security or any "true" discount on
such Debt Security (i.e., the excess of the Debt Security's stated principal
amount over its issue price) equals or exceeds a specified de minimis amount,
then the stated interest on the Debt Security would be treated as original issue
discount rather than qualified stated interest.
Payments of qualified stated interest on a Debt Security are taxable to a
U.S. Holder as ordinary interest income at the time such payments are accrued or
are received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of a Discount Debt Security must include original
issue discount in income as ordinary interest for United States Federal income
tax purposes as it accrues under a constant yield method in advance of receipt
of the cash payments attributable to such income, regardless of such U.S.
Holder's regular method of tax accounting. In general, the amount of original
issue discount included in income by the initial U.S. Holder of a Discount Debt
Security is the sum of the daily portions of original issue discount with
respect to such Discount Debt Security for each day during the taxable year (or
portion of the taxable year) on which such U.S. Holder held such Discount Debt
Security. The "daily portion" of original issue discount on any Discount Debt
Security is determined by allocating to each day in any accrual period a ratable
portion of the original issue discount allocable to that accrual period. An
"accrual period" may be of any length and the accrual periods may vary in length
over the term of the Discount Debt Security, provided that each accrual period
is no longer than one year and each scheduled payment of principal or interest
occurs either on the final day of an accrual period or on the first day of an
accrual period. The amount of original issue discount allocable to each accrual
period is generally equal to the difference between (i) the product of the
Discount Debt Security's adjusted issue price at the beginning of such accrual
period and its yield to maturity (determined on the basis of compounding at the
close of each accrual period and appropriately adjusted to take into account the
length of the particular accrual period) and (ii) the amount of any qualified
stated interest payments allocable to such accrual period. The "adjusted issue
price" of
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a Discount Debt Security at the beginning of any accrual period is the sum of
the issue price of the Discount Debt Security plus the amount of original issue
discount allocable to all prior accrual periods minus the amount of any prior
payments on the Discount Debt Security that were not qualified stated interest
payments. Under these rules, U.S. Holders generally will have to include in
income increasingly greater amounts of original issue discount in successive
accrual periods.
A U.S. Holder who purchases a Discount Debt Security for an amount that is
greater than its adjusted issue price as of the purchase date and less than or
equal to the sum of all amounts payable on the Discount Debt Security after the
purchase date other than payments of qualified stated interest, will be
considered to have purchased the Discount Debt Security at an "acquisition
premium." Under the acquisition premium rules, the amount of original issue
discount which such U.S. Holder must include in its gross income with respect to
such Discount Debt Security for any taxable year (or portion thereof in which
the U.S. Holder holds the Discount Debt Security) will be reduced (but not below
zero) by the portion of the acquisition premium properly allocable to the
period.
Under the OID Regulations, Floating Rate Debt Securities and Indexed Debt
Securities ("Variable Debt Securities") are subject to special rules whereby a
Variable Debt Security will qualify as a "variable rate debt instrument" if (a)
its issue price does not exceed the total noncontingent principal payments due
under the Variable Debt Security by more than a specified de minimus amount and
(b) it provides for stated interest, paid or compounded at least annually, at
current values of (i) one or more qualified floating rates, (ii) a single fixed
rate and one or more qualified floating rates, (iii) a single objective rate, or
(iv) a single fixed rate and a single objective rate that is a qualified inverse
floating rate.
A "qualified floating rate" is any variable rate where variations in the
value of such rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds in the currency in which the
Variable Debt Security is denominated. Although a multiple of a qualified
floating rate will generally not itself constitute a qualified floating rate, a
variable rate equal to the product of a qualified floating rate and a fixed
multiple that is greater than 0.65 but not more than 1.35 will constitute a
qualified floating rate. A variable rate equal to the product of a qualified
floating rate and a fixed multiple that is greater than 0.65 but not more than
1.35, increased or decreased by a fixed rate, will also constitute a qualified
floating rate. In addition, under the OID Regulations, two or more qualified
floating rates that can reasonably be expected to have approximately the same
values throughout the term of the Variable Debt Security (e.g., two or more
qualified floating rates with values within 25 basis points of each other as
determined on the Variable Debt Security's issue date) will be treated as a
single qualified floating rate. Notwithstanding the foregoing, a variable rate
that would otherwise constitute a qualified floating rate but which is subject
to one or more restrictions such as a maximum numerical limitation (i.e., a cap)
or a minimum numerical limitation (i.e., a floor) may, under certain
circumstances, fail to be treated as a qualified floating rate under the OID
Regulations unless such cap or floor is fixed throughout the term of the Debt
Security. An "objective rate" is a rate that is not itself a qualified floating
rate but which is determined using a single fixed formula and that is based on
objective financial or economic information. A rate will not qualify as an
objective rate if it is based on information that is within the control of the
Company (or a related party) or that is unique to the circumstances of the
Company (or a related party), such as dividends, profits, or the value of the
Company's stock (although a rate does not fail to be an objective rate merely
because it is based on the credit quality of the Company). A "qualified inverse
floating rate" is any objective rate where such rate is equal to a fixed rate
minus a qualified floating rate, as long as variations in the rate can
reasonably be expected to inversely reflect contemporaneous variations in the
qualified floating rate. The OID Regulations also provide that if a Variable
Debt Security provides for stated interest at a fixed rate for an initial period
of
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one year or less followed by a variable rate that is either a qualified floating
or an objective rate and if the variable rate on the Variable Debt Security's
issue date is intended to approximate the fixed rate (e.g., the value of the
variable rate on the issue date does not differ from the value of the fixed rate
by more than 25 basis points), then the fixed rate and the variable rate
together will constitute either a single qualified floating rate or objective
rate, as the case may be.
If a Variable Debt Security that provides for stated interest at either a
single qualified floating rate or a single objective rate throughout the term
thereof qualifies as a "variable rate debt instrument" under the OID Regulations
and if the interest on such Debt Security is unconditionally payable in cash or
property (other than debt instruments of the Company) at least annually, then
all stated interest on the Debt Security will constitute qualified stated
interest and will be taxed accordingly. Thus a Variable Debt Security that
provides for stated interest at either a single qualified floating rate or a
single objective rate throughout the term thereof and that qualifies as a
"variable rate debt instrument" under the OID Regulations will generally not be
treated as having been issued with original issue discount unless the Variable
Debt Security is issued at a "true" discount (i.e., at a price below the Debt
Security's stated principal amount) in excess of a specified de minimus amount.
The amount of qualified stated interest and the amount of original issue
discount, if any, that accrues during an accrual period on such a Variable Debt
Security is determined under the rules applicable to fixed rate debt instruments
by assuming that the variable rate is a fixed rate equal to (i) in the case of a
qualified floating rate or qualified inverse floating rate, the value, as of the
issue date, of the qualified floating rate or qualified inverse floating rate,
or (ii) in the case of an objective rate (other than a qualified inverse
floating rate), a fixed rate that reflects the yield that is reasonably expected
for the Variable Debt Security. The qualified stated interest allocable to an
accrual period is increased (or decreased) if the interest actually paid during
an accrual period exceeds (or is less than) the interest assumed to be paid
during the accrual period pursuant to the foregoing rules.
In general, any other Variable Debt Security that qualifies as a "variable
rate debt instrument" will be converted into an "equivalent" fixed rate debt
instrument for purposes of determining the amount and accrual of original issue
discount and qualified stated interest on the Variable Debt Security. The OID
Regulations generally require that such a Variable Debt Security be converted
into an "equivalent" fixed rate debt instrument by substituting any qualified
floating rate or qualified inverse floating rate provided for under the terms of
the Variable Debt Security with a fixed rate equal to the value of the qualified
floating rate or qualified inverse floating rate, as the case may be, as of the
Variable Debt Security's issue date. Any objective rate (other than a qualified
inverse floating rate) provided for under the terms of the Variable Debt
Security is converted into a fixed rate that reflects the yield that is
reasonably expected for the Variable Debt Security. In the case of a Variable
Debt Security that qualifies as a "variable rate debt instrument" and provides
for stated interest at a fixed rate in addition to either one or more qualified
floating rates or a qualified inverse floating rate, the fixed rate is initially
converted into a qualified floating rate (or a qualified inverse floating rate,
if the Variable Debt Security provides for a qualified inverse floating rate).
Under such circumstances, the qualified floating rate or qualified inverse
floating rate that replaces the fixed rate must be such that the fair market
value of the Variable Debt Security as of the Variable Debt Security's issue
date is approximately the same as the fair market value of an otherwise
identical debt instrument that provides for either the qualified floating rate
or qualified inverse floating rate rather than the fixed rate. Subsequent to
converting the fixed rate into either a qualified floating rate or a qualified
inverse floating rate, the Variable Debt Security is then converted into an
"equivalent" fixed rate debt instrument in the manner described above.
Once the Variable Debt Security is converted into an fixed rate debt
instrument pursuant to the foregoing rules, the amount of
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original issue discount and qualified stated interest, if any, are determined
for the "equivalent" fixed rate debt instrument by applying the general original
issue discount rules to the "equivalent" fixed rate debt instrument and a U.S.
Holder of the Variable Debt Security will account for such original issue
discount and qualified stated interest as if the U.S. Holder held the
"equivalent" fixed rate debt instrument. In each accrual period appropriate
adjustments will be made to the amount of qualified stated interest or original
issue discount assumed to have been accrued or paid with respect to the
"equivalent" fixed rate debt instrument in the event that such amounts differ
from the actual amount of interest accrued or paid on the Variable Debt Security
during the accrual period.
If a Variable Debt Security does not qualify as a "variable rate debt
instrument" under the OID Regulations, then the Variable Debt Security would be
treated as a contingent payment debt obligation. U.S. Holders should be aware
that on June 11, 1996, the Treasury Department issued final regulations (the
"CPDI Regulations") concerning the proper United States Federal income tax
treatment of contingent payment debt instruments. In general the CPDI
Regulations would cause the timing and character of income, gain or loss
reported on a contingent payment debt instrument under general principles of
current United States Federal income tax law. Specifically, the CPDI Regulations
generally require a U.S. Holder of such an instrument to include future
contingent and noncontingent interest payments in income as such interest
accrues based upon a projected payment schedule. Moreover, in general, under the
CPDI Regulations, any gain recognized by a U.S. Holder on the sale, exchange, or
retirement of a contingent payment debt instrument will be treated as ordinary
income and all or a portion of any loss realized could be treated as ordinary
loss as opposed to capital loss (depending upon the circumstances). The CPDI
Regulations apply to debt instruments issued on or after August 13, 1996. The
proper United States Federal income tax treatment of Variable Debt Securities
that are treated as contingent payment debt obligations will be more fully
described in the applicable prospectus supplement. Furthermore, any other
special United States Federal income tax considerations, not otherwise discussed
herein, which are applicable to any particular issue of Debt Securities will be
discussed in the applicable prospectus supplement.
Certain of the Debt Securities (i) may be redeemable at the option of the
Company prior to their stated maturity (a "call option") and/or (ii) may be
repayable at the option of the holder prior to their stated maturity (a "put
option"). Debt Securities containing such features may be subject to rules that
differ from the general rules discussed above. Investors intending to purchase
Debt Securities with such features should consult their own tax advisors, since
the original issue discount consequences will depend, in part, on the particular
terms and features of the purchased Debt Securities.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions.
Remarketed Notes. The proper United States Federal income tax treatment of
Remarketed Notes is uncertain. Because the Remarketed Notes are subject to
mandatory tender to the Remarketing Agent at par on each Interest Rate
Adjustment Date, the Remarketed Notes may be treated as maturing on the Initial
Interest Rate Adjustment Date and each Interest Rate Adjustment Date thereafter
for United States Federal income tax purposes. Under the foregoing treatment,
interest on the Remarketed Notes would generally be taxable as ordinary income
for United States Federal income tax purposes when received or accrued by a U.S.
Holder in accordance with such holder's regular method of tax accounting because
such interest would constitute qualified stated interest. However, it is
possible that the Remarketed
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<PAGE> 64
Notes may be treated for United States Federal income tax purposes as maturing
only on the Stated Maturity Date therefor. Under such analysis, in general, the
proper treatment of Remarketed Notes will depend upon whether the Remarketed
Notes qualify as "variable rate debt instruments" or, alternatively, are treated
as contingent payment debt instruments.
If the Remarketed Notes are treated as maturing on the Stated Maturity
Date, each Commercial Paper Term Mode and the Long Term Rate Mode should
individually constitute separate qualified floating rates under the OID
Regulations since the interest rate for Remarketed Notes in either a Commercial
Paper Term Mode or the Long Term Rate Mode will be periodically reset to a
market rate pursuant to a remarketing and such remarketing can reasonably be
expected to measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the Remarketed Notes are denominated.
However, if the Remarketed Notes are in the SPURS Mode and the SPURS Agent
elects to remarket the Remarketed Notes at the SPURS Interest Rate, which will
not be set at a market rate of interest, the interest rate will likely not
qualify as a "qualified floating rate." As a result, the Remarketed Notes, upon
original issuance, may not be treated as a "variable rate debt instrument" and
the Remarketed Notes may be treated as governed by the CPDI Regulations
notwithstanding the fact that the SPURS Agent may never elect to remarket the
Remarketed Notes at the SPURS Interest Rate.
If the CPDI Regulations applied, the Company would be required to
construct a projected payment schedule for the Remarketed Notes, based upon the
Company's current borrowing costs for comparable debt instruments of the
Company, from which an estimated yield on the Remarketed Notes would be
calculated. A U.S. Holder would be required to include in income original issue
discount in an amount equal to the product of the adjusted issue price of the
Remarketed Notes at the beginning of each interest accrual period and the
estimated yield of the Remarketed Notes. In general, for these purposes, the
Remarketed Notes' adjusted issue price would equal the Remarketed Notes' issue
price increased by the interest previously accrued on the Remarketed Notes, and
reduced by all payments made on the Remarketed Notes. As a result of the
application of the Contingent Payment Regulations, it is possible that a U.S.
Holder would be required to include interest in income in excess of actual cash
payments received for certain taxable years.
In addition, the character of any gain or loss, upon the sale or exchange
of a Remarketed Note (including a sale pursuant to the mandatory tender on each
Interest Rate Adjustment Date and the SPURS Remarketing Date) by a U.S. Holder,
will likely differ if the Remarketed Notes were treated as contingent payment
obligations. Any such taxable gain generally would be treated as ordinary
income. Any such taxable loss generally would be ordinary to the extent of
previously accrued original issue discount, and any excess would generally be
treated as capital loss.
Short-Term Debt Instruments. Debt Securities that have a fixed maturity of
one year or less ("Short-Term Debt Securities") will be treated as having been
issued with original issue discount. In general, an individual or other cash
method U.S. Holder is not required to accrue such original issue discount unless
the U.S. Holder elects to do so. If such an election is not made, any gain
recognized by the U.S. Holder on the sale, exchange or maturity of the
Short-Term Debt Security will be ordinary income to the extent of the original
issue discount accrued on a straight-line basis or upon election under the
constant yield method (based on daily compounding), through the date of sale or
maturity, and a portion of the deductions otherwise allowable to the U.S. Holder
for interest on borrowings allocable to the Short-Term Debt Security will be
deferred until a corresponding amount of income is realized. U.S. Holders who
report income for United States Federal income tax purposes under the accrual
method, and certain other holders including banks and dealers in securities, are
required to accrue original issue discount on a Short-Term Debt
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<PAGE> 65
Security on a straight-line basis unless an election is made to accrue the
original issue discount under a constant yield method (based on daily
compounding).
Market Discount. If a U.S. Holder purchases a Debt Security, other than a
Discount Debt Security, for an amount that is less than its issue price (or, in
the case of a subsequent purchaser, it stated redemption price at maturity) or,
in the case of a Discount Debt Security, for an amount that is less than its
adjusted issue price as of the purchase date, the amount of the difference will
be treated as "market discount," unless such difference is less than a specified
de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of a Discount Debt Security, any
payment that does not constitute qualified stated interest) on, or any gain
realized on the sale, exchange, requirement or other disposition of, a Debt
Security as ordinary income to the extent of the lesser of (i) the amount of
such payment or realized gain or (ii) the market discount which has not
previously been included in income and is treated as having accrued on such Debt
Security at the time of such payment or disposition. Market discount will be
considered to accrue ratably during the period from the date of acquisition to
the maturity date of the Debt Security, unless the U.S. Holder elects to accrue
market discount on the basis of semiannual compounding.
A U.S. Holder may be required to defer the deduction of all or a portion
of the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a Debt Security with market discount until the maturity of the
Debt Security or its earlier disposition in a taxable transaction, because a
current deduction is only allowed to the extent the interest expense exceeds an
allocable portion of market discount. A U.S. Holder may elect to include market
discount in income currently as it accrues (on either a ratable or semiannual
compounding basis), in which case the rules described above regarding the
treatment as ordinary income of gain upon the disposition of the Debt Security
and upon the receipt of certain cash payments and regarding the deferral of
interest deductions will not apply. Generally, such currently included market
discount is treated as ordinary interest for United States Federal income tax
purposes.
Premium. If a U.S. Holder purchases a Debt Security for an amount that is
greater than its stated redemption price at maturity, such U.S. Holder will be
considered to have purchased the Debt Security with "amortizable bond premium"
equal in amount to such excess. A U.S. Holder may elect to amortize such premium
using a constant yield method over the remaining term of the Debt Security and
may offset interest otherwise required to be included in respect of the Debt
Security during any taxable year by the amortized amount of such excess for the
taxable year. However, if the Debt Security may be optionally redeemed after the
U.S. Holder acquires it at a price in excess of its stated redemption price at
maturity, special rules would apply which could result in a deferral of the
amortization of some bond premium until later in the term of the Debt Security.
Disposition of Debt Securities. Except as discussed above, upon the sale,
exchange or retirement of a Debt Security, a U.S. Holder generally will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and such U.S. Holder's adjusted tax
basis in the Debt Security. A U.S. Holder's adjusted tax basis in a Debt
Security generally will equal such U.S. Holder's initial investment in the Debt
Security increased by any original issue discount included in income (and
accrued market discount, if any, if the U.S. Holder has included such market
discount in income) and decreased by the amount of any payments, other than
qualified stated interest payments, received and amortizable bond premium taken
with respect to such Debt Security. Such gain or loss generally will be
long-term capital gain or loss if the Debt Security were held for more than one
year. The deductibility of capital losses is subject to limitations.
Foreign Currency Debt Securities. Any special United States Federal income
tax
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considerations applicable to Debt Securities that provide for the payment of
principal, premium (if any) or interest in a currency other than U.S. dollars
will be discussed in the applicable prospectus supplement.
NON-U.S. HOLDERS
A non-U.S. Holder will not be subject to United States Federal income
taxes on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a Debt Security, unless such non-U.S. Holder is a
direct or indirect 10% or greater shareholder of the Company, a controlled
foreign corporation related to the Company or a bank receiving interest
described in Section 881(c)(3)(A) of the Code. To qualify for the exemption from
taxation, the last United States payor in the chain of payment prior to payment
to a non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the beneficial owner
of the Debt Security under penalties of perjury, (ii) certified that such owner
is not a U.S. Holder and (iii) provides the name and address of the beneficial
owner. The statement may be made on an IRS Form W-8 or a substantially similar
form, and the beneficial owner must inform the Withholding Agent of any change
in the information on the statement within 30 days of such change. If a Debt
Security is held through a securities clearing organization or certain other
financial institutions, the organization or institution may provide a signed
statement to the Withholding Agent. However, in such case, the signed statement
must be accompanied by a copy of the IRS Form W-8 or the substitute form
provided by the beneficial owner to the organization or institution. The
Treasury Department is considering implementation of further certification
requirements aimed at determining whether the Company of a debt obligation is
related to holders thereof.
Generally, a non-U.S. Holder will not be subject to Federal income taxes
on any amount which constitutes capital gain upon retirement or disposition of a
Debt Security, provided the gain is not effectively connected with the conduct
of a trade or business in the United States by the non-U.S. Holder. Certain
other exceptions may be applicable, and a non-U.S. Holder should consult its tax
advisor in this regard.
The Debt Securities will not be includible in the estate of a non-U.S.
Holder unless the individual is a direct or indirect 10% or greater shareholder
of the Company or, at the time of such individual's death, payments in respect
of the Debt Securities would have been effectively connected with the conduct by
such individual of a trade or business in the United States.
BACKUP WITHHOLDING
Backup withholding of United States Federal income tax at a rate of 31%
may apply to payments made in respect of the Debt Securities to registered
owners who are not "exempt recipients" and who fail to provide certain
identifying information (such as the registered owner's taxpayer identification
number) in the required manner. Generally, individuals are not exempt
recipients, whereas corporations and certain other entities generally are exempt
recipients. Payments made in respect of the Debt Securities to a U.S. Holder
must be reported to the IRS, unless the U.S. Holder is an exempt recipient or
establishes an exemption. Compliance with the identification procedures
described in the preceding section would establish an exemption from backup
withholding for those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a Debt Security to (or through) a broker,
the broker must withhold 31% of the entire purchase price, unless either (i) the
broker determines that the seller is a corporation or other exempt recipient or
(ii) the seller provides, in the required manner, certain identifying
information and, in the case of a non-U.S. Holder, certifies that such seller is
a non-U.S. Holder (and certain other conditions are met). Such a sale must also
be reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-U.S.
status (and certain other conditions are met). Certification of the registered
owner's
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non-U.S. status would be made normally on an IRS Form W-8 under penalties of
perjury, although in certain cases it may be possible to submit other
documentary evidence.
Any amount withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers, (ii) directly to a limited number of institutional purchasers or to a
single purchaser, (iii) through agents or (iv) through any combination of the
above. An accompanying prospectus supplement will set forth the terms of the
offering of the Debt Securities offered thereby, including the name or names of
any underwriters, the purchase price of the Debt Securities and the net proceeds
to the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale of Debt Securities, such Debt
Securities will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Unless otherwise set forth in the prospectus supplement,
the several obligations of the underwriters to purchase any Debt Securities
offered thereby will be subject to certain conditions precedent and the
underwriters will be obligated to take and pay for all of such Debt Securities
if any are taken.
The Debt Securities may be sold directly by the Company or through
underwriters or agents designated by the Company from time to time. Any agent
involved in the offer or sale of the Debt Securities will be named, and any
commissions payable by the Company to such agents will be set forth, in an
accompanying prospectus supplement. Unless otherwise indicated in such
prospectus supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment.
Until the distribution of the Debt Securities is completed, rules of the
SEC may limit the ability of underwriters and certain selling group members to
bid for and purchase the Debt Securities. As an exception to these rules,
underwriters are permitted to engage in certain transactions that stabilize the
price of the Debt Securities. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Debt Securities.
If any underwriters create a short position in the Debt Securities in
connection with an offering, i.e., if they sell more Debt Securities than are
set forth on the cover page of the applicable prospectus supplement, the
underwriters may reduce that short position by purchasing Debt Securities in the
open market.
Underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase Debt Securities in the
open market to reduce the underwriters' short position or to stabilize the price
of the Debt Securities, they may reclaim the amount of the selling concession
from the selling group members who sold those Debt Securities as part of the
offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of the Debt Securities to the extent that
it discourages resales of the Debt Securities.
Neither the Company nor any underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Debt Securities. In
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addition, neither the Company nor any underwriters make any representation that
the underwriters will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Act.
The place and time of delivery for the Debt Securities in respect of which
this prospectus is delivered are set forth in the accompanying Prospectus
Supplement.
LEGAL OPINIONS
The validity of the Debt Securities offered hereby will be passed upon for
the Company by Christopher C. Nern, Esq., Vice President and General Counsel of
the Company, and for any underwriters, dealers or agents by counsel named in the
applicable prospectus supplement. Brown & Wood LLP, special tax counsel to the
Company, has passed upon the material United States federal income tax
considerations with respect to the Debt Securities.
EXPERTS
The consolidated financial statements and related financial statement
schedule of the Company and its subsidiaries, incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the three
month periods ended March 31, 1998 and 1997 and three and six month periods
ended June 30, 1998 and 1997 included in the Quarterly Reports on Form 10-Q
which are incorporated herein by reference, Deloitte & Touche LLP have applied
limited procedures in accordance with professional standards for a review of
such information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998 and incorporated by reference herein, they did not audit and they do
not express an opinion on such interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
LLP are not subject to the liability provisions of Section 11 of the Securities
Act of 1933, as amended, (the "Act") for their reports on the unaudited interim
financial information because those reports are not "reports" or a "part" of the
Registration Statement prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
The statements made in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 and Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1998 (which are incorporated in this prospectus by
reference), as to matters of law with respect to regulation and environmental
matters and the statements made herein under the caption "Description of Debt
Securities", have been reviewed by Christopher C. Nern, Esq., Vice President and
General Counsel of the Company, and have been made in reliance upon his opinion
and upon his authority as an expert.
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Supplement
The Company.............................. S-2
Risk Factors............................. S-2
Selected Historical Consolidated
Financial
Data................................... S-5
Ratio of Earnings to Fixed Charges....... S-5
Capitalization........................... S-6
Certain Developments..................... S-6
Forward-Looking Statements............... S-8
Description of the QUIDS................. S-8
United States Federal Income Tax
Consequences........................... S-14
Underwriting............................. S-17
Legal Opinions........................... S-18
Prospectus
Where You Can Find More Information...... 2
Incorporation of Certain Documents by
Reference.............................. 2
The Company.............................. 2
Use of Proceeds.......................... 3
Regulatory Matters....................... 3
Ratio of Earnings to Fixed Charges....... 4
Description of Debt Securities........... 4
DTC Book-Entry-Only System............... 38
United States Federal Income Tax
Considerations......................... 40
Plan of Distribution..................... 48
Legal Opinions........................... 49
Experts.................................. 49
</TABLE>
- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
$100,000,000
THE DETROIT EDISON COMPANY
% Quarterly Income Debt
Securities (QUIDSSM)
(Junior Subordinated
Deferrable Interest
Debentures, Due 2028)
----------------------
DETROIT EDISON LOGO
----------------------
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY
MCDONALD & COMPANY
SECURITIES, INC.
RONEY CAPITAL MARKETS
A DIVISION OF FIRST CHICAGO CAPITAL MARKETS, INC.
SG COWEN
REPRESENTATIVES OF THE UNDERWRITERS
- ----------------------------------------------------------
- ----------------------------------------------------------
<PAGE> 70
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses, other than underwriting discounts and commissions, in
connection with the issuance and distribution of the Debt Securities are as
follows:
<TABLE>
<S> <C>
Registration Fees........................................... $ 88,600
Printing.................................................... 100,000
Blue Sky Fees and Expenses.................................. 1,000
Accountants' Fees and Expenses.............................. 75,000
Legal Fees and Expenses..................................... 50,000
Trustees' Fees and Expenses................................. 15,000
Rating Agency Fees.......................................... 150,000
Miscellaneous Expenses...................................... 70,400
--------
Total.................................................. $550,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Indemnification. Pursuant to Article VI of the Company's Restated
Articles of Incorporation, directors of the Company will not be personally
liable to the Company or its shareholders in the performance of their duties to
the full extent permitted by law.
Article VII of the Company's Restated Articles of Incorporation provides
that each person who is or was or had agreed to become a director or officer of
the Company, or each such person who is or was serving or who had agreed to
serve at the request of the Board of Directors as an employee or agent of the
Company or as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise (including the heirs,
executors, administrators or estate of such person), shall be indemnified by the
Company to the full extent permitted by the Michigan Business Corporation Act or
any other applicable laws as presently or hereafter in effect. In addition,
pursuant to the authority granted by Article VII of the Restated Articles of
Incorporation the Company has entered into indemnification agreements with its
officers and directors which provide for indemnification to the maximum extent
permitted by law. These agreements set forth certain procedures for the
advancement by the Company of certain expenses to indemnitees.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the Company pursuant to the above provisions or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person in connection with
the securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Reference is made to Section 8 of the form of Underwriting Agreement filed
as Exhibit 1-35 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the
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proposed offering of Subordinated Debt
Securities registered hereby.
Reference is made to Section 6 of the form of Distribution Agreement filed
as Exhibit 1-36 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the proposed offering of the
Remarketed Notes registered hereby.
Reference is made to Section 6 of the form of Distribution Agreement filed
as Exhibit 1-37 hereto for a description of the indemnification arrangements the
Company is prepared to make in connection with the proposed offering of the
General and Refunding Mortgage Bonds designated as secured Medium-Term Notes
registered hereby.
Reference is made to Article VII of the form of Underwriting Agreement
filed as Exhibit 1-38 hereto for a description of the indemnification
arrangements the Company is prepared to make in connection with the proposed
offering of General and Refunding Mortgage Bonds registered hereby.
Reference is made to Section 10 of the forms of Remarketing Agreements
filed as Exhibits 99-28 and 99-29 hereto for a description of the
indemnification arrangements the Company is prepared to make in connection with
the remarketing of the Notes registered hereby.
Reference is made to Section 9.04 of the form of Standby Note Purchase
Agreement filed as Exhibit 99-30 hereto for a description of the indemnification
arrangements the Company is prepared to make in connection with the engagement
of a liquidity provider thereunder.
(b) Insurance. The Company (with respect to indemnification liability) and
its directors and officers (in their capacities as such) are insured against
liability for wrongful acts (to the extent defined) under three insurance
policies providing aggregate coverage in the amount of $85 million.
ITEM 16. EXHIBITS.
(A) EXHIBITS FILED HEREWITH:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <C> <S>
1-35 -- Form of Underwriting Agreement (Subordinated Debt
Securities).
1-36 -- Form of Distribution Agreement (Remarketed Secured Notes).
1-37 -- Form of Distribution Agreement (General and Refunding
Mortgage Bonds designated as Secured Medium-Term Notes).
1-38 -- Form of Underwriting Agreement (General and Refunding
Mortgage Bonds).
3-9 -- Bylaws of the Detroit Edison Company, as amended through May
1, 1998.
3-10 -- Bylaws of DTE Energy Company, as amended through May 1,
1998.
4-198 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds Collateralizing Remarketed Secured
Notes (including Form of Mortgage Bonds on pages 9 through
13).
4-199 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds (including Form of Mortgage Bonds
on pages 9 through 13).
4-200 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds, a Series of Secured Medium-Term
Notes (including Form of Mortgage Bonds on pages 9 through
16).
4-201 -- Form of Supplemental Indenture (Notes) for Remarketed
Secured Notes (including forms of Notes as Exhibits A and B
on pages 35 through 77).
</TABLE>
II-2
<PAGE> 72
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <C> <S>
4-202 -- Form of Supplemental Indenture (Notes) for Subordinated Debt
Securities (including Form of Notes as Exhibit A on pages
A-1 through A-9).
5-48 -- Opinion and Consent of Christopher C. Nern, Esq., Vice
President and General Counsel of the Company.
8-2 -- Tax opinion and consent of Brown & Wood LLP.
12-14 -- Computation of Ratio of Earnings to Fixed Charges.
15-9 -- Awareness letter of Deloitte & Touche LLP regarding their
reports dated April 27, 1998 and July 27, 1998.
23-5 -- Consent of Deloitte & Touche LLP.
25-8 -- Statement of Eligibility of Trustee (mortgage).
25-9 -- Statement of Eligibility of Trustee (note indenture).
99-28 -- Form of Remarketing Agreement (Remarketed Notes).
99-29 -- Form of Remarketing Agreement (Remarketed Notes -- Spurs
Mode).
99-30 -- Form of Standby Note Purchase Agreement (Remarketed Notes).
99-31 -- Sixth Amendment to 1988 Amended and Restated Nuclear Fuel
Heat Purchase Contract.
99-32 -- Sixth Amendment, dated as of August 27, 1998 to 364-Day
Credit Agreement dated as of September 1, 1990, as amended,
among the Company, Renaissance Energy Company, the banks
party thereto and Barclays Bank PLC, New York Branch, as
agent.
</TABLE>
(B) EXHIBITS INCORPORATED HEREIN BY REFERENCE.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C> <C>
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).
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, 7.74% 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(e) -- 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(f) -- Agreement and Plan of Exchange (Exhibit 1(2) to DTE Energy
Form 8-B filed January 2, 1996, File No. 1-11607).
</TABLE>
II-3
<PAGE> 73
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C> <C>
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>
<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
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 4-121 to Form 10-Q for quarter ended March 31,
1992
April 15, 1992 Exhibit 4-122 to Form 10-Q for quarter ended June 30,
1992
July 15, 1992 Exhibit 4-123 to Form 10-Q for quarter ended September
30, 1992
July 31, 1992 Exhibit 4-124 to Form 10-Q for quarter ended September
30, 1992
November 30, 1992 Exhibit 4-130 to Registration No. 33-56496
January 1, 1993 Exhibit 4-131 to Registration No. 33-56496
March 1, 1993 Exhibit 4-141 to Form 10-Q for quarter ended March 31,
1993
</TABLE>
II-4
<PAGE> 74
<TABLE>
<S> <C>
March 15, 1993 Exhibit 4-142 to Form 10-Q for quarter ended March 31,
1993
April 1, 1993 Exhibit 4-143 to Form 10-Q for quarter ended March 31,
1993
April 26, 1993 Exhibit 4-144 to Form 10-Q for quarter ended March 31,
1993
May 31, 1993 Exhibit 4-148 to Registration No. 33-64296
June 30, 1993 Exhibit 4-149 to Form 10-Q for quarter ended June 30,
1993 (1993 Series AP)
June 30, 1993 Exhibit 4-150 to Form 10-Q for quarter ended June 30,
1993 (1993 Series H)
September 15, 1993 Exhibit 4-158 to Form 10-Q for quarter ended September
30, 1993
March 1, 1994 Exhibit 4-163 to Registration No. 33-53207
June 15, 1994 Exhibit 4-166 to Form 10-Q for quarter ended June 30,
1994
August 15, 1994 Exhibit 4-168 to Form 10-Q for quarter ended September
30, 1994
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>
<TABLE>
<S> <C>
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) -- Sixth Supplemental Note Indenture, dated as of May 1, 1998
(Exhibit 4-193 to Detroit Edison Form 10-Q for the quarter
ended June 30, 1998.
4(k) -- Standby Note Purchase Credit Facility, dated as of August
17, 1994, among The Detroit Edison Company, Barclays Bank
PLC, as Bank and Administrative Agent, Bank of America, The
Bank of New York, The Fuji Bank Limited, The Long-Term
Credit Bank of Japan, LTD, Union Bank and Citicorp
Securities, Inc. and First Chicago Capital Markets, Inc. as
Remarketing Agents (Exhibit 99-18 to Form 10-Q for quarter
ended September 30, 1994).
</TABLE>
II-5
<PAGE> 75
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's Annual Report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act of 1933 shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
II-6
<PAGE> 76
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-7
<PAGE> 77
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF DETROIT, STATE OF MICHIGAN, ON THE 15TH DAY OF
OCTOBER, 1998.
THE DETROIT EDISON COMPANY
(Registrant)
By: /s/ ANTHONY F. EARLEY, JR.
-----------------------------------
(Anthony F. Earley, Jr., Chairman
of the Board, President and Chief
Executive Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
PRINCIPAL EXECUTIVE OFFICERS:
/s/ ANTHONY F. EARLEY, JR. Chairman of the Board, October 15, 1998
- --------------------------------------------- President, Chief Executive Officer
Anthony F. Earley, Jr. and Director
/s/ GERARD M. ANDERSON President, DTE Energy Resources October 15, 1998
- --------------------------------------------- Group
(Gerard M. Anderson)
/s/ ROBERT J. BUCKLER President, DTE Distribution Group October 15, 1998
- ---------------------------------------------
(Robert J. Buckler)
PRINCIPAL FINANCIAL OFFICER:
/s/ LARRY G. GARBERDING Executive Vice President, October 15, 1998
- --------------------------------------------- Chief Financial Officer and
(Larry G. Garberding) Director
PRINCIPAL ACCOUNTING OFFICER:
/s/ DAVID E. MEADOR Vice President and October 15, 1998
- --------------------------------------------- Controller
(David E. Meador)
</TABLE>
<PAGE> 78
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ TERENCE E. ADDERLEY Director October 15, 1998
- ---------------------------------------------
(Terence E. Adderley)
/s/ LILLIAN BAUDER Director October 15, 1998
- ---------------------------------------------
(Lillian Bauder)
Director
- ---------------------------------------------
(David Bing)
/s/ WILLIAM C. BROOKS Director October 15, 1998
- ---------------------------------------------
(William C. Brooks)
/s/ ALLAN D. GILMOUR Director October 15, 1998
- ---------------------------------------------
(Allan D. Gilmour)
/s/ THEODORE S. LEIPPRANDT Director October 15, 1998
- ---------------------------------------------
(Theodore S. Leipprandt)
/s/ JOHN E. LOBBIA Director October 15, 1998
- ---------------------------------------------
(John E. Lobbia)
/s/ EUGENE A. MILLER Director October 15, 1998
- ---------------------------------------------
(Eugene A. Miller)
/s/ DEAN E. RICHARDSON Director October 15, 1998
- ---------------------------------------------
(Dean E. Richardson)
/s/ ALAN E. SCHWARTZ Director October 15, 1998
- ---------------------------------------------
(Alan E. Schwartz)
/s/ WILLIAM WEGNER Director October 15, 1998
- ---------------------------------------------
(William Wegner)
</TABLE>
<PAGE> 79
EXHIBIT INDEX
(A) EXHIBITS FILED HEREWITH
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<C> <C> <S> <C>
1-35 -- Form of Underwriting Agreement (Subordinated Debt
Securities).
1-36 -- Form of Distribution Agreement (Remarketed Secured Notes).
1-37 -- Form of Distribution Agreement (General and Refunding
Mortgage Bonds designated as Secured Medium-Term Notes).
1-38 -- Form of Underwriting Agreement (General and Refunding
Mortgage Bonds).
3-9 -- Bylaws of the Detroit Edison Company, as amended through May
1, 1998.
3-10 -- Bylaws of DTE Energy Company, as amended through May 1,
1998.
4-198 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds Collateralizing Remarketed Secured
Notes (including Form of Mortgage Bonds on pages 9 through
13).
4-199 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds (including Form of Mortgage Bonds
on pages 9 through 13).
4-200 -- Form of Supplemental Indenture (Mortgage) for General and
Refunding Mortgage Bonds, a Series of Secured Medium-Term
Notes (including Form of Mortgage Bonds on pages 9 through
16).
4-201 -- Form of Supplemental Indenture (Notes) for Remarketed
Secured Notes (including forms of Notes as Exhibits A and B
on pages 35 through 77).
4-202 -- Form of Supplemental Indenture (Notes) for Subordinated Debt
Securities (including Form of Notes as Exhibit A on pages
A-1 through A-9).
5-48 -- Opinion and Consent of Christopher C. Nern, Esq., Vice
President and General Counsel of the Company.
8-2 -- Tax opinion and consent of Brown & Wood LLP.
12-14 -- Computation of Ratio of Earnings to Fixed Charges.
15-9 -- Awareness letter of Deloitte & Touche LLP regarding their
reports dated April 27, 1998 and July 27, 1998.
23-5 -- Consent of Deloitte & Touche LLP.
25-8 -- Statement of Eligibility of Trustee (mortgage).
25-9 -- Statement of Eligibility of Trustee (note indenture).
99-28 -- Form of Remarketing Agreement (Remarketed Notes).
99-29 -- Form of Remarketing Agreement (Remarketed Notes -- Spurs
Mode).
99-30 -- Form of Standby Note Purchase Agreement (Remarketed Notes).
99-31 -- Sixth Amendment to 1988 Amended and Restated Nuclear Fuel
Heat Purchase Contract.
99-32 -- Sixth Amendment, dated as of August 27, 1998 to 364-Day
Credit Agreement dated as of September 1, 1990, as amended,
among the Company, Renaissance Energy Company, the banks
party thereto and Barclays Bank PLC, New York Branch, as
agent.
</TABLE>
<PAGE> 80
(B) EXHIBITS INCORPORATED HEREIN BY REFERENCE.
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ----------- ------------
<S> <C> <C> <C>
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).
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, 7.74% 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(e) -- 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(f) -- 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>
<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
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
</TABLE>
<PAGE> 81
<TABLE>
<S> <C>
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 4-121 to Form 10-Q for quarter ended March 31, 1992
April 15, 1992 Exhibit 4-122 to Form 10-Q for quarter ended June 30, 1992
July 15, 1992 Exhibit 4-123 to Form 10-Q for quarter ended September 30,
1992
July 31, 1992 Exhibit 4-124 to Form 10-Q for quarter ended September 30,
1992
November 30, 1992 Exhibit 4-130 to Registration No. 33-56496
January 1, 1993 Exhibit 4-131 to Registration No. 33-56496
March 1, 1993 Exhibit 4-141 to Form 10-Q for quarter ended March 31, 1993
March 15, 1993 Exhibit 4-142 to Form 10-Q for quarter ended March 31, 1993
April 1, 1993 Exhibit 4-143 to Form 10-Q for quarter ended March 31, 1993
April 26, 1993 Exhibit 4-144 to Form 10-Q for quarter ended March 31, 1993
May 31, 1993 Exhibit 4-148 to Registration No. 33-64296
June 30, 1993 Exhibit 4-149 to Form 10-Q for quarter ended June 30, 1993
(1993 Series AP)
June 30, 1993 Exhibit 4-150 to Form 10-Q for quarter ended June 30, 1993
(1993 Series H)
September 15, 1993 Exhibit 4-158 to Form 10-Q for quarter ended September 30,
1993
March 1, 1994 Exhibit 4-163 to Registration No. 33-53207
June 15, 1994 Exhibit 4-166 to Form 10-Q for quarter ended June 30, 1994
August 15, 1994 Exhibit 4-168 to Form 10-Q for quarter ended September 30,
1994
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>
<TABLE>
<S> <C> <C>
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).
</TABLE>
<PAGE> 82
<TABLE>
<S> <C> <C>
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) -- Sixth Supplemental Note Indenture, dated as of May 1, 1998
(Exhibit 4-193 to Detroit Edison Form 10-Q for the quarter
ended June 30, 1998.
4(k) -- Standby Note Purchase Credit Facility, dated as of August
17, 1994, among The Detroit Edison Company, Barclays Bank
PLC, as Bank and Administrative Agent, Bank of America, The
Bank of New York, The Fuji Bank Limited, The Long-Term
Credit Bank of Japan, LTD, Union Bank and Citicorp
Securities, Inc. and First Chicago Capital Markets, Inc. as
Remarketing Agents (Exhibit 99-18 to Form 10-Q for quarter
ended September 30, 1994).
</TABLE>
<PAGE> 1
EXHIBIT 1-35
THE DETROIT EDISON COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT
[ ]
[UNDERWRITERS]
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Dear Sirs:
From time to time The Detroit Edison Company, a Michigan corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time
to time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This underwriting agreement (the "Agreement") shall not
be construed as an obligation of the Company to sell any of the Securities or as
an obligation of any of the Underwriters to purchase the Securities. The
obligation of the Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the aggregate principal
amount of such Designated Securities, the initial public offering price of such
Designated Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the
<PAGE> 2
principal amount of such Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the Indenture and the registration
statement and prospectus with respect thereto) the terms of such Designated
Securities. A Pricing Agreement shall be in the form of an executed writing
(which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters have been declared effective
by the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission; and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus"; the various parts
of such registration statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the registration
statement at the time such part of the registration statement became effective
but excluding Forms T-1, each as amended at the time such part of the
registration statement became effective, being hereinafter called the
"Registration Statement"; the prospectus relating to the Securities, in the form
in which it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment to the Registration Statement shall
be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Designated Securities in the form in
which it is filed with the Commission
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<PAGE> 3
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any material
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change (in either case not in the ordinary course
of business), in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus;
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<PAGE> 4
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all of those
properties, except pollution control facilities standing in the names of certain
municipalities which are being purchased by the Company pursuant to installment
sales contracts and the undivided ownership interest of Michigan Public Power
Agency in a portion of the Belle River Power Plant, in each case as described in
the Prospectus, which constitute or on which there are erected its principal
plants, generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of real
estate) and improvements thereon, subject to the lien of the Mortgage and 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 the Company has adequate
rights to maintain and operate such of its transmission and distribution
facilities as are located on public or other property not owned by the Company.
(g) The Securities have been duly authorized, and, when Designated
Securities are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, such Designated Securities
will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits provided by the Note Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Note Indenture has been
duly authorized and duly qualified under the Trust Indenture Act and, at the
Time of Delivery for such Designated Securities (as defined in Section 4
hereof), the Note Indenture will constitute a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; and the Note Indenture conforms, and the Designated Securities will
conform, to the descriptions thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Note Indenture, this
Agreement and any Pricing Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, nor will such
action result in any violation of the provisions of the Restated Articles of
Incorporation, as amended, or By-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or the Note Indenture,
except such as have been, or will have been prior to the Time of Delivery,
obtained under the Act
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<PAGE> 5
and the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Securities
by the Underwriters; and
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least twenty-four hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor in the manner
specified in the Pricing Agreement relating thereto, payable to the order of the
Company, all at the place and time and date specified in such Pricing Agreement
or at such other place and time and date as the Representatives and the Company
may agree upon in writing, such time and date being herein called the "Time of
Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Securities and prior to the Time of
Delivery for such Securities which shall be disapproved by the Representatives
for such Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13 (a), 13 (c), 14
or 15 (d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Securities, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has
5
<PAGE> 6
been filed with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any prospectus
relating to the Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any such stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for offering
and sale under the securities laws of such jurisdictions as the Representatives
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of such Securities, provided that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may reasonably
request, and, if the delivery of a prospectus is required at any time in
connection with the offering or sale of the Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify the Representatives and upon their request to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11 (a) of the Act and the rules and regulations of the
Commission thereunder (including at the option of the Company Rule 158); and
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Securities and continuing to and including the earlier of
(i) the termination of trading restrictions for such Designated Securities, as
notified to the Company by the Representatives and (ii) the Time of Delivery for
such Designated Securities, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company which mature more than one year
after such Time of Delivery and which are substantially similar to such
Designated Securities, without the prior written consent of the Representatives.
6
<PAGE> 7
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Indenture, any Blue Sky and Legal Investment Memoranda and any other documents
in connection with the offering, purchase, sale and delivery of the Securities;
(iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) the cost of preparing the Securities; (vi) the fees
and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424 (b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated the Time of Delivery for such Designated
Securities, with respect to the incorporation of the Company, this Agreement,
the validity of the Indenture, the Designated Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related matters
as the Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
7
<PAGE> 8
(c) Christopher C. Nern, Esq., Vice President and General Counsel to
the Company, shall have furnished to the Representatives his written opinion (a
draft of such opinion, subject to such changes as shall be mutually agreed to
prior to the Time of Delivery is attached as Annex II(b) hereto), dated the Time
of Delivery for such Designated Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
(ii) The Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all
of those properties, except pollution control facilities standing in
the names of certain municipalities which are being purchased by the
Company pursuant to installment sales contracts and the undivided
ownership interest of Michigan Public Power Agency in a portion of the
Belle River Power Plant, in each case as described in the Prospectus,
which constitute or on which there are erected its principal plants,
generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of
real estate) and improvements thereon, subject to the lien of the
Mortgage and 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 the Company has adequate rights to maintain and
operate such of its transmission and distribution facilities as are
located on public or other property owned by the Company;
(iii) To the best of such counsel's knowledge after due inquiry
and other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered
by the Company and are valid and binding agreements of the Company
enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or offering creditors rights and to general
equity principles and, except as rights to indemnity thereunder may be
limited by applicable law;
(v) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Note Indenture, subject, as to
8
<PAGE> 9
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Designated Securities and the
Note Indenture conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(vi) The Note Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(vii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Note Indenture, this Agreement and the Pricing
Agreement with respect to the Designated Securities and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel, after due inquiry, to which the
Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, nor will such actions
result in any violation of the provisions of the Restated Articles of
Incorporation, as amended, or By-laws of the Company or any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency, including, without limitation, the Michigan Public
Service Commission or any body having jurisdiction over the Company or
any of its properties, except that such counsel need express no opinion
as to rights to indemnity which may be limited by applicable law;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency,
including, without limitation, the Michigan Public Service Commission
or any body is required for the issue and sale of the Designated
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or such Pricing Agreement or the Note
Indenture, except such as have been obtained under the Act, the Trust
Indenture Act and from the Michigan Public Service Commission and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Designated Securities by the
Underwriters;
(ix) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules therein and except for those parts of the
Registration Statement which constitute the Statements of Eligibility
and Qualification of the Trustee (the "Forms T-1"), as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such documents,
when they became effective or were so filed, as the case may be,
contained,
9
<PAGE> 10
in the case of a registration statement which became effective under
the Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission,
an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such documents were
so filed, not misleading; and
(x) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules therein and
except for those parts of the Registration Statement which constitute
the Forms T-1, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act
and the Trust Indenture Act and the rules and regulations thereunder;
such counsel has no reason to believe that, as of its effective date,
the Registration Statement or any further amendment thereto (including
the filing of the Company's most recent Annual Report on Form 10-K with
the Commission) made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein and
except for those parts of the Registration Statement which constitute
the Forms T-1, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein and
except for those parts of the Registration Statement which constitute
the Forms T-1, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of
the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein and
except for those parts of the Registration Statement which constitute
the Forms T-1, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and such counsel
does not know of any amendment to the Registration Statement required
to be filed or any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or required to
be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement
or the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(d) On the date of the Pricing Agreement relating to the Designated
Securities, the independent accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have furnished to
the Representatives a letter or letters dated the date of the Pricing
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<PAGE> 11
Agreement, each in a form satisfactory to you (a draft of the form of letter is
attached as Annex III(a) hereto);
(e) At the Time of Delivery for such Designated Securities, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a "bring down" letter or letters dated at the Time of Delivery,
each in a form satisfactory to you (a draft of the form of letter is attached as
Annex III(b) hereto);
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented any
material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Prospectus as amended
or supplemented there shall not have been any material change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change (other than such as may have occurred in the ordinary course of
business), in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for purposes of
Rule 436(g) (2) under the Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a general moratorium on commercial banking activities
in New York declared by either Federal or New York State authorities; or (iii)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war if the effect of
any such event specified in this Clause (iii) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Securities on the terms and in the
manner contemplated in the Prospectus as amended or supplemented; and
(i) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and
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<PAGE> 12
warranties of the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be performed
at or prior to such Time of Delivery, as to the matters set forth in subsections
(a) and (f) of this Section and as to such other matters as the Representatives
may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
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<PAGE> 13
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay
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<PAGE> 14
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11 (f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect
to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company that they
have so arranged for the purchase of such Designated Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Designated Securities, the Representatives or the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of such
defaulting
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<PAGE> 15
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile
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<PAGE> 16
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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<PAGE> 17
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
The Detroit Edison Company
By:________________________
Name:
Title:
Accepted as of the date hereof:
[UNDERWRITERS]
By:_____________________
17
<PAGE> 18
ANNEX I
PRICING AGREEMENT
[UNDERWRITERS]
As Representatives of the several
Underwriters named in Schedule I hereto,
[ ]
Dear Sirs:
The Detroit Edison Company, a Michigan corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated [ ] (the "Underwriting Agreement"),
between the Company on the one hand and [UNDERWRITERS] on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
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<PAGE> 19
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
The Detroit Edison Company
By:_______________________
Name:
Title:
Accepted as of the date hereof:
[UNDERWRITERS]
By:___________________________
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<PAGE> 20
SCHEDULE I
Principal Amount
of Designated
Securities to be
Underwriter Purchased
- ----------- --------------------------
Sch. I-1
<PAGE> 21
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
AGGREGATE PRINCIPAL AMOUNT:
PRICE TO PUBLIC:
PURCHASE PRICE BY UNDERWRITERS:
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
INDENTURE:
Indenture dated as of June 30, 1993, as supplemented by and through a
Seventh Supplemental Indenture dated as of [ ] between the Company and
Bankers Trust Company, as Trustee
MATURITY:
INTEREST RATE:
INTEREST PAYMENT DATES:
REDEMPTION PROVISIONS:
SINKING FUND PROVISIONS:
No sinking fund provisions.
Sch. II-1
<PAGE> 22
TIME OF DELIVERY:
9:00 A.M.
[ ], 1998
CLOSING LOCATION FOR DELIVERY OF SECURITIES:
Brown & Wood LLP
One World Trade Center
New York, New York 10048
NAMES AND ADDRESSES OF REPRESENTATIVES:
Sch. II-2
<PAGE> 1
EXHIBIT 1-36
THE DETROIT EDISON COMPANY
REMARKETED SECURED NOTES
DISTRIBUTION AGREEMENT
[ ]
[AGENTS]
Ladies and Gentlemen:
The Detroit Edison Company, a Michigan corporation (the "Company"),
proposes to issue and sell up to $ aggregate principal amount of its
Remarketed Secured Notes (the "Notes") in one or more offerings on terms to be
determined at the time of sale. The Notes will be issued pursuant to a
collateral trust indenture, dated as of June 30, 1993, as amended and
supplemented from time to time (together, the "Indenture"), between the Company
and Bankers Trust Company, as trustee (the "Note Trustee"). Each issue of Notes
may vary as to aggregate principal amount, maturity date and any other variable
terms which the Indenture contemplates may be set forth in the Notes as issued
from time to time.
Payment of the principal of, premium, if any, and interest on each
series of Notes is to be secured by the pledge by the Company to the Note
Trustee of a general and refunding mortgage bond (each, a "Pledged Bond") to be
issued under the Mortgage and Deed of Trust, dated as of October 1, 1924,
between the Company and Bankers Trust Company, as trustee ("Mortgage Trustee"),
as amended and supplemented by various supplemental indentures including the
supplemental indenture creating each Pledged Bond (the "Mortgage").
Prior to each offering of the Notes the Company shall enter into a
terms agreement substantially in the form of Exhibit A hereto (the "Terms
Agreement"). From and after the date of the execution and delivery of the Terms
Agreement, this Agreement shall be deemed to incorporate the Terms Agreement. As
used herein, "you" and "your", unless the context otherwise requires, shall mean
such of the parties, if any, to whom this Agreement is addressed as are named in
the Terms Agreement or any additional parties specifically identified as agents
or underwriters in the Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (File No. 333- ) on Form S-3 relating to
the Notes and the offering thereof from time to time in accordance with Rule 415
under the Securities Act of 1933, as amended (the "Act"), and has filed such
amendments thereto, if any, and such amended preliminary prospectuses as may
have been required to the date hereof, and will file
<PAGE> 2
such additional amendments thereto and such amended prospectuses as may
hereafter be required. Such registration statement (as amended, if applicable)
and the prospectus constituting a part thereof (including in each case the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act), as from time to time amended or supplemented pursuant to the
Act, are hereinafter referred to as the "Registration Statement" and the
"Prospectus", respectively; provided, however, that a supplement to the
Prospectus prepared pursuant to Section 3(a) hereof (a "Prospectus Supplement")
shall be deemed to have supplemented the Prospectus only with respect to the
offering of Notes to which it relates.
1. Representations and Warranties of the Company. The Company
represents and warrants to you as of the date hereof, and to each of you named
in the Terms Agreement as of the date thereof (such later date being hereinafter
referred to as the "Representation Date") as follows:
a. The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
b. (i) Each document, if any, filed or to be filed pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement (including material
incorporated by reference therein), when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) the
Registration Statement and the Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with
the Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Registration Statement and the Prospectus do
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
Section 1(b) do not apply (A) to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to you furnished to the Company in writing by you expressly
for use therein or (B) to those parts of the Registration Statement
that constitute the Statement of Eligibility (the "Form T-1") under the
Trust Indenture Act of the Note Trustee or the Mortgage Trustee.
c. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Michigan,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
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<PAGE> 3
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
d. Each of this Agreement and, on the applicable Representation Date,
the Terms Agreement has been duly authorized, executed and delivered by
the Company.
e. Each of the Indenture and the Mortgage has been duly qualified
under the Trust Indenture Act and has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
f. The forms of Notes have been duly authorized and established in
conformity with the provisions of the Indenture and, when the Notes
have been executed and authenticated in accordance with the provisions
of the Indenture and delivered and duly paid for as contemplated
hereby, the Notes will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their respective terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
g. The Pledged Bond has been duly authorized and established in
conformity with the provisions of the Mortgage and, when the Pledged
Bond has been executed and authenticated in accordance with the
provisions of the Mortgage and pledged to the Note Trustee as
contemplated by the Indenture, the Pledged Bond will be entitled to the
benefits of the Mortgage and will be a valid and binding obligation of
the Company, enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; and the payments of
the principal of, premium, if any, and interest on the Notes to which a
Terms Agreement relates are secured by the related Pledged Bond.
h. The execution and delivery by the Company of this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, and the performance by the Company of its obligations
under this Agreement, the applicable Terms Agreement, the Notes, the
Indenture, the Pledged Bond and the Mortgage will not contravene any
provision of applicable law or the articles of incorporation or by-laws
of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and
its subsidiaries, taken as a whole, or any judgment,
3
<PAGE> 4
order or decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency not already obtained is required for the
performance by the Company of its obligations under this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, except such as may be required by the securities or
blue sky laws of the various states in connection with the offer and
sale of the Notes.
i. There has not been any material adverse change, or any development
involving a prospective material adverse change (in either case, not in
the ordinary course of business), in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
j. Other than as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that are required to
be described in the Registration Statement or the Prospectus and are
not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed or incorporated by reference
as exhibits to the Registration Statement that are not described, filed
or incorporated as required.
k. Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities and all courts
and other tribunals, to own, lease, license and use its properties and
assets and to conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
l. Assuming that the Note Trustee holds the Pledged Bond as provided
in the Indenture, the Indenture creates a valid and perfected first
priority security interest in the Pledged Bond.
m. The Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all
of those properties, except pollution control facilities standing in
the names of certain municipalities which are being purchased by the
Company pursuant to installment sales contracts and the undivided
ownership interest of Michigan Public Power Agency in a portion of the
Belle River Power Plant, in each case as described in the Prospectus,
which constitute or on which there are erected its principal plants,
generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of
real estate)and
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<PAGE> 5
improvements thereon, subject to the lien of the Mortgage and 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 the
Company has adequate rights to maintain and operate such of its
transmission and distribution facilities as are located on public or
other property not owned by the Company.
n. The Mortgage is a first lien (subject to no prior liens, charges,
encumbrances or security interests, except current taxes and
assessments not yet due and minor encumbrances which do not materially
impair the use of such property for the purpose for which it is held by
the Company) duly filed and recorded, on substantially all of the
Company's tangible properties and franchises (other than items
purchased for resale in the ordinary course of business) and (subject
to the necessity for particular filings and recordings in the case of
certain personal property such as railroad rolling stock) will
constitute a like lien on any such properties hereafter acquired by the
Company except that any such after-acquired property will be subject to
prior liens and encumbrances, if any, existing when acquired by the
Company, except that the Mortgage will not become a lien upon
after-acquired real property in a new county until it has been duly
filed and recorded and except that the Mortgage may not be effective as
to property acquired subsequent to the filing of a case with respect to
the Company under the Bankruptcy Code.
Any certificate signed by any director or officer of the Company and
delivered to you in connection with an offering of Notes or the sale of Notes
shall be deemed a representation and warranty by the Company to you as to the
matters covered thereby on the date of such certificate and at each
Representation Date subsequent thereto.
2. Solicitations as Agent; Purchases as Principal.
a. The Company may sell Notes directly to purchasers, in which case
you will act as agent of the Company and use your reasonable efforts to
solicit offers to purchase Notes, or the Company may sell Notes to you
as principal for resale to purchasers.
b. Your engagement as agent for the Company or your commitment to
purchase Notes as principal shall be deemed to have been made on the
basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set
forth. The Terms Agreement shall specify whether the Notes subject
thereto are being sold by the Company through you as agent or to you as
principal, the principal amount of Notes to be sold through or
purchased by you pursuant thereto, as applicable, the commission to be
paid by the Company to you as agent (which shall be expressed as a
percentage of the principal amount of each Note sold by the Company as
a result of a solicitation made by you) or the price to be paid by you
to the Company for such Notes (which, if not so specified in the Terms
Agreement, shall be expressed as a discount of the public offering
price of such Notes), the time (such time being
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<PAGE> 6
hereinafter referred to as a "Closing Time") and place of delivery of
and the manner of payment for such Notes, and such other provisions
(including further terms of such Notes) as may be mutually agreed upon.
3. Covenants of the Company. The Company covenants and agrees with
you, and with each of you participating in the sale or offering of Notes, as
follows:
a. Prospectus Supplements. Immediately following the execution of
each Terms Agreement, the Company will prepare a Prospectus Supplement
setting forth the principal amount of Notes covered thereby and their
terms not otherwise specified in the Prospectus, the names of such of
you as are participating in the offering and the commissions or
discounts received by you in connection with such offering, the initial
public offering price, the selling concession and reallowance, if any,
and such other information as you and the Company deem appropriate in
connection with the offering of the Notes. The Company will promptly
transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 of the rules and regulations under the Act.
b. Notice of Certain Proposed Filings. The Company will give you
notice of its intention to file any amendment to the Registration
Statement or any amendment or supplement to the Prospectus whether by
the filing of documents pursuant to the Exchange Act, the Act or
otherwise, and will furnish you with copies of any such amendment or
supplement or other documents proposed to be filed a reasonable time in
advance of such proposed filing, and will not file any such amendment
or supplement in a form to which you shall reasonably object.
c. Notice of Certain Events. The Company will immediately notify you
(i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the receipt of any comments from the Commission with
respect to the Registration Statement or the Prospectus, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
d. Copies of the Registration Statement. The Company will provide to
you, without charge, as many signed and conformed copies of the
Registration Statement (as originally filed) and each amendment
thereto, including any post-effective amendment thereto (in each case
including financial statements and schedules and exhibits thereto and
documents incorporated by reference therein (including exhibits
incorporated therein by reference to the extent not previously
furnished to you)) as you may reasonably request.
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<PAGE> 7
e. Copies of the Prospectus. The Company will provide to you as many
copies of the Prospectus (as amended or supplemented) and Prospectus
Supplement as you may reasonably request so long as you are required to
deliver a Prospectus and Prospectus Supplement in connection with sales
or solicitations of offers to purchase Notes covered by a Terms
Agreement.
f. Revisions of Prospectus -- Material Changes. If any event occurs
as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, or if for any other reason it is necessary at any time to
amend or supplement the Registration Statement or the Prospectus to
comply with the Act, the Exchange Act or the Trust Indenture Act or the
respective rules or regulations of the Commission thereunder or any
other law, the Company will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement
or omission or effects such compliance.
g. Earning Statements. The Company, as soon as practicable, but not
later than 90 days after the close of the period covered thereby, will
make generally available to its security holders a consolidated earning
statement or statements of the Company and its subsidiaries (in form
complying with the provisions of Section 11(a) of the Act and Rule 158
promulgated thereunder) covering each twelve month period beginning not
later than the first day of the Company's fiscal quarter next following
the "effective date" (as defined in such Rule 158) of the Registration
Statement.
h. Blue Sky Qualifications. The Company will arrange for the
registration or qualification of the Notes for offering and sale and
the determination of their eligibility for investment under the
securities or blue sky laws of such jurisdictions as you may designate
and will continue such qualifications in effect for as long as may be
necessary for the distribution of the Notes, provided, however, that in
connection therewith the Company shall not be required to qualify to do
business as a foreign corporation or as a broker-dealer or to execute a
general consent to service of process in any jurisdiction. The Company
will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above
provided. The Company will promptly advise you of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of the Notes for sale in
any such state or jurisdiction or the initiating or threatening of any
proceeding for such purpose.
i. Stand-Off Agreement. During the period commencing on the date of
any Terms Agreement and ending at the Closing Time therefor, the
Company will not, without your prior written consent, directly or
indirectly, sell, offer to sell, contract to sell or otherwise dispose
of, or announce the offering of, any debt
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<PAGE> 8
securities of the Company substantially similar to the Notes covered by
such Terms Agreement (other than the Notes that are to be sold pursuant
to the Terms Agreement and commercial paper in the ordinary course of
business), except as may otherwise be provided in such Terms Agreement.
j. Use of Proceeds. The Company will apply the net proceeds from the
sale of the Notes as set forth under "Use of Proceeds" in the
Prospectus.
4. Expenses. The Company will pay all reasonable costs and expenses
(it being understood that you have no obligation or liability with respect to
any costs or expenses hereunder deemed not to be reasonable) incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 8 hereof, including, but not limited to, all costs and
expenses incident to (i) the preparation, filing and printing or other
production of documents (including word processing and duplication) with respect
to such transactions, including any costs of printing the Registration Statement
and any amendment thereto and the Prospectus and Prospectus Supplement and any
amendment or supplement thereto, the Indenture, the Mortgage, the Form T-1's,
this Agreement, each Terms Agreement and such other agreements related to the
distribution of the Notes and any blue sky or legal investment memoranda (which
shall include the reasonable disbursements of your counsel relating thereto),
(ii) all arrangements relating to the delivery to you of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, accountants and any
other experts or advisors retained by the Company, (iv) preparation, printing,
issuance and delivery of certificates evidencing the Notes and each Pledged
Bond, (v) the qualification of the Notes and determination of their eligibility
for investment under state securities and blue sky laws, including filing fees
and fees and disbursements of your counsel, (vi) the fees and disbursements of
the Note Trustee and the Mortgage Trustee and their counsel, (vii) the filing
fees and expenses of the Commission relating to the Notes, (viii) any fees
charged by investment rating agencies for the rating of the Notes, and (ix) the
fees and expenses of any Depository (as defined in the Indenture) and any
nominees thereof in connection with the Notes.
5. Conditions of Obligations. Your obligation pursuant to any Terms
Agreement to solicit offers to purchase the Notes covered thereby as agent of
the Company, the obligations of any purchasers of such Notes sold through you as
agent, or your obligation to purchase such Notes as principal will be subject to
the accuracy of the representations and warranties on the part of the Company
herein contained and to the accuracy of the statements of the Company's officers
made in any certificate furnished pursuant to the provisions hereof, to the
performance and observance by the Company of all its covenants and agreements
herein contained and to the following additional conditions precedent:
a. At the applicable Closing Time no stop order suspending the
effectiveness of the Registration Statement shall be in effect under
the Act or proceedings therefor initiated or threatened by the
Commission.
b. At the applicable Closing Time you shall have received:
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<PAGE> 9
(1) The favorable opinion, dated as of the applicable Closing Time, of
Christopher C. Nern, Esq., Vice President and General Counsel for the
Company, in form and substance satisfactory to you, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Michigan, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its consolidated
subsidiaries, taken as a whole;
(ii) the Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the
extent that the failure to obtain or file would not have a material
adverse effect on the Company and its consolidated subsidiaries, taken
as a whole;
(iii) each of this Agreement and the applicable Terms Agreement
has been duly authorized, executed and delivered by the Company;
(iv) each of the Indenture and the Mortgage has been duly
qualified under the Trust Indenture Act and has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(v) the forms of Notes covered by the applicable Terms
Agreement have been duly authorized and established in conformity with
the provisions of the Indenture and, when such Notes are executed by
the Company and authenticated by the Note Trustee in accordance with
the provisions of the Indenture and delivered to and duly paid for as
contemplated hereby, such Notes will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vi) the Pledged Bond relating to the Notes covered by the
applicable Terms Agreement has been duly authorized and established in
conformity with
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<PAGE> 10
the provisions of the Mortgage and, when such Pledged Bond is executed
by the Company and authenticated by the Mortgage Trustee in accordance
with the provisions of the Mortgage and pledged to the Note Trustee as
contemplated by the Indenture, such Pledged Bond will be secured by the
lien of and entitled to the benefits of Mortgage and will be a valid
and binding obligation of the Company, enforceable in accordance with
its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; and the payments of the principal of, premium, if any,
and interest on the Notes covered by the applicable Terms Agreement are
secured by such Pledged Bond;
(vii) the execution and delivery by the Company of this Agreement,
the applicable Terms Agreement, the Notes, the Indenture, the Pledged
Bond and the Mortgage, and the performance by the Company of its
obligations under this Agreement, the applicable Terms Agreement, the
Notes, the Indenture, the Pledged Bond and the Mortgage will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or, to the best of such
counsel's knowledge after due inquiry, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its consolidated subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge after due inquiry,
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency not already obtained is required for the
performance by the Company of its obligations under this Agreement, the
applicable Terms Agreement, the Notes, the Indenture, the Pledged Bond
and the Mortgage, except such as may be required by the securities or
blue sky laws of the various states in connection with the offer and
sale of the Notes;
(viii) the statements set forth under the headings and
(except insofar
as such statements specify the amount of bonds which could be issued)
in the Prospectus and in the Prospectus
Supplement, insofar as such statements purport to summarize certain
provisions of the Indenture, the Notes, the Mortgage and the Pledged
Bond, provide a fair summary of such provisions and the information
with respect thereto required under the Act; and the statements set
forth under the heading "Regulatory Matters" in the Prospectus, insofar
as such statements constitute a summary of legal matters, documents or
proceedings referred to therein provide a fair summary of such legal
matters, documents and proceedings and the information with respect
thereto required under the Act;
(ix) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties of
the Company or any of its subsidiaries is subject that are required to
be described in the Registration
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<PAGE> 11
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required
to be described in the Registration Statement or the Prospectus, or to
be filed or incorporated by reference as exhibits to such Registration
Statement that are not described, filed or incorporated by reference as
required;
(x) the Registration Statement has been declared effective under
the Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act or proceedings therefor initiated or threatened by the Commission;
and such counsel is of the opinion that (1) each document filed
pursuant to the Exchange Act and incorporated by reference in the
Prospectus (except for financial statements and schedules included
therein as to which such counsel need not express any opinion),
complied when so filed as to form in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and (2) each part of the Registration Statement and
Prospectus (except for financial statements and schedules indicated
therein as to which such counsel need not express any opinion, and
except for those parts of the Registration Statement that constitute
the Forms T-1, as to the requirements of Form T-1), comply as to form
in all material respects with the Act and the applicable rules and
regulations of the Commission thereunder;
(xi) assuming that the Note Trustee holds the Pledged Bond
relating to Notes covered by the applicable Terms Agreement as provided
in the Indenture, the Indenture creates a valid and perfected first
priority security interest in such Pledged Bond;
(xii) the Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all
of those properties, except pollution control facilities standing in
the names of certain municipalities which are being purchased by the
Company pursuant to installment sales contracts and the undivided
ownership interest of Michigan Public Power Agency in a portion of the
Belle River Power Plant, in each case as described in the Prospectus,
which constitute or on which there are erected its principal plants,
generating stations and substations and on which its general office and
service buildings are constructed and all other important parcels of
real estate) and improvements thereon, subject to the lien of the
Mortgage and 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 the Company has adequate rights to maintain and
operate such of its transmission and distribution facilities as are
located on public or other property owned by the Company; and
(xiii) the Mortgage is a first lien (subject to no prior liens,
charges, encumbrances or security interests, except current taxes and
assessments not yet due and minor encumbrances which, in such counsel's
opinion, do not materially impair the use of such property for the
purpose for which it is held by the
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<PAGE> 12
Company), duly filed and recorded, on substantially all of the
Company's tangible properties and franchises (other than items
purchased for resale in the ordinary course of business) and (subject
to the necessity for particular filings and recordings in the case of
certain personal property such as railroad rolling stock) will
constitute a like lien on any such properties hereafter acquired by the
Company except that any such after-acquired property will be subject to
prior liens and encumbrances, if any, existing when acquired by the
Company, except that the Mortgage will not become a lien upon
after-acquired real property in a new county until it has been duly
filed and recorded and except that the Mortgage may not be effective as
to property acquired subsequent to the filing of a case with respect to
the Company under the Bankruptcy Code.
(2) The favorable opinion, dated as of the applicable Closing Time, of
Brown & Wood LLP, your counsel, with respect to matters set forth in
subparagraphs (i), (iii) through (vi), inclusive and (viii) and (x)
(insofar as such subparagraph relates to the effectiveness of the
Registration Statement) of subsection (b)(1) of this Section. In
rendering such opinion, Brown & Wood LLP may rely, as to matters of
Michigan law, upon the opinion of Christopher C. Nern, Esq.
