DTE ENERGY CO (Form: 10-Q, Received: 05/11/2001 14:31:19)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

___________________________

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended March 31, 2001


	Registrants; State of
Commission	Incorporation; Address; and	I.R.S. Employer
File Number	Telephone Number	Identification No.

1-11607	DTE Energy Company (a Michigan corporation) 2000 2nd Avenue Detroit, Michigan 48226-1279 313-235-4000	38-3217752




1-2198	The Detroit Edison Company (a Michigan corporation) 2000 2nd Avenue Detroit, Michigan 48226-1279 313-235-8000	38-0478650

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes No

At April 30, 2001, 135,803,708 shares of DTE Energy’s Common Stock, substantially all held by non-affiliates, were outstanding.

TABLE OF CONTENTS


DEFINITIONS
QUARTERLY REPORT ON FORM 10-Q FOR DTE ENERGY COMPANY
	PART I - FINANCIAL INFORMATION
		ITEM 1 - FINANCIAL STATEMENTS
		ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
		ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
	PART II - OTHER INFORMATION
		ITEM 5 - OTHER INFORMATION.
QUARTERLY REPORT ON FORM 10-Q FOR THE DETROIT EDISON COMPANY
	PART I - FINANCIAL INFORMATION
		ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED).
		ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
	PART II - OTHER INFORMATION
		ITEM 1 - LEGAL PROCEEDINGS.
		ITEM 5 - OTHER INFORMATION.
QUARTERLY REPORTS ON FORM 10-Q FOR DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY
		ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
SIGNATURE PAGE TO DTE ENERGY COMPANY QUARTERLY REPORT ON FORM 10-Q
SIGNATURES
Supplemental Indenture, dated March 15, 2001
First Supplemental Indenture, dated April 9, 2001
Second Supplemental Indenture, dated April 9, 2001
Third Supplemental Indenture, dated April 9, 2001
Executive Vehicle Plan
Securitization Property Sale Agreement, 03/09/01
2001 Stock Incentive Plan
Annual Incentive Plan
Basic and Diluted Earnings Per Share of Common Stk
Computation of Ratio of Earnings to Fixed Charges
Computation of Ratio of Earnings to Fixed Charges
Awareness Letter of Deloitte & Touche LLP
Assignment and Assumption Agreement, April 9, 2001
Inter-Creditor Agreement, dated March 9, 2001
Amendment to Trade Receivables Purchase and Sale
Amended and Restated Trade Receivables Purchase

DTE ENERGY COMPANY
and
THE DETROIT EDISON COMPANY
FORM 10-Q
For The Quarter Ended March 31, 2001

This document contains the Quarterly Reports on Form 10-Q for the quarter ended March 31, 2001 for each of DTE Energy Company and The Detroit Edison Company. Information contained herein relating to an individual registrant is filed by such registrant on its own behalf. Accordingly, except for its subsidiaries, The Detroit Edison Company makes no representation as to information relating to any other companies affiliated with DTE Energy Company.

TABLE OF CONTENTS


			Page

Definitions				3
















Quarterly Report on Form 10-Q for DTE Energy Company:




	Part I —	Financial Information		4




		Item 1 — Financial Statements		4




		Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		25




		Item 3 — Quantitative and Qualitative Disclosures About Market Risk		30




	Part II —	Other Information		31




		Item 5 — Other Information		31
















Quarterly Report on Form 10-Q for The Detroit Edison Company:




	Part I —	Financial Information		32




		Item 1 — Financial Statements		32




		Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		32




	Part II —	Other Information		32




		Item 1 — Legal Proceedings		32




		Item 5 — Other Information		32
















Quarterly Reports on Form 10-Q for DTE Energy Company and The Detroit Edison Company:




		Item 6 — Exhibits and Reports on Form 8-K		33
















Signature Page to DTE Energy Company Quarterly Report on Form 10-Q				41




Signature Page to The Detroit Edison Company Quarterly Report on Form 10-Q				42

DEFINITIONS


Annual Report		2000 Annual Report to the Securities and Exchange Commission on Form 10-K for DTE Energy Company or The Detroit Edison Company, as the case may be
















Annual Report Notes		Notes to Consolidated Financial Statements appearing on pages 41 through 71 and 76 through 78 of the 2000 Annual Report to the Securities and Exchange Commission on Form 10-K for DTE Energy Company and The Detroit Edison Company, as the case may be
















ABATE		Association of Businesses Advocating Tariff Equity
















Company		DTE Energy Company and Subsidiary Companies
















Detroit Edison		The Detroit Edison Company (a wholly owned subsidiary of DTE Energy Company) and Subsidiary Companies
















DTE Capital		DTE Capital Corporation (a wholly owned subsidiary of DTE Energy Company)
















Electric Choice		Electric customer access to competitive generation resources
















EPA		United States Environmental Protection Agency
















FERC		Federal Energy Regulatory Commission
















kWh		Kilowatthour
















MCN		MCN Energy Group Inc.
















MPSC		Michigan Public Service Commission
















MW		Megawatt
















MWh		Megawatthour
















Note(s)		Note(s) to Condensed Consolidated Financial Statements (Unaudited) appearing herein
















PSCR		Power Supply Cost Recovery
















Registrant		Company or Detroit Edison, as the case may be

QUARTERLY REPORT ON FORM 10-Q FOR DTE ENERGY COMPANY
PART I — FINANCIAL INFORMATION

Item 1 — Condensed Consolidated Financial Statements (Unaudited).

The following condensed consolidated financial statements (unaudited) are included herein.


		Page
DTE Energy Company:




	Condensed Consolidated Statement of Income		5




	Condensed Consolidated Balance Sheet		6




	Condensed Consolidated Statement of Cash Flows		8




	Condensed Consolidated Statement of Changes in Shareholders’ Equity		9




The Detroit Edison Company:




	Condensed Consolidated Statement of Income		11




	Condensed Consolidated Balance Sheet		12




	Condensed Consolidated Statement of Cash Flows		14




	Condensed Consolidated Statement of Changes in Shareholder’s Equity		15




Notes to Condensed Consolidated Financial Statements (Unaudited)			16




Independent Accountants’ Report			24

Note: Detroit Edison’s Condensed Consolidated Financial Statements are presented here for ease of reference and are not considered to be part of Item I of the Company’s report.