(3) In giving their opinions required by subsections (b)(1) and
(b)(2), respectively, of this Section, Christopher C. Nern, Esq. and
Brown & Wood LLP shall each additionally state that nothing has come to
their attention that leads them to believe that the Registration
Statement, at the time the Registration Statement became effective, or
if an amendment to the Registration Statement or an annual report on
Form 10-K has been filed by the Company with the Commission subsequent
to the effectiveness of the Registration Statement, then at the time of
the most recent such filing, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
that the Prospectus, as amended or supplemented at the Closing Time,
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(it being understood that such counsel need express no opinion with
respect to the financial statements and schedules and other financial
data included in the Registration Statement or Prospectus). In
addition, with respect to the opinion contained in clause (x) of
subsection (b)(1), Christopher C. Nern, Esq., may state that his
opinion and belief are based upon his participation, or the
participation of someone under his supervision, in the preparation of
the Registration Statement and Prospectus and any amendments or
supplements thereto and documents incorporated therein by reference and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
c. At the time of the execution of this Agreement and at the
applicable Closing Time you shall have received from a
letter in form and substance satisfactory to you, to the effect that:
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<PAGE> 13
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion the audited consolidated financial
statements and schedules included in the Registration Statement and the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act and the
related published rules and regulations thereunder;
(iii) on the basis of a reading of the latest available interim
unaudited consolidated financial statements of the Company and its
subsidiaries made available by the Company, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the comments
set forth in this paragraph (iii), a reading of the minute books of the
shareholders, the board of directors and committees thereof of the
Company and each of its subsidiaries, and inquiries of certain
officials of the Company and its subsidiaries who have responsibility
for financial and accounting matters, nothing came to their attention
that caused them to believe that:
(A) the interim unaudited consolidated financial statements
of the Company and its subsidiaries included in the Registration
Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited consolidated financial statements
included in the Registration Statement and the Prospectus;
(B) at a specific date not more than five days prior to the
date of such letter, there were any changes in the capital stock
or long-term debt of the Company and its subsidiaries or any
decreases in stockholders' equity of the Company and its
subsidiaries, in each case compared with amounts shown on the most
recent unaudited consolidated balance sheet incorporated by
reference in the Registration Statement, or for the period from a
specified date not more than five days prior to the date of such
letter there were any decreases, as compared with the
corresponding period in the preceding years, in sales or net
revenues of the Company and its consolidated subsidiaries, except
in all instances for changes, decreases or increases as is set
forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of the Company and its consolidated subsidiaries which are
included in the Registration Statement and the Prospectus and the
Prospectus Supplement and which are specified by you and
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<PAGE> 14
have found such amounts, percentages and financial information to be in
agreement with the relevant accounting, financial and other records of
the Company and its subsidiaries identified in such letter.
d. At the applicable Closing Time the Company shall have furnished to
you a certificate of the Company, signed by an executive officer of the
Company, dated such date, to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Prospectus, the Prospectus Supplement and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the date of such certificate with the same effect as if made on the
date of such certificate and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the date of such certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of the Company's
knowledge, threatened; and
(iii) since the date of the applicable Terms Agreement, there has
been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
(in any such case, not in the ordinary course of business) of the
Company and its subsidiaries, except as set forth in or contemplated by
the Prospectus.
e. At the applicable Closing Time you shall have received such
further certificates, documents or other information as they may have
reasonably requested from the Company for the purpose of enabling them
to pass upon the issuance and sale of the Notes as herein contemplated
and related proceedings, or in order to evidence the accuracy and
completeness of any of the representations or warranties or the
fulfillment of any of the conditions herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Notes and the related Pledged Bond as herein contemplated
shall be satisfactory in form and substance to you.
If any condition in this Section shall not have been fulfilled when and
as provided in this Agreement, the applicable Terms Agreement may be terminated
by such of you as may be named in such Terms Agreement by notice to the Company
at or prior to the applicable Closing Time and any such termination shall be
without liability of any party to any other party, except as provided in Section
4 hereof.
6. Indemnification and Contribution.
a. The Company agrees to indemnify each of you and hold harmless each
of you and each person, if any, who controls you within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal
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<PAGE> 15
or other expenses reasonably incurred by you or any such controlling
person in connection with investigating or defending any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or in any
amendment thereof or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages
or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to
you furnished to the Company in writing by you expressly for use
therein.
b. Each of you severally agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the
meaning of either Section 15 of the Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from the Company to
you, but only with reference to information relating to you furnished
to the Company in writing by you expressly for use in the Registration
Statement or the Prospectus or any amendments or supplements thereto.
c. In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity
may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to one local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by you, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of
parties indemnified pursuant to paragraph (b) above. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be
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<PAGE> 16
a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
d. In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 6 is unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
on the other from each offering of Notes or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable
law, not only such relative benefits but also the relative fault of the
indemnifying party or parties on the one hand and the indemnified party
on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof). The relative benefits
received by the Company on the one hand and you on the other shall be
deemed to be in the same proportion as the total proceeds from the
offering appearing in the applicable Prospectus Supplement (net of
underwriting discount or agent's commissions but before deducting
expenses) received by the Company bear to the total underwriting
discounts or commissions appearing in such Prospectus Supplement
received by you. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company
or you, the parties' relative intents, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and
any other equitable considerations appropriate in the circumstances.
Each of the Company and you agrees that it would not be equitable if
the amount of such contribution were determined by pro rata or per
capita allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the first
sentence of this paragraph (d). No person guilty of
16
<PAGE> 17
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each director, officer, employee and agent of you and
each person, if any, who controls you within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights
to contribution as you, and each director of the Company, each officer
of the Company who signed the Registration Statement and each person,
if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, shall have the same rights
to contribution as the Company.
7. Representations, Warranties, Agreements and Indemnities to Survive
Delivery. The respective representations, warranties, agreements, indemnities
and other statements of the Company, its respective officers and you set forth
in this Agreement or the applicable Terms Agreement, or in certificates of
officers of the Company submitted pursuant hereto or thereto, shall remain in
full force and effect, regardless of (i) any investigation made by or on behalf
of either of the Company, any of its officers or directors, you, any of your
directors, officers, employees or agents or any controlling person referred to
in Section 6 hereof, and (ii) each delivery of and payment for the Notes.
8. Termination. (a) This Agreement may be terminated for any reason
at any time by either the Company or the parties to whom this Agreement is
addressed upon the giving of thirty days' written notice of such termination to
the other party hereto. Such of you as may be named in a Terms Agreement may
terminate such Terms Agreement, immediately upon notice to the Company, at any
time prior to the applicable Closing Time (i) if there has been, since the date
of such Terms Agreement or since the respective dates as of which information is
given in the Registration Statement, any material adverse change or any
development involving a prospective material adverse change (in either case not
in the ordinary course of business), in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, or (ii) if there shall have occurred any material adverse
change in the financial markets or any outbreak or escalation of hostilities or
other calamity or crisis the effect of which on the financial markets is such as
to make it, in the reasonable judgment of such of you as are named in such Terms
Agreement, impracticable to market the Notes or enforce contracts for the sale
of the Notes, or (iii) if trading in any securities of the Company has been
suspended by the Commission or a national securities exchange, or if trading
generally on either the American Stock Exchange or the New York Stock Exchange
shall have been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said exchanges or by order of the Commission or any other governmental
authority or if a banking moratorium shall have been declared by Federal, New
York or Michigan authorities, or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company as of
the date of such Terms Agreement shall have been lowered since that date or if
any such rating agency shall have publicly announced since that date that it has
placed any debt securities of the Company on what is commonly termed a "watch
list" for possible downgrading, or (v) if there shall have come to the attention
of such of you as are named in such Terms Agreement any facts that would cause
you to believe that the Prospectus or any amendment or supplement thereto, at
the time it was required to be delivered to a purchaser of Notes, contained an
untrue statement of a material fact
17
<PAGE> 18
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time of such
delivery, not misleading.
(b) In the event of any such termination, no party will have any
liability to any other party hereto, except as provided in Section 4, and
provided, further, that Section 6 hereof shall survive such termination.
9. Default. If one or more of you named in a Terms Agreement shall
fail at the applicable Closing Time to purchase the Notes which you are
obligated to purchase thereunder (the "Unpurchased Notes"), then you shall have
the right, within 36 hours thereafter, to make arrangements for one or more of
such of you as have not defaulted, or any other underwriters, to purchase all,
but not less than all, of the Unpurchased Notes in such amounts as may be agreed
upon and upon the terms set forth herein and in the applicable Terms Agreement.
If, however, during such 36 hours you shall not have completed such arrangements
for the purchase of all of the Unpurchased Notes, then:
a. if the aggregate principal amount of Unpurchased Notes does not
exceed 10% of the aggregate principal amount of the Notes to be
purchased pursuant to such Terms Agreement, such of you named in such
Terms Agreement who have not defaulted shall be obligated to purchase
the full amount thereof in the proportions that your respective
underwriting obligations under such Terms Agreement bear to the
underwriting obligations of all of you named in such Terms Agreement,
or
b. if the aggregate principal amount of Unpurchased Notes exceeds 10%
of the aggregate principal amount of the Notes to be purchased pursuant
to such Terms Agreement, such Terms Agreement shall terminate, without
any liability on the part of any of you who have not defaulted or the
Company.
No action taken pursuant to this Section shall relieve any of you who
have defaulted from liability in respect of any default of such of you who have
defaulted under this Agreement and the applicable Terms Agreement.
In the event of a default by any of you as set forth in this Section,
either you or the Company shall have the right to postpone the applicable
Closing Time for a period not exceeding seven days in order that any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements may be effected.
10. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and effective only on receipt, and shall be mailed
or delivered to the Company at: The Detroit Edison Company, 2000 Second Avenue,
853 W.C.B., Detroit, Michigan 48226, attention: Corporate Secretary;
18
<PAGE> 19
, or to such other person and place as may be specified in the
applicable Terms Agreement. Any notice given hereunder may be made by
telecopier, telephone or telegraph, but if so made shall be subsequently
confirmed in writing.
11. Successors. This Agreement shall inure to the benefit of and shall
be binding upon you, the Company and any of you who becomes a party to any Terms
Agreement and their respective successors and legal representatives. Nothing
expressed or mentioned in this Agreement or a Terms Agreement is intended or
shall be construed to give any other person, firm or corporation, any legal or
equitable right, remedy or claim under or in respect of this Agreement or such
Terms Agreement, or any provision herein or therein contained, this Agreement
and any Terms Agreement and all conditions and provisions hereof and thereof
being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person, firm or corporation, except that
(i) the indemnities of the Company contained in Section 6 of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of such of you as are named in the applicable Terms Agreement and any person or
persons who control you within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of such of you as are named in a
Terms Agreement contained in Section 6 of this Agreement shall also be for the
benefit of the directors of the Company, the directors and officers of the
Company who have signed the Registration Statement and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Notes from you shall be deemed a successor
because of such purchase.
12. APPLICABLE LAW. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. Counterparts. This Agreement and each Terms Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
19
<PAGE> 20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between you and the Company in accordance with its terms.
Very truly yours,
THE DETROIT EDISON COMPANY
By: ________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
[ ]
By: _____________________________
Authorized Signatory
[ ]
By: ______________________________
Authorized Signatory
[ ]
By: ______________________________
Authorized Signatory
20
<PAGE> 21
Exhibit A
THE DETROIT EDISON COMPANY
$__________________
REMARKETED SECURED NOTES
TERMS AGREEMENT
Dated: , 19
TO: The Detroit Edison Company
2000 Second Avenue
Detroit, Michigan 48226
Re: Distribution Agreement dated , 19 .
Registration Statement No. 333-
Agent or Principal
Transaction: [Agent] [Principal]
Title of Notes:
Principal Amount: $______________
Denominations: $______________
Initial Interest Rate:
Initial Interest Rate
Adjustment Date:
Initial Interest Rate
Payment Date(s):
Date of Maturity:
[Agent's Commission: ______% per Note.]
[Public Offering Price: ______%, plus accrued interest, if any, from
__________,19__.
Purchase Price: _____%, plus accrued interest, if any, from
____________, 19__ (payable in [same day][next day]
funds)]
Current ratings:
Closing date and location:
Additional [Agents]
[co-managers], if any:
[Each Underwriter severally agrees, subject to the terms and provisions of the
above-referenced Distribution Agreement, which is incorporated herein in its
entirety and made a part hereof, to purchase the principal amount of Notes set
forth opposite its name.
A-1
<PAGE> 22
Name Principal Amount of Notes
------------------------
Total . . ]
================================
[AGENT(S)]
[Managing Agents]
By
---------------------------------
[Acting on behalf of themselves
and the other named Agents]
Accepted:
THE DETROIT EDISON COMPANY
By
------------------------
A-2
<PAGE> 1
EXHIBIT 1-37
THE DETROIT EDISON COMPANY
$__________________
Secured Medium-Term Notes, Series __
Due Not Less than Two Years from Date of Issue
FORM OF
DISTRIBUTION AGREEMENT
_______________,
[Names and addresses of Agents]
Dear Sirs:
The Detroit Edison Company, a Michigan corporation (the "Company"),
confirms its agreement with you with respect to the issue and sale from time to
time by the Company of up to $_____________ aggregate initial public offering
price of its Secured Medium-Term Notes, Series _, due not less than two
years from date of issue (the "Notes"). The Notes are to be issued under and
secured by the Mortgage and Deed of Trust dated as of October 1, 1924
between the Company and Bankers Trust Company, as trustee (the "Trustee"), as
amended and supplemented by various Supplemental Indentures and as to be
further amended and supplemented by a Supplemental Indenture to be dated as
of____________, creating the Notes (the "Mortgage"). Reference is hereby
made to the Mortgage for full and complete statements of the provisions
thereof, including the definitions of certain terms used, and for other
information with respect to the Notes. The Notes will have the maturities,
interest rates, redemption provisions, if any, and other terms as set forth in
supplements to the Basic Prospectus referred to below.
Subject to the terms and conditions stated herein and subject to the
reservation by the Company of the right to sell Notes directly to investors
(other than broker-dealers) on its own behalf, the Company hereby appoints
you as its exclusive agents for the purpose of soliciting and receiving offers
to purchase Notes from the Company by others and, on the basis of the
representations and warranties herein contained, but subject to the terms and
<PAGE> 2
conditions herein set forth, you agree to use reasonable efforts to
solicit and receive offers to purchase Notes upon terms acceptable to the
Company at such times and in such amounts as the Company shall from time
to time specify. In addition, you may also purchase Notes as principal
pursuant to the terms of a Terms Agreement relating to such sale (a "Terms
Agreement") in accordance with the provisions of Section 2(b) hereof.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Notes. Such registration statement, including the exhibits thereto, as
amended at the Commencement Date (as hereinafter defined), is hereinafter
referred to as the "Registration Statement." The Company proposes to file with
the Commission from time to time, pursuant to Rule 424 under the Securities
Act of 1933, as amended (the "Securities Act"), supplements to the prospectus
included in the Registration Statement that will describe certain terms of the
Notes. The prospectus in the form in which it appears in the Registration
Statement is hereinafter referred to as the "Basic Prospectus." The term
"Prospectus" means the Basic Prospectus together with the prospectus supplement
or supplements (each a "Prospectus Supplement") specifically relating to
Notes, as filed with, or transmitted for filing to, the Commission pursuant to
Rule 424. As used herein, the terms "Basic Prospectus" and "Prospectus" shall
include in each case the documents, if any, incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein shall
include all documents deemed to be incorporated by reference in the Prospectus
that are filed subsequent to the date of the Basic Prospectus by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
1. Representations and Warranties. The Company represents and
warrants to and agrees with you as of the Commencement Date, as of each date on
which you solicit offers to purchase Notes, as of each date on which the
Company accepts an offer to purchase Notes (including any purchase by you as
principal pursuant to a Terms Agreement), as of each date the Company issues
and sells Notes and as of each date the Registration Statement or the Basic
Prospectus is amended or supplemented, as follows (it being understood that
such representations, warranties and agreements shall be deemed to relate to
the Registration Statement, the Basic Prospectus and the Prospectus, each
as amended or supplemented to each such date):
-2-
<PAGE> 3
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations of the Commission thereunder, (ii) each
part of the Registration Statement (including material incorporated by
reference therein), when such part became effective, did not contain, and each
such part, as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Registration Statement and the Prospectus
do not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that (1) the
representations and warranties set forth in this Section 1(b) do not apply (A)
to statements or omissions in the Registration Statement or the Prospectus
based upon information relating to you furnished to the Company in writing by
you expressly for use therein or (B) to those parts of the Registration
Statement that constitute the Statements of Eligibility (Form T-1) under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee and (2) the representations and warranties set forth in clauses
(iii) and (iv) above, when made as of the Commencement Date or as of any
date on which you solicit offers to purchase Notes or on which the Company
accepts an offer to purchase Notes, shall be deemed not to cover information
concerning an offering of particular Notes to the extent such information will
be set forth in a supplement to the Basic Prospectus.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Michigan, has the
corporate power and authority to own its property and to conduct its busi-
-3-
<PAGE> 4
ness as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) This Agreement and any applicable Written Terms Agreement has
been duly authorized, executed and delivered by the Company.
(e) The Mortgage has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(f) The forms of Notes have been duly authorized and established in
conformity with the provisions of the Mortgage and, when the Notes have been
executed and authenticated in accordance with the provisions of the Mortgage
and delivered to and duly paid for by the purchasers thereof, the Notes will
be entitled to the benefits of the Mortgage and will be valid and binding
obligations of the Company, enforceable in accordance with their respective
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.
(g) The execution and delivery by the Company of this Agreement, the
Notes, the Mortgage and any applicable Written Terms Agreement, and the
performance by the Company of its obligations under, this Agreement, the Notes,
the Mortgage and any applicable Terms Agreement will not contravene any
provision of applicable law or the articles of incorporation or by-laws of the
Company or any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or any judgment, order or decree of any governmental body, agency
or court having
-4-
<PAGE> 5
jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of or qualification with any governmental
body or agency not already obtained is required for the performance by the
Company of its obligations under this Agreement, the Notes, the Mortgage and
any applicable Terms Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Notes.
(h) There has not been any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set forth in the
Prospectus.
(i) Other than as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are
not described, filed or incorporated as required.
(j) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, except to the extent that
the failure to obtain or file would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(k) The Company has good and marketable title to all properties
standing of record in its name (which includes, without limitation, all of
those properties, except pollution control facilities standing in the names of
certain municipalities which are being purchased by the Company pursuant to
installment sales contracts and the undivided ownership interest of Michigan
Public Power Agen-
-5-
<PAGE> 6
cy in a portion of the Belle River Power Plant, in each case as
described in the Prospectus, which constitute or on which there are erected its
principal plants, generating stations and substations and on which its general
office and service buildings are constructed and all other important parcels
of real estate) and improvements thereon, subject to the lien of the Mortgage
and 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 the Company
has adequate rights to maintain and operate such of its transmission and
distribution facilities as are located on public or other property not owned
by the Company.
(1) The Mortgage is a first lien (subject to no prior liens, charges,
encumbrances or security interests, except current taxes and assessments not
yet due and minor encumbrances which do not materially impair the use of such
property for the purpose for which it is held by the Company), duly filed and
recorded, on substantially all of the Company's tangible properties and
franchises (other than items purchased for resale in the ordinary course of
business) and (subject to the necessity for particular filings and
recordings in the case of certain personal property such as railroad rolling
stock) will constitute a like lien on any such properties hereafter acquired by
the Company except that any such after-property will be subject to
prior liens and encumbrances, if any, existing when acquired by the Company,
except that the Mortgage will not become a lien upon after-acquired real
property in a new county until it has been duly filed and recorded and except
that the Mortgage may not be effective as to property acquired subsequent to
the filing of a case with respect to the Company under the Bankruptcy Code.
2. Solicitations as Aqent; Purchases as Principal.
(a) Solicitations as Aqent. In connection with your actions as
agent hereunder, you agree to use reasonable efforts to solicit offers to
purchase Notes upon the terms and conditions set forth in the Prospectus as
then amended or supplemented.
The Company reserves the right, in its sole discretion, to instruct
you to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase Notes. Upon receipt of at least one
business
-6-
<PAGE> 7
day's prior notice from the Company, you will forthwith suspend solicitations
of offers to purchase Notes from the Company until such time as the Company
has advised you that such solicitation may be resumed. While such
solicitation is suspended, the Company shall not be required to deliver any
certificates, opinions or letters in accordance with Sections 5(a), 5(b) and
5(c); provided, however, that if the Registration Statement or Prospectus is
amended or supplemented during the period of suspension (other than by an
amendment or supplement providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on the
Notes or for a change you deem to be immaterial), you shall not be required to
resume soliciting offers to purchase Notes until the Company has delivered such
certificates, opinions and letters as you may reasonably request.
The Company agrees to pay to you, as consideration for the sale of
each Note resulting from a solicitation made or an offer to purchase received
by you, a commission, by means of a deduction from the proceeds of a sale of
Notes, equal to the applicable percentage of the public offering price of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule I hereto or such other discount as may be specified in
the Prospectus Supplement relating to such Note.
You shall communicate to the Company, orally or in writing, each offer
to purchase Notes received by you as agent that in your judgment should be
considered by the Company. The Company shall have the sole right to accept
offers to purchase Notes and may reject any offer in whole or in part. You
shall have the right to reject any offer to purchase Notes that you consider to
be unacceptable, and any such rejection shall not be deemed a breach of your
agreements contained herein. The procedural details relating to the issue
and delivery of Notes sold by you as agent and the pavement therefor shall be
as set forth in the Administrative Procedures (as hereinafter defined).
(b) Purchases as Principal. Each sale of Notes to you as principal
shall be made in accordance with the terms of this Agreement. In connection
with each such sale, the Company will enter into a Terms Agreement that will
provide for the sale of such Notes to and the purchase thereof by you. Each
Terms Agreement will take the form of either (i) a written agreement between
you and the Company, which may be substantially in the form of Exhibit A hereto
(a "Written Terms Agreement"), or (ii) an oral agreement
-7-
<PAGE> 8
between you and the Company confirmed in writing by you to the Company.
Your commitment to purchase Notes as principal, pursuant to a Terms
Agreement, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Notes to be purchased by you pursuant
thereto, the maturity date of such Notes, the price to be paid to the Company
for such Notes, the interest rate and interest rate formula, if any,
applicable to such Notes and any other terms of such Notes. Each such Terms
Agreement may also specify any requirements for officers' certificates,
opinions of counsel and letters from the independent auditors of the Company
pursuant to Section 4 hereof. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Notes by you.
Each Terms Agreement shall specify the time and place of delivery of
and payment for such Notes. Unless otherwise specified in a Terms Agreement,
the procedural details relating to the issue and delivery of Notes purchased
by you as principal and the payment therefor shall be as set forth in the
Administrative Procedures. Each date of delivery of and payment for Notes to
be purchased by you as principal pursuant to a Terms Agreement is referred to
herein as a "Settlement Date."
Unless otherwise specified in a Terms Agreement, if you are purchasing
Notes as principal you may resell such Notes to other dealers. Any such sales
may be at a discount, which shall not exceed the amount set forth in the
Prospectus Supplement relating to such Notes.
(c) Administrative Procedures. You and the Company agree to
perform the respective duties and obligations specifically provided to be
performed in the Secured Medium-Term Notes Administrative Procedures
(attached hereto as Exhibit B) (the "Administrative Procedures"), as amended
from time to time. The Administrative Procedures may be amended only by
written agreement of the Company and you.
(d) Delivery. The documents required to be delivered by Section 4
of this Agreement as a condition precedent to your obligation to begin
soliciting offers to purchase Notes as agent of the Company shall be delivered
at or telecopied and confirmed to (in which case, an origi-
-8-
<PAGE> 9
nal hard copy shall promptly be forwarded) the office of your counsel,
not later than 4:00 p.m., New York time, on the date hereof, or at such other
time and/or place as you and the Company may agree upon in writing, but in no
event later than the day prior to the earlier of (i) the date on which you
begin soliciting offers to purchase Notes and (ii) the first date on which the
Company accepts any offer by you to purchase Notes as principal. The date of
delivery of such documents is referred to herein as the "Commencement Date."
3. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the Notes pursuant to
this Agreement or any Terms Agreement, the Company will not file any
Prospectus Supplement relating to the Notes or any amendment to the
Registration Statement unless the Company has previously furnished to you a
copy thereof for your review and will not file any such proposed supplement or
amendment to which you reasonably object; provided, however, that the
foregoing requirement shall not apply to any of the Company's periodic filings
with the Commission required to be filed pursuant to Section 13(a),
13(c), 13(f), 14 or 15(d) of the Exchange Act, copies of which filings the
Company will cause to be delivered to you promptly after being transmitted for
filing with the Commission. Subject to the foregoing sentence, the
Company will promptly cause each Prospectus Supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b) under
the Securities Act. The Company will promptly advise you (i) of the filing of
any amendment or supplement to the Basic Prospectus, (ii) of the filing and
effectiveness of any amendment to the Registration Statement, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Basic Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose and (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company will use its
best efforts to prevent the issuance of any such stop order or notice of
suspension of qualification and, if issued, to obtain as soon as possible the
withdrawal thereof. If the Basic Prospectus is amended or supple-
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<PAGE> 10
mented as a result of the filing under the Exchange Act of any document
incorporated by reference in the Prospectus, you shall not be obligated to
solicit offers to purchase Notes so long as you are not reasonably satisfied
with such document.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Prospectus, as then amended or
supplemented, would include an untrue statement of a material fact, or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances when the prospectus, as then amended or supplemented, is
delivered to a purchaser, not misleading, or if, in your opinion or in the
opinion of the Company, it is necessary at any time to amend or supplement the
Prospectus, as then amended or supplemented, to comply with applicable law, the
Company will immediately notify you by telephone (with confirmation in writing)
to suspend solicitation of offers to purchase Notes and, if so notified by the
Company, you shall forth-with suspend such solicitation and cease using the
Prospectus, as then amended or supplemented. If the Company shall decide to
amend or supplement the Registration Statement or Prospectus, as then amended
or supplemented, it shall so advise you promptly by telephone (with
confirmation in writing) and, at its expense, shall prepare and cause to be
filed promptly with the Commission an amendment or supplement to the
Registration Statement or Prospectus, as then amended or supplemented,
satisfactory in all respects to you, that will correct such statement or
omission or effect such compliance and will supply such amended or supplemented
Prospectus to you in such quantities as you may reasonably request. If any
documents, certificates, opinions and letters furnished to you pursuant to
paragraph (f) below and Sections 5(a), 5(b) and 5(c) in connection with the
preparation and filing of such amendment or supplement are satisfactory in all
respects to you, upon the filing with the Commission of such amendment or
supplement to the Prospectus or upon the effectiveness of an amendment to the
Registration Statement, you will resume the solicitation of offers to purchase
Notes hereunder. Notwithstanding any other provision of this Section 3(b),
until the distribution of any Notes you may own as principal has been
completed, if any event described above in this paragraph (b) occurs, the
Company will, at its own expense, forthwith prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or Prospectus, as then amended or supplemented, satisfactory
-10-
<PAGE> 11
in all respects to you, will supply such amended or supplemented
Prospectus to you in such quantities as you may reasonably request and shall
furnish to you pursuant to paragraph (f) below and Sections 5(a), 5(b) and 5(c)
such documents, certificates, opinions and letters as you may request in
connection with the preparation and filing of such amendment or supplement.
(c) The Company will make generally available to its security holders
and to you as soon as practicable earning statements that satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder covering twelve month periods beginning, in each
case, not later than the first day of the Company's fiscal quarter next
following the "effective date" (as defined in Rule 158 under the Securities
Act) of the Registration Statement with respect to each sale of Notes. If
such fiscal quarter is the last fiscal quarter of the Company's fiscal year,
such earning statement shall be made available not later than 90 days after the
close of the period covered thereby and in all other cases shall be made
available not later than 45 days after the close of the period covered thereby.
(d) The Company will furnish to you, without charge, a signed copy of
the Registration Statement, including exhibits and all amendments thereto, and
as many copies of the Prospectus, any documents incorporated by reference
therein and any supplements and amendments thereto as you may reasonably
request.
(e) The Company will endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to maintain such qualifications for as long as you shall
reasonably request.
(f) During the term of this Agreement, the Company shall furnish to
you such relevant documents and certificates of officers of the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, the Basic Prospectus, any amendments or supplements
thereto, the Mortgage, the Notes, this Agreement, the Administrative
Procedures, any Terms Agreement and the performance by the Company of its
obligations hereunder or thereunder as you may from time to time reasonably
request and shall notify you promptly in writing of any downgrading, or of its
receipt of any notice of any intended or potential downgrading or of any
review for possible
-11-
<PAGE> 12
change that does not indicate the direction of the possible change, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.
(g) During the term of this Agreement, the Company will, whether or
not any sale of Notes is consummated, pay all expenses incident to the
performance of its obligations under this Agreement and any Terms Agreement,
including: (i) the preparation and filing of the Registration Statement and
the Prospectus and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Notes, (iii) the fees and
disbursements of the Company's counsel and accountants and of the Trustee and
their counsel, (iv) the qualification of the Notes under securities or Blue
Sky laws in accordance with the provisions of Section 3(e), including filing
fees and the fees and disbursements of your counsel in connection therewith
and in connection with the preparation of any Blue Sky or Legal Investment
Memoranda, (v) the printing and delivery to you in quantities as hereinabove
stated of copies of the Registration Statement and all amendments thereto and
of the Basic Prospectus and any amendments or supplements thereto, (vi) the
printing and delivery to you of copies of the Mortgage and any Blue Sky or
Legal Investment Memoranda, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers,
Inc., (ix) the fees and disbursements of your counsel incurred in connection
with the offering and sale of the Notes, including any opinions to be rendered
by such counsel hereunder, and (x) any reasonable out-of-pocket expenses
incurred by you; provided that any advertising expenses incurred by you shall
have been approved by the Company.
(h) Between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without your prior
consent, offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company substantially similar to such Notes (other than (i)
the Notes that are to be sold pursuant to such Terms Agreement, (ii) Notes
previously determined to be sold by the Company and disclosed to the relevant
Agent or Agents (including, without limitation, Mortgage Bonds collateralizing
industrial development revenue bonds) and (iii) commercial paper issued in
the ordinary
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<PAGE> 13
course of business), except as may otherwise be provided in such Terms
Agreement.
4. Conditions of the Obliqations of the Agents. Your obligation to
solicit offers to purchase Notes as agent of the Company, your obligation to
purchase Notes as principal pursuant to any Terms Agreement and the obligation
of any other purchaser to purchase Notes will be subject to the accuracy
of the representations and warranties on the part of the Company herein, to the
accuracy of the statements of the Company's officers made in each certificate
furnished pursuant to the provisions hereof and to the performance and
observance by the Company of all covenants and agreements herein contained on
its part to be performed and observed (in the case of your obligation to
solicit offers to purchase Notes, at the time of such solicitation, and, in
the case of your or any other purchaser's obligation to purchase Notes, at
the time the Company accepts the offer to purchase such Notes and at the time
of purchase) and (in each case) to the following additional conditions
precedent when and as specified:
(a) Prior to such solicitation or purchase, as the case may be:
(i) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus, as
amended or supplemented at the time of such solicitation or at the time
such offer to purchase was made, that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market the
Notes on the terms and in the manner contemplated by the Prospectus, as so
amended or supplemented;
(ii) there shall not have occurred any (A) suspension or material
limitation of trading generally on or by, as the case may be, the New York
Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (B) suspension of
trading of any securities of the Company on any exchange or in any
over-the-counter market, (C) declaration of a general moratorium on
commercial banking activities in New York by either Federal or New York
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<PAGE> 14
State authorities or (D) any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in your
judgment, is material and adverse and, in the case of any of the events
described in clauses (ii)(A) through (D), such event, singly or together
with any other such event, makes it, in your judgment, impracticable to
market the Notes on the terms and in the manner contemplated by the
Prospectus, as amended or supplemented at the time of such solicitation or
at the time such offer to purchase was made; and
(iii) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act;
(A) except, in each case described in paragraph (i), (ii) or (iii)
above, as disclosed to you in writing by the Company prior to such
solicitation or, in the case of a purchase of Notes, before the offer to
purchase such Notes was made or (B) unless in each case described in (ii)
above, the relevant event shall have occurred and been known to you prior to
such solicitation or, in the case of a purchase of Notes, before the offer
to purchase such Notes was made.
(b) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, you shall have received:
(i) The opinion, dated as of such date, of the General Counsel of the
Company, to the effect that:
(A) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Michigan, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus,
as amended or supplemented, and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of
its business or its
-14-
<PAGE> 15
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its consolidated subsidiaries, taken as a whole;
(B) the Company has all necessary consents, authorizations,
approvals, orders, certificates and permits of and from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Prospectus, as amended or
supplemented, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
consolidated subsidiaries, taken as a whole;
(C) each of this Agreement and any applicable Written Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(D) the Mortgage has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(E) the forms of Notes have been duly authorized and
established in conformity with the provisions of the Mortgage and,
when the Notes are executed by the Company and authenticated by the
Trustee or its duly appointed agent in accordance with the provisions
of the Mortgage and delivered to and duly paid for by the
purchasers thereof on
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<PAGE> 16
the date of such opinion, the Notes will be entitled to the
benefits of the Mortgage and would be valid and binding obligations of
the Company, enforceable in accordance with their respective terms
except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(F) the execution and delivery by the Company of the Notes,
the Mortgage and any applicable Written Terms Agreement, and the
performance by the Company of its obligations under, this Agreement,
the Notes, the Mortgage and any applicable Terms Agreement will not
contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or, to the best of such
counsel's knowledge after due inquiry, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its consolidated subsidiaries, taken as a
whole, or, to the best of such counsel's knowledge after due inquiry,
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of or qualification with
any governmental body or agency not already obtained is required for
the performance by the Company of its obligations under this
Agreement, the Notes, the Mortgage and any applicable Terms
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Notes;
(G) the statments (1) in the Prospectus Supplement as of
the date hereof, under the captions "Description of Secured Medium-
Term Notes, Series "and "Plan of Distribution" and (2) in'the
Basic Prospectus, as supplemented as of the date hereof,
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<PAGE> 17
under the caption "Description of General and Refunding
Mortgage Bonds" (except insofar as such statements specify the
amount of bonds which could be issued), in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(H) after due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus, as then amended or supplemented, and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus, as then amended or supplemented, or to
be filed or incorporated by reference as exhibits to such Registration
Statement that are not described, filed or incorporated by reference
as required;
(I) such counsel (1) is of the opinion that each document
filed pursuant to the Exchange Act and incorporated by reference in
the Prospectus, as then amended or supplemented (except for
financial statements and schedules included therein as to which such
counsel need not express any opinion), complied when so filed as to
form in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (2) believes
that (except for financial statements and schedules indicated
therein and that part of the Registration Statement that constitutes
the Forms T-1 heretofore referred to as to which such counsel need not
express any belief) each part of the Registration Statement, as then
amended, if applicable, when such part
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<PAGE> 18
became effective did not, and as of the date such opinion is
delivered, does not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (3) is of
the opinion that the Registration Statement and Prospectus, as then
amended or supplemented, if applicable (except for the content of
the financial statements and schedules included therein as to which
such counsel need not express any opinion), comply as to form in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder including such rules and
regulations as govern the financial statements required to be included
therein and (4) believes that (except for financial statements and
schedules indicated therein as to which such counsel need not
express any belief) the Prospectus, as then amended or supplemented,
if applicable, as of the date such opinion is delivered does not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that in the case of an opinion delivered on the
Commencement Date or pursuant to Section 5(b), the opinion and
belief set forth in clauses (3) and (4) above shall be deemed not to
cover information concerning an offering of particular Notes to the
extent such information will be set forth in a supplement to the
Basic Prospectus;
(J) the Company has good and marketable title to all
properties standing of record in its name (which includes, without
limitation, all of those properties, except pollution control
facilities standing in the names of certain municipalities which are
being purchased by the Company pursuant to installment sales contracts
and the undivided ownership interest of Michigan Public Power Agency
in a portion of the Belle River Power Plant, in each case as
described in
-18-
<PAGE> 19
the Prospectus, which constitute or on which there are erected
its principal plants, generating stations and substations and on which
its general office and service buildings are constructed and all
other important parcels of real estate) and improvements thereon,
subject to the lien of the Mortgage and 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 the Company has
adequate rights to maintain and operate such of its transmission and
distribution facilities as are located on public or other property not
owned by the Company; and
(K) the Mortgage is a first lien (subject to no prior
liens, charges, encumbrances or security interests, except current
taxes and assessments not yet due and minor encumbrances which, in
such counsel's opinion, do not materially impair the use of such
property for the purpose for which it is held by the Company), duly
filed and recorded, on substantially all of the Company's tangible
properties and franchises (other than items purchased for resale in
the ordinary course of business) and (subject to the necessity for
particular filings and recordings in the case of certain personal
property such as railroad rolling stock) will constitute a like lien
on any such properties hereafter acquired by the Company except that
any such after-acquired property will be subject to prior liens and
encumbrances, if any, existing when acquired by the Company, except
that the Mortgage will not become a lien upon after-acquired real
property in a new county until it has been duly filed and recorded and
except that the Mortgage may not be effective as to property acquired
subsequent to the filing of a case with respect to the Company under
the Bankruptcy Code.
(ii) The opinion, dated as of such date, of ________ your special
counsel, covering the matters in
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<PAGE> 20
subparagraphs (C), (D), (E) and (G) (with respect to statements in
the Prospectus, as then amended or supplemented, under the captions
"Description of Notes" (in the Prospectus Supplement), "Description of
Debt Securities" (in the Basic Prospectus) and "Plan of Distribution" (in
the Prospectus Supplement and in the Basic Prospectus)) and clauses (2),
(3) and (4) of subparagraph (I) in paragraph (b)(i) above, with such
changes therein as you may approve.
With respect to subparagraph (I) of paragraph (b)(i) above, the
General Counsel of the Company may state that his opinion and belief are
based upon his participation, or the participation of someone under his
supervision, in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as
specified. With respect to clauses (2), (3) and (4) of subparagraph
(I) of paragraph (b)(i) above, may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus (or review thereof) and any amendments or
supplements thereto (but not including documents incorporated therein by
reference) and review and discussion of the contents thereof (including
documents incorporated therein by reference), but are without independent
check or verification, except as specified.
(c) On the Commencement Date and, if called for by any Terms
Agreement, on the corresponding Settlement Date, you shall have received a
certificate, dated such Commencement Date or Settlement Date, as the case may
be, signed by an executive officer of the Company to the effect set forth in
subparagraph (a)(iii) above and to the effect that the representations and
warranties of the Company contained herein are true and correct as of such date
and that the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied on or before such
date and that there have been no material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus, as
supplemented.
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<PAGE> 21
The officer signing and delivering such certifi-
cate may rely upon the best of his knowledge as to proceed-
ings threatened.
(d) On the Commencement Date and, if called for
by any Terms Agreement, on the corresponding Settlement
Date, the Company's independent auditors shall have fur-
nished to you a letter or letters, dated as of the Com-
mencement Date or such Settlement Date, as the case may be,
in form and substance satisfactory to you containing state-
ments and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial informa-
tion contained in or incorporated by reference into the
Prospectus, as then amended or supplemented.
(e) On the Commencement Date and on each Settle-
ment Date, the Company shall have furnished to you such
appropriate further information, certificates and documents
as you may reasonably request.
5. Additional Aqreements of the Company. (a)
Each time the Registration Statement or Prospectus is amen-
ded or supplemented (other than by an amendment or supple-
ment providing solely for a change in the interest rates,
redemption provisions, amortization schedules or maturities
offered on the Notes or for a change you deem to be immate-
rial), the Company will deliver or cause to be delivered
forthwith to you a certificate signed by an executive offi-
cer of the Company, dated the date of such amendment or
supplement, as the case may be, in form reasonably satis-
factory to you, of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration
Statement or the Prospectus as amended or supplemented to
the time of delivery of such certificate.
(b) Each time the Company furnishes a certifi-
cate pursuant to Section 5(a), the Company will furnish or
cause to be furnished forthwith to you a written opinion of
counsel for the Company. Any such opinion shall be dated
the date of such amendment or supplement, as the case may
be, shall be in a form satisfactory to you and shall be of
the same tenor as the opinion referred to in Section
4(b)(i), but modified to relate to the Registration State-
ment and the Prospectus as amended and supplemented to the
time of delivery of such opinion. In lieu of such opinion,
counsel last furnishing such an opinion to you may furnish
to you a letter to the effect that you may rely on such
last opinion to the same extent as though it were dated the
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<PAGE> 22
date of such letter (except that statements in such last
opinion will be deemed to relate to the Registration State-
ment and the Prospectus as amended or supplemented to the
time of delivery of such letter.)
(c) Each time the Registration Statement or the
Prospectus is amended or supplemented to set forth amended
or supplemental financial information or such amended or
supplemental information is incorporated by reference in
the Registration Statement or the Prospectus, the Company,
upon the written request of an Agent, shall cause its inde-
pendent public accountants forthwith to furnish you with a
letter, dated the date of such amendment or supplement, as
the case may be, in form satisfactory to you, of the same
tenor as the letter referred to in Section 4(d), with
regard to the amended or supplemental financial information
included or incorporated by reference in the Registration
Statement or the Prospectus as amended or supplemented to
the date of such letter.
6. Indemnification and Contribution. (a) The
Company agrees to indemnify and hold harmless you and each
person, if any, who controls you within the meaning of
either Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any and all losses,
claims, damages and liabilities (including, without limita-
tion, any legal or other expenses reasonably incurred by
you or any such controlling person in connection with
investigating or defending any such action or claim) caused
by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or in
any amendment thereof or the Prospectus (as amended or
supplemented if the Company shall have furnished any amend-
ments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to you furnished
to the Company in writing by you expressly for use therein.
(b) You agree to indemnify and hold harmless the
Company, its directors, its officers who sign the Registra-
tion Statement and each person, if any, who controls the
Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to
you, but only with reference to information relating to you
-22-
<PAGE> 23
furnished to the Company in writing by you expressly for
use in the Registration Statement or the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any gov-
ernmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant
to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person
against whom such indemnity may be sought (the "indemni-
fying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to repre-
sent the indemnified party and any others the indemnifying
party may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing inter-
ests between them. It is understood that the indemnifying
party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for
the reasonable fees and expenses of more than one separate
firm (in addition to one local counsel) for all such indem-
nified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be desig-
nated in writing by you, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the
case of parties indemnified pursuant to paragraph (b)
above. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judg-
ment. Notwithstanding the foregoing sentence, if at any
time an indemnified party shall have requested an indemni-
fying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the third sentence
of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding
-23-
<PAGE> 24
effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemni-
fied party in accordance with such request prior to the
date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceed-
ing in respect of which any indemnified party is or could
have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in para-
graph (a) or (b) of this Section 6 is unavailable to an
indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein in con-
nection with any offering of Notes, then each indemnifying
party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the rela-
tive benefits received by the Company on the one hand and
you on the other hand from the offering of such Notes or
(ii) if the allocation provided by clause (i) is not per-
mitted by applicable law, in such proportion as is appro-
priate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the
Company on the one hand and you on the other hand in con-
nection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative
benefits received by the Company on the one hand and you on
the other hand in connection with the offering of such
Notes shall be deemed to be in the same respective propor-
tions as the total net proceeds from the offering of such
Notes (before deducting expenses) received by the Company
bear to the total discounts and commissions received by you
in respect thereof. The relative fault of the Company on
the one hand and of you on the other hand shall be deter-
mined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact
relates to information supplied by the Company or by you
and the parties' relative intent, knowledge, access to
-24-
<PAGE> 25
information and opportunity to correct or prevent such
statement or omission.
(e) The Company and you agree that it would not
be just or equitable if contribution pursuant to this Sec-
tion 6 were determined by pro rata allocation or by any
other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indem-
nified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions
of this Section 6, you shall not be required to contribute
any amount in excess of the amount by which the total price
at which the Notes referred to in paragraph (d) above that
were offered and sold to the public through you exceeds the
amount of any damages that you have otherwise been required
to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contrib-
ution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Sec-
tion 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemni-
fied party at law or in equity.
7. Position of the Agent. In acting under this
Agreement and in connection with the sale of any Notes by
the Company (other than Notes sold to you as principal),
you are acting solely as agent of the Company and do not
assume any obligation towards or relationship of agency or
trust with any purchaser of Notes. You shall make reason-
able efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Notes has been
solicited by you and accepted by the Company, but you shall
not have any liability to the Company in the event any such
purchase is not consummated for any reason. If the Company
shall default in its obligations to deliver Notes to a pur-
chaser whose offer it has accepted, the Company shall hold
you harmless against any loss, claim, damage or liability
arising from or as a result of such default and shall, in
particular, pay to you the commission you would have
received had such sale been consummated.
-25-
<PAGE> 26
8. Termination. This Agreement may be termi-
nated at any time either by the Company or by you upon the
giving of written notice of such termination to the other
party hereto, but without prejudice to any rights, obliga-
tions or liabilities of either party hereto accrued or
incurred prior to such termination. The termination of
this Agreement shall not require termination of any Terms
Agreement, and the termination of any such Terms Agreement
shall not require termination of this Agreement. If this
Agreement is terminated, the provisions of the third para-
graph of Section 2(a), the last sentence of Section 3(b)
and Sections 3(c), 3(g), 6, 7, 9, 11 and 13 shall survive;
provided that if at the time of termination an offer to
purchase Notes has been accepted by the Company but the
time of delivery to the purchaser or its agent of such
Notes has not occurred, the provisions of Sections 2(b),
2 (c) , 3 (a), 3 (b), 3 (e), 3 (f) , 3 (h), 4 and 5 shall also
survive until such delivery has been made.
9. Representations and Indemnities to Survive.
The respective indemnity and contribution agreements,
representations, warranties and other statements of the
Company, its officers and you set forth in or made pursuant
to this Agreement or any Terms Agreement will remain in
full force and effect, regardless of any termination of
this Agreement or any such Terms Agreement, any investiga-
tion made by or on behalf of you or the Company or any of
the officers, directors or controlling persons referred to
in Section 6 and delivery of and payment for the Notes.
10. Notices. All communications hereunder will
be in writing and effective only on receipt, and, if sent
to you, will be mailed, delivered or telefaxed and con-
firmed if to [names, addresses and telefax numbers of
Agents]; or, if sent to the Company, will be mailed, deliv-
ered or telefaxed and confirmed to the Company at 2000
Second Avenue, Detroit, Michigan 48226, Attention:
(telefax number: (313) 237-9470).
11. Successors. This Agreement and any Terms
Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in
Section 6 and the purchasers of Notes (to the extent ex-
pressly provided in Section 4), and no other person will
have any right or obligation hereunder.
12. Counterparts. This Agreement may be signed
in any number of counterparts, each of which shall be an
-26-
<PAGE> 27
original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
13. APPLICABLE LAW. THIS AGREEMENT WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
14. Headings. The headings of the sections of
this Agreement have been inserted for convenience of refer-
ence only and shall not be deemed a part of this Agreement.
-27-
<PAGE> 28
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to
us the enclosed duplicate hereof, whereupon this letter and
your acceptance shall represent a binding agreement between
the Company and you.
Very truly yours,
THE DETROIT EDISON COMPANY
By______________________
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
[ NAME OF AGENT ]
By __________________________
Title:
[ NAME OF AGENT ]
By __________________________
Title:
[NAME OF AGENT]
By __________________________
Title:
-28 -
<PAGE> 29
EXHIBIT A
THE DETROIT EDISON COMPANY
SECURED MEDIUM-TERM NOTES, SERIES
TERMS AGREEMENT
_________________, 19____
[Name and Address of
Agent ]
Attention:
Re: Distribution Agreement dated ________________,
(the "Distribution Aqreement")
The undersigned agrees to purchase your Secured
Medium-Term Notes, Series _, having the following
terms:
Principal Interest
Amount: Rate:
Purchase Applicability
Price: of Modified
Payment upon
Acceleration:
Price to
Public:
If yes, state
Settlement issue price:
Date and Time:
Place of Amortization
Delivery: Schedule:
A-1
<PAGE> 30
EXHIBIT A
Face Amount Applicability
(if any): of Annual
Interest
Original Issue Payments:
Date:
Interest Accrual
Date:
Maturity
Date:
Initial Accrual
Period OID:
Total Amount of
OID:
Original Yield
to Maturity:
Optional Repayment
Date(s):
Optional Redemption
Date(s):
Initial Redemption
Date:
Initial Redemption
Percentage:
Annual Redemption
Percentage
Reduction:
Other Terms:
The provisions of Sections 1, 2(b) and 2(c) and 3
through 6 and 9 through 13 of the Distribution Agreement
and the related definitions are incorporated by reference
A-2
<PAGE> 31
EXHIBIT A
herein and shall be deemed to have the same force and
effect as if set forth in full herein.
This Agreement is subject to termination on the
terms incorporated by reference herein. If this Agreement
is so terminated, the provisions of Sections 3(g), 6, 9, 11
and 13 of the Distribution Agreement shall survive for the
purposes of this Agreement.
The following information, opinions, certifi-
cates, letters and documents referred to in Section 4 of
the Distribution Agreement will be required: ____________
[ NAME OF AGENT ]
By__________________
Title:
Accepted:
THE DETROIT EDISON COMPANY
By________________________
Title:
A-3
<PAGE> 32
EXHIBIT B
THE DETROIT EDISON COMPANY
SECURED MEDIUM-TERM NOTES, SERIES _
ADMINISTRATIVE PROCEDURES
_________________________
Explained below are the administrative procedures
and specific terms of the offering of Secured Medium-Term
Notes, 1993 Series _ (the "Notes"), on a continuous basis
by The Detroit Edison Company (the "Company") pursuant to
the Distribution Agreement, dated , (the "Dis-
tribution Agreement") between the Company and [names of
Agents] (each an "Agent" and collectively the "Agents").
The Notes are to be issued under and secured by the Mort-
gage and Deed of Trust dated as of October 1, 1924 between
the Company and Bankers Trust Company, as trustee (the
"Trustee"), as amended and supplemented by various Supple-
mental Indentures and as to be further amended and supple-
mented by a Supplemental Indenture dated as of ,
creating the Notes (the "Mortgage"). Reference is
hereby made to the Mortgage for full and complete state-
ments of the provisions thereof, including the definitions
of certain terms used, and for other information with
respect to the Note. In the Distribution Agreement, the
Agent has agreed to use reasonable efforts to solicit pur-
chases of the Notes, and the administrative procedures
explained below will govern the issuance and settlement of
any Notes sold through the Agent, as agent of the Company.
An Agent, as principal, may also purchase Notes for its own
account, and if requested by such Agent, the Company and
the Agent will enter into a terms agreement (a "Terms
Agreement"), as contemplated by the Distribution Agreement.
The administrative procedures explained below will govern
the issuance and settlement of any Notes purchased by an
Agent, as principal, unless otherwise specified in the
applicable Terms Agreement.
Bankers Trust Company ("Bankers Trust") will be
the Paying Agent for the Notes and will perform the duties
specified herein. Each Note will be represented by a
Global Security (as defined below) delivered to Bankers
Trust, as agent for The Depository Trust Company ("DTC"),
B-1
<PAGE> 33
EXHIBIT B
and recorded in the book-entry system maintained by DTC (a
"Book-Entry Note").
Book-Entry Notes, which may be payable only in
U.S. dollars, will be issued in accordance with the admin-
istrative procedures set forth herein as they may subse-
quently be amended as the result of changes in DTC's oper-
ating procedures. Unless otherwise defined herein, terms
defined in the Mortgage, the Notes or any Prospectus Sup-
plement relating to the Notes shall be used herein as
therein defined.
The Company will advise the Agents in writing of
the employees of the Company with whom the Agents are to
communicate regarding offers to purchase Notes and the
related settlement details.
In connection with the qualification of the Book-
Entry Notes for eligibility in the book-entry system main-
tained by DTC, Bankers Trust will perform the custodial,
document control and administrative functions described
below, in accordance with its respective obligations under
a Letter of Representations from the Company and Bankers)
Trust to DTC, dated as of , (the "Letter of
Representations"), and a Medium-Term Note Certificate
Agreement between Bankers Trust and DTC, dated as of Octo-
ber 21, 1988, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: On any date of settlement (as de-
fined under "Settlement" below)
for one or more Book-Entry Notes,
the Company will issue one or more
global securities in fully regis-
tered form without coupons (col-
lectively the "Global Security"),
registered in the name of Cede &
Co. representing up to U.S.
$200,000,000 principal amount of
all such Notes that have the same
Original Issue Date, Maturity Date
and other terms. Each Global
Security will be dated and issued
as of the date of its authentica-
tion by Bankers Trust. Each
Global Security will bear an
B-2
<PAGE> 34
EXHIBIT B
"Interest Accrual Date," which
will be (i) with respect to an
original Global Security (or any
portion thereof), its original
issuance date and (ii) with
respect to any Global Security (or
any portion thereof) issued subse-
quently upon exchange of a Global
Security, or in lieu of a
destroyed, lost or stolen Global
Security, the most recent Interest
Payment Date to which interest has
been paid or duly provided for on
the predecessor Global Security or
Securities (or if no such payment
or provision has been made, the
original issuance date of the
predecessor Global Security),
regardless of the date of authen-
tication of such subsequently
issued Global Security.
Book-Entry Notes may be payable
only in U.S. dollars.
Identification The Company has arranged with the
Numbers: CUSIP Service Bureau of Standard &
Poor's Ratings Services (the "CUSIP
Service Bureau") for the reserva-
tion of a series of approximately
900 CUSIP numbers (including
tranche numbers) for assignment to
the Global Securities representing
the Book-Entry Notes. The Company
has obtained from the CUSIP Ser-
vice Bureau a written list of each
series of reserved CUSIP numbers
and has delivered to the Bankers
Trust and DTC the written list of
900 CUSIP numbers of such series.
Bankers Trust will assign CUSIP
numbers to Global Securities. DTC
will notify the CUSIP Service
Bureau periodically of the CUSIP
numbers that the Bankers Trust has
assigned to Global Securities. At
any time when fewer than 100 of
B-3
<PAGE> 35
EXHIBIT B
the reserved CUSIP numbers of
either series remain unassigned to
Global Securities, Bankers Trust
shall so advise the Company and,
if it deems necessary, the Company
will reserve additional CUSIP
numbers for assignment to Global
Securities representing Book-Entry
Notes. Upon obtaining such addi-
tional CUSIP numbers, the Company
shall deliver a list of such addi-
tional CUSIP numbers to Bankers
Trust and DTC.
Denominations: Book-Entry Notes will be issued in
principal amounts of U.S. $1,000
or any amount in excess thereof
that is an integral multiple of
U.S. $1,000. Global Securities
will be denominated in principal
amounts not in excess of U.S.
$200,000,000. If one or more
Book-Entry Notes having an aggre-
gate principal amount in excess of
$200,000,000 would, but for the
preceding sentence, be represented
by a single Global Security, then
one Global Security will be issued
to represent each U.S.
$200,000,000 principal amount of
such Book-Entry Note or Notes and
an additional Global Security will
be issued to represent any remain-
ing principal amount of such Book-
Entry Note or Notes. In such a
case, each of the Global Secur-
ities representing such Book-Entry
Note or Notes shall be assigned
the same CUSIP number.
Manner of Payment: The total amount of any principal
and interest due on Global Securi-
ties on any Interest Payment Date
or at maturity or upon redemption
or repayment shall be paid by the
Company to Bankers Trust in funds
B-4
<PAGE> 36
EXHIBIT B
available for immediate use by
Bankers Trust not later than 9:30
A.M. (New York City time) on such
date. The Company will make such
payment on such Global Securities
by instructing the Bankers Trust
to withdraw funds from an account
maintained by the Company at Bank-
ers Trust. The Company will con-
firm such instructions in writing
to Bankers Trust. Payment shall
be made prior to 10:00 A.M. (New
York City time) or as soon there-
after as practicable, on each
Maturity Date or redemption or
repayment date or, if either such
date is not a Business Day, as
soon as possible thereafter, Bank-
ers Trust will pay by separate
wire transfer (using Fedwire mes-
sage entry instructions in a form
previously specified by DTC) to an
account at the Federal Reserve
Bank of New York previously speci-
fied by DTC, in funds available
for immediate use by DTC, each
payment of principal (together
with interest thereon) due on
Global Securities or Maturity Date
or redemption or repayment date.
On each Interest Payment Date or,
if any such date is not a Business
Day, as soon as possible thereaf-
ter, interest payments and, in the
case of Amortizing Notes, interest
and principal payments shall be
made to DTC in same day funds in
accordance with existing arrange-
ments between Bankers Trust and
DTC. Thereafter on each such
date, DTC will pay, in accordance
with its SDFS operating procedures
then in effect, such amounts in
funds available for immediate use
to the respective participants in
whose names the Book-Entry Notes
B-5
<PAGE> 37
EXHIBIT B
represented by such Global Securi-
ties are recorded in the book-
entry system maintained by DTC.
Neither the Company nor Bankers
Trust shall have any responsibili-
ty or liability for the payment by
DTC to such participants of the
principal of an interest on the
Book-Entry Notes.
Withholding Taxes: The amount of any taxes required
under applicable law to be with-
held from any interest payment on
a Book-Entry Note will be deter-
mined and withheld by the partici-
pant, indirect participant in DTC
or other person responsible for
forwarding payments directly to
the beneficial owner of such Note.
Preparation If any order to purchase a Book-
of Pricing Entry Note is accepted by or on
Supplement: behalf of the Company, the Company
will prepare a pricing supplement
(a "Pricing Supplement") reflect-
ing the terms of such Note. The
Company (i) will arrange to file
10 copies of such Pricing Supple-
ment with the Commission in ac-
cordance with the applicable para-
graph of Rule 424(b) under the Act
and (ii) will, as soon as possible
and in any event not later than
the date on which such Pricing
Supplement is filed with the Com-
mission, deliver the number of
copies of such Pricing Supplement
to the Agent as the Agent shall
request. The Agent will cause
such Pricing Supplement to be
delivered to the purchaser of the
Note.
In each instance that a Pricing
Supplement is prepared, the Agent
will affix the Pricing Supplement
B-6
<PAGE> 38
EXHIBIT B
to Prospectuses prior to their
use. Outdated Pricing Supple-
ments, and the Prospectuses to
which they are attached (other
than those retained for files),
will be destroyed.
Settlement: The receipt by the Company of
immediately available funds in
payment for a Book-Entry Note and
the authentication and issuance of
the Global Security representing
such Note shall constitute "set-
tlement" with respect to such
Note. All orders accepted by the
Company will be settled on the
fifth Business Day pursuant to the
timetable for settlement set forth
below unless the Company and the
purchaser agree to settlement on
another day, which shall be no
earlier than the next Business
Day.
Settlement Settlement Procedures with
Procedures: regard to each Book-Entry Note
sold by the Company to or through
the Agent (unless otherwise speci-
fied pursuant to a Terms Agree-
ment), shall be as follows:
A. The Agent will advise the
Company by telephone that such
Note is a Book-Entry Note and
of the following settlement
information:
1. Principal amount.
2. Maturity Date.
3. The Interest Rate, whether
such Note will pay
interest annually or
semiannually, the
Interest Payment
Date or Dates specifying
B-7
<PAGE> 39
EXHIBIT B
the Initial Interest
Payment Date and
whether such
Note is an Amortizing
Note, and, if so, the
amortization schedule.
4. Redemption or repayment
provisions, if any.
5. Settlement date and time
(Original Issue Date).
6. Interest Accrual Date.
7. Price.
8. Net proceeds to Company.
9. Agent's commission, if
any, determined as
provided in the
Distribution Agreement.
10. Whether the Note is an
Original Issue Discount
Note (an "OID Note"), and
if it is an OID Note, the
total amount of OID, the
yield to maturity, the
initial accrual period
OID and the applica-
bility of Modified
Payment upon Accelera-
tion (and, if so,
the Issue Price).
11. Any other applicable
terms.
B. The Company will advise
Bankers Trust by telephone or
electronic transmission (con-
firmed in a written request
for authentication and
delivery at any time on the
same date) of the
information set forth in
Settlement Procedure
B-8
<PAGE> 40
EXHIBIT B
"A" above. Bankers Trust will
then assign a CUSIP number to
the Global Security represent-
ing such Note and will notify
the Company and the Agent of
such CUSIP number by telephone
as soon as practicable.
C. Bankers Trust will enter a
pending deposit message
through DTC's Participant
Terminal System, providing the
following settlement informa-
tion to DTC, the Agent and
Standard & Poor's Corporation:
1. The information set forth
in Settlement Procedure
"A."
2. The Initial Interest Pay-
ment Date for such Note,
the number of days by
which such date succeeds
the related DTC Record
Date which shall be the
Record Date as defined in
the Note) and the amount
of interest payable on
such Initial Interest
Payment Date.
3. The CUSIP number of the
Global Security represent-
ing such Note.
4. Whether such Global Secu-
rity will represent any
other Book-Entry Note (to
the extent known at such
time).
5. Whether such Note is an
Amortizing Note (by an
appropriate notation in
the comments field of
B-9
<PAGE> 41
EXHIBIT B
DTC's participant
Terminal System).
6. The number of
participant accounts
to be maintained
by DTC on behalf of
the Agent and
Bankers Trust.
D. Bankers Trust will
complete and authent-
icate the Global Security
representing such
Note and will send a
copy by first class mail
to the Company.
E. DTC will credit such
Note to Bankers Trust's
participant account at
DTC.
F. Bankers Trust will enter
an SDFS deliver order
through DTC's Partici-
pant Terminal System
instructing DTC to (i)
debit such Note to Bankers
Trust's participant
account and credit such
Note to the Agent's
participant account
and (ii) debit the Agent's
settlement account and
credit Bankers Trust's
settlement account for
an amount equal to the
price of such Note less
the Agent's commission,
if any. The entry of
such a deliver order
shall constitute a
representation and
warranty by Bankers
Trust to DTC that
(a) the Global Security
representing such Book-
Entry Note has been
issued and authenti-
cated and (b) Bankers
Trust is holding such
Global Security
pursuant to the Medium
Term Note Certificate
Agreement between
Bankers Trust and DTC.
B-10
<PAGE> 42
EXHIBIT B
G. Unless the Agent is the end
purchaser of such Note, the
Agent will enter an SDFS
deliver order through DTC's
Participant Terminal System
instructing DTC (i) to debit
such Note to the Agent's
participant account and
credit such Note to the
participant accounts of
the Participants with
respect to such Note and
(ii) to debit the settlement
accounts of such Partici-
pants and credit the
settlement account of the
Agent for an amount equal
to the price of such Note.
H. Transfers of funds in accor-
dance with SDFS deliver
orders described in Settle-
ment Procedures "F" and
"G" will be settled in
accordance with SDFS
operating procedures in
effect on the settlement
date.
I. Bankers Trust will credit to
the account of the Company
(Account # 00-007-907 at
Bankers Trust Company, New
York, New York), in funds
available for immediate
use in the amount trans-
ferred to Bankers Trust in
accordance with Settlement
Procedure "F".
J. Unless the Agent is the end
purchaser of such Note, the
Agent will confirm the pur-
chase of such Note to the
purchaser either by
transmitting to the
Participants with respect
to such Note a confirma-
tion order or orders
through DTC's institutional
delivery system or by
mailing
B-11
<PAGE> 43
EXHIBIT B
a written confirmation to such
purchaser.
K. Monthly, Bankers Trust will
send to the Company a state-
ment setting forth the princi-
pal amount of Notes outstand-
ing as of that date under the
Mortgage and setting forth a
brief description of any sales
of which the Company has
advised Bankers Trust that
have not yet been settled.
Settlement For sales by the Company of Book-
Procedures Entry Notes to or through the
Timetable: Agent (unless otherwise specified
pursuant to a Terms Agreement) for
settlement on the first Business
Day after the sale date, Settle-
ment Procedures "A" through "J"
set forth above shall be completed
as soon as possible but not later
than the respective times in New
York City set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on settlement date
E 10:00 A.M. on settlement date
F-G 2:00 P.M. on settlement date
H 4:45 P.M. on settlement date
I-J 5:00 P.M. on settlement date
If a sale is to be settled more
than one Business Day after the
sale date, Settlement Procedures
"A", "B" and "C" shall be
completed as soon as practicable
but no later than 11:00 A.M.,
12 Noon and 2:00 P.M.,
respectively, on the
B-12
<PAGE> 44
EXHIBIT B
first Business Day after the sale
date.
If settlement of a Book-Entry Note
is rescheduled or cancelled, Bank-
ers Trust, after receiving notice
from the Company or the Agent,
will deliver to DTC, through DTC's
Participant Terminal System, a
cancellation message to such
effect by no later than 2:00 P.M.
on the Business Day immediately
preceding the scheduled settlement
date.
Failure If Bankers Trust fails to enter an
to Settle: SDFS deliver order with respect to
a Book-Entry Note pursuant to Set-
tlement Procedure "F", Bankers
Trust may deliver to DTC, through
DTC's Participant Terminal System,
as soon as practicable a withdraw-
al message instructing DTC to
debit such Note to Bankers Trust's
participant account, provided that
Bankers Trust's participant
account contains a principal
amount of the Global Security
representing such Note that is at
least equal to the principal
amount to be debited. If a with-
drawal message is processed with
respect to all the Book-Entry
Notes represented by a Global
Security, Bankers Trust will mark
such Global Security "cancelled,"
make appropriate entries in Bank-
ers Trust's records and send such
cancelled Global Security to the
Company. The CUSIP number
assigned to such Global Security
shall, in accordance with the
procedures of the CUSIP Service
Bureau of Standard & Poor's Corpo-
ration, be cancelled and not imme-
diately reassigned. If a
B-13
<PAGE> 45
EXHIBIT B
withdrawal message is processed
with respect to one or more, but
not all, of the Book-Entry Notes
represented by a Global Security,
Bankers Trust will exchange such
Global Security for two Global
Securities, one of which shall
represent such Book-Entry Note or
Notes and shall be cancelled
immediately after issuance and
the other of which shall
represent the remaining
Book-Entry Notes previously
represented by the surrendered
Global Security and shall bear
the CUSIP number of the
surrendered Global Security.
If the purchase price for any
Book-Entry Note is not timely
paid to the Participants with
respect to such Note by the
beneficial purchaser thereof
(or a person, including an
indirect participant in DTC,
acting on behalf of such
purchaser), such Participants
and, in turn, the Agent may
enter SDFS deliver orders
through DTC's Participant
Terminal System reversing
the orders entered pursuant to
Settlement Procedures "F" and
"G," respectively. Thereafter,
Bankers Trust will deliver the
withdrawal message and take the
related actions described in
the preceding paragraph.
Notwithstanding the foregoing,
upon any failure to settle with
respect to a Book-Entry Note, DTC
may take any actions in
accordance with its SDFS
operating procedures then in
effect.
In the event of a failure to
settle with respect to one or
more, but not all, of the
Book-Entry
B-14
<PAGE> 46
EXHIBIT B
Notes to have been represented by
a Global Security, Bankers Trust
will provide, in accordance with
Settlement Procedures "D" and
"F," for the authentication and
issuance of a Global Security
representing the Book-Entry
Notes to be represented by such
Global Security and will make
appropriate entries in its
records.
Bankers Trust Nothing herein will be deemed to
Not to Risk Funds: require Bankers Trust to risk or
expend its own funds in
connection with any payment to
the Company, the Agents, DTC or
any beneficial owner of a Note,
it being understood by all
parties that payments made by
Bankers Trust to any party will
be made only to the extent
that funds are provided to
Bankers Trust for such purposes.
B-15
<PAGE> 47
SCHEDULE I
----------
SECURED MEDIUM-TERM NOTE FEE SCHEDULE
-------------------------------------
<TABLE>
<CAPTION>
Maturity Commission
- -------- ----------
<S> <C> <C>
2 years to < 3 years
3 years to < 4 years
4 years to < 5 years
5 years to < 6 years
6 years to < 7 years
7 years to < 8 years
8 years to < 9 years
9 years to < 10 years
10 years to < 15 years
15 years to < 20 years
20 years to < 30 years
</TABLE>
<PAGE> 1
EXHIBIT 1-38
$______________*
[NAME OF ISSUER]
[FULL TITLE OF THE SECURITIES]
FORM OF
UNDERWRITING AGREEMENT**
_________, 199_ ***
_________
* Insert principal amount of securities to be sold.
** Standard Form -- Debt. To be used with
related Commentary.
*** Insert date of Underwriting Agreement.
<PAGE> 2
_________, 19___*
Dear Sirs:
[NAME OF ISSUER], a [STATE OF ISSUER'S INCORPORATION]
corporation (the "Company"), proposes to issue and sell the several
Underwriters named in Schedule I hereto (the "Underwriters") $_____________
principal amount of its [FULL TITLE OF THE SECURITIES] (the "Securities") to
be issued pursuant to the provisions of an Indenture dated as of __________
__, 19 (the "Indenture") between the Company and ___________, as Trustee (the "
Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to
the Securities. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "Securities Act"), is
hereinafter referred to as the Registration Statement; the prospectus in the
form first used to confirm sales of Securities is hereinafter referred to as
the Prospectus.
I
The Company represents and warrants to each of the Underwriters that:
- ----------
*Insert date of Underwriting Agreement.
<PAGE> 3
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties
set forth in this paragraph 1(b) do not apply (A) to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
-2-
<PAGE> 4
effect on the Company and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corpotation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
(g) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture, and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors,
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability.
-3-
<PAGE> 5
(h) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Identure and the
Securities will not contravene any provision of applicable law or the
articles of incorporation or by-laws of the Company agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is required
for the performance by the Company of its obligations under this Agreement, the
Indenture or the Securities, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and sale of
the Securities.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from set forth in the
Prospectus, [except for changes in the ordinary course of business].
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is party or to which
any of the properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulation, contracts or other
documents that are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement that are
not described or filed as required.
(k) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of
the Commission thereunder.
-4-
<PAGE> 6
(l) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(m) The Company and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole, [except as set forth in the Prospectus].
-5-
<PAGE> 7
II.
The Company hereby agrees to sell to the several Underwriters, and the
Underwriters, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agree, severally
and not jointly, to purchase from the Company the respective principal amounts
of Securities set forth in Schedule I hereto opposite their names at __% of
their principal amount -- the purchase price -- plus accrued interest, if any,
from ___________, 19__ to the date of payment and delivery.
III.
The Company is advised by you that the Underwriters propose to make a
public offering of their respective portions of the Securities as soon after
the Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company is further advised by you that the
Securities are to be offered to the public initially at __% of their principal
amount -- the public offering price -- plus accrued interest, if any, and to
certain dealers selected by you at a price that represents a concession not
in excess of __% of their principal amount under the public offering price, and
that any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of __% of their principal amount, to any Underwriter or to certain
other dealers.
IV.
Payment for the Securities shall be made by wire transfer in immediate
available funds in [Clearing House funds] [Federal funds] at the office of
______________________ __________________________________ at 10:00 A.M., local
time, on _______, 19__, * or at such other time on the same or such other date,
not later than _______ _____, 19__, ** as shall
- -----------
* Insert date 3 business days after date of Underwriting Agreement.
** Insert date 10 business days after date of Underwriting Agreement.
-6-
<PAGE> 8
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the Closing Date.
Payment for the Securities shall be made against delivery to you for
the respective accounts of the several Underwriters of the Securities
registered in such names and in such denominations as you shall request in
writing not later than two full business days prior to the date of delivery,
with any transfer taxes payable in connection with the transfer of the
Securities to the Underwriters duly paid.
V.
The obligations of the Company and the several obligations of the
Underwriters hereunder are subject to the condition that the Registration
Statement shall have become effective not later than the date hereof.
The several obligations of the Underwriters hereunder are subject to
the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations, of
the Company and subsidiaries, taken as a whole, from that set forth in
the Registration Statement, that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to market
the Securities on the terms and in the manner contemplated in the
Prospectus, [except for changes in the ordinary course of business].
-7-
<PAGE> 9
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in clause (a)(i) above and to the effect that
the representations and warranties of the Company contained in this Agreement
are true and correct as of the Closing Date and that the Company has complied
with all of the agreements and satisfied all of the conditions on its part to
be performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
____________, counsel for the Company, dated the Closing Date, to the effect
that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(ii) each of the subsidiaries of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
-8-
<PAGE> 10
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (a) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(v) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations
of the Company, enforceable in accordance with their terms except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(b) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(vi) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Securities and the Indenture will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its subsidiaries
that is material to the Company and
-9-
<PAGE> 11
its subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement,
the Securities and the Indenture, except such as may be required by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities;
(vii) the statements (1) in the Prospectus under the
captions "______________," "___________," "Description of
Securities" and "Underwriters" and (2) in the Registration Statement
under Items 14 and 15, in each case insofar as such statements
constitute summaries of the legal matters, documents and proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(viii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required;
(ix) the Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended; and
-10-
<PAGE> 12
(x) such counsel (1) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules included therein as to which such counsel need not express
any opinion) comply as to form in all material respects with the
Securities Act and the rules and regulations of the Commission
thereunder, (2) believes that (except for financial statements and
schedules as to which such counsel need not express any belief and
except for that part of the Registration Statement that constitutes
the Form T-1 heretofore referred to) the Registration Statement and
the prospectus included therein at the time the Registration Statement
became effective did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (3)
believes that (except for financial statements and schedules as to
which such counsel need not express any belief) the Prospectus as of
the Closing Date does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(d) You shall have received on the Closing Date an opinion of
______________, special counsel for the Underwriters, dated the Closing
Date, covering the matters referred to in subparagraphs (iii), (iv),
(v), (vii) (but only as to the statements in the Prospectus under
"Description of Securities" and "Underwriters"), (ix) and (x) of paragraph
(c) above.