DTE Energy Company
Condensed Consolidated Statement of Income (Unaudited)
(Millions, Except Per Share Amounts; Shares in Thousands)


				Three Months Ended
				March 31

				2001			2000

Operating Revenues				$	1,842		$	1,182

Operating Expenses




	Fuel and purchased power				948			344




	Operation and maintenance				385			355




	Depreciation and amortization				184			192




	Taxes other than income				81			76

		Total Operating Expenses			1,598			967

Operating Income					244			215

Interest Expense and Other




	Interest expense				91			83




	Other — net				(1	)		2

		Total Interest Expense and Other			90			85

Income Before Income Taxes					154			130




Income Taxes					19			13

Income Before Cumulative Effect of a Change in




	Accounting Principle				135			117




Cumulative Effect of a Change in Accounting




	Principle, Net of Tax				3			—

Net Income				$	138		$	117

Basic Earnings per Common Share:




	Income Before Cumulative Effect of a Change




			In Accounting Principle	$	0.96		$	0.81




	Cumulative Effect of a Change in Accounting




			Principle		0.02			—

	Net Income			$	0.98		$	0.81

	Weighted Average Common Shares — basic				141,872			144,508




Diluted Earnings per Common Share:




	Income Before Cumulative Effect of a Change




			In Accounting Principle	$	0.95		$	0.81




	Cumulative Effect of a Change in Accounting




			Principle		0.02			—

	Net Income			$	0.97		$	0.81

	Weighted Average Common Shares — diluted				142,197			144,535

See Notes to Condensed Consolidated Financial Statements (Unaudited).

DTE Energy Company
Condensed Consolidated Balance Sheet (Unaudited)
(Millions, Except Shares)


			March 31		December 31
			2001		2000

ASSETS




Current Assets




	Cash and cash equivalents		$	987	$	64




	Restricted cash			92		88




	Accounts receivable




		Customer (less allowance for doubtful accounts of $21)		519		510




		Accrued unbilled revenues		182		188




		Other		90		140




	Inventories (at average cost)




		Fuel		163		193




		Materials and supplies		143		142




	Assets from risk management activities			260		289




	Other			117		38

				2,553		1,652

Investments




	Nuclear decommissioning trust funds			382		398




	Other			259		269

				641		667

Property




	Property, plant and equipment			12,382		12,179




	Property under capital leases			221		221




	Nuclear fuel under capital lease			713		705




	Construction work in progress			106		57

				13,422		13,162

Less accumulated depreciation and amortization				5,845		5,775

				7,577		7,387

Regulatory Assets				1,137		2,686

Securitized Regulatory Assets (Note 3)				1,719		—

Other Assets				255		270

Total Assets			$	13,882	$	12,662

See Notes to Condensed Consolidated Financial Statements (Unaudited).


		March 31			December 31
		2001			2000

LIABILITIES AND SHAREHOLDERS’ EQUITY




Current Liabilities




	Accounts payable	$	384		$	404




	Accrued interest		72			59




	Dividends payable		73			73




	Accrued payroll		90			103




	Short-term borrowings		35			503




	Income taxes		77			97




	Current portion long-term debt		417			256




	Current portion capital leases		38			41




	Liabilities from risk management activities		221			280




	Liabilities from hedging activities		103			—




	Other		265			218

			1,775			2,034

Other Liabilities




	Deferred income taxes		1,867			1,801




	Capital leases		146			145




	Regulatory liabilities		181			185




	Other		752			588

			2,946			2,719

Long-Term Debt			5,316			3,894

Shareholders’ Equity




	Common stock, without par value, 400,000,000 shares authorized, 138,151,908 and 142,651,172 issued and outstanding, respectively		1,857			1,918




	Accumulated other comprehensive loss		(61	)		—




	Retained earnings		2,049			2,097

			3,845			4,015

Total Liabilities and Shareholders’ Equity		$	13,882		$	12,662

See Notes to Condensed Consolidated Financial Statements (Unaudited).

DTE Energy Company
Condensed Consolidated Statement of Cash Flows (Unaudited)
(Millions)


				Three Months Ended
				March 31

				2001			2000

Operating Activities




	Net Income			$	138		$	117




	Adjustments to reconcile net income to net cash from operating activities:




		Depreciation and amortization			184			192




		Other			(40	)		22




		Changes in current assets and liabilities:




			Restricted cash		19			2




			Accounts receivable		47			44




			Inventories		29			18




			Payables		(20	)		(63	)




			Other		(120	)		(148	)

		Net cash from operating activities			237			184

Investing Activities




	Plant and equipment expenditures				(172	)		(176	)

		Net cash used for investing activities			(172	)		(176	)

Financing Activities




	Issuance of long-term debt				1,750			219




	Increase (decrease) in short-term borrowings				(468	)		114




	Increase in restricted cash for debt redemptions				(15	)		—




	Redemption of long-term debt				(168	)		(212	)




	Repurchase of common stock				(168	)		(62	)




	Dividends on common stock				(73	)		(75	)

		Net cash from (used for) financing activities			858			(16	)

Net Increase (Decrease) in Cash and Cash Equivalents					923			(8	)




Cash and Cash Equivalents at Beginning of the Period					64			33

Cash and Cash Equivalents at End of the Period				$	987		$	25

Supplementary Cash Flow Information




	Interest paid (excluding interest capitalized)			$	78		$	91




	Income taxes paid				22			14




Noncash Investing and Financing Activities




	Acquisition of assets by assuming liabilities				87			—




	New capital lease obligations				8			40

See Notes to Condensed Consolidated Financial Statements (Unaudited).

DTE Energy Company
Condensed Consolidated Statement of Changes in Shareholders’ Equity (Unaudited)
(Millions, Except Per Share Amounts; Shares in Thousands)


				2001

				Shares			Amount

Common Stock




	Balance at beginning of year				142,651		$	1,918




	Repurchase and retirement of common stock				(4,499	)		(61	)

	Balance at March 31, 2001				138,152		$	1,857

Accumulated Other Comprehensive Loss




Net Unrealized Losses on Derivatives Qualified as Hedges:




	Balance at beginning of year						$	—




	Net change in unrealized gains and losses (a)							(61	)

	Balance at March 31, 2001						$	(61	)

Retained Earnings




	Balance at beginning of year						$	2,097




	Net income							138




	Dividends declared on common stock ($0.515 per share)							(73	)




	Repurchase and retirement of common stock							(113	)

	Balance at March 31, 2001						$	2,049

Total Shareholders’ Equity							$	3,845

(a) Disclosure of Comprehensive Income (Loss)




		Net income					$	138

		Other comprehensive loss, net of tax:




		Net Unrealized Losses on Derivatives Qualified as Hedges:




			Net unrealized holding losses arising during period due to cumulative effect of a change in accounting principle, net of taxes of $24					(42	)




			Other net unrealized holding losses arising during the period, net of taxes of $12					(23	)




			Reclassification of losses recognized in net income, net of taxes of $2					4

								(61	)

		Comprehensive income					$	77

[ This page intentionally left blank. ]

The Detroit Edison Company
Condensed Consolidated Statement of Income (Unaudited)
(Millions)


			Three Months Ended
			March 31

			2001			2000

Operating Revenues			$	1,024		$	949

Operating Expenses




	Fuel and purchased power			269			229




	Operation and maintenance			256			240




	Depreciation and amortization			174			182




	Taxes other than income			79			75

		Total Operating Expenses		778			726

Operating Income				246			223

Interest Expense and Other




	Interest expense			72			69




	Other — net			5			4

		Total Interest Expense and Other		77			73

Income Before Income Taxes				169			150




Income Taxes				53			53

Income Before Cumulative Effect of a Change in




	Accounting Principle			116			97




Cumulative Effect of a Change in Accounting




	Principle, Net of Tax			(3	)		—

Net Income			$	113		$	97

See Notes to Condensed Consolidated Financial Statements (Unaudited).