With respect to subparagraph (x) of paragraph (c) above, ______________
and ____________ may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification except as
specified.
-11-
<PAGE> 13
[The opinion of __________________ described in paragraph (c) above
shall be rendered to you at the request of the Company and shall so state
therein.]
(e) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from
_______________, independent public accountants for the Company, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
VI.
In further consideration of the agreements of the Underwriters herein
contained, the Company covenants as follows:
(a) To furnish to you, without charge, _____* signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first date of the public offering
of the Securities as in the opinion of your counsel the Prospectus is
required by law to be delivered in connection with
- ------------
* Insert number of Co-Managers _____________________ plus one.
-12-
<PAGE> 14
sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to amend
or supplement the Prospectus to comply with law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters
and to the dealers (whose names and addresses you will furnish to the
Company) to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with (i) the determination of the eligibility of the Securities
for investment under the laws of such jurisdictions as you may designate
and (ii) any review of the offering of the Securities by the National
Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending ________________, 19__* that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
[(f) During the period beginning on the date hereof and continuing to
and including the Closing
- ------------
* Insert date one year after the end of the Company's fiscal quarter in which
the closing will occur.
-13-
<PAGE> 15
Date, not to offer, sell contract to sell or otherwise dispose of any
debt securities of the Company or warrants to purchase debt securities of
the Company substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of
business), without your prior written consent.]
(g) To pay all document production charges and expenses of __________,
special counsel for the Underwriters (but not including their fees for
professional services), in connection with the preparation of this
Agreement.
VII.
The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred by any Underwriter or any such controlling
person in connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any prelimi-
nary prospectus or the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insolaf as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter fur-
-14-
<PAGE> 16
nished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the "indem-
nified party") shall promptly notify the person against whom such indemnity may
be sought (the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such proceeding and shall
pay the fees and disbursements of such counsel related to such proceeding. In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by ____________________ in
the case of parties indemnified pursuant to the second preceding paragraph, and
by the Company, in the case of parties indemnified pursuant to the first
preceding paragraph. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third sen-
tences of this paragraph, the indemnifying party agrees that
-15-
<PAGE> 17
it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than
30 days after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second paragraph of
this Article VII is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Securities. The
relative fault of the Company on the one hand and of the Underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters
-16-
<PAGE> 18
and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Article V
II are several in proportion to the respective principal amounts of Securities
they have purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Article VII were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately'preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article VII, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Article VII are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Article VII
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
-17-
<PAGE> 19
VIII.
This Agreement shall be subject to termination by notice given by you
to the Company, if (a) after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New
York shall have been declared by either Federal or New York State authorities
or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in your
judgment, is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event singly or together with
any other such event makes it, in your judgment, impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus.
IX.
This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of
the effectiveness of the Registration Statement by the Commission.
If, on the Closing Date, any one or more of the Underwriters shall fail
or refuse to purchase Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of the
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I bears to the principal
amount of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase
the Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase pur-
-18-
<PAGE> 20
suant to Article II be increased pursuant to this Article IX by an
amount in excess of one-ninth of such principal amount of Securities without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Securities and
the aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities
to be purchased on such date, and arrangements satisfactory to you and the
Company for the purchase of such Securities are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if
for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
-19-
<PAGE> 21
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
Very truly yours,
[NAME OF ISSUER]
By__________________________
Accepted, ____________, 19__*
_____________________
_____________________
[ NAMES OF OTHER CO-MANAGERS ]
Acting severally on behalf
of themselves and the
several Underwriters
named herein.
By __________________
__________________
By __________________
- -----------
* Insert date of Underwriting Agreement.
-20-
<PAGE> 22
SCHEDULE I
Principal Amount
of Securities
Underwriter To Be Purchased
_______________________________
[NAMES OF OTHER CO-MANAGERS]
[NAMES OF OTHER UNDERWRITTERS]
__________________
Total ........
------------------
------------------
-21-
<PAGE> 1
EXHIBIT 3-9
================================================================================
================================================================================
BYLAWS
of
THE DETROIT EDISON COMPANY
As amended through May 1, 1998
================================================================================
================================================================================
<PAGE> 2
BYLAWS
of
THE DETROIT EDISON COMPANY
------------------
INDEX
Page
----
ARTICLE I
Shareholders.................................................................. 1
SECTION 1. Annual Meeting.......................................1
SECTION 2. Special Meetings.....................................1
SECTION 3. Notice of Meetings...................................1
SECTION 4. Quorum...............................................1
SECTION 5. Voting and Inspectors................................2
SECTION 6. Record of Shareholders...............................2
SECTION 7. List of Shareholders.................................2
SECTION 8. Order of Business....................................2
ARTICLE II
Board of Directors and Committees..............................................4
SECTION 1. Number, Time of Holding Office, and Limitation on
Age..................................................4
SECTION 2. Vacancies............................................5
SECTION 3. Nominations of Directors; Election...................5
SECTION 4. Meetings of the Board................................6
SECTION 5. Quorum...............................................6
SECTION 6. Annual Meeting of Directors..........................6
SECTION 7. Executive Committee..................................6
SECTION 8. Committees...........................................7
SECTION 9. Participation in Meetings............................7
SECTION 10. Compensation.........................................7
ARTICLE III
Officers.......................................................................7
SECTION 1. Officers and Agents..................................7
SECTION 2. Term of Office.......................................7
SECTION 3. Chairman of the Board................................8
SECTION 4. President............................................8
SECTION 5. Other Officers.......................................8
SECTION 6. Compensation.........................................8
<PAGE> 3
ARTICLE IV
Capital Stock..................................................................8
SECTION 1. Certificates of Shares...............................8
SECTION 2. Transfer of Shares...................................9
SECTION 3. Lost or Destroyed Stock Certificates................ 9
ARTICLE V
Checks, Notes, Bonds, Debentures, etc..........................................9
ARTICLE VI
Corporate Seal.................................................................9
ARTICLE VII
Control Share Acquisitions....................................................10
ARTICLE VIII
Amendment of Bylaws...........................................................10
ii
<PAGE> 4
BYLAWS
OF
THE DETROIT EDISON COMPANY
AS AMENDED THROUGH MAY 1, 1998
ARTICLE I
SHAREHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of the shareholders of
the Company shall be held on the fourth Wednesday of April in each year (or if
said day be a legal holiday, then on the next succeeding day not a legal
holiday), at such time and at such place as may be fixed by the Board of
Directors and stated in the notice of meeting, for the purpose of electing
directors and transacting such other business as may properly be brought before
the meeting as determined by Article I, Section 8 hereof.
Section 2. SPECIAL MEETINGS. Special meetings of the shareholders may
be held upon call of the Board of Directors or the Chairman of the Board or the
President or the holders of record of three-quarters of the outstanding shares
of stock of the Company, at such time as may be fixed by the Board of Directors
or the Chairman of the Board or the President or such shareholders and stated in
the notice of meeting. All such meetings shall be held at the office of the
Company in the City of Detroit unless some other place is specified in the
notice.
Section 3. NOTICE OF MEETINGS. Written notice of the date, time,
place and purpose or purposes of every meeting of the shareholders, signed by
the Corporate Secretary or an Assistant Corporate Secretary, shall be given
either personally or by mail, within the time prescribed by law, to each
shareholder of record entitled to vote at such meeting and to any shareholder
who, by reason of any action proposed at such meeting, might be entitled to
receive payment for such stock if such action were taken. If mailed, such
notice is given when deposited in the United States mail, with postage thereon
prepaid, directed to the shareholder at the address as it appears on the record
of shareholders, or, if the shareholders shall have filed with the Corporate
Secretary of the Company a written request that notices intended for such
shareholder be mailed to some other address, then directed to the address
designated in such request. Further notice shall be given by mail, publication,
or otherwise, if and as required by law.
Notice of meeting need not be given to any shareholder who submits a
signed waiver of notice, in person or by proxy, whether before or after the
meeting. The attendance of any shareholder at the meeting, in person or by
proxy, without protesting at the beginning of the meeting the lack of notice of
such meeting, shall constitute a waiver of notice by such shareholder.
Notice of a special meeting shall also indicate that it is being issued
by or at the direction of the person or persons calling the meeting.
Detroit Edison 1
<PAGE> 5
Section 4. QUORUM. At every meeting of the shareholders, the holders
of record of a majority of the outstanding shares of stock of the Company
entitled to vote at such meeting, whether present in person or represented by
proxy, shall constitute a quorum. If at any meeting there shall be no quorum,
the holders of a majority of the outstanding shares of stock so present or
represented may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall have been obtained, when
any business may be transacted which might have been transacted at the meeting
as first convened had there been a quorum. When a quorum is once present to
organize a meeting, it is not broken by the subsequent withdrawal of any
shareholder.
Section 5. VOTING AND INSPECTORS. Each holder of record of
outstanding shares of stock of the Company entitled to vote at a meeting of
shareholders shall be entitled to one vote for each share of stock standing in
the shareholder's name on the record of shareholders, and may so vote either in
person or by proxy appointed by instrument in writing executed by such holder
or by the shareholder's duly authorized attorney-in-fact. No proxy shall be
valid after the expiration of three years from the date of its execution unless
the shareholder executing it shall have specified the length of time it is to
continue in force which shall be for some limited period. The authority of the
holder of a proxy to act shall not be revoked by the incompetence or death of
the shareholder who executed the proxy unless, before the authority is
exercised, written notice of an adjudication of such incompetence or of such
death is received by the Corporate Secretary or an Assistant Corporate
Secretary.
In advance of any meeting of shareholders, the Board of Directors may
appoint one or more inspectors for the meeting. If inspectors are not so
appointed, the chairman of the meeting shall appoint such inspectors. Before
entering upon the discharge of their duties, the inspectors shall take and
subscribe an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of their ability, and shall
take charge of the polls and after balloting shall make a certificate of the
result of the vote taken. No officer or director of the Company or candidate for
office of director shall be appointed as an inspector. At all elections of
directors, the voting shall be by ballot and a plurality of the votes cast shall
elect.
Section 6. RECORD OF SHAREHOLDERS. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action, the Board of Directors may fix, in advance, a date
as the record date for any such determination of shareholders, which record date
shall not less than 10 days nor more than the maximum number of days permitted
by law before the date of the meeting, or taking of any other action.
Section 7. LIST OF SHAREHOLDERS. A list of shareholders as of the
record date, certified by the Corporate Secretary or any Assistant Corporate
Secretary or by a transfer agent, shall be produced at any meeting of
shareholders upon the request thereat or prior thereto of any shareholder. If
the right to vote at any meeting is challenged, the inspectors, or the person
presiding at the meeting, shall require such list of shareholders to be produced
as evidence of the right of the persons challenged to vote at such meeting, and
all persons who appear on such list to be shareholders entitled to vote thereat
may vote at such meeting.
Section 8. ORDER OF BUSINESS. (a) The Chairman, or such other officer
of the Company designated by a majority of the total number of directors that
the Company would have if there were no vacancies on the Board of Directors
(such number being referred to as the "Whole Board"), will call
Detroit Edison 2
<PAGE> 6
meetings of shareholders to order and will act as presiding officer thereof.
Unless otherwise determined by the Board of Directors prior to the meeting, the
presiding officer of the meeting of shareholders will also determine the order
of business and have the authority in his or her sole discretion to regulate the
conduct of any such meeting including, without limitation, by imposing
restrictions on the persons (other than shareholders of the Company or their
duly appointed proxies) who may attend any such shareholders' meeting, by
ascertaining whether any shareholder or his proxy may be excluded from any
meeting of shareholders based upon any determination by the presiding officer,
in his or her sole discretion, that any such person has unduly disrupted or is
likely to disrupt the proceedings of the meeting, and by determining the
circumstances in which any person may make a statement or ask questions at any
meeting of shareholders.
(b) At an annual meeting of the shareholders, only such business will
be conducted or considered as is properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Chairman, the President, a Vice President, the Corporate Secretary or an
Assistant Corporate Secretary in accordance with Section 3 of this Article I;
(ii) otherwise properly brought before the meeting by the presiding officer or
by or at the direction of a majority of the Whole Board; or (iii) otherwise
properly requested to be brought before the meeting by a shareholder of the
Company in accordance with Section 8(c) below.
(c) For business to be properly requested by a shareholder to be
brought before an annual meeting, the shareholder must (i) be a shareholder of
the Company of record at the time of the giving of the notice for such annual
meeting provided for in these Bylaws; (ii) be entitled to vote at such meeting;
and (iii) have given timely notice thereof in writing to the Corporate
Secretary. To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company not less than 60
nor more than 90 calendar days prior to the annual meeting; provided, however,
that in the event public announcement of the date of the annual meeting is not
made at least 100 calendar days prior to the date of the annual meeting, notice
by the shareholder to be timely must be so received not later than the close of
business on the 10th calendar day following the day on which public announcement
is first made of the date of the annual meeting. A shareholder's notice to the
Corporate Secretary must set forth as to each matter the shareholder proposes to
bring before the annual meeting: (A) a description in reasonable detail of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting; (B) the name and address, as
they appear on the Company's books, of the shareholder proposing such business
and of the beneficial owner, if any, on whose behalf the proposal is made; (C)
the class and number of shares of the Company that are owned beneficially and of
record by the shareholder proposing such business and by the beneficial owner,
if any, on whose behalf the proposal is made; and (D) any material interest in
such business of such shareholder proposing such business and the beneficial
owner, if any, on whose behalf the proposal is made. Notwithstanding the
foregoing provisions of this Section 8(c), a shareholder must also comply with
all applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder with respect to the matters set forth
in this Section 8(c). For purposes of this Section 8(c) and Section 3 of Article
II, "public announcement" means disclosure in a press release reported by the
Dow Jones News Service, Associated Press, or comparable national news service or
in a document publicly filed by the Company with the Securities and Exchange
Commission pursuant to Sections 13, 14, or 15(d) of the Securities Exchange Act
of 1934, as amended, or publicly filed by the Company with any national
securities exchange or quotation service through which the Company's
Detroit Edison 3
<PAGE> 7
stock is listed or traded, or furnished by the Company to its shareholders.
Nothing in this Section 8(c) will be deemed to affect any rights of shareholders
to request inclusion of proposals in the Company's proxy statement pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934, as amended.
(d) At a special meeting of shareholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Chairman, the President, a Vice President, the Corporate Secretary or an
Assistant Corporate Secretary (or in case of their failure to give any required
notice, the other persons entitled to give notice) in accordance with Section 3
of Article I or (ii) otherwise brought before the meeting by the presiding
officer or by or at the direction of a majority of the Whole Board.
(e) The determination of whether any business sought to be brought
before any annual or special meeting of the shareholders is properly brought
before such meeting in accordance with this Section 8 will be made by the
presiding officer of such meeting. If the presiding officer determines that any
business is not properly brought before such meeting, he or she will so declare
to the meeting and any such business will not be conducted or considered.
ARTICLE II
BOARD OF DIRECTORS AND COMMITTEES
Section 1. NUMBER, TIME OF HOLDING OFFICE AND LIMITATION ON AGE. The
business and affairs of the Company shall be managed and controlled by a Board
of Directors. The number of directors constituting the Whole Board shall be
determined from time to time by resolution of the Board so long as the total
number of directors is not less than twelve nor more than eighteen; provided,
however, that the minimum and maximum number of directors may be increased or
decreased from time to time by vote of a majority of the Whole Board; and,
further provided that no change in the number of directors shall serve to
shorten the term of office of any incumbent director. Commencing with the annual
election of directors by the shareholders in 1991, the directors shall be
divided into three classes, as nearly equal in number as possible, and the term
of office of the first class shall expire at the 1992 annual meeting of
shareholders, the term of office of the second class shall expire at the 1993
annual meeting of shareholders and the term of office of the third class shall
expire at the 1994 annual meeting of shareholders, or, in each case, until their
successors shall be duly elected and qualified. At each annual meeting
commencing in 1992, a number of directors equal to the number of the class whose
term expires at the time of the meeting shall be elected to hold office until
the third succeeding annual meeting of shareholders. In the event the holders of
the Preferred Stock or the Preference Stock are entitled to elect directors as
provided in Article V, Division I, subdivision (9) or Article V, Division II,
subdivision (9) of the Restated Articles of Incorporation of the Company, then
the provisions of such class of stock with respect to their rights shall apply
and such directors shall be elected for terms expiring at the next annual
meeting of shareholders and without regard to the classification of the
remaining members of the Board of Directors.
Except as hereinafter provided, each director shall be a holder of
Common Stock of DTE Energy Company at the time of initial election to the Board
or shall become a holder within thirty days after such election (to the extent
of at least one share, owned beneficially) and any director who thereafter
ceases to be such a holder, shall thereupon cease to be a director. The Board
shall have the authority to waive the
Detroit Edison 4
<PAGE> 8
requirement to hold shares in individual situations upon presentation of
evidence that a nominee or director is unable to hold shares for legal or
religious reasons.
No person who shall have served as an employee of the Company or an
affiliate shall be elected a director after retiring from employment with the
Company or an affiliate; provided, however, that if such person was the Chief
Executive Officer of the Company at the time of such retirement, such person
shall be eligible for election as a director until attaining age 70. No other
person shall be elected a director after attaining age 70; provided, however,
the Board shall have the authority to waive this provision for no more than one
three-year term upon a determination that circumstances exist which make it
prudent to continue the service of a director who possesses special and unique
expertise clearly beneficial to the Company.
Section 2. VACANCIES. Whenever any vacancy shall occur in the Board
of Directors by death, resignation, or any other cause, it shall be filled
without undue delay by a majority vote of the remaining members of the Board of
Directors and the person who is to fill any such vacancy shall hold office for
the unexpired term of the director to whom such person succeeds, or for the
term fixed by the Board of Directors acting in compliance with Section l of
this Article II in case of a vacancy created by an increase in the number of
directors, and until a successor shall be elected and shall have qualified;
provided, however, that no vacancy need be filled if, after such vacancy shall
occur, the number of directors remaining on the Board shall be not less than a
majority of the whole Board. During the existence of any vacancy or vacancies,
the surviving or remaining directors shall possess and may exercise all the
powers of the full Board of Directors, when action by a larger number is not
required by law.
Section 3. NOMINATIONS OF DIRECTORS; ELECTION. (a) Except as may be
otherwise provided in any resolution establishing any Preferred or Preference
Stock, only persons who are nominated in accordance with this Section 3 will be
eligible for election at a meeting of shareholders to be members of the Board of
Directors of the Company.
(b) Nominations of persons for election as directors of the Company
may be made only at an annual meeting of shareholders (i) by or at the
direction of the Board of Directors or a committee thereof or (ii) by any
shareholder who is a shareholder of record at the time of giving of notice
provided for in this Section 3, who is entitled to vote for the election of
directors at such meeting, and who complies with the procedures set forth in
this Section 3. All nominations by shareholders must be made pursuant to timely
notice in proper written form to the Corporate Secretary.
(c) To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company not less
than 60 nor more than 90 calendar days prior to the annual meeting of
shareholders; provided, however, that in the event that public announcement of
the date of the annual meeting is not made at least 100 calendar days prior to
the date of the annual meeting, notice by the shareholder to be timely must be
so received not later than the close of business on the 10th calendar day
following the day on which public announcement (as defined in Section 8(c) of
Article I) is first made of the date of the annual meeting. To be in proper
written form, such shareholder's notice must set forth or include: (i) the name
and address, as they appear on the Company's books, of the shareholder giving
the notice and of the beneficial owner, if any, on whose behalf the nomination
is made; (ii) a representation that the shareholder giving the notice is a
holder of record of stock of the Company entitled to vote at such annual
meeting and intends to appear in person or by proxy at the annual meeting to
nominate the person or persons specified in the notice; (iii) the class and
number of shares of stock of the Company owned beneficially and of record by
the shareholder giving the notice and by the beneficial owner, if any, on whose
Detroit Edison 5
<PAGE> 9
behalf the nomination is made; (iv) a description of all arrangements or
understandings between or among any of (A) the shareholder giving the notice,
(B) the beneficial owner on whose behalf the notice is given, (C) each nominee,
and (D) any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder giving the
notice; (v) such other information regarding each nominee proposed by the
shareholder giving the notice as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (vi) the signed consent of each nominee to serve as a
director of the Company if so elected. The presiding officer of any annual
meeting may, if the facts warrant, determine that a nomination was not made in
accordance with this Section 3, and if he or she should so determine, he or she
will so declare to the meeting, and the defective nomination will be
disregarded. Notwithstanding the foregoing provisions of this Section 3, a
shareholder must also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section 3.
Section 4. MEETINGS OF THE BOARD. Regular meetings of the Board of
Directors shall be held at such times and at such places as may from time to
time be fixed by the Board of Directors.
Special meetings of the Board of Directors may be called by the
Chairman of the Board or the President or, in the event of the incapacity of the
Chairman of the Board and the President, the Executive Committee by giving
reasonable notice of the time and place of such meetings or by obtaining written
waivers of notice, before or after the meeting, from each absent director. All
such meetings shall be held at the office of the Company in the City of Detroit
unless some other place is specified in the notice.
A notice, or waiver of notice, need not specify the purpose of the
meeting.
Section 5. QUORUM A majority of the directors in office at the time
of a meeting of the Board shall constitute a quorum for the transaction of
business, but if at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of the directors present may adjourn the
meeting from time to time without notice other than announcement at the meeting,
until a quorum shall have been obtained, when any business may be transacted
which might have been transacted at the meeting as first convened had there been
a quorum. The acts of a majority of the directors present at any meeting at
which there is a quorum shall be the acts of the Board, unless otherwise
provided by law, by the Restated Articles of Incorporation or by the Bylaws.
Section 6. ANNUAL MEETING OF DIRECTORS. A meeting of the Board of
Directors, known as the directors' annual meeting, shall be held without notice
each year after the adjournment of the annual shareholders' meeting and on the
same day, and at such meeting the officers of the Company for the ensuing year
shall be elected. If a quorum of the directors is not present on the day
appointed for the directors' annual meeting, the meeting shall be adjourned to
some convenient day.
Section 7. EXECUTIVE COMMITTEE. The Board of Directors may, by
resolution or resolutions passed by a majority of the Whole Board, designate an
Executive Committee to consist of the Chief Executive Officer and two or more of
the other directors, and alternates, and shall designate the Chairman thereof.
The Executive Committee shall have and may exercise, when the Board is not in
session, all of the powers of the Board in the management of the business and
affairs of the Company, and shall have power to authorize the seal of the
Company to be affixed to all papers which may require it; but the Executive
Detroit Edison 6
<PAGE> 10
Committee shall not have power to declare dividends, to change the number of
directors constituting the Whole Board, to fill vacancies in the Board, or to
establish or change the membership of, or to fill vacancies in, any committee,
or to fix the compensation of the directors or committee members, or to make or
amend Bylaws of the Company, or to submit matters for action by shareholders, or
to amend or repeal a resolution of the Board which by its terms may not be
changed by the Executive Committee. The Board shall have the power at any time
to fill vacancies in, to change the membership of, or to dissolve, the Executive
Committee. The Executive Committee may make rules for the conduct of its
business and may appoint such subcommittees and assistants as it shall from time
to time deem necessary. A majority of the members of the Executive Committee
shall constitute a quorum. All action taken by the Executive Committee shall be
reported to the Board at its next meeting succeeding such action. The Corporate
Secretary or an Assistant Corporate Secretary shall attend and act as the
secretary of all meetings of the Executive Committee and keep the minutes
thereof.
Meetings of the Executive Committee may be called by the Chairman of
the Board or the President, or, in the event of the incapacity of the Chairman
of the Board and the President, by two or more members of the Executive
Committee by giving reasonable notice of the time and place of such meetings.
All such meetings shall be held at the office of the Company in the City of
Detroit unless some other place is specified in the notice.
Section 8. COMMITTEES. The Board of Directors may, by resolution,
create a committee or committees of one or more directors, and alternates, to
consider and report upon or to carry out such matters (not excepted by the
foregoing section) as may be entrusted to them by the Board of Directors, and
shall designate the Chairman of each such committee.
Section 9. PARTICIPATION IN MEETINGS. One or more members of the
Board of Directors or any committee thereof may participate in any meeting of
such Board or such committee by means of a conference telephone or similar
communications equipment which enables all persons participating in such a
meeting to hear each other at the same time and the participation in the manner
so described shall constitute presence in person at such meetings.
Section 10. COMPENSATION. Each director of the Company who is not a
salaried officer or employee of the Company may receive reasonable compensation
for services as a director, including a reasonable fee for attendance at
meetings of the Board and committees thereof, and attendance at the Company's
request at other meetings or similar activities related to the Company.
ARTICLE III
OFFICERS
Section 1. OFFICERS AND AGENTS. The officers of the Company to be
elected by the Board of Directors, as soon as practicable after the election of
directors each year, shall be Chairman of the Board, the President, a Corporate
Secretary and a Treasurer. The Board of Directors may also from time to time
elect one or more Vice Presidents, a Controller, a General Auditor, a General
Counsel, and such other officers and agents as it may deem proper. The Chairman
of the Board and the President shall be chosen from among the directors. The
persons holding the offices of Chairman of the Board or President may not
Detroit Edison 7
<PAGE> 11
also hold the office of General Auditor. The Board of Directors may, in its
discretion, leave vacant any office other than that of Chairman of the Board,
President, Corporate Secretary or Treasurer.
Section 2. TERM OF OFFICE. The term of office of all officers shall
be until the next directors' annual meeting of or until their respective
successors are chosen and qualified; but any officer or agent elected by the
Board of Directors may be removed by the Board at any time, with or without
cause.
Section 3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
the chief executive officer of the Company, shall preside at all meetings of the
Board of Directors and, subject to Section 8(a) of Article I, meetings of
shareholders, at which the Chairman is present, and shall make the annual report
to the shareholders The Chairman shall have general charge of the business and
affairs of the Company subject to the control of the Board of Directors, may
execute in the name of the Company any authorized corporate obligation or other
instrument and shall perform such other functions as may be prescribed by the
Board from time to time.
The Chairman of the Board shall manage or supervise the conduct of the
corporate finances and relations of the Company with its shareholders, with the
public and with regulatory authorities and in addition to the President, may
exercise all powers elsewhere in the Bylaws conferred upon the President. The
Chairman may delegate from time to time to the President or to other officers,
employees or positions of the Company, such powers as the Chairman may specify
in writing, with such terms and conditions, if any, as the Chairman may set
forth. A copy of each such delegation and of any revocation or change shall be
filed with the Corporate Secretary.
Section 4. PRESIDENT. The President shall be the chief operating
officer of the Company, subject to the control of the Board of Directors and the
Chairman of the Board, shall have power to authorize the employment of such
subordinate employees as may, in the President's judgment, be advisable for the
operations of the Company, may execute in the name of the Company any authorized
corporate obligation or other instrument and shall perform all other acts
incident to the President's office or prescribed by the Board of Directors or
the Chairman of the Board, or authorized or required by law. During the absence
or disability of the Chairman of the Board, the President shall assume the
duties and authority of the Chairman of the Board and shall be the chief
executive officer of the Company.
SECTION 5. OTHER OFFICERS. The other officers, agents and employees
of the Company shall each have such powers and perform such duties in the
management of the property and affairs of the Company, subject to the control of
the Board of Directors, as generally pertain to their respective offices, as
well as such powers and duties as from time to time may be prescribed by the
Board of Directors, by the Chairman of the Board or by the President.
Section 6. COMPENSATION. The Board of Directors shall
determine the compensation to be paid to the Chairman of the Board, the
President and each Vice President above the level of Assistant Vice President.
Detroit Edison 8
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ARTICLE IV
CAPITAL STOCK
Section 1. CERTIFICATES OF SHARES. The interest of each shareholder
shall be evidenced by a certificate or certificates for shares of stock of the
Company in such form as the Board of Directors may from time to time prescribe.
The certificates of stock shall be signed by the Chairman of the Board, the
President or a Vice President and by the Treasurer, an Assistant Treasurer, the
Corporate Secretary, or an Assistant Corporate Secretary of the Company, shall
be sealed with the seal of the Company or a facsimile thereof, and shall be
countersigned by a transfer agent for the stock and registered by a registrar
for such stock. The signatures of the officers and the transfer agent and the
registrar upon such certificates may be facsimiles, engraved or printed, subject
to the provisions of applicable law. In case any officer, transfer agent or
registrar shall cease to serve in that capacity after their facsimile signature
has been placed on a certificate, the certificates may be issued with the same
effect as if the officer, transfer agent or registrar were still in office.
Section 2. TRANSFER OF SHARES. Shares in the capital stock of the
Company shall be transferred on the books of the Company upon surrender and
cancellation of certificates for a like number of shares, with duly executed
power to transfer endorsed thereon or attached to the certificate.
Section 3. LOST OR DESTROYED STOCK CERTIFICATES. No certificate for
shares of stock of the Company shall be issued in place of any certificate
alleged to have been lost, stolen or destroyed, except upon production of such
evidence of the loss, theft or destruction, and upon indemnification of the
Company and its agents to such extent and in such manner as the Board of
Directors may from time to time prescribe.
ARTICLE V
CHECKS, NOTES, BONDS, DEBENTURES, ETC.
All checks and drafts on the Company's bank accounts and all bills of
exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers or agent or agents, either manually or by facsimile signature or
signatures, as shall be thereunto authorized from time to time by the Board of
Directors either generally or in specific instances; provided that bonds,
debentures and other evidences of indebtedness of the Company bearing facsimile
signatures of officers of the Company shall be issued only when authenticated by
a manual signature on behalf of a trustee or an authenticating agent appointed
by the Board of Directors and in case any such officer of the Company shall
cease to be such after such officer's facsimile signature has been placed
thereon, such bonds, debentures or other evidences of indebtedness may be issued
with the same effect as if such person were still in office.
ARTICLE VI
CORPORATE SEAL
The Board of Directors shall provide a suitable seal containing the
name of the Company.
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ARTICLE VII
CONTROL SHARE ACQUISITIONS
The Stacey, Bennett, and Randall Shareholder Equity Act (Chapter 7B of
the Michigan Business Corporation Act) shall not apply to any control share
acquisitions (as defined in such Act) of shares of the Company.
This Article VII of the Bylaws may not be amended, altered or repealed
with respect to any control share acquisition of shares of the Company effected
pursuant to a tender offer or other transaction commenced prior to the date of
such amendment, alteration or repeal.
ARTICLE VIII
AMENDMENT OF BYLAWS
Those provisions of these Bylaws providing for a classified Board of
Directors (currently the third, fourth and fifth sentences of the first
paragraph of Section 1 of Article II) and the provisions of this sentence may be
amended or repealed only by the vote of the holders of a majority of shares of
Common Stock of the Company. Except as provided in the immediately preceding
sentence, Bylaws of the Company may be amended, repealed or adopted by vote of
the holders of a majority of shares at the time entitled to vote in the election
of any directors or by vote of a majority of the directors in office.
Detroit Edison 10
<PAGE> 1
EXHIBIT 3-10
================================================================================
================================================================================
BYLAWS
of
DTE ENERGY COMPANY
As amended through May 1, 1998
================================================================================
================================================================================
<PAGE> 2
BYLAWS
of
DTE ENERGY COMPANY
______________
INDEX
ARTICLE I
Page
----
Shareholders.................................................................1
SECTION 1. Annual Meeting.....................................1
SECTION 2. Special Meetings...................................1
SECTION 3. Notice of Meetings.................................1
SECTION 4. Quorum.............................................2
SECTION 5. Voting and Inspectors..............................2
SECTION 6. Record of Shareholders.............................2
SECTION 7. List of Shareholders...............................2
SECTION 8. Order of Business..................................3
ARTICLE II
Board of Directors and Committees............................................4
SECTION 1 Number, Time of Holding Office, and Limitation on
Age................................................4
SECTION 2. Vacancies..........................................5
SECTION 3. Nominations of Directors; Elections................5
SECTION 4. Meetings of the Board..............................6
SECTION 5. Quorum.............................................6
SECTION 6. Annual Meeting of Directors........................7
SECTION 7. Executive Committee................................7
SECTION 8. Committees.........................................7
SECTION 9. Participation in Meetings..........................7
SECTION 10. Compensation.......................................8
ARTICLE III
Officers.....................................................................8
SECTION 1. Officers and Agents................................8
SECTION 2. Term of Office.....................................8
SECTION 3. Chairman of the Board..............................8
SECTION 4. President..........................................8
SECTION 5. Other Officers.....................................9
SECTION 6. Compensation.......................................9
SECTION 7. Voting of Shares and Securities
of Other Corporations..............................9
<PAGE> 3
ARTICLE IV
Capital Stock................................................................9
SECTION 1. Certificates of Shares.............................9
SECTION 2. Transfer of Shares.................................9
SECTION 3. Lost or Destroyed Stock Certificates...............9
ARTICLE V
Checks, Notes, Bonds, Debentures, etc.......................................10
ARTICLE VI
Corporate Seal..............................................................10
ARTICLE VII
Control Share Acquisitions..................................................10
ARTICLE VIII
Amendment of Bylaws.........................................................10
ii
<PAGE> 4
BYLAWS
OF
DTE ENERGY COMPANY
AS AMENDED THROUGH MAY 1, 1998
ARTICLE I
SHAREHOLDERS
Section 1. ANNUAL MEETING. The annual meeting of the shareholders of
the Company shall be held on the fourth Wednesday of April in each year (or if
said day be a legal holiday, then on the next succeeding day not a legal
holiday), at such time and at such place as may be fixed by the Board of
Directors and stated in the notice of meeting, for the purpose of electing
directors and transacting such other business as may properly be brought before
the meeting as determined by Article I, Section 8 hereof.
Section 2. SPECIAL MEETINGS. Special meetings of the shareholders
may be held upon call of the Board of Directors or the Chairman of the Board or
the President or the holders of record of three-quarters of the outstanding
shares of stock of the Company entitled to vote at such meeting, at such time as
may be fixed by the Board of Directors or the Chairman of the Board or the
President or such shareholders and stated in the notice of meeting. All such
meetings shall be held at the office of the Company in the City of Detroit
unless some other place is specified in the notice.
Section 3. NOTICE OF MEETINGS. Written notice of the date, time,
place and purpose or purposes of every meeting of the shareholders, signed by
the Corporate Secretary or an Assistant Corporate Secretary, shall be given
either personally or by mail, within the time prescribed by law, to each
shareholder of record entitled to vote at such meeting and to any shareholder
who, by reason of any action proposed to be taken at such meeting, might be
entitled to receive payment for such stock if such action were taken. If mailed,
such notice is given when deposited in the United States mail, with postage
prepaid, directed to the shareholder at the address as it appears on the record
of shareholders, or, if the shareholders shall have filed with the Corporate
Secretary of the Company a written request that notices intended for such
shareholder be mailed to some other address, then directed to the address
designated in such request. Further notice shall be given by mail, publication,
or otherwise, if and as required by law.
Notice of meeting need not be given to any shareholder who submits a
signed waiver of notice, in person or by proxy, whether before or after the
meeting. The attendance of any shareholder at the meeting, in person or by
proxy, without protesting at the beginning of the meeting the lack of notice of
such meeting, shall constitute a waiver of notice by such shareholder.
Notice of a special meeting shall also indicate that it is being issued
by or at the direction of
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the person or persons calling the meeting.
Section 4. QUORUM. At every meeting of the shareholders, the
holders of record of a majority of the outstanding shares of stock of the
Company entitled to vote at such meeting, whether present in person or
represented by proxy, shall constitute a quorum. If at any meeting there shall
be no quorum, the holders of a majority of the outstanding shares of stock so
present or represented may adjourn the meeting from time to time, without notice
(unless otherwise required by statute) other than announcement at the meeting,
until a quorum shall have been obtained, when any business may be transacted
which might have been transacted at the meeting as first convened had there been
a quorum. When a quorum is once present to organize a meeting, it is not broken
by the subsequent withdrawal of any shareholder.
Section 5. VOTING AND INSPECTORS. Except as provided in the Articles
of Incorporation, each holder of record of outstanding shares of stock of the
Company entitled to vote at a meeting of shareholders shall be entitled to one
vote for each share of stock standing in the shareholder's name on the record of
shareholders, and may so vote either in person or by proxy appointed by
instrument in writing executed by such holder or by the shareholder's duly
authorized attorney-in-fact. No proxy shall be valid after the expiration of
three years from the date of its execution unless the shareholder executing it
shall have specified the length of time it is to continue in force which shall
be for some limited period. The authority of the holder of a proxy to act shall
not be revoked by the incompetence or death of the shareholder who executed the
proxy unless, before the authority is exercised, written notice of an
adjudication of such incompetence or of such death is received by the Corporate
Secretary or an Assistant Corporate Secretary.
In advance of any meeting of shareholders, the Board of Directors may
appoint one or more inspectors for the meeting. If inspectors are not so
appointed, the chairman of the meeting shall appoint such inspectors. Before
entering upon the discharge of their duties, the inspectors shall take and
subscribe an oath faithfully to execute the duties of inspector at such meeting
with strict impartiality and according to the best of their ability, and shall
take charge of the polls and after balloting shall make a certificate of the
result of the vote taken. No officer or director of the Company or candidate for
office of director shall be appointed as an inspector. At all elections of
directors the voting shall be by ballot and a plurality of the votes cast shall
elect.
Section 6. RECORD OF SHAREHOLDERS. For the purpose of determining
the shareholders entitled to notice of or to vote at any meeting of shareholders
or any adjournment thereof, or to express consent to or dissent from any
proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividend or the allotment of any rights, or
for the purpose of any other action, the Board of Directors may fix, in advance,
a date as the record date for any such determination of shareholders. The record
date shall not precede the date upon which it is fixed and shall not be less
than 10 days nor more than the maximum number of days permitted by law before
the date of the meeting, or taking of any other action.
Section 7. LIST OF SHAREHOLDERS. A list of shareholders of record,
arranged alphabetically within each class and series of stock, as of the record
date, certified by the Corporate Secretary or any Assistant Corporate Secretary
or by a transfer agent, shall be produced at any meeting of shareholders and may
be inspected by any shareholder at any time during the meeting. If the right to
vote at any meeting is challenged, the inspectors, or the chairman presiding at
the
DTE Energy Company 2
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meeting, shall require such list of shareholders to be produced as evidence
of the right of the
DTE Energy Company 3
<PAGE> 7
persons challenged to vote at such meeting, and all persons who appear on such
list to be shareholders entitled to vote thereat may vote at such meeting.
SECTION 8. ORDER OF BUSINESS. (a) The Chairman, or such other officer
of the Company designated by a majority of the total number of directors that
the Company would have if there were no vacancies on the Board of Directors
(such number being referred to as the "Whole Board"), will call meetings of
shareholders to order and will act as presiding officer thereof. Unless
otherwise determined by the Board of Directors prior to the meeting, the
presiding officer of the meeting of shareholders will also determine the order
of business and have the authority in his or her sole discretion to regulate the
conduct of any such meeting including, without limitation, by imposing
restrictions on the persons (other than shareholders of the Company or their
duly appointed proxies) who may attend any such shareholders' meeting, by
ascertaining whether any shareholder or his proxy may be excluded from any
meeting of shareholders based upon any determination by the presiding officer,
in his or her sole discretion, that any such person has unduly disrupted or is
likely to disrupt the proceedings of the meeting, and by determining the
circumstances in which any person may make a statement or ask questions at any
meeting of shareholders.
(b) At an annual meeting of the shareholders, only such business will
be conducted or considered as is properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Chairman, the President, a Vice President, the Corporate Secretary or an
Assistant Corporate Secretary in accordance with Section 3 of this Article I;
(ii) otherwise properly brought before the meeting by the presiding officer or
by or at the direction of a majority of the Whole Board; or (iii) otherwise
properly requested to be brought before the meeting by a shareholder of the
Company in accordance with Section 8(c) below.
(c) For business to be properly requested by a shareholder to be
brought before an annual meeting, the shareholder must (i) be a shareholder of
the Company of record at the time of the giving of the notice for such annual
meeting provided for in these Bylaws; (ii) be entitled to vote at such meeting;
and (iii) have given timely notice thereof in writing to the Corporate
Secretary. To be timely, a shareholder's notice must be delivered to or mailed
and received at the principal executive offices of the Company not less than 60
nor more than 90 calendar days prior to the annual meeting; provided, however,
that in the event public announcement of the date of the annual meeting is not
made at least 100 calendar days prior to the date of the annual meeting, notice
by the shareholder to be timely must be so received not later than the close of
business on the 10th calendar day following the day on which public announcement
is first made of the date of the annual meeting. A shareholder's notice to the
Corporate Secretary must set forth as to each matter the shareholder proposes to
bring before the annual meeting: (a) a description in reasonable detail of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting; (b) the name and address, as
they appear on the Company's books, of the shareholder proposing such business
and of the beneficial owner, if any, on whose behalf the proposal is made; (c)
the class and number of shares of the Company that are owned beneficially and of
record by the shareholder proposing such business and by the beneficial owner,
if any, on whose behalf the proposal is made; and (d) any material interest in
such business of such
DTE Energy Company 4
<PAGE> 8
shareholder proposing such business and the beneficial owner, if any, on whose
behalf the proposal is made. Notwithstanding the foregoing provisions of this
Section 8(c), a shareholder must also comply with all applicable requirements of
the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder with respect to the matters set forth in this Section 8(c). For
purposes of this Section 8(c) and Section 3 of Article II, "public announcement"
means disclosure in a press release reported by the Dow Jones News Service,
Associated Press, or comparable national news service or in a document publicly
filed by the Company with the Securities and Exchange Commission pursuant to
Sections 13, 14, or 15(d) of the Securities Exchange Act of 1934, as amended, or
publicly filed by the Company with any national securities exchange or quotation
service through which the Company's stock is listed or traded, or furnished by
the Company to its shareholders. Nothing in this Section 8(c) will be deemed to
affect any rights of shareholders to request inclusion of proposals in the
Company's proxy statement pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, as amended.
(d) At a special meeting of shareholders, only such business may be
conducted or considered as is properly brought before the meeting. To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Chairman, the President, a Vice President, the Corporate Secretary or an
Assistant Corporate Secretary (or in case of their failure to give any required
notice, the other persons entitled to give notice) in accordance with Section 3
of Article I or (ii) otherwise brought before the meeting by the presiding
officer or by or at the direction of a majority of the Whole Board.
(e) The determination of whether any business sought to be brought
before any annual or special meeting of the shareholders is properly brought
before such meeting in accordance with this Section 8 will be made by the
presiding officer of such meeting. If the presiding officer determines that any
business is not properly brought before such meeting, he or she will so declare
to the meeting and any such business will not be conducted or considered.
ARTICLE II
BOARD OF DIRECTORS AND COMMITTEES
Section 1. NUMBER, TIME OF HOLDING OFFICE AND LIMITATION ON AGE. The
business and affairs of the Company shall be managed by or under the direction
of a Board of Directors. The number of directors constituting the Whole Board
shall be determined from time to time by resolution of the Board so long as the
total number of directors is not less than twelve nor more than eighteen;
provided, however, that the minimum and maximum number of directors may be
increased or decreased from time to time by vote of a majority of the Whole
Board; and, further provided that no change in the number of directors shall
serve to shorten the term of office of any incumbent director. The directors
shall be divided into three classes, as nearly equal in number as possible, and
the term of the office of the first class shall expire at the 1996 annual
meeting of shareholders, the term of office of the second class shall expire at
the 1997 annual meeting of shareholders and the term of office of the third
class shall expire at the 1998 annual meeting of shareholders, or, in each case,
until their successors shall be duly elected and qualified. At each
DTE Energy Company 5
<PAGE> 9
annual meeting commencing in 1996, a number of directors equal to the number of
the class whose term expires at the time of the meeting shall be elected to hold
office until the third succeeding annual meeting of shareholders. If at any time
the holders of any series of the Company's Preferred Stock are entitled to elect
directors pursuant to the Articles of Incorporation of the Company, then the
provisions of such series of Preferred Stock with respect to their rights shall
apply and such directors shall be elected in a manner and for terms expiring
consistent with the Articles of Incorporation.
Except as hereinafter provided, each director shall be a holder of
Common Stock of the Company at the time of initial election to the Board or
shall become a holder within 30 days after such election (to the extent of at
least one share, owned beneficially). Any director who thereafter ceases to be
such a holder, shall thereupon cease to be a director. The Board shall have the
authority to waive the requirement to hold shares in individual situations upon
presentation of evidence that a nominee or director is unable to hold shares for
legal or religious reasons.
No person who shall have served as an employee of the Company or an
affiliate shall be elected a director after retiring from employment with the
Company or an affiliate; provided, however, that if such person was the Chief
Executive Officer of the Company at the time of such retirement, such person
shall be eligible for election as a director until attaining age 70. No other
person shall be elected a director after attaining age 70; provided, however,
the Board shall have the authority to waive this provision for no more than one
three-year term upon a determination that circumstances exist which make it
prudent to continue the service of a director who possesses special and unique
expertise clearly beneficial to the Company.
Section 2. VACANCIES. Whenever any vacancy shall occur in the Board
of Directors by death, resignation, or any other cause, it shall be filled
without undue delay by a majority vote of the remaining members of the Board of
Directors (even if constituting less than a quorum), and the person who is to
fill any such vacancy shall hold office for the unexpired term of the director
to whom such person succeeds, or for the term fixed by the Board of Directors
acting in compliance with Section l of this Article II in case of a vacancy
created by an increase in the number of directors, and until a successor shall
be elected and shall have qualified; provided, however, that no vacancy need be
filled if, after such vacancy shall occur, the number of directors remaining on
the Board shall be not less than a majority of the Whole Board. During the
existence of any vacancy or vacancies, the surviving or remaining directors
shall possess and may exercise all the powers of the full Board of Directors,
when action by a larger number is not required by law.
SECTION 3. NOMINATIONS OF DIRECTORS; ELECTION. (a) Except as may be
otherwise provided in any resolution establishing any Preferred Stock, only
persons who are nominated in accordance with this Section 3 will be eligible for
election at a meeting of shareholders to be members of the Board of Directors of
the Company.
(b) Nominations of persons for election as directors of the Company
may be made only at an annual meeting of shareholders (i) by or at the
direction of the Board of Directors or a committee thereof or (ii) by any
shareholder who is a shareholder of record at the time of giving of notice
provided for in this Section 3, who is entitled to vote for the election of
directors at such meeting, and who complies with the procedures set forth in
this Section 3. All nominations by
DTE Energy Company 6
<PAGE> 10
shareholders must be made pursuant to timely notice in proper written form to
the Corporate Secretary.
(c) To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Company not less
than 60 nor more than 90 calendar days prior to the annual meeting of
shareholders; provided, however, that in the event that public announcement of
the date of the annual meeting is not made at least 100 calendar days prior to
the date of the annual meeting, notice by the shareholder to be timely must be
so received not later than the close of business on the 10th calendar day
following the day on which public announcement (as defined in Section 8(c ) of
Article I) is first made of the date of the annual meeting. To be in proper
written form, such shareholder's notice must set forth or include: (i) the name
and address, as they appear on the Company's books, of the shareholder giving
the notice and of the beneficial owner, if any, on whose behalf the nomination
is made; (ii) a representation that the shareholder giving the notice is a
holder of record of stock of the Company entitled to vote at such annual
meeting and intends to appear in person or by proxy at the annual meeting to
nominate the person or persons specified in the notice; (iii) the class and
number of shares of stock of the Company owned beneficially and of record by
the shareholder giving the notice and by the beneficial owner, if any, on whose
behalf the nomination is made; (iv) a description of all arrangements or
understandings between or among any of (A) the shareholder giving the notice,
(B) the beneficial owner on whose behalf the notice is given, (C) each nominee,
and (D) any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder giving
the notice; (v) such other information regarding each nominee proposed by the
shareholder giving the notice as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to be nominated, by the
Board of Directors; and (vi) the signed consent of each nominee to serve as a
director of the Company if so elected. The presiding officer of any annual
meeting may, if the facts warrant, determine that a nomination was not made in
accordance with this Section 3, and if he or she should so determine, he or she
will so declare to the meeting, and the defective nomination will be
disregarded. Notwithstanding the foregoing provisions of this Section 3, a
shareholder must also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder with
respect to the matters set forth in this Section 3.
Section 4. MEETINGS OF THE BOARD. Regular meetings of the Board of
Directors shall be held at such times and at such places as may from time to
time be fixed by the Board of Directors.
Special meetings of the Board of Directors may be called by the
Chairman of the Board, the President, or, in the event of the incapacity of the
Chairman of the Board and the President, the Executive Committee by giving
reasonable notice of the time and place of such meetings or by obtaining written
waivers of notice, before or after the meeting, from each absent director. All
such meetings shall be held at the office of the Company in the City of Detroit
unless some other place is specified in the notice.
A notice, or waiver of notice, need not specify the purpose of the
meeting.
DTE Energy Company 7
<PAGE> 11
Section 5. QUORUM. A majority of the directors in office at the time
of a meeting of the Board, shall constitute a quorum for the transaction of
business. If at any meeting of the Board of Directors there shall be less than a
quorum present, a majority of the directors present may adjourn the meeting
without notice other than announcement at the meeting, until a quorum shall have
been obtained, when any business may be transacted which might have been
transacted at the meeting as first convened had there been a quorum. The acts of
a majority of the directors present at any meeting at which there is a quorum
shall be the acts of the Board, unless otherwise provided by law, by the
Articles of Incorporation or by the Bylaws.
Section 6. ANNUAL MEETING OF DIRECTORS. A meeting of the Board of
Directors, known as the directors' annual meeting, shall be held without notice
each year after the adjournment of the annual shareholders' meeting and on the
same day. At such meeting the officers of the Company for the ensuing year shall
be elected. If a quorum of the directors is not present on the day appointed for
the directors' annual meeting, the meeting shall be adjourned to some convenient
day.
Section 7. EXECUTIVE COMMITTEE. The Board of Directors may, by
resolution or resolutions passed by a majority of the Whole Board, designate an
Executive Committee to consist of the Chief Executive Officer and two or more of
the other directors, and alternates, and shall designate the Chairman thereof.
The Executive Committee shall have and may exercise, when the Board is not in
session, all of the powers of the Board in the management of the business and
affairs of the Company, and shall have power to authorize the seal of the
Company to be affixed to all papers which may require it. The Executive
Committee shall not have power to (a) amend these Bylaws, (b) change the number
of directors constituting the Whole Board or fill vacancies in the Board, (c)
declare dividends, (d) establish, change the membership of, or fill vacancies
in, any committee, (e) fix the compensation of the directors or committee
members, (f) submit matters for action by shareholders, or (g) amend or repeal a
resolution of the Board which by its terms may not be changed by the Executive
Committee. The Board shall have the power at any time to fill vacancies in, to
change the membership of, or to dissolve, the Executive Committee. The Executive
Committee may make rules for the conduct of its business and may appoint such
subcommittees and assistants as it shall from time to time deem necessary. A
majority of the members of the Executive Committee shall constitute a quorum.
All action taken by the Executive Committee shall be reported to the Board at
its next meeting succeeding such action. The Corporate Secretary or an Assistant
Corporate Secretary shall attend and act as the secretary of all meetings of the
Committee and keep the minutes thereof.
Meetings of the Executive Committee may be called by the Chairman of
the Board, or, the President, or, in the event of the incapacity of the Chairman
of the Board and the President, by two or more members of the Executive
Committee by giving reasonable notice of the time and place of such meetings.
All such meetings shall be held at the office of the Company in the City of
Detroit unless some other place is specified in the notice.
Section 8. COMMITTEES. The Board of Directors may, by resolution,
create a committee or committees of one or more directors, and alternates, to
consider and report upon or to
DTE Energy Company 8
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carry out such matters (not excepted by Article II, Section 7) as may
be entrusted to them by the Board of Directors, and shall designate the Chairman
of each such committee.
Section 9. PARTICIPATION IN MEETINGS. One or more members of the
Board of Directors or any committee may participate in any meeting of such
Board or such committee by means of a conference telephone or similar
communications equipment which enables all persons participating in such a
meeting to hear each other at the same time. Participation in the manner so
described shall constitute presence in person at such meetings.
Section 10. COMPENSATION. Each director of the Company who is not a
salaried officer or employee of the Company may receive reasonable compensation
for services as a director, including a reasonable fee for attendance at
meetings of the Board and committees thereof, and attendance at the Company's
request at other meetings or similar activities related to the Company.
ARTICLE III
OFFICERS
Section 1. OFFICERS AND AGENTS. The officers of the Company to be
elected by the Board of Directors, as soon as practicable after the election of
directors each year, shall be Chairman of the Board, the President, a Corporate
Secretary and a Treasurer. The Board of Directors may also from time to time
elect one or more Vice Presidents, a Controller, a General Auditor, a General
Counsel, and such other officers and agents as it may deem proper. The Chairman
of the Board and the President shall be chosen from among the directors. The
persons holding the offices of Chairman of the Board or President may not also
hold the office of General Auditor. The Board of Directors may, in its
discretion, leave vacant any office other than that of Chairman of the Board,
President, Corporate Secretary, or Treasurer.
Section 2. TERM OF OFFICE. The term of office of all officers shall
be until the next directors' annual meeting or until their respective successors
are chosen and qualified. Any officer or agent elected by the Board of Directors
may be removed by the Board at any time, with or without cause.
Section 3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall be
the Chief Executive Officer of the Company and, shall preside at all meetings of
the Board of Directors and, subject to Section 8(a) of Article I, meetings of
shareholders, at which the Chairman is present, and shall make the annual report
to the shareholders. The Chairman shall have general charge of the business and
affairs of the Company subject to the control of the Board of Directors, may
create in the name of the Company any authorized corporate obligation or other
instrument and shall perform such other functions as may be prescribed by the
Board from time to time.
DTE Energy Company 9
<PAGE> 13
The Chairman of the Board shall manage or supervise the conduct of the
corporate finances and relations of the Company with its shareholders, with the
public, and with regulatory authorities, and in addition to the President, may
exercise all powers elsewhere in the Bylaws conferred upon the President. The
Chairman may delegate from time to time to the President or to other officers,
employees or positions of the Company, such powers as the Chairman may specify
in writing, with such terms and conditions, if any, as the Chairman may set
forth. A copy of each such delegation and of any revocation or change shall be
filed with the Corporate Secretary.
Section 4. PRESIDENT. The President shall be the chief operating
officer of the Company, subject to the control of the Board of Directors and the
Chairman of the Board, shall have power to authorize the employment of such
subordinate employees as may, in the President's judgment, be advisable for the
operations of the Company, may execute in the name of the Company any authorized
corporate obligation or other instrument, and shall perform all other acts
incident to the President's office or prescribed by the Board of Directors or
the Chairman of the Board, or authorized or required by law. During the absence
or disability of the Chairman of the Board, the President shall assume the
duties and authority of the Chairman of the Board and shall be the Chief
Executive Officer of the Company.
Section 5. OTHER OFFICERS. The other officers, agents, and employees
of the Company shall each have such powers and perform such duties in the
management of the property and affairs of the Company, subject to the control of
the Board of Directors, as generally pertain to their respective offices, as
well as such powers and duties as from time to time may be prescribed by the
Board of Directors, by the Chairman of the Board, or by the President.
Section 6. COMPENSATION. The Board of Directors shall determine the
compensation to be paid to the Chairman of the Board, the President, and each
Vice President above the level of Assistant Vice President.
Section 7. VOTING OF SHARES AND SECURITIES OF OTHER CORPORATIONS.
Unless the Board of Directors otherwise directs, the Company's Chairman of the
Board and President shall each be entitled to vote or designate a proxy to vote
all shares and other securities which the Company owns in any other corporation
or entity.
ARTICLE IV
CAPITAL STOCK
Section 1. CERTIFICATES OF SHARES. The interest of each shareholder
shall be evidenced by a certificate or certificates for shares of stock of the
Company in such form as the Board of Directors may from time to time prescribe.
The certificates of stock shall be signed by the Chairman of the Board, the
President or a Vice President and by the Treasurer, an Assistant Treasurer, the
Corporate Secretary, or an Assistant Corporate Secretary of the Company, and
shall be countersigned by a transfer agent for the stock and registered by a
registrar for such stock. The signatures of the officers and the transfer agent
and the registrar upon such certificates may be facsimiles, engraved, or
printed, subject to the provisions of applicable law. In case any officer,
DTE Energy Company 10
<PAGE> 14
transfer agent, or registrar shall cease to serve in that capacity after their
facsimile signature has been placed on a certificate, the certificates may be
issued with the same effect as if the officer, transfer agent, or registrar were
still in office.
Section 2. TRANSFER OF SHARES. Shares in the capital stock of the
Company shall be transferred on the books of the Company upon surrender and
cancellation of certificates for a like number of shares, with duly executed
power to transfer endorsed on or attached to the certificate.
Section 3. LOST OR DESTROYED STOCK CERTIFICATES. No certificate for
shares of stock of the Company shall be issued in place of any certificate
alleged to have been lost, stolen or destroyed, except upon production of such
evidence of the loss, theft or destruction, and upon indemnification of the
Company and its agents to such extent and in such manner as the Board of
Directors may from time to time prescribe.
ARTICLE V
CHECKS, NOTES, BONDS, DEBENTURES, ETC.
All checks and drafts on the Company's bank accounts, all bills of
exchange and promissory notes, and all acceptances, obligations, and other
instruments for the payment of money, shall be signed by such officer or
officers or agent or agents, either manually or by facsimile signature or
signatures, as shall be thereunto authorized from time to time by the Board of
Directors either generally or in specific instances; provided that bonds,
debentures, and other evidences of indebtedness of the Company bearing facsimile
signatures of officers of the Company shall be issued only when authenticated by
a manual signature on behalf of a trustee or an authenticating agent appointed
by the Board of Directors. In case any such officer of the Company shall cease
to be such after such officer's facsimile signature has been placed thereon,
such bonds, debentures or other evidences of indebtedness may be issued with the
same effect as if such person were still in office.
ARTICLE VI
CORPORATE SEAL
The Board of Directors shall provide a suitable seal containing the
name of the Company.
ARTICLE VII
CONTROL SHARE ACQUISITIONS
The Stacey, Bennett, and Randall Shareholder Equity Act (Chapter 7B of
the Michigan Business Corporation Act) shall not apply to any control share
acquisitions (as defined in such Act) of shares of the Company.
DTE Energy Company 11
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This Article VII of the Bylaws may not be amended, altered, or repealed
with respect to any control share acquisition of shares of the Company effected
pursuant to a tender offer or other transaction commenced prior to the date of
such amendment, alteration, or repeal.
ARTICLE VIII
AMENDMENT OF BYLAWS
Those provisions of these Bylaws providing for a classified Board of
Directors (currently the third, fourth and fifth sentences of the first
paragraph of Section 1 of Article II) and the provisions of this sentence may be
amended or repealed only by the affirmative vote of the holders of a majority of
shares of Common Stock of the Company. Except as provided in the immediately
preceding sentence, Bylaws of the Company may be amended, repealed or adopted by
vote of the holders of a majority of shares at the time entitled to vote in the
election of any directors or by vote of a majority of the directors in office.
DTE Energy Company 12
<PAGE> 1
Form of Supplemental Indenture (Mortgage) for
General and Refunding Mortgage Bonds
collateralizing Remarketed Secured Notes
(including Form of Mortgage Bonds on pages 9
through 13).
EXHIBIT 4-198
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
Dated as of
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(a) SERIES
AND
(b) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
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PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 4
Bonds to be 1994 Series ......................................... 5
Further Assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 5
PART I.
CREATION OF
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES
Sec. 1. Certain terms of Bonds of Series ..................... 6
Sec. 2. Redemption of Bonds of Series ..................... 7
Sec. 3. Redemption of Bonds of Series in event of acceleration
of Secured Notes ....................................... 8
Sec. 4. Form of Bonds of Series .............................. 8
Form of Trustee's Certificate................................. 13
PART II.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 14
Recording and filing of Supplemental Indentures...................... 14
Recording of Certificates of Provision for Payment................... 19
PART III.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 19
PART IV.
MISCELLANEOUS
Confirmation of Section 318(c) of Trust Indenture Act................ 19
Execution in Counterparts............................................ 19
Testimonium.......................................................... 20
Execution............................................................ 20
Acknowledgment of execution by Company............................... 20
Acknowledgment of execution by Trustee............................... 21
Affidavit as to consideration and good faith......................... 22
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* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
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PARTIES. SUPPLEMENTAL INDENTURE, dated as of the day of , in the year
one thousand nine hundred and ninety-four, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989, July 15, 1989, December 1, 1989, February 15, 1990, November 1,
1990, April 1, 1991, May 1, 1991, May 15, 1991, September 1, 1991,
November 1, 1991, January 15, 1992, February 29, 1992, April 15, 1992,
July 15, 1992, July 31, 1992, November 30, 1992, December 15, 1992,
January 1, 1993, March 1, 1993, March 15, 1993, April 1, 1993, April 26,
1993, May 31, 1993, June 30, 1993, June 30, 1993, September 15, 1993 and
March 1, 1994, June 15, 1994, August 15, 1994, December 1, 1994 and August 1,
1995 supplemental to the Original Indenture, have heretofore been
entered into between the Company and the Trustee (the Original Indenture
and all indentures supplemental thereto together being hereinafter
sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of ($ )have heretofore been issued
ISSUED. under the indenture as follows, viz:
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(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
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2
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(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series AA -- Principal Amount $100,000,000,
(20) Bonds of Series BB -- Principal Amount $50,000,000,
(21) Bonds of Series CC -- Principal Amount $50,000,000,
(22) Bonds of Series UU -- Principal Amount $100,000,000,
(23-31) Bonds of Series DDP Nos. 1-9 -- Principal Amount $14,305,000,
(32-45) Bonds of Series FFR Nos. 1-14 -- Principal Amount $45,600,000,
(46-67) Bonds of Series GGP Nos. 1-22 -- Principal Amount $42,300,000,
(68) Bonds of Series HH -- Principal Amount $50,000,000,
(69-90) Bonds of Series IIP Nos. 1-22 -- Principal Amount $3,750,000,
(91-98) Bonds of Series JJP Nos. 1-8 -- Principal Amount $6,850,000,
(99-106) Bonds of Series KKP Nos. 1-8 -- Principal Amount $14,890,000,
(107-121) Bonds of Series LLP Nos. 1-15 -- Principal Amount $8,850,000,
(122-142) Bonds of Series NNP Nos. 1-21 -- Principal Amount $47,950,000,
(143-160) Bonds of Series OOP Nos. 1-18 -- Principal Amount $18,880,000,
(161-178) Bonds of Series QQP Nos. 1-18 -- Principal Amount $13,215,000,
(179-193) Bonds of Series TTP Nos. 1-15 -- Principal Amount $3,800,000,
(194) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(195-219) Bonds of 1980 Series CP Nos. 1-25 -- Principal Amount $35,000,000,
(220-230) Bonds of 1980 Series DP Nos. 1-11 -- Principal Amount $10,750,000,
(231-246) Bonds of 1981 Series AP Nos. 1-16 -- Principal Amount $124,000,000,
(247) Bonds of 1985 Series A -- Principal Amount $35,000,000,
(248) Bonds of 1985 Series B -- Principal Amount $50,000,000,
(249) Bonds of Series PP -- Principal Amount $70,000,000,
(250) Bonds of Series RR -- Principal Amount $70,000,000,
(251) Bonds of Series EE -- Principal Amount $50,000,000,
(252-253) Bonds of Series MMP and MMP No. 2 -- Principal Amount $5,430,000,
(254) Bonds of Series T -- Principal Amount $75,000,000,
(255) Bonds of Series U -- Principal Amount $75,000,000,
(256) Bonds of 1986 Series B -- Principal Amount $100,000,000,
(257) Bonds of 1987 Series D -- Principal Amount $250,000,000,
(258) Bonds of 1987 Series E -- Principal Amount $150,000,000,
(259) Bonds of 1987 Series C -- Principal Amount $225,000,000,
(260) Bonds of Series V -- Principal Amount $100,000,000,
(261) Bonds of Series SS -- Principal Amount $150,000,000,
(262) Bonds of 1980 Series B -- Principal Amount $100,000,000,
(263) Bonds of 1986 Series C -- Principal Amount $200,000,000,
(264) Bonds of 1986 Series A -- Principal Amount $200,000,000,
(265) Bonds of 1987 Series B -- Principal Amount $175,000,000,
(266) Bonds of Series X -- Principal Amount $100,000,000,
(267) Bonds of 1987 Series F -- Principal Amount $200,000,000,
(268) Bonds of 1987 Series A -- Principal Amount $300,000,000,
(269) Bonds of Series Y -- Principal Amount $60,000,000,
(270) Bonds of Series Z -- Principal Amount $100,000,000,
all of which have either been retired and cancelled, or no longer
represent obligations of the Company, having been called for redemption
and funds necessary to effect the payment, redemption and retirement
thereof having been deposited with the Trustee as a special trust fund to
be applied for such purpose;
(271) Bonds of Series R in the principal amount of One hundred million
dollars ($100,000,000), all of which are outstanding at the date hereof;
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3
(272) Bonds of Series S in the principal amount of One hundred fifty
million dollars ($150,000,000), all of which are outstanding at the
date hereof;
(273-278) Bonds of Series KKP Nos. 9-14 in the principal amount of One
hundred ninety-three million two hundred ninety thousand dollars
($193,290,000), all of which are outstanding at the date hereof;
(279) Bonds of Series QQP No. 19 in the principal amount of Four
hundred thirty-five thousand dollars ($435,000), all of which are
outstanding at the date hereof;
(280) Bonds of 1984 Series AP in the principal amount of Two
million four hundred thousand dollars ($2,400,000), all of which are
outstanding at the date hereof;
(281) Bonds of 1984 Series BP in the principal amount of Seven million
seven hundred fifty thousand dollars ($7,750,000), all of which are
outstanding at the date hereof;
(282) Bonds of 1989 Series A in the principal amount of Three hundred
million dollars ($300,000,000) of which One hundred thirty-one million
seven hundred fifteen thousand dollars ($131,715,000) principal amount
have heretofore been retired and One hundred sixty-eight million two
hundred eighty-five thousand dollars ($168,285,000) principal amount
are outstanding at the date hereof;
(283) Bonds of 1989 Series BP in the principal amount of Sixty-six
million five hundred sixty-five thousand dollars ($66,565,000), all
of which are outstanding at the date hereof;
(284) Bonds of 1990 Series A in the principal amount of One hundred
ninety-four million six hundred forty-nine thousand dollars
($194,649,000) of which Twenty-five million one hundred sixteen
thousand dollars ($25,116,000) principal amount have heretofore been
retired and One hundred sixty-nine million five hundred thirty-three
thousand dollars ($169,533,000) principal amount are outstanding at
the date hereof;
(285) Bonds of 1990 Series B in the principal amount of Two hundred
fifty-six million nine hundred thirty-two thousand dollars
($256,932,000) of which Thirty-eight million sixty-four thousand
dollars ($38,064,000) principal amount have heretofore been retired
and Two hundred eighteen million eight hundred sixty-eight thousand
dollars ($218,868,000) principal amount are outstanding at the date
hereof;
(286) Bonds of 1990 Series C in the principal amount of Eighty-five
million four hundred seventy-five thousand dollars ($85,475,000) of
which Thirteen million six hundred seventy-six thousand dollars
($13,676,000) principal amount have heretofore been retired and
Seventy-one million seven hundred ninety-nine thousand dollars
($71,799,000) principal amount are outstanding at the date hereof;
(287) Bonds of 1991 Series AP in the principal amount of Thirty-two
million three hundred seventy-five thousand dollars ($32,375,000), all
of which are outstanding at the date hereof;
(288) Bonds of 1991 Series BP in the principal amount of Twenty-five
million nine hundred ten thousand dollars ($25,910,000), all of which
are outstanding at the date hereof;
(289) Bonds of 1991 Series CP in the principal amount of Thirty-two
million eight hundred thousand dollars ($32,800,000), all of which are
outstanding at the date hereof;
(290) Bonds of 1991 Series DP in the principal amount of Thirty-seven
million six hundred thousand dollars ($37,600,000), all of which are
outstanding at the date hereof;
(291) Bonds of 1991 Series EP in the principal amount of Forty-one
million four hundred eighty thousand dollars ($41,480,000), all of
which are outstanding at the date hereof;
(292) Bonds of 1991 Series FP in the principal amount of Ninety-eight
million three hundred seventy-five thousand dollars ($98,375,000), all
of which are outstanding at the date hereof;
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(293) Bonds of 1992 Series BP in the principal amount
of Twenty million nine hundred seventy-five thousand dollars
($20,975,000), all of which are outstanding at the date
hereof;
(294) Bonds of 1992 Series AP in the principal amount
of Sixty-six million dollars ($66,000,000), all of which are
outstanding at the date hereof;
(295) Bonds of 1992 Series D in the principal amount of
Three hundred million dollars ($300,000,000), all of which
are outstanding at the date hereof;
(296) Bonds of 1992 Series CP in the principal amount
of Thirty-five million dollars ($35,000,000), all of which
are outstanding at the date hereof;
(297) Bonds of 1992 Series E in the principal amount of
Fifty million dollars ($50,000,000), all of which are
outstanding at the date hereof;
(298) Bonds of 1989 Series BP No. 2 in the principal
amount of Thirty-six million dollars ($36,000,000), all of
which are outstanding at the date hereof;
(299) Bonds of 1993 Series C in the principal amount of
Two hundred twenty-five million dollars ($225,000,000), all
of which are outstanding at the date hereof;
(300) Bonds of 1993 Series B in the principal amount of
Fifty million dollars ($50,000,000), all of which are
outstanding at the date hereof;
(301) Bonds of 1993 Series E in the principal amount of
Four hundred million dollars ($400,000,000), all of which are
outstanding at the date hereof;
(302) Bonds of 1993 Series D in the principal amount of
One hundred million dollars ($100,000,000), all of which are
outstanding at the date hereof;
(303) Bonds of 1993 Series FP in the principal amount
of Five million six hundred eighty-five thousand dollars
($5,685,000), all of which are outstanding at the date
hereof;
(304) Bonds of 1993 Series G in the principal amount of
Two hundred twenty-five million dollars ($225,000,000), all
of which are outstanding at the date hereof;
(305) Bonds of 1993 Series J in the principal amount of
Three hundred million dollars ($300,000,000), all of which
are outstanding at the date hereof;
(306) Bonds of 1993 Series IP in the principal amount
of Five million eight hundred twenty-five thousand dollars
($5,825,000), all of which are outstanding at the date
hereof;
(307) Bonds of 1993 Series AP in the principal amount
of Sixty-five million dollars ($65,000,000), all of which are
outstanding at the date hereof;
(308) Bonds of 1993 Series H in the principal amount of
Fifty million dollars ($50,000,000), all of which are
outstanding at the date hereof;
(309) Bonds of 1993 Series K in the principal amount of
One hundred sixty million dollars ($160,000,000), all of
which are outstanding at the date hereof;
and, accordingly, of the bonds so issued, dollars
principal ($ )amount are outstanding at the date hereof;
and
REASON FOR WHEREAS, the Company intends to issue and sell a series of
CREATION OF its debt securities entitled "Remarketed Secured Notes
NEW SERIES. Series Due (hereinafter referred to as "Secured
Notes, "); and
WHEREAS, the Secured Notes, , will be issued pursuant
to a Collateral Trust Indenture, dated as of as amended, and
as further amended by a Supplemental Indenture, dated as
of , between the Company and Bankers Trust Company, as
Note Trustee (the Collateral Trust Indenture, as amended, and
as further amended by the Supplemental Indenture being
hereinafter referred to as the "Note Indenture"); and
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WHEREAS, pursuant to the Note Indenture the Company has agreed to issue
its General and Refunding Mortgage Bonds under the Indenture in order
further to secure its obligations under the Note Indenture and with
respect to the Secured Notes, ; and
WHEREAS, for such purposes the Company desires to issue a new series of
bonds to be issued under the Indenture and to be authenticated and
delivered pursuant to Section 8 of Article III of the Indenture; and
BONDS TO BE WHEREAS, the Company desires by this Supplemental Indenture to create a
SERIES . new series of bonds, to be designated "General and Refunding Mortgage
Bonds, Series "; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the property
ASSURANCE. subject to the lien thereof all of the estates and properties, real,
personal and mixed, rights, privileges and franchises of every nature and
kind and wheresoever situate, then or thereafter owned or possessed by or
belonging to the Company or to which it was then or at any time thereafter
might be entitled in law or in equity (saving and excepting, however, the
property therein specifically excepted or released from the lien thereof),
and the Company therein covenanted that it would, upon reasonable request,
execute and deliver such further instruments as may be necessary or proper
for the better assuring and confirming unto the Trustee all or any part of
the trust estate, whether then or thereafter owned or acquired by the
Company (saving and excepting, however, property specifically excepted or
released from the lien thereof); and
AUTHORIZATION WHEREAS, the Company in the exercise of the powers and authority
OF SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
FOR SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
</TABLE>
<PAGE> 8
6
<TABLE>
<CAPTION>
PART I.