The Detroit Edison Company
Condensed Consolidated Balance Sheet (Unaudited)
(Millions, Except Per Share Amounts and Shares)


			March 31		December 31
			2001		2000

ASSETS




Current Assets




	Cash and cash equivalents		$	477	$	24




	Restricted cash			15		—




	Accounts receivable




		Customer (less allowance for doubtful accounts of $20)		290		328




		Accrued unbilled revenues		182		188




		Other		95		127




	Inventories (at average cost)




		Fuel		146		163




		Materials and supplies		140		139




	Other			131		25

				1,476		994

Investments




	Nuclear decommissioning trust funds			382		398




	Other			39		38

				421		436

Property




	Property, plant and equipment			11,489		11,431




	Property under capital leases			220		220




	Nuclear fuel under capital lease			713		705




	Construction work in progress			11		2

				12,433		12,358

Less accumulated depreciation and amortization				5,717		5,659

				6,716		6,699

Regulatory Assets				1,137		2,686

Securitized Regulatory Assets (Note 3)				1,719		—

Other Assets				204		171

Total Assets			$	11,673	$	10,986

See Notes to Condensed Consolidated Financial Statements (Unaudited).


		March 31			December 31
		2001			2000

LIABILITIES AND SHAREHOLDER’S EQUITY




Current Liabilities




	Accounts payable	$	222		$	253




	Accrued interest		62			56




	Dividends payable		79			80




	Accrued payroll		87			96




	Short-term borrowings		—			245




	Income taxes		121			95




	Current portion long-term debt		318			159




	Current portion capital leases		38			41




	Other		126			167

			1,053			1,192

Other Liabilities




	Deferred income taxes		1,882			1,811




	Capital leases		146			145




	Regulatory liabilities		181			185




	Other		711			586

			2,920			2,727

Long-Term Debt			4,786			3,344

Shareholder’s Equity




	Common stock, $10 par value, 400,000,000 shares authorized, 134,287,832 and 145,119,875 issued and outstanding, respectively		1,343			1,451




	Premium on common stock		507			548




	Common stock expense		(44	)		(48	)




	Accumulated other comprehensive income		3			—




	Retained earnings		1,105			1,772

			2,914			3,723

Total Liabilities and Shareholder’s Equity		$	11,673		$	10,986

See Notes to Condensed Consolidated Financial Statements (Unaudited).

The Detroit Edison Company
Condensed Consolidated Statement of Cash Flows (Unaudited)
(Millions)


				Three Months Ended
				March 31

				2001			2000

Operating Activities




	Net Income			$	113		$	97




Adjustments to reconcile net income to net cash from operating activities:




		Depreciation and amortization			174			182




		Other			(71	)		58




		Changes in current assets and liabilities:




			Accounts receivable		76			49




			Inventories		16			6




			Payables		(34	)		(49	)




			Other		(109	)		(108	)

		Net cash from operating activities			165			235

Investing Activities




	Plant and equipment expenditures				(126	)		(130	)

		Net cash used for investing activities			(126	)		(130	)

Financing Activities




	Issuance of long-term debt				1,750			219




	Decrease in short-term borrowings				(245	)		(46	)




	Increase in restricted cash for debt redemptions				(15	)		—




	Redemption of long-term debt				(150	)		(194	)




	Repurchase of common stock				(846	)		—




	Dividends on common stock				(80	)		(80	)

		Net cash from (used for) financing activities			414			(101	)

Net Increase in Cash and Cash Equivalents					453			4




Cash and Cash Equivalents at Beginning of the Period					24			4

Cash and Cash Equivalents at End of the Period				$	477		$	8

Supplementary Cash Flow Information




	Interest paid (excluding interest capitalized)			$	66		$	84




	Income taxes paid				41			16




	New capital lease obligations				8			40

See Notes to Condensed Consolidated Financial Statements (Unaudited).

The Detroit Edison Company
Condensed Consolidated Statement of Changes in Shareholder’s Equity (Unaudited)
(Millions, Except Per Share Amounts; Shares in Thousands)


			2001

			Shares			Amount

Common Stock




	Balance at beginning of year			145,120		$	1,451




	Repurchase and retirement of common stock			(10,832	)		(108	)

	Balance at March 31, 2001			134,288		$	1,343

Premium on Common Stock




	Balance at beginning of year					$	548




	Repurchase and retirement of common stock						(41	)

	Balance at March 31, 2001					$	507

Common Stock Expense




	Balance at beginning of year					$	(48	)




	Repurchase and retirement of common stock						4

	Balance at March 31, 2001					$	(44	)

Accumulated Other Comprehensive Income




Net Unrealized Gains on Derivatives Qualified as Hedges:




	Balance at beginning of year					$	—




	Net change in unrealized gains and losses (a)						3

	Balance at March 31, 2001					$	3

Retained Earnings




	Balance at beginning of year					$	1,772




	Net income						113




	Dividends declared on common stock ($0.55 per share)						(79	)




	Repurchase and retirement of common stock						(701	)

	Balance at March 31, 2001					$	1,105

Total Shareholder’s Equity						$	2,914

(a) Disclosure of Comprehensive Income (Loss)




	Net income					$	113

	Other comprehensive income, net of tax:




	Net Unrealized Gains on Derivatives Qualified as Hedges:




		Net unrealized holding gains arising during period due to cumulative effect of a change in accounting principle, net of taxes of $6					13




		Other net unrealized holding losses arising during the period, net of taxes of $5					(10	)

							3

	Comprehensive income					$	116

See Notes to Condensed Consolidated Financial Statements (Unaudited).

DTE Energy Company and The Detroit Edison Company
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 – ANNUAL REPORT NOTES

These condensed consolidated financial statements (unaudited) should be read in conjunction with the Annual Report Notes. The Notes contained herein update and supplement matters discussed in the Annual Report Notes.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The condensed consolidated financial statements are unaudited, but in the opinion of the Company and Detroit Edison, with respect to its own financial statements, include all adjustments necessary for a fair statement of the results for the interim periods. Financial results for this interim period are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year.

Certain prior year balances have been reclassified to conform to the current year’s presentation.