CREATION OF
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
SERIES
<S> <C>
CERTAIN TERMS SECTION 1. The Company hereby creates the series of
OF BONDS OF bonds to be issued under and secured by the Original Indenture as amended
SERIES. to date and as further amended by this Supplemental Indenture, to be
designated, and to be distinguished from the bonds of all other series, by
the title "General and Refunding Mortgage Bonds, Series "
(elsewhere herein referred to as the "bonds of Series "). The
aggregate principal amount of bonds of Series shall be limited to
million dollars ($ ), except as provided
in Sections 7 and 13 of Article II of the Original Indenture with respect
to exchanges and replacements of bonds.
Each bond of Series is to be irrevocably assigned to, and
registered in the name of, Bankers Trust Company, as trustee, or a
successor trustee (said trustee or any successor trustee being hereinafter
referred to as the "Note Indenture Trustee"), under the Note Indenture
between the Note Indenture Trustee and the Company, to secure payment of
the Company's Secured Notes, .
The bonds of Series shall be issued as registered bonds without
coupons in denominations of a multiple of $100,000. The bonds of
Series shall be issued in the aggregate principal amount of
$ , shall mature on and shall bear interest at
a maximum rate of 15% per annum (unless such maximum rate shall be
increased by resolution of the Company's Board of Directors and set forth
in an additional Supplemental Indenture between the Company and the
Trustee) or such lesser amount as shall be provided for in the Note
Indenture on such date or dates provided for in the Note Indenture and
thereafter until the Company's obligation with respect to the payment of
said principal shall have been discharged as provided in the Indenture.
The bonds of Series shall be payable as to principal, premium, if
any, and interest as provided in the Indenture, but only to the extent and
in the manner herein provided. The bonds of Series shall be payable, both
as to principal and interest, at the office or agency of the Company in the
Borough of Manhattan, The City and State of New York, in any coin or
currency of the United States of America which at the time of payment is
legal tender for public and private debts.
Except as provided herein, each bond of Series shall be dated the
date of its authentication and interest shall be payable on the principal
represented thereby as provided in the Note Indenture.
The bonds of Series in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denominations of bonds of
Series ). Until bonds of Series in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of
Series in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of Series , if any, may be printed and
may be issued in authorized denominations in substantially the form of
definitive bonds of Series , but with such omissions, insertions
and variations as may be appropriate for temporary bonds, all as may be
determined by the Company.
</TABLE>
<PAGE> 9
7
<TABLE>
<CAPTION>
<S> <C>
Bonds of Series shall not be assignable or transferable except as
may be set forth under Section 405 of the Note Indenture, or, subject to
compliance with applicable law, as may be involved in the course of the
exercise of rights and remedies consequent upon an Event of Default under
the Note Indenture. Any such transfer shall be made upon surrender thereof
for cancellation at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, together with a written
instrument of transfer (if so required by the Company or by the Trustee)
in form approved by the Company duly executed by the holder or by its duly
authorized attorney. Bonds of Series shall in the same manner be
exchangeable for a like aggregate principal amount of
bonds of Series upon the terms and conditions
specified herein and in Section 7 of Article II of the
Indenture. The Company waives its rights under Section 7 of
Article II of the Indenture not to make exchanges or
transfers of bonds of Series , during any period of ten
days next preceding any redemption date for such bonds.
Bonds of Series , in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or as may be specified in the Note
Indenture.
Upon payment of the principal or premium, if any, or interest on the
Secured Notes, whether at maturity or prior to maturity by
redemption or otherwise, or upon provision for the payment thereof having
been made in accordance with Article V of the Note Indenture, bonds of
Series in a principal amount equal to the principal amount of such
Secured Notes , shall, to the extent of such payment of principal,
premium or interest, be deemed fully paid and the obligation of the
Company thereunder to make such payment shall forthwith cease and be
discharged, and, in the case of the payment of principal and premium, if
any, such bonds shall be surrendered for cancellation or presented for
appropriate notation to the Trustee.
REDEMPTION SECTION 2. Bonds of Series shall be redeemed on the respective
OF BONDS OF dates and in the respective principal amounts which correspond to the
SERIES. redemption dates for, and the principal amounts to be redeemed of, the
Secured Notes .
In the event the Company elects to redeem any Secured
Notes, prior to maturity in accordance with the
provisions of the Note Indenture, the Company shall on the
same date redeem bonds of Series in principal amounts and
at redemption prices corresponding to the Secured Notes, so
redeemed. The Company agrees to give the Trustee notice of
any such redemption of bonds of Series on the same date
as it gives notice of redemption of Secured Notes, to the
Note Indenture Trustee.
</TABLE>
<PAGE> 10
8
<TABLE>
<S> <C>
REDEMPTION SECTION 3. In the event of an Event of Default under the Note Indenture
OF BONDS OF and the acceleration of all Secured Notes, , the bonds of Series
SERIES IN EVENT OF shall be redeemable in whole upon receipt by the Trustee of a written
ACCELERATION demand (hereinafter called a "Redemption Demand") from the Note Indenture
OF SECURED NOTES . Trustee stating that there has occurred under the Note Indenture both an
Event of Default and a declaration of acceleration of payment of
,principal, accrued interest and premium, if any, on the Secured Notes,
specifying the last date to which interest on the Secured Notes,
has been paid (such date being hereinafter referred to as the
"Initial Interest Accrual Date") and demanding redemption of the bonds of
said series. The Trustee shall, within five days after receiving such
Redemption Demand, mail a copy thereof to the Company marked to indicate
the date of its receipt by the Trustee. Promptly upon receipt by the
Company of such copy of a Redemption Demand, the Company shall fix a date
on which it will redeem the bonds of said series so demanded to be
redeemed (hereinafter called the "Demand Redemption Date"). Notice of the
date fixed as the Demand Redemption Date shall be mailed by the Company to
the Trustee at least ten days prior to such Demand Redemption Date. The
date to be fixed by the Company as and for the Demand Redemption Date may
be any date up to and including the earlier of (x) the 60th day after
receipt by the Trustee of the Redemption Demand or (y) the maturity date
of such bonds first occurring following the 20th day after the receipt by
the Trustee of the Redemption Demand; provided, however, that if the
Trustee shall not have received such notice fixing the Demand Redemption
Date on or before the 10th day preceding the earlier of such dates, the
Demand Redemption Date shall be deemed to be the earlier of such dates.
The Trustee shall mail notice of the Demand Redemption Date (such notice
being hereinafter called the "Demand Redemption Notice") to the Note
Indenture Trustee not more than ten nor less than five days prior to the
Demand Redemption Date.
Each bond of Series shall be redeemed by the Company on the Demand
Redemption Date therefore upon surrender thereof by the Note Indenture
Trustee to the Trustee at a redemption price equal to the principal amount
thereof plus accrued interest thereon at the rate specified for such bond
from the Initial Interest Accrual Date to the Demand Redemption Date plus
an amount equal to the aggregate premium, if any, due and payable on such
Demand Redemption Date on all Secured Notes, ; provided, however,
that in the event of a receipt by the Trustee of a notice that, pursuant
to Section 613 of the Note Indenture, the Note Indenture Trustee has
terminated proceedings to enforce any right under the Note Indenture, then
any Redemption Demand shall thereby be rescinded by the Note Indenture
Trustee, and no Demand Redemption Notice shall be given, or, if already
given, shall be automatically annulled; but no such rescission or
annulment shall extend to or affect any subsequent default or impair any
right consequent thereon.
Anything herein contained to the contrary notwithstanding, the Trustee
is not authorized to take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or effect, unless it is
executed in the name of the Note Indenture Trustee by its President or one
of its Vice Presidents.
FORM OF BONDS SECTION 4. The bonds of Series and the form of Trustee's
OF SERIES . Certificate to be endorsed on such bonds shall be substantially in the
following forms, respectively:
</TABLE>
<PAGE> 11
9
<TABLE>
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
SERIES , DUE ,
<S> <C>
Notwithstanding any provisions hereof or in the Indenture, this bond is
not assignable or transferable except as may be required to effect a
transfer to any successor trustee under the Collateral Trust Indenture,
dated as of June 30, 1993, as amended, and as further amended as of ,
between The Detroit Edison Company and Bankers Trust Company, as
Note Trustee, or, subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and remedies consequent
upon an Event of Default under said Trust Indenture.
$......... No..........
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to Bankers Trust Company, as Note Trustee, or registered assigns,
at the Company's office or agency in the Borough of Manhattan, The City
and State of New York, the principal sum of dollars
($ ) in lawful money of the United States of America on the date
specified in the title hereof and interest thereon on such date or dates
provided for in a Collateral Trust Indenture, dated as of June 30, 1993,
as amended and as further amended as of , (hereinafter
called the "Note Trust Indenture"), between the Company and Bankers Trust
Company, as Note Trustee (hereinafter called the "Note Indenture
Trustee"). This bond of Series shall bear interest at a maximum rate
of 15% per annum (unless such maximum rate shall be increased by
resolution of the Company's Board of Directors and set forth in an
additional Supplemental Indenture between the Company and the Trustee) or
such lessor amount as shall be provided in the Note Trust Indenture on
such date or dates provided for in the Note Trust Indenture and thereafter
until the Company's obligation with respect to payment of said principal
shall have been discharged, all as provided, to the extent and in the
manner specified in the Indenture hereinafter mentioned on the reverse
hereof and in the supplemental indenture pursuant to which this bond has
been issued.
This bond was originally issued to the Note Indenture Trustee so as to
secure the payment of the Company's Remarketed Secured Notes, Series
(hereinafter referred to as "Secured Notes, "). Payments of
principal of, or premium, if any, or interest on, the Secured Notes,
shall constitute like payments on this bond as further provided herein and
in the supplemental indenture pursuant to which this bond has been issued.
Reference is hereby made to such further provisions of this bond set
forth on the reverse hereof and such further provisions shall for all
purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
</TABLE>
<PAGE> 12
10
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed by its Chairman of the Board and its Vice
President and Treasurer, with their manual or facsimile signatures,
and its corporate seal, or a facsimile thereof, to be impressed or
imprinted hereon and the same to be attested by its Corporate
Secretary or an Assistant Corporate Secretary with his or her manual
or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By ............................
Chairman of the Board
............................
Vice President
Attest: and Treasurer
............................
Corporate Secretary
<PAGE> 13
11
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the Company,
unlimited as to amount except as provided in the Indenture hereinafter
mentioned or any indentures supplemental thereto, and is one of a
series of General and Refunding Mortgage Bonds known as Series ,
limited to an aggregate principal amount of $ , except as
otherwise provided in the Indenture hereinafter mentioned. This bond
and all other bonds of said series are issued and to be issued under,
and are all equally and ratably secured (except insofar as any
sinking, amortization, improvement or analogous fund, established in
accordance with the provisions of the Indenture hereinafter mentioned,
may afford additional security for the bonds of any particular series
and except as provided in Section 3 of Article VI of said Indenture)
by an Indenture, dated as of October 1, 1924, duly executed by the
Company to Bankers Trust Company, a corporation of the State of New
York, as Trustee, to which Indenture and all indentures supplemental
thereto (including the Supplemental Indenture dated as of , )
reference is hereby made for a description of the properties
and franchises mortgaged and conveyed, the nature and extent of the
security, the terms and conditions upon which the bonds are issued and
under which additional bonds may be issued, and the rights of the
holders of the bonds and of the Trustee in respect of such security
(which Indenture and all indentures supplemental thereto, including
the Supplemental Indenture dated as of , , are
hereinafter collectively called the "Indenture"). As provided in the
Indenture, said bonds may be for various principal sums and are
issuable in series, which may mature at different times, may bear
interest at different rates and may otherwise vary as in said
Indenture provided. With the consent of the Company and to the extent
permitted by and as provided in the Indenture, the rights and
obligations of the Company and of the holders of the bonds and the
terms and provisions of the Indenture, or of any indenture
supplemental thereto, may be modified or altered in certain respects
by affirmative vote of at least eighty-five percent (85%) in amount of
the bonds then outstanding, and, if the rights of one or more, but
less than all, series of bonds then outstanding are to be affected by
the action proposed to be taken, then also by affirmative vote of at
least eighty-five percent (85%) in amount of the series of bonds so to
be affected (excluding in every instance bonds disqualified from
voting by reason of the Company's interest therein as specified in the
Indenture); provided, however, that, without the consent of the holder
hereof, no such modification or alteration shall, among other things,
affect the terms of payment of the principal of or the interest on
this bond, which in those respects is unconditional.
This bond is redeemable upon the terms and conditions set forth
in the Indenture, including provision for redemption upon demand of
the Note Indenture Trustee following the occurrence of an Event of
Default under the Note Trust Indenture and the acceleration of the
principal of the Secured Notes, .
Under the Indenture, funds may be deposited with the Trustee
(which shall have become available for payment), in advance of the
redemption date of any of the bonds of Series (or portions
thereof), in trust for the redemption of such bonds (or portions
thereof) and the interest due or to become due thereon, and thereupon
all obligations of the Company in respect of such bonds (or portions
thereof) so to be redeemed and such interest shall cease and be
discharged, and the holders thereof shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature
on their part under the Indenture or with respect to such bonds (or
portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall
occur, the principal of all the bonds issued thereunder may become or
be declared due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
<PAGE> 14
12
Upon payment of the principal of, or premium, if any, or
interest on, the Secured Notes, whether at maturity or prior to
maturity by redemption or otherwise or upon provision for the payment
thereof having been made in accordance with Article IV of the Note
Trust Indenture, bonds of Series in a principal amount equal to
the principal amount of such Secured Notes, and having both a
corresponding maturity date and interest rate shall, to the extent of
such payment of principal, premium or interest, be deemed fully paid
and the obligation of the Company thereunder to make such payment
shall forthwith cease and be discharged, and, in the case of the
payment of principal and premium, if any, such bonds of said series
shall be surrendered for cancellation or presented for appropriate
notation to the Trustee.
This bond is not assignable or transferable except as set forth
under Section 405 of the Note Trust Indenture, or, subject to
compliance with applicable law, as may be involved in the course of
the exercise of rights and remedies consequent upon an Event of
Default under the Note Trust Indenture. Any such transfer shall be
made by the registered holder hereof, in person or by his attorney
duly authorized in writing, on the books of the Company kept at its
office or agency in the Borough of Manhattan, The City and State of
New York, upon surrender and cancellation of this bond, and thereupon,
a new registered bond of the same series of authorized denominations
for a like aggregate principal amount will be issued to the transferee
in exchange therefor, and this bond with others in like form may in
like manner be exchanged for one or more new bonds of the same series
of other authorized denominations, but of the same aggregate principal
amount, all as provided and upon the terms and conditions set forth in
the Indenture, and upon payment, in any event, of the charges
prescribed in the Indenture.
No recourse shall be had for the payment of the principal of or
the interest on this bond, or for any claim based hereon or otherwise
in respect hereof or of the Indenture, or of any indenture
supplemental thereto, against any incorporator, or against any past,
present or future stockholder, director or officer, as such, of the
Company, or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether for amounts unpaid on stock subscriptions or by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise howsoever; all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released by
every holder or owner hereof, as more fully provided in the Indenture.
<PAGE> 15
13
[FORM OF TRUSTEE'S CERTIFICATE]
FORM OF This bond is one of the bonds, of the series designated
TRUSTEE'S therein, described in the within-mentioned Indenture.
CERTIFICATE.
BANKERS TRUST COMPANY,
as Trustee
By ...........................
Authorized Officer
<PAGE> 16
14
<TABLE>
<CAPTION>
PART II.
RECORDING AND FILING DATA
<S> <C>
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Secretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
-------------- ------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
</TABLE>
<PAGE> 17
15
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
<S> <C> <C>
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
</TABLE>
<PAGE> 18
16
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
<S> <C> <C>
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
</TABLE>
<PAGE> 19
17
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------- ------------------
<S> <C> <C>
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C January 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
December 1, 1989.................. Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990................. 1990 Series A, 1990 November 1, 1990
Series B, 1990 Series
C, 1990 Series D, 1990
Series E and 1990
Series F
November 1, 1990.................. Series KKP No. 12 April 1, 1991
April 1, 1991..................... 1991 Series AP May 1, 1991
May 1, 1991....................... 1991 Series BP and 1991 May 15, 1991
Series CP
May 15, 1991...................... 1991 Series DP September 1, 1991
September 1, 1991................. 1991 Series EP November 1, 1991
November 1, 1991.................. 1991 Series FP January 15, 1992
January 15, 1992.................. 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992................. 1992 Series AP April 15, 1992
April 15, 1992.................... Series KKP No. 13 July 15, 1992
July 15, 1992..................... 1992 Series CP November 30, 1992
July 31, 1992..................... 1992 Series D November 30, 1992
November 30, 1992................. 1992 Series E and 1993 March 15, 1993
Series D
December 15, 1992................. Series KKP No. 14 and March 15, 1992
1989 Series BP No. 2
January 1, 1993................... 1993 Series C April 1, 1993
March 1, 1993..................... 1993 Series E June 30, 1993
March 15, 1993.................... 1993 Series D September 15, 1993
April 1, 1993..................... 1993 Series FP and 1993 September 15, 1993
Series IP
April 26, 1993.................... 1993 Series G and September 15, 1993
Amendment of Article
II, Section 5
May 31, 1993...................... 1993 Series J September 15, 1993
September 15, 1993................ 1993 Series K March 1, 1994
</TABLE>
[UPDATE]
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<PAGE> 20
18
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as , providing for
the terms of bonds to be issued thereunder of series has heretofore
been entered into between the Company and the Trustee and has been
filed in the Office of the Secretary of State of Michigan as a
financing statement on , 1994 (Filing No. ), has been filed
and recorded in the Office of the Interstate Commerce Commission
(Recordation No. 5485- ) on , _______, and has been
recorded as a real estate mortgage in the offices of the respective
Register of Deeds of certain counties in the State of Michigan, as
follows:
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
----------------------------- ------------------ ------ ----------
<S> <C> <C> <C>
Genesee......................
Huron........................
Ingham.......................
Lapeer.......................
Lenawee......................
Livingston...................
Macomb.......................
Mason........................
Monroe.......................
Oakland......................
Sanilac......................
St. Clair....................
Tuscola......................
Washtenaw....................
Wayne........................
</TABLE>
<PAGE> 21
19
<TABLE>
<CAPTION>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, Y, Z, AA, BB, CC, DDP Nos. 1-9, FFR Nos.
FOR PAYMENT. 1-14, GGP Nos. 1-22, HH, IIP Nos. 1-22, JJP Nos. 1-8, KKP Nos. 1-8, LLP
Nos. 1-15, NNP Nos. 1-21, OOP Nos. 1-18, QQP Nos. 1-17, TTP Nos. 1-15, UU,
1980 Series A, 1980 Series CP Nos. 1-25, 1980 Series DP Nos. 1-11, 1981
Series AP Nos. 1-16, 1985 Series A, 1985 Series B, 1987 Series A, PP, RR,
EE, MMP and MMP No. 2 which were issued under Supplemental Indentures
dated as of, respectively, June 1, 1925, August 1, 1927, February 1, 1931,
October 1, 1932, September 25, 1935, September 1, 1936, December 1, 1940,
September 1, 1947, November 15, 1951, January 15, 1953, May 1, 1953, March
15, 1954, May 15, 1955, August 15, 1957, December 15, 1970, November 15,
1971, January 15, 1973, May 1, 1974, October 1, 1974, January 15, 1975,
November 1, 1975, February 1, 1976, June 15, 1976, July 15, 1976, October
1, 1977, March 1, 1977, July 1, 1979, March 1, 1977, March 1, 1977, March
1, 1977, September 1, 1979, July 1, 1977, July 1, 1979, September 15,
1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1, 1979,
January 1, 1980, August 15, 1980, November 1, 1981, May 1, 1985, May 15,
1985, January 31, 1987, June 1, 1978, October 15, 1978, December 15, 1975,
February 15, 1977, and September 1, 1979 have matured or have been called
for redemption and funds sufficient for such payment or redemption have
been irrevocably deposited with the Trustee for that purpose; and
Certificates of Provision for Payment have been recorded in the offices of
the respective Registers of Deeds of certain counties in the State of
Michigan, with respect to all bonds of Series A, B, C, D, E, F, G, H, K,
L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1 and 2, IIP
No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
[UPDATE]
<CAPTION>
PART III.
THE TRUSTEE.
<S> <C>
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
<CAPTION>
PART IV.
MISCELLANEOUS.
<S> <C>
CONFIRMATION OF Except to the extent specifically provided therein, no provision of
SECTION 318(C) OF this supplemental indenture or any future supplemental indenture is
TRUST INDENTURE intended to modify, and the parties do hereby adopt and confirm, the
ACT. provisions of Section 318(c) of the Trust Indenture Act which amend and
supercede provisions of the Indenture in effect prior to November 15,
1990.
EXECUTION IN THIS SUPPLEMENTAL INDENTURE MAY BE SIMULTANEOUSLY EXECUTED IN ANY
COUNTERPARTS. NUMBER OF COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO
BE AN ORIGINAL; BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE
AND THE SAME INSTRUMENT.
</TABLE>
<PAGE> 22
20
TESTIMONIUM. IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND BANKERS TRUST
COMPANY HAVE CAUSED THESE PRESENTS TO BE SIGNED IN THEIR
RESPECTIVE CORPORATE NAMES BY THEIR RESPECTIVE CHAIRMEN OF THE
BOARD, PRESIDENTS, VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS,
TREASURERS OR ASSISTANT TREASURERS AND IMPRESSED WITH THEIR
RESPECTIVE CORPORATE SEALS, ATTESTED BY THEIR RESPECTIVE
SECRETARIES OR ASSISTANT SECRETARIES, ALL AS OF THE DAY AND
YEAR FIRST ABOVE WRITTEN.
THE DETROIT EDISON COMPANY,
(Corporate Seal) By
--------------------------
C. C. Arvani
Assistant Treasurer
EXECUTION. Attest:
------------------------------
Ronald J. Gdowski
Assistant Corporate Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
-------------------------------
Jack L. Somers
-------------------------------
Cathy M. Lewis
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
ACKNOWLEDGMENT On this day of , , before me, the
OF EXECUTION subscriber, a Notary Public within and for the County of
BY COMPANY. Wayne, in the State of Michigan, personally appeared C. C.
Arvani, to me personally known, who, being by me duly
sworn, did say that he does business at 2000 Second Avenue,
Detroit, Michigan 48226 and is the Assistant Treasurer of
THE DETROIT EDISON COMPANY, one of the corporations
described in and which executed the foregoing instrument;
that he knows the corporate seal of the said corporation
and that the seal affixed to said instrument is the
corporate seal of said corporation; and that said
instrument was signed and sealed in behalf of said
corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and
said C. C. Arvani, acknowledged said instrument to be the
free act and deed of said corporation.
--------------------------
(Notarial Seal) Judith Thun, Notary Public
Wayne County, MI
My Commission Expires March 4, 1995
<PAGE> 23
21
BANKERS TRUST COMPANY,
(Corporate Seal) By
-------------------
R.T. Gorman
Vice President
Attest:
-------------------------
Shikha Dombek
Assistant Secretary
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
-------------------------
John Florio
-------------------------
Scott Thiel
STATE OF NEW YORK
SS.:
COUNTY OF NEW YORK
ACKNOWLEDGMENT On this day of , , before me, the
OF EXECUTION subscriber, a Notary Public within and for the County of
BY TRUSTEE. Kings, in the State of New York, personally appeared R.T.
Gorman, to me personally known, who, being by me duly
sworn, did say that his business office is located at
Four Albany Street, New York, New York 10015, and he is
Vice President of BANKERS TRUST COMPANY, one of the
corporations described in and which executed the foregoing
instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument
is the corporate seal of said corporation; and that said
instrument was signed and sealed in behalf of said
corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority;
and said R.T. Gorman acknowledged said instrument to be
the free act and deed of said corporation.
(Notarial Seal)
Notary Public, State of New York
No.
Qualified in Kings County
Commission Expires
<PAGE> 24
22
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
AFFIDAVIT AS TO C. C. Arvani, being duly sworn, says: that he is the
CONSIDERATION Assistant Treasurer of THE DETROIT EDISON COMPANY, the
AND GOOD FAITH. Mortgagor named in the foregoing instrument, and that he
has knowledge of the facts in regard to the making of said
instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and
adequate, and that the same was given in good faith for
the purposes in such instrument set forth.
----------------------
C. C. Arvani
Sworn to before me this day of
,
-------------------------------------
Notary Public
Wayne County, MI
My Commission Expires
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman,
Esq., 2000 Second Avenue, Detroit, Michigan 48226
<PAGE> 1
EXHIBIT 4-199
Form of Supplemental Indenture
(Mortgage) for General and Refunding
Mortgage Bonds (including Form
of Mortgage Bonds on pages 9
through 13).
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
FORM OF INDENTURE
Dated as of
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS, SERIES , DUE
AND
(B) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 4
Indenture to be Amended and Bonds to be 19 Series ............... 5
Further Assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 5
PART I.
CREATION OF
SERIES OF BONDS
GENERAL AND REFUNDING MORTGAGE BONDS,
19 SERIES
Sec. 1. Terms of Bonds of 19 Series ............................... 6
Sec. 2. Redemption of Bonds of 19 Series .......................... 7
Exchange and transfer........................................ 8
Sec. 3. Consent...................................................... 8
Sec. 4. Form of Bonds of 19 Series ................................ 9
Form of Trustee's Certificate................................ 13
PART II.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 14
Recording and filing of Supplemental Indentures...................... 14
Recording of Certificates of Provision for Payment................... 19
PART III.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 19
PART IV.
MISCELLANEOUS
Confirmation of Section 318(c) of Trust Indenture Act................ 19
Execution in Counterparts............................................ 19
Testimonium.......................................................... 20
Execution............................................................ 20
Acknowledgment of execution by Company............................... 20
Acknowledgment of execution by Trustee............................... 21
Affidavit as to consideration and good faith......................... 22
</TABLE>
- ------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
<TABLE>
<S> <C>
PARTIES. SUPPLEMENTAL INDENTURE, dated as of the day of , in the year
one thousand nine hundred and ninety-four, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989, July 15, 1989, December 1, 1989, February 15, 1990, November 1,
1990, April 1, 1991, May 1, 1991, May 15, 1991, September 1, 1991,
November 1, 1991, January 15, 1992, February 29, 1992, April 15, 1992,
July 15, 1992, July 31, 1992, November 30, 1992, December 15, 1992,
January 1, 1993, March 1, 1993, March 15, 1993, April 1, 1993, April 26,
1993, May 31, 1993, June 30, 1993, June 30, 1993, September 15, 1993,
March 1, 1994, June 15, 1994, August 15, 1995, December 1,
1994 and August 1, 1995 supplemental to the Original Indenture, have
heretofore been entered into between the Company and the Trustee (the
Original Indenture and all indentures supplemental thereto together being
hereinafter sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of
ISSUED. dollars ($ ) have
heretofore been issued under the indenture as follows, viz:
</TABLE>
<TABLE>
<CAPTION>
[Update As Necessary]
<S> <C>
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
</TABLE>
<PAGE> 4
2
<TABLE>
<S> <C> <C>
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series AA -- Principal Amount $100,000,000,
(20) Bonds of Series BB -- Principal Amount $50,000,000,
(21) Bonds of Series CC -- Principal Amount $50,000,000,
(22) Bonds of Series UU -- Principal Amount $100,000,000,
(23-31) Bonds of Series DDP Nos. 1-9 -- Principal Amount $14,305,000,
(32-45) Bonds of Series FFR Nos. 1-14 -- Principal Amount $45,600,000,
(46-67) Bonds of Series GGP Nos. 1-22 -- Principal Amount $42,300,000,
(68) Bonds of Series HH -- Principal Amount $50,000,000,
(69-90) Bonds of Series IIP Nos. 1-22 -- Principal Amount $3,750,000,
(91-98) Bonds of Series JJP Nos. 1-8 -- Principal Amount $6,850,000,
(99-106) Bonds of Series KKP Nos. 1-8 -- Principal Amount $14,890,000,
(107-121) Bonds of Series LLP Nos. 1-15 -- Principal Amount $8,850,000,
(122-142) Bonds of Series NNP Nos. 1-21 -- Principal Amount $47,950,000,
(143-160) Bonds of Series OOP Nos. 1-18 -- Principal Amount $18,880,000,
(161-178) Bonds of Series QQP Nos. 1-18 -- Principal Amount $13,215,000,
(179-193) Bonds of Series TTP Nos. 1-15 -- Principal Amount $3,800,000,
(194) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(195-219) Bonds of 1980 Series CP Nos. 1-25 -- Principal Amount $35,000,000,
(220-230) Bonds of 1980 Series DP Nos. 1-11 -- Principal Amount $10,750,000,
(231-246) Bonds of 1981 Series AP Nos. 1-16 -- Principal Amount $124,000,000,
(247) Bonds of 1985 Series A -- Principal Amount $35,000,000,
(248) Bonds of 1985 Series B -- Principal Amount $50,000,000,
(249) Bonds of Series PP -- Principal Amount $70,000,000,
(250) Bonds of Series RR -- Principal Amount $70,000,000,
(251) Bonds of Series EE -- Principal Amount $50,000,000,
(252-253) Bonds of Series MMP and MMP No. 2 -- Principal Amount $5,430,000,
(254) Bonds of Series T -- Principal Amount $75,000,000,
(255) Bonds of Series U -- Principal Amount $75,000,000,
(256) Bonds of 1986 Series B -- Principal Amount $100,000,000,
(257) Bonds of 1987 Series D -- Principal Amount $250,000,000,
(258) Bonds of 1987 Series E -- Principal Amount $150,000,000,
(259) Bonds of 1987 Series C -- Principal Amount $225,000,000,
(260) Bonds of Series V -- Principal Amount $100,000,000,
(261) Bonds of Series SS -- Principal Amount $150,000,000,
(262) Bonds of 1980 Series B -- Principal Amount $100,000,000,
(263) Bonds of 1986 Series C -- Principal Amount $200,000,000,
(264) Bonds of 1986 Series A -- Principal Amount $200,000,000,
(265) Bonds of 1987 Series B -- Principal Amount $175,000,000,
(266) Bonds of Series X -- Principal Amount $100,000,000,
(267) Bonds of 1987 Series F -- Principal Amount $200,000,000,
(268) Bonds of 1987 Series A -- Principal Amount $300,000,000,
(269) Bonds of Series Y -- Principal Amount $60,000,000,
(270) Bonds of Series Z -- Principal Amount $100,000,000,
all of which have either been retired and cancelled, or no longer
represent obligations of the Company, having been called for redemption
and funds necessary to effect the payment, redemption and retirement
thereof having been deposited with the Trustee as a special trust fund to
be applied for such purpose;
(271) Bonds of Series R in the principal amount of One hundred million
dollars ($100,000,000), all of which are outstanding at the date hereof;
</TABLE>
<PAGE> 5
3
<TABLE>
<S> <C>
(272) Bonds of Series S in the principal amount of One hundred fifty
million dollars ($150,000,000), all of which are outstanding at the date
hereof;
(273-278) Bonds of Series KKP Nos. 9-14 in the principal amount of One
hundred ninety-three million two hundred ninety thousand dollars
($193,290,000), all of which are outstanding at the date hereof;
(279) Bonds of Series QQP No. 19 in the principal amount of Four hundred
thirty-five thousand dollars ($435,000), all of which are outstanding at
the date hereof;
(280) Bonds of 1984 Series AP in the principal amount of Two million four
hundred thousand dollars ($2,400,000), all of which are outstanding at
the date hereof;
(281) Bonds of 1984 Series BP in the principal amount of Seven million
seven hundred fifty thousand dollars ($7,750,000), all of which are
outstanding at the date hereof;
(282) Bonds of 1989 Series A in the principal amount of Three hundred
million dollars ($300,000,000) of which One hundred thirty-one million
seven hundred fifteen thousand dollars ($131,715,000) principal amount
have heretofore been retired and One hundred sixty-eight million two
hundred eighty-five thousand dollars ($168,285,000) principal amount are
outstanding at the date hereof;
(283) Bonds of 1989 Series BP in the principal amount of Sixty-six million
five hundred sixty-five thousand dollars ($66,565,000), all of which are
outstanding at the date hereof;
(284) Bonds of 1990 Series A in the principal amount of One hundred
ninety-four million six hundred forty-nine thousand dollars
($194,649,000) of which Twenty-five million one hundred sixteen thousand
dollars ($25,116,000) principal amount have heretofore been retired and
One hundred sixty-nine million five hundred thirty-three thousand dollars
($169,533,000) principal amount are outstanding at the date hereof;
(285) Bonds of 1990 Series B in the principal amount of Two hundred
fifty-six million nine hundred thirty-two thousand dollars
($256,932,000) of which Thirty-eight million sixty-four thousand dollars
($38,064,000) principal amount have heretofore been retired and Two
hundred eighteen million eight hundred sixty-eight thousand dollars
($218,868,000) principal amount are outstanding at the date hereof;
(286) Bonds of 1990 Series C in the principal amount of Eighty-five
million four hundred seventy-five thousand dollars ($85,475,000) of
which Thirteen million six hundred seventy-six thousand dollars
($13,676,000) principal amount have heretofore been retired and
Seventy-one million seven hundred ninety-nine thousand dollars
($71,799,000) principal amount are outstanding at the date hereof;
(287) Bonds of 1991 Series AP in the principal amount of Thirty-two
million three hundred seventy-five thousand dollars ($32,375,000), all
of which are outstanding at the date hereof;
(288) Bonds of 1991 Series BP in the principal amount of Twenty-five
million nine hundred ten thousand dollars ($25,910,000), all of which
are outstanding at the date hereof;
(289) Bonds of 1991 Series CP in the principal amount of Thirty-two
million eight hundred thousand dollars ($32,800,000), all of which are
outstanding at the date hereof;
(290) Bonds of 1991 Series DP in the principal amount of Thirty-seven
million six hundred thousand dollars ($37,600,000), all of which are
outstanding at the date hereof;
(291) Bonds of 1991 Series EP in the principal amount of Forty-one million
four hundred eighty thousand dollars ($41,480,000), all of which are
outstanding at the date hereof;
(292) Bonds of 1991 Series FP in the principal amount of Ninety-eight
million three hundred seventy-five thousand dollars ($98,375,000), all
of which are outstanding at the date hereof;
</TABLE>
<PAGE> 6
4
<TABLE>
<S> <C>
(293) Bonds of 1992 Series BP in the principal amount of Twenty million
nine hundred seventy-five thousand dollars ($20,975,000), all of which
are outstanding at the date hereof;
(294) Bonds of 1992 Series AP in the principal amount of Sixty-six million
dollars ($66,000,000), all of which are outstanding at the date hereof;
(295) Bonds of 1992 Series D in the principal amount of Three hundred
million dollars ($300,000,000), all of which are outstanding at the date
hereof;
(296) Bonds of 1992 Series CP in the principal amount of Thirty-five
million dollars ($35,000,000), all of which are outstanding at the date
hereof;
(297) Bonds of 1992 Series E in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(298) Bonds of 1989 Series BP No. 2 in the principal amount of Thirty-six
million dollars ($36,000,000), all of which are outstanding at the date
hereof;
(299) Bonds of 1993 Series C in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(300) Bonds of 1993 Series B in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(301) Bonds of 1993 Series E in the principal amount of Four hundred
million dollars ($400,000,000), all of which are outstanding at the date
hereof;
(302) Bonds of 1993 Series D in the principal amount of One hundred
million dollars ($100,000,000), all of which are outstanding at the date
hereof;
(303) Bonds of 1993 Series FP in the principal amount of Five million six
hundred eighty-five thousand dollars ($5,685,000), all of which are
outstanding at the date hereof;
(304) Bonds of 1993 Series G in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(305) Bonds of 1993 Series J in the principal amount of Three hundred
million dollars ($300,000,000), all of which are outstanding at the date
hereof;
(306) Bonds of 1993 Series IP in the principal amount of Five million
eight hundred twenty-five thousand dollars ($5,825,000), all of which
are outstanding at the date hereof;
(307) Bonds of 1993 Series AP in the principal amount of Sixty-five
million dollars ($65,000,000), all of which are outstanding at the date
hereof;
(308) Bonds of 1993 Series H in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(309) Bonds of 1993 Series K in the principal amount of One hundred sixty
million dollars ($160,000,000), all of which are outstanding at the date
hereof;
and, accordingly, of the bonds so issued, three billion five hundred
eleven million nine hundred fifty thousand dollars ($3,511,950,000)
principal amount are outstanding at the date hereof; and
REASON FOR WHEREAS, the Company desires to provide funds to refund or replace
CREATION OF funds utilized by the Company for the purpose of meeting (or replacing
NEW SERIES. corporate funds utilized for such purposes) debt and Preferred Stock
refundings (including optional redemptions) and for this purpose desires
to issue and sell a new series of bonds to be issued under the Indenture
in the aggregate principal amount of up to million dollars
($ ) to be authenticated and delivered pursuant to Section 8
of Article III of the Indenture; and
</TABLE>
<PAGE> 7
5
<TABLE>
<S> <C>
INDENTURE TO BE WHEREAS, the Company desires by this Supplemental Indenture to agree
AMENDED AND BONDS with the Trustee to amend the Indenture and to create such new series of
TO BE bonds, to be designated "General and Refunding Mortgage Bonds, 19 Series
SERIES . "; and
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the
ASSURANCE. property subject to the lien thereof all of the estates and properties,
real, personal and mixed, rights, privileges and franchises of every
nature and kind and wheresoever situate, then or thereafter owned or
possessed by or belonging to the Company or to which it was then or at any
time thereafter might be entitled in law or in equity (saving and
excepting, however, the property therein specifically excepted or released
from the lien thereof), and the Company therein covenanted that it would,
upon reasonable request, execute and deliver such further instruments as
may be necessary or proper for the better assuring and confirming unto the
Trustee all or any part of the trust estate, whether then or thereafter
owned or acquired by the Company (saving and excepting, however, property
specifically excepted or released from the lien thereof); and
AUTHORIZATION OF WHEREAS, the Company in the exercise of the powers and authority
SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION FOR NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
</TABLE>
<PAGE> 8
6
<TABLE>
<CAPTION>
PART I.
CREATION OF
SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS,
19 SERIES
<S> <C>
TERMS OF BONDS SECTION 1. The Company hereby creates the
OF 19 SERIES . series of bonds to be issued under and secured by the
Original Indenture as amended to date and as further amended by this
Supplemental Indenture, to be designated, and to be distinguished from the
bonds of all other series, by the title "General and Refunding Mortgage
Bonds, 19 Series " (elsewhere herein referred to as the "bonds of 19
Series "). The aggregate principal amount of bonds of 19 Series shall
be limited to million dollars ($ ), except as
provided in Sections 7 and 13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds.
The bonds of 19 Series shall mature on and shall be
issued as registered bonds without coupons in denominations of $1,000 and
any multiple thereof, and shall bear interest, payable [semi-annually] on
and of each year (commencing on ), at the
rate of per centum ( %) per annum [if variable
rate, insert variable rate provisions] until the principal shall have
become due and payable, and thereafter until the Company's obligation with
respect to the payment of said principal shall have been discharged as
provided in the Indenture. Except as otherwise specifically provided in
this Supplemental Indenture, the principal of and interest on the bonds of
19 Series shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, The State of New York in any
coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts. The interest on
bonds of 19 Series , whether in temporary or definitive form, shall be
payable without presentation of such bonds and (subject to the provisions
of this Section 1) only to or upon the written order of the registered
holders thereof.
Each bond of 19 Series shall be dated the date of its authentication
and interest shall be payable on the principal represented thereby from
the or next preceding the date thereof to which interest
has been paid on bonds of 19 Series , unless the bond is authenticated
on a date to which interest has been paid, in which case interest shall be
payable from the date of authentication, or unless the date of
authentication is prior to , in which case interest shall be
payable from on the bond of 19 Series originally
evidencing the debt represented thereby.
The bonds of 19 Series in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denomination of bonds of 19
Series ). Until bonds of 19 Series in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 19
Series in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of 19 Series , if any, may be printed and may
be issued in authorized denominations in substantially the form of
definitive bonds of 19 Series , but without a recital of redemption
prices and with such omissions, insertions and variations as may be
appropriate for temporary bonds, all as may be determined by the Company.
Interest on any bond of 19 Series which is payable on any interest
payment date and is punctually paid or duly provided for shall be paid to
the person in whose name that bond, or any previous bond to the extent
evidencing the same debt as that evidenced by that bond, is registered at
the close of business on the regular record date for such interest, which
regular record date shall be the fifteenth day of June or December as the
case may be (whether or not a business day) next preceding such interest
payment date. If the Company shall default in the payment of the interest
due on any interest payment date on the principal represented by any bond
of 19 Series ,
</TABLE>
<PAGE> 9
7
<TABLE>
<S> <C>
such defaulted interest shall forthwith cease to be payable to the
registered holder of that bond on the relevant regular record date by
virtue of his having been such holder, and such defaulted interest may be
paid to the registered holder of that bond (or any bond or bonds of 19
Series issued upon transfer or exchange thereof) on the date of payment
of such defaulted interest or, at the election of the Company, to the
person in whose name that bond (or any bond or bonds of 19 Series issued
upon transfer or exchange thereof) is registered on a subsequent record
date established by notice given by mail by or on behalf of the Company to
the holders of bonds of 19 Series not less than ten (10) days preceding
such subsequent record date, which subsequent record date shall be at
least five (5) days prior to the payment date of such defaulted interest.
[If applicable, insert rate-mode conversion provisions.]
REDEMPTION OF SECTION 2. The bonds of 19 Series shall be redeemable prior to
BONDS OF 19 stated maturity, at the election of the Company on any date prior to
SERIES . maturity, as a whole, or in part from time to time, by lot, at the
following redemption prices (expressed as percentages of the principal
amount thereof) plus in each case accrued interest to the date fixed for
redemption:
</TABLE>
<TABLE>
<CAPTION>
IF REDEEMED IF REDEEMED
DURING 12 MONTH REDEMPTION DURING 12 MONTH REDEMPTION
PERIOD ENDING PRICE PERIOD ENDING PRICE
--------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
</TABLE>
provided, however, that prior to no bonds
of 19 Series may be redeemed, directly or indirectly,
from or in anticipation of the proceeds of any refunding
operation involving borrowing, at an interest cost to the
Company, computed in accordance with generally accepted
financial practice, of less than % per annum.
The bonds of 19 Series shall be redeemable as aforesaid
and except as otherwise provided herein, and as specified
in Article IV of the Indenture upon giving notice
of such redemption by first class mail, postage prepaid, by
or on behalf of the Company at least thirty (30) days, but
not more than ninety (90) days, prior to the date fixed for
redemption to the registered holders of bonds of 19 Series
so called for redemption at their last respective addresses
appearing on the register thereof, but failure to mail such
notice to the registered holders of any bonds of 19 Series
designated for redemption shall not affect the validity of
any such redemption of any other bonds of such series.
Interest shall cease to accrue on any bonds of 19 Series
(or any portion thereof) so called for redemption from and
after the date fixed for redemption if payment sufficient
to redeem the bonds of 19 Series (or such portion)
designated for redemption has been duly provided for. Bonds
of 19 Series redeemed in part only shall be in amounts of
$1,000 or any multiple thereof.
If the giving of the notice of redemption shall have
been completed, or if provision satisfactory to the Trustee
for the giving of such notice shall have been made, and if
the Company shall have deposited with the Trustee in trust
funds (which shall have become available for payment to the
holders of the bonds of 19 Series so to be redeemed)
sufficient to redeem bonds of 19 Series in whole or in
part, on the date fixed for redemption, then all
obligations of the Company in respect of such bonds (or
portions thereof) so to be redeemed and interest due or to
become due thereon shall cease and be discharged and the
holders of such bonds of 19 Series (or portions thereof)
shall
<PAGE> 10
8
<TABLE>
<S> <C>
thereafter be restricted exclusively to such funds for any and all claims
of whatsoever nature on their part under the Indenture or in respect of
such bonds (or portions thereof) and interest.
The bonds of 19 Series [shall] [not] be entitled to or subject to any
sinking fund.
EXCHANGE AND At the option of the registered holder, any bonds of 19 Series , upon
TRANSFER. surrender thereof for cancellation at the office or agency of the Company
in the Borough of Manhattan, The City of New York, The State of New York,
together with a written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the Company duly executed
by the holder or by its duly authorized attorney, shall be exchangeable
for a like aggregate principal amount of bonds of 19 Series of other
authorized denominations, upon the terms and conditions specified herein
and in Section 7 of Article II of the Indenture. Bonds of 19 Series
shall be transferable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, The State of New York. The
Company waives its rights under Section 7 of Article II of the Indenture
not to make exchanges or transfers of bonds of 19 Series during any
period of ten (10) days next preceding any interest payment date for such
bonds.
Bonds of 19 Series , in definitive and temporary form, may bear such
legends as may be necessary to comply with any law or with any rules or
regulations made pursuant thereto or with the rules or regulations of any
stock exchange or to conform to usage with respect thereto.
CONSENT. SECTION 3. The holders of bonds of the 19 Series consent that the
Company may, but shall not be obligated to, fix a record date for the
purpose of determining the holders of bonds of 19 Series entitled to
consent to any amendment, supplement or waiver. If a record date is fixed,
those persons who were holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent
to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such persons continue to be holders after
such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
</TABLE>
<PAGE> 11
9
<TABLE>
<S> <C>
FORM OF SECTION 4. The bonds of 19 Series and the form of Trustee's Certificate
BONDS OF to be endorsed on such bonds shall be substantially in the following
19 SERIES . forms, respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
19 Series ,[ %] due
[$ IF REGISTERED No.
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a
corporation of the State of Michigan, for value received, hereby promises
to pay to or registered assigns, at its office or
agency in the Borough of Manhattan, The City and State of New York, the
principal sum of in lawful money of the United States of America
on the day of , and to pay interest thereon at the rate
specified in the title hereof, at such office or agency, in like lawful
money, from , and after the first interest payment on bonds
of this Series has been made or otherwise provided for, from the most
recent date to which such interest has been paid, [semi-annually] on the
day of and in each year (commencing on ),
to the person in whose name this bond is registered at the close of
business on the day of the preceding or (subject
to certain exceptions provided in the Indenture hereinafter mentioned),
until the Company's obligation with respect to payment of said principal
shall have been discharged, all as provided, to the extent and in the
manner specified in such Indenture hereinafter mentioned on the reverse
hereof and in the supplemental indenture pursuant to which this bond has
been issued.]
[$ IF BOOK-ENTRY No.
Unless and until this Bond is exchanged in whole or in part for certified
Bonds registered in the names of the various beneficial holders hereof as
then certified to the Trustee by The Depository Trust Company or its
successor (the "Depositary"), this Bond may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another 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 issuer or its
agent for registration of transfer, exchange or payment, and any
certificate to be issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of the Depositary
and any amount payable thereunder is made payable to Cede & Co. or such
other name, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.
This Bond may be exchanged for certificated Bonds registered in the names
of the various beneficial owners hereof only if (a) the Depositary is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the issuer within 90 days, or (b) the
issuer, the Trustee and the Depositary consent to such exchange.]
Reference is hereby made to the further provisions of this bond set forth
on the reverse hereof and such further provisions shall for all purposes
have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until
Bankers Trust Company, the Trustee under the Indenture hereinafter
mentioned on the reverse hereof, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.
</TABLE>
<PAGE> 12
10
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed on its behalf by its Chairman of the Board
and its President or a Vice President, with their manual or facsimile
signatures, and its corporate seal, or a facsimile thereof, to be
impressed or imprinted hereon and the same to be attested by its
Secretary or an Assistant Secretary by manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
----------------------------
Chairman of the Board
----------------------------
Vice President
[SEAL] and Treasurer
Attest:
-----------------------------------------------
Secretary
<PAGE> 13
11
[FORM OF REVERSE OF BOND]
This bond is one of an authorized issue of bonds of the
Company, unlimited as to amount except as provided in the Indenture
hereinafter mentioned or any indentures supplemental thereto, and is
one of a series of said bonds known as General and Refunding Mortgage
Bonds, 19 Series (elsewhere herein referred to as the "bonds of 19
Series "), limited to an aggregate principal amount of $
, except as otherwise provided in the Indenture hereinafter mentioned.
This bond and all other bonds of said series are issued and to be
issued under, and are all equally and ratably secured (except insofar
as any sinking, amortization, improvement or analogous fund,
established in accordance with the provisions of the Indenture
hereinafter mentioned, may afford additional security for the bonds of
any particular series and except as provided in Section 3 of Article
VI of said Indenture) by an Indenture, dated as of October 1, 1924,
duly executed by the Company to Bankers Trust Company, a corporation
of the State of New York, as Trustee, to which Indenture and all
indentures supplemental thereto (including the Supplemental Indenture
dated as of ) reference is hereby made for a
description of the properties and franchises mortgaged and conveyed,
the nature and extent of the security, the terms and conditions upon
which the bonds are issued and under which additional bonds may be
issued, and the rights of the holders of the bonds and of the Trustee
in respect of such security (which Indenture and all indentures
supplemental thereto, including the Supplemental Indenture dated as of
, are hereinafter collectively called the
"Indenture"). As provided in the Indenture, said bonds may be for
various principal sums and are issuable in series, which may mature
at different times, may bear interest at different rates and may
otherwise vary as in said Indenture provided. With the consent of the
Company and to the extent permitted by and as provided in the
Indenture, the rights and obligations of the Company and of the
holders of the bonds and the terms and provisions of the Indenture,
or of any indenture supplemental thereto, may be modified or alted in
certain respects by affirmative vote of at least eighty-five percent
(85%) in principal amount of the bonds then outstanding, and, if the
rights of one or more, but less than all, series of bonds then
outstanding are to be affected by the action proposed to be taken,
then also by affirmative vote of at least eighty-five percent (85%)
in principal amount of the series of bonds so to be affected
(excluding in every instance bonds disqualified from voting by reason
of the Company's interest therein as specified in the Indenture);
provided, however, that, without the consent of the holder hereof, no
such modification or alteration shall, among other things, affect the
terms of payment of the principal of, or the interest on, this bond,
which in those respects is unconditional.
[If appropriate, insert rate-mode conversion provisions.]
If Book-Entry
[The holder of this bond of 19 Series hereby consents that
the Company may, but shall not be obligated to, fix a record date for
the purpose of determining the holders of bonds of this series
entitled to consent to any amendment, supplement or waiver. If a
record date is fixed, those persons who were holders at such record
date (or their duly designated proxies), and only those persons, shall
be entitled to consent to such amendment, supplement or waiver or to
revoke any consent previously given, whether or not such persons
continue to be holders after such record date. No such consent shall
be valid or effective for more than 90 days after such record date.]
This bond is redeemable on giving notice of such redemption by
first class mail, postage prepaid, by or on behalf of the Company at
least thirty (30) days, but not more than ninety (90) days, prior to
the date fixed for redemption to the registered holder of this bond
at his last address appearing on the register thereof, in the manner
and upon the terms provided in the Indenture, at the election of the
Company on any date as a whole or in part by lot, from time to time,
at the following redemption prices (expressed
<PAGE> 14
12
as percentages of the principal amount hereof) plus in each
case accrued interest to the date fixed for redemption:
<TABLE>
<CAPTION>
IF REDEEMED IF REDEEMED
DURING 12 MONTH REDEMPTION DURING 12 MONTH REDEMPTION
PERIOD ENDING PRICE PERIOD ENDING PRICE
--------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
</TABLE>
provided, however, that prior to , no bonds of 19
Series may be redeemed, directly or indirectly, from the proceeds or
in anticipation of any refunding operation involving borrowing at an
interest cost to the Company, computed in accordance with generally
accepted financial practice, of less than % per annum.
Under the Indenture, funds may be deposited with the Trustee
(which shall have become available for payment), in advance of the
redemption date of any of the bonds of 19 Series (or portions
thereof), in trust for the redemption of such bonds (or portions
thereof) and the interest due or to become due thereon, and thereupon
all obligations of the Company in respect of such bonds (or portions
thereof) so to be redeemed and such interest shall cease and be
discharged, and the holders thereof shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature
on their part under the Indenture or with respect to such bonds (or
portions thereof) and interest.
The bonds of 19 Series , including this bond, [shall] [not] be
entitled or subject to a sinking fund.
In case an event of default, as defined in the Indenture, shall
occur, the principal of all the bonds issued thereunder may become or
be declared due and payable, in the manner, with the effect and
subject to the conditions, provided in the Indenture.
This bond is transferable by the registered holder hereof, in person
or by his attorney duly authorized in writing, on the books of the
Company kept at its office or agency in the Borough of Manhattan,
The City and State of New York, upon surrender and cancellation of
this bond, and, thereupon, a new registered bond or bonds of the same
series of authorized denominations for a like aggregate principal
amount will be issued to the transferee or transferees in exchange
herefor, and this bond with others of like form may in like manner be
exchanged for one or more new registered bonds of the same series of
other authorized denominations, but of the same aggregate principal
amount, all as provided and upon the terms and conditions set forth in
the Indenture, and upon payment, in any event, of the charges
prescribed in the Indenture.
No recourse shall be had for the payment of the principal of, or
the interest on, this bond, or for any claim based hereon or otherwise
in respect hereof or of the Indenture, or of any indenture
supplemental thereto, against any incorporator, or against any past,
present or future stockholder, director or officer, as such, of the
Company, or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether for amounts unpaid on stock subscriptions or by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise howsoever; all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released by
every holder or owner hereof, as more fully provided in the Indenture.
<PAGE> 15
13
expressly waived and released by every holder or owner
hereof, as more fully provided in the Indenture.
[FORM OF TRUSTEE'S CERTIFICATE]
<TABLE>
<S> <C>
FORM OF This bond is one of the bonds, of the series designated therein, described
TRUSTEE'S in the within-mentioned Indenture.
CERTIFICATE.
</TABLE>
BANKERS TRUST COMPANY,
as Trustee
By ..............................
Authorized Officer
<PAGE> 16
14
<TABLE>
<CAPTION>
PART II.
RECORDING AND FILING DATA
<S> <C>
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Secretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and September 1, 1947
Additional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional
Provisions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
</TABLE>
<PAGE> 17
15
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
</TABLE>
<PAGE> 18
16
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
</TABLE>
<PAGE> 19
17
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
April 1, 1986..................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986................... 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986................. 1986 Series C January 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
December 1, 1989.................. Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990................. 1990 Series A, 1990 November 1, 1990
Series B, 1990 Series
C, 1990 Series D, 1990
Series E and 1990
Series F
November 1, 1990.................. Series KKP No. 12 April 1, 1991
April 1, 1991..................... 1991 Series AP May 1, 1991
May 1, 1991....................... 1991 Series BP and 1991 May 15, 1991
Series CP
May 15, 1991...................... 1991 Series DP September 1, 1991
September 1, 1991................. 1991 Series EP November 1, 1991
November 1, 1991.................. 1991 Series FP January 15, 1992
January 15, 1992.................. 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992................. 1992 Series AP April 15, 1992
April 15, 1992.................... Series KKP No. 13 July 15, 1992
July 15, 1992..................... 1992 Series CP November 30, 1992
July 31, 1992..................... 1992 Series D November 30, 1992
November 30, 1992................. 1992 Series E and 1993 March 15, 1993
Series D
December 15, 1992................. Series KKP No. 14 and March 15, 1992
1989 Series BP No. 2
January 1, 1993................... 1993 Series C April 1, 1993
March 1, 1993..................... 1993 Series E June 30, 1993
March 15, 1993.................... 1993 Series D September 15, 1993
April 1, 1993..................... 1993 Series FP and 1993 September 15, 1993
Series IP
April 26, 1993.................... 1993 Series G and September 15, 1993
Amendment of Article
II, Section 5
May 31, 1993...................... 1993 Series J September 15, 1993
September 15, 1993................ 1993 Series K March 1, 1994
</TABLE>
[Update As Necessary]
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<PAGE> 20
18
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as , 1994 providing
for the terms of bonds to be issued thereunder of 1994 Series has
heretofore been entered into between the Company and the Trustee and
has been filed in the Office of the Secretary of State of Michigan as
a financing statement on , (Filing No. ), has
been filed and recorded in the Office of the Interstate Commerce
Commission (Recordation No. 5485- ) on , 1994, and has been
recorded as a real estate mortgage in the offices of the respective
Register of Deeds of certain counties in the State of Michigan, as
follows:
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
----------------------------- ------------------ ------ ----------
<S> <C> <C> <C>
Genesee......................
Huron........................
Ingham.......................
Lapeer.......................
Lenawee......................
Livingston...................
Macomb.......................
Mason........................
Monroe.......................
Oakland......................
Sanilac......................
St. Clair....................
Tuscola......................
Washtenaw....................
Wayne........................
</TABLE>
<PAGE> 21
19
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, Y, Z, AA, BB, CC, DDP Nos. 1-9, FFR Nos.
FOR PAYMENT. 1-14, GGP Nos. 1-22, HH, IIP Nos. 1-22, JJP Nos. 1-8, KKP Nos. 1-8, LLP
Nos. 1-15, NNP Nos. 1-21, OOP Nos. 1-18, QQP Nos. 1-17, TTP Nos. 1-15, UU,
1980 Series A, 1980 Series CP Nos. 1-25, 1980 Series DP Nos. 1-11, 1981
Series AP Nos. 1-16, 1985 Series A, 1985 Series B, 1987 Series A, PP, RR,
EE, MMP and MMP No. 2 which were issued under Supplemental Indentures
dated as of, respectively, June 1, 1925, August 1, 1927, February 1, 1931,
October 1, 1932, September 25, 1935, September 1, 1936, December 1, 1940,
September 1, 1947, November 15, 1951, January 15, 1953, May 1, 1953, March
15, 1954, May 15, 1955, August 15, 1957, December 15, 1970, November 15,
1971, January 15, 1973, May 1, 1974, October 1, 1974, January 15, 1975,
November 1, 1975, February 1, 1976, June 15, 1976, July 15, 1976, October
1, 1977, March 1, 1977, July 1, 1979, March 1, 1977, March 1, 1977, March
1, 1977, September 1, 1979, July 1, 1977, July 1, 1979, September 15,
1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1, 1979,
January 1, 1980, August 15, 1980, November 1, 1981, May 1, 1985, May 15,
1985, January 31, 1987, June 1, 1978, October 15, 1978, December 15, 1975,
February 15, 1977, and September 1, 1979 have matured or have been called
for redemption and funds sufficient for such payment or redemption have
been irrevocably deposited with the Trustee for that purpose; and
Certificates of Provision for Payment have been recorded in the offices of
the respective Registers of Deeds of certain counties in the State of
Michigan, with respect to all bonds of Series A, B, C, D, E, F, G, H, K,
L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1 and 2, IIP
No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART III.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
PART IV.
MISCELLANEOUS.
CONFIRMATION OF Except to the extent specifically provided therein, no provision of
SECTION 318(C) OF this supplemental indenture or any future supplemental indenture is
TRUST INDENTURE intended to modify, and the parties do hereby adopt and confirm, the
ACT provisions of Section 318(c) of the Trust Indenture Act which amend and
supercede provisions of the Indenture in effect prior to November 15,
1990.
EXECUTION IN THIS SUPPLEMENTAL INDENTURE MAY BE SIMULTANEOUSLY EXECUTED IN ANY
COUNTERPARTS. NUMBER OF COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO
BE AN ORIGINAL; BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE
AND THE SAME INSTRUMENT.
</TABLE>
<PAGE> 22
20
<TABLE>
<S> <C>
TESTIMONIUM. IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND BANKERS TRUST
COMPANY HAVE CAUSED THESE PRESENTS TO BE SIGNED IN THEIR RESPECTIVE
CORPORATE NAMES BY THEIR RESPECTIVE CHAIRMEN OF THE BOARD, PRESIDENTS,
VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS, TREASURERS OR ASSISTANT
TREASURERS AND IMPRESSED WITH THEIR RESPECTIVE CORPORATE SEALS, ATTESTED
BY THEIR RESPECTIVE SECRETARIES OR ASSISTANT SECRETARIES, ALL AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN.
</TABLE>
THE DETROIT EDISON COMPANY,
(Corporate Seal) By
------------------------
C. C. Arvani
Assistant Treasurer
EXECUTION. Attest:
--------------------
Elaine M. Godfrey
Assistant Corporate Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
----------------------
Jack L. Somers
---------------------
Cathy M. Lewis
<TABLE>
<CAPTION>
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
<S> <C>
ACKNOWLEDGMENT On this day of , before me, the subscriber, a Notary Public
OF EXECUTION within and for the County of Wayne, in the State of Michigan, personally
BY COMPANY. appeared C. C. Arvani, to me personally known, who, being by me duly
sworn, did say that he does business at 2000 Second Avenue, Detroit,
Michigan 48226 and is the Assistant Treasurer of THE DETROIT EDISON
COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and said C. C.
Arvani, acknowledged said instrument to be the free act and deed of said
corporation.
</TABLE>
----------------------
(Notarial Seal) , Notary Public
Wayne County, MI
My Commission Expires
<PAGE> 23
21
BANKERS TRUST COMPANY,
(Corporate Seal) By
-------------------
R.T. Gorman
Vice President
Attest:
----------------
Scott Thiel
Assistant Treasurer
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
-----------------------
Michael Weber
--------------------
Denise Mitchell
<TABLE>
<CAPTION>
STATE OF NEW YORK
SS.:
COUNTY OF NEW YORK
<S> <C>
ACKNOWLEDGMENT On this day of , before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of New York, in the State of New York,
BY TRUSTEE. personally appeared R.T. Gorman, to me personally known, who, being by me
duly sworn, did say that his business office is located at Four Albany
Street, New York, New York 10015, and he is Vice President of BANKERS
TRUST COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and said R.T.
Gorman acknowledged said instrument to be the free act and deed of said
corporation.
</TABLE>
(Notarial Seal)
--------------------
John Florio
Notary Public, State of New York
No. 01FL5021631
Qualified in New York County
Commission Expires 12-20-95
<PAGE> 24
22
STATE OF MICHIGAN
COUNTY OF WAYNE SS.:
<TABLE>
<S> <C>
AFFIDAVIT AS TO C. C. Arvani, being duly sworn, says: that he is the Assistant Treasurer
CONSIDERATION of THE DETROIT EDISON COMPANY, the Mortgagor named in the foregoing
AND GOOD FAITH. instrument, and that he has knowledge of the facts in regard to the making
of said instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and adequate, and that
the same was given in good faith for the purposes in such instrument set
forth.
</TABLE>
--------------
C. C. Arvani
Sworn to before me this day of
-------------------------
, Notary Public
Wayne County, MI
My Commission Expires
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq.,
2000 Second Avenue, Detroit, Michigan 48226
<PAGE> 1
Form of Supplemental Indenture (Mortgage)
for General and Refunding Mortgage Bonds,
a Series of Secured Medium-Term Notes
(including Form of mortgage Bonds on
pages 9 through 16).
EXHIBIT 4-200
THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)
TO
BANKERS TRUST COMPANY
(Four Albany Street,
New York, New York 10015)
AS TRUSTEE
------------------------
FORM OF INDENTURE
Dated as of ,
------------------------
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) SECURED MEDIUM-TERM NOTES, SERIES
AND
(B) RECORDING AND FILING DATA
<PAGE> 2
i
TABLE OF CONTENTS*
------------------------
<TABLE>
<CAPTION>
PAGE
---
<S> <C>
PARTIES.............................................................. 1
RECITALS
Original Indenture and Supplementals............................... 1
Issue of Bonds under Indenture..................................... 1
Bonds heretofore issued............................................ 1
Reason for creation of new series.................................. 4
Indenture to be Amended and Bonds to be Series................... 5
Further assurance.................................................. 5
Authorization of Supplemental Indenture............................ 5
Consideration for Supplemental Indenture........................... 5
PART I.
CREATION OF SERIES OF BONDS
SERIES
Sec. 1. Terms of Bonds of Series .................................. 6
Sec. 2. Redemption of Bonds of Series ............................. 7
Exchange and transfer........................................ 7
Sec. 3. Consent...................................................... 8
Sec. 4. Form of Bonds of Series ................................... 9
Form of Trustee's Certificate................................ 15
PART II.
RECORDING AND FILING DATA
Recording and filing of Original Indenture........................... 17
Recording and filing of Supplemental Indentures...................... 17
Recording of Certificates of Provision for Payment................... 22
PART III.
THE TRUSTEE
Terms and conditions of acceptance of trust by Trustee............... 22
PART IV.
MISCELLANEOUS
Confirmation of Section 318(c) of Trust Indenture Act................ 22
Execution in Counterparts............................................ 22
Testimonium.......................................................... 23
Execution............................................................ 23
Acknowledgement of execution by Company.............................. 23
Acknowledgement of execution by Trustee.............................. 24
Affidavit as to consideration and good faith......................... 25
</TABLE>
- ------------------------
* This Table of Contents shall not have any bearing upon the interpretation of
any of the terms or provisions of this Indenture.
<PAGE> 3
1
<TABLE>
<S> <C>
PARTIES. SUPPLEMENTAL INDENTURE, dated as of the day of , in the year
one thousand nine hundred and ninety-four, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under the laws of the State
of Michigan and a transmitting utility (hereinafter called the "Company"),
party of the first part, and BANKERS TRUST COMPANY, a corporation
organized and existing under the laws of the State of New York, having its
corporate trust office at Four Albany Street, in the Borough of Manhattan,
The City and State of New York, as Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the "Trustee"), party of
the second part.