NOTE 2 – MERGER AGREEMENT

As discussed in Notes 2 and 17 of the Annual Report Notes, on February 28, 2001, the Company and MCN announced a revised merger agreement that provides that the Company will acquire all outstanding shares of MCN for $24.00 per share in cash, or 0.715 shares of Company common stock for each share of MCN common stock. Certain allocation and proration procedures provided for in the original agreement continue to apply and will be used to ensure that the aggregate number of shares of MCN common stock that will be converted into cash and the Company’s common stock will be equal to 55% and 45%, respectively, of the total number of shares of MCN common stock outstanding immediately prior to the pending merger. MCN’s common shareholders have been asked to approve the revised merger agreement at a special meeting scheduled for May 15, 2001. The Company is currently awaiting approval of the merger from the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935, as amended. Although no assurances can be given, and the merger may be completed later, the Company currently expects that the merger will be completed on May 31, 2001. If this expectation does not change by May 24, 2001, the Company will publicly announce May 31, 2001 as the closing date. Even then, the closing could be delayed if SEC approval is not received prior to May 31, 2001.

Effective March 21, 2001, the Federal Trade Commission accepted a proposed consent order and easement agreement and granted DTE and MCN early termination of the Hart-Scott-Rodino Anti-trust Improvements Act of 1976 pre-merger waiting period. The easement agreement, which addresses the FTC’s competitive concerns, conveys an easement to Exelon Corp., an unaffiliated company, over the Michigan Consolidated Gas Company’s (“MichCon’s”) local natural gas distribution system that will allow Exelon Corp. to engage in the distribution, storage and sale of natural gas in MichCon’s and Detroit Edison’s overlapping distribution areas. MichCon, a natural gas utility

serving 1.2 million customers in more than 530 communities throughout Michigan, is MCN’s largest subsidiary.

The revised merger agreement expires December 31, 2001, in order to allow for sufficient time to obtain necessary regulatory approvals. The value of the revised transaction is approximately $4.1 billion, including the assumption of approximately $1.8 billion of MCN’s debt. The Company estimates that closing on the merger will occur in second quarter 2001.

NOTE 3 – SECURITIZATION

On June 5, 2000, Michigan Public Acts 141 and 142 became effective, providing Detroit Edison with the right to recover certain stranded costs through securitization, assuming such recovery was authorized by an appropriate order of the MPSC.

In an order issued on November 2, 2000, and clarified on January 4, 2001, the MPSC approved the issuance of up to $1.774 billion of securitization bonds for the benefit of Detroit Edison. Detroit Edison formed The Detroit Edison Securitization Funding LLC (“Securitization LLC”), a wholly owned single member Michigan limited liability corporation, for the purpose of securitizing its stranded costs (referred to as qualified costs and securitization property in the Michigan statutes). The securitization property created by the MPSC’s order consists of certain of Detroit Edison’s qualified costs (primarily unamortized costs related to Detroit Edison’s Fermi 2 nuclear power plant), an irrevocable right to recover amounts sufficient to pay the principal of and interest on the securitization bonds, as well as amounts sufficient to pay ongoing costs associated with the securitization bond transaction and the Securitization LLC.

On March 9, 2001, the Securitization LLC issued $1.750 billion of its Securitization Bonds, Series 2001-1 and Detroit Edison sold $1.750 billion of stranded costs to its Securitization LLC. The Securitization Bonds mature over a period of up to fifteen years and have an average interest rate of 6.3%. Detroit Edison has implemented a non-bypassable surcharge on its customer bills, effective March 26, 2001. The MPSC’s securitization order also permits Detroit Edison to recover taxes associated with securitization.

The Securitization LLC is independent of the Company and Detroit Edison, as is its ownership of the securitization property. Due to principles of consolidation, stranded costs sold by Detroit Edison to the Securitization LLC and the $1.750 billion of its securitization bonds appear on the Company’s and Detroit Edison’s balance sheets. Neither the Company nor Detroit Edison make claim to these assets and ownership of such assets has vested in the Securitization LLC and been assigned to the trustee for the Securitization Bonds. Funds collected by Detroit Edison, acting in the capacity of a servicer for the Securitization LLC, are remitted to the trustee for the Securitization Bonds. Neither the securitization property nor funds collected from Detroit Edison’s customers for the payment of costs related to the Securitization LLC and Securitization Bonds are available to the Company’s or Detroit Edison’s creditors.

NOTE 4 – SHORT-TERM CREDIT ARRANGEMENTS AND BORROWINGS

At March 31, 2001, Detroit Edison had total short-term credit arrangements of approximately $518 million, under which no amounts were outstanding. Additionally, Detroit Edison had a $200 million short-term financing agreement secured by its customer accounts receivable and unbilled revenues portfolios, under which no amounts were outstanding at March 31, 2001.

On April 9, 2001, DTE Capital was merged into the Company, with the Company assuming all of DTE Capital’s assets and liabilities. The Company has assumed DTE Capital’s $400 million commercial paper program, as well as direct liability for $400 million of remarketed notes originally issued by DTE Capital. At March 31, 2001, $35 million in commercial paper was outstanding, and the Company assumed direct liability for this commercial paper. Support agreements for the benefit of DTE Capital have been terminated. Guarantees of non-regulated affiliate obligations, of which $296 million were outstanding and $700 million were authorized at March 31, 2001, will now be issued solely by the Company.

NOTE 5 – FINANCIAL AND OTHER DERIVATIVE INSTRUMENTS

In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that all derivative instruments be recognized as either assets or liabilities, measured at fair value. The accounting for changes in fair value depends upon the purpose of the derivative instrument and whether it is designated as a hedge and qualifies for hedge accounting. To the extent derivative instruments qualify as hedges and are designated as hedges of the variability of cash flows associated with forecasted transactions, the effective portion of the gain or loss on such derivative instruments is generally reported in other comprehensive income. The ineffective portion, if any, is reported in net income. Such amounts reported in other comprehensive income are reclassified into net income when the forecasted transaction affects earnings. If a cash flow hedge is discontinued because it is probable that the forecasted transaction will not occur, the net gain or loss is immediately reclassified into earnings. To the extent derivative instruments qualify as hedges and are designated as hedges of changes in fair value of an existing asset, liability or firm commitment, the gain or loss on the hedging instrument is recognized in earnings along with the changes in fair value of the hedged asset, liability or firm commitment attributable to the hedged risk.

SFAS No. 133 requires that as of the date of initial adoption, the difference between the fair market value of derivative instruments recorded on the balance sheet and the previous carrying amount of those derivatives be reported in net income or other comprehensive income, as appropriate, as the cumulative effect of a change in accounting principle in accordance with Accounting Principles Board Opinion 20, “Accounting Changes.”

THE COMPANY

As of January 1, 2001, the Company adopted SFAS No. 133, as required. The cumulative effect of the adoption of SFAS No. 133 was an after-tax increase in net income of $3 million, and an after-tax increase in other comprehensive loss of $42 million. The financial statement impact of recording the various SFAS 133 transactions for the Company at January 1, 2001 was as follows:


	Amount
Financial Statement Line Item	Increase (Decrease)

	(millions)
Asset from Risk Management Activities	$	26




Liabilities from Hedging Activities	$	85




Income Taxes Payable	$	(20	)




Other Comprehensive Loss	$	42




Cumulative Effect of a Change in Accounting Principle	$	3

The Company’s primary market risk exposures are associated with interest rates and commodity prices. The Company has risk management policies to monitor and assist in mitigating these market risks and uses derivative instruments to manage some of the exposures. Except for the activities of DTE Energy Trading (DTE ET), the Company does not hold or issue derivative instruments for trading purposes.

Interest Rate Risk

Hedge of Anticipated Issuance of Long-Term Debt

In accordance with its risk management policy, the Company entered into a series of forward-starting interest rate swaps and Treasury locks in order to limit its sensitivity to market interest rate risk associated with its forecasted issuance of long-term debt to be used to finance the pending merger with MCN. Such instruments have been formally designated as cash flow hedges for accounting purposes, are measured at fair market value and are recorded as liabilities in the Company’s consolidated balance sheet. Losses on these instruments are included in other comprehensive loss. At March 31, 2001, the Company recorded $63 million, net of tax in other comprehensive loss for this hedge. Amounts recorded in other comprehensive loss will be reclassified to interest expense as the forecasted interest payments associated with the debt issuance affect earnings. The maximum length of time over which the Company is hedging its exposure to the variability of future cash flows for this forecasted transaction is 30 years.

During the three-month period ended March 31, 2001, no amounts were recognized in earnings due to hedge ineffectiveness of this hedging relationship. However, a loss of approximately $6 million was reclassified from accumulated other comprehensive loss into earnings since management determined it was probable that certain forecasted transactions within a series of interest payments associated with this issuance of long-term debt would not occur within the time frame originally anticipated. This loss was reported as a component of interest expense within the consolidated statement of

income. The estimated net amount of existing losses at March 31, 2001 that is expected to be reclassified into earnings within the next 12 months is approximately $6 million.

Interest Rate Swap

PCI Enterprises Company (PCI), a wholly owned coal pulverizing subsidiary of the Company, entered into a seven-year interest rate swap agreement beginning June 30, 1997, with the intent of reducing the impact of certain cash flows due to changes in LIBOR associated with its variable rate non-recourse debt. The swap has been formally designated as a cash flow hedge for accounting purposes, is measured at fair market value and is recorded as a liability in the Company’s consolidated balance sheet. The holding loss on the swap is included in other comprehensive loss. At March 31, 2001, the Company recorded $0.7 million, net of tax in other comprehensive loss for this hedge. During the three-month period ended March 31, 2001, no amounts were recognized in earnings due to ineffectiveness of this hedging relationship. No amounts are expected to be reclassified into earnings within the next 12 months.

The effects of adopting SFAS No. 133 are recorded in the following line items in the accompanying Balance Sheet of the Company at March 31, 2001:


Financial Statement Line Item	Balance

Assets from Risk Management Activities	$	30




Other Current Assets	$	7




Liabilities from Hedging Activities	$	103




Other Liabilities — Other	$	3

DETROIT EDISON

The cumulative effect of the adoption of SFAS No. 133 was an after-tax decrease in net income of $3 million, and an after-tax increase in other comprehensive income of $13 million. The financial statement impact of recording the various SFAS 133 transactions at January 1, 2001 was as follows:


	Amount
Financial Statement Line Item	Increase (Decrease)

	(millions)
Other Current Assets	$	26




Other Current Liabilities	$	10




Income Taxes Payable	$	6




Other Comprehensive Income	$	13




Cumulative Effect of a Change in Accounting Principle	$	(3	)

Commodity Price Risk

Forward Energy Purchase Contracts

Detroit Edison uses over-the-counter (OTC) forward contracts and options to manage the risk of fluctuations in the market price of electricity. To achieve its hedging objectives, Detroit Edison chooses the time to enter into purchase and sale contracts and selects the types of instruments. The forward contracts used to financially hedge electricity price risks are relatively liquid instruments and provide Detroit Edison the flexibility to execute its hedging strategies and meet its objectives.

Certain of these contracts have been formally designated as cash flow hedges of the forecasted purchase of power for accounting purposes. Such contracts are measured at fair market value and are recorded as assets and liabilities in the consolidated balance sheets. Gains and losses on these instruments are included in other comprehensive income. At March 31, 2001, Detroit Edison recorded $3 million, net of tax in other comprehensive income for these hedges. Amounts recorded in other comprehensive income will be reclassified to fuel and purchased power expense as the forecasted purchases of electricity affect earnings. At March 31, 2001, the estimated net amount of existing gains that is expected to be reclassified into earnings within the next 12 months is approximately $3 million. The maximum length of time over which Detroit Edison is hedging its exposure to the variability of future cash flows is seventeen months. Ineffectiveness recognized in these hedging relationships was immaterial for the three months ended March 31, 2001. As forward contracts settle in the second and third quarters of 2001, existing gains and losses that are currently reported in accumulated other comprehensive income will be reclassified into earnings.

Other Derivative Instruments

Certain of Detroit Edison’s electricity forward purchase and sale contracts and purchased option contracts, entered into for the purpose of economically hedging its exposure to commodity risk, do not qualify for hedge accounting under the provisions of SFAS No. 133. Detroit Edison marks these contracts to market on its consolidated balance sheet and records an offsetting gain or loss in earnings. Such holding gains and losses are recorded in revenues or fuel and purchased power expense, depending on the type of contract.

The effects of adopting SFAS No. 133 are recorded in the following line items in the accompanying Balance Sheet of Detroit Edison at March 31, 2001:


Financial Statement Line Item	Balance

Other Current Assets	$	37




Other Liabilities — Other	$	2

Certain of Detroit Edison’s forward electric contracts are considered “normal purchases and sales,” as defined by SFAS No. 133, and therefore are excluded from the scope of SFAS No. 133. In April 2001, the Derivatives Implementation Group (DIG), a committee

of the FASB responsible for providing guidance on the implementation of SFAS No. 133, reached tentative conclusions regarding certain contracts in the power generation industry. Depending on the final decision of the FASB, certain commodity contracts currently considered “normal purchases and sales” may no longer qualify for this exclusion, and may be required to be accounted for under SFAS No. 133. In this case, Detroit Edison would follow the transition provisions for applying the implementation guidance for SFAS No. 133. Management believes such contracts would qualify as cash flow hedges and be recorded at fair value on the balance sheet, with the effective portion of the hedge recognized in accumulated other comprehensive income.

TRADING ACTIVITIES

DTE ET markets and trades electricity and natural gas physical products and financial instruments, and provides risk management services utilizing energy commodity derivative instruments, which include futures, exchange traded and over-the-counter options, and forward purchase and sales commitments.