ORIGINAL WHEREAS, the Company has heretofore executed and delivered its Mortgage
INDENTURE AND and Deed of Trust (hereinafter referred to as the "Original Indenture"),
SUPPLEMENTALS. dated as of October 1, 1924, to the Trustee, for the security of all bonds
of the Company outstanding thereunder, and pursuant to the terms and
provisions of the Original Indenture, indentures dated as of,
respectively, June 1, 1925, August 1, 1927, February 1, 1931, June 1,
1931, October 1, 1932, September 25, 1935, September 1, 1936, November 1,
1936, February 1, 1940, December 1, 1940, September 1, 1947, March 1,
1950, November 15, 1951, January 15, 1953, May 1, 1953, March 15, 1954,
May 15, 1955, August 15, 1957, June 1, 1959, December 1, 1966, October 1,
1968, December 1, 1969, July 1, 1970, December 15, 1970, June 15, 1971,
November 15, 1971, January 15, 1973, May 1, 1974, October 1, 1974, January
15, 1975, November 1, 1975, December 15, 1975, February 1, 1976, June 15,
1976, July 15, 1976, February 15, 1977, March 1, 1977, June 15, 1977, July
1, 1977, October 1, 1977, June 1, 1978, October 15, 1978, March 15, 1979,
July 1, 1979, September 1, 1979, September 15, 1979, January 1, 1980,
April 1, 1980, August 15, 1980, August 1, 1981, November 1, 1981, June 30,
1982, August 15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, May 15,
1985, October 15, 1985, April 1, 1986, August 15, 1986, November 30, 1986,
January 31, 1987, April 1, 1987, August 15, 1987, November 30, 1987, June
15, 1989, July 15, 1989, December 1, 1989, February 15, 1990, November 1,
and 1990, April 1, 1991, May 1, 1991, May 15, 1991, September 1, 1991,
November 1, 1991, January 15, 1992, February 29, 1992, April 15, 1992,
July 15, 1992, July 31, 1992, November 30, 1992, December 15, 1992,
January 1, 1993, March 1, 1993, March 15, 1993, April 1, 1993, April 26,
1993, May 31, 1993, June 30, 1993, June 30, 1993, September 15, 1993,
March 1, 1994, June 15, 1994, August 15, 1995, December 1, 1994 and
August 15, 1995 supplemental to the Original Indenture, have heretofore been
entered into between the Company and the Trustee (the Original Indenture
and all indentures supplemental thereto together being hereinafter
sometimes referred to as the "Indenture"); and
ISSUE OF WHEREAS, the Indenture provides that said bonds shall be issuable in one
BONDS UNDER or more series, and makes provision that the rates of interest and dates
INDENTURE. for the payment thereof, the date of maturity or dates of maturity, if of
serial maturity, the terms and rates of optional redemption (if
redeemable), the forms of registered bonds without coupons of any series
and any other provisions and agreements in respect thereof, in the
Indenture provided and permitted, as the Board of Directors may determine,
may be expressed in a supplemental indenture to be made by the Company to
the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of dollars ($ ) have
ISSUED. heretofore been issued under the indenture as follows, viz:
</TABLE>
[UPDATE AS NECESSARY]
<TABLE>
<S> <C>
(1) Bonds of Series A -- Principal Amount $26,016,000,
(2) Bonds of Series B -- Principal Amount $23,000,000,
(3) Bonds of Series C -- Principal Amount $20,000,000,
(4) Bonds of Series D -- Principal Amount $50,000,000,
(5) Bonds of Series E -- Principal Amount $15,000,000,
(6) Bonds of Series F -- Principal Amount $49,000,000,
(7) Bonds of Series G -- Principal Amount $35,000,000,
(8) Bonds of Series H -- Principal Amount $50,000,000,
(9) Bonds of Series I -- Principal Amount $60,000,000,
(10) Bonds of Series J -- Principal Amount $35,000,000,
(11) Bonds of Series K -- Principal Amount $40,000,000,
</TABLE>
<PAGE> 4
2
<TABLE>
<S> <C> <C>
(12) Bonds of Series L -- Principal Amount $24,000,000,
(13) Bonds of Series M -- Principal Amount $40,000,000,
(14) Bonds of Series N -- Principal Amount $40,000,000,
(15) Bonds of Series O -- Principal Amount $60,000,000,
(16) Bonds of Series P -- Principal Amount $70,000,000,
(17) Bonds of Series Q -- Principal Amount $40,000,000,
(18) Bonds of Series W -- Principal Amount $50,000,000,
(19) Bonds of Series AA -- Principal Amount $100,000,000,
(20) Bonds of Series BB -- Principal Amount $50,000,000,
(21) Bonds of Series CC -- Principal Amount $50,000,000,
(22) Bonds of Series UU -- Principal Amount $100,000,000,
(23-31) Bonds of Series DDP Nos. 1-9 -- Principal Amount $14,305,000,
(32-45) Bonds of Series FFR Nos. 1-14 -- Principal Amount $45,600,000,
(46-67) Bonds of Series GGP Nos. 1-22 -- Principal Amount $42,300,000,
(68) Bonds of Series HH -- Principal Amount $50,000,000,
(69-90) Bonds of Series IIP Nos. 1-22 -- Principal Amount $3,750,000,
(91-98) Bonds of Series JJP Nos. 1-8 -- Principal Amount $6,850,000,
(99-106) Bonds of Series KKP Nos. 1-8 -- Principal Amount $14,890,000,
(107-121) Bonds of Series LLP Nos. 1-15 -- Principal Amount $8,850,000,
(122-142) Bonds of Series NNP Nos. 1-21 -- Principal Amount $47,950,000,
(143-160) Bonds of Series OOP Nos. 1-18 -- Principal Amount $18,880,000,
(161-178) Bonds of Series QQP Nos. 1-18 -- Principal Amount $13,215,000,
(179-193) Bonds of Series TTP Nos. 1-15 -- Principal Amount $3,800,000,
(194) Bonds of 1980 Series A -- Principal Amount $50,000,000,
(195-219) Bonds of 1980 Series CP Nos. 1-25 -- Principal Amount $35,000,000,
(220-230) Bonds of 1980 Series DP Nos. 1-11 -- Principal Amount $10,750,000,
(231-246) Bonds of 1981 Series AP Nos. 1-16 -- Principal Amount $124,000,000,
(247) Bonds of 1985 Series A -- Principal Amount $35,000,000,
(248) Bonds of 1985 Series B -- Principal Amount $50,000,000,
(249) Bonds of Series PP -- Principal Amount $70,000,000,
(250) Bonds of Series RR -- Principal Amount $70,000,000,
(251) Bonds of Series EE -- Principal Amount $50,000,000,
(252-253) Bonds of Series MMP and MMP
No. 2 -- Principal Amount $5,430,000,
(254) Bonds of Series T -- Principal Amount $75,000,000,
(255) Bonds of Series U -- Principal Amount $75,000,000,
(256) Bonds of 1986 Series B -- Principal Amount $100,000,000,
(257) Bonds of 1987 Series D -- Principal Amount $250,000,000,
(258) Bonds of 1987 Series E -- Principal Amount $150,000,000,
(259) Bonds of 1987 Series C -- Principal Amount $225,000,000,
(260) Bonds of Series V -- Principal Amount $100,000,000,
(261) Bonds of Series SS -- Principal Amount $150,000,000,
(262) Bonds of 1980 Series B -- Principal Amount $100,000,000,
(263) Bonds of 1986 Series C -- Principal Amount $200,000,000,
(264) Bonds of 1986 Series A -- Principal Amount $200,000,000,
(265) Bonds of 1987 Series B -- Principal Amount $175,000,000,
(266) Bonds of Series X -- Principal Amount $100,000,000,
(267) Bonds of 1987 Series F -- Principal Amount $200,000,000,
(268) Bonds of 1987 Series A -- Principal Amount $300,000,000,
(269) Bonds of Series Y -- Principal Amount $60,000,000,
(270) Bonds of Series Z -- Principal Amount $100,000,000,
all of which have either been retired and cancelled, or
no longer represent obligations of the Company, having been
called for redemption and funds necessary to effect the
payment, redemption and retirement thereof having been
deposited with the Trustee as a special trust fund to be
applied for such purpose;
(271) Bonds of Series R in the principal amount of One
hundred million dollars ($100,000,000), all of which are
outstanding at the date hereof;
</TABLE>
<PAGE> 5
3
<TABLE>
<S> <C>
(272) Bonds of Series S in the principal amount of One hundred fifty
million dollars ($150,000,000), all of which are outstanding at the date
hereof;
(273-278) Bonds of Series KKP Nos. 9-14 in the principal amount of One
hundred ninety-three million two hundred ninety thousand dollars
($193,290,000), all of which are outstanding at the date hereof;
(279) Bonds of Series QQP No. 19 in the principal amount of Four hundred
thirty-five thousand dollars ($435,000), all of which are outstanding at
the date hereof;
(280) Bonds of 1984 Series AP in the principal amount of Two million four
hundred thousand dollars ($2,400,000), all of which are outstanding at
the date hereof;
(281) Bonds of 1984 Series BP in the principal amount of Seven million
seven hundred fifty thousand dollars ($7,750,000), all of which are
outstanding at the date hereof;
(282) Bonds of 1989 Series A in the principal amount of Three hundred
million dollars ($300,000,000) of which One hundred thirty-one million
seven hundred fifteen thousand dollars ($131,715,000) principal amount
have heretofore been retired and One hundred sixty-eight million two
hundred eighty-five thousand dollars ($168,285,000) principal amount are
outstanding at the date hereof;
(283) Bonds of 1989 Series BP in the principal amount of Sixty-six million
five hundred sixty-five thousand dollars ($66,565,000), all of which are
outstanding at the date hereof;
(284) Bonds of 1990 Series A in the principal amount of One hundred
ninety-four million six hundred forty-nine thousand dollars
($194,649,000) of which Twenty-five million one hundred sixteen thousand
dollars ($25,116,000) principal amount have heretofore been retired and
One hundred sixty-nine million five hundred thirty-three thousand dollars
($169,533,000) principal amount are outstanding at the date hereof;
(285) Bonds of 1990 Series B in the principal amount of Two hundred
fifty-six million nine hundred thirty-two thousand dollars
($256,932,000) of which Thirty-eight million sixty-four thousand dollars
($38,064,000) principal amount have heretofore been retired and Two
hundred eighteen million eight hundred sixty-eight thousand dollars
($218,868,000) principal amount are outstanding at the date hereof;
(286) Bonds of 1990 Series C in the principal amount of Eighty-five
million four hundred seventy-five thousand dollars ($85,475,000) of
which Thirteen million six hundred seventy-six thousand dollars
($13,676,000) principal amount have heretofore been retired and
Seventy-one million seven hundred ninety-nine thousand dollars
($71,799,000) principal amount are outstanding at the date hereof;
(287) Bonds of 1991 Series AP in the principal amount of Thirty-two
million three hundred seventy-five thousand dollars ($32,375,000), all
of which are outstanding at the date hereof;
(288) Bonds of 1991 Series BP in the principal amount of Twenty-five
million nine hundred ten thousand dollars ($25,910,000), all of which
are outstanding at the date hereof;
(289) Bonds of 1991 Series CP in the principal amount of Thirty-two
million eight hundred thousand dollars ($32,800,000), all of which are
outstanding at the date hereof;
(290) Bonds of 1991 Series DP in the principal amount of Thirty-seven
million six hundred thousand dollars ($37,600,000), all of which are
outstanding at the date hereof;
(291) Bonds of 1991 Series EP in the principal amount of Forty-one million
four hundred eighty thousand dollars ($41,480,000), all of which are
outstanding at the date hereof;
(292) Bonds of 1991 Series FP in the principal amount of Ninety-eight
million three hundred seventy-five thousand dollars ($98,375,000), all
of which are outstanding at the date hereof;
</TABLE>
<PAGE> 6
4
<TABLE>
<S> <C>
(293) Bonds of 1992 Series BP in the principal amount of Twenty million
nine hundred seventy-five thousand dollars ($20,975,000), all of which
are outstanding at the date hereof;
(294) Bonds of 1992 Series AP in the principal amount of Sixty-six million
dollars ($66,000,000), all of which are outstanding at the date hereof;
(295) Bonds of 1992 Series D in the principal amount of Three hundred
million dollars ($300,000,000), all of which are outstanding at the date
hereof;
(296) Bonds of 1992 Series CP in the principal amount of Thirty-five
million dollars ($35,000,000), all of which are outstanding at the date
hereof;
(297) Bonds of 1992 Series E in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(298) Bonds of 1989 Series BP No. 2 in the principal amount of Thirty-six
million dollars ($36,000,000), all of which are outstanding at the date
hereof;
(299) Bonds of 1993 Series C in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(300) Bonds of 1993 Series B in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(301) Bonds of 1993 Series E in the principal amount of Four hundred
million dollars ($400,000,000), all of which are outstanding at the date
hereof;
(302) Bonds of 1993 Series D in the principal amount of One hundred
million dollars ($100,000,000), all of which are outstanding at the date
hereof;
(303) Bonds of 1993 Series FP in the principal amount of Five million six
hundred eighty-five thousand dollars ($5,685,000), all of which are
outstanding at the date hereof;
(304) Bonds of 1993 Series G in the principal amount of Two hundred
twenty-five million dollars ($225,000,000), all of which are outstanding
at the date hereof;
(305) Bonds of 1993 Series J in the principal amount of Three hundred
million dollars ($300,000,000), all of which are outstanding at the date
hereof;
(306) Bonds of 1993 Series IP in the principal amount of Five million
eight hundred twenty-five thousand dollars ($5,825,000), all of which
are outstanding at the date hereof;
(307) Bonds of 1993 Series AP in the principal amount of Sixty-five
million dollars ($65,000,000), all of which are outstanding at the date
hereof;
(308) Bonds of 1993 Series H in the principal amount of Fifty million
dollars ($50,000,000), all of which are outstanding at the date hereof;
(309) Bonds of 1993 Series K in the principal amount of One hundred sixty
million dollars ($160,000,000), all of which are outstanding at the date
hereof;
and, accordingly, of the bonds so issued, dollars ($ ) principal amount are
outstanding at the date hereof: and
REASON FOR WHEREAS, the Company desires to provide funds to refund or replace
CREATION OF funds utilized by the Company for the purpose of meeting (or replacing
NEW SERIES. corporate funds utilized for such purposes) debt and Preferred Stock
refundings (including optional redemptions) and for this purpose desires
to issue and sell a new series of bonds to be issued under the Indenture
in the aggregate principal amount of up to million dollars
($ ) to be authenticated and delivered pursuant to Section 8
of Article III of the Indenture; and
</TABLE>
<PAGE> 7
5
<TABLE>
<S> <C>
INDENTURE TO BE WHEREAS, the Company desires by this Supplemental Indenture to agree
AMENDED AND with the Trustee to amend the Indenture and to create such new series of
BONDS TO BE bonds, to be designated "Secured Medium-Term Notes, Series "; and
SERIES .
FURTHER WHEREAS, the Original Indenture, by its terms, includes in the
ASSURANCE. property subject to the lien thereof all of the estates and properties,
real, personal and mixed, rights, privileges and franchises of every
nature and kind and wheresoever situate, then or thereafter owned or
possessed by or belonging to the Company or to which it was then or at any
time thereafter might be entitled in law or in equity (saving and
excepting, however, the property therein specifically excepted or released
from the lien thereof), and the Company therein covenanted that it would,
upon reasonable request, execute and deliver such further instruments as
may be necessary or proper for the better assuring and confirming unto the
Trustee all or any part of the trust estate, whether then or thereafter
owned or acquired by the Company (saving and excepting, however, property
specifically excepted or released from the lien thereof); and
AUTHORIZATION OF WHEREAS, the Company in the exercise of the powers and authority
SUPPLEMENTAL conferred upon and reserved to it under and by virtue of the provisions of
INDENTURE. the Indenture, and pursuant to resolutions of its Board of Directors has
duly resolved and determined to make, execute and deliver to the Trustee a
supplemental indenture in the form hereof for the purposes herein
provided; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been done, performed and fulfilled, and the
execution and delivery hereof have been in all respects duly authorized;
CONSIDERATION FOR NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The Detroit Edison
SUPPLEMENTAL Company, in consideration of the premises and of the covenants contained
INDENTURE. in the Indenture and of the sum of One Dollar ($1.00) and other good and
valuable consideration to it duly paid by the Trustee at or before the
ensealing and delivery of these presents, the receipt whereof is hereby
acknowledged, hereby covenants and agrees to and with the Trustee and its
successors in the trusts under the Original Indenture and in said
indentures supplemental thereto as follows:
</TABLE>
<PAGE> 8
6
PART I.
CREATION OF
SERIES OF BONDS.
SECURED MEDIUM-TERM NOTES,
SERIES
<TABLE>
<S> <C>
TERMS OF BONDS SECTION 1. The Company hereby creates the series of General and
OF SERIES. Refunding Mortgage Bonds to be issued under and secured by the
Original Indenture as amended to date and as further amended by this
Supplemental Indenture, to be designated, and to be distinguished from the
bonds of all other series, by the title "Secured Medium-Term Notes,
Series " (elsewhere herein referred to as the
"bonds of Series "). The aggregate principal amount of
bonds of Series , which shall be issued from time to
time, shall be limited to million dollars
($ ), except as provided in Sections 7 and 13
of Article II of the Original Indenture with respect to
exchanges and replacements of bonds.
The bonds of Series shall be issued as registered bonds without
coupons in denominations of $1,000 and any multiple thereof. Each bond of
1994 Series shall mature on such date not less than two years from date
of issue, shall bear interest at such rate or rates and have such other
terms and provisions not inconsistent with the Indenture as may be set
forth in a Certificate filed by the Company with the Trustee referring to
this Supplemental Indenture; interest on bonds of Series shall be
payable semi-annually on interest payment dates specified by the Company
and at maturity; and thereafter until the Company's obligation with
respect to the payment of said principal shall have been discharged as
provided in the Indenture. Except as otherwise specifically provided in
this Supplemental Indenture, the principal of and interest on the bonds of
Series shall be payable at the office or agency of the Company in
the Borough of Manhattan, The City of New York, The State of New York in
any coin or currency of the United States of America which at the time of
payment is legal tender for public and private debts. The interest on
bonds of Series , whether in temporary or definitive form, shall be
payable without presentation of such bonds and (subject to the provisions
of this Section 1) only to or upon the written order of the registered
holders thereof.
Each bond of Series shall be dated the date of its authentication.
The bonds of Series in definitive form shall be, at the election
of the Company, fully engraved or shall be lithographed or printed in
authorized denominations as aforesaid and numbered 1 and upwards (with
such further designation as may be appropriate and desirable to indicate
by such designation the form, series and denomination of bonds of 1994
Series ). Until bonds of Series in definitive form are ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver in lieu thereof, bonds of 1994
Series in temporary form, as provided in Section 10 of Article II of the
Indenture. Temporary bonds of Series , if any, may be printed and
may be issued in authorized denominations in substantially the form of
definitive bonds of Series .
Interest on any bond of Series which is payable on any interest
payment date and is punctually paid or duly provided for shall be paid to
the person in whose name that bond, or any previous bond to the extent
evidencing the same debt as that evidenced by that bond, is registered at
the close of business on the regular record date for such interest, which
regular record date shall be specified by the Company. If the Issue Date
of the bonds of Series of a designated interest rate and maturity is
after the record date, such bonds shall bear interest from the Issue Date
but payment of interest shall commence on the second interest payment date
succeeding the Issue Date. "Issue Date" with respect to bonds of
Series of a designated interest rate and maturity shall mean the date of
first authentication of bonds of such designated interest rate and
maturity. If the Company shall default in the payment of the interest due
on any interest payment date on the principal represented by any bond of
Series , such defaulted interest shall forthwith cease to be payable
to the registered holder of that bond on the relevant regular record date
by virtue of his having been such holder, and such defaulted interest may
be paid to the registered holder of that bond (or any bond or bonds of
</TABLE>
<PAGE> 9
7
<TABLE>
<S> <C>
Series issued upon transfer or exchange thereof) on the date of payment
of such defaulted interest or, at the election of the Company, to the
person in whose name that bond (or any bond or bonds of Series
issued upon transfer or exchange thereof) is registered on a subsequent
record date established by notice given by mail by or on behalf of the
Company to the holders of bonds of Series not less than ten (10)
days preceding such subsequent record date, which subsequent record
date shall be at least five (5) days prior to the payment date of
such defaulted interest.
REDEMPTION OF SECTION 2. The bonds of Series may be redeemable prior to stated
BONDS OF 1994 maturity in the manner set forth in a Certificate filed by the Company
SERIES . with the Trustee.
The bonds of Series may be redeemable as aforesaid and except as
otherwise provided herein, and as specified in Article IV of the
Indenture upon giving notice of such redemption by first class
mail, postage prepaid, by or on behalf of the Company at least
thirty (30) days, but not more than ninety (90) days, prior to
the date fixed for redemption to the registered holders of bonds
of 1994 Series so called for redemption at their last respective
addresses appearing on the register thereof, but failure to mail
such notice to the registered holders of any bonds of 1994 Series
designated for redemption shall not affect the validity of any such
redemption of any other bonds of such series. Interest shall cease
to accrue on any bonds of Series (or any portion thereof) so called for
redemption from and after the date fixed for redemption if payment
sufficient to redeem the bonds of Series (or such portion) designated
for redemption has been duly provided for. Bonds of 1994 Series redeemed
in part only shall be in amounts of $1,000 or any multiple thereof.
If the giving of the notice of redemption shall have been completed,
or if provision satisfactory to the Trustee for the giving of such notice
shall have been made, and if the Company shall have deposited with the
Trustee in trust funds (which shall have become available for payment to
the holders of the bonds of Series so to be redeemed) sufficient to
redeem bonds of 1994 Series in whole or in part, on the date fixed for
redemption, then all obligations of the Company in respect of such bonds
(or portions thereof) so to be redeemed and interest due or to become due
thereon shall cease and be discharged and the holders of such bonds of
Series (or portions thereof) shall thereafter be restricted
exclusively to such funds for any and all claims of whatsoever nature on
their part under the Indenture or in respect of such bonds (or portions
thereof) and interest.
The bonds of Series may be entitled to or subject to any sinking
fund specified in a Certificate filed by the Company with the Trustee.
EXCHANGE AND At the option of the registered holder, any bonds of Series ,
TRANSFER. upon surrender thereof for cancellation at the office or agency of the
Company in the Borough of Manhattan, The City of New York, The State of
New York, together with a written instrument of transfer (if so required
by the Company or by the Trustee) in form approved by the Company duly
executed by the holder or by its duly authorized attorney, shall be
exchangeable for a like aggregate principal amount of bonds of Series
subject to the same terms and conditions of other authorized
denominations, upon the terms and conditions specified herein and in
Section 7 of Article II of the Indenture. Bonds of Series shall be
transferable at the office or agency of the Company in the Borough of
Manhattan, The City of New York, The State of New York. The Company waives
its rights under Section 7 of Article II of the Indenture not to make
exchanges or transfers of bonds of Series during any period of ten
(10) days next preceding any interest payment date for such bonds.
Bonds of Series , in definitive and temporary form, may bear
such legends as may be necessary to comply with any law or with any rules
or regulations made pursuant thereto or with the rules or regulations of
any stock exchange or to conform to usage with respect thereto.
</TABLE>
<PAGE> 10
8
<TABLE>
<S> <C>
CONSENT. SECTION 3. The holders of bonds of the Series consent that the
Company may, but shall not be obligated to, fix a record date for the
purpose of determining the holders of bonds of Series entitled to
consent to any amendment, supplement or waiver. If a record date is fixed,
those persons who were holders at such record date (or their duly
designated proxies), and only those persons, shall be entitled to consent
to such amendment, supplement or waiver or to revoke any consent
previously given, whether or not such persons continue to be holders after
such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
</TABLE>
<PAGE> 11
9
<TABLE>
<S> <C>
FORM OF SECTION 4. The bonds of Series and the form of Trustee's
BONDS OF Certificate to be endorsed on such bonds shall be substantially in the
SERIES . following forms, respectively:
[FORM OF BOND]
THE DETROIT EDISON COMPANY
SECURED MEDIUM-TERM NOTE
Series
Unless and until this Bond is exchanged in whole or in part for
certified Bonds registered in the names of the various beneficial holders
hereof as then certified to the Trustee by The Depository Trust Company or
its successor (the "Depositary"), this Bond may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another 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 issuer or its agent for registration of transfer, exchange or
payment, and any certificate to be issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative
of the Depositary and any amount payable thereunder is made payable to
Cede & Co. or such other name, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
This Bond may be exchanged for certificated Bonds registered in the
names of the various beneficial owners hereof only if (a) the Depositary
is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by the issuer within 90 days, or (b)
the issuer, the Trustee and the Depositary consent to such exchange.
[If applicable, the "Amount of OID", the "Original Issue Date", the
"Yield to Maturity", and the "Short Accrual Period OID" (computed under
the Approximate Method) will be set forth below. The calculation of the
amount of OID upon (a) optional redemption or (b) declaration of
acceleration is discussed herein.]
</TABLE>
<PAGE> 12
10
<TABLE>
<S> <C> <C> <C>
R- $ CUSIP No.
(principal amount)
ORIGINAL INITIAL REDEMPTION APPLICABILITY
ISSUE DATE: DATE: OF MODIFIED
PAYMENT UPON
MATURITY DATE: INITIAL REDEMPTION ACCELERATION:
PERCENTAGE:
INTEREST RATE: If yes, state Issue
[AMOUNT OF OID PER Price:
INTEREST PAYMENT DATES: $1,000 OF PRINCIPAL:]
APPLICABILITY OF ANNUAL
INTEREST PAYMENT PERIOD: REDEMPTION PERCENTAGE
RECORD DATES: INCREASE:
APPLICABILITY OF ANNUAL
REDEMPTION PERCENTAGE If yes, state each
OPTIONAL REPAYMENT REDUCTION: redemption date and
DATE(S): redemption price:
If yes, state Annual
Percentage Reduction: SHORT ACCRUAL PERIOD
OID:
YIELD TO MATURITY:
SINKING FUND PROVISIONS:
AMORTIZATION SCHEDULE:
</TABLE>
<PAGE> 13
11
THE DETROIT EDISON COMPANY (hereinafter called the "Company"),
a corporation of the State of Michigan, for value received, hereby
promises to pay to Cede & Co. or registered assigns, at its office or
agency in the Borough of Manhattan, The City and State of New York,
the principal sum specified above in lawful money of the United States
of America on the Maturity Date specified above, and to pay interest
thereon at the rate specified above, at such office or agency, in like
lawful money, from the Issue Date specified above if the date of this
bond is prior to the first interest payment date, otherwise from the
most recent date to which interest has been paid, semi-annually on the
Interest Payment Dates specified above in each year, to the person in
whose name this bond is registered at the close of business on the
applicable Record Date specified above (subject to certain exceptions
provided in the Indenture hereinafter mentioned), until the Company's
obligation with respect to payment of said principal shall have been
discharged, all as provided, to the extent and in the manner specified
in such Indenture hereinafter mentioned on the reverse hereof and in
the supplemental indenture pursuant to which this bond has been
issued. If the date of this bond (if other than the Issue Date) is
after a Record Date (as specified above) with respect to any Interest
Payment Date and on or prior to such Interest Payment Date, then
interest shall be payable only from such Interest Payment Date. If the
Issue Date is after such Record Date, then interest shall be payable
from the Issue Date and payment of interest shall commence on the
second Interest Payment Date succeeding the Issue Date. If the Company
shall default in the payment of interest due on any Interest Payment
Date, then interest shall be payable from the next preceding Interest
Payment Date to which interest has been paid, or, if no interest has
been paid, from the Issue Date.
This bond shall not be valid or become obligatory for any
purpose until Bankers Trust Company, the Trustee under the Indenture
hereinafter mentioned on the reverse hereof, or its successor
thereunder, shall have signed the form of certificate endorsed hereon.
<PAGE> 14
12
This bond is one of an authorized issue of bonds of the
Company, unlimited as to amount except as provided in the
Indenture hereinafter mentioned or any indentures supplemental
thereto, and is one of a series of General and Refunding
Mortgage Bonds known as Secured Medium-Term Notes, Series
(elsewhere herein referred to as the "bonds of Series
"), limited to an aggregate principal amount of
, except as otherwise provided in the Indenture
hereinafter mentioned. This bond and all other bonds of said
series are issued and to be issued under, and are all equally
and ratably secured (except insofar as any sinking,
amortization, improvement or analogous fund, established in
accordance with the provisions of the Indenture hereinafter
mentioned, may afford additional security for the bonds of any
particular series and except as provided in Section 3 of
Article VI of said Indenture) by an Indenture, dated as of
October 1, 1924, duly executed by the Company to Bankers Trust
Company, a corporation of the State of New York, as Trustee, to
which Indenture and all indentures supplemental thereto
(including the Supplemental Indenture dated as of
, ) reference is hereby made for a
description of the properties and franchises mortgaged and
conveyed, the nature and extent of the security, the terms and
conditions upon which the bonds are issued and under which
additional bonds may be issued, and the rights of the holders
of the bonds and of the Trustee in respect of such security
(which Indenture and all indentures supplemental thereto,
(including the Supplemental Indenture dated as of
, ), are hereinafter collectively called the
"Indenture"). As provided in the Indenture, said bonds may be
for various principal sums and are issuable in series, which
may mature at different times, may bear interest at different
rates and may otherwise vary as in said Indenture provided.
With the consent of the Company and to the extent permitted by
and as provided in the Indenture, the rights and obligations of
the Company and of the holders of the bonds and the terms and
provisions of the Indenture, or of any indenture supplemental
thereto, may be modified or altered in certain respects by
affirmative vote of at least eighty-five percent (85%) in
principal amount of the bonds then outstanding, and, if the
rights of one or more, but less than all, series of bonds then
outstanding are to be affected by the action proposed to be
taken, then also by affirmative vote of at least eighty-five
percent (85%) in principal amount of the series of bonds so to
be affected (excluding in every instance bonds disqualified
from voting by reason of the Company's interest therein as
specified in the Indenture); provided, however, that, without
the consent of the holder hereof, no such modification or
alteration shall, among other things, affect the terms of
payment of the principal of, or the interest on, this bond,
which in those respects is unconditional.
The holder of this bond of Series hereby consents that
the Company may, but shall not be obligated to, fix a record
date for the purpose of determining the holders of bonds of
this series entitled to consent to any amendment, supplement or
waiver. If a record date is fixed, those persons who were
holders at such record date (or their duly designated proxies),
and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent
previously given, whether or not such persons continue to be
holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.
This bond is subject to the redemption provisions specified
above.
Under the Indenture, funds may be deposited with the Trustee
(which shall have become available for payment), in advance of
the redemption date of any of the bonds of Series (or
portions thereof), in trust for the redemption of such bonds
(or portions thereof) and the interest due or to become due
thereon, and thereupon all obligations of the Company in
respect of such bonds (or portions thereof) so to be redeemed
and such interest shall cease and be discharged, and the
holders thereof shall thereafter be restricted exclusively to
such funds for any and all claims of whatsoever nature on their
part under the Indenture or with respect to such bonds (or
portions thereof) and interest.
This bond is entitled to or subject to the sinking fund
provisions specified above.
<PAGE> 15
13
This bond will be subject to repayment at the option of the
holder hereof on the Optional Repayment Date(s), if any, indicated on
the face hereof. If no Optional Repayment Dates are set forth on the
face hereof, this bond shall not be so repaid at the option of the
holder hereof prior to maturity. On any Optional Repayment Date, this
bond shall be repayable in whole or in part in increments of $1,000
(provided that any remaining principal amount hereof shall not be less
than the minimum authorized denomination hereof) at the option of the
holder hereof at a repayment price equal to 100% of the principal
amount to be repaid, together with interest thereon payable to the
date of repayment. For this bond to be repaid in whole or in part at
the option of the holder hereof, this bond must be received, with the
form entitled "Option to Elect Repayment" below duly completed, by the
Trustee at its corporate trust office at 4 Albany Street, New York,
New York, or such address which the Company shall from time to time
notify the holders of the bond, not more than 60 nor less than 30 days
prior to an Optional Repayment Date. Exercise of such repayment option
by the Holder hereof shall be irrevocable. If specified above that
this bond is subject to (i) "Annual Redemption Percentage Reduction"
or (ii) "Annual Redemption Percentage Increase", then this bond may be
redeemed in whole or in part at the option of the Company on or after
the Initial Redemption Date specified on the face hereof on the terms
set forth above, together with interest accrued and unpaid hereon to
the date of redemption (except as provided below). If this bond is
subject to "Annual Redemption Percentage Reduction", the Initial
Redemption Percentage indicated on the face hereof will be reduced on
each anniversary of the Initial Redemption Date specified above by the
Annual Percentage Reduction specified on the face hereof until the
redemption price of this bond is 100% of the principal amount hereof.
If this bond is subject to "Annual Redemption Percentage Increase",
the amount of original issue discount allocable to such short accrual
period is the Amortized Amount. "Amortized Amount" means the original
issue discount amortized from the Original Issue Date to the date of
redemption or declaration, as the case may be, which amortization
shall be calculated using the "constant yield method" (computed in
accordance with the rules under the Internal Revenue Code of 1986, as
amended, and the regulations thereunder, in effect on the date of
redemption or declaration, as the case may be).
In case an event of default, as defined in the Indenture, shall
occur, the principal of all the bonds issued thereunder may become or
be declared due and payable, in the manner, with the effect and
subject to the conditions, provided in the Indenture.
If specified above that this bond is subject to "Modified
Payment upon Acceleration," then (i) if the principal hereof is
declared to be due and payable as discussed in the preceding
paragraph, the amount of principal due and payable with respect to
this bond shall be limited to the sum of the Issue Price specified
above plus the Amortized Amount, (ii) for the purpose of any vote of
securityholders taken pursuant to the Indenture prior to the
acceleration of payment of this bond, the principal amount hereof
shall equal the amount that would be due and payable hereon,
calculated as set forth in clause (i) above, if this bond were
declared to be due and payable on the date of any such vote and (iii)
for the purpose of any vote of securityholders taken pursuant to the
Indenture following the acceleration of payment of this bond, the
principal amount hereof shall equal the amount of principal due and
payable with respect to this bond, calculated as set forth in clause
(i) above.
This bond is transferable by the registered holder hereof, in
person or by his attorney duly authorized in writing, on the books of
the Company kept at its office or agency in the Borough of Manhattan,
The City and State of New York, upon surrender and cancellation of
this bond, and, thereupon, a new registered bond or bonds of the same
series of authorized denominations for a like aggregate principal
amount will be issued to the transferee or transferees in exchange
herefor, and this bond with others of like form may in like manner be
exchanged for one or more new registered bonds of the same series of
other authorized denominations, but of the same aggregate principal
amount, all as provided and upon the terms and conditions set forth in
the Indenture, and upon payment, in any event, of the charges
prescribed in the Indenture.
<PAGE> 16
14
No recourse shall be had for the payment of the principal of,
or the interest on, this bond, or for any claim based hereon or
otherwise in respect hereof or of the Indenture, or of any indenture
supplemental thereto, against any incorporator, or against any past,
present or future stockholder, director or officer, as such, of the
Company, or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether for amounts unpaid on stock subscriptions or by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise howsoever; all
such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released by
every holder or owner hereof, as more fully provided in the Indenture.
IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has caused this
instrument to be executed on its behalf by its Chairman of the Board
and its Vice President and Treasurer, with their manual or facsimile
signatures, and its corporate seal, or a facsimile thereof, to be
impressed or imprinted hereon and the same to be attested by its
Secretary or an Assistant Secretary by manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
By
-----------------------
Chairman of the Board
-----------------------
[SEAL] Vice President and Treasurer
Attest:
-----------------------------------------------
Corporate Secretary
<PAGE> 17
15
<TABLE>
<CAPTION>
[FORM OF TRUSTEE'S CERTIFICATE]
<S> <C>
FORM OF This bond is one of the bonds, of the series designated therein, described
TRUSTEE'S in the within-mentioned Indenture.
CERTIFICATE.
</TABLE>
BANKERS TRUST COMPANY,
as Trustee
By ..............................
Authorized Officer
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 assignee) the
within bond of THE DETROIT EDISON COMPANY and does hereby
irrevocably constitute and appoint
----------------------------------------------------------
----------------------------------------------------------
Attorney, to transfer said bond on the books of the
within-mentioned Company, with full power of substitution
in the premises.
Dated:
-------------------------------------
Notice: The signature to this assignment must correspond
with the name as written upon the face of the bond in
every particular without alteration or enlargement or any
change whatsoever.
<PAGE> 18
16
<TABLE>
<CAPTION>
OPTION TO ELECT REPAYMENT
<S> <C>
The undersigned hereby irrevocably request(s) and instruct(s) the Company
to repay this bond (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with
interest to the applicable Optional Repayment Date, to the undersigned, at
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(please print or typewrite name and address of the undersigned)
For this bond to be repaid, the Trustee must receive at 4 Albany St., New
York, New York, or at such other place or places of which the Company
shall from time to time notify the holder of this bond, not more than 60
nor less than 30 days prior to an Optional Repayment Date, if any, shown
on the face of this bond, this bond with this "Option to Elect Repayment"
form duly completed.
If less than the entire principal amount of this bond is to be repaid,
specify the portion hereof (which shall be in increments of $1,000) which
the holder elects to have repaid and specify the denomination or
denominations (which shall not be less than the minimum authorized
denomination of this bond and shall be an integral multiple of $1,000 of
the bond to be issued to the holder for the portion of this bond not being
repaid (in the absence of any such specification, one such bond will be
issued for the portion not being repaid).
$
-------------------------
Date
----------------------
Notice: The signature on this Option to Elect Repayment must correspond
with the name as written upon the face of this bond in every particular,
without alteration or enlargement or any change whatever.
</TABLE>
<PAGE> 19
17
<TABLE>
<CAPTION>
PART II.
RECORDING AND FILING DATA
<S> <C>
RECORDING AND The Original Indenture and indentures supplemental thereto have been
FILING OF ORIGINAL recorded and/or filed and Certificates of Provision for Payment have been
INDENTURE. recorded as hereinafter set forth.
The Original Indenture has been recorded as a real estate mortgage and
filed as a chattel mortgage in the offices of the respective Registers of
Deeds of certain counties in the State of Michigan as set forth in the
Supplemental Indenture dated as of September 1, 1947, has been recorded as
a real estate mortgage in the office of the Register of Deeds of Genesee
County, Michigan as set forth in the Supplemental Indenture dated as of
May 1, 1974, has been filed in the Office of the Secretary of State of
Michigan on November 16, 1951 and has been filed and recorded in the
office of the Interstate Commerce Commission on December 8, 1969.
RECORDING AND Pursuant to the terms and provisions of the Original Indenture,
FILING OF indentures supplemental thereto heretofore entered into have been recorded
SUPPLEMENTAL as a real estate mortgage and/or filed as a chattel mortgage or as a
INDENTURES. financing statement in the offices of the respective Registers of Deeds of
certain counties in the State of Michigan, the Office of the Secretary of
State of Michigan and the Office of the Interstate Commerce Commission, as
set forth in supplemental indentures as follows:
</TABLE>
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
June 1, 1925(a)(b)................ Series B Bonds February 1, 1940
August 1, 1927(a)(b).............. Series C Bonds February 1, 1940
February 1, 1931(a)(b)............ Series D Bonds February 1, 1940
June 1, 1931(a)(b)................ Subject Properties February 1, 1940
October 1, 1932(a)(b)............. Series E Bonds February 1, 1940
September 25, 1935(a)(b).......... Series F Bonds February 1, 1940
September 1, 1936(a)(b)........... Series G Bonds February 1, 1940
November 1, 1936(a)(b)............ Subject Properties February 1, 1940
February 1, 1940(a)(b)............ Subject Properties September 1, 1947
December 1, 1940(a)(b)............ Series H Bonds and Addi- September 1, 1947
tional Provisions
September 1, 1947(a)(b)(c)........ Series I Bonds, November 15, 1951
Subject Properties and
Additional Provisions
March 1, 1950(a)(b)(c)............ Series J Bonds November 15, 1951
and Additional Provi-
sions
November 15, 1951(a)(b)(c)........ Series K Bonds January 15, 1953
Additional Provisions
and Subject Properties
January 15, 1953(a)(b)............ Series L Bonds May 1, 1953
May 1, 1953(a).................... Series M Bonds March 15, 1954
and Subject Properties
March 15, 1954(a)(c).............. Series N Bonds May 15, 1955
and Subject Properties
May 15, 1955(a)(c)................ Series O Bonds August 15, 1957
and Subject Properties
August 15, 1957(a)(c)............. Series P Bonds June 1, 1959
Additional Provisions
and Subject Properties
June 1, 1959(a)(c)................ Series Q Bonds December 1, 1966
and Subject Properties
December 1, 1966(a)(c)............ Series R Bonds October 1, 1968
Additional Provisions
and Subject Properties
October 1, 1968(a)(c)............. Series S Bonds December 1, 1969
and Subject Properties
</TABLE>
<PAGE> 20
18
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
December 1, 1969(a)(c)............ Series T Bonds July 1, 1970
and Subject Properties
July 1, 1970(c)................... Series U Bonds December 15, 1970
and Subject Properties
December 15, 1970(c).............. Series V and June 15, 1971
Series W Bonds
June 15, 1971(c).................. Series X Bonds November 15, 1971
and Subject Properties
November 15, 1971(c).............. Series Y Bonds January 15, 1973
and Subject Properties
January 15, 1973(c)............... Series Z Bonds May 1, 1974
and Subject Properties
May 1, 1974....................... Series AA Bonds October 1, 1974
and Subject Properties
October 1, 1974................... Series BB Bonds January 15, 1975
and Subject Properties
January 15, 1975.................. Series CC Bonds November 1, 1975
and Subject Properties
November 1, 1975.................. Series DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975................. Series EE Bonds February 1, 1976
and Subject Properties
February 1, 1976.................. Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976..................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976..................... Series HH Bonds February 15, 1977
and Subject Properties
February 15, 1977................. Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977..................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP Nos.
1-7 Bonds, Series KKP
Nos. 1-7 Bonds and
Series LLP Nos. 1-7
Bonds
June 15, 1977..................... Series FFR No. 14 Bonds July 1, 1977
and Subject Properties
July 1, 1977...................... Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977................... Series GGP Nos. 8-22 June 1, 1978
Bonds and Series OOP
Nos. 1-17 Bonds and
Subject Properties
June 1, 1978...................... Series PP Bonds, October 15, 1978
Series QQP Nos. 1-9
Bonds and Subject
Properties
October 15, 1978.................. Series RR Bonds March 15, 1979
and Subject Properties
March 15, 1979.................... Series SS Bonds July 1, 1979
and Subject Properties
</TABLE>
<PAGE> 21
19
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
July 1, 1979...................... Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP Nos.
8-21 Bonds and Series
TTP Nos. 1-15 Bonds
and Subject Properties
September 1, 1979................. Series JJP No. 8 Bonds, September 15, 1979
Series KKP No. 8
Bonds, Series LLP Nos.
8-15 Bonds, Series MMP
No. 2 Bonds and Series
OOP No. 18 Bonds and
Subject Properties
September 15, 1979................ Series UU Bonds January 1, 1980
January 1, 1980................... 1980 Series A Bonds and April 1, 1980
Subject Properties
April 1, 1980..................... 1980 Series B Bonds August 15, 1980
August 15, 1980................... Series QQP Nos. 10-19 August 1, 1981
Bonds, 1980 Series CP
Nos. 1-12 Bonds and
1980 Series DP No.
1-11 Bonds and Subject
Properties
August 1, 1981.................... 1980 Series CP Nos. November 1, 1981
13-25 Bonds and
Subject Properties
November 1, 1981.................. 1981 Series AP Nos. 1-12 June 30, 1982
Bonds
June 30, 1982..................... Article XIV August 15, 1982
Reconfirmation
August 15, 1982................... 1981 Series AP Nos. June 1, 1983
13-14 and Subject
Properties
June 1, 1983...................... 1981 Series AP Nos. October 1, 1984
15-16 and Subject
Properties
October 1, 1984................... 1984 Series AP and 1984 May 1, 1985
Series BP Bonds and
Subject Properties
May 1, 1985....................... 1985 Series A Bonds May 15, 1985
May 15, 1985...................... 1985 Series B Bonds and October 15, 1985
Subject Properties
October 15, 1985.................. Series KKP No. 9 Bonds April 1, 1986
and Subject Properties
</TABLE>
<PAGE> 22
20
<TABLE>
<CAPTION>
RECORDED AND/OR
FILED AS SET FORTH IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
---------------------------------- ------------------------ ------------------
<S> <C> <C>
April 1, 1986..................... 1986 Series A and Subject August 15, 1986
Properties
August 15, 1986................... 1986 Series B and Subject November 30, 1986
Properties
November 30, 1986................. 1986 Series C January 31, 1987
January 31, 1987.................. 1987 Series A April 1, 1987
April 1, 1987..................... 1987 Series B and 1987 August 15, 1987
Series C
August 15, 1987................... 1987 Series D and 1987 November 30, 1987
Series E and Subject
Properties
November 30, 1987................. 1987 Series F June 15, 1989
June 15, 1989..................... 1989 Series A July 15, 1989
July 15, 1989..................... Series KKP No. 10 December 1, 1989
December 1, 1989.................. Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990................. 1990 Series A, 1990 November 1, 1990
Series B, 1990 Series
C, 1990 Series D, 1990
Series E and 1990
Series F
November 1, 1990.................. Series KKP No. 12 April 1, 1991
April 1, 1991..................... 1991 Series AP May 1, 1991
May 1, 1991....................... 1991 Series BP and 1991 May 15, 1991
Series CP
May 15, 1991...................... 1991 Series DP September 1, 1991
September 1, 1991................. 1991 Series EP November 1, 1991
November 1, 1991.................. 1991 Series FP January 15, 1992
January 15, 1992.................. 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992................. 1992 Series AP April 15, 1992
April 15, 1992.................... Series KKP No. 13 July 15, 1992
July 15, 1992..................... 1992 Series CP November 30, 1992
July 31, 1992..................... 1992 Series D November 30, 1992
November 30, 1992................. 1992 Series E and 1993 March 15, 1993
Series D
December 15, 1992................. Series KKP No. 14 and March 15, 1992
1989 Series BP No. 2
January 1, 1993................... 1993 Series C April 1, 1993
March 1, 1993..................... 1993 Series E June 30, 1993
March 15, 1993.................... 1993 Series D September 15, 1993
April 1, 1993..................... 1993 Series FP and 1993 September 15, 1993
Series IP
April 26, 1993.................... 1993 Series G and September 15, 1993
Amendment of Article
II, Section 5
May 31, 1993...................... 1993 Series J September 15, 1993
September 15, 1993................ 1993 Series K March 1, 1994
</TABLE>
[Update as Necessary]
------------------------------------------
(a) See Supplemental Indenture dated as of July 1, 1970 for
Interstate Commerce Commission filing and recordation
information.
(b) See Supplemental Indenture dated as of May 1, 1953 for
Secretary of State of Michigan filing information.
(c) See Supplemental Indenture dated as of May 1, 1974 for
County of Genesee, Michigan recording and filing
information.
<PAGE> 23
21
Further, pursuant to the terms and provisions of the Original
Indenture, a Supplemental Indenture dated as ,
providing for the terms of bonds to be issued thereunder of
Series has heretofore been entered into between the Company and the
Trustee and has been filed in the Office of the Secretary of State of
Michigan as a financing statement on , 1994 (Filing No. ),
has been filed and recorded in the Office of the Interstate Commerce
Commission (Recordation No. 5485- ) on ,
and has been recorded as a real estate mortgage in the offices of the
respective Register of Deeds of certain counties in the State of
Michigan, as follows:
<TABLE>
<CAPTION>
LIBER
OF
MORTGAGES
OR
COUNTY
COUNTY RECORDED RECORDS PAGE
----------------------------- ------------------ ------ ----------
<S> <C> <C> <C>
Genesee......................
Huron........................
Ingham.......................
Lapeer.......................
Lenawee......................
Livingston...................
Macomb.......................
Mason........................
Monroe.......................
Oakland......................
Sanilac......................
St. Clair....................
Tuscola......................
Washtenaw....................
Wayne........................
</TABLE>
<PAGE> 24
22
<TABLE>
<S> <C>
RECORDING OF All the bonds of Series A which were issued under the Original
CERTIFICATES Indenture dated as of October 1, 1924, and of Series B, C, D, E, F, G, H,
OF PROVISION I, J, K, L, M, N, O, P, Q, W, Y, Z, AA, BB, CC, DDP Nos. 1-9, FFR Nos.
FOR PAYMENT. 1-14, GGP Nos. 1-22, HH, IIP Nos. 1-22, JJP Nos. 1-8, KKP Nos. 1-8, LLP
Nos. 1-15, NNP Nos. 1-21, OOP Nos. 1-18, QQP Nos. 1-17, TTP Nos. 1-15, UU,
1980 Series A, 1980 Series CP Nos. 1-25, 1980 Series DP Nos. 1-11, 1981
Series AP Nos. 1-16, 1985 Series A, 1985 Series B, 1987 Series A, PP, RR,
EE, MMP and MMP No. 2 which were issued under Supplemental Indentures
dated as of, respectively, June 1, 1925, August 1, 1927, February 1, 1931,
October 1, 1932, September 25, 1935, September 1, 1936, December 1, 1940,
September 1, 1947, November 15, 1951, January 15, 1953, May 1, 1953, March
15, 1954, May 15, 1955, August 15, 1957, December 15, 1970, November 15,
1971, January 15, 1973, May 1, 1974, October 1, 1974, January 15, 1975,
November 1, 1975, February 1, 1976, June 15, 1976, July 15, 1976, October
1, 1977, March 1, 1977, July 1, 1979, March 1, 1977, March 1, 1977, March
1, 1977, September 1, 1979, July 1, 1977, July 1, 1979, September 15,
1979, October 1, 1977, June 1, 1978, October 1, 1977, July 1, 1979,
January 1, 1980, August 15, 1980, November 1, 1981, May 1, 1985, May 15,
1985, January 31, 1987, June 1, 1978, October 15, 1978, December 15, 1975,
February 15, 1977, and September 1, 1979 have matured or have been called
for redemption and funds sufficient for such payment or redemption have
been irrevocably deposited with the Trustee for that purpose; and
Certificates of Provision for Payment have been recorded in the offices of
the respective Registers of Deeds of certain counties in the State of
Michigan, with respect to all bonds of Series A, B, C, D, E, F, G, H, K,
L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos. 1-3, GGP Nos. 1 and 2, IIP
No. 1, JJP No. 1, KKP No. 1, LLP No. 1 and GGP No. 8.
PART III.
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared and provided, and
CONDITIONS OF agrees to perform the same upon the terms and conditions in the Original
ACCEPTANCE OF Indenture, as amended to date and as supplemented by this Supplemental
TRUST BY TRUSTEE. Indenture, and in this Supplemental Indenture set forth, and upon the
following terms and conditions:
The Trustee shall not be responsible in any manner whatsoever for and
in respect of the validity or sufficiency of this Supplemental Indenture
or the due execution hereof by the Company or for or in respect of the
recitals contained herein, all of which recitals are made by the Company
solely.
PART IV.
MISCELLANEOUS.
CONFIRMATION OF Except to the extent specifically provided therein, no provision of
SECTION 318(C) OF this supplemental indenture or any future supplemental indenture is
TRUST INDENTURE intended to modify, and the parties do hereby adopt and confirm, the
ACT. provisions of Section 318(c) of the Trust Indenture Act which amend and
supercede provisions of the Indenture in effect prior to November 15,
1990.
EXECUTION IN THIS SUPPLEMENTAL INDENTURE MAY BE SIMULTANEOUSLY EXECUTED IN ANY
COUNTERPARTS. NUMBER OF COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO
BE AN ORIGINAL; BUT SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE
AND THE SAME INSTRUMENT.
</TABLE>
<PAGE> 25
23
<TABLE>
<S> <C>
TESTIMONIUM. IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND BANKERS TRUST
COMPANY HAVE CAUSED THESE PRESENTS TO BE SIGNED IN THEIR RESPECTIVE
CORPORATE NAMES BY THEIR RESPECTIVE CHAIRMEN OF THE BOARD, PRESIDENTS,
VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS, TREASURERS OR ASSISTANT
TREASURERS AND IMPRESSED WITH THEIR RESPECTIVE CORPORATE SEALS, ATTESTED
BY THEIR RESPECTIVE SECRETARIES OR ASSISTANT SECRETARIES, ALL AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN.
</TABLE>
THE DETROIT EDISON COMPANY,
(Corporate Seal) By
-------------------------
C. C. Arvani
Assistant Treasurer
EXECUTION. Attest:
---------------------------------
Ronald J. Gdowski
Assistant Corporate Secretary
Signed, sealed and delivered by THE
DETROIT EDISON COMPANY, in the
presence of
---------------------------------
Jack L. Somers
---------------------------------
Cathy M. Lewis
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
<TABLE>
<S> <C>
ACKNOWLEDGMENT On this day of , before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of Wayne, in the State of Michigan,
BY COMPANY. personally appeared C. C. Arvani, to me personally known, who, being by me
duly sworn, did say that he does business at 2000 Second Avenue, Detroit,
Michigan 48226 and is the Assistant Treasurer of THE DETROIT EDISON
COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and said C. C.
Arvani, acknowledged said instrument to be the free act and deed of said
corporation.
</TABLE>
-----------------------------------
(Notarial Seal) Notary Public
Wayne County, MI
My Commission Expires
<PAGE> 26
24
BANKERS TRUST COMPANY,
(Corporate Seal) By
----------------------
R.T. Gorman
Vice President
Attest:
------------------------------
Shikha Dombek
Assistant Secretary
Signed, sealed and delivered by
BANKERS TRUST COMPANY, in the
presence of
------------------------------
John Florio
------------------------------
Scott Thiel
STATE OF NEW YORK
SS.:
COUNTY OF NEW YORK
<TABLE>
<S> <C>
ACKNOWLEDGMENT On this day of , before me, the subscriber, a Notary
OF EXECUTION Public within and for the County of Kings, in the State of New York,
BY TRUSTEE. personally appeared R.T. Gorman, to me personally known, who, being by me
duly sworn, did say that his business office is located at Four Albany
Street, New York, New York 10015, and he is Vice President of BANKERS
TRUST COMPANY, one of the corporations described in and which executed the
foregoing instrument; that he knows the corporate seal of the said
corporation and that the seal affixed to said instrument is the corporate
seal of said corporation; and that said instrument was signed and sealed
in behalf of said corporation by authority of its Board of Directors and
that he subscribed his name thereto by like authority; and said R.T.
Gorman acknowledged said instrument to be the free act and deed of said
corporation.
</TABLE>
(Notarial Seal) ----------------------------------
Notary Public, State of New York
No.
Qualified in Kings County
Commission Expires
<PAGE> 27
25
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
<TABLE>
<S> <C>
AFFIDAVIT AS TO C. C. Arvani, being duly sworn, says: that he is the Assistant Treasurer
CONSIDERATION of THE DETROIT EDISON COMPANY, the Mortgagor named in the foregoing
AND GOOD FAITH. instrument, and that he has knowledge of the facts in regard to the making
of said instrument and of the consideration therefor; that the
consideration for said instrument was and is actual and adequate, and that
the same was given in good faith for the purposes in such instrument set
forth.
</TABLE>
---------------------------
C. C. Arvani
Sworn to before me this day of
,
------------------------------------
Judith Thun, Notary Public
Wayne County, MI
My Commission Expires
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq.,
2000 Second Avenue, Detroit, Michigan 48226
<PAGE> 1
EXHIBIT 4-201
===============================================================================
THE DETROIT EDISON COMPANY
AND
BANKERS TRUST COMPANY
Trustee
--------------
SUPPLEMENTAL INDENTURE
Dated as of ,
Supplementing the Collateral Trust Indenture
Dated as of June 30, 1993
--------------
$
Remarketed Secured Notes - Series due
===============================================================================
<PAGE> 2
SUPPLEMENTAL INDENTURE, dated as of the day of , , 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, a Fifth
Supplemental Trust Indenture dated as of February 1, 1996, a Sixth Supplemental
Indenture dated as of May 1, 1998 and (together 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 1001 thereof, and pursuant to appropriate
resolutions of the Board of Directors, has duly determined to make, execute and
deliver to the Trustee this Supplemental Indenture to the Original
Indenture as permitted by Sections 201 and 301 of the Original Indenture in
order to establish the form or terms of, and to provide for the creation and
issue of, a series of Securities under the Original Indenture in the aggregate
principal amount of up to $ ; 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
Supplemental Indenture a valid, binding and legal agreement of the Company, have
been done;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH that, in order to establish the terms of a series of Securities, and
for and in consideration of the premises and of the covenants contained in the
Original Indenture and in this Supplemental Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 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.
2
<PAGE> 3
"Administrative Agent" means the entity designated as such in the
applicable Standby Note Purchase Agreement, if any.
"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 E hereto (which includes facsimile or
appropriate electronic media) from the Company, that sets forth applicable Note
to which it relates, the new Interest
3
<PAGE> 4
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.
"Determination Date" means the third Business Day preceding the
applicable SPURS Remarketing Date.
"DTC" has the meaning specified in Section 203 hereof.
"Floating Interest Rate Notice" has the meaning specified in
Section 204 hereof. The form of Floating Rate Interest Notice is set forth as
Exhibit D to this 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 .
"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.
"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.
"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
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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.
"Maximum Rate" means that rate of interest equal to fifteen
percent (15%) per annum or such higher rate as may be established from time to
time by the Board of Directors of the Company.
"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.
"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.
"Remarketing Agent" means such agent or agents, including any
standby remarketing agent (each a "Standby Remarketing Agent"), as the Company
may appoint from
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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 Supplemental Indenture shall, unless the
context otherwise requires, refer to this Supplemental Indenture.
ARTICLE TWO
TITLE, RANKING AND TERMS OF THE NOTES
Section 201. Title and Ranking of the Notes. This Supplemental
Indenture hereby establishes a series of senior Securities designated as the
"Remarketed Secured Notes - Series due . " 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
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 to the Original Indenture.
Section 203. Amount and Denominations; DTC. The aggregate
principal amount of Notes that may be issued under this Supplemental Indenture
is limited to $ .
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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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.
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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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 interest rate on the Notes will not exceed the Maximum
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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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 or 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, Bankers Trust Company 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 in H.15(519) (as hereinafter defined)
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 in H.15 Daily Update (as hereinafter defined), or such other
recognized electronic source used for the purpose of displaying such rate under
the caption, "CDs (Secondary Market)." If such rate is not yet published in
H.15(519), H.15 Daily Update or
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another recognized electronic source 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.
"H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
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 7051, 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,
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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 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 Bridge Telerate,
Inc. (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
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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 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)" as such rate is
displayed on Bridge Telerate, Inc. (or any successor service) on page 120
("Telerate Page 120") or, if such rate does not appear on Telerate Page 120 or
is 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 H.15
Daily Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the heading "Federal Funds/Effective." If such rate
is not yet published in H.15(519), H.15 Daily Update or another recognized
electronic source 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
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<PAGE> 16
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 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 Bridge Telerate, Inc. (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
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<PAGE> 17
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,"
or, if not published prior to 3:00 p.m., New York City time, on the related
Calculation Date, the rate on such Prime Rate Interest Determination Date as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption "Bank Prime Loan." If
such rate is not yet published in H.15(519), H.15 Daily Update or another
recognized electronic source by 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
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 on the Reuter
Monitor Money Rates Service (or any successor service) on the "USPRIME1" page
(or such other page as may replace the USPRIME1 page on such 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 under the
caption "AVGE INVEST YIELD" on the display on Bridge Telerate, Inc. (or any
successor service) on page 56 or page 57 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
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<PAGE> 18
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 the rate (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) on such Treasury Rate Interest Determination Date of Treasury
Bills having the Index Maturity specified in the applicable Floating Interest
Rate Notice as published in H.15(519) under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market" or, if not yet published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on such
Treasury Rate Interest Determination Date of such Treasury Bills as published in
H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate will be calculated by the Calculation Agent and will 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.
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;
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<PAGE> 19
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 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
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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 or Interest Rate Period 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 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.
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(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 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
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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.
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.
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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 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.
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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 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 Supplemental Indenture until such
time as the Company delivers the Notes to the Trustee for cancellation.
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<PAGE> 25
(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 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.
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<PAGE> 26
(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 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 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
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<PAGE> 27
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.
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).
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<PAGE> 28
"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 Bridge Telerate, Inc. (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 Bridge
Telerate, Inc..
"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
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<PAGE> 29
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.
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
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<PAGE> 30
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 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 601 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
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<PAGE> 31
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
SECURITY; AUTHENTICATION AND DELIVERY OF THE NOTES
Section 501. Security As provided in and pursuant to Article Four of
the Original Indenture, the Notes will be secured as to payments of principal,
interest and premium, if any, by a series of general and refunding mortgage
bonds (the "General and Refunding Mortgage Bonds, 1993 Series B" or the "Bonds")
of the Company to be issued from time to time under and secured by a Mortgage
and Deed of Trust, dated as of October 1, 1924, between the Company and the
Trustee, as amended and supplemented by various supplemental indentures,
including the supplemental indenture, dated as of September 15, 1993, creating
the General and Refunding Mortgage Bonds, 1993 Series B (collectively, the
"Mortgage"), pledged by the Company for the benefit of the holders of the Notes
to the Trustee under this Indenture.
Section 502. 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
Supplemental Indenture for the authentication and delivery of such Notes and the
Trustee or such Authenticating Agent shall authenticate and deliver such Notes.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect
of, and shall not be responsible in any manner whatsoever for and in respect of,
the validity or sufficiency of this Supplemental Indenture or the proper
authorization or the due execution hereof by the Company or for or in respect of
the recitals and statements contained herein, all of which recitals and
statements are made solely by the Company.
Except as expressly amended hereby, the Original Indenture shall
continue in full force and effect in accordance with the provisions thereof and
the Original Indenture is in all respects hereby ratified and confirmed. This
Supplemental Indenture and all its provisions shall be deemed a part of the
Original Indenture in the manner and to the extent herein and therein provided.
This Supplemental Indenture shall be governed by, and construed
in accordance with, the laws of the State of New York.
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<PAGE> 32
This Supplemental Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
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<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the day and
year first above written.
THE DETROIT EDISON COMPANY
Name:
Title:
ATTEST:
By:
----------------------------------
BANKERS TRUST COMPANY,
as Trustee
Name:
Title:
ATTEST:
By:
----------------------------------
33
<PAGE> 34
STATE OF MICHIGAN )
) :
COUNTY OF WAYNE )
On the __th day of , 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 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 , before me personally came , to me
known, who, being by me duly sworn, did depose and say that she is ___________
of BANKERS TRUST COMPANY, 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]
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<PAGE> 35
EXHIBIT A
FORM OF NOTE
(Attached)
35
<PAGE> 36
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.
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<PAGE> 37
No:
THE DETROIT EDISON COMPANY
REMARKETED SECURED NOTE - SERIES DUE
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.
THE DETROIT EDISON COMPANY, 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 (the "Stated Maturity"), upon the presentation
and surrender hereof at the principal corporate trust office of Bankers Trust
Company, 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> 38
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 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, a Fifth Supplemental
Indenture dated as of February 1, 1996 a Sixth Supplemental Indenture dated as
of May 1, 1998 and (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 secured as to payment of principal, interest and premium,
if any, by a general and refunding mortgage bond of the Company issued under and
secured by a Mortgage and Deed of Trust, dated as of October 1, 1924, between
the Company and the Trustee, as amended and supplemented by various supplemental
indentures, pledged by the Company for the benefit of the holders of the Notes
to the Trustee under the Indenture.
DEFINITIONS
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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 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
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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 Bridge Telerate, Inc. (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 Bridge
Telerate, Inc..
"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 D to the 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.
"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 .
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"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.
"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.
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
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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.
"Maximum Rate" means that rate of interest equal to fifteen percent
(15%) per annum or such higher rate as may be established from time to time by
the Board of Directors of the Company.
"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.
"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.
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"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.
"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
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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 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. The interest rate on this Note will not
exceed the Maximum Rate.
(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
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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 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
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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.
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 or the maximum rate permitted by New York law, as the same
may be modified by United States laws of general application.
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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.
Unless otherwise specified in the applicable Floating Interest Rate
Notice, Bankers Trust Company 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
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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 in H.15(519) (as
hereinafter defined) 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 in H.15
Daily Update (as hereinafter defined) or such other recognized electronic source
used for the purpose of displaying such rate under the caption, "CDs (Secondary
Market)". If such rate is not yet published in H.15(519) or another recognized
electronic source 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
Interest Determination Date will be the CD Rate in effect on such CD Rate
Interest Determination Date.
"H.15(519)" means the weekly statistical release designated as such, or
any successor publication, published by the Board of Governors of the Federal
Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available
through the world-wide-web site of the Board of Governors of the Federal Reserve
System at http://www.bog.frb.fed.us/releases/h15/update, or any successor site
or publication.
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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 7051, 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 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
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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 Bridge
Telerate, Inc. (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)" as
such rate is displayed on Bridge Telerate, Inc. (or any successor service) on
page 120 ("Telerate Page 120") or, if such rate does not appear on Telerate Page
120 or is 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 H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the heading "Federal Funds
(Effective)". If such rate is not yet published in H.15(519), H.15 Daily Update
or another recognized electronic source 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
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<PAGE> 51
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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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 Bridge Telerate, Inc. (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" or, if not published
prior to 3:00 p.m., New York City time, on the related Calculation Date, the
rate on such Prime Rate Interest Determination Date as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying such rate, under the caption "Bank Prime Loan." If such rate is not
yet published in H.15(519), H.15 Daily Update or another recognized electronic
source by 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
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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 on the Reuters
Monitor Money Rates Service (or any successor service) on the "USPRIME1" page
(or such other page as may replace the USPRIME1 page on such 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,
under the caption "AVGE INVEST YIELD" on the display on Bridge Telerate, Inc.
(or any successor service) on page 56 or page 57 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 the rate (expressed as
a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) on such Treasury Rate Interest Determination Date of
Treasury Bills having the Index Maturity specified in the applicable Floating
Interest Rate Notice as published in H.15(519) under the caption "U.S.
Government Securities/Treasury Bills/Secondary Market" or, if not yet published
by 3:00 P.M., New York City time, on the related Calculation Date, the rate on
such Treasury Rate Interest Determination Date of such Treasury Bills as
published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying such rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market." If such rate is not yet published
in H.15(519), H.15 Daily Update or another recognized electronic source, then
the Treasury Rate will be calculated by the Calculation Agent and will 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.
(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.
(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. The Company may change the Interest Rate Mode or
Interest Rate Period at its option in accordance with the procedures set forth
in the Indenture. 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.
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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 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.
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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.
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
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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.
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
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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 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,
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<PAGE> 59
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.
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
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<PAGE> 60
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 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
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<PAGE> 61
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 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.
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
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<PAGE> 62
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 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
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<PAGE> 63
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
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, THE DETROIT EDISON COMPANY has caused this
instrument to be duly executed.
THE DETROIT EDISON COMPANY
-----------------------------------------
Name:
Title:
Attest:
By
-----------------------
Name:
Title:
This is one of the Notes of the series designated herein, referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By
--------------------
Authorized Signatory
Date:
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<PAGE> 65
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:*
----------------------
- ------------------------
* Signature must be guaranteed by a commercial bank, trust company or member
firm or a major stock exchange.
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<PAGE> 66
ANNEX A(1)
THE DETROIT EDISON COMPANY
Remarketed Secured Notes - Series due
Initial Interest Rate Period
CUSIP Number:
Principal Amount: $
Original Issue Date:
Issue Price: %
Stated Maturity:
Initial Interest Rate: % per annum
Interest Payment Dates: and , commencing
Record Dates: 15 days prior to the related Interest Payment Date
Initial Interest Rate
Adjustment Date:
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 form 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 Bankers Trust Company):
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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EXHIBIT B
FORM OF LIQUIDITY PROVIDER NOTE
(Attached)
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<PAGE> 71
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.
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LIQUIDITY PROVIDER NOTE
No. $____________
THE DETROIT EDISON COMPANY
REMARKETED SECURED NOTES
SERIES DUE
<TABLE>
<CAPTION>
Facility
Expiration Date of Original
Date Maturity Issue Date CUSIP
---- -------- ---------- -----
<S> <C> <C> <C>
</TABLE>
THE DETROIT EDISON COMPANY, 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 _____________, upon the presentation and
surrender hereof at the principal office of Bankers Trust Company, 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, 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, a Fifth Supplemental Trust
Indenture dated as of February 1, 1996, a Sixth Supplemental Indenture dated as
of May 1, 1998 and (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.
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<PAGE> 73
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 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.
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<PAGE> 74
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, 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
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<PAGE> 75
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.
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, THE DETROIT EDISON COMPANY has caused this
instrument to be duly executed.
THE DETROIT EDISON COMPANY
By: ________________________________
Attest:
By:____________________________
This Note is one of the Notes of the series designated herein, referred
to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
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By: ________________________________
Authorized Signatory
Date:
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<PAGE> 77
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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<PAGE> 78
EXHIBIT C
THE DETROIT EDISON COMPANY
REMARKETED SECURED NOTES - SERIES DUE
SUPPLEMENTAL COMPANY ORDER
Pursuant to Article Six of the Supplemental Indenture, dated as of
_________, to the Collateral Trust Indenture, dated as of June 30, 1993, 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 _____
__, ____.
______________________
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EXHIBIT D
[The Detroit Edison Company Letterhead]
FLOATING INTEREST RATE NOTICE
[Date]
To: [Remarketing Agent(s)]
[Address]
Bankers Trust Company
Re: Remarketed Secured Notes - Series due (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;
[ ] LIBOR Reuters, where the Index Currency will be __________,
and the Designated LIBOR Page will be ____________;
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<PAGE> 80
[ ] 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: [ ]
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<PAGE> 81
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.
THE DETROIT EDISON COMPANY
By: ______________________
Name:
Title:
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<PAGE> 82
EXHIBIT E
[FORM OF CONVERSION NOTICE]
(Attached)
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<PAGE> 83
[The Detroit Edison Company Letterhead]
CONVERSION NOTICE
[Date]
To: [Remarketing Agent(s)]
BANKERS TRUST COMPANY
Re: Remarketed Secured Notes - Series due
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: ___________
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[ ] 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.
THE DETROIT EDISON COMPANY
By:_______________________________
Name:
Title:
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<PAGE> 1
EXHIBIT 4-202
- --------------------------------------------------------------------------------
THE DETROIT EDISON COMPANY
AND
BANKERS TRUST COMPANY
TRUSTEE
-------
SEVENTH SUPPLEMENTAL INDENTURE
DATED AS OF ,
-------
SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30,1993
PROVIDING FOR
QUARTERLY INCOME DEBT SECURITIES
("QUIDS") (JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES, DUE )
- --------------------------------------------------------------------------------
<PAGE> 2
SEVENTH SUPPLEMENTAL INDENTURE, dated as of the day of 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, a Fifth
Supplemental Trust Indenture dated as of February 1, 1996 and a Sixth
Supplemental Indenture dated as of May 1, 1998 (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 Seventh 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 % Quarterly Income Debt Securities (the "QUIDS") Junior
Subordinated Deferrable Interest Debentures, Due 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 Seventh
Supplemental Indenture a valid, binding and legal agreement of the Company, have
been done;
NOW, THEREFORE, THIS SEVENTH 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 Seventh 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), (B) the $185 million in
aggregate principal amount of Quarterly Income Debt Securities (Junior
Subordinated Deferrable Interest Debentures, Due 2026) and (C) the
$100,122,300 in aggregate principal amount of Quarterly Income Debt
Securities (Junior Subordinated Deferrable Interest Debentures, Due
2028), 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;
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<PAGE> 4
(c) any Payment Obligation of the Company in respect of any
interest rate exchange agreement, currency exchange agreement or
similar agreement 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;
(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 Seventh Supplemental Indenture.
ARTICLE TWO
TITLE AND TERMS OF THE QUIDS
SECTION 201. Title of the QUIDS. This Seventh Supplemental Indenture
hereby establishes a series of QUIDS, which shall be known as the Company's %
Quarterly Income Debt Securities (Junior Subordinated Deferrable Interest
Debentures, Due ) (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
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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 Seventh Supplemental Indenture is
limited to $ . 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 % 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 , 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 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
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 .
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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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
8
<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
9
<PAGE> 11
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
10
<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 Seventh 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
Seventh 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 Seventh Supplemental Indenture shall be governed by, and construed
in accordance with, the laws of the State of New York.
This Seventh 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.
11
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
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:_____________________________
12
<PAGE> 14
[Corporate Seal]
STATE OF MICHIGAN )
) :
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 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:________________________
13
<PAGE> 15
[Corporate Seal]
STATE OF NEW YORK )
) :
COUNTY OF NEW YORK )
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 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]
14
<PAGE> 16
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR
ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC)
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
NO. R-1 $
THE DETROIT EDISON COMPANY
% QUARTERLY INCOME DEBT SECURITIES
(JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES
DUE )
ISSUE PRICE ISSUE DATE CUSIP NO.
----------- ---------- ---------
$25.00, or any integral
multiple thereof. , 1998
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 $ on
and to pay interest at the rate of % 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
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<PAGE> 17
forth herein) in arrears on March 31, June 30, September 30 and December 31 of
each year (each such date, an "Interest Payment Date"), commencing.
The amount of interest payable for any period shall be computed on the
basis of twelve 30-day months and a 360-day year 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
A-2
<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, a Sixth Supplemental Indenture dated as
of May 1, 1998 and a Seventh Supplemental Indenture dated as of , 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 Seventh 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 Seventh 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,"
A-3
<PAGE> 19
"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), 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 Seventh
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 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.
A-4
<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
A-5
<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.
A-7
<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:
A-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.
A-9
<PAGE> 1
EXHIBIT 5-48
[DETROIT EDISON LETTERHEAD]
[DETROIT EDISON LOGO]
October 15, 1998
The Detroit Edison Company
2000 Second Avenue
Detroit, Michigan 48226
Gentlemen:
With respect to the Registration Statement on Form S-3 (the "Registration
Statement") filed by The Detroit Edison Company, a Michigan corporation (the
"Company"), with the Securities and Exchange Commission for the purpose of
registering under the Securities Act of 1933, as amended, $300,000,000 aggregate
principal amount of the Company's Debt Securities (as described in the
Prospectus forming a part of the Registration Statement) and the related Special
Mandatory Purchase Right for the Remarketed Secured Notes, described in such
Prospectus, I, as Vice President and General Counsel of the Company, in
conjunction with the members of the Legal Department of the Company, have
examined such certificates, instruments and documents and reviewed such
questions of law as I have considered necessary or appropriate for the purposes
of this opinion.
Based upon the foregoing examination and review, it is my opinion that:
1. The Company is duly incorporated and validly existing as a
corporation under the laws of the State of Michigan;
2. When (a) the Registration Statement has become effective under the
Securities Act of 1933, as amended, (b) the proposed Supplemental Indentures
supplementing the Collateral Trust Indenture dated as of June 30, 1993, as
amended between the Company and Bankers Trust Company, Trustee, pursuant to
which certain of the Debt Securities are to be issued, shall have been duly
authorized, executed and delivered and shall have been qualified under the Trust
Indenture Act of 1939, as amended, (c) the proposed Supplemental Indentures
supplementing the Mortgage and Deed of Trust dated October 1, 1924 as amended
between the Company and Bankers Trust Company, Trustee, pursuant to which
certain of the Debt Securities are to be issued, shall have been duly
authorized, executed, delivered, recorded and filed and shall have been
qualified under the Trust Indenture Act of 1939, as amended, and (d) the
individual series of Debt Securities shall have been duly executed,
authenticated, issued and delivered against payment therefor, (i) the Debt
Securities will thereupon be validly issued and binding obligations of the
Company and (ii) when exercised, the Special Mandatory Purchase Right(s) will be
binding obligations of the Company.
<PAGE> 2
The Detroit Edison Company
October 15, 1998
Page 2
I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the captions "Experts" and "Legal
Opinions" in the Prospectus and under the caption "Certain Legal Matters" in the
Prospectus Supplement, each forming a part of the Registration Statement.
Very truly yours,
/s/ Christopher C. Nern
Christopher C. Nern
CCN:gg
<PAGE> 1
EXHIBIT 8-2
[BROWN & WOOD LLP LETTERHEAD]
October 15, 1998
The Detroit Edison Company
2000 Second Avenue
Detroit, Michigan 48226
Ladies and Gentlemen:
We have acted as special United States tax counsel to The Detroit
Edison Company (the "Company") in connection with the filing by the Company of
a Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
$300,000,000 aggregate initial public offering price of its debt securities
(the "Debt Securities") and special mandatory purchase right. The Registration
Statement includes a prospectus (the "Prospectus") and a prospectus supplement
(the "Prospectus Supplement"), which Prospectus Supplement relates to an
offering of Quarterly Income Debt Securities ("QUIDS(SM)") (Junior Subordinated
Deferrable Interest Debentures) to be offered by the Company. The QUIDS are a
series of Debt Securities (as defined in the Prospectus) of the Company, the
terms of which are set forth in the Prospectus relating to the Company's
registration statement on Form S-3 filed on the date hereof (the "Registration
Statement").
Based upon the terms of the QUIDS and the Debt Securities,
respectively, we hereby confirm that the discussions set forth under the
captions entitled "United States Federal Income Tax Consequences" in the
Prospectus Supplement and "United States Federal Income Tax Considerations" in
the Prospectus, except as otherwise stated therein, constitute our opinions as
to the material United States Federal income tax considerations of the
acquisition, holding and disposition of the QUIDS and the Debt Securities,
respectively.
Our opinions, which are not binding on the Internal Revenue Service,
are based upon existing statutory, regulatory and judicial authority, any of
which may be changed at any time with retroactive effect to the detriment of
the holders of the Debt Securities, including the QUIDS. The opinions expressed
in the preceding paragraph are limited to the tax matters specifically
discussed under the captions entitled "United States Federal Income Tax
Consequences" in the Prospectus Supplement and "United States Federal Income
Tax Considerations" in the Prospectus, and we have not been asked to address,
nor have we addressed, any other tax considerations relating to the Debt
Securities or the QUIDS.
<PAGE> 2
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the Federal law of the
United States. As you are aware, we also are acting as counsel to the
underwriters of the proposed QUIDS offering.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement and to the references to us under the captions "United
States Federal Income Tax Consequences," "United States Federal Income Tax
Considerations" and "Legal Opinions" in the related Prospectus Supplement and
Prospectus. In giving such consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act.