Notional Amounts and Terms

The notional amounts and terms of DTE ET’s outstanding energy trading financial instruments as of March 31, 2001 were:

Fixed Price

Maximum

Payor

Receiver

Terms in Years

(Thousand of MWh)

Electricity Commodities

1,010

1,308

At March 31, 2001, DTE ET also had sales and purchase commitments for physical delivery of electricity associated with contracts based on fixed prices totaling 216,556 net MWh purchased with terms extending up to 2 years.

Notional amounts reflect the volume of transactions, but do not necessarily represent the amounts exchanged by the parties to the energy commodity derivative instruments. Accordingly, notional amounts do not accurately measure DTE ET’s exposure to market or credit risks. The maximum terms in years detailed above are not indicative of likely future cash flows as these positions may be offset in the markets at any time in response to DTE ET’s risk management needs.

Fair Values

The average fair values of DTE ET’s derivative assets and liabilities were $271.8 million and $263.7 million, respectively, during the first quarter ended March 31, 2001, and $80.5 million and $62.0 million, respectively, during the first quarter ended March 31, 2000. At March 31, 2001 and December 31, 2000, the fair values of the derivative assets and liabilities were approximately $228 million and $221 million, and $288.9 million and

$279.9 million, respectively. Net unrealized gains were $6.1 million and $9.0 million at March 31, 2001 and December 31, 2000, respectively.

NOTE 6 – SEGMENT AND RELATED INFORMATION

The Company’s reportable business segments are its electric utility, Detroit Edison, which is engaged in the generation, purchase, distribution and sale of electric energy (transmission services are performed by Detroit Edison’s wholly owned subsidiary, International Transmission Company), in a 7,600-square-mile area in Southeastern Michigan, its energy trading company, and energy services business, which develops and manages energy-related projects and services primarily concentrated in the steel industry. All Other includes businesses involved in new energy technologies. Inter-segment revenues are not material. Income taxes are allocated based on inter-company tax sharing agreements, which generally allocate the tax benefit of alternate fuels tax credits and accelerated depreciation to the respective subsidiary, without regard to the subsidiary’s own net income or whether such tax benefits are realized by the Company. Financial data for business segments are as follows:


												Reconciliations
			Electric		Energy		Energy		All			and
			Utility		Trading		Services		Other			Eliminations			Consolidated

							(Millions)
Three Months Ended




	March 31, 2001




		Operating revenues	$	1,024	$	685	$	134	$	15		$	(16	)	$	1,842




		Net income (loss)		113		1		33		(7	)		(2	)		138




















Three Months Ended




	March 31, 2000




		Operating revenues	$	949	$	126	$	107	$	17		$	(17	)	$	1,182




		Net income (loss)		97		6		25		(9	)		(2	)		117

___________________________________________

This Quarterly Report on Form 10-Q, including the report of Deloitte & Touche LLP (on page 24) will automatically be incorporated by reference in the Prospectuses constituting part of the Registration Statements on Form S-3 (Registration Nos. 33-53207, 33-64296 and 333-65765) of The Detroit Edison Company and Form S-8 (Registration No. 333-00023), Form S-4 (Registration No. 333-89175) and Form S-3 (Registration Nos. 33-57545 and 333-58834) of DTE Energy Company, filed under the Securities Act of 1933. Such report of Deloitte & Touche LLP, however, is not a “report” or “part of the Registration Statement” within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the liability provisions of Section 11(a) of such Act do not apply.

Independent Accountants’ Report

To the Board of Directors and Shareholders of DTE Energy Company and
The Detroit Edison Company

We have reviewed the accompanying condensed consolidated balance sheets of DTE Energy Company and subsidiaries and of The Detroit Edison Company and subsidiaries as of March 31, 2001, and the related condensed consolidated statements of income and cash flows for the three-month periods ended March 31, 2001 and 2000, and the condensed consolidated statements of changes in shareholders’ equity for the three-month period ended March 31, 2001. These financial statements are the responsibility of DTE Energy Company’s management and of The Detroit Edison Company’s management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheets of DTE Energy Company and subsidiaries and of The Detroit Edison Company and subsidiaries as of December 31, 2000, and the related consolidated statements of income, changes in shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated January 24, 2001, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheets as of December 31, 2000 is fairly stated, in all material respects, in relation to the consolidated balance sheets from which it has been derived.

DELOITTE & TOUCHE LLP

Detroit, Michigan
May 9, 2001

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This analysis for the three months ended March 31, 2001, as compared to the same period in 2000, should be read in conjunction with the condensed consolidated financial statements (unaudited), the accompanying Notes, and the Annual Report Notes.

Detroit Edison is the principal operating subsidiary of the Company and, as such, unless otherwise identified, this discussion explains material changes in results of operations of both the Company and Detroit Edison and identifies recent trends and events affecting both the Company and Detroit Edison.

GROWTH

The Company is focused on prudently growing its earnings base. For the past three years, it has articulated a growth strategy that has consistently achieved its 6% growth objective (after adjustment in 2000 for one-time legislative and merger items). Given its prior successes, depth of management team and strategic asset base, the Company has increased its growth objective up to 8% over the next several years. The new anticipated growth rate is expected to be achieved by strengthening our core electric and gas (after the pending merger with MCN) utility businesses in the short term, building our non-regulated businesses in the mid term and leveraging investments in energy technology over the long term. The growth strategy, focused on the greater Midwest region, leverages and expands existing assets and skills.

As discussed in Note 2, the Company and MCN announced a revised merger agreement. The Company expects that completion of the pending merger will result in the issuance of approximately 29 million shares of its common stock and approximately $1.2 billion in external financing. The pending merger is expected to create a fully integrated electric and natural gas company that is anticipated to support the Company’s commitment to a long-term earnings growth rate of up to 8%. The merger is expected to be accretive to earnings in the first full year of operation as a combined company. In addition, it is expected that approximately $1.1 billion of cost savings will be realized over the next 10 years. See Note 5 for a discussion of the financial instruments used to hedge the interest rate risk associated with financing the pending merger.

As a result of Detroit Edison’s sale of certain of its stranded costs and the related sale of Securitization Bonds, Detroit Edison’s operating revenues and income are expected to be reduced in 2001 and future years. This revenue reduction is offset by the certainty of stranded cost recovery that resulted from the issuance of the Securitization Bonds. Earnings per share are not expected to be impacted due to the reduction in average common shares outstanding resulting from the buyback of common shares.

The Company projects that earnings (excluding the impact of goodwill and merger restructuring charges) will be approximately $3.50 to $3.60 per share in 2001 and $4.10 to $4.20 per share in 2002.

ELECTRIC INDUSTRY RESTRUCTURING

Pursuant to Michigan legislation and MPSC orders, on March 9, 2001, Detroit Edison sold $1.750 billion of stranded costs to its Securitization LLC subsidiary, and the Securitization LLC issued $1.750 billion of securitization bonds. Detroit Edison is in the process of using the proceeds of the bonds to retire debt and equity, as required, in a manner that will maintain its debt/equity ratio at approximately 50%. The Company will likewise retire approximately 50% debt and 50% equity with the proceeds received as the sole holder of Detroit Edison’s equity.

LIQUIDITY AND CAPITAL RESOURCES

Cash From Operating Activities

Net cash from operating activities was higher for the Company due primarily to increased net income and changes in other current assets and liabilities.

Net cash from operating activities was lower for Detroit Edison due primarily to increases in other assets.

Cash Used for Investing Activities

Net cash used for investing activities was lower due to decreased plant and equipment expenditures.

Cash From Financing Activities

Net cash from financing activities was higher due primarily to the issuance of Securitization Bonds, partially offset by the resulting redemptions of short-term borrowings and long-term debt and the buyback of common stock. Remaining proceeds from securitization will be used for additional debt redemptions and buyback of common stock.

RESULTS OF OPERATIONS

For the three months ended March 31, 2001, the Company’s net income was $138 million, or $0.98 per basic common share, compared to $117 million, or $0.81 per basic common share for the three months ended March 31, 2000.

The 2001 three-month earnings were higher than 2000 due to higher utility revenues due to the suspension of the PSCR clause and higher non-regulated income, partially offset by higher purchased power costs, higher operating expenses and the effect of the implementation of the new accounting standard for derivatives (FAS 133).

As a result of the suspension of the PSCR clause, the Company expects that the distribution of yearly earnings will shift significantly. The first and fourth quarters of the year are expected to show higher earnings, while lower earnings are expected in the second and third quarters. In addition, the fuel clause suspension will have an impact on earnings, since rates will no longer be adjusted for changes in fuel and purchased power expenses.

Operating Revenues

Operating revenues were $1.842 billion, up 55.8% from 2000 operating revenues of $1.182 billion. Operating revenues increased (decreased) due to the following:


			2001			2000

			(Millions)
Detroit Edison




	Rate change		$	—		$	4




	Residential rate reduction			(17	)		—




	System sales volume and mix			(2	)		36




	Suspension of PSCR mechanism			46			—




	Wholesale sales			32			(7	)




	Other — net			16			5

		Total Detroit Edison		75			38

Non-Regulated




	DTE Energy Services			27			26




	DTE Energy Trading			559			99




	Other — net			(1	)		(5	)

		Total Non-Regulated		585			120

Total			$	660		$	158

Detroit Edison MWh sales for 2001 and the percentage change by year were as follows:


		2001		2001			2000

		(Thousands of MWh)
		Sales

Residential			3,671		5.5	%		(0.1	)%




Commercial			4,503		(3.3	)		3.3




Industrial			3,674		(7.3	)		11.6




Other (primarily sales for resale)			674		(2.5	)		3.8

	Total System		12,522		1.1			4.7




Wholesale sales			727		49.5			(56.8	)

	Total		13,249		(0.2	)		(0.5	)

In 2001, residential sales increased due to greater heating demand. Commercial sales decreased due to increased migration of customers to Electric Choice program. Industrial sales decreased due to reduced auto and steel production.

Non-regulated revenues were higher due to an increased level of operations, primarily at DTE Energy Trading, and the addition of new businesses.

Operating Expenses

Fuel and Purchased Power

Fuel and purchased power expense increased for the Company due primarily to non-regulated subsidiary expenses, principally DTE Energy Trading. Detroit Edison fuel and purchased power expense increased due to greater plant generation and increased market prices of purchased energy. The increased costs are partially offset by increased usage of lower cost coal and nuclear generation, decreased usage of higher cost gas and oil generation, and reduced purchased energy quantities.

System output and average delivered fuel and purchased power unit costs for Detroit Edison were as follows:


		Three Months

		2001		2000

		(Thousands of MWh)
Power plant generation




	Fossil		10,228		9,856




	Nuclear		2,413		2,389




Purchased power			1,532		1,972

System output			14,173		14,217

Average unit cost ($/MWh)




	Generation	$	12.34	$	12.72

	Purchased power	$	43.32	$	28.98

Operation and Maintenance

The Company’s operation and maintenance expenses were higher by $30 million. Higher non-regulated expenses ($14 million) were due to an increased level of operations and the addition of new businesses, partially offset by a gain on the sale of an interest in a coke battery. Higher Detroit Edison expenses ($16 million) resulted primarily from an increase in storm expense, distribution system and plant maintenance in preparation for the summer and an increase in benefit costs.

Depreciation and Amortization

Depreciation and amortization expense was lower due to an extension of the amortization period resulting from the securitization of regulatory assets in March 2001.

Income Taxes

Income tax expense for the Company increased due primarily to increased pretax income, partially offset by increased utilization of alternate fuels credits generated from non-regulated businesses. The majority of alternate fuels credits are available through 2002, while others have been extended through 2007.

ACCOUNTING FOR DERIVATIVES

Effective January 1, 2001, The Company adopted Statement of Financial Accounting Standards No. 133 (SFAS No. 133), as amended. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.

In general, SFAS No. 133 requires that companies recognize all derivatives as either assets or liabilities on the balance sheet, measured at fair value. SFAS No. 133 provides an exemption for certain contracts that qualify as “normal purchases and sales.” To qualify for this exemption, certain criteria must be met, including that it must be probable that the contract will result in physical delivery.

The Company’s adoption of SFAS No. 133 on January 1, 2001 resulted in the recognition of derivative assets on the consolidated balance sheet at January 1, 2001 in the amount of $26 million, with offsetting amounts, net of tax, recorded in other comprehensive income of $13 million, and cumulative effect of a change in accounting principle of $3 million. As of January 1, 2001, derivative liabilities in the amount of $85 million were also recorded as a result of adopting SFAS No. 133, with an offsetting amount, net of tax, recorded in other comprehensive loss, of $55 million.

Detroit Edison’s adoption of SFAS No. 133 on January 1, 2001 resulted in the recognition of derivative assets on the consolidated balance sheet at January 1, 2001 in the amount of $26 million, with offsetting amounts, net of tax, recorded in other comprehensive income of $13 million, and cumulative effect of a change in accounting principle of $3 million. As of January 1, 2001, derivative liabilities in the amount of $10 million were also recorded as a result of adopting SFAS No. 133, with an offsetting amount, net of tax, recorded in cumulative effect of a change in accounting principle of $(6) million.

See “Note 5 – Financial and Other Derivative Instruments” herein for additional information.