Very truly yours,
/s/ Brown & Wood LLP
2
<PAGE> 1
EXHIBIT 12-14
THE DETROIT EDISON COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six
Months Year Ended December 31
Ended ------------------------------------------------------
6/30/98 1997 1996 1995 1994 1993
------- ------ ------ ------ ------ ------
(Millions, except for ratio)
<S> <C> <C> <C> <C> <C> <C>
Net income $ 193 $ 417 $ 328 $ 434 $ 420 $ 522
------ ------ ------ ------ ------ ------
Taxes based on income:
Current income taxes 144 308 224 221 169 217
Deferred taxes - net 9 (6) 16 79 110 100
Investment tax credit adjustments - net (7) (14) (15) (17) (13) (14)
Municipal and state 2 4 3 3 3 3
------ ------ ------ ------ ------ ------
Total taxes based on income 148 292 228 286 269 306
------ ------ ------ ------ ------ ------
Fixed charges:
Interest on long-term debt 126 262 275 275 274 325
Amortization of debt discount, premium
and expense 5 11 12 11 11 9
Other interest 5 9 4 10 11 5
Interest factor of rents 17 34 34 29 28 29
------ ------ ------ ------ ------ ------
Total fixed charges 153 316 325 325 324 368
------ ------ ------ ------ ------ ------
Earnings before taxes based on income
and fixed charges $ 494 $1,025 $ 881 $1,045 $1,013 $1,196
====== ====== ====== ====== ====== ======
Ratio of earnings to fixed charges 3.23 3.24 2.71 3.21 3.13 3.25
</TABLE>
<PAGE> 1
EXHIBIT 15-9
October 15, 1998
The Detroit Edison Company
Detroit, Michigan
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of The Detroit Edison Company and subsidiaries for the three month
periods ended March 31, 1998 and 1997 and the three and six-month periods ended
June 30, 1998 and 1997, as indicated in our reports dated April 27, 1998 and
July 27, 1998, respectively; because we did not perform an audit, we expressed
no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998 and June
30, 1998, are being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1933, are 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 & Touche LLP
Detroit, Michigan
October 15, 1998
<PAGE> 1
EXHIBIT 23-5
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
The Detroit Edison Company on Form S-3 of our report dated January 26, 1998,
appearing in the Annual Report on Form 10-K of The Detroit Edison Company for
the year ended December 31, 1997 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Detroit, Michigan
October 15, 1998
<PAGE> 1
EXHIBIT 25-8
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
------------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of agent for service)
---------------------------------
THE DETROIT EDISON COMPANY
(Exact name of Registrant as specified in its charter)
MICHIGAN 38-0478650
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
2000 SECOND AVENUE
DETROIT, MICHIGAN 48226
(313) 237-8000
(Address, including zip code of principal executive offices)
GENERAL AND REFUNDING MORTGAGE BONDS
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust
powers. Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each
such affiliation.
None.
ITEM 3. -15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
</TABLE>
EXHIBIT 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7, 1990,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 21, 1995 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
March 20, 1996, incorporate by referenced to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 333-25843 and Certificate
of Amendment of the Organization Certificate
of Bankers Trust Company dated June 19,
1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence
business - Incorporated herein by reference
to Exhibit 2 filed with Form T-1 Statement,
Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form
T-1 Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust
Company, as amended on November 18, 1997.
Copy attached.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to Exhibit
4 filed with Form T-1 Statement,
Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of
Bankers Trust Company dated as of June 30,
1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 8th day
of October, 1998.
BANKERS TRUST COMPANY
By: /s/ Barbara Nastro
------------------------------
Barbara Nastro
Assistant Treasurer
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 8th day
of October, 1998.
BANKERS TRUST COMPANY
By: /s/ Barbara Nastro
------------------
Barbara Nastro
Assistant Treasurer
-5-
<PAGE> 6
State of New York,
BANKING DEPARTMENT
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of
New York, this 27th day of June in the Year of our Lord
one thousand nine hundred and NINETY-SEVEN.
/s/ Manuel Kursky
----------------------------------
Deputy Superintendent of Banks
<PAGE> 7
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into
One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE> 8
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
/s/ James T. Byrne, Jr.
-----------------------------------
James T. Byrne, Jr.
Managing Director
/s/ Lea Lahtinen
-----------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
/s/ Lea Lahtinen
-----------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
/s/ Sandra L. West
- ------------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 9
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 10
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
<PAGE> 11
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board of
Directors may be filled by the affirmative vote of a majority of the directors
then in office, and the directors so elected shall hold office for the balance
of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time to
time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
<PAGE> 12
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals thereof
shall meet at other times on call of the Chairman.
<PAGE> 13
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a Chairman
of the Board and a Chief Executive Officer; and shall also elect a President,
and may also elect a Senior Vice Chairman, one or more Vice Chairmen, one or
more Executive Vice Presidents, one or more Senior Managing Directors, one or
more Managing Directors, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, one or more General Managers, a
Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate
General Counsels, a General Auditor, a General Credit Auditor, and one or more
Deputy Auditors, who need not be directors. The officers of the corporation may
also include such other officers or assistant officers as shall from time to
time be elected or appointed by the Board. The Chairman of the Board or the
Chief Executive Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint assistant officers.
All officers elected or appointed by the Board of Directors shall hold their
respective offices during the pleasure of the Board of Directors, and all
assistant officers shall hold office at the pleasure of the Board or the
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors
may require any and all officers and employees to give security for the faithful
performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer of
the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to such office
and shall have such other powers as may be prescribed or assigned to him from
time to time by the Board of Directors or vested in him by law or by these
By-Laws. He shall perform such other duties and shall make such investigations,
examinations and reports as may be prescribed or required by the Audit
Committee. The General Auditor shall have unrestricted access to all records and
premises of the Company and shall delegate such authority to his subordinates.
He shall have the duty to report to the Audit Committee on all matters
concerning the internal audit
<PAGE> 14
program and the adequacy of the system of internal controls of the Company which
he deems advisable or which the Audit Committee may request. Additionally, the
General Auditor shall have the duty of reporting independently of all officers
of the Company to the Audit Committee at least quarterly on any matters
concerning the internal audit program and the adequacy of the system of internal
controls of the Company that should be brought to the attention of the directors
except those matters responsibility for which has been vested in the General
Credit Auditor. Should the General Auditor deem any matter to be of special
immediate importance, he shall report thereon forthwith to the Audit Committee.
The General Auditor shall report to the Chief Financial Officer only for
administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
<PAGE> 15
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018 of
the New York Banking Law, indemnify any person who is or was made, or threatened
to be made, a party to an action or proceeding, whether civil or criminal,
whether involving any actual or alleged breach of duty, neglect or error, any
accountability, or any actual or alleged misstatement, misleading statement or
other act or omission and whether brought or threatened in any court or
administrative or legislative body or agency, including an action by or in the
right of the Company to procure a judgment in its favor and an action by or in
the right of any other corporation of any type or kind, domestic or foreign, or
any partnership, joint venture, trust, employee benefit plan or other
enterprise, which any director or officer of the Company is servicing or served
in any capacity at the request of the Company by reason of the fact that he, his
testator or intestate, is or was a director or officer of the Company, or is
serving or served such other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against judgments,
fines, amounts paid in settlement, and costs, charges and expenses, including
attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the
<PAGE> 16
President, and (ii) only if and to the extent that, after making
such efforts as the Chairman of the Board, the Chief Executive Officer or the
President shall deem adequate in the circumstances, such person shall be unable
to obtain indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement of
expense pursuant to this Article V (i) is a contract right pursuant to which the
person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant is
not entitled to indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a presumption that the
claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE> 17
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
<PAGE> 18
I, Barbara Nastro, Assistant Treasurer of Bankers Trust Company, New York, New
York, hereby certify that the foregoing is a complete, true and correct copy of
the By-Laws of Bankers Trust Company, and that the same are in full force and
effect at this date.
/s/ Barbara Nastro
--------------------------
ASSISTANT TREASURER
DATED: October 8, 1998
<PAGE> 19
<TABLE>
<S><C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
----------------------
| C400 |
-------------------------------|
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------------------------------------|
<S> <C>
ASSETS | / / / / / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) ................... | 0081 1,868,000 |1.a.
b. Interest-bearing balances (2) ............................................ | 0071 2,041,000 |1.b.
2. Securities: | / / / / / / / / / / / / / /|
a. Held-to-maturity securities (from Schedule RC-B, column A) ............... | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).............. | 1773 7,419,000 |2.b.
3. Federal funds sold and securities purchased under agreements to resell........... | 1350 41,837,000 |3.
4. Loans and lease financing receivables: | / / / / / / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 20,707,000 | / / / / / / / / / / / / / / /|4.a.
b. LESS: Allowance for loan and lease losses....................RCFD 3123 629,000 | / / / / / / / / / / / / / / /|4.b.
c. LESS: Allocated transfer risk reserve .......................RCFD 3128 0 | / / / / / // / / / / / / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / / / / / / / /|
allowance, and reserve (item 4.a minus 4.b and 4.c) ....................... | 2125 20,078,000 |4.d.
5. Trading Assets (from schedule RC-D) ............................................ | 3545 49,665,000 |5.
6. Premises and fixed assets (including capitalized leases) ........................ | 2145 848,000 |6.
7. Other real estate owned (from Schedule RC-M) .................................... | 2150 180,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 92,000 |8.
9. Customers' liability to this bank on acceptances outstanding .................... | 2155 512,000 |9.
10. Intangible assets (from Schedule RC-M)........................................... | 2143 270,000 |
11. Other assets (from Schedule RC-F) ............................................... | 2160 6,442,000 |11.
12. Total assets (sum of items 1 through 11) ........................................ | 2170 131,252,000 |12.
--------------------------------
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 20
<TABLE>
<S> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands |/ / / / /Bil Mil Thou _|
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
LIABILITIES | / / / / / / / / / / / |
13. Deposits: | / / / / / / / / / / / |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 26,791,000|13.a.
(1) Noninterest-bearing(1) ............................RCON 6631 3,362,000... | / / / / / / / / / / |13.a.(1)
(2) Interest-bearing .................................. .....RCON 6636 23,429,000... | / / / / / / / / / / /|13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E | / / / / / / / / / / /|
part II) | RCFN 2200 22,089,000|13.b.
(1) Noninterest-bearing .................................RCFN 6631 1,810,000 | / / / / / / / / / / |13.b.(1)
(2) Interest-bearing ...................................RCFN 6636 20,279,000 | / / / / / / / / / / |13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 19,274,000|14.
15. a. Demand notes issued to the U.S. Treasury ............................................... | RCON 2840 0|15.a.
b. Trading liabilities (from Schedule RC-D)................................................ | RCFD 3548 30,729,000|15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases):| / / / / / / / / / / /|
a. With a remaining maturity of one year or less .......................................... | RCFD 2332 7,891,000|16.a.
b. With a remaining maturity of more than one year through three years.................... | A547 3,576,000|16.b.
c. With a remaining maturity of more than three years...................................... | A548 2,872,000|16.c
17. Not Applicable. | / / / / / / / / / / / |17.
18. Bank's liability on acceptances executed and outstanding .................................... | RCFD 2920 512,000|18.
19. Subordinated notes and debentures (2)........................................................ | RCFD 3200 1,534,000|19.
20. Other liabilities (from Schedule RC-G) ...................................................... | RCFD 2930 9,202,000|20.
21. Total liabilities (sum of items 13 through 20) .............................................. | RCFD 2948 124,470,000|21.
22. Not Applicable | / / / / / / / / / / /|
| / / / / / / / / / / |22.
EQUITY CAPITAL | / / / / / / / / / / |
23. Perpetual preferred stock and related surplus ............................................... | RCFD 3838 1,000,000|23.
24. Common stock ................................................................................ | RCFD 3230 2,001,000|24.
25. Surplus (exclude all surplus related to preferred stock) .................................... | RCFD 3839 540,000|25.
26. a. Undivided profits and capital reserves ................................................. | RCFD 3632 3,693,000|26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ................. | RCFD 8434 ( 71,000)|26.b.
27. Cumulative foreign currency translation adjustments ......................................... | RCFD 3284 ( 381,000)|27.
28. Total equity capital (sum of items 23 through 27) ........................................... | RCFD 3210 6,782,000|28.
29. Total liabilities and equity capital (sum of items 21 and 28)................................ | RCFD 3300 131,252,000|29
| |
-------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes Number
the most comprehensive level of auditing work performed for the bank by independent -------------------------
external auditors as of any date during 1997 ...........................................| RCFD 6724 N/A | M.1
------------------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 25-9
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)
--------------
------------------------------
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of Incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
BANKERS TRUST COMPANY
LEGAL DEPARTMENT
130 LIBERTY STREET, 31ST FLOOR
NEW YORK, NEW YORK 10006
(212) 250-2201
(Name, address and telephone number of
agent for service)
---------------------------------
THE DETROIT EDISON COMPANY
(Exact name of Registrant as specified in
its charter)
MICHIGAN 38-0478650
(State or other jurisdiction of (I.R.S. employer
Incorporation or organization) Identification no.)
2000 SECOND AVENUE
DETROIT, MICHIGAN 48226
(313) 237-8000
(Address, including zip code of principal executive offices)
DEBT SECURITIES
(Title of the indenture securities)
<PAGE> 2
ITEM 1.GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
NAME ADDRESS
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2.AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
ITEM 3.-15. NOT APPLICABLE
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers Trust
Company dated August 7, 1990, Certificate of
Amendment of the Organization Certificate of
Bankers Trust Company dated June 21, 1995 -
Incorporated herein by reference to Exhibit 1 filed
with Form T-1 Statement, Registration No. 33-65171,
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated March
20, 1996, incorporate by referenced to Exhibit 1
filed with Form T-1 Statement, Registration No.
333-25843 and Certificate of Amendment of the
Organization Certificate of Bankers Trust Company
dated June 19, 1997, copy attached.
EXHIBIT 2 - Certificate of Authority to commence business -
Incorporated herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers Incorporated herein by
reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
EXHIBIT 4 - Existing By-Laws of Bankers Trust Company, as
amended on November 18, 1997. Copy attached.
-2-
<PAGE> 3
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. Incorporated herein by
reference to Exhibit 4 filed with Form T-1
Statement, Registration No. 22-18864.
EXHIBIT 7 - The latest report of condition of Bankers Trust
Company dated as of June 30, 1998. Copy attached.
EXHIBIT 8 - Not Applicable.
EXHIBIT 9 - Not Applicable.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 8th day
of October, 1998.
BANKERS TRUST COMPANY
By: /s/ Barbara Nastro
-----------------------------------
Barbara Nastro
Assistant Treasurer
-4-
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 8th day
of October, 1998.
BANKERS TRUST COMPANY
By: /s/ Barbara Nastro
-----------------------------------
Barbara Nastro
Assistant Treasurer
-5-
<PAGE> 6
State of New York,
Banking Department
I, MANUEL KURSKY, Deputy Superintendent of Banks of the State of New
York, DO HEREBY APPROVE the annexed Certificate entitled "CERTIFICATE OF
AMENDMENT OF THE ORGANIZATION CERTIFICATE OF BANKERS TRUST COMPANY UNDER SECTION
8005 OF THE BANKING LAW," dated June 19, 1997, providing for an increase in
authorized capital stock from $1,601,666,670 consisting of 100,166,667 shares
with a par value of $10 each designated as Common Stock and 600 shares with a
par value of $1,000,000 each designated as Series Preferred Stock to
$2,001,666,670 consisting of 100,166,667 shares with a par value of $10 each
designated as Common Stock and 1,000 shares with a par value of $1,000,000 each
designated as Series Preferred Stock.
WITNESS, my hand and official seal of the Banking Department at the City of
New York,
this 27TH day of June in the Year of our Lord one thousand
nine hundred and NINETY-SEVEN.
/s/ Manuel Kursky
-------------------------------
Deputy Superintendent of Banks
<PAGE> 7
CERTIFICATE OF AMENDMENT
OF THE
ORGANIZATION CERTIFICATE
OF BANKERS TRUST
Under Section 8005 of the Banking Law
-----------------------------
We, James T. Byrne, Jr. and Lea Lahtinen, being respectively a Managing
Director and an Assistant Secretary of Bankers Trust Company, do hereby certify:
1. The name of the corporation is Bankers Trust Company.
2. The organization certificate of said corporation was filed by the
Superintendent of Banks on the 5th of March, 1903.
3. The organization certificate as heretofore amended is hereby amended
to increase the aggregate number of shares which the corporation shall have
authority to issue and to increase the amount of its authorized capital stock in
conformity therewith.
4. Article III of the organization certificate with reference to the
authorized capital stock, the number of shares into which the capital stock
shall be divided, the par value of the shares and the capital stock outstanding,
which reads as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is One Billion, Six Hundred and One Million, Six Hundred Sixty-Six
Thousand, Six Hundred Seventy Dollars ($1,601,666,670), divided into
One Hundred Million, One Hundred Sixty-Six Thousand, Six Hundred
Sixty-Seven (100,166,667) shares with a par value of $10 each
designated as Common Stock and 600 shares with a par value of One
Million Dollars ($1,000,000) each designated as Series Preferred
Stock."
is hereby amended to read as follows:
"III. The amount of capital stock which the corporation is hereafter to
have is Two Billion One Million, Six Hundred Sixty-Six Thousand, Six
Hundred Seventy Dollars ($2,001,666,670), divided into One Hundred
Million, One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven
(100,166,667) shares with a par value of $10 each designated as Common
Stock and 1000 shares with a par value of One Million Dollars
($1,000,000) each designated as Series Preferred Stock."
<PAGE> 8
5. The foregoing amendment of the organization certificate was
authorized by unanimous written consent signed by the holder of all outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, we have made and subscribed this certificate this
19th day of June, 1997.
/s/ James T. Byrne, Jr.
---------------------------------
James T. Byrne, Jr.
Managing Director
/s/ Lea Lahtinen
---------------------------------
Lea Lahtinen
Assistant Secretary
State of New York )
) ss:
County of New York )
Lea Lahtinen, being fully sworn, deposes and says that she is an
Assistant Secretary of Bankers Trust Company, the corporation described in the
foregoing certificate; that she has read the foregoing certificate and knows the
contents thereof, and that the statements herein contained are true.
/s/ Lea Lahtinen
---------------------------------
Lea Lahtinen
Sworn to before me this 19th day
of June, 1997.
/s/ Sandra L. West
- ----------------------------
Notary Public
SANDRA L. WEST
Notary Public State of New York
No. 31-4942101
Qualified in New York County
Commission Expires September 19, 1998
<PAGE> 9
BY-LAWS
NOVEMBER 18, 1997
BANKERS TRUST COMPANY
NEW YORK
<PAGE> 10
BY-LAWS
OF
BANKERS TRUST COMPANY
ARTICLE I
MEETINGS OF STOCKHOLDERS
SECTION 1. The annual meeting of the stockholders of this Company shall be held
at the office of the Company in the Borough of Manhattan, City of New York, on
the third Tuesday in January of each year, for the election of directors and
such other business as may properly come before said meeting.
SECTION 2. Special meetings of stockholders other than those regulated by
statute may be called at any time by a majority of the directors. It shall be
the duty of the Chairman of the Board, the Chief Executive Officer or the
President to call such meetings whenever requested in writing to do so by
stockholders owning a majority of the capital stock.
SECTION 3. At all meetings of stockholders, there shall be present, either in
person or by proxy, stockholders owning a majority of the capital stock of the
Company, in order to constitute a quorum, except at special elections of
directors, as provided by law, but less than a quorum shall have power to
adjourn any meeting.
SECTION 4. The Chairman of the Board or, in his absence, the Chief Executive
Officer or, in his absence, the President or, in their absence, the senior
officer present, shall preside at meetings of the stockholders and shall direct
the proceedings and the order of business. The Secretary shall act as secretary
of such meetings and record the proceedings.
ARTICLE II
DIRECTORS
SECTION 1. The affairs of the Company shall be managed and its corporate powers
exercised by a Board of Directors consisting of such number of directors, but
not less than ten nor more than twenty-five, as may from time to time be fixed
by resolution adopted by a majority of the directors then in office, or by the
stockholders. In the event of any increase in the number of directors,
additional directors may be elected within the limitations so fixed, either by
the stockholders or within the limitations imposed by law, by a majority of
directors then in office. One-third of the number of directors, as fixed from
time to time, shall constitute a quorum. Any one or more members of the Board of
Directors or any Committee thereof may participate in a meeting of the Board of
Directors or Committee thereof by means of a conference telephone or similar
communications equipment which allows all persons participating in the meeting
to hear each other at the same time. Participation by such means shall
constitute presence in person at such a meeting.
<PAGE> 11
All directors hereafter elected shall hold office until the next annual meeting
of the stockholders and until their successors are elected and have qualified.
No person who shall have attained age 72 shall be eligible to be elected or
re-elected a director. Such director may, however, remain a director of the
Company until the next annual meeting of the stockholders of Bankers Trust New
York Corporation (the Company's parent) so that such director's retirement will
coincide with the retirement date from Bankers Trust New York Corporation.
No Officer-Director who shall have attained age 65, or earlier relinquishes his
responsibilities and title, shall be eligible to serve as a director.
SECTION 2. Vacancies not exceeding one-third of the whole number of the Board
of Directors may be filled by the affirmative vote of a majority of the
directors then in office, and the directors so elected shall hold office for the
balance of the unexpired term.
SECTION 3. The Chairman of the Board shall preside at meetings of the Board of
Directors. In his absence, the Chief Executive Officer or, in his absence, such
other director as the Board of Directors from time to time may designate shall
preside at such meetings.
SECTION 4. The Board of Directors may adopt such Rules and Regulations for the
conduct of its meetings and the management of the affairs of the Company as it
may deem proper, not inconsistent with the laws of the State of New York, or
these By-Laws, and all officers and employees shall strictly adhere to, and be
bound by, such Rules and Regulations.
SECTION 5. Regular meetings of the Board of Directors shall be held from time
to time on the third Tuesday of the month. If the day appointed for holding such
regular meetings shall be a legal holiday, the regular meeting to be held on
such day shall be held on the next business day thereafter. Special meetings of
the Board of Directors may be called upon at least two day's notice whenever it
may be deemed proper by the Chairman of the Board or, the Chief Executive
Officer or, in their absence, by such other director as the Board of Directors
may have designated pursuant to Section 3 of this Article, and shall be called
upon like notice whenever any three of the directors so request in writing.
SECTION 6. The compensation of directors as such or as members of committees
shall be fixed from time to time by resolution of the Board of Directors.
<PAGE> 12
ARTICLE III
COMMITTEES
SECTION 1. There shall be an Executive Committee of the Board consisting of not
less than five directors who shall be appointed annually by the Board of
Directors. The Chairman of the Board shall preside at meetings of the Executive
Committee. In his absence, the Chief Executive Officer or, in his absence, such
other member of the Committee as the Committee from time to time may designate
shall preside at such meetings.
The Executive Committee shall possess and exercise to the extent permitted by
law all of the powers of the Board of Directors, except when the latter is in
session, and shall keep minutes of its proceedings, which shall be presented to
the Board of Directors at its next subsequent meeting. All acts done and powers
and authority conferred by the Executive Committee from time to time shall be
and be deemed to be, and may be certified as being, the act and under the
authority of the Board of Directors.
A majority of the Committee shall constitute a quorum, but the Committee may act
only by the concurrent vote of not less than one-third of its members, at least
one of whom must be a director other than an officer. Any one or more directors,
even though not members of the Executive Committee, may attend any meeting of
the Committee, and the member or members of the Committee present, even though
less than a quorum, may designate any one or more of such directors as a
substitute or substitutes for any absent member or members of the Committee, and
each such substitute or substitutes shall be counted for quorum, voting, and all
other purposes as a member or members of the Committee.
SECTION 2. There shall be an Audit Committee appointed annually by resolution
adopted by a majority of the entire Board of Directors which shall consist of
such number of directors, who are not also officers of the Company, as may from
time to time be fixed by resolution adopted by the Board of Directors. The
Chairman shall be designated by the Board of Directors, who shall also from time
to time fix a quorum for meetings of the Committee. Such Committee shall conduct
the annual directors' examinations of the Company as required by the New York
State Banking Law; shall review the reports of all examinations made of the
Company by public authorities and report thereon to the Board of Directors; and
shall report to the Board of Directors such other matters as it deems advisable
with respect to the Company, its various departments and the conduct of its
operations.
In the performance of its duties, the Audit Committee may employ or retain, from
time to time, expert assistants, independent of the officers or personnel of the
Company, to make studies of the Company's assets and liabilities as the
Committee may request and to make an examination of the accounting and auditing
methods of the Company and its system of internal protective controls to the
extent considered necessary or advisable in order to determine that the
operations of the Company, including its fiduciary departments, are being
audited by the General Auditor in such a manner as to provide prudent and
adequate protection. The Committee also may direct the General Auditor to make
such investigation as it deems necessary or advisable with respect to the
Company, its various departments and the conduct of its operations. The
Committee shall hold regular quarterly meetings and during the intervals thereof
shall meet at other times on call of the Chairman.
<PAGE> 13
SECTION 3. The Board of Directors shall have the power to appoint any other
Committees as may seem necessary, and from time to time to suspend or continue
the powers and duties of such Committees. Each Committee appointed pursuant to
this Article shall serve at the pleasure of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. The Board of Directors shall elect from among their number a
Chairman of the Board and a Chief Executive Officer; and shall also elect a
President, and may also elect a Senior Vice Chairman, one or more Vice Chairmen,
one or more Executive Vice Presidents, one or more Senior Managing Directors,
one or more Managing Directors, one or more Senior Vice Presidents, one or more
Principals, one or more Vice Presidents, one or more General Managers, a
Secretary, a Controller, a Treasurer, a General Counsel, one or more Associate
General Counsels, a General Auditor, a General Credit Auditor, and one or more
Deputy Auditors, who need not be directors. The officers of the corporation may
also include such other officers or assistant officers as shall from time to
time be elected or appointed by the Board. The Chairman of the Board or the
Chief Executive Officer or, in their absence, the President, the Senior Vice
Chairman or any Vice Chairman, may from time to time appoint assistant officers.
All officers elected or appointed by the Board of Directors shall hold their
respective offices during the pleasure of the Board of Directors, and all
assistant officers shall hold office at the pleasure of the Board or the
Chairman of the Board or the Chief Executive Officer or, in their absence, the
President, the Senior Vice Chairman or any Vice Chairman. The Board of Directors
may require any and all officers and employees to give security for the faithful
performance of their duties.
SECTION 2. The Board of Directors shall designate the Chief Executive Officer
of the Company who may also hold the additional title of Chairman of the Board,
President, Senior Vice Chairman or Vice Chairman and such person shall have,
subject to the supervision and direction of the Board of Directors or the
Executive Committee, all of the powers vested in such Chief Executive Officer by
law or by these By-Laws, or which usually attach or pertain to such office. The
other officers shall have, subject to the supervision and direction of the Board
of Directors or the Executive Committee or the Chairman of the Board or, the
Chief Executive Officer, the powers vested by law or by these By-Laws in them as
holders of their respective offices and, in addition, shall perform such other
duties as shall be assigned to them by the Board of Directors or the Executive
Committee or the Chairman of the Board or the Chief Executive Officer.
The General Auditor shall be responsible, through the Audit Committee, to the
Board of Directors for the determination of the program of the internal audit
function and the evaluation of the adequacy of the system of internal controls.
Subject to the Board of Directors, the General Auditor shall have and may
exercise all the powers and shall perform all the duties usual to such office
and shall have such other powers as may be prescribed or assigned to him from
time to time by the Board of Directors or vested in him by law or by these
By-Laws. He shall perform such other duties and shall make such investigations,
examinations and reports as may be prescribed or required by the Audit
Committee. The General Auditor shall have unrestricted access to all records and
premises of the Company and shall delegate such authority to his subordinates.
He shall have the duty to report to the Audit Committee on all matters
concerning the internal audit
<PAGE> 14
program and the adequacy of the system of internal controls of the Company which
he deems advisable or which the Audit Committee may request. Additionally, the
General Auditor shall have the duty of reporting independently of all officers
of the Company to the Audit Committee at least quarterly on any matters
concerning the internal audit program and the adequacy of the system of internal
controls of the Company that should be brought to the attention of the directors
except those matters responsibility for which has been vested in the General
Credit Auditor. Should the General Auditor deem any matter to be of special
immediate importance, he shall report thereon forthwith to the Audit Committee.
The General Auditor shall report to the Chief Financial Officer only for
administrative purposes.
The General Credit Auditor shall be responsible to the Chief Executive Officer
and, through the Audit Committee, to the Board of Directors for the systems of
internal credit audit, shall perform such other duties as the Chief Executive
Officer may prescribe, and shall make such examinations and reports as may be
required by the Audit Committee. The General Credit Auditor shall have
unrestricted access to all records and may delegate such authority to
subordinates.
SECTION 3. The compensation of all officers shall be fixed under such plan or
plans of position evaluation and salary administration as shall be approved from
time to time by resolution of the Board of Directors.
SECTION 4. The Board of Directors, the Executive Committee, the Chairman of the
Board, the Chief Executive Officer or any person authorized for this purpose by
the Chief Executive Officer, shall appoint or engage all other employees and
agents and fix their compensation. The employment of all such employees and
agents shall continue during the pleasure of the Board of Directors or the
Executive Committee or the Chairman of the Board or the Chief Executive Officer
or any such authorized person; and the Board of Directors, the Executive
Committee, the Chairman of the Board, the Chief Executive Officer or any such
authorized person may discharge any such employees and agents at will.
<PAGE> 15
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHERS
SECTION 1. The Company shall, to the fullest extent permitted by Section 7018
of the New York Banking Law, indemnify any person who is or was made, or
threatened to be made, a party to an action or proceeding, whether civil or
criminal, whether involving any actual or alleged breach of duty, neglect or
error, any accountability, or any actual or alleged misstatement, misleading
statement or other act or omission and whether brought or threatened in any
court or administrative or legislative body or agency, including an action by or
in the right of the Company to procure a judgment in its favor and an action by
or in the right of any other corporation of any type or kind, domestic or
foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Company is servicing or
served in any capacity at the request of the Company by reason of the fact that
he, his testator or intestate, is or was a director or officer of the Company,
or is serving or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement, and costs, charges and expenses,
including attorneys' fees, or any appeal therein; provided, however, that no
indemnification shall be provided to any such person if a judgment or other
final adjudication adverse to the director or officer establishes that (i) his
acts were committed in bad faith or were the result of active and deliberate
dishonesty and, in either case, were material to the cause of action so
adjudicated, or (ii) he personally gained in fact a financial profit or other
advantage to which he was not legally entitled.
SECTION 2. The Company may indemnify any other person to whom the Company is
permitted to provide indemnification or the advancement of expenses by
applicable law, whether pursuant to rights granted pursuant to, or provided by,
the New York Banking Law or other rights created by (i) a resolution of
stockholders, (ii) a resolution of directors, or (iii) an agreement providing
for such indemnification, it being expressly intended that these By-Laws
authorize the creation of other rights in any such manner.
SECTION 3. The Company shall, from time to time, reimburse or advance to any
person referred to in Section 1 the funds necessary for payment of expenses,
including attorneys' fees, incurred in connection with any action or proceeding
referred to in Section 1, upon receipt of a written undertaking by or on behalf
of such person to repay such amount(s) if a judgment or other final adjudication
adverse to the director or officer establishes that (i) his acts were committed
in bad faith or were the result of active and deliberate dishonesty and, in
either case, were material to the cause of action so adjudicated, or (ii) he
personally gained in fact a financial profit or other advantage to which he was
not legally entitled.
SECTION 4. Any director or officer of the Company serving (i) another
corporation, of which a majority of the shares entitled to vote in the election
of its directors is held by the Company, or (ii) any employee benefit plan of
the Company or any corporation referred to in clause (i) in any capacity shall
be deemed to be doing so at the request of the Company. In all other cases, the
provisions of this Article V will apply (i) only if the person serving another
corporation or any partnership, joint venture, trust, employee benefit plan or
other enterprise so served at the specific request of the Company, evidenced by
a written communication signed by the Chairman of the Board, the Chief Executive
Officer or the
<PAGE> 16
President, and (ii) only if and to the extent that, after making such efforts as
the Chairman of the Board, the Chief Executive Officer or the President shall
deem adequate in the circumstances, such person shall be unable to obtain
indemnification from such other enterprise or its insurer.
SECTION 5. Any person entitled to be indemnified or to the reimbursement or
advancement of expenses as a matter of right pursuant to this Article V may
elect to have the right to indemnification (or advancement of expenses)
interpreted on the basis of the applicable law in effect at the time of
occurrence of the event or events giving rise to the action or proceeding, to
the extent permitted by law, or on the basis of the applicable law in effect at
the time indemnification is sought.
SECTION 6. The right to be indemnified or to the reimbursement or advancement
of expense pursuant to this Article V (i) is a contract right pursuant to which
the person entitled thereto may bring suit as if the provisions hereof were set
forth in a separate written contract between the Company and the director or
officer, (ii) is intended to be retroactive and shall be available with respect
to events occurring prior to the adoption hereof, and (iii) shall continue to
exist after the rescission or restrictive modification hereof with respect to
events occurring prior thereto.
SECTION 7. If a request to be indemnified or for the reimbursement or
advancement of expenses pursuant hereto is not paid in full by the Company
within thirty days after a written claim has been received by the Company, the
claimant may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled also to be paid the expenses of prosecuting such
claim. Neither the failure of the Company (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of or
reimbursement or advancement of expenses to the claimant is proper in the
circumstance, nor an actual determination by the Company (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant is
not entitled to indemnification or to the reimbursement or advancement of
expenses, shall be a defense to the action or create a presumption that the
claimant is not so entitled.
SECTION 8. A person who has been successful, on the merits or otherwise, in the
defense of a civil or criminal action or proceeding of the character described
in Section 1 shall be entitled to indemnification only as provided in Sections 1
and 3, notwithstanding any provision of the New York Banking Law to the
contrary.
<PAGE> 17
ARTICLE VI
SEAL
SECTION 1. The Board of Directors shall provide a seal for the Company, the
counterpart dies of which shall be in the charge of the Secretary of the Company
and such officers as the Chairman of the Board, the Chief Executive Officer or
the Secretary may from time to time direct in writing, to be affixed to
certificates of stock and other documents in accordance with the directions of
the Board of Directors or the Executive Committee.
SECTION 2. The Board of Directors may provide, in proper cases on a specified
occasion and for a specified transaction or transactions, for the use of a
printed or engraved facsimile seal of the Company.
ARTICLE VII
CAPITAL STOCK
SECTION 1. Registration of transfer of shares shall only be made upon the books
of the Company by the registered holder in person, or by power of attorney, duly
executed, witnessed and filed with the Secretary or other proper officer of the
Company, on the surrender of the certificate or certificates of such shares
properly assigned for transfer.
ARTICLE VIII
CONSTRUCTION
SECTION 1. The masculine gender, when appearing in these By-Laws, shall be
deemed to include the feminine gender.
ARTICLE IX
AMENDMENTS
SECTION 1. These By-Laws may be altered, amended or added to by the Board of
Directors at any meeting, or by the stockholders at any annual or special
meeting, provided notice thereof has been given.
<PAGE> 18
I, Barbara Nastro, Assistant Treasurer of Bankers Trust Company, New York, New
York, hereby certify that the foregoing is a complete, true and correct copy of
the By-Laws of Bankers Trust Company, and that the same are in full force and
effect at this date.
/s/ Barbara Nastro
--------------------------
ASSISTANT TREASURER
Dated: October 8, 1998
<PAGE> 19
<TABLE>
<S><C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-1
City, State ZIP: New York, NY 10006 11
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, reported the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
----------------------
| C400 |
-------------------------------|
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------------------------------------|
<S> <C>
ASSETS | / / / / / / / / / / / / / / |
1. Cash and balances due from depository institutions (from Schedule RC-A): | / / / / / / / / / / / / / / |
a. Noninterest-bearing balances and currency and coin (1) ................... | 0081 1,868,000 |1.a.
b. Interest-bearing balances (2) ............................................ | 0071 2,041,000 |1.b.
2. Securities: | / / / / / / / / / / / / / /|
a. Held-to-maturity securities (from Schedule RC-B, column A) ............... | 1754 0 |2.a.
b. Available-for-sale securities (from Schedule RC-B, column D).............. | 1773 7,419,000 |2.b.
3. Federal funds sold and securities purchased under agreements to resell........... | 1350 41,837,000 |3.
4. Loans and lease financing receivables: | / / / / / / / / / / / / / |
a. Loans and leases, net of unearned income (from Schedule RC-C) RCFD 2122 20,707,000 | / / / / / / / / / / / / / / /|4.a.
b. LESS: Allowance for loan and lease losses....................RCFD 3123 629,000 | / / / / / / / / / / / / / / /|4.b.
c. LESS: Allocated transfer risk reserve .......................RCFD 3128 0 | / / / / / // / / / / / / / / |4.c.
d. Loans and leases, net of unearned income, | / / / / / / / / / / / / / / /|
allowance, and reserve (item 4.a minus 4.b and 4.c) ....................... | 2125 20,078,000 |4.d.
5. Trading Assets (from schedule RC-D) ............................................ | 3545 49,665,000 |5.
6. Premises and fixed assets (including capitalized leases) ........................ | 2145 848,000 |6.
7. Other real estate owned (from Schedule RC-M) .................................... | 2150 180,000 |7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) | 2130 92,000 |8.
9. Customers' liability to this bank on acceptances outstanding .................... | 2155 512,000 |9.
10. Intangible assets (from Schedule RC-M)........................................... | 2143 270,000 |
11. Other assets (from Schedule RC-F) ............................................... | 2160 6,442,000 |11.
12. Total assets (sum of items 1 through 11) ........................................ | 2170 131,252,000 |12.
--------------------------------
</TABLE>
- --------------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 20
<TABLE>
<S> <C>
Legal Title of Bank: Bankers Trust Company Call Date: 06/30/98 ST-BK: 36-4840 FFIEC 031
Address: 130 Liberty Street Vendor ID: D CERT: 00623 Page RC-2
City, State Zip: New York, NY 10006 12
FDIC Certificate No.: | 0 | 0 | 6 | 2 | 3
</TABLE>
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
-------------------------
Dollar Amounts in Thousands |/ / / / /Bil Mil Thou _|
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
LIABILITIES | / / / / / / / / / / / |
13. Deposits: | / / / / / / / / / / / |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) | RCON 2200 26,791,000|13.a.
(1) Noninterest-bearing(1) ............................RCON 6631 3,362,000... | / / / / / / / / / / |13.a.(1)
(2) Interest-bearing .................................. .....RCON 6636 23,429,000... | / / / / / / / / / / /|13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E | / / / / / / / / / / /|
part II) | RCFN 2200 22,089,000|13.b.
(1) Noninterest-bearing .................................RCFN 6631 1,810,000 | / / / / / / / / / / |13.b.(1)
(2) Interest-bearing ...................................RCFN 6636 20,279,000 | / / / / / / / / / / |13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase | RCFD 2800 19,274,000|14.
15. a. Demand notes issued to the U.S. Treasury ............................................... | RCON 2840 0|15.a.
b. Trading liabilities (from Schedule RC-D)................................................ | RCFD 3548 30,729,000|15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases):| / / / / / / / / / / /|
a. With a remaining maturity of one year or less .......................................... | RCFD 2332 7,891,000|16.a.
b. With a remaining maturity of more than one year through three years.................... | A547 3,576,000|16.b.
c. With a remaining maturity of more than three years...................................... | A548 2,872,000|16.c
17. Not Applicable. | / / / / / / / / / / / |17.
18. Bank's liability on acceptances executed and outstanding .................................... | RCFD 2920 512,000|18.
19. Subordinated notes and debentures (2)........................................................ | RCFD 3200 1,534,000|19.
20. Other liabilities (from Schedule RC-G) ...................................................... | RCFD 2930 9,202,000|20.
21. Total liabilities (sum of items 13 through 20) .............................................. | RCFD 2948 124,470,000|21.
22. Not Applicable | / / / / / / / / / / /|
| / / / / / / / / / / |22.
EQUITY CAPITAL | / / / / / / / / / / |
23. Perpetual preferred stock and related surplus ............................................... | RCFD 3838 1,000,000|23.
24. Common stock ................................................................................ | RCFD 3230 2,001,000|24.
25. Surplus (exclude all surplus related to preferred stock) .................................... | RCFD 3839 540,000|25.
26. a. Undivided profits and capital reserves ................................................. | RCFD 3632 3,693,000|26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ................. | RCFD 8434 ( 71,000)|26.b.
27. Cumulative foreign currency translation adjustments ......................................... | RCFD 3284 ( 381,000)|27.
28. Total equity capital (sum of items 23 through 27) ........................................... | RCFD 3210 6,782,000|28.
29. Total liabilities and equity capital (sum of items 21 and 28)................................ | RCFD 3300 131,252,000|29
| |
-------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes Number
the most comprehensive level of auditing work performed for the bank by independent -------------------------
external auditors as of any date during 1997 ...........................................| RCFD 6724 N/A | M.1
------------------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required
by state chartering authority)
</TABLE>
- ----------------------
(1) Including total demand deposits and noninterest-bearing time and
savings deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 1
EXHIBIT 99-28
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of (the "Remarketing
Agreement"), among The Detroit Edison Company, a Michigan corporation (the
"Company"), and ( the "Remarketing Agents" and
individually, a "Remarketing Agent").
WHEREAS, the Company has issued $ aggregate principal amount of its
Remarketed Secured Notes, Series Due (the "Notes"), pursuant to
an Indenture, dated as of June 30, 1993, as supplemented and as further
supplemented by the Supplemental Indenture, dated as of
(the "Indenture"), between the Company and Bankers Trust Company, as trustee
(the "Trustee"), secured by bonds (the "Pledged Bond") issued from time to time
under a Mortgage and Deed of Trust, dated as of October 1, 1924, as amended and
supplemented by various supplemental indentures (the "Mortgage"), pledged by the
Company to the Trustee under the Indenture; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.333-
) under the Securities Act of 1933, as amended (the "1933 Act"), in connection
with the offering of Debt Securities, including the Notes, and the Special
Mandatory Repurchase Right, which registration statement was declared effective
by order of the Commission on and, has filed such amendments thereto,
such amended prospectuses as may have been required to the date hereof and will
file such additional amendments thereto and such additional amended prospectuses
as may hereafter be required (such registration statement and any amendments
thereto including any prospectus relating to the offering of Notes by the
Company constituting a part thereof, and all documents incorporated therein by
reference, as from time to time amended or supplemented pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1933 Act, or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus shall be
provided to the Remarketing Agents by the Company for use in connection with the
remarketing of the Notes which differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective (whether or
not such revised prospectus is required to be filed by the Company pursuant to
Rule 424(b) of the rules and regulationsunder the 1933 Act (the "Regulations")),
the term "Prospectus" shall refer to such revised prospectus from and after the
time it is first provided to the Remarketing Agents for such use; and
WHEREAS, the Company has requested each of to act as its Remarketing
Agent with respect to the Notes and as such from time to time under this
Agreement for the purpose of (i) setting the interest rate or rates and the
Spread (if any) and/or Spread Multiplier (if any) for such Notes, (ii) setting
the Interest Rate Period in certain circumstances, (iii) remarketing such Notes
from time to time on behalf of the Beneficial Owners thereof and (iv) accepting
tendered Notes for remarketing and receiving payment of the purchase price for
Notes subject to remarketing and paying Beneficial Owners on whose behalf such
Notes were remarketed; and
<PAGE> 2
WHEREAS, each of the Remarketing Agents is willing to assume such
duties on the terms and conditions expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in the Indenture.
Section 2. Representations and Warranties. The Company represents
and warrants to each of the Remarketing Agents as of the date hereof, and as of
each date that a prospectus is required to be delivered with respect to a
remarketing (each such date being hereinafter referred to as a "Representation
Date"), as follows:
(a) The Registration Statement and the Prospectus, at the time the
Registration Statement became effective and as of the applicable Representation
Date, complied in all material respects with the requirements of the 1933 Act
and the Regulations. The Registration Statement, at the time the Registration
Statement became effective, did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus, at the
time the Registration Statement became effective, as of the date hereof and as
of the applicable Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Remarketing Agents by the Company for
use in connection with the offering or the remarketing of Notes which differs
from the Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case at the time it is first provided to
the Remarketing Agents for such use), did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions from
the Registration Statement or Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Remarketing Agent
expressly for use in the Registration Statement or Prospectus.
(b) The consolidated financial statements included or incorporated by
reference in the Registration Statement and Prospectus present fairly the
consolidated financial position of the Company and its consolidated subsidiaries
as at the dates indicated and the results of their operations for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved, except as indicated therein; and the supporting schedules
included or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein.
(c) The documents incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations thereunder, and, when read together with the other
information in the Prospectus, at the time the Registration Statement and any
amendments thereto became or become effective, did not and will not contain
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<PAGE> 3
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein or
contemplated thereby, there has been no material adverse change in the
condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business.
(e) The Michigan Public Service Commission has authorized the issuance
and sale of the Notes and the issuance and pledge of the Pledged Bond; and,
other than approvals that may be required under state securities laws, no other
approval of any regulatory public body, state or federal, is necessary in
connection with the issuance and sale of the Notes or the issuance and pledge of
the Pledged Bond.
(f) The Company is not a "holding company" but is an "affiliate" of a
"holding company" (within the meaning of the Public Utility Holding Company Act
of 1935, as amended (the "1935 Act")), which holding company is exempt from the
provisions of the 1935 Act, other than Section 9(a)(2) thereof, pursuant to
Section 3(a)(2) thereof..
Section 3. Covenants of the Company. The Company covenants with
each of the Remarketing Agents as follows:
(a) If at any time when the Prospectus is required by the 1933 Act to
be delivered in connection with remarketings of any of the Notes any event shall
occur or condition exist as a result of which it is necessary, in the view of
the applicable Remarketing Agent or counsel for the Company, to further amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in the light of circumstances
existing at the time it is delivered to a purchaser or if it shall be necessary,
in the view of such counsel or the applicable Remarketing Agent, at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the Regulations, the
Company will promptly prepare and file with the Commission such amendment or
supplement, whether by filing documents pursuant to the 1934 Act or otherwise,
as may be necessary to correct such untrue statement or omission or to make the
Registration Statement comply with such requirements.
(b) If a Prospectus is required by the 1933 Act to be delivered in
connection with a remarketing, the Company will make generally available to its
security holders as soon as practicable thereafter, but not later than 90 days
after the close of the period covered thereby, earning statements (in form
complying with the provisions of Rule 158 under the 1933 Act) covering twelve
month periods beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in Rule
158) of the Registration Statement relating to the Notes.
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<PAGE> 4
(c) The Company will give each of the Remarketing Agents notice
immediately upon the filing of any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus (excluding any pricing supplement or prospectus supplement prepared
solely for and used in connection with the offer and sale of notes or other
securities other than the Notes sold by, through or to the Remarketing Agents,
but otherwise including any revised prospectus which the Company proposes for
use by the Remarketing Agents in connection with the remarketing of the Notes
which differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Regulations), whether
pursuant to the 1934 Act, the 1933 Act or otherwise, will furnish the
Remarketing Agents with copies of any such amendment or supplement or other
documents as soon as practicable after any such filing and a reasonable time in
advance of any such use.
(d) The Company will notify each of the Remarketing Agents immediately
(i) of the effectiveness of any amendment to the Registration Statement
(excluding any pricing supplement or prospectus supplement prepared solely for
and used in connection with the offer and sale of notes or other securities
other than the Notes sold by, through or to the Remarketing Agents), (ii) of the
mailing or the delivery to the Commission for filing of any supplement to the
Prospectus (excluding any pricing supplement or prospectus supplement prepared
solely for and used in connection with the offer and sale of notes or other
securities other than the Notes sold by, through or to the Remarketing Agents)
or any document to be filed pursuant to the 1934 Act, (iii) of the receipt of
any comments from the Commission with respect to the Registration Statement or
the Prospectus (excluding any pricing supplement or prospectus supplement
prepared solely for and used in connection with the offer and sale of notes or
other securities other than the Notes sold by, through or to the Remarketing
Agents), (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(e) The Company will deliver to each of the Remarketing Agents one
signed and as many conformed copies of each amendment to the Registration
Statement relating to the Notes as originally filed with the Commission
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as each of the
Remarketing Agents may reasonably request.
(f) The Company will endeavor, in cooperation with the Remarketing
Agents, to maintain the qualification of the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Remarketing Agents have designated, and will maintain such
qualifications in effect for as long as may be required for remarketings of the
Notes. The Company will file such statements and reports as may be required by
the laws of each jurisdiction in which the Notes have been qualified as above
provided.
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<PAGE> 5
(g) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file promptly all documents required to be
filed with the Commission pursuant to Section 13 or 14 of the 1934 Act.
(h) Each time that a Prospectus is required to be delivered under the
1933 Act in c onnection with a remarketing, the Company shall cause , or such
other nationally recognized accounting firm acting as accountants for the
Company, forthwith to furnish the applicable Remarketing Agent a letter in form
satisfactory to such Remarketing Agent and consistent with applicable auditing
standards with respect to the financial information set forth therein.
(i) Each time that the Company is required to provide a Remarketing
Agent with the letter referred to in Section 3(h) hereof, the Company shall
furnish or cause to be furnished to such Remarketing Agent forthwith (i) a
certificate in form satisfactory to such Remarketing Agent to the effect that
the representations and warranties contained in this Agreement are true and
correct at the time such letter is provided, as though made at and as of such
time and (ii) opinions of counsel in the form delivered pursuant to the
Distribution Agreement (as defined below).
(j) The Company will provide notice to the applicable Remarketing
Agent of any change in Interest Rate Modes, as provided in the Indenture.
(k) The Company will provide prompt notice to the Remarketing Agents
of any notification by a rating agency with regard to the ratings of any
securities of the Company.
(l) The Company will provide the applicable Remarketing Agent not less
than ten (10) days prior notice (which may be waived by the applicable
Remarketing Agent) of (i) the conversion from one Interest Rate Mode to any
other Interest Rate Mode or (ii) the establishment of a Long Term Rate Period.
Section 4. Appointment and Obligations of the Remarketing Agents. (a)
The Company hereby appoints each of _________________, _________________ and
______________________, and _______________, _____________ and _____________
hereby accept their respective appointments, as the exclusive Remarketing Agents
with respect to $_______________, $____________ and $________________ principal
amount of the Notes, respectively, for the purpose of (i) setting the interest
rate or rates and the Spread (if any) and/or Spread Multiplier (if any) for such
Notes, (ii) setting the Interest Rate Period in certain circumstances, (iii)
remarketing such Notes from time to time on behalf of the Beneficial Owners
thereof and (iv) accepting such tendered Notes for remarketing and receiving
payment of the purchase price for such Notes subject to remarketing and paying
Beneficial Owners on whose behalf such Notes were remarketed. In addition, for
purposes of facilitating the remarketing arrangements provided for herein, each
Remarketing Agent hereby agrees to act as standby Remarketing Agent for the
other Remarketing Agents (each, a "Standby Remarketing Agent"). In the event
that a Remarketing Agent is not able to remarket Notes on any Interest Rate
Adjustment Date, then each applicable Standby Remarketing Agent shall use its
best efforts to assist in the remarketing of such Notes. Any duty to provide
notification by a Remarketing Agent to the Company, the Trustee or the Liquidity
Provider hereunder shall be solely the
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<PAGE> 6
responsibility of such Remarketing Agent and not that of any Standby Remarketing
Agent. The Company reserves the right to appoint or replace any Standby
Remarketing Agent at any time. Unless otherwise specified herein, each Standby
Remarketing Agent shall have all of the rights, privileges and benefits of a
Remarketing Agent as fully as though named as such herein for the period it is
acting as such Standby Remarketing Agent.
(b) The applicable Remarketing Agent agrees to (i) use its reasonable
efforts to set the interest rate and the Spread (if any) and/or the Spread
Multiplier (if any) for each Note in the Interest Rate Mode selected by the
Company, which rate shall be the lowest rate necessary in the judgment of such
Remarketing Agent to remarket such Note on such date of determination at a price
equal to 100% of the principal amount thereof, (ii) notify the Company and the
Trustee promptly of such interest rate and the Spread (if any) and the Spread
Multiplier (if any) for such Note and, the next Interest Rate Period for such
Note, (iii) use its reasonable efforts to remarket each Note tendered to such
Remarketing Agent in remarketings held from time to time and (iv) accept
tendered Notes for remarketing and receive payment of the purchase price for
Notes subject to remarketing and pay Beneficial Owners on whose behalf such
Notes were remarketed. Each 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 determining the interest rate, Spread or Spread Multiplier, as
the case may be.
(c) It is expressly understood and agreed by the parties hereto that
the obligations of each Remarketing Agent hereunder with respect to the Notes to
be remarketed by such Remarketing Agent are conditioned on the issuance and
delivery of such Notes pursuant to the terms and conditions of the Distribution
Agreement, dated (the "Distribution Agreement"),
between the Company and . It is further expressly understood and agreed by and
between the parties hereto that a Remarketing Agent shall not be obligated to
set the interest rate or the Spread or Spread Multiplier on any Notes or to
remarket any Notes or perform any of the other duties set forth herein at any
time that any of the conditions set forth in clause (a) or (b) of Section 9
hereof shall not have been fully and completely met to the satisfaction of such
Remarketing Agent or at any time any of the events set forth in clause (c) of
Section 9 hereof shall have occurred.
(d) By 11:00 a.m., New York City time (or 9:30 a.m., New York City
time, in the case of any Note in the Daily Interest Rate Mode), on the Interest
Rate Adjustment Date for any Notes, the applicable Remarketing Agent will
determine the interest rate for such Notes being remarketed to the nearest one
hundred-thousandth (0.00001) of one percent per annum for the next Interest Rate
Period; provided, that between 11:00 a.m., New York City time and 11:50 a.m.,
New York City time, the Remarketing Agent and Standby Remarketing Agents shall
use their reasonable efforts to determine the interest rate for any Notes not
successfully remarketed as of 11:00 a.m., New York City time. For such purpose,
any Standby Remarketing Agent shall immediately notify such Remarketing Agent of
the principal amount of Notes that such Standby Remarketing Agent is able to
remarket at a price equal to 100% of the principal amount thereof plus accrued
interest, if any, on such date. In determining the applicable interest rate for
such Notes and other terms, such Remarketing Agent and, if applicable, the
Standby Remarketing Agents 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 the Notes
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<PAGE> 7
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
or the Spread or Spread Multiplier therefor at which they would be willing to
hold or purchase such Notes.
(e) By 12:30 p.m., New York City time, on the Interest Rate Adjustment
Date for a 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 (if any) and Spread Multiplier (if
any) and the Initial Interest Reset Date applicable to such Note and all other
Notes for which such Remarketing Agent is responsible hereunder, subject to
remarketing 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 all tendered Notes for which such
Remarketing Agent is responsible hereunder on such date, and (vi) the aggregate
principal amount of tendered Notes that such Remarketing Agent and the
applicable Standby Remarketing Agent or Agents were able to remarket, at a price
equal to 100% of the principal amount thereof plus accrued interest, if any. The
Trustee has agreed in the Indenture to transmit such information to DTC
immediately after receiving such notice, and, in any case, not later than 1:30
p.m. New York City time.
(f) 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 Notes remarketed on such date (or the DTC Participant of each
such purchaser who it is expected in turn will advise such purchaser) of the
principal amount of Notes that such purchaser is to purchase.
(g) 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 such tendered
Notes that have been sold in the remarketing. If any such Notes were subject to
purchase as provided in clause (h) of this Section 4, subject to receipt of
funds from the Company or the Liquidity Provider, as the case may be, the
Trustee has agreed to make such payment of the purchase price of such Notes plus
accrued interest, if any, to such date.
(h) By 12:00 o'clock noon, New York City time, on any Interest Rate
Adjustment Date, the applicable Remarketing Agent shall notify the Liquidity
Provider (as hereinafter defined), if any, the Company and the Trustee, by
telephone or facsimile, confirmed in writing, of the principal amount of Notes
that such Remarketing Agent and the applicable Standby Remarketing Agent or
Agents were unable to remarket at a price equal to 100% of the principal amount
thereof plus accrued interest, if any, on such date. In the event that the
Company has entered into a Standby Note Purchase Agreement (as hereinafter
defined) 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
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<PAGE> 8
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 pursuant thereto for
whatever reason, the Company will be obligated under the terms of the Indenture
to purchase such unremarketed Notes. The Liquidity Provider or the Company, as
the case may be, will deposit same-day funds with the Trustee by 3:00 p.m., New
York City time, on such Interest Rate Adjustment Date, in an amount equal to the
principal amount of such unremarketed Notes. In each such case, the Company 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) by
3:00 p.m., New York City time, on such date in an amount equal to the accrued
and unpaid interest, if any, on such unremarketed Notes to such date.
Notwithstanding any other provision of this Remarketing Agreement to the
contrary, no Remarketing Agent shall utilize any funds advanced by a Liquidity
Provider for the purchase of unremarketed Notes for which the Company shall not
have deposited accrued and unpaid interest in accordance with the preceding
sentence. As used herein, the term "Liquidity Provider" means any bank or banks
or other credit provider whose obligations such as those under the Standby Note
Purchase Agreement are exempt from registration under the 1933 Act, 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, provided that, for purposes of any notices to be
given hereunder, the term "Liquidity Provider" means the Administrative Agent
(as defined in the Standby Note Purchase Agreement), if any, and the term
"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 such unremarketed Notes.
(i) Upon satisfaction of all conditions precedent in the Standby Note
Purchase Agreement, Notes purchased by the Liquidity Provider or the Company as
contemplated under clause (h) of this Section 4 shall, subject to compliance
with applicable securities laws, be subject to remarketing on each Interest Rate
Adjustment Date therefor, but the Remarketing Agents shall be under no duty to
remarket such Notes after the expiration of the Standby Note Purchase Agreement.
The applicable Remarketing Agent will promptly notify the Liquidity Provider
upon a successful remarketing of Notes at a price equal to 100% of the principal
amount thereof plus accrued interest, if any, purchased by the Liquidity
Provider.
(j) The applicable Remarketing Agent shall supply to any Beneficial
Owner upon request information regarding the interest rate, Spread (if any),
Spread Multiplier (if any), Interest Rate Mode, Interest Rate Period and next
Interest Rate Adjustment Date applicable to such Beneficial Owner's Notes.
(k) The Remarketing Agents may, in accordance with the Indenture,
modify the settlement and remarketing procedures set forth in the Indenture in
order to facilitate the settlement and remarketing process.
Section 5. Fees and Expenses. For its services in performing its
duties set forth under Section 4(a) hereof and in determining the interest rate
and remarketing Notes, each Remarketing Agent will receive from the Company a
fee which, except as described below, shall
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<PAGE> 9
be payable quarterly in arrears on , ,
, and , commencing on
and shall be equal to . % per annum of the
principal amount of Notes for which such Remarketing Agent is responsible
hereunder outstanding at the beginning of such quarterly payment period (or, in
the case of the quarter ending , % per
annum of the principal amount of such Notes pro rated from
), so long as the interest rate on the Notes
shall be in the Commercial Paper Term Mode or the Daily or Weekly Interest Rate
Mode; provided that, if all of such Notes shall have been redeemed during any
such quarterly period, such fee shall be payable on the redemption date. In the
event that any Interest Rate Period is to be a Long Term Rate Period or in the
SPURS Mode for any Notes, the Company shall pay to the applicable Remarketing
Agent a fee for such Notes to be determined by mutual agreement of the Company
and such Remarketing Agent. A Remarketing Agent may pay to selected
broker-dealers a portion of any fees described above, reflecting Notes sold
through such broker-dealers to purchasers in remarketings and shall pay to the
applicable Standby Remarketing Agent or Agents a portion of the fees described
above, reflecting Notes remarketed by such Standby Remarketing Agent or Agents,
equal to . % per annum of the principal amount of such Notes pro rated
for the period commencing on the date of such remarketing and ending on the next
succeeding Interest Rate Adjustment Date for such Notes (in the case of Notes in
the Commercial Paper Term Mode, and otherwise in accordance with the rate paid
by the Company to the Remarketing Agent). In addition to its obligations under
Section 10 hereof, the Company shall, from time to time upon the request of a
Remarketing Agent, pay the reasonable fees and expenses of counsel incurred by
such Remarketing Agent in connection with the performance of its duties
hereunder. The obligations of the Company to make the payments required by this
Section 5 shall survive the termination of this Agreement and remain in full
force and effect until all such payments shall have been made in full.
Section 6. Resignation and Removal of the Remarketing Agents. (a) A
Remarketing Agent may resign and be discharged from its duties and obligations
hereunder at any time, such resignation to be effective 30 days after delivery
of notice to the Company, the Trustee and the other Remarketing Agents of such
resignation; provided, however, that if (i) such resigning Remarketing Agent
shall then be the sole Remarketing Agent or (ii) the other Remarketing Agents
elect to resign or are removed within one week of delivery of such notice, then
no such resignation shall become effective until the Company shall have
appointed at least one nationally recognized broker-dealer as successor
Remarketing Agent and such successor Remarketing Agent shall have entered into a
remarketing agreement with the Company in which it shall have agreed to conduct
remarketings in accordance with the terms and conditions of the Indenture. In
such case, the Company will use its best efforts to appoint a successor
Remarketing Agent and enter into such a remarketing agreement with such person
as soon as reasonably practicable. It shall be the sole obligation of the
Company to appoint a successor Remarketing Agent.
(b) The Company may in its absolute discretion remove a Remarketing
Agent by giving at least 30 days' prior notice to such Remarketing Agent, the
Trustee and the other Remarketing Agents; provided, however, that if (i) such
removed Remarketing Agent shall then be the sole Remarketing Agent or (ii) the
other Remarketing Agents elect to resign or is removed within one week of
delivery of such notice, then no such removal shall become effective until the
Company shall have appointed a nationally recognized broker-dealer as successor
Remarketing
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<PAGE> 10
Agent and such successor Remarketing Agent shall have entered into a remarketing
agreement with the Company in which it shall have agreed to conduct remarketings
in accordance with the terms and conditions of the Indenture. In such case, the
Company will use its best efforts to appoint a successor Remarketing Agent and
enter into such a remarketing agreement with such person as soon as reasonably
practicable.
(c) If, as a result of a resignation or removal or any other reason,
there shall be only one Remarketing Agent, such Remarketing Agent shall conduct
the remarketings alone and all references herein to Remarketing Agents shall be
deemed to refer to such Remarketing Agent alone.
Section 7. Dealing in the Notes; Redemption of Remarketing Agents'
Notes. (a) Each Remarketing Agent, when acting as a Remarketing Agent, a Standby
Remarketing Agent or in its individual or any other capacity, may, to the extent
permitted by law, buy, sell, hold and deal in any of the Notes. Notwithstanding
the foregoing, no Remarketing Agent or Standby Remarketing Agent is obligated to
purchase any Notes that would otherwise remain unsold in a remarketing. If a
Remarketing Agent or Standby Remarketing Agent holds any Notes immediately prior
to a remarketing of such Notes and if all other Notes tendered for sale by
Beneficial Owners other than such Remarketing Agent or Standby Remarketing Agent
have been sold in such remarketing, then such Remarketing Agent may sell such
number of its Notes or those of the Standby Remarketing Agent in such
remarketing as there are outstanding orders to purchase that have not been
filled by Notes tendered for sale by Beneficial Owners other than the
Remarketing Agent and the Standby Remarketing Agent. Each Remarketing Agent, as
Holder of the Notes, may exercise any vote or join as a Holder in any action
which any Holder of Notes may be entitled to exercise or take pursuant to the
Indenture with like effect as if it did not act in any capacity hereunder. Each
Remarketing Agent, in its capacity either as principal or agent, may also engage
in or have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.
(b) The Company may purchase Notes in a remarketing, provided that the
interest rate established with respect to Notes in such remarketing is not
different from the interest rate that would have been established if the Company
had not purchased such Notes.
Section 8. Information. (a) The Company agrees to furnish to each of
the Remarketing Agents: (i) copies of each report or other document mailed or
filed by the Company with the Commission including the Registration Statement
and the Prospectus relating to the Notes (including in each case any documents
incorporated therein by reference), (ii) notice of the occurrence of any of the
events set forth in clause (c) of Section 9 hereof, and (iii) in connection with
each remarketing of Notes, such other information as each of such Remarketing
Agents may reasonably request from time to time, in such form as the Remarketing
Agents may reasonably request, including but not limited to the financial
condition of the Company or any material subsidiary thereof. The Company agrees
to provide each of the Remarketing Agents with as many copies of the foregoing
materials and information as the Remarketing Agents may reasonably request for
use in connection with each remarketing of Notes and consents to the use thereof
for such purpose.
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(b) If, at any time during the term of this Agreement, any event or
condition known to the Company relating to or affecting the Company, any
subsidiary thereof or the Notes or the Pledged Bond shall occur which might
affect the accuracy or completeness of any statement of a material fact
contained in any of the reports, documents, materials or information referred to
in subparagraph (i) of paragraph (a) above or any document incorporated therein
by reference (collectively, the "Remarketing Materials"), the Company shall
promptly notify each of the Remarketing Agents in writing of the circumstances
and details of such event or condition.
Section 9. Conditions to Remarketing Agents' Obligations. The
obligations of each of the Remarketing Agents under this Agreement have been
undertaken in reliance on, and shall be subject to, (a) the due performance in
all material respects by the Company of its obligations and agreements as set
forth in this Agreement and the accuracy of the representations and warranties
in this Agreement, (b) the due performance in all material respects by the
Company of its obligations and agreements set forth in, and the accuracy in all
material respects as of the dates specified therein of the representations and
warranties contained in, the Distribution Agreement and the Standby Note
Purchase Agreement, if any, and (c) the further condition that none of the
following events shall have occurred:
(i) the rating of the Notes shall have been downgraded or put on
CreditWatch or Watch List with negative implications or withdrawn by a
national rating service after the date hereof, the effect of which, in
the opinion of the applicable Remarketing Agent, is to affect
materially and adversely the market price of the Notes or the
Remarketing Agent's ability to remarket the Notes;
(ii) all of the Notes for which such Remarketing Agent is
responsible hereunder shall have been called for redemption or
purchased pursuant to a Special Mandatory Purchase or converted to a
Fixed Interest Rate Mode;
(iii) without the prior written consent of the applicable Remarketing
Agent, the Indenture, the Mortgage, the Pledged Bond or the Standby
Note Purchase Agreement shall have been amended in any manner, or
otherwise contain any provision contained therein as of the date
hereof, that in either case in the reasonable opinion of such
Remarketing Agent materially changes the nature of the Notes or the
remarketing procedures (a "Material Change") (it being understood that
notwithstanding the provisions of this clause (iii) the Company shall
not be prohibited from amending such documents);
(iv) a suspension or material limitation in trading in securities
generally on either the American Stock Exchange or the New York Stock
Exchange or the suspension of trading of the Company's securities on
any exchange shall have occurred or a banking moratorium shall have
been declared by federal, New York or Michigan authorities;
(v) any outbreak or escalation of major hostilities, any
declaration of war by Congress or any other substantial calamity or
emergency shall have occurred; or
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<PAGE> 12
(vi) a material adverse change or any development involving a
prospective material adverse change in the financial condition or
otherwise of the Company shall have occurred.
In the event of the failure of any of such conditions, the applicable
Remarketing Agent may terminate its obligations under this Agreement as provided
in Section 12(b).
Section 10. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Remarketing Agent and its respective officers, directors and
employees (collectively the "Indemnified Persons" and individually an
"Indemnified Person") from and against any losses, claims, damages, liabilities
and expenses, as incurred, to which any Indemnified Person may become subject
insofar as such losses, claims, damages, liabilities and expenses (or actions in
respect thereof) arise out of, or are based upon, (i) the failure to satisfy the
prospectus delivery requirements of the 1933 Act because the Company failed to
notify such Remarketing Agent of such delivery requirement or failed to provide
such Remarketing Agent with an updated Prospectus for delivery, or (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
of the Remarketing Materials (including any incorporated documents), or (iii)
the omission or alleged omission to state a material fact required to be stated
in the Remarketing Materials or any revision thereof or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, or (iv) any violation by the Company of, or any failure by the
Company to perform any of its obligations under, this Agreement, or (v) the
duties such Remarketing Agent performs hereunder except due to its gross
negligence or willful misconduct. The Company agrees promptly to reimburse each
Indemnified Person for any legal or other expenses reasonably incurred by such
Indemnified Person in investigating, defending or preparing to defend any such
action or claim (including reasonable costs of counsel); provided, however, that
the foregoing indemnity shall not inure to the benefit of a Remarketing Agent,
or an officer or director of such Remarketing Agent, if such losses, claims,
damages, liabilities and expenses arose from the use by such Remarketing Agent,
or any officer or director of such Remarketing Agent, of written information it
provides to the Company expressly for use in the Remarketing Materials. The
indemnity agreement in this paragraph shall be in addition to any liability or
obligation which the Company may otherwise have to any Indemnified Person and
shall extend upon the same terms and conditions to each person, if any, who
controls any Indemnified Person within the meaning of the 1934 Act.
(b) Each Remarketing Agent severally agrees to indemnify and hold
harmless the Company, its directors and each of its officers who signed the
Registration Statement, against any and all losses, claims, damages, liabilities
and expenses, as incurred, but only with respect to untrue statements or
omissions made in the Remarketing Materials in reliance upon and in conformity
with information furnished to the Company in writing by such Remarketing Agent
expressly for use in such Remarketing Materials. The indemnity agreement in this
paragraph shall extend upon the same terms and conditions to each person, if
any, who controls the Company within the meaning of the 1934 Act.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure so
to notify an indemnifying party shall not relieve such indemnifying party from
any liability which it may have otherwise than on account
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<PAGE> 13
of this indemnity agreement. No settlement or compromise of any such action
shall be made without the consent of the indemnifying party, which consent shall
not be unreasonably withheld. An indemnifying or indemnified party may
participate at its own expense in the defense of such action. In no event shall
an indemnifying party be liable for fees and expenses of more than one counsel
(the selection of which the indemnifying party shall not reasonably object to)
separate from its own counsel for all indemnified parties in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. The Remarketing
Agents or any controlling person referenced in paragraph (a) of this Section 10
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be borne by the Remarketing Agents or such controlling person unless (i)
the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded parties)
include both the Remarketing Agent or Agents, as the case may be, or such
controlling person and the Company and the Remarketing Agent or Agents, as the
case may be, or such controlling person shall have been advised by counsel that
representation of such indemnified party and the indemnifying party by the same
counsel would be inappropriate (whether or not such representation by the same
counsel has been proposed) under applicable standards of professional conduct
due to actual or potential differing interests between them (in which case the
Company shall not have the right to assume the defense of such action on behalf
of the Remarketing Agents or such controlling person, it being understood,
however, that the Company shall, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys at any time
for the Remarketing Agents or such controlling person, which firm shall be
designated in writing by the Remarketing Agents and reasonably satisfactory to
the Company, unless a Remarketing Agent shall have been advised by counsel that
representation of such Remarketing Agent by the same counsel as the other
Remarketing Agent would be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, in which case the Company shall be liable for the reasonable fees and
expenses of a firm of attorneys for each Remarketing Agent).
(d) The indemnity agreements contained in paragraphs (a), (b) and
(c) of this Section 10 shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Remarketing Agents,
and shall survive the termination or cancellation of this Agreement and the
remarketing of any Notes hereunder.
Section 11. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 10 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and each
Remarketing Agent in each remarketing of any Notes sold by, through or to such
Remarketing Agent shall contribute to the aggregate losses, claims, damages,
liabilities and expenses, as incurred, of the nature contemplated by said
indemnity agreement incurred by the Company and such Remarketing Agent in
respect of such remarketing (i) in such proportions as will reflect the relative
benefits from the remarketing of such Notes received by the Company on the one
hand and by such Remarketing Agent on the other hand, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable
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<PAGE> 14
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and such Remarketing Agent on the other hand; provided
that the relative benefits from such remarketing shall be deemed to be such that
the Remarketing Agent shall be responsible for that portion of the aggregate
losses, claims, damages, liabilities and expenses represented by the percentage
that the commissions and fees paid to such Remarketing Agent in connection with
such remarketing bears to the aggregate principal amount of such Notes
outstanding at the time of such remarketing and the Company shall be responsible
for the balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls a Remarketing Agent within the meaning of the 1934 Act shall have the
same rights to contribution as such Remarketing Agent, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of the 1934 Act
shall have the same rights to contribution as the Company. The relative fault of
the Company on the one hand and the relevant Remarketing Agent on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
such Remarketing Agent and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Section 12. Termination of Remarketing Agreement. (a) This
Agreement shall terminate as to each Remarketing Agent on the effective date
of the resignation or removal of such Remarketing Agent pursuant to Section 6
hereof.
(b) In addition, either Remarketing Agent may terminate all of its
obligations under this Agreement by notifying the Securities Depository and the
other Remarketing Agent of its election to do so, if any of the conditions
referred to or set forth in Section 9 hereof have not been met or satisfied in
full and such failure shall have continued for a period of 30 days after such
Remarketing Agent has given notice thereof to the Company and the other
Remarketing Agent specifying the condition which has not been met and requiring
it to be met; provided, however, that termination of this Agreement by a
Remarketing Agent after giving the required notices shall be immediate in the
event of the occurrence and continuation of any event set forth in Section 9(c)
hereof, or in the event such Remarketing Agent determines, in its sole
discretion, after consultation with the Company, that it shall not have received
all of the information, whether or not specifically referenced herein, necessary
to fulfill its obligations under this Agreement.
Section 13. Remarketing Agents' Performance; Duty of Care. The duties
and obligations of each of the Remarketing Agents shall be determined solely by
the express provisions of this Remarketing Agreement and the Indenture. No
Remarketing Agent shall be responsible for the acts or omissions of the other
Remarketing Agents pursuant to this Agreement. No implied covenants or
obligations of or against the Remarketing Agents shall be read into this
Remarketing Agreement or the Indenture. In the absence of bad faith on the part
of a Remarketing Agent, such Remarketing Agent may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of this
Remarketing Agreement or
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<PAGE> 15
the Indenture, as to the truth of the statements expressed in any of such
documents. Each Remarketing Agent shall be protected in acting upon any document
or communication reasonably believed by it to have been signed, presented or
made by the proper party or parties. Each Remarketing Agent shall incur no
liability to the Company or to any Beneficial Owner or Holder of Notes in its
individual capacity or as Remarketing Agent for any action or failure to act in
connection with a remarketing or otherwise, except as a result of gross
negligence or willful misconduct on its part.
Section 14. GOVERNING LAW. THIS REMARKETING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 15. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full force
and effect from the date hereof until the first day thereafter on which no Notes
are outstanding. Regardless of any termination of this Agreement pursuant to any
of the provisions hereof, or any person entitled to contribution to the extent
provided in Section 11 hereof, the obligations of the Company pursuant to
Sections 5, 10 and 11 hereof shall remain operative and in full force and effect
until fully satisfied.
Section 16. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person without
the prior written consent of each of the Remarketing Agents. The rights and
obligations of the Remarketing Agents hereunder may not be assigned or delegated
to any other person without the prior written consent of the Company. This
Agreement shall inure to the benefit of and be binding upon the Company and each
of the Remarketing Agents and their respective successors and assigns, and will
not confer any benefit upon any other person, partnership, association or
corporation other than persons, if any, controlling any Remarketing Agent within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, or any
Indemnified Person to the extent provided in Section 10 hereof, or any person
entitled to contribution to the extent provided in Section 11 hereof. The terms
"successors" and "assigns" shall not include any purchaser of any Notes merely
because of such purchase.
Section 17. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used in
the interpretation of any provisions of this Agreement.
Section 18. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable
as applied in any particular case in any or all jurisdictions because it
conflicts with any provision of any constitution, statute, rule or public policy
or for any other reason, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
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<PAGE> 16
Section 19. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and all
of which shall constitute one and the same document.
Section 20. Remarketing Agents Not Acting as Underwriters. It is
understood and agreed by the parties hereto that each Remarketing Agent's only
obligations hereunder are as set forth in Sections 4, 6, 7, 10, 11 and 20 of
this Agreement. When engaged in remarketing any tendered Notes, each of the
Remarketing Agents shall act only as agent for and on behalf of each Beneficial
Owner of such Notes so tendered. None of the Remarketing Agents shall act as
underwriters for the tendered Notes or shall in any way be obligated to advance
its own funds to purchase any tendered Notes (except if in their respective
individual capacities as purchaser of those Notes any of them shall elect, in
accordance with Section 7 hereof, to purchase, in their sole discretion) or to
otherwise expend or risk its own funds or incur or become exposed to financial
liability in the performance of its duties hereunder.
Section 21. Amendments. This Agreement may be amended by any
instrument in writing signed by all of the parties hereto so long as this
Agreement as amended is not inconsistent with the Indenture in effect as of the
date of any such amendment.
Section 22. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing and shall be deemed to have been validly given
or made when delivered or mailed, registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
(a) to the Company:
The Detroit Edison Company
2000 Second Avenue
821 W.C.B.
Detroit, Michigan 48226
Attention: Assistant Treasurer
(b) to :
(c) to :
(d) to :
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<PAGE> 17
or to such other address as the Company or the Remarketing Agents shall specify
in writing.
17
<PAGE> 18
IN WITNESS WHEREOF, each of the Company and each of the Remarketing
Agents has caused this Agreement to be executed in its name and on its behalf by
one of its duly authorized officers as of the date first above written.
THE DETROIT EDISON COMPANY
By
---------------------------------------------------
Name:
Title:
[ ]
By
---------------------------------------------------
Authorized Signatory
[ ]
By
---------------------------------------------------
Authorized Signatory
[ ]
By
---------------------------------------------------
Authorized Signatory
18
<PAGE> 1
EXHIBIT 99-29
[FORM OF SPURS REMARKETING AGREEMENT]
REMARKETING AGREEMENT, dated as of __________, ____ (the "SPURS
Remarketing Agreement"), among:
THE DETROIT EDISON COMPANY, a Michigan corporation (the
"Company");
and
________________ ("_________________" and, in its capacity as the
remarketing agent hereunder, the "SPURS Agent").
WHEREAS, the Company has issued $_______________ aggregate
principal amount of its Remarketed Notes, Series __ due ____ (the "Notes")
pursuant to an Indenture, dated as of June 30, 1993 (the "Original Indenture"),
between the Company and Bankers Trust Company, as trustee (in such capacity, the
"Trustee") and a _____ Supplemental Indenture, dated as of __, 1998 between the
Company and the Trustee (together with the Original Indenture, as further
amended or supplemented, the "Indenture");
WHEREAS, the Notes are being sold initially pursuant to a
distribution agreement, dated __________ _, ____ (the "Distribution Agreement"),
between the Company and __________________;
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 333- )
under the Securities Act of 1933, as amended (the "Securities Act"), in
connection with the offering of Debt Securities, including the Notes, which
registration statement was declared effective by order of the Commission on ,
and has filed such amendments thereto and such amended prospectuses as may have
been required to the date hereof, and will file such additional amendments
thereto and such additional amended prospectuses as may hereafter be required;
WHEREAS, the Company may elect to remarket the Notes in different
Interest Rate Modes, including the SPURS Mode, and the Company and certain
agents have entered into a Remarketing Agreement, dated as of ____________ __,
____ (the "Remarketing Agreement") to set forth certain understanding and
procedures with respect to Notes remarketed in the Commercial Paper Term Mode or
the Long Term Rate Mode; and
WHEREAS, _____________ is prepared to act as the SPURS Agent with
respect to the remarketing of the Notes on _____________ (the "SPURS Remarketing
Date") pursuant to the terms of, but subject to the conditions set forth in,
this Agreement;
NOW, THEREFORE, for and in consideration of the covenants herein
made and subject to the conditions herein set forth, the parties hereto agree as
follows:
<PAGE> 2
Section 1. Definitions. Capitalized terms used and not defined in
this Agreement shall have the meanings assigned to them in the Indenture
(including in the form of the Notes issued thereunder).
Section 2. Representations and Warranties.
(a) The Company represents and warrants to the SPURS Agent as
of the date hereof, the Notification Date (as defined below), the Determination
Date (as defined below), the SPURS Remarketing Date and each date thereafter, if
any, of delivery of Notes by the SPURS Agent (each of the foregoing dates being
hereinafter referred to as a "Representation Date"), that (i) no consent,
approval, authorization, order or decree of any court or governmental agency or
body, including as to an effective registration statement under the Securities
Act with respect to the Notes, is required in connection with the remarketing of
Notes pursuant hereto, and (ii) the representations and warranties contained in
the Purchase Agreement are true and correct with the same force and effect as
though expressly made at and as of the date hereof.
(b) The Company further represents and warrants to the SPURS
Agent as of each Representation Date as follows:
(i) All of the required filings with the Commission made by
the Company have been made on or before the relevant Representation
Date under the Exchange Act and the rules and regulations of the
Commission thereunder (the "Exchange Act Regulations") (collectively,
the "Exchange Act Documents"), comply in all material respects with
the requirements of the Exchange Act and Exchange Act Regulations,
and each Exchange Act Document did not at the time of filing with the
Commission, and as of each Representation Date will not, include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The accountants who certified the
financial statements and supporting schedules included or
incorporated by reference in the Exchange Act Documents are
independent public accountants as required by the Securities Act and
the regulations of the Commission thereunder (the "Securities Act
Regulations").
(ii) The financial statements included or incorporated by
reference in the Exchange Act Documents, together with the related
schedules and notes, present fairly the financial condition and
results of operations of the Company and its consolidated subsidiaries
at the dates and for the periods indicated and comply with the
applicable accounting requirements of the Exchange Act; said financial
statements have been prepared in conformity with the generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules included or
incorporated by reference in the Exchange Act Documents, if any,
present fairly in accordance with GAAP the information required to be
stated therein.
(iii) Since the respective dates as of which information is
given in the Exchange Act Documents, except as otherwise stated
therein, there has not been any material adverse change, or any
development which could reasonably be expected to result in a
prospective material adverse change, in the financial condition, or in
the
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<PAGE> 3
earnings, business, operations or business prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(iv) This Agreement has been duly authorized, executed and
delivered by the Company.
(v) The Notes are rated at least ["____"] by Moody's Investors
Service, Inc., at least ["____"] by Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., or, in each
case, such other rating as to which the Company shall have most
recently notified the SPURS Agent pursuant to Section 3(a) hereof. The
Indenture has been validly authorized, executed and delivered by the
Company and the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act")), and, assuming
that the Indenture has been duly executed and delivered by the
Trustee, constitutes the legally binding obligation of the Company.
(vi) The Notes have been validly authorized and executed by the
Company and authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the purchase
price therefor as provided in the Distribution Agreement, and
constitute legally binding obligations of the Company entitled to the
benefits of the Indenture.
(vii) Neither the Company nor any of its subsidiaries is in
violation of its corporate charter or by-laws or in default under any
agreement, indenture or instrument, except for such defaults that
would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture and the
Notes and the consummation of the transactions contemplated herein and
in the prospectus relating to the initial issuance of the Notes
(including the issuance and sale of the Notes and the use of the
proceeds from the sale thereof as described under the caption "Use of
Proceeds") have been duly authorized by all necessary corporate action
on the part of the Company and do not and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any
material agreement, indenture or instrument to which the Company or
any such subsidiary is a party or by which it is bound or to which any
of its property or assets is subject, nor will such action result in a
material violation of the charter or by-laws of the Company or any
such subsidiary or any order, rule or regulation in effect on the
relevant Representation Date of any court or governmental agency
having jurisdiction over the Company or any such subsidiary or its
property.
(viii) There is no material action, suit or proceeding before any
court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any of its subsidiaries, which is required to
be disclosed in the Exchange Act Documents (other than as disclosed
therein), or which might reasonably be expected to result in a
Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof, or
the consummation of the transactions contemplated in this Agreement or
the performance by the Company of its obligations hereunder.
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<PAGE> 4
(ix) No consent, authorization or order of, or filing or
registration with, any court or governmental agency is required on the
relevant Representation Date for the execution, delivery and
performance by the Company of this Agreement or the Indenture or the
consummation of the transactions contemplated hereby and thereby,
except such as have been already obtained.
(x) The Company and its subsidiaries possess adequate
certificates, authorities, licenses or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except to the
extent that the failure to possess any such certificate, authority,
license or permit, singly or in the aggregate, could not reasonably be
expected to adversely affect the financial condition, stockholders'
equity, results of operations, business or prospects of the Company
and its subsidiaries considered as one enterprise. Neither the Company
nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority, license or permit that, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(xi) The Company and each of its subsidiaries has title or
rights to all real and personal property necessary for the conduct of
the business of the Company or such subsidiary, except to the extent
the failure to have such title or rights could not reasonably be
expected to have a Material Adverse Effect.
(xii) The Michigan Public Service Commission has authorized the
issuance and sale of the Notes and the issuance and pledge of the
Pledged Bond; and, other than approvals that may be required under
state securities laws, no other approval of any regulatory public
body, state or federal, is necessary in connection with the issuance
and sale of the Notes or the issuance and pledge of the Pledged Bond.
(xiii) The Company is not a "holding company" but is an
"affiliate" of a "holding company" (within the meaning of the Public
Utility Holding Company Act of 1935, as amended (the "1935 Act")),
which holding company is exempt from the provisions of the 1935 Act,
other than Section 9(a)(2) thereof, pursuant to Section 3(a)(2)
thereof.
(c) Any certificate signed by any director or officer of the
Company or DTE Energy and delivered to the SPURS Agent or to counsel for the
SPURS Agent in connection with the remarketing of the Notes shall be deemed a
representation and warranty by the Company or DTE Energy, as the case may be, to
the SPURS Agent as to the matters covered thereby.
Section 3. Covenants. The Company covenants with the SPURS Agent
as follows:
(a) The Company will provide prompt notice by telephone,
confirmed in writing (which may include facsimile or other electronic
transmission), to the SPURS Agent of (i) any notification or announcement by a
"nationally recognized statistical rating organization
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<PAGE> 5
(as defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act) with regard to the ratings of any securities of the Company,
including, without limitation, notification of a downgrade in or withdrawal of
the rating of any security of the Company or notification or announcement of the
placement of any rating of any securities of the Company under surveillance or
review, including placement on Credit Watch or on Watch List with negative
implications, or (ii) the occurrence at any time of any event set forth in
Section 9(d) of this Agreement.
(b) The Company will furnish to the SPURS Agent:
(i) if required as provided in paragraph (e) below for
purposes of the remarketing, a then currently
effective registration statement under the
Securities Act and a then current prospectus
relating to the Notes to be used by the SPURS
Agent for remarketing and resale of the Notes
(such registration statement (whether consisting
of the registration statement relating to the
initial issuance of the Notes, or any amendment
thereto or a new registration statement) and any
amendments thereto, including any such prospectus
(whether consisting of the prospectus relating to
the initial issuance of the Notes or any amendment
or supplement thereto or a new prospectus)
relating to the Notes constituting a part thereof,
and all documents incorporated therein by
reference, as from time to time amended or
supplemented pursuant to the Exchange Act, the
Securities Act, or otherwise, are referred to
herein as the "Registration Statement" and the
"Prospectus," respectively, except that if any
revised prospectus shall be provided to the SPURS
Agent by the Company for use in connection with
the remarketing of the Notes which differs from
the Prospectus on file at the Commission at the
time the Registration Statement becomes effective,
the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first
provided to the SPURS Agent for such use);
(ii) each Exchange Act Document filed after the date
hereof; and
(iii) in connection with the remarketing of Notes, such
other information as the SPURS Agent may
reasonably request from time to time.
The Company agrees to provide the SPURS Agent with as many copies
of the foregoing written materials and other Company approved information as the
SPURS Agent may reasonably request for use in connection with the remarketing of
Notes and consents to the use thereof for such purpose.
(c) If, at any time during which the SPURS Agent would be
obligated to take any action under this Agreement, any event or condition known
to the Company relating to or affecting the Company, any subsidiary thereof or
the Notes shall occur which could reasonably
5
<PAGE> 6
be expected to cause any of the reports, documents, materials or information
referred to in paragraph (b) above or any document incorporated therein by
reference (collectively, the "Remarketing Materials") to contain an untrue
statement of a material fact or omit to state a material fact, the Company shall
promptly notify the SPURS Agent in writing of the circumstances and details of
such event or condition.
(d) So long as the Notes are outstanding, the Company will
file all documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act and the
Exchange Act Regulations.
(e) The Company will comply with the Securities Act and the
Securities Act Regulations, the Exchange Act and the Exchange Act Regulations
and the 1939 Act and the rules and regulations of the Commission thereunder so
as to permit the completion of the remarketing of the Notes as freely
transferable securities, as contemplated in this Agreement and in the prospectus
relating to the initial issuance of the Notes. In furtherance of the foregoing,
if it shall be necessary, in the opinion of counsel for the SPURS Agent or for
the Company to have a Registration Statement and a Prospectus in order to comply
with the requirements of the Securities Act or the Securities Act Regulations
and the Commission's interpretations of the Securities Act and the Securities
Act Regulations, or if at any time when a Prospectus is required by the
Securities Act to be delivered in connection with remarketing and resales of the
Notes, any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the SPURS Agent or for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in order
that the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, the Company, at its expense, will promptly (i) prepare
and file with the Commission such Registration Statement and Prospectus, or such
amendment or supplement as may be necessary to correct such statement or
omission as referred to above or to make the Registration Statement or the
Prospectus comply with such requirements as referred to above, (ii) furnish to
the SPURS Agent such number of copies of such Registration Statement and
Prospectus or such amendment, supplement or other document as the SPURS Agent
may reasonably request and (iii) furnish to the SPURS Agent an officers'
certificate, an opinion (including a statement as to the absence of material
misstatements in or omissions from the Registration Statement and Prospectus, as
amended or supplemented) of counsel for the Company satisfactory to the SPURS
Agent and a "comfort letter" from the Company's independent accountants, in each
case in form and substance satisfactory to the SPURS Agent, of the same tenor as
the officers' certificate, opinion and comfort letter, respectively, delivered
pursuant to the Distribution Agreement, but modified to relate to the
Registration Statement and Prospectus as amended or supplemented to the date
thereof.
(f) The Company agrees that neither it nor any of its
subsidiaries or affiliates shall defease, purchase or otherwise acquire, or
enter into any agreement to defease, purchase or otherwise acquire, any of the
Notes prior to the remarketing thereof by the SPURS Agent, other than pursuant
to Section 4(g) or 4(h) of this Agreement.
(g) Notwithstanding any provision to the contrary set forth in
the Indenture, the Company shall (i) use its best efforts to maintain the Notes
in book-entry form with The
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<PAGE> 7
Depository Trust Company ("DTC") or any successor thereto and to appoint a
successor depositary to the extent necessary to maintain the Notes in book-entry
form, and (ii) waive any discretionary right it otherwise has under the
Indenture to cause the Notes to be issued in certificated form.
(h) To the extent that a Registration Statement and a
Prospectus are required as contemplated in paragraph (e) above, the Company
will comply with covenants of the same tenor as those set forth in the
Distribution Agreement, but modified to relate to the Registration Statement
and Prospectus.
Section 4. Appointment and Obligations of the SPURS Agent.
(a) Unless this Agreement is otherwise terminated in
accordance with Section 12. hereof, in accordance with the terms, but subject
to the conditions, of this Agreement, the Company hereby appoints ____________
and _____________ hereby accepts such appointment, as the exclusive SPURS Agent
with respect to $_______________ aggregate principal amount of Notes, subject
further to repurchase of the Notes in accordance with clause (h) of this
Section 4. or redemption of the Notes in accordance with clause (h) of this
Section 4.
(b) It is expressly understood and agreed by the parties
hereto that the obligations of the SPURS Agent hereunder with respect to the
Notes to be remarketed on the SPURS Remarketing Date are conditioned on (i) the
issuance and delivery of such Notes pursuant to the terms and conditions of the
Purchase Agreement and (ii) the SPURS Agent's election on the Notification Date
to purchase the Notes for remarketing on the SPURS Remarketing Date. It is
further expressly understood and agreed by and between the parties hereto that,
if the SPURS Agent has elected to remarket the Notes pursuant to clause (c)
below, the SPURS Agent shall not be obligated to set the SPURS Interest Rate
(as defined below) on any Notes, to remarket any Notes or to perform any of the
other duties set forth herein at any time after the Notification Date in the
event that (i) any of the conditions set forth in clauses (a), (b) or (c) of
Section 9 hereof shall not have been fully and completely met to the
satisfaction of the SPURS Agent, or (ii) any of the events set forth in clause
(d) of Section 9 hereof shall have occurred.
(c) On a Business Date not later than ten days prior to the
SPURS Remarketing Date, the SPURS Agent will notify the Company and the Trustee
as to whether it elects to purchase the Notes on the SPURS Remarketing Date
(the "Notification Date"). If, and only if, the Remarketing Agent so elects,
the Notes shall be subject to mandatory tender to the SPURS Agent for purchase
and remarketing on the SPURS Remarketing Date, upon the terms and subject to
the conditions described herein, including the Company's right to either
convert the Notes to a new Interest Rate Mode on the SPURS Remarketing Date
pursuant to the terms of clause (g) below or to redeem the Notes from the SPURS
Agent in the manner described in clause (h) below. The purchase price of such
tendered Notes shall be equal to 100% of the aggregate principal amount
thereof. 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
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<PAGE> 8
and the Notes will be subject to remarketing on such date by an agent
appointed by the Company pursuant to the terms of the Remarketing Agreement.
(d) Subject to the SPURS Agent's election to remarket the
Notes as provided in clause (c) above by 3:30 p.m., New York City time, on the
third Business Day immediately preceding the SPURS Remarketing Date (the
"Determination Date"), the SPURS Agent shall determine the SPURS Interest Rate
to the nearest one hundred-thousandth (0.00001) of one percent per annum. The
"SPURS Interest Rate" shall be equal to the sum of _________% (the "Base
Rate"), established by the SPURS Agent after consultation with the Company, and
the Applicable Spread (as defined below), which will be based on the Dollar
Price (as defined below) of the Notes. The SPURS Interest Rate announced by the
SPURS Agent, absent manifest error, shall be binding and conclusive upon the
actual purchasers of the Notes ("Beneficial Owners") and Holders of the Notes,
the Company and the Trustee.
The "Applicable Spread" shall 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
Rate 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
described above, then the Applicable Spread shall be the lowest of
such bid indications obtained as described above.
"Comparable Treasury Issues" means 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 succeeding Interest Rate Adjustment Date of the
Notes being purchased.
"Comparable Treasury Price" means, with respect to the SPURS
Remarketing Date, (a) the offer prices of 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 the Determination Date, (i) the average of the
Reference Treasury Dealer Quotations (as defined below) for the SPURS
Remarketing Date, after excluding the highest and lowest 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
BridgeTelerate, Inc. (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 BridgeTelerate, Inc.
"Dollar Price" means, with respect to the Notes, the present
value determined by the SPURS Agent, as of the SPURS Remarketing Date,
of the Remaining Scheduled
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<PAGE> 9
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.
"Reference Treasury Dealer" means such Reference Treasury Dealers
as shall be appointed by the SPURS Agent after consultation with the
Company.
"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 such Reference
Treasury Dealer by 3:30 p.m., on the Determination Date.
"Remaining Scheduled Payments" means, 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
Rate Adjustment Date, as determined by the SPURS Agent.
"Treasury Rate" means, 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 the SPURS Remarketing Date.
(e) Subject to the SPURS Agent's election to remarket the
Notes as provided in clause (c) above, the SPURS Agent shall notify the
Company, the Trustee and The Depository Trust Company ("DTC") by telephone,
confirmed in writing (which may include facsimile or other electronic
transmission), by 4:00 p.m., New York City time, on the Determination Date of
the SPURS Interest Rate applicable to the Notes effective from and including
the SPURS Remarketing Date.
(f) 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 subject to remarketing, 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 the purchase price for such tendered Notes
shall be equal to 100% of the aggregate principal amount thereof. 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.
(g) If the SPURS Agent elects to remarket the Notes as
provided in clause (c) above, then not later than the Business Day immediately
preceding the Determination Date, the Company shall notify the SPURS Agent and
the Trustee if the Company irrevocably elects to exercise its right to convert
the Notes, in whole but not in part, to a new Interest Rate Mode. In
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<PAGE> 10
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 on the Notes in same-day
funds by wire transfer to an account designated by the SPURS Agent on the SPURS
Remarketing Date. If the Company elects to convert the Notes, 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.
(h) If the SPURS Agent elects to remarket the Notes as
provided in clause (c) above, then not later than the Business Day immediately
preceding the Determination Date, the Company shall notify the SPURS Agent and
the Trustee if the Company irrevocably elects to exercise its right to redeem
the Notes, in whole but not in part, from the SPURS Agent on the SPURS
Remarketing Date at the Optional Redemption Price. The "Optional Redemption
Price" shall be the greater of (i) 100% of the aggregate principal amount of
the Notes 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 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.
(i) In accordance with the terms and provisions of the Notes,
the tender and settlement procedures set forth in this Section 4, including
provisions for payment by purchasers of Notes in the remarketing or for payment
to selling Beneficial Owners of tendered Notes, shall be subject to
modification, notwithstanding any provision to the contrary set forth in the
Indenture, to the extent required by DTC or, if the book-entry system is no
longer available for the Notes at the time of the remarketing, to the extent
required to facilitate the tendering and remarketing of Notes in certificated
from. In addition, the SPURS Agent may, notwithstanding anything to the contrary
contained in the Indenture, modify the settlement procedures set forth in the
Indenture and/or the Notes in order to facilitate the settlement process. If the
Company fails to redeem the Notes from the SPURS Agent following any such
election, the [SPURS Agent will be deemed to have elected not to remarket the
Notes], subject to the obligation of the Company to pay the Calculation Amount
to the SPURS Agent as provided in Section 12(e) of this Agreement.
(j) In accordance with the terms and provisions of the Notes,
the Company hereby agrees that at all times, notwithstanding any provision to
the contrary set forth in the Indenture, (i) it will use its best efforts to
maintain the Notes in book-entry form with DTC or any successor thereto and to
appoint a successor depository to the extent necessary to maintain the Notes in
book-entry form and (ii) it will waive any discretionary right it otherwise may
have under the Indenture to cause the Notes to be issued in certificated form.
Section 5. Fees and Expenses. Subject to Section 12 of this
Agreement, for its services in performing its duties set forth herein, the SPURS
Agent will not receive any fees or reimbursement of expenses from the Company.
Section 6. Resignation of the SPURS Agent. The SPURS Agent may
resign and be discharged from its duties and obligations hereunder at any time,
such resignation to be
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<PAGE> 11
effective 10 days after delivery of a written notice to the Company and the
Trustee of such resignation. The SPURS Agent also may resign and be discharged
from its duties and obligations hereunder at any time, such resignation to be
effective immediately, upon termination of this Agreement in accordance with
Section 12(b) hereof. It shall be the sole obligation of the Company to appoint
a successor SPURS Agent.
Section 7. Dealing in the Notes; Purchase of Notes by the
Company.
(a) ________________, when acting as the SPURS Agent or in its
individual or any other capacity, and its affiliates may, to the extent
permitted by law, buy, sell, hold and deal in any of the Notes.
_________________, as Holder or Beneficial Owner of the Notes, and its
affiliates may exercise any vote or join as a Holder or Beneficial Owner, as the
case may be, in any action which any Holder or Beneficial Owner of the Notes may
be entitled to exercise or take pursuant to the Indenture with like effect as if
___________________ did not act in any capacity hereunder. The SPURS Agent, in
its capacity, either as principal or agent, and its affiliates may also engage
in or have an interest in any financial or other transaction with the Company as
freely as if the SPURS Agent did not act in any capacity hereunder.
(b) The Company may purchase Notes in the remarketing,
provided that the SPURS Interest Rate established with respect to Notes in the
remarketing is not different from the SPURS Interest Rate that would have been
established if the Company had not purchased such Notes.
Section 8. Information.
(a) The Company agrees to furnish to the SPURS Agent (i)
notice of the occurrence of any of the events set forth in Section 9 hereof and
(ii) in connection with the remarketing, promptly following any request
therefor, such other information including, but not limited to, the operations,
business affairs and financial condition of the Company, DTE Energy or any
material subsidiary thereof, or compliance with the terms of this Agreement, as
the SPURS Agent may reasonably request. The Company agrees to provide the SPURS
Agent with as many copies of the foregoing materials and information as the
SPURS Agent may reasonably request for use in connection with the remarketing
and consents to the use thereof for such purpose.
(b) If, at any time during the term of this Agreement, any
event or condition known to the Company relating to or affecting the Company,
DTE Energy or any subsidiary thereof or the Notes shall occur which might cause
(i) any of the Exchange Act Documents, (ii) any materials or information
referred to in clause (i) of paragraph (a) above or (iii) any document
incorporated therein by reference (collectively, the "Remarketing Materials")
to include an untrue statement of a material fact or omit to state a material
fact, the Company shall promptly notify the SPURS Agent in writing of the
circumstances and details of such event or condition.
Section 9. Conditions to SPURS Agent's Obligations. The
obligations of the SPURS Agent under this Agreement have been undertaken in
reliance on, and shall be subject to, (a) the due performance in all material
respects by the Company of its respective obligations and agreements as set
forth in this Agreement and the accuracy of the representations and warranties
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<PAGE> 12
in this Agreement and any certificate delivered pursuant hereto, (b) the due
performance in all material respects by the Company of its obligations and
agreements set forth in, and the accuracy as of the dates specified therein of
the representations and warranties contained in, the Distribution Agreement, (c)
the submission of a bid by a Reference Corporate Dealer on the Determination
Date to purchase the full aggregate principal amount of the Notes at the Dollar
Price and (d) the further condition that none of the following events shall have
occurred after the SPURS Agent elects on the Notification Date to remarket the
Notes:
(i) the rating of any securities of the Company shall have
been down graded or put under surveillance or review with negative
implications, including being put on what is commonly termed a "watch
list," or withdrawn by a nationally recognized statistical rating
organization;
(ii) without the prior written consent of the SPURS Agent, the
Indenture (including the Notes) shall have been amended in any manner,
or otherwise contain any provision not contained therein as of the
date hereof, that in either case in the reasonable judgment of the
SPURS Agent materially changes the nature of the Notes or the
remarketing procedures (it being understood that, notwithstanding the
provisions of this clause (ii), the Company shall not be prohibited
from amending the Indenture);
(iii) trading in any securities of the Company shall have been
suspended or materially limited by the Commission, or if trading
generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market shall have been suspended or
materially limited, or minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices shall have been
required, by any of said exchanges or by such system or by order of
the Commission, the National Association of Securities Agents, Inc. or
any other governmental authority, or if a banking moratorium shall
have been declared by either Federal, New York or Michigan
authorities.
(iv) there shall have occurred any material adverse change in
the financial markets in the United States, any outbreak of
hostilities or escalation thereof, or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the reasonable
judgment of the SPURS Agent, impracticable to remarket the Notes or to
enforce contracts for the sale of the Notes;
(v) an Event of Default, or any event which, with the giving
of notice or passage of time, or both, would constitute an Event of
Default, with respect to the Notes shall have occurred and be
continuing.
(vi) any material adverse change, or any development which
could reasonably be expected to result in a prospective material
adverse change, in the financial condition, or in the earnings,
business or operations or business prospects, of the Company and
its subsidiaries taken as a whole, the effect of which is such as to
make it, in the reasonable judgment of the SPURS Agent, impracticable
to remarket the Notes or to enforce contracts for the sale of the
Notes, shall have occurred since the Notification Date or
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<PAGE> 13
since the respective dates as of which information is given in the
Exchange Act Documents; or
(vii) the Notes are not maintained in book-entry form with DTC
or any successor thereto; provided, that the SPURS Agent, in its sole
discretion and subject to receipt of an opinion of counsel for the
Company reasonably satisfactory to the SPURS Agent, may waive the
foregoing condition if in the SPURS Agent's judgment the Indenture and
the Notes can be amended, and they are amended, so as to permit the
remarketing of the Notes in certificated form and otherwise as
contemplated herein.
(e) In furtherance of the foregoing, the effectiveness of the
SPURS Agent's election on the Notification Date to remarket the Notes shall be
subject to the condition that the SPURS Agent shall have received a certificate
of the Chairman of the Board, the President, the Chief Financial Officer or a
Vice President of the Company, and the Treasurer or an Assistant Treasurer of
the Company, dated as of the Notification Date, to the effect that (i) the
Company has, prior to the SPURS Agent's election on the Notification Date to
remarket the Notes, provided the SPURS Agent with notice of all events as
required under Section 3(a) of this Agreement, (ii) the representations and
warranties in this Agreement are true and correct at and as of the Notification
Date and (iii) the Company has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its part to
be performed or satisfied at or prior to the Notification Date. Such certificate
shall be delivered by the Company to the SPURS Agent as soon as practicable
following notification by the SPURS Agent to the Company on the Notification
Date of its election to remarket the Notes and in any event prior to the
Determination Date.
In the event of the failure of any of the foregoing conditions,
the SPURS Agent may terminate its obligations under this Agreement or determine
the SPURS Interest Rate as provided in Section 12.
Section 10. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
SPURS Agent and its officers, directors and employees and each person, if any,
who controls the SPURS Agent within the meaning of Section 20 of the Exchange
Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of (A) any untrue statement or
alleged untrue statement of a material fact contained in any of the
Remarketing Materials (including any incorporated documents), or (B)
the omission or alleged omission therefrom of a material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, or (C) any
violation by the Company of, or any failure by the Company to perform
any of its respective obligations under this Agreement, or (D) the
acts or omissions of the SPURS Agent in connection with its duties and
obligations hereunder except to the extent due to its gross negligence
or willful misconduct;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent to the aggregate amount
paid in settlement of any litigation, or
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<PAGE> 14
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever arising out of, or
based upon, any of items (A) through (D) in clause (i) above; provided
that (subject to clause (d) below) such settlement is effected with
the written consent of the Company, which consent shall not be
unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the SPURS
Agent), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of, or based upon, any of items (A) through (D)
in clause (i) above to the extent that any such expense is not paid
under (i) or (ii) above; provided that the foregoing indemnity shall
not apply to any losses, liabilities, claims, damages and expenses to
the extent arising out of any untrue statement or omission made in
reliance upon and in conformity with written information furnished to
the Company by the SPURS Agent expressly for use in the Remarketing
Materials.
(b) The SPURS Agent agrees to indemnify and hold harmless the
Company and its officers, directors and employees and each person, if any, who
controls the Company within the meaning of Section 20 of the Exchange Act as
follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statements or
omissions made in the Remarketing Materials in reliance upon and in
conformity with information furnished to the Company in writing by the
SPURS Agent expressly for use in such Remarketing Materials;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever arising out of, or based upon, clause (i) above;
provided that (subject to clause (d) below) such settlement is
effected with the written consent of the SPURS Agent, which consent
shall not be unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Company), reasonably incurred in investigating preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of, or based upon, clause (i) above to the
extent that any such expense is not paid under (i) or (ii) above.
(c) Promptly after receipt by any indemnified party under
Section 10(a) or Section 10(b) hereof of notice of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party pursuant to Section 10(a)
or Section 10(b) hereof, notify the indemnifying party in writing of the claim
or the commencement of that action; provided however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 10 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or
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<PAGE> 15
defenses) by such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided however, that an
indemnified party will have the right to employ its own counsel in any such
action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnified party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which cases the
reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Section 10(a) and Section 10 (b) hereof, shall use all reasonable
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall be liable for any settlement of any
such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a)(ii) or (b)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such
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<PAGE> 16
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
(e) The indemnity agreements contained in this Section 10
shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of the SPURS Agent, and shall survive the
termination or cancellation of this Agreement and the remarketing of any Notes
hereunder.
Section 11. Contribution. If the indemnification provided for in
Section 10 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the SPURS Agent on the other hand from the
remarketing of the Notes pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
SPURS Agent on the other hand in connection with the acts, failures to act,
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
the SPURS Agent on the other hand in connection with the remarketing of the
Notes pursuant to this Agreement shall be deemed to be in the same respective
proportions as (i) the aggregate principal amount of the Notes, and (iii) the
aggregate positive difference, if any, between the price paid by the SPURS Agent
for the Notes tendered on the SPURS Remarketing Date and the price at which the
Notes are sold by the SPURS Agent in the remarketing.
The relative fault of the Company on the one hand the SPURS Agent
on the other hand shall be determined by reference to, among other things, the
responsibility hereunder of the applicable party for any act or failure to act
relating to the losses, liabilities, claims, damages or expenses incurred or, in
the case of any losses, liabilities, claims, damages or expenses arising out of
any untrue or alleged untrue statement of a material fact contained in any of
the Remarketing Materials.
Section 12. Termination of Remarketing Agreement or
Redetermination of the SPURS Interest Rate.
(a) This Agreement shall terminate as to the SPURS Agent on
the effective date of the resignation of the SPURS Agent pursuant to Section 6
hereof or the repurchase of the Notes by the Company pursuant to Section 4(h)
hereof or the redemption of the Notes by the Company pursuant to Section 4(h)
hereof.
(b) In addition, the SPURS Agent may terminate all of its
obligations under this Agreement by notifying the Company and the Trustee of its
election to do so, at any time on or before the SPURS Remarketing Date, in the
event that: (i) any of the conditions referred to or
16
<PAGE> 17
set forth in Section 9(a), (b) or (c) hereof have not been met or satisfied in
full or (ii) any of the events set forth in Section 9(d) shall have occurred
after the SPURS Agent elects to remarket the Notes.
(c) Notwithstanding any provision herein to the contrary, in
lieu of terminating this Agreement pursuant to Section 12(b) above, upon the
occurrence of any of the events set forth therein, the SPURS Agent, in its sole
discretion at any time between the Determination Date and 3:30 p.m., New York
City time, on the Business Day immediately preceding the SPURS Remarketing Date,
may elect to purchase the Notes for remarketing and determine a new SPURS
Interest Rate in the manner provided in Section 4(d) of this Agreement, except
that for purposes of determining the new SPURS Interest Rate pursuant to this
paragraph the Determination Date referred to therein shall be the date of such
election and redetermination. The SPURS Agent shall notify the Company, the
Trustee and DTC by telephone, confirmed in writing (which may include facsimile
or other electronic transmission), by 4:00 p.m., New York City time, on the date
of such election, of the new SPURS Interest Rate applicable to the Notes.
Thereupon, such new SPURS Interest Rate shall supersede and replace any SPURS
Interest Rate previously determined by the SPURS Agent and, absent manifest
error, shall be binding and conclusive upon the Beneficial Owners and Holders of
the Notes on and after the SPURS Remarketing Date, the Company and the Trustee;
provided that the SPURS Agent, by redetermining the SPURS Interest Rate upon the
occurrence of any event set forth in Section 12(b) as set forth above, shall not
thereby be deemed to have waived its right to determine a new SPURS Interest
Rate or terminate this Agreement upon the occurrence of any other event set
forth in Section 12(b).
(d) If this Agreement is terminated pursuant to this Section
12, such termination shall be without liability of any party to any other party,
except that, in the case of termination pursuant to Section 12(b) of this
Agreement, the Company shall reimburse the SPURS Agent for all of its reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the SPURS Agent, and except further as set forth in Section 12(e)
below. Section 1, Section 10, Section 11, Section 12(d) and Section 12(e) shall
survive such termination and remain in full force and effect.
(e) In the case of either (i) termination of this Agreement
pursuant to Section 12(b), (ii) the occurrence, prior to the SPURS Agent's
election on the Notification Date to remarket the Notes, of any event set forth
in Section 9(d)(ii), (v) or (vii), (iii) after the SPURS Agent's election to
remarket the Notes, no bid is submitted by a Reference Corporate Agent to the
SPURS Agent on the Determination Date to purchase the full aggregate principal
amount of the Notes at the Dollar Price or (iv) any failure by the Company to
redeem the Notes from the SPURS Agent following any election by the Company to
effect such redemption as specified in Section 4(h) (each a "Calculation
Event"), the Company shall immediately following the Calculation Amount
Determination Date (as defined below) pay the SPURS Agent, in same-day funds by
wire transfer to an account designated by the SPURS Agent, the fair market
value, calculated as set forth below, of the SPURS Agent's right to purchase and
remarket the Notes pursuant to this Agreement (the "Calculation Amount").
The Calculation Amount will be determined by the SPURS Agent in
good faith and on a commercially reasonable basis and will be equal to an
amount, if any, that would be
17
<PAGE> 18
paid by the SPURS Agent in consideration of an agreement between the SPURS Agent
and a Reference Corporate Agent (other than the SPURS Agent) to enter into a
transaction that would have the effect of preserving for the SPURS Agent the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent) by the SPURS Agent and the Beneficial
Owners that would, but for the occurrence of the Calculation Event, have been
required on the SPURS Remarketing Date; provided that, if the Calculation Amount
is being determined with respect to a Calculation Event occurring on or after
the SPURS Agent's election on the Notification Date to remarket the Notes, the
Calculation Amount will be equal to the excess, if any, of (a) the Dollar Price
over (b) the aggregate principal amount of the Notes then outstanding. In
determining the Calculation Amount, the SPURS Agent will be entitled to assume
that the Notes are obligations issued by the United States Department of the
Treasury backed by the full faith and credit of the United States of America.
The SPURS Agent shall determine the applicable Calculation Amount as soon as
practicable after the occurrence of any of the events as described in (i)
through (iii) in the preceding paragraph (the "Calculation Amount Determination
Date"). The SPURS Agent shall promptly notify the Company of the Calculation
Amount by telephone, confirmed in writing (which may include facsimile or other
electronic transmission). The Calculation Amount, absent manifest error, shall
be binding and conclusive upon the parties hereto.
18
<PAGE> 19
(f) This Agreement shall not be subject to termination by the
Company.
Section 13. SPURS Agent's Performance; Duty of Care. The duties
and obligations of the SPURS Agent shall be determined solely by the express
provisions of this Agreement and the Indenture. No implied covenants or
obligations of or against the SPURS Agent shall be read into this Agreement or
the Indenture. In the absence of bad faith on the part of the SPURS Agent, the
SPURS Agent may conclusively rely upon any document furnished to it, which
purports to confirm to the requirements of this Agreement and the Indenture, as
to the truth of the statements expressed in any of such documents. The SPURS
Agent shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties. The SPURS Agent shall incur no liability to the Company or to any
Beneficial Owner to Holder of Notes in its individual capacity or as SPURS Agent
for any action or failure to act in connection with the remarketing or
otherwise, except as a result of gross negligence or willful misconduct on its
part.
Section 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 15. Terms of Agreement. Unless otherwise terminated in
accordance with the provision hereof, this Agreement shall remain in full force
and effect from the date hereof until the earlier of the first day thereafter on
which no Notes are outstanding or the completion of the remarketing of the
Notes. Regardless of any termination of this Agreement pursuant to any of the
provisions hereof, the obligations of the Company pursuant to Section 10,
Section 11 and Section 12 hereof shall remain operative and in full force and
effect until fully satisfied.
Section 16. Successors and Assigns. The rights and obligations of
the Company hereunder may not be assigned or delegated to any other person
without the prior written consent of the SPURS Agent. The rights and obligations
of the SPURS Agent hereunder may not be assigned or delegated to any other
person without the prior written consent of the Company, except that the SPURS
Agent may assign and delegate all or any portion of its rights and obligations
hereunder to _____________________________ (or any other affiliate of
____________________ registered as a broker-dealer under the Exchange Act) and
that any such delegation will relieve the SPURS Agent of the obligations so
delegated. This Agreement shall inure to the benefit of and be binding upon the
Company and the SPURS Agent and their respective successors and permitted
assigns, and will not confer any benefit upon any other person, partnership,
association or corporation other than persons, if any, controlling the SPURS
Agent within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, or any indemnified party to the extent provided in Section 10
hereof, or any person entitled to contribution to the extent provided in Section
11 hereof. The terms "successors" and "assigns" shall not include any purchaser
or any Notes merely because of such purchase.
Section 17. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a
19
<PAGE> 20
part of this Agreement and will not be used in the interpretation of any
provisions of this Agreement.
Section 18. Severability. If any person of this Agreement shall
be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
Section 19. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original and all of
which shall constitute one and the same document.
Section 20. Amendments. This Agreement may be amended by any
instrument in writing signed by each of the parties hereto so long as this
Agreement as amended is not inconsistent with the Indenture in effect as of the
date of any such amendment.
Section 21. Notices. Unless otherwise specified, any notices,
requests, consents, waivers or other communications given or made hereunder or
pursuant hereto shall be made in writing (which may include facsimile or other
electronic transmission) and shall be deemed to have been validly given or made
when delivered or mailed, registered or certified mail, return receipt requested
and postage prepaid, addressed as follows:
(a) to the Company:
The Detroit Edison Company
2000 Second Avenue
Detroit, Michigan 48226
Telephone:
Facsimile:
Attention:
(b) to _______________________:
or to such other address as the Company or the SPURS Agent shall specify in
writing.
IN WITNESS WHEREOF, each of the Company and the SPURS Agent has
caused this Remarketing Agreement to be executed in its name and on its behalf
by one of its duly authorized officers as of the date first above written.
20
<PAGE> 21
THE DETROIT EDISON COMPANY
By:__________________________________
Title
[ ]
By:__________________________________
Title:
21
<PAGE> 1
EXHIBIT 99.30
FORM OF STANDBY NOTE
PURCHASE CREDIT FACILITY
==================================================================
U.S. $
STANDBY NOTE PURCHASE CREDIT FACILITY
DATED AS OF
Among
THE DETROIT EDISON COMPANY
and
THE BANKS SIGNATORY HERETO
and
as Administrative Agent,
and
as Remarketing Agents
------------------------------------
==================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C> <C>
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . 2
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.03. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II.
COMMITMENTS; FAILED REMARKETINGS; PURCHASED NOTES . . . . . . . . . . . . 10
SECTION 2.01. The Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.02. Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.03. Failed Remarketings; Purchases of Purchased Notes; Grant of
Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.04. Extension of Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.05. Company Mandatory and Optional Repurchase of Purchased Notes . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.06. Remarketing of Purchased Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III.
AMOUNTS AND TERMS OF THE ADVANCES. . . . . . . . . . . . . . . . . 14
SECTION 3.01. Making the Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.02. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.03. Repayment; Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.04. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.05. Conversion of Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.06. Increased Costs; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.07. Additional Interest on Eurodollar Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.08. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.09. Payments and Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.10. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.11. Funding Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.12. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV.
CONDITIONS OF LENDING. . . . . . . . . . . . . . . . . . . . 21
SECTION 4.01. Condition Precedent to Initial Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.02. Conditions Precedent to Each Borrowing and Conversion . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE V.
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.01. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI.
COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 6.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII.EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . 31
SECTION 7.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.02. Upon an Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII.
THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.01. Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.02. Administrative Agent's Reliance, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.03. The Chase Manhattan Bank and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 8.04. Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.05. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 8.06. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.01. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.02. Notices, Etc.37
SECTION 9.03. No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.04. Costs, Expenses, Taxes and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.05. Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 9.06. Binding Effect; Assignments; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.07. Eligible Bank Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 9.08. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 9.09. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
Schedule I - List of Domestic Lending Offices and Eurodollar Lending Offices
Exhibit A - Form of Notice of Failed Remarketing and Borrowing Request
Exhibit B - Form of Assignment and Acceptance Agreement
Exhibit C - Form of Opinion of Counsel to the Company
iii
<PAGE> 5
STANDBY NOTE
PURCHASE CREDIT FACILITY
Dated as of
THE DETROIT EDISON COMPANY, a Michigan corporation (the "COMPANY"), the
banks (the "BANKS") listed on the signature pages hereof, as
administrative agent (the "ADMINISTRATIVE AGENT") for the Banks hereunder, and
, each as a Remarketing Agent (as hereinafter defined), agree as
follows:
PRELIMINARY STATEMENT
The Company expects to remarket $ aggregate principal
amount of its Multi-Mode Remarketed Secured Notes (the "NOTES") issued pursuant
to a Collateral Trust Indenture, dated as of 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 by the First Amendment to
the Second Supplemental Indenture, dated as of August 15, 1996, a Third
Supplemental Indenture, dated as of August 15, 1994, as amended by the First
Amendment to the Third Supplemental Indenture, dated as of December 12, 1995, 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, the "NOTE INDENTURE"), between the Company and
Bankers Trust Company, as trustee. Pursuant to the Note Indenture, the Notes are
and continue to be secured by general and refunding mortgage bonds of the
Company (the "PLEDGED BOND"), which were issued pursuant to the Mortgage and
Deed of Trust, dated as of October 1, 1924, between the Company and Bankers
Trust Company, as amended and supplemented by various supplemental indentures,
including that certain Supplemental Indenture creating the Pledged Bond, dated
as of (as so amended and supplemented, and as further amended
and supplemented from time to time, the "MORTGAGE").
Pursuant to the terms and conditions of the Note Indenture, the Notes
may from time to time be tendered for purchase by the beneficial owners thereof
(each a "BENEFICIAL OWNER"), and, if so tendered, will be remarketed in
accordance with the terms and conditions of the Remarketing Agreement (as
hereinafter defined). In order to assure that adequate liquidity is available
in connection with the purchase upon tender and remarketing of the Notes, the
Company has requested that the Banks establish the credit facility provided for
hereunder for the making of Advances (as hereinafter defined) to the
Remarketing Agents under the circumstances hereinafter described. All Advances
will be utilized for the purchase of Notes which the applicable Remarketing
Agent has been unable to successfully remarket, coincident with their tender by
the holders thereof, in accordance with the terms of the Remarketing Agreement.
Any Notes the purchase of which is funded with the proceeds of Advances will be
purchased for the account of the Administrative Agent for the ratable benefit
of the Banks, and will be registered with DTC (as hereinafter defined) in the
name of the Administrative Agent or its nominee on behalf of the
<PAGE> 6
2
Banks. Such Notes shall constitute Purchased Notes (as hereinafter defined)
for all purposes of the Note Indenture, until such Notes are successfully
remarketed or repurchased by the Company and the proceeds thereof are paid to
the Administrative Agent for distribution to the Banks hereunder (all as
provided herein and in the Note Indenture). The Company will be required to
repurchase any Notes registered in the name of the Administrative Agent upon
any termination of the credit facility established hereunder.
The Banks are willing to make the Advances, and the Administrative
Agent has agreed to act as agent for the Banks, on the terms and conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADVANCE" means an advance made by a Bank to any Remarketing Agent
pursuant to Article III, and refers to a Base Rate Advance or a Eurodollar Rate
Advance, each of which shall be a "TYPE" of Advance.
"AGREEMENT" means this Standby Note Purchase Credit Facility, as
amended, modified, supplemented and in effect from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of a Base Rate Advance and such
Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means % per annum.
"BASE RATE" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(a) the rate of interest announced by at its
principal office in from time to time as its prime commercial
lending rate; and
(b) percent per annum above the Federal Funds
Effective Rate in effect from time to time.
<PAGE> 7
3
Each change in the Base Rate shall take effect simultaneously with the
corresponding change or changes in the rates described in clause (i) or clause
(ii), above.
"BASE RATE ADVANCE" means any Advance which bears interest as provided
in Section 3.04(a).
"BENEFICIAL OWNER" has the meaning specified in the Preliminary
Statement.
"BORROWING" means a borrowing under this Agreement, initially
consisting of Base Rate Advances, but which subsequently may be Converted to
Eurodollar Rate Advances. Each Borrowing shall consist of Advances made or
Converted on the same day by the Banks.
"BUSINESS DAY" means a day of the year other than a Saturday or Sunday
on which banks are not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"CODE" means the Internal Revenue Code of 1986 and the regulations
promulgated and rulings issued thereunder, each as amended, modified or
supplemented from time to time; or any successor legislation.
"COMMITMENT" has the meaning specified in Section 2.01.
"CONSOLIDATED NET WORTH" means the sum of the capital stock (excluding
treasury stock and capital stock subscribed for and unissued) and surplus
(including earned surplus, capital surplus and the balance of the current
profit and loss account not transferred to surplus) accounts of the Company and
its subsidiaries appearing on a consolidated balance sheet of the Company and
its subsidiaries prepared as of the date of determination in accordance with
generally accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in Section 5.01(h), after
eliminating all intercompany transactions and all amounts properly attributable
to minority interests, if any, in the stock and surplus of subsidiaries.
"CONVERSION", "CONVERT" and "CONVERTED" each refers to a conversion
of Advances of one Type into another Type of Advances, or the selection of a
new, or the renewal of the same, Interest Period for Eurodollar Rate Advances.
"DEBT" means (i) indebtedness for borrowed money or for the deferred
purchase price of property or services, (ii) obligations as lessee under leases
that have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (iii) obligations under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) or (ii)
<PAGE> 8
4
above, and (iv) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA.
"DOMESTIC LENDING OFFICE" means, with respect to any Bank, the office
of such Bank specified as its "DOMESTIC LENDING OFFICE" opposite its name on
Schedule I hereto or in the Assignment and Acceptance (substantially in the
form of Exhibit B) pursuant to which it became a Bank, or such other office of
such Bank as such Bank may from time to time specify to the Company and the
Administrative Agent.
"DTC" means The Depository Trust Company, as depositary of the Notes,
or any successor entity acting as depositary of the Notes hereunder.
"ELIGIBLE BANK" means a commercial bank or other financial institution
engaged generally in the business of extending credit or purchasing debt
instruments; provided, however, that (i) obligations such as those hereunder of
such Person are exempt from registration under the Securities Act of 1933, as
amended, (ii) such Person shall have senior long term debt ratings by Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and
Moody's Investors Service, Inc. at least equal to those of the Company as of
the date of this Agreement, and (iii) such Person shall have combined capital
and surplus (as established in its most recent report of condition to its
primary regulator) of not less than $250,000,000 (or its equivalent in foreign
currency).
"ENVIRONMENTAL EVENT" means (i) the generation, storage, disposal,
removal, transportation or treatment of any "Hazardous Substances" (as defined
in any applicable Environmental Laws, and including asbestos and materials
containing asbestos) on any real property owned, occupied or operated by the
Company or on real property adjoining or in the vicinity of such real property,
which through soil or ground water migration could have come to be located at
or on such Property owned, occupied or operated by the Company or any Person
for whose conduct the Company is responsible (any or all of such other property
being "other affected property"); (ii) the receipt by the Company of any notice
or claim of any violation of any Environmental Law or of any action based upon
nuisance, negligence or other tort theory alleging liability on the basis of
improper generation, storage, disposal, removal, transportation or treatment of
Hazardous Substances on any Property owned, occupied or operated by the Company
or on any other affected property; or (iii) the presence or release of
Hazardous Substances at or from any Property owned, occupied or operated by the
Company or any other affected property that has resulted in contamination or
deterioration of any portion of such Property in a level of contamination
greater than the levels permitted or established by any governmental agency
having jurisdiction over the Company or any of such Property or other affected
property.
"ENVIRONMENTAL LAW" means any and all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental restrictions relating to
the environment or the release of any materials into the environment.
<PAGE> 9
5
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder, in each case as in effect from time to time. References to
sections of ERISA also refer to any applicable successor provisions.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control within the meaning of Section 414 of the Code or
Section 4001 of ERISA.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Bank, the
office of such Bank specified as its "EURODOLLAR LENDING OFFICE" opposite its
name on Schedule I hereto (or, if no such office is specified, its Domestic
Lending Office) or in the Assignment and Acceptance (substantially in the form
of Exhibit B) pursuant to which it became a Bank, or such other office of such
Bank as such Bank may from time to time specify to the Company and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for a Eurodollar Rate
Advance resulting from the same Borrowing, an interest rate per annum
calculated as of the first day of such Interest Period in the following manner:
(i) the Eurodollar Rate shall be the rate for deposits in
U.S. dollars for a period equal to such Interest Period that appears
on Telerate Page 3750 at approximately 11:00 A.M., London time, on the
second Business Day prior to the first day of such Interest Period, or
(ii) if no rate appears on Telerate Page 3750 on such day,
or if Telerate Page 3750 shall no longer exist, the Administrative
Agent will determine the applicable Eurodollar Rate for such Interest
Period by reference to the rate quoted by The Chase Manhattan Bank in
the London interbank market for deposits in U.S. dollars in the London
Interbank Market on the second Business Day prior to the first day of
such Interest Period for a period equal to such Interest Period;
provided, that if the Administrative Agent, in its sole discretion,
determines that it is not reasonably practicable to determine a
Eurodollar Rate for such Interest Period, then the Administrative
Agent shall not determine such a Eurodollar Rate, and the provisions
of Section 3.08 shall apply.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest as
provided in Section 3.04(b).
"EVENT OF DEFAULT" has the meaning specified in Section 7.01.
<PAGE> 10
6
A "FAILED REMARKETING" shall be deemed to have occurred on any
Interest Rate Adjustment Date (as defined in the Note Indenture) on which a
Remarketing Agent (and Standby Remarketing Agent, if any), by 12:00 noon (New
York City time), shall have failed to remarket, at a price equal to 100% of the
principal amount thereof, plus accrued interest, if any, any portion of the
Notes tendered for purchase to such Remarketing Agent by the Beneficial Owners
thereof on such date.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FISCAL YEAR" means the annual accounting period adopted by the
Company.
"GOVERNING BODY" of any specified Person means the board of directors
or board of trustees of such Person or any duly authorized committee of that
board, or if there shall be no board of trustees or board of directors, then
the Person or body that pursuant to law or the organizational documents of such
Person is vested with powers similar to those vested in a board of trustees or
a board of directors, and, with respect to the Company, its Board of Directors.
"GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau or court or other judicial or administrative tribunal having
jurisdiction over the Administrative Agent, any Bank, any Remarketing Agent or
the Company, or over any Property of the Company.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance resulting
from the same Borrowing, the period commencing on the date of Conversion of a
Base Rate Advance or Eurodollar Rate Advance into such Eurodollar Rate Advance
and ending on the last day of the period selected by the Company pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Company may select; provided, however, that:
(i) the duration of any Interest Period which commences
before the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date;
(ii) the duration of any Interest Period which would
otherwise end on a day later than the third Business Day following the
last day of the sixth month following the date of the Borrowing
resulting in such Eurodollar Rate Advance shall end on such day (such
date the "REQUIRED CONVERSION DATE" for such Advance);
<PAGE> 11
7
(iii) Interest Periods commencing on the same date for
Eurodollar Advances resulting from the same Borrowing shall be of the
same duration; and
(iv) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, unless such extension would cause the last day of such
Interest Period to occur in the next following calendar month, in
which event the last day of such Interest Period shall occur on the
next preceding Business Day.
"INTEREST RATE ADJUSTMENT DATE" has the meaning specified in the Note
Indenture.
"LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
"LIBOR RESERVE PERCENTAGE" of any Bank for the Interest Period for any
Eurodollar Rate Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time to time by the Board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"LIEN" means any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exception (including any conditional sale or other title retention agreement,
any financing lease involving substantially the same economic effect as any of
the foregoing and filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
"MAJORITY BANKS" means at any time Banks holding at least 66-2/3% of
the Commitments.
"MAXIMUM RATE" means that rate of interest equal to fifteen percent
(15%) per annum or such higher rate as may be established from time to time by
the Board of Directors of the Company as the maximum rate of interest payable
by the Company hereunder.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA.
<PAGE> 12
8
"MULTIPLE EMPLOYER PLAN" means an employee benefit plan, other than a
Multiemployer Plan, subject to Title IV of ERISA to which the Company or any
ERISA Affiliate, and one or more employers other than the Company or an ERISA
Affiliate, is making or accruing an obligation to make contributions or, in the
event that any such plan has terminated, to which the Company or any ERISA
Affiliate made or accrued an obligation to make contributions during any of the
five plan years preceding the date of termination of such plan.
"NOTE" means any , issued by the Company
pursuant to the Note Indenture, and initially sold by, to or through Morgan
Stanley & Co. Incorporated or Lehman Brothers Inc.
"NOTE INDENTURE" has the meaning specified in the Preliminary
Statement.
"NOTICE OF FAILED REMARKETING AND BORROWING REQUEST" has the meaning specified
in Section 3.01.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company and delivered
to the Administrative Agent for the benefit of the Banks.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PERCENTAGE" means, for any Bank on any date of determination, the
percentage obtained by dividing such Bank's Commitment on such date by the
total of the Commitments on such date, and multiplying the quotient so obtained
by 100%.
"PERSON" means an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, government (or an agency or political subdivision thereof) or any
entity of any kind.
"PLAN" means an employee benefit plan (other than a Multiemployer
Plan) maintained for employees of the Company or any ERISA Affiliate and
covered by Title IV of ERISA.
"PLAN TERMINATION EVENT" means (i) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of the Company or any ERISA
Affiliate from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of proceedings
to terminate a Plan by the PBGC, or (v) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
<PAGE> 13
9
"PLEDGED BOND" has the meaning specified in the Preliminary Statement.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PROSPECTUS" means the Prospectus relating to the Notes, dated
, as supplemented by the Prospectus Supplement, dated
, and as further amended, supplemented or otherwise
modified from time to time, together with the documents incorporated therein by
reference.
"PURCHASED NOTE" means any Note purchased by any Remarketing Agent
with the proceeds of an Advance.
"RELATED DOCUMENTS" means this Agreement, the Note Indenture, the
Notes, the Remarketing Agreement, the Mortgage, and any other agreement or
instrument relating hereto or thereto.
"REMARKETING AGENT" means each Person serving in the capacity of
Remarketing Agent pursuant to the Remarketing Agreement (including, without
limitation, any Standby Remarketing Agent), which initially shall be Citicorp
Securities, Inc. and Lehman Brothers Inc., and each such Person's successors
and assigns.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
, as amended, supplemented or otherwise modified from time to
time, among the Company, Citicorp Securities, Inc. and Lehman Brothers Inc.,
and any similar such agreement by the Company with any successor Remarketing
Agent.
"REQUIRED CONVERSION DATE" has the meaning specified in the definition
of "Interest Period" set forth in this Section 1.01.
"SECURITIES LAWS" means all Federal and state laws applicable to the
sale of Notes or other securities, including, without limitation, the
Securities Act of 1933, as amended, and all rules, regulations and
administrative interpretations thereof; provided, however, that the term
"Securities Laws" does not include the Glass-Steagall Act of 1933, as amended,
or any rules, regulations or administrative interpretations thereof.
"SENIOR SECURED INDEBTEDNESS" of the Company means mortgage bonds of
the Company issued under the Mortgage or, if at any relevant time no such
mortgage bonds shall be outstanding, senior debt of the Company outstanding at
such time carrying the highest applicable ratings assigned by any nationally
recognized rating organizations in the United States to any senior debt of the
Company at such time.
<PAGE> 14
10
"STANDBY REMARKETING AGENT" means any Person designated as a Standby
Remarketing Agent by the Company or otherwise serving in such capacity pursuant
to the Remarketing Agreement.
"TELERATE PAGE 3750" means the display designated as "Page 3750" on
the Telerate System Incorporated Service (or such other page as may replace
such page on such service for the purpose of displaying the rates at which U.S.
dollar deposits are offered by leading banks in the London interbank deposit
market).
"TERMINATION DATE" means the earlier to occur of ,
as such date may be extended pursuant to Section 2.04, and the date of
termination in whole of the Commitments pursuant to Section 2.02(b) or 7.02.
"UNREMARKETED NOTES" means any Notes tendered for remarketing, but not
successfully remarketed, in connection with the occurrence of a Failed
Remarketing.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistently applied, except as otherwise stated
or defined herein. All accounting terms shall be construed taking into account
changes in generally accepted accounting principles mandated by the Financial
Accounting Standards Board or any similar accounting authority of comparable
standing.
ARTICLE II
COMMITMENTS; FAILED REMARKETINGS; PURCHASED NOTES
SECTION 2.01. THE COMMITMENTS. Each Bank severally agrees, on the
terms and conditions hereinafter set forth, to make Advances for the account of
the Company to one or more applicable Remarketing Agents for the purchase of
Unremarketed Notes, as provided herein, from time to time on any Interest Rate
Adjustment Date (as defined in the Note Indenture) during the period from the
date hereof until the Termination Date in an aggregate amount that, when added
to the aggregate outstanding principal amount of all Advances theretofore made
by such Bank and the principal amount of all Purchased Notes then outstanding
to such Bank, shall not exceed at any time outstanding the amount set opposite
such Bank's name on Schedule I hereto, as such amount may be reduced pursuant
to Section 2.02 (such Bank's "COMMITMENT"). Each Borrowing shall consist of
Advances made or Converted on the same day by the Banks ratably according to
their respective Commitments.
<PAGE> 15
11
SECTION 2.02. REDUCTION OF THE COMMITMENTS. (a) The Company may,
upon at least five Business Days' notice to the Administrative Agent, terminate
in whole or reduce ratably in part the unused portions of the respective
Commitments of the Banks; provided, however, that any such partial reduction
shall be in the aggregate amount of $5,000,000, or an integral multiple of
$1,000,000 in excess thereof. Commitments terminated or reduced by the Company
hereunder may not be reinstated.
(b) The Administrative Agent shall promptly notify the Banks upon
receipt of any notification from the Company of one or more amendments to or
modifications of any Related Documents. Within ten Business Days following
receipt by the Banks of any such notification from the Administrative Agent,
the Majority Banks may elect, upon 30 days' prior notice to the Company, to
terminate in whole or reduce ratably in part their Commitments; provided,
however, that any such partial reduction shall be in the aggregate amount of
$5,000,000, or an integral multiple of $1,000,000 in excess thereof.
SECTION 2.03. FAILED REMARKETINGS; PURCHASES OF PURCHASED NOTES;
GRANT OF AUTHORITY. (a) The Company hereby irrevocably authorizes and directs
each Remarketing Agent to (i) notify the Administrative Agent and the Company
by 12:00 noon (New York City time) upon the occurrence of any Failed
Remarketing involving Unremarketed Notes tendered to that Remarketing Agent,
and (ii) request and receive the proceeds of Advances made by the Banks
hereunder, and apply such proceeds for the purpose of purchasing such
Unremarketed Notes at a price equal to 100% of the outstanding principal amount
thereof. The authorization of each Remarketing Agent by the Company pursuant
to this subsection is coupled with an interest and is irrevocable.
(b) Upon (and only upon) receipt by the Trustee of (i) the
proceeds of Advances and (ii) all accrued and unpaid interest, if any, due from
the Company with respect to Unremarketed Notes subject to a Failed Remarketing,
the applicable Remarketing Agent, in accordance with the terms and conditions
of the Remarketing Agreement, will (A) make or cause the Trustee to make
payment to the DTC Participant (as defined in the Note Indenture) of each
tendering Beneficial Owner of such Unremarketed Notes, by book entry through
DTC against delivery of such Beneficial Owner's tendered Notes, of the purchase
price of such tendered Notes, and (B) arrange or cause the Trustee to arrange
for the crediting through DTC for the account of the Administrative Agent (or
such other account or accounts at DTC as the Administrative Agent may direct)
of such Unremarketed Notes, which shall be registered in the name of the
Administrative Agent or its nominee for the ratable benefit of the Banks, and
which shall be Purchased Notes in accordance with the terms of this Agreement
and the Note Indenture.
SECTION 2.04. EXTENSION OF TERMINATION DATE. Unless the Commitments
shall have been terminated in whole or an Event of Default or an event which,
with the giving of notice or the passage of time, or both, would constitute an
Event of Default shall have occurred and then be continuing, at least 30 days
but not more than 60 days prior to the then-effective Termination Date, the
Company, by written notice to the Administrative Agent, may request the Banks
to
<PAGE> 16
12
consent to an extension of the Termination Date to the last Business Day
occurring not more than 364 days after the Termination Date then in effect.
Each Bank may, in its sole and absolute discretion, determine whether to
consent to such request and shall notify the Administrative Agent of its
determination not earlier than 30 days prior to the then-effective Termination
Date. Failure by any Bank to respond by the tenth day prior to the
then-effective Termination Date shall be deemed to be a denial of the Company's
request by such Bank. If such request shall have been consented to by all of
the Banks, the Administrative Agent shall notify the Company in writing of such
Banks' unanimous consent, and such extension shall become effective upon the
then-effective Termination Date if the Company shall have delivered (on or
prior to the then- effective Termination Date) to the Administrative Agent and
each Bank, a certificate, dated on or as of the then-effective Termination
Date, of a duly authorized officer of the Company as to the accuracy, both
before and after giving effect to such proposed extension, of the
representations and warranties set forth in Section 5.01, and as to the
absence, both before and after giving effect to such proposed extension, of any
Event of Default or event which with the giving of notice of or the passage of
time, or both, would constitute an Event of Default.
SECTION 2.05. COMPANY MANDATORY AND OPTIONAL REPURCHASE OF PURCHASED
NOTES.
(a) On the Termination Date, whether scheduled or resulting from
the termination in whole of the Commitments pursuant to Section 2.02(b) or
7.02, and on any date on which the interest rate applicable to any Advance
would exceed the Maximum Rate pursuant to Section 3.04, the Company shall be
required to purchase all outstanding Purchased Notes from the Banks; provided,
however, if and for so long as (i) no Event of Default shall have occurred and
be continuing and (ii) the interest rate applicable to any Advance shall not
have exceeded the Maximum Rate, the Company may, by written notice delivered to
the Administrative Agent no less than 5 Business Days prior to the Termination
Date (which notice shall be promptly provided to each Bank by the
Administrative Agent), extend, for a period of up to one year following the
date of any Borrowing resulting in the purchase of Purchased Notes, the date
for the performance of its obligation to purchase such Purchased Notes from the
Banks under this subsection (a).
(b) The Company may, at its option, purchase all outstanding
Purchased Notes from the Banks at any time prior to being required to do so
pursuant to clause (a) of this Section 2.05 upon written notice to the
Administrative Agent not less than three (3) Business Days prior to the date of
such purchase; provided, however, that no Bank shall be required to tender any
Purchased Note to the Company for any such purchase unless (i) in the opinion
of such Bank in its sole and absolute discretion, (A) such tender and purchase
would not violate any material law, rule or regulation applicable to such Bank
at the time of such tender and purchase and (B) such tender and purchase of
such Purchased Notes will not violate any Securities Laws in effect at such
time, and (ii) such Bank shall have received, in form and substance
satisfactory to such Bank in its sole and absolute discretion, an opinion of
counsel to the Company that all necessary actions shall have been taken in
order that such tender and purchase will be in compliance with all applicable
Securities Laws in effect at such time, and as to such other matters as such
Bank may reasonably request.
<PAGE> 17
13
(c) Any purchase by the Company of Purchased Notes from the Banks
pursuant to this Section 2.05 shall be made without recourse to or warranty
from the Banks, for a price equal to 100% of the outstanding principal amount
thereof plus (i) all accrued and unpaid interest, if any, thereon and (ii) any
payment required to be made pursuant to Section 3.11. The payment of the
purchase price for the Purchased Notes by the Company shall not be contingent
on any receipt by the Company of the proceeds of any subsequent remarketing of
such Purchased Notes. Such price shall be paid by crediting the account of the
Administrative Agent at DTC (or such other account or accounts at DTC as the
Administrative Agent may direct) with immediately available funds, in return
for which the Administrative Agent or its nominee will instruct DTC to credit
the account of the Company at DTC (or such other account or accounts at DTC as
the Company may direct) with the Purchased Notes.
SECTION 2.06. REMARKETING OF PURCHASED NOTES. Notwithstanding any
provision of this Agreement, any Related Document, or any other agreement or
instrument whatsoever to the contrary, no Bank shall be required to tender any
Purchased Note to any Remarketing Agent for remarketing (and no Purchased Note
shall be deemed to have been tendered to a Remarketing Agent for remarketing
pursuant to the provisions of such Purchased Note or otherwise) unless, (i) in
the opinion of such Bank in its sole and absolute discretion, (A) such tender
and remarketing would not violate any material law, rule or regulation
applicable to such Bank at the time of such tender and remarketing and (B) such
tender and remarketing will not violate any Securities Laws in effect at such
time, and (ii) such Bank shall have received, in form and substance
satisfactory to such Bank in its sole and absolute discretion, an opinion of
counsel to the Company that all necessary actions shall have been taken in
order that such tender and remarketing will be in compliance with all
applicable Securities Laws as in effect at such time and as to such other
matters as such Bank may reasonably request. Each Bank shall promptly notify
the Company and each Remarketing Agent upon its receipt in accordance with the
preceding sentence of the required legal opinion. The Company hereby agrees
(1) to indemnify each Bank, its shareholders, affiliates, officers, directors,
employees and agents from and against any and all claims, damages, losses,
liabilities and expenses that may be incurred by or asserted against any of
such parties with respect to any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in any offering document filed with the Securities and Exchange
Commission or otherwise used in connection with the remarketing of Purchased
Notes tendered by such Bank to the applicable Remarketing Agents and (2) in the
event that the foregoing indemnification shall be unavailable under applicable
Securities Laws, that the Company and such Bank shall each contribute to the
satisfaction of any such claims, damages, losses, liabilities and expenses in
proportion to their relative benefits received from the offering of the Notes
(provided, that the relative benefits from any remarketing shall be deemed to
be such that such Bank shall be responsible for that portion of the aggregate
claims, damages, losses, liabilities and expenses represented by the ratio of
the interest earned by such Bank on Purchased Notes included in such
remarketing to the aggregate principal amount of all Notes outstanding at the
time of such remarketing, and the Company shall be responsible for the
balance). Nothing in this Section 2.06 shall in any way impair the Company's
obligations to repurchase Purchased Notes pursuant to
<PAGE> 18
14
Section 2.05(a), above. The Company's indemnification obligations under this
Section 2.06 shall survive the repayment of all amounts owing to the
Administrative Agent and the Banks under the Related Documents and the
termination of the Commitments.
ARTICLE III
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 3.01. MAKING THE ADVANCES. (a) Each Borrowing shall consist
solely of Base Rate Advances and shall be made on notice, given not later than
12:00 noon (New York City time) on the Interest Rate Adjustment Date of the
proposed Borrowing, by the applicable Remarketing Agent to the Administrative
Agent (with a copy to the Company), which shall give to each Bank prompt notice
thereof by telephone or telecopier, telex or cable. Each such notice (a
"NOTICE OF FAILED REMARKETING AND BORROWING REQUEST") shall be by telephone or
telecopier, confirmed in writing, in substantially the form of Exhibit A
hereto, and shall (i) specify the principal amount of Unremarketed Notes
tendered to the applicable Remarketing Agent in the Failed Remarketing, (ii)
confirm that the applicable Remarketing Agent has received, or has informed the
Company of its need to receive, from the Company all accrued and unpaid
interest on such Unremarketed Notes, and (iii) identify the requested date and
aggregate amount of the requested Borrowing. Each Bank shall, before 2:00 P.M.
(New York City time) on the date of such Borrowing, make available for the
account of its Domestic Lending Office to the Administrative Agent at its
address referred to in Section 9.02, in same day funds, such Bank's ratable
portion of such Borrowing. Subject to the fulfillment of the applicable
conditions set forth in Article IV, promptly following receipt of such funds by
the Administrative Agent, but no later than 3:00 p.m. (New York City time) on
the date of such Borrowing, the Administrative Agent will transfer, in
same-day funds, such funds to such account as may from time to time be
identified in a notice delivered by the Trustee to the Administrative Agent
(with copies of such notice to the Borrower and the Remarketing Agents).
(b) Unless the Administrative Agent shall have received notice
from a Bank prior to the date of any Borrowing that such Bank will not make
available to the Administrative Agent such Bank's ratable portion of such
Borrowing, the Administrative Agent may assume that such Bank has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 3.01 and the Administrative
Agent may, in reliance upon such assumption, make available to the applicable
Remarketing Agent on such date a corresponding amount. If and to the extent
that such Bank shall not have so made such ratable portion available to the
Administrative Agent, such Bank and the Company severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the applicable Remarketing Agent until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Company, the interest rate
applicable at the time to the Purchased Notes purchased with the proceeds of
the Advances comprising such Borrowing (or, if no Purchased Notes were
<PAGE> 19
15
purchased with such proceeds, the interest rate applicable at the time to
Advances comprising such Borrowing), and (ii) in the case of such Bank, the
Federal Funds Effective Rate. If such Bank shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Bank's Advance as part of such Borrowing for purposes of this Agreement.
(c) The failure of any Bank to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Bank of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Bank
shall be responsible for the failure of any other Bank to make the Advance to
be made by such other Bank on the date of any Borrowing.
SECTION 3.02. FEES. (a) The Company agrees to pay to the
Administrative Agent for the account of each Bank a commitment fee on the
average daily unused portion of such Bank's Commitment from the date hereof, in
the case of each Bank listed on the signature pages hereto, and from the
effective date specified in the Assignment and Acceptance substantially in the
form of Exhibit B hereto pursuant to which it became a Bank pursuant to Section
9.06 hereof, in the case of any other Bank, until the Termination Date, payable
on the last day of each March, June, September and December during the term of
such Bank's Commitment, commencing , and on the Termination
Date, at the rate of % per annum.
(b) The Company agrees to pay the Administrative Agent, for its
own account, such fees at such times and in such amounts as agreed upon in a
letter agreement between the Company and the Administrative Agent (or as
otherwise agreed in writing by the Company and the Administrative Agent from
time to time). The fees described in this Section 3.02(b) shall not be
refundable under any circumstances.
SECTION 3.03. REPAYMENT; PREPAYMENTS. (a) The Company shall repay
the unpaid principal amount of each Advance made by each Bank in accordance
with the terms of the Purchased Notes acquired with the proceeds of such
Advance. The purchase of a Purchased Note with the proceeds of any Advance,
coupled with the crediting through DTC for the account of the Administrative
Agent or its nominee of such Purchased Note, shall, for all purposes, be deemed
to constitute repayment of the principal amount of such Advance.
(b) In the event that Purchased Notes are not, for any reason,
purchased with the proceeds of any Advance and credited through DTC for the
account of the Administrative Agent or its nominee, such Advance shall become
immediately due and payable by the Company hereunder, together with interest
thereon, as hereinafter provided.
(c) If and to the extent that the aggregate principal amount of
Advances owed to the Banks on any date shall exceed the aggregate amount of the
Commitments on such date, the Company shall prepay on such date, either
directly or by effecting purchases of Purchased Notes, an amount at least equal
to such excess.
<PAGE> 20
16
SECTION 3.04. INTEREST. The Company shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the following
interest rates per annum:
(a) BASE RATE ADVANCES. If such Advance is a Base Rate Advance
(including, without limitation, a Base Rate Advance Converted from a Eurodollar
Rate Advance), a rate per annum equal at all times to the Base Rate in effect
from time to time. Such interest shall be payable by the Company on the last
day of each March, June, September and December (or on such other dates as the
Company and the Banks may agree from time to time), commencing on the first
such date to occur following the date hereof as the case may be, and shall be
payable on the Termination Date, any date of Conversion of such Base Rate
Advance into a Eurodollar Rate Advance and, as provided in subsection (d),
below, on any other date on which the Purchased Notes purchased with such
Advance shall be remarketed by a Remarketing Agent.
(b) EURODOLLAR RATE ADVANCES. If such Advance is a Eurodollar
Rate Advance, a rate per annum equal at all times during the Interest Period
for such Eurodollar Rate Advance to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin, payable on the last day of such
Interest Period (and, in the case of any Interest Period of six months, on the
last day of the third month of such Interest Period).
(c) OVERDUE PRINCIPAL PAYMENTS. Notwithstanding the foregoing,
any amount of principal of any Advance which is not paid when due (whether at
stated maturity, by acceleration or otherwise) shall bear interest, from the
date on which such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the greater of (i) % per
annum above the Base Rate in effect from time to time and (ii) % per annum
above the rate per annum required to be paid on such Advance immediately prior
to the date on which such amount became due; provided, however, that at no time
shall the interest rate per annum applicable to the Advances exceed the Maximum
Rate. The Company promptly shall repurchase Purchased Notes purchased with any
Advance pursuant to Section 2.05(a) if the interest rate applicable to such
Advance would exceed the Maximum Rate but for the prohibition contained in the
preceding sentence.
(d) INTEREST PAYMENTS ON PURCHASED NOTES. This Agreement
constitutes the entire agreement of the Company and the Banks with respect to
the interest rates and interest payment terms applicable to any Purchased
Notes. All payments of interest by the Company with respect to and in
accordance with the terms of any Purchased Note and this Agreement shall, for
all purposes, satisfy the obligations of the Company to pay such interest on
the unpaid principal amount of the Advance which was utilized by the applicable
Remarketing Agent to purchase such Purchased Note. The Company shall pay all
accrued and unpaid interest on the unpaid principal amount of each Purchased
Note prior to any remarketing thereof by a Remarketing Agent.
SECTION 3.05. CONVERSION OF ADVANCES. (a) Subject to subsections (c)
and (d), below, the Company may on any Business Day, upon notice given to the
Administrative Agent not later
<PAGE> 21
17
than 11:00 A.M. (New York City time) on the third Business Day prior to the
date of the proposed Conversion and subject to the provisions of Sections 3.08,
3.12 and 4.02, Convert all Advances of one Type resulting from the same
Borrowing into Advances of another Type or, in the case of Eurodollar Rate
Advances, select a new or renew the same Interest Period for such Eurodollar
Rate Advances; provided, however, that any Conversion of Eurodollar Rate
Advances into Base Rate Advances shall be made on, and only on, the last day of
an Interest Period for such Eurodollar Rate Advances. Each such notice of a
Conversion shall specify (i) the date of such Conversion, (ii) the Advances to
be Converted, and (iii) if such Conversion is into, or with respect to,
Eurodollar Rate Advances, the duration of the Interest Period for such
Eurodollar Rate Advances.
(b) If the Company shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "INTEREST PERIOD" in Section 1.01 and
subsection (a) above, the Administrative Agent will forthwith so notify the
Company and the Banks and such Advances will automatically, on the last day of
the then existing Interest Period therefor, Convert into Base Rate Advances.
(c) Any Eurodollar Rate Advance outstanding on the Required
Conversion Date for such Eurodollar Rate Advance shall be Converted to a Base
Rate Advance on such day; provided, however, that if such Conversion would
result in a reduction of the interest rate per annum payable by the Company
with respect to such Advance, the Company and the Banks shall negotiate a
substitute interest rate to apply to such Eurodollar Rate Advance following
such Conversion to a Base Rate Advance to their mutual satisfaction (which
substitute interest rate shall be an all-in rate not lower than the rate
applicable to such Eurodollar Rate Advance immediately prior to such
substitution).
(d) No Base Rate Advance shall be Converted to a Eurodollar Rate
Advance following the Required Conversion Date with respect thereto.
SECTION 3.06. INCREASED COSTS; CAPITAL ADEQUACY. (a) In the event
that after the date hereof the implementation of or any change in any law or
regulation, or any guideline or directive (whether or not having the force of
law) or the interpretation or administration thereof, in each case by any
court, central bank or administrative or governmental authority charged with
the administration thereof shall:
(i) subject any Bank to any tax of any kind with respect
to this Agreement or its Advances or the transactions contemplated
hereby or shall change the basis of taxation of such Bank (other than
a change in the rate of tax on the overall net income of such Bank);
or
(ii) impose, modify or deem applicable any reserve,
special deposit, capital adequacy or similar requirement (other than,
in the case of Eurodollar Rate Advances, any
<PAGE> 22
18
change by way of imposition or increase of reserve requirements,
included in the LIBOR Reserve Percentage); or
(iii) impose on such Bank any other condition;
and as a result of any of the foregoing, in the sole opinion of such Bank,
there shall be any increase in the cost to any Bank of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then the Company shall
from time to time, upon demand by such Bank (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Bank additional amounts sufficient to compensate such Bank for such increased
cost. A certificate as to the amount of such increased cost, submitted to the
Company and the Administrative Agent by such Bank, shall be conclusive and
binding for all purposes, absent manifest error.
(b) In the event that the application of any existing law, rule,
regulation or the interpretation thereof by any court, central bank or
governmental authority or any adoption of or change in any applicable law, rule
or regulation or the interpretation thereof by any court or governmental
authority or the compliance by any Bank with any request, guideline, order or
directive of any court, central bank or governmental authority, in each case
whether or not having the force of law, or the introduction of any such new
laws, rules or regulations (including, without limitation, the issuance of any
final rule, regulation or guideline) shall impose, modify or deem applicable
capital adequacy or similar requirements respecting assets (funded or
contingent), of, or credit extended by or commitments to extend credit by, any
Bank, or otherwise deem applicable to the obligations of any Bank under this
Agreement, capital adequacy or similar requirements, and the net result of any
of the foregoing is to reduce the rate of return on such Bank's capital as a
consequence of its obligations hereunder to a level below that which such Bank
would have received but for the imposition of such requirement (taking into
consideration such Bank's capital adequacy policies), then the Company shall
from time to time upon the demand by such Bank (with a copy of such demand to
the Administrative Agent), pay to the Administrative Agent for the account of
such Bank additional amounts to compensate such Bank for such reduced rate of
return. A certificate as to the calculation of such additional amounts
submitted by such Bank to the Company and the Administrative Agent shall be
conclusive and binding for all purposes absent manifest error.
SECTION 3.07. ADDITIONAL INTEREST ON EURODOLLAR RATE ADVANCES. The
Company shall pay to each Bank, so long as such Bank shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Bank, from the date of such Advance until
such principal amount is paid in full, at an interest rate per annum equal at
all times to the difference obtained by subtracting (i) the Eurodollar Rate for
the Interest Period for such Eurodollar Rate Advance, from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the LIBOR Reserve Percentage of such Bank for such Interest Period or such
term,
<PAGE> 23
19
as the case may be, payable on each date on which interest is payable on such
Advance. Such additional interest shall be determined by such Bank and
notified to the Company through the Administrative Agent.
SECTION 3.08. INTEREST RATE DETERMINATION. The Administrative Agent
shall determine the Eurodollar Rate from time to time in accordance with the
provisions of this Agreement. If, for any reason, the Administrative Agent in
its sole discretion determines that it is unable to so determine the Eurodollar
Rate, the right of the Company to select Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the Company and the Banks
that the circumstances causing such suspension no longer exist, and such
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance.
SECTION 3.09. PAYMENTS AND COMPUTATIONS. (a) The Company shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at its address
referred to in Section 9.02 in same day funds. Upon receipt of any payments of
principal, interest, commitment fees or other amounts payable hereunder or
under the Purchased Notes, the Administrative Agent will promptly cause to be
distributed like funds relating to such payments ratably (other than amounts
payable pursuant to Section 3.06) to the Banks for the account of their
respective Applicable Lending Offices, and like funds relating to the payment
of any other amount payable to any Bank to such Bank, for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement.
(b) All computations of interest based on the Base Rate, and all
computations of commitment fees, shall be made by the Administrative Agent on
the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or commitment fees are payable.
Each determination by the Administrative Agent of an interest rate hereunder
shall be conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the Banks
hereunder or under the Purchased Notes that the Company will not make such
payment in full, the Administrative Agent may assume that the
<PAGE> 24
20
Company has made such payment in full to the Administrative Agent on such date
and the Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then
due such Bank. If and to the extent the Company shall not have so made such
payment in full to the Administrative Agent, each Bank shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Administrative Agent, at the Federal Funds Effective Rate.
SECTION 3.10. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances made by it or the Purchased
Notes held for its benefit (other than pursuant to Section 3.06 or 3.07) in
excess of its ratable share of payments on account of the Advances or the
Purchased Notes obtained by all the Banks, such Bank shall forthwith purchase
from the other Banks such participations in the Advances made by them and the
Purchased Notes held for their benefit as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the
purchase price to the extent of such recovery together with an amount equal to
such Bank's ratable share (according to the proportion of (i) the amount of
such Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company
agrees that any Bank so purchasing a participation from another Bank pursuant
to this Section 3.10 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation.
SECTION 3.11. FUNDING INDEMNITY. The Company agrees to indemnify and
hold harmless the Administrative Agent and the Banks from any loss or expense
which they or any of them may sustain or incur as a result of:
(a) the repayment or prepayment of any Eurodollar Rate
Advance in whole or in part other than on the last day of the Interest
Period applicable thereto; or
(b) the failure of the Company to pay the principal of or
interest on any Advance when due (whether at stated maturity, upon
acceleration or otherwise); or
(c) the failure of the Company to Convert any Base Rate
Advance on the date specified for such Conversion in a notice
delivered to the Administrative Agent by the Company pursuant to
Section 3.05(a);
<PAGE> 25
21
including but not limited to any such loss or expense arising from interest,
fees or other amounts payable by the Administrative Agent or any of the Banks
to lenders of funds obtained by them in order to make and maintain the Advances
hereunder.
SECTION 3.12. ILLEGALITY. Notwithstanding any other provision of
this Agreement, if any Bank shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for any Bank or its Eurodollar Lending
Office to perform its obligations hereunder to make Eurodollar Rate Advances or
to fund or maintain Eurodollar Rate Advances hereunder, (i) all Eurodollar Rate
Advances shall be Converted into Base Rate Advances and (ii) the obligation of
the Banks to make, or to Convert Base Rate Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Company and the Banks that the circumstances causing such suspension no longer
exist.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. CONDITION PRECEDENT TO INITIAL ADVANCES. The
obligation of each Bank to make its initial Advance is subject to the condition
precedent that the Administrative Agent shall have received, on or before the
date hereof, the following, each dated such date (except as otherwise provided
herein), in form and substance satisfactory to the Administrative Agent and in
sufficient copies for each Bank:
(a) Counterparts of this Agreement, duly executed and delivered by
the Company, the Administrative Agent, the Banks listed on the signature pages
hereto and each Remarketing Agent.
(b) Certified copies of the resolutions of the Board of Directors
of the Company approving the Related Documents, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the Related Documents and the transactions contemplated thereby.
(c) A certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers of the
Company authorized to sign each Related Document and the other documents to be
delivered hereunder.
(d) Copies of the Certificate of Incorporation and by-laws of the
Company, together with all amendments thereto, certified by the Secretary or an
Assistant Secretary of the Company.
(e) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Remarketing Agreement, duly executed by the Company and
each Remarketing Agent.
<PAGE> 26
22
(f) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Note Indenture (including the Third Supplemental Indenture
thereto), duly executed by the Company and the trustee thereunder.
(g) An executed copy (or a duplicate copy thereof certified by the
Company in a manner satisfactory to the Administrative Agent to be a true and
correct copy) of the Mortgage (including the Supplemental Indenture dated as of
thereto), duly executed by the Company and the trustee thereunder.
(h) A certified copy of the order of the Michigan Public Service
Commission (the "MPSC ORDER") authorizing the issuance and sale of the Notes
and the issuance and sale of the general and refunding mortgage bond under the
Mortgage as security for the obligations of the Company under the Indenture.
(i) A favorable opinion of the Company's General Counsel,
substantially in the form of Exhibit C hereto and as to such other matters as
any Bank through the Administrative Agent may reasonably request.
(j) Copies of the Prospectus used in connection with the offering
and remarketing of the Notes as in effect on such date, including any
amendments or supplements thereto.
(k) Such other approvals, opinions and documents as the Majority
Banks, through the Administrative Agent, may reasonably request as to the
legality, validity, binding effect or enforceability of this Agreement or any
Related Document or the financial condition, properties, operations or
prospects of the Company.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH BORROWING AND CONVERSION.
The obligation of each Bank to make an Advance on the occasion of each
Borrowing (including the initial Borrowing), and the obligation of each Bank to
make each Conversion on the occasion thereof, shall be subject to the further
conditions precedent that on the date of such Borrowing or Conversion:
(a) the following statements shall be true (and each of the giving
of the applicable Notice of Failed Remarketing and Borrowing Request and the
making of such Advance, or the making of such Conversion, without prior
correction by the Company, shall constitute a representation and warranty by
the Company that, on the date of such Borrowing or Conversion, such statements
are true):
(i) The representations and warranties contained in
Section 5.01 of this Agreement (excluding subsections (e) and (h)
thereof) are correct on and as of the date of such Borrowing or
Conversion, as the case may be, before and after giving effect to such
<PAGE> 27
23
Borrowing and the application of the proceeds therefrom, or to such
Conversion, as the case may be, as though made on and as of such date,
and
(ii) No event has occurred and is continuing, or would
result from such Borrowing or from the application of the proceeds
therefrom, or from such Conversion, as the case may be, which
constitutes an Event of Default or would constitute an Event of
Default but for the requirement that notice be given or time elapse or
both;
(b) the Administrative Agent shall have received a Notice of
Failed Remarketing and Borrowing Request, signed by a duly authorized officer
of the applicable Remarketing Agent, dated the date of such Borrowing, or the
appropriate notice of Conversion delivered by the Company pursuant to Section
3.05(a), with respect to such Conversion; and
(c) the Administrative Agent shall have received such other
approvals, opinions or documents relating to the satisfaction of foregoing
conditions as any Bank through the Administrative Agent may reasonably request.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as follows:
(a) The Company is a corporation duly formed, validly existing and
in good standing under the laws of the State of Michigan. There is no other
jurisdiction where the conduct of its business or the ownership of its Property
requires the Company to qualify to do business. The Company has all requisite
power and authority to conduct its business, to own its Properties, and to
execute and deliver and perform all of its obligations under this Agreement and
each of the other Related Documents to which it is a party.
(b) The execution, delivery and performance by the Company of this
Agreement and the other Related Documents to which it is a party have been duly
authorized by all necessary corporate action, and do not, and will not,
contravene (i) any provision of the charter or by- laws of the Company, (ii)
law, or (iii) any contractual restriction binding on or affecting the Company,
and do not result in or require the creation of any Lien (except pursuant to,
or as contemplated by, this Agreement, the Note Indenture or the Mortgage) upon
or with respect to any of its Properties.
(c) No authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by the Company of this Agreement or any
other Related Document to which the Company is a party,
<PAGE> 28
24
except the MPSC Order, which has been duly obtained and is in full force and
effect, and such other authorizations, approvals, actions and notices as have
been duly obtained or made and are in full force and effect.
(d) This Agreement is, and each of the other Related Documents to
which the Company is a party when delivered hereunder will be, legal, valid and
binding obligations of the Company enforceable against the Company in
accordance with their respective terms.
(e) Except and to the extent specifically described in written
reports, copies of which have been furnished to the Banks, there is no pending
or threatened action, investigation or proceeding before any court,
governmental agency or arbitrator against or affecting the Company that would,
if adversely determined, have a material adverse effect on the financial
condition or operations of the Company or the ability of the Company to perform
its obligations hereunder or under any of the other Related Documents to which
it is, or is to be, a party, or that purports to affect the legality, validity
or enforceability of this Agreement or any other Related Document.
(f) The information provided by the Company about itself and under
the heading "The Company" in the Prospectus (the "COMPANY INFORMATION") was
accurate on and as of the date of the Prospectus in all material respects for
the purposes for which its use was authorized. The Company Information in the
Prospectus does not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein, in the
light of the circumstances under which they are or were made and as of the date
of the Prospectus, not misleading.
(g) The Company has filed all income tax returns and all other
material tax returns that are required to be filed by it and has paid all taxes
due pursuant to such returns or pursuant to any assessments received by it.
The charges, accruals and reserves on the books of the Company in respect of
taxes or other governmental charges are adequate in accordance with generally
accepted accounting principles.
(h) The balance sheet of the Company as of , and
the related statements of income and cash flows of the Company for the Fiscal
Year then ended, and the balance sheet of the Company as of , and
the related statements of income and cash flows of the Company for the three
months then ended, copies of which have been furnished to the Administrative
Agent for each Bank, fairly represent, subject, in the case of said balance
sheet as at , and of said statements of income and cash flows for
the three months then ended, to year-end audit adjustments, the financial
condition of the Company as of such dates and the periods ended on such dates,
all in accordance with generally accepted accounting principles consistently
applied, and there has been no material adverse change in such condition or
operations since , except such as may have occurred in the
ordinary course of business. The Company has no material liability, contingent
or otherwise, including material liabilities for taxes, for which it has not
provided adequate reserves in accordance with generally accepted accounting
principles.
<PAGE> 29
25
(i) The Company has good and marketable title to all of its
Property reflected on the balance sheet of the Company as of December 31, 1996,
as being owned by the Company, except for (A) such Property as has been
disposed of in the ordinary course of business, (B) pollution control
facilities being purchased by the Company under installment sales contracts and
the undivided ownership interest of the Michigan Public Power Agency in a
portion of the Belle River Power Plant, and (C) minor exceptions and minor
defects, irregularities and deficiencies that do not materially impair the use
of such Property for the purpose for which it is held by the Company.
(j) The Company is not in default under (and no event has occurred
that with the lapse of time or notice or action by a third party could result
in a default under) any instrument evidencing any Debt or under any agreement
relating thereto, or any indenture, mortgage, deed of trust, security
agreement, lease, franchise or other agreement or other instrument to which the
Company is a party or by which the Company or any of its Property is subject to
or bound.
(k) The Company is not in violation of any Legal Requirements to
which the Company is subject, nor has the Company failed to obtain any
licenses, permits, franchises, or other governmental authorizations necessary
to the ownership of its Property or to the conduct of its business, which
violation or failure to obtain materially adversely affects the business,
prospects, profits, Property or condition (financial or otherwise) of the
Company.
(l) The material Property used or to be used in the continuing
operations of the Company is in good repair, working order and condition as is
customary for a public utility.
(m) The Company is not an "investment company", or a company
"controlled" by an "investment company" (within the meaning of the Investment
Company Act of 1940, as amended). The Company is not a "holding company" but
is an "affiliate" of a "holding company" (within the meaning of the Public
Utility Holding Company Act of 1935, as amended ("PUHCA")), which holding
company is exempt from the provisions of PUHCA, other than Section 9(a)(2)
thereof, pursuant to Section 3(a)(2) thereof.
(n) No Plan Termination Event has occurred with respect to any
Plan or Multiple Employer Plan. Each Plan established or maintained by the
Company and its ERISA Affiliates is in compliance with all applicable
provisions of ERISA, and the Company and all of its ERISA Affiliates have filed
all reports required by ERISA and the Code to be filed with respect to each
Plan. The Company has no knowledge of any event that could result in a
liability of the Company or its ERISA Affiliates to the PBGC, whether under a
Plan, a Multiemployer Plan, or otherwise. The Company and all of its ERISA
Affiliates have met all requirements with respect to funding the Plans imposed
by ERISA or the Code. There have not been any nor are there now existing any
events or conditions that would permit any Plan to be terminated under
circumstances that would cause the lien provided under Section 4068 of ERISA to
attach to the Property of the Company or its ERISA Affiliates. The value of
the Plans' benefits guaranteed under Title IV of ERISA on the date hereof does
not exceed the value of such Plans' assets allocable to such
<PAGE> 30
26
benefits as of the date of this Agreement. No "Prohibited Transaction" within
the meaning of Section 406 of the Pension Reform Act, as amended, exists or
will exist upon the execution and delivery of this Agreement or any Related
Document.
(o) The Company carries insurance with reputable insurers or self
insurance, as is customary, in respect of its Property.
(p) In addition to the representations and warranties contained in
this Article V, all statements contained in any other Related Document or in
any agreement, document, instrument or certificate delivered by or on behalf of
the Company in connection with the transactions contemplated hereby and thereby
shall constitute representations and warranties made by the Company hereunder.
All representations and warranties made by or on behalf of the Company herein
shall survive the delivery of this Agreement, and any investigation at any time
made by or on behalf of the Administrative Agent or any Bank shall not diminish
its rights to rely thereon.
(q) No part of the proceeds of the Advances or the Notes will be
used directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of Debt that was incurred for the purposes of
purchasing or carrying, any margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve System), or to extend
credit to others for the purpose of purchasing or carrying any margin stock.
(r) The Company is in substantial compliance with all
Environmental Laws and no material Environmental Event has occurred.
ARTICLE VI
COVENANTS OF THE COMPANY
SECTION 6.01. AFFIRMATIVE COVENANTS. So long as the Banks shall have
any Commitment under this Agreement, or the Company shall have an obligation to
pay any amount to any Bank hereunder or under any Purchased Note, the Company
will, unless the Majority Banks shall otherwise consent in writing:
(a) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain its corporate existence and all rights, privileges and franchises
necessary and desirable in the normal conduct of its business and in the
performance of its obligations under the Related Documents and not dissolve or
otherwise discontinue its existence or operations.
(b) COMPLIANCE WITH LAWS, ETC. Comply with all Legal Requirements
applicable to the Company and its Property.
<PAGE> 31
27
(c) PAYMENT OF TAXES, ETC. Pay and discharge before the same
shall become delinquent (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its Property and (ii) all lawful claims that, if
unpaid, might by law become a lien upon the Company's Property; provided,
however, that the Company shall not be required to pay and discharge or cause
to be paid and discharged any such tax, assessment, governmental charge, or
claim to the extent that the amount, applicability, or validity thereof shall
currently be contested in good faith by appropriate proceedings, so long as no
tax sale can occur during such proceedings and the Company shall have
established and shall maintain adequate reserves on its books for the payment
of such amounts.
(d) VISITATION RIGHTS. At any reasonable time and from time to
time, upon reasonable notice, permit the Administrative Agent or any agents or
representatives thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the Properties of, the Company and
to discuss the affairs, finances and accounts of the Company with any of its
officers.
(e) KEEPING OF BOOKS. Keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Company in accordance with generally accepted
accounting principles consistently applied.
(f) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of
its Properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(g) MAINTENANCE OF INSURANCE. Maintain insurance with responsible
and reputable insurance carriers, or self-insurance as is customary, in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning similar Properties in the same general areas in
which the Company operates.
(h) PERFORMANCE AND COMPLIANCE WITH OTHER COVENANTS. Perform and
comply in all material respects with each of the covenants binding on the
Company set forth in the Note Indenture and the other Related Documents, as in
effect on the date hereof, or as such covenants may hereafter be amended or
supplemented in accordance with the terms of this Agreement or such Related
Document.
(i) REPORTING REQUIREMENTS. Furnish to the Administrative Agent,
with sufficient copies for each of the Banks, the following:
(i) as soon as possible and in any event within five days
after the Company knows or has reason to know of the occurrence of an
Event of Default or an event that, with the giving of notice or time
lapse, or both, would constitute an Event of Default continuing on the
date of such statement, an Officer's Certificate of the Company
setting
<PAGE> 32
28
forth details of such Event of Default or event and the action that
the Company proposes to take with respect thereto;
(ii) as soon as possible and in any event within five days
after the Company knows or has reason to know of the occurrence of any
material adverse change in the financial condition or operations of
the Company, an Officer's Certificate of the Company setting forth
details of such material adverse change and the action that the
Company proposes to take with respect thereto;
(iii) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, promptly after the
commencement thereof, notice of all actions, suits and proceedings
against the Company before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Company that may materially adversely affect
the financial condition or operations or prospects of the Company;
(iv) 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, financial statements of the Company as of the end of
such quarter consisting of a balance sheet and the related statements
of income and changes in cash flow of the Company (or consisting of
such other financial information as is customary at the time of
preparation of such financial statements) for the portion of the
Fiscal Year ended at the end of such quarter, setting forth in the
case of statements of income and cash flows in comparative form the
figures for the corresponding quarter of the previous Fiscal Year,
and, in the event such financial statements have not been prepared in
accordance with generally accepted accounting principles consistently
applied, such financial statements shall be accompanied by a statement
of a responsible officer of the Company as to the reasons therefor;
and if an Event of Default or event that with notice or lapse of time,
or both, would constitute an Event of Default has occurred during such
quarter and is continuing, such financial statements shall be
accompanied by an Officer's Certificate of the Company containing a
statement as to the nature thereof and the action that the Company
proposes to take with respect thereto;
(v) as soon as available, and in any event within 90 days
after the end of each Fiscal Year, a copy of the annual report for
such year, including therein balance sheets of the Company as at the
end of such Fiscal Year, an income statement, and a cash flow
statement (or consisting of such other financial information as is
customary at the time of preparation of such financial statements) for
such Fiscal Year, setting forth in each case in comparative form the
figures for the previous year, in each case certified by independent
accountants of recognized standing, and if an Event of Default or an
event that, with notice or lapse of time or both, would constitute an
Event of Default, has occurred and is continuing, such annual report
shall be accompanied by an Officer's
<PAGE> 33
29
Certificate of the Company as to the nature thereof and detailing the
actions the Company proposes to take with respect thereto;
(vi) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, as soon as possible and
in any event within five days after occurrence of any material
Environmental Event, an Officer's Certificate of the Company setting
forth the details of such material Environmental Event and the action
that the Company proposes to take with respect thereto;
(vii) to the extent not otherwise to be disclosed by the
Company in a report on Form 10-K, Form 10-Q or Form 8-K to be filed
with the Securities and Exchange Commission, promptly upon becoming
aware thereof, notice of any Plan Termination Event or any event or
action that could result in the Company's or an ERISA Affiliate's
complete withdrawal, partial withdrawal or secondary liability for
withdrawal liability payments with respect to a Multiemployer Plan or
a Multiple Employer Plan, together with an Officer's Certificate of
the Company describing the event or the action taken and the reasons
therefor;
(viii) promptly after the sending or filing thereof, copies
of all material reports that the Company sends to its securityholders,
and copies of all reports on Form 10-K, Form 10-Q or Form 8-K that the
Company files with the Securities and Exchange Commission; and
(ix) such other information regarding the business,
Property or the condition or operations, financial or otherwise, of
the Company as the Administrative Agent may from time to time
reasonably request.
(j) MAINTENANCE OF STATUS. Maintain its status as a public
utility regulated by the Michigan Public Service Commission and the Federal
Energy Regulatory Commission.
(k) ERISA. Maintain, and cause each of its ERISA Affiliates to
maintain, Plan assets that are at least equal in value to Plan benefits
guaranteed under Title IV of ERISA, and not permit any "Prohibited Transaction"
within the meaning of Section 406 of ERISA to exist.
(l) FURTHER ASSURANCES. Execute and deliver, or cause to be
executed and delivered, to the Administrative Agent from time to time, promptly
upon request therefor, any and all other and further instruments, and take all
further action, that may be necessary or that any Bank through the
Administrative Agent may reasonably request, in order to cure any deficiency in
the execution and delivery of, and to give full effect to, this Agreement or
any Related Document to which it is a party, or to describe more fully
particular aspects of any of the Company's agreements and undertakings provided
in this Agreement or so intended to be. In addition, the
<PAGE> 34
30
Company will use all reasonable efforts to duly fulfill all Legal Requirements
from time to time on or prior to such date as the same may become legally
required.
(m) USE OF PROCEEDS. Use the proceeds of all Advances solely for
the purchase of Unremarketed Notes pursuant to the terms and conditions of this
Agreement and the other Related Documents.
(n) NOTIFICATION OF AMENDMENTS. Notify the Administrative Agent
of any proposed amendment to or modification of any Related Document prior to
the effective date of such amendment or modification.
(o) REMARKETING IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS. In
the event that the Company at any time shall remarket Purchased Notes purchased
from the Banks pursuant to Section 2.06 of this Agreement, such remarketing
shall be in full compliance with all applicable Securities Laws.
SECTION 6.02. NEGATIVE COVENANTS. So long as the Banks shall have
any Commitment under this Agreement, or the Company shall have any obligation
to pay any amount to any Bank hereunder or under any Purchased Note, the
Company will not, without the prior written consent of the Majority Banks:
(a) AMENDMENT OF NOTE INDENTURE OR LIQUIDITY PROVIDER NOTE. Enter
into or consent to any amendment to or modification of the Note Indenture, as
in effect on the date hereof, which amendment to or modification of the Note
Indenture affects the form of Liquidity Provider Note attached as an exhibit to
the Note Indenture or requires the consent of all Beneficial Owners.
(b) MERGER, CONSOLIDATION OR SALE OF ASSETS. Dissolve, sell or
otherwise dispose of all or substantially all of its assets or consolidate
with, or merge into, another corporation or permit one or more other
corporations to consolidate with or merge into it; provided, however, that the
Company may merge into, or consolidate with or transfer or otherwise dispose of
substantially all of its assets to any other Person and any Person may merge
into, or consolidate with, the Company provided in each case that (i) the
Company has given the Administrative Agent prior written notice of its
intention to consummate such a transaction setting forth the details thereof,
(ii) immediately after giving effect thereto (A) no event shall occur and be
continuing which constitutes an Event of Default or would, with the passage of
time or giving of notice, or both, constitute an Event of Default and (B) the
entity formed by or resulting from such consolidation shall have a Consolidated
Net Worth at least equal to that of the Company prior to any such merger or
consolidation and there otherwise shall have been no material adverse change in
the consolidated financial position of the Company, (iii) the entity formed by
any such consolidation or into which the Company shall be merged, or to which
the Company's assets shall be transferred shall assume in a writing satisfactory
to the Majority Banks the Company's obligations under this Agreement and the
Related Documents to which the Company is a party, and (iv) in all cases the
surviving entity or entity formed by such consolidation, or the entity to
<PAGE> 35
31
which assets shall be transferred, shall be a public utility regulated by a
state Public Service Commission or the Federal Energy Regulatory Commission.
(c) ALTERNATE CREDIT FACILITY. Cause a substitute credit facility
to be established for the Company without payment in full to the Banks of all
obligations hereunder through and including the Termination Date.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT. The occurrence of any of the
following events shall be an "EVENT OF DEFAULT" hereunder:
(a) The Company shall fail to pay any amount payable hereunder or
under any of the other Related Documents on the date when due or shall fail to
perform or observe any of the covenants and agreements contained in Section
6.01(i)(i) or Section 6.02; or
(b) Any representation or warranty made or deemed made by the
Company (or any of its officers) herein or by the Company (or any of its
officers) in connection with this Agreement or any of the other Related
Documents shall prove to have been incorrect in any material respect when made
or deemed made; or
(c) The Company shall fail to perform or observe any other term,
covenant or agreement (other than a term, covenant, or agreement whose
performance or observance is dealt with specifically elsewhere in this Section
7.01) contained in this Agreement on its part to be performed or observed and
any such failure shall remain unremedied for 30 days after written notice
thereof by the Administrative Agent to the Company; or
(d) (i) The Company shall fail to pay any Debt in excess of an
aggregate amount of $ (excluding Debt under this Agreement), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt, (ii) the Company shall fail to perform any
term, covenant, agreement or condition on its part to be performed or observed
under any agreement or instrument relating to any such Debt when required to be
performed or observed, and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Debt, or (iii) any such Debt shall be accelerated or declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
<PAGE> 36
32
(e) The Company shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Company
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or any substantial part of its Property and, if instituted against the
Company shall remain undismissed for a period of 30 days or an "order for
relief" as defined in the United States Bankruptcy Reform Act of 1978, as
amended (the "FEDERAL BANKRUPTCY CODE"), shall be rendered prior to the
expiration of that 30-day period; or any judgment, writ, warrant of attachment
or execution or similar process shall be issued or levied against any
substantial part of the Property of the Company and shall not be released,
vacated or fully bonded within ten Business Days after its issue or levy, or
the Company shall take any action to authorize any of the actions set forth
above in this subsection (e); or
(f) One or more judgments, decrees or orders for the payment of
money the enforcement of which, in the aggregate, would have a material adverse
effect on the financial condition, results of operations, operations, Property
or prospects of the Company, shall be rendered against the Company, and either
(i) enforcement proceedings shall have been commenced by any creditor upon any
such judgment, decree or order, or (ii) there shall be any period of 30
consecutive days during which a stay of enforcement of any such judgment,
decree or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) Any Plan Termination Event with respect to a Plan that the
Administrative Agent determines in good faith might constitute grounds for the
termination of any Plan or for the appointment of a trustee to administer any
Plan shall have occurred, and, 10 days after notice thereof shall have been
given by the Administrative Agent to the Company, (i) such Plan Termination
Event (if correctable) shall not have been corrected, and (ii) the then present
value of such Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by an amount which the Administrative Agent determines
in good faith could have a material adverse effect on the financial condition
or operations of the Company; or
(h) The Company or any ERISA Affiliate shall receive a notice of
liability or demand for payment with respect to a Multiemployer Plan or a
Multiple Employer Plan that the Administrative Agent determines in good faith
could have a material adverse effect on the financial condition or operations
of such Person; or
(i) An Environmental Event shall have occurred that materially
adversely affects the financial condition, business or operations of the
Company; or
(j) Any provision of this Agreement shall at any time for any
reason cease to be valid and binding on the Company, or shall be declared to be
null and void, or the validity or enforceability thereof shall be contested by
the Company, or a proceeding shall be commenced
<PAGE> 37
33
by any Governmental Authority seeking to establish the invalidity or
unenforceability thereof, or the Company shall deny that it has any or further
liability or obligation under this Agreement; or
(k) Any "Event of Default", however defined, under the Note
Indenture or any other Related Document shall have occurred and be continuing;
or
(l) Any other Related Document shall for any reason cease to be
in full force and effect; or
(m) The security interest in and lien created under the Note
Indenture on the general and refunding mortgage bond issued as security for the
Notes under the Mortgage shall cease to be a valid and perfected first priority
security interest and lien and such cessation shall be deemed to be material by
the Administrative Agent.
SECTION 7.02. UPON AN EVENT OF DEFAULT. If any Event of Default
shall have occurred and be continuing beyond any applicable grace period, the
Administrative Agent (i) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Company, declare the obligation of each Bank
to make Advances to be terminated, whereupon the same shall forthwith
terminate, or (ii) if any Purchased Notes are at the time outstanding, shall at
the request, or may with the consent, of the Majority Banks, give notice to the
Company that all outstanding Purchased Notes are subject to immediate
repurchase by the Company pursuant to this Agreement, at a price equal to the
sum of the unpaid principal amount thereof plus all interest accrued and unpaid
thereon, whereupon the Company shall have an obligation, which obligation shall
be immediately due and owing, absolutely and unconditionally, to effect such
repurchase by paying such price to the Administrative Agent, along with all
other amounts due and payable under this Agreement, in immediately available
funds, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Company, and (iii) shall at the
request, or may with the consent, of the Majority Banks, by notice to the
Company, declare the outstanding principal amount of all other amounts owing or
to become owing under this Agreement to be forthwith due and payable, whereupon
all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company; provided, however, that in the event of
an actual or deemed entry of an order for relief with respect to the Company or
any of its subsidiaries under the Federal Bankruptcy Code, (A) the obligation
of each Bank to make Advances shall automatically be terminated, (B) the
Company shall have an immediate obligation to purchase all outstanding
Purchased Notes at a price equal to the unpaid principal amount thereof plus
all interest accrued and unpaid thereon and (C) all amounts owing or to become
owing hereunder shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.
<PAGE> 38
34
ARTICLE VIII
THE ADMINISTRATIVE AGENT
SECTION 8.01. AUTHORIZATION AND ACTION. Each Bank hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks and such instructions shall be
binding upon all Banks and all holders of Purchased Notes; provided, however,
that the Administrative Agent shall not be required to take any action which
exposes the Administrative Agent to personal liability or which is contrary to
this Agreement or applicable law. The Administrative Agent agrees to give to
each Bank prompt notice of each notice given to it by the Company pursuant to
the terms of this Agreement. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation towards
or relationship of agency or trust with or for the Company.
SECTION 8.02. ADMINISTRATIVE AGENT'S RELIANCE, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may consult with legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) makes no warranty or representation to any Bank
and shall not be responsible to any Bank for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement on the part of the Company or to inspect the property (including the
books and records) of the Company; (iv) shall not be responsible to any Bank
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (v) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. THE CHASE MANHATTAN BANK AND AFFILIATES. With respect
to its Commitment, the Advances made by it and the Purchased Notes held for its
benefit, The Chase Manhattan Bank shall have the same rights and powers under
this Agreement as any other Bank and may exercise the same as though it were
not the Administrative Agent; and the terms Bank
<PAGE> 39
35
and Banks shall, unless otherwise expressly indicated, include The Chase
Manhattan Bank in its individual capacity. The Chase Manhattan Bank and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Company,
any of its subsidiaries and any Person who may do business with or own
securities of the Company, or any such subsidiary, all as if The Chase
Manhattan Bank were not the Administrative Agent and without any duty to
account therefor to the Banks.
SECTION 8.04. BANK CREDIT DECISION. Each Bank acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Bank and based on the financial statements referred to in Section 5.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 8.05. INDEMNIFICATION. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Company), ratably
according to the respective amounts of their Commitments, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by the Administrative Agent under this Agreement;
provided that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, to the extent that
the Administrative Agent is not reimbursed for such expenses by the Company.
SECTION 8.06. SUCCESSOR AGENT. (a) The Administrative Agent may
resign at any time by giving written notice thereof to the Banks and the
Company and may be removed at any time with cause by the Majority Banks. Upon
any such resignation or removal, the Majority Banks shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Banks, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving of notice of resignation or the Majority Banks' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of at least
$250,000,000.
<PAGE> 40
36
(b) So long as no Event of Default, or event which, with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, shall have occurred and be continuing, the Company may at any time
remove the Administrative Agent with or without cause; provided that prior to
such removal a Bank acceptable to the Majority Banks shall have agreed to
accept the Company's appointment as successor Administrative Agent hereunder.
(c) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. (a) No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Company
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Majority Banks, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks, do any of the following: (i) waive or
modify any of the conditions specified in Article IV, (ii) increase the
Commitments of the Banks or subject the Banks to any additional obligations,
(iii) reduce the principal of, or interest on, the Advances, the Purchased
Notes or any fees or other amounts payable hereunder, (iv) postpone any date
fixed for any payment of principal of, or interest on, the Advances, the
Purchased Notes or any fees or other amounts payable hereunder, (v) change the
percentage of the Commitments or of the aggregate unpaid principal amount of
the Advances, the Purchased Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action hereunder, (vi) amend
this Section 9.01 or (vii) release any collateral securing the Purchased Notes
or change any provision of the Note Indenture providing for the release of any
collateral securing the obligations of the Company thereunder; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Banks required above to
take such action, affect the rights or duties of the Administrative Agent under
this Agreement or with respect to any Purchased Note.
(b) No amendment or waiver of any provision of this Agreement
affecting the rights or duties of any Remarketing Agent, nor consent to any
departure by any party therefrom, shall in any event be effective unless the
same shall be in writing and signed by such Remarketing
<PAGE> 41
37
Agent. Except as provided in the preceding sentence, the consent of any
Remarketing Agent shall not be required for the amendment or waiver of, or
consent to departure from, any provision of this Agreement.
SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Company, at its address at 2000 Second Avenue,
853 W.C.B., Detroit, Michigan 48226, Attention: Assistant Treasurer-Banking; if
to any Bank, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; and if to the Administrative Agent, at its address at
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and communications
shall, when mailed, telecopied, telegraphed, telexed or cabled, be effective
when deposited in the mails, telecopied, delivered to the telegraph company,
confirmed by telex answerback or delivered to the cable company, respectively,
except that notices and communications to the Administrative Agent pursuant to
Article II, III or VIII shall not be effective until received by the
Administrative Agent.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any
Bank or the Administrative Agent to exercise, and no delay in exercising, any
right under any Related Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS, EXPENSES, TAXES AND INDEMNIFICATION. (a) The
Company agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Related Documents and the other documents to be delivered under the Related
Documents, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under the Related Documents. The Company further agrees to
pay on demand all costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses of each Bank, including the allocated
costs of staff counsel), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of the Related Documents and the
other documents to be delivered under the Related Documents, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 9.04. In addition, the Company shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution, delivery, filing and recording of the Related
Documents and the other documents to be delivered under the Related Documents,
and agrees to save the Administrative Agent and each Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
<PAGE> 42
38
(b) The Company hereby agrees to indemnify and hold the
Administrative Agent and the Banks and their respective officers, directors,
employees, professional advisors and affiliates (each, an "INDEMNIFIED PERSON")
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses (including reasonable attorney's fees and expenses, whether
or not such Indemnified Person is named as a party to any proceeding or
investigation or is otherwise subjected to judicial or legal process arising
from any such proceeding or investigation) which any of them may incur or which
may be claimed against any of them by any person or entity (except to the
extent such claims, damages, losses, liabilities, costs or expenses arise from
the gross negligence or willful misconduct of the Indemnified Person):
(i) by reason of or in connection with the execution,
delivery or performance of any of the Related Documents or any
transaction contemplated thereby, or the use by the Company or any
Remarketing Agent of the proceeds of any Advance; or
(ii) by reason of any inaccuracy or alleged inaccuracy in
any material respect, or any untrue statement or alleged untrue
statement of any material fact, contained in any registration
statement relating to the Notes or in the Prospectus relating to the
Notes or any amendment or supplement thereto, except to the extent
contained in or arising from information in the Prospectus relating to
the Notes supplied in writing by and describing the Administrative
Agent or the Banks.
(c) The Company's obligations under this Section 9.04 shall
survive the repayment of all amounts owing to the Administrative Agent and the
Banks under the Related Documents and the termination of the Commitments. If
and to the extent that the obligations of the Company under this Section 9.04
are unenforceable for any reason, the Company agrees to make the maximum
contribution to the payment and satisfaction thereof which is permissible under
applicable law.
SECTION 9.05. RIGHT OF SET-OFF. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of any request or
the granting of any consent specified by Section 7.02 to authorize the
Administrative Agent to demand a repurchase of Purchased Notes or to declare
Advances due and payable pursuant to the provisions of Section 7.02, each Bank
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the credit or the account
of the Company against any and all of the obligations of the Company now or
hereafter existing under any Related Document, whether or not such Bank shall
have made any demand under this Agreement and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Company after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 9.05 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Bank may have.
<PAGE> 43
39
SECTION 9.06. BINDING EFFECT; ASSIGNMENTS; PARTICIPATIONS (a) This
Agreement shall become effective when it shall have been executed by the
Company, the Administrative Agent, the Banks and the Remarketing Agents, and
thereafter shall be binding upon and inure to the benefit of the Company, the
Administrative Agent, each Remarketing Agent and each Bank and their respective
successors and assigns, except that: (i) the Company shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Banks, and (ii) the Banks shall not have the right to assign or
transfer any portion of their respective Commitments (except for assignments or
pledges to a Federal Reserve Bank) (A) without the prior written consent of the
Company (unless an Event of Default shall have occurred and be continuing, in
which event no such consent shall be required) and the Administrative Agent,
which consents shall not be unreasonably withheld, (B) to any assignee Bank
that is not an Eligible Bank and (C) unless the parties to each such assignment
shall execute and deliver to the Administrative Agent, for its acceptance and
recording, an Assignment and Acceptance substantially in the form of Exhibit B,
and a processing and recordation fee of $3,500 payable by the assigning Bank
and/or the assignee Bank (such processing and recordation fee not to be payable
by the Company under any circumstances).
(b) Each Bank may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and its beneficial interest in any
Purchased Notes); provided, however, that (i) such Bank's obligations under
this Agreement (including, without limitation, its Commitment) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iii) the Company, the
Administrative Agent, the Remarketing Agents and the other Banks shall continue
to deal solely and directly with such Bank in connection with such Bank's
rights and obligations under this Agreement.
SECTION 9.07. ELIGIBLE BANK STATUS. Each Bank confirms that it
satisfies the requirements of an Eligible Bank on the date of this Agreement.
If at any time any Bank shall cease to satisfy the requirements of an Eligible
Bank, such Bank shall assign its Commitments to an Eligible Bank as promptly as
is practicable in compliance with terms and provisions of Section 9.06;
provided, however, that so long as any Bank satisfies the requirements set
forth in clause (i) of the definition of Eligible Bank and is in the process of
promptly (and in no event later than 10 Business Days following the date on
which such Bank ceased to satisfy the requirements of an Eligible Bank)
restoring its compliance with the other requirements for Eligible Bank status,
such Bank shall not be required to effect the assignment of its Commitments
otherwise required by this sentence.
SECTION 9.08. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 9.09. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
<PAGE> 44
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE DETROIT EDISON COMPANY
By
---------------------------------
as Administrative Agent and as Bank
By
---------------------------------
as Remarketing Agent
---------------------------------
as Remarketing Agent
---------------------------------
<PAGE> 45
EXHIBIT A
NOTICE OF FAILED REMARKETING
AND BORROWING REQUEST
as Administrative Agent,
for the Banks parties
to the Standby Note Purchase
Credit Facility referred to below
[Date]
Gentlemen:
The undersigned, (the "REMARKETING AGENT"), refers to the
Standby Note Purchase Credit Facility, dated as of (the "AGREEMENT",
the terms defined therein being used herein as therein defined), among The
Detroit Edison Company (the "COMPANY"), certain Banks parties thereto,
, as Administrative Agent for said Banks, the Remarketing Agent and .
Pursuant to Section 2.03 of the Agreement, the Company has authorized the
Remarketing Agent to notify you in the event of any Failed Remarketing and to
request a Borrowing in connection therewith. The Remarketing Agent hereby
represents and warrants that (i) it is a Remarketing Agent under the Remarketing
Agreement on and as of the date hereof, (ii) the Remarketing Agreement is in
full force and effect on the date hereof, (iii) a Failed Remarketing has
occurred on the date hereof with respect to $________ in outstanding principal
amount of Unremarketed Notes tendered to the Remarketing Agent and (iv) the
Remarketing Agent has received adequate funds to pay all accrued and unpaid
interest, if any, with respect to such Unremarketed Notes, or has informed the
Company of the Company's obligation to pay such accrued and unpaid interest on
the date hereof. The Remarketing Agent hereby gives you notice, irrevocably,
pursuant to Section 3.01 of the Agreement, that it requests a Borrowing under
the Agreement in connection with the Failed Remarketing described herein, and in
that connection sets forth below the information relating to such Borrowing as
required by Section 3.01(a) of the Agreement.
<PAGE> 46
(A) The Business Day of the requested Borrowing is ___________,
19__; and
(B) The aggregate amount of the requested Borrowing is $________.
Very truly yours,
By _________________________________
Name:
Title:
<PAGE> 47
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Standby Note Purchase Credit Facility dated as
of (the "AGREEMENT") among The Detroit Edison Company, a Michigan
corporation (the "COMPANY"), the Banks (as defined in the Agreement), ,
as Administrative Agent for the Banks (the "ADMINISTRATIVE AGENT") and the
Remarketing Agents named therein as parties thereto. Terms defined in the
Agreement are used herein with the same meaning.
_______________________ (the "ASSIGNOR") and _____________________
(the "ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date as set forth in Schedule 1 hereto (the "EFFECTIVE DATE"), an
interest (the "ASSIGNED INTEREST") in and to the Assignor's rights and
obligations under the Agreement with respect to those credit facilities
contained in the Agreement as are set forth on Schedule 1 (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount and percentage for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement, any other Related
Document or any other instrument or document furnished pursuant thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Agreement, any other Related Document or any other instrument or
document furnished pursuant thereto, other than that it has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; and (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company, any of its subsidiaries or any other
obligation or the performance or observance by the Company, any of its
subsidiaries or any other obligor of any of their respective obligations under
the Agreement or any other Related Document or any other instrument or document
furnished pursuant hereto or thereto.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Agreement, together with copies of the financial
statements referred to in Section 5.01(h) thereof, the financial statements
delivered pursuant to Section 6.01(i) thereof, if any, and such other documents
and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon
<PAGE> 48
2
the Assignor, the Administrative Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement, the other Related Documents or any other instrument or document
furnished pursuant hereto or thereto; (iv) confirms that it is an Eligible
Bank; (v) appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers under the Agreement as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Agreement are required to be performed by it as a Bank; and (vii) specifies as
its Domestic Lending Office and its Eurodollar Lending Office the respective
offices set forth beneath its name on the signature pages hereof.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent pursuant to Section 9.06 of the Agreement, effective
as of the Effective Date (which date shall not, unless otherwise agreed to by
the Administrative Agent, be earlier than five Business Days after the date of
such acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignee which accrue subsequent to the Effective Date.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Agreement for periods prior to the Effective Date directly between
themselves.
6. From and after the Effective Date, (i) the Assignee shall be a
party to the Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Bank thereunder and shall be
bound by the provisions thereof and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the law of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Assignment and
Acceptance by signing any such counterpart.
<PAGE> 49
3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their
respective duly authorized officers on Schedule 1 hereto.
[NAME OF ASSIGNOR]
By:_________________________________
Name:
Title:
[NAME OF ASSIGNEE]
By:_________________________________
Name:
Title:
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
<PAGE> 50
4
Accepted this ____ day
of ____________, 19__
, as
Administrative Agent
By:______________________________
Name:
Title:
[Consented to this _____ day
of __________, 19___
THE DETROIT EDISON COMPANY
By:______________________________]1
Name:
Title:
- ---------------------
1 To be included if required under Section 9.06(a) of the Facility
Agreement.
<PAGE> 51
Schedule 1 to
Assignment and Acceptance
relating to the Standby Note Purchase Facility,
dated as of September 12, 1997,
among The Detroit Edison Company, the banks party thereto,
as , Administrative Agent for the Banks
(in such capacity, the "ADMINISTRATIVE AGENT")
and the Remarketing Agents party thereto
Name of Assignor: _________________________________
Name of Assignee: _________________________________
Effective Date of Assignment: _____________________
<TABLE>
<CAPTION>
Facility Principal Percentage
-------- Amount Assigned Assigned
--------------- --------
<S> <C> <C> <C>
</TABLE>
<PAGE> 1
EXHIBIT 99-31
-----
SIXTH AMENDMENT TO
1988 AMENDED AND RESTATED
NUCLEAR FUEL HEAT PURCHASE CONTRACT
Sixth Amendment, dated as of August 28, 1997 (this "Sixth
Amendment"), to the 1988 Amended and Restated Nuclear Fuel Heat Purchase
Contract dated as of October 4, 1988, as amended by First, Second, Third, Fourth
and Fifth Amendments thereto dated as of February 1, 1990, September 1, 1993,
August 31, 1994, March 8, 1996 and August 29, 1996 respectively (as so amended,
the "Contract"), between RENAISSANCE ENERGY COMPANY, a Delaware corporation
("Fuel Company") and THE DETROIT EDISON COMPANY, a Michigan corporation
("Utility").
W I T N E S S E T H:
Whereas, the Fuel Company is a party to (i) a $200,000,000 364
Day Credit Agreement dated as of September 1, 1993, as amended by a First
Amendment thereto dated as of September 1, 1994, extension letters from the
Banks to the Fuel Company dated June 30, 1995, a Third Amendment thereto dated
March 8, 1996 and a Fourth Amendment thereto dated August 29, 1996, among the
Fuel Company, the Utility, Barclays Bank PLC, New York Branch, as agent (the
"Agent") and the banks signatory thereto (the "Banks") (as so amended, the "364
Day Credit Agreement"); and (ii) a $200,000,000 Multi-Year Credit Agreement
dated as of September 1, 1993, as amended by a First Amendment thereto dated as
of September 1, 1994, extension letters from the Banks to the Fuel Company dated
June 30, 1995, a Third Amendment thereto, dated March 8, 1996 and a Fourth
Amendment thereto, dated September 1, 1996, among the Fuel Company, the Utility,
the Agent and the Banks (as so amended, the "Multi-Year Credit Agreement"; the
364 Day Credit Agreement and the Multi-Year Credit Agreement, collectively, the
"Credit Agreement");
Whereas, each of the 364 Day Credit Agreement and the
Multi-Year Credit Agreement, respectively, are being amended by Fifth Amendments
thereto (collectively, the "Credit Agreement Amendments");
Whereas, it is a condition precedent to the effectiveness of
the Credit Agreement Amendments that the Utility and Fuel Company enter into
this Sixth Amendment.
<PAGE> 2
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the Fuel Company and the Utility agree as
follows:
Section 1. Defined Terms. All capitalized
terms used herein and not defined shall have the meanings
ascribed to such terms in the Contract.
Section 2. Amendments to Contract. Section
2(b) of the Contract is hereby amended to read in its
entirety as follows:
"(b) The term of this Contract shall, unless
sooner terminated pursuant to the provisions hereof, end at 12:00 midnight, New
York time, on the Expiration Date. The Expiration Date in effect on the date
hereof is August 27, 1998. Subject to the proviso below, the Utility shall have
the right to renew this Contract for subsequent terms by designating in writing
to the Fuel Company, within 90 days prior to the then current Expiration Date, a
new Expiration Date; provided, however, that the Expiration Date for such
renewal term shall be, (i) in the event the Michigan Public Service Commission
(the "MPSC") has authorized this Contract, not later than September 1, 2001 (an
"Outside Expiration Date") or (ii) if the MPSC has not authorized this Contract,
not later than the earlier to occur of the Outside Expiration Date and twelve
months from the then current Expiration Date; and provided, further, that (i) no
material adverse change shall have occurred (except such as may have occurred in
the ordinary course of the Utility's business) in the financial condition or
results of operations of Utility since the most recent financial statements of
the Utility delivered to the Borrower, and (ii) no Event of Default (as defined
herein or as defined in any Credit Agreement) or other event which with the
giving of notice or lapse of time, or both, would constitute such an Event of
Default shall have occurred and be continuing."
Section 3. Miscellaneous.
(a) Each of Utility and Fuel Company hereby
represents and warrants as to itself that this Sixth Amendment has been duly
authorized by all necessary corporate action on its part and this Sixth
Amendment has been duly and validly executed and delivered by itself and
constitutes its respective legal, valid and binding obligation, enforceable in
accordance with the terms of this Sixth Amendment.
(b) Except as amended hereby, the terms of
the Contract shall continue in full force and effect and is hereby ratified and
confirmed in all respects as so amended.
2
<PAGE> 3
(c) This Sixth Amendment shall be governed by and
construed in accordance with the laws of the State of New York without
reference to principles of conflicts of laws.
(d) This Sixth Amendment may be signed in
any number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, Utility and Fuel Company have caused this
Sixth Amendment to be duly executed by their duly authorized officers, all as of
the day and year first above written.
RENAISSANCE ENERGY COMPANY
By:
------------------------
Title:
THE DETROIT EDISON COMPANY
By:
------------------------
Title:
3
<PAGE> 1
EXHIBIT 99-32
[EXECUTION COPY]
SIXTH AMENDMENT
364-DAY CREDIT AGREEMENT
SIXTH AMENDMENT (this "AMENDMENT"), dated as of August 27, 1998, to the
364-DAY CREDIT AGREEMENT dated as of September 1, 1993, as amended by the First
Amendment, dated as of August 31, 1994, certain extension letters, each dated
June 30, 1995, the Third Amendment, dated as of March 8, 1996, the Fourth
Amendment dated as of August 29, 1996 and the Fifth Amendment dated as of August
28, 1997, by and among RENAISSANCE ENERGY COMPANY, a Delaware corporation (the
"BORROWER"), THE DETROIT EDISON COMPANY, a Michigan corporation (the
"GUARANTOR"), the banks referred to therein (the "BANKS"), and BARCLAYS BANK
PLC, New York Branch, as agent (the "AGENT") for the Banks (such Credit
Agreement, as heretofore amended, being hereinafter referred to as the "EXISTING
CREDIT AGREEMENT", and, as amended by this Amendment, as the "AMENDED CREDIT
AGREEMENT" or the "CREDIT AGREEMENT").
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantor, the Banks and the Agent have
previously entered into the Existing Credit Agreement; and
WHEREAS, the Borrower, the Guarantor, the Banks and the Agent now wish
to amend the Existing Credit Agreement to extend the Termination Date described
therein and to effect certain other amendments to the Existing Credit Agreement;
NOW THEREFORE, the Borrower, the Guarantor, the Banks and the Agent
agree as follows (capitalized terms used but not defined in this Amendment
having the meanings assigned them in the Existing Credit Agreement):
SECTION 1. AMENDMENTS TO EXISTING CREDIT AGREEMENT. (a) EXTENSION OF
TERMINATION DATE. Effective as of the date hereof, and subject to the
satisfaction of the conditions precedent set forth in Section 2 hereof, the
Termination Date is hereby extended to August 26, 1999.
(b) AMENDMENT OF SECTION 2.04(a). Section 2.04(a) of the
Existing Agreement is hereby amended to read in its entirety as follows:
2.04. FACILITY FEE. (a) The Borrower agrees to pay to the
Agent for the account of each Bank a facility fee (the "FACILITY FEE")
on the full amount of
<PAGE> 2
such Bank's Commitment (whether used or unused), from the date hereof
in the case of each Bank listed on the signature pages hereto, and from
the effective date specified in the Assignment and Acceptance pursuant
to which it became a Bank pursuant to Section 9.07 hereof in the case
of any other Bank, until the Termination Date or earlier termination of
such Bank's Commitment pursuant to Section 2.05, payable on the basis
of the actual number of days elapsed in a year of 365 or 366 days, on
the last Business Day of March, June, September and December in each
year and on the Termination Date, at the rate per annum set forth below
as determined in accordance with the then applicable Ratings Level:
=======================================================================
RATINGS LEVEL I II III
-----------------------------------------------------------------------
FACILITY FEE 0.15% 0.15% 0.30%
=======================================================================
provided, however, that during any period in which the Guarantor's
Senior Secured Indebtedness unsupported by letters of credit or similar
credit enhancement facilities is rated at or below BB+ by S&P or at or
below Ba-1 by Moody's, or shall cease to be rated by either or both,
the Facility Fee shall be 0.425% per annum.
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective as of the date set forth above when, and only when, the Agent shall
have received (in sufficient copies for each Bank) the following:
(a) Counterparts of this Amendment executed by the Borrower, the
Guarantor and all of the Banks.
(b) Certified copies of the resolutions of the Board of Directors of
the Borrower authorizing this Amendment and of all documents evidencing other
necessary corporate action and governmental and regulatory approvals required to
be obtained by it in connection therewith, certified by the Secretary or
Assistant Secretary of the Borrower.
(c) Certified copies of the resolutions of the Board of Directors of
the Guarantor authorizing this Amendment and of all documents evidencing other
necessary corporate action and governmental and regulatory approvals required to
be obtained by it in connection therewith, certified by the Secretary or
Assistant Secretary of the Guarantor.
(d) A favorable opinion of counsel to the Borrower, to the effect set
forth in Annex I to this Amendment and as to such other matters relating to the
transactions contemplated hereby as any Bank through the Agent may reasonably
request.
<PAGE> 3
3
(e) A favorable opinion of the General Counsel of the Guarantor, to
the effect set forth in Annex II to this Amendment and as to such other matters
relating to the transactions contemplated hereby as any Bank through the Agent
may reasonably request.
(f) Evidence satisfactory to the Agent and its counsel that the
Guarantor has extended, through the Termination Date as extended hereby, the
Guarantee set forth in Section 6.02 of the Existing Agreement.
(g) Evidence that the "Expiration Date" of the Heat Purchase Contract
has been extended to August 26, 1999.
(h) Such other instruments, opinions or documents as any Bank through
the Agent may reasonably request.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Each of the
Borrower and the Guarantor represents and warrants, as to itself only, as
follows:
(a) The execution and delivery by it of this Amendment, and the
performance by it of the Amended Credit Agreement and the other Financing
Documents to which it is a party are within its corporate powers, have been duly
authorized by all necessary corporate or other similar action, and do not and
will not contravene (i) its charter or by-laws, as the case may be, or any law
or legal restriction or (ii) any contractual restriction binding on or affecting
it or its properties;
(b) This Amendment has been duly executed and delivered by it, and,
assuming the due execution and delivery by the Banks pursuant to due authority
of this Amendment, this Amendment, the Amended Credit Agreement and the other
Financing Documents to which it is a party are its legal, valid and binding
obligations, enforceable against it in accordance with their respective terms;
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally;
(c) No consent, license, order, authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by it of this
Amendment;
(d) Its representations and warranties contained in Section 4.01 (in
the case of the Borrower) or Section 4.02 (in the case of the Guarantor) of the
Existing Credit Agreement are true and correct in all material respects on and
as of the date of this Amendment, as though made on and as of such date;
<PAGE> 4
4
(e) No event in respect of it has occurred and is continuing, which
constitutes an Event of Default or a Default; and
(f) In the case of the Guarantor: (i) the FERC Authorization is in
full force and effect and (ii) without regard to any further extension thereof,
the FERC Authorization as presently in effect is sufficient to authorize: (A)
the creation, validity and performance of the Guarantee described in Section
6.01 of the Amended Credit Agreement in respect of each Advance made on or prior
to the Termination Date, as extended by this Amendment, (B) the Guarantor to
perform its obligations under the Credit Agreement and the other Financing
Documents in respect of each such Advance and the corresponding Guarantee, and
(C) the Guarantor to extend through the Termination Date as extended hereby the
Guarantee set forth in Section 6.02 of the Credit Agreement and to perform its
obligations thereunder.
SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a) Upon the
effectiveness of this Amendment in accordance with Section 2 hereof, on and
after the date hereof each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Existing Credit Agreement, and each reference in the Notes and the other
Financing Documents to "the Credit Agreement", "thereunder", "thereof" or words
of like import referring to the Existing Credit Agreement, shall mean and be a
reference to the Amended Credit Agreement.
(b) Except as specifically amended above, the Credit Agreement and
all other Financing Documents are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Bank or the Agent under any of the Financing Documents,
nor constitute a waiver of any provision of any of the Financing Documents.
SECTION 5. COSTS AND EXPENSES. The Borrower agrees to pay on demand
all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent and the Banks as to their respective rights and
responsibilities hereunder and thereunder.
SECTION 6. EXECUTION IN COUNTERPARTS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
<PAGE> 5
5
SECTION 7. GOVERNING LAW. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of New York.
<PAGE> 6
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written,
RENAISSANCE ENERGY COMPANY
By
-------------------------
Title:
THE DETROIT EDISON COMPANY,
as Guarantor
By
-------------------------
Title:
[BANK SIGNATURE PAGES OMITTED.]
<PAGE> 7
ANNEX I
[SCOPE OF OPINION OF COUNSEL TO THE BORROWER]
The Opinion of Counsel to the Borrower referred to in Section 2(d) of this
Amendment shall re-affirm, as of the date of this Amendment, the opinions
expressed in the opinion of such counsel previously delivered pursuant to
Section 3.01(m) of the Existing Credit Agreement, except that, for purposes of
such re-affirmation, (i) the "Transaction Documents" shall be stated to include
this Amendment and (ii) references in such opinions to the "Credit Agreement"
shall be stated to refer to the Amended Credit Agreement.
<PAGE> 8
ANNEX II
[SCOPE OF OPINION OF COUNSEL TO THE GUARANTOR]
The Opinion of Counsel to the Guarantor referred to in Section 2(e) of this
Amendment shall be to the effect that:
(a) The execution and delivery by the Guarantor of this Amendment,
and the performance by the Guarantor of the Amended Credit Agreement and the
other Financing Documents to which it is a party are within its corporate
powers, have been duly authorized by all necessary corporate or other similar
action, and do not and will not contravene (i) its charter or by-laws, as the
case may be, or any law or legal restriction or (ii) any contractual restriction
binding on or affecting it or its properties;
(b) This Amendment has been duly executed and delivered by it, and,
assuming the due execution and delivery by the Banks pursuant to due authority
of this Amendment, this Amendment, the Amended Credit Agreement and the other
Financing Documents to which the Guarantor is a party are the Guarantor's legal,
valid and binding obligations, enforceable against the Guarantor in accordance
with their respective terms; subject to the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally;
(c) No consent, license, order, authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by the Guarantor
of this Amendment;
(d) (i) the FERC Authorization is in full force and effect, and (ii)
without regard to any further extension thereof, the FERC Authorization as
presently in effect is sufficient to authorize: (A) the creation, validity and
performance of the Guarantee described in Section 6.01 of the Amended Credit
Agreement in respect of each Advance made on or prior to the Termination Date,
as extended by this Amendment, (B) the Guarantor to perform its obligations
under the Credit Agreement and the other Financing Documents in respect of each
such Advance and the corresponding Guarantee, and (C) the Guarantor to extend
through the Termination Date as extended by this Amendment the Guarantee set
forth in Section 6.02 of the Credit Agreement and to perform its obligations
thereunder;
AND such opinion of counsel to the Guarantor shall re-affirm, as of the date of
this Amendment, the opinions expressed in paragraphs 1, 4, 5 and 6 of the
opinion of such counsel previously delivered pursuant to Section 3.01(n) of the
Existing Credit Agreement.
<PAGE> 9
S - 1
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written,
RENAISSANCE ENERGY COMPANY
By______________________
Title:
THE DETROIT EDISON COMPANY,
as Guarantor
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 10
S - 2
BARCLAYS BANK PLC,
NEW YORK BRANCH,
as Agent and as Bank
By____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 11
S - 3
THE BANK OF NEW YORK
By____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 12
S - 4
THE BANK OF NOVA SCOTIA
By____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 13
S - 5
BHF-BANK AKTIENGESELLSCHAFT
By______________________
Title:
By______________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 14
S - 6
THE CHASE MANHATTAN BANK
By______________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 15
S - 7
CITIBANK, N.A.
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 16
S - 8
COMERICA BANK
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 17
S - 9
THE DAI-ICHI KANGYO BANK, LTD.
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 18
S - 10
THE FIRST NATIONAL BANK OF CHICAGO
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 19
S - 11
THE FUJI BANK, LIMITED
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 20
S - 12
THE INDUSTRIAL BANK OF JAPAN
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 21
S - 13
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 22
S - 14
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 23
S - 15
THE NORTHERN TRUST COMPANY
By____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 24
S - 16
SOCIETE GENERALE
By_____________________
Title:
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 25
S - 17
TORONTO DOMINION (TEXAS), INC.
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
<PAGE> 26
S - 18
UNION BANK OF CALIFORNIA, N.A.
By_____________________
Title:
SIGNATURE PAGE TO RENAISSANCE ENERGY CO. SIXTH AMENDMENT