FORWARD-LOOKING STATEMENTS

Certain information presented herein is based on the expectations of the Company and Detroit Edison, and, as such, is forward-looking. The Private Securities Litigation Reform Act of 1995 encourages reporting companies to provide analyses and estimates of future prospects and also permits reporting companies to point out that actual results may differ from those anticipated.

Actual results for the Company and Detroit Edison may differ from those expected due to a number of variables including, but not limited to, interest rates, the level of borrowings, weather, actual sales, changes in the cost of fuel and purchased power due to the suspension of the PSCR mechanism (including natural gas subsequent to the pending merger with MCN), the effects of competition and the phased-in implementation of Electric Choice, the implementation of utility restructuring in Michigan (which involves pending regulatory and related judicial proceedings, and actual and possible reductions in rates and earnings), environmental and nuclear requirements,

the impact of FERC proceedings and regulations, and the contributions to earnings by non-regulated businesses. In addition, expected results will be affected by the Company’s pending merger with MCN and the timing of the accretive effect of such merger. While the Company and Detroit Edison believe that estimates given accurately measure the expected outcome, actual results could vary materially due to the variables mentioned, as well as others.

Item 3 — Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

The Company is subject to interest rate risk in conjunction with the anticipated issuance of long-term debt to be used to finance the merger with MCN. The Company’s exposure to interest rate risk arises from market fluctuations in interest rates until the date of the anticipated debt issuance. To limit the sensitivity to interest rate fluctuations, the Company has entered into a series of forward-starting interest rate swaps and Treasury locks and designated such instruments as hedges. See Note 5 for further discussion of these derivative financial instruments.

A sensitivity analysis model was used to calculate the fair values of the Company’s derivative financial instruments, utilizing applicable market interest rates in effect at March 31, 2001. The sensitivity analysis involved increasing and decreasing the market rates by a hypothetical 10% and calculating the resulting change in the fair values of the interest rate sensitive instruments. The favorable (unfavorable) changes in fair value are as follows:


			Assuming 10%			Assuming 10%
			Increase in Rates			Decrease in Rates

			(Millions)
Interest Rate Risk




Interest Rate Sensitive Forward Starting Swaps – 5-year				$	6.1		$	(6.3	)




		– 10-year			19.6			(20.9	)




	Treasury Locks – 10-year				1.8			(1.9	)




		– 30-year			12.0			(12.3	)

Commodity Price Risk

Detroit Edison is subject to commodity price risk in conjunction with the anticipated purchase of electricity to meet reliability obligations during times of peak customer demand. Detroit Edison's exposure to commodity price risk arises from market fluctuations in commodity prices until the date of the anticipated purchase of electricity. To limit the sensitivity to commodity price fluctuations, Detroit Edison has entered into a series of forward electricity contracts and option contracts. See Note 5 for further discussion of these derivative instruments.

A sensitivity analysis model was used to calculate the fair values of Detroit Edison's derivative instruments, utilizing applicable commodity prices in effect at March 31, 2001. The sensitivity analysis involved increasing and decreasing the commodity prices by a hypothetical 10% and calculating the resulting change in the fair values of the commodity price sensitive instruments. The favorable (unfavorable) changes in fair value are as follows:

Assuming 10%

Increase in

Decrease in

Commodity Prices

(Millions)

Forward Electricity and Option
Contracts

(8.4

)

8.2

QUARTERLY REPORT ON FORM 10-Q FOR
DTE ENERGY COMPANY

PART II – OTHER INFORMATION

Item 5 – Other Information.

David E. Meador was elected Senior Vice President and Chief Financial Officer of the Company and Detroit Edison, effective with the close of the pending merger with MCN. Mr. Meador was Controller, Mopar Parts Division, at Chrysler Corporation, an international automotive manufacturer, from November 1996 until February 1997. From 1986 to 1996, he held a variety of executive financial positions at Chrysler. Effective February 28, 1997, he was elected Vice President and effective March 29, 1997, he assumed the duties of Controller. Effective April 28, 1999, he was elected Vice President – Finance and Accounting and effective May 15, 2000, he was elected Senior Vice President and Treasurer.

Larry G. Garberding, current Executive Vice President and Chief Financial Officer, will continue as executive vice president and a member of the board of directors until his retirement at year-end.

Effective February 28, 2001, Daniel G. Brudzynski was elected Vice President and Controller, respectively, of the Company and Detroit Edison. Mr. Brudzynski was Manager, Product Development Finance and Manager, Forecasting Redesign and Implementation at Chrysler Corporation, an international automotive manufacturer, from 1995 until 1997. He joined Detroit Edison in 1997 as Assistant Controller. Effective April 28, 1999, he was elected Controller and Assistant Vice President.

QUARTERLY REPORT ON FORM 10-Q FOR
THE DETROIT EDISON COMPANY

PART I — FINANCIAL INFORMATION

Item 1 – Condensed Consolidated Financial Statements (Unaudited).

See pages 11 through 15.

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

See the Company’s and Detroit Edison’s “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which is incorporated herein by reference.

PART II — OTHER INFORMATION

Item 1 – Legal Proceedings.

In April 2001, the Michigan Court of Appeals denied plaintiffs’ application for leave for an interlocutory hearing on the trial court’s denial of class certification in Coch, et al v. Detroit Edison (Circuit Court for Wayne County, Michigan). This matter, which alleges employment-related claims of discrimination, is proceeding as nine separate claims. Detroit Edison believes all claims are without merit.

Item 5 – Other Information.

On March 20, 2001, the International Transmission Company (ITC), currently a wholly owned subsidiary of Detroit Edison, along with other members of the Alliance Regional Transmission Organization (RTO), filed with FERC a settlement agreement with parties of the Midwest Independent System Operator (ISO). Both parties are developing proposals for a regional transmission organization in the Midwest. The settlement allows the business models for the Midwest ISO and the Alliance RTO to continue developing. The development of a single rate was agreed to and any eligible customer taking service under either the Midwest ISO Open Access Transmission Tariff (OATT) or the Alliance RTO OATT will be able to obtain service at this single rate. This rate will be in effect until at least December 31, 2004. The parties will also coordinate activities for transmission and transmission-related services, and plan to be operational by December 15, 2001.

The MPSC initiated a case in February 2001 to address the August 2000 request by ABATE to consider the consequences of the transfer of transmission assets from Detroit Edison to ITC. In March 2001, ABATE filed a motion to consolidate its request with the application that Detroit Edison must file by June 5, 2001, proposing to unbundle its commercial and industrial rates. Detroit Edison supported ABATE’s consolidation request, and the case has been adjourned until Detroit Edison files its case.

QUARTERLY REPORTS ON FORM 10-Q FOR
DTE ENERGY COMPANY AND THE DETROIT EDISON COMPANY

Item 6 – Exhibits and Reports on Form 8-K.

(a) Exhibits

(i) Exhibits filed herewith


Exhibit
Number

4-222		Supplemental Indenture, dated as of March 15, 2001, between Detroit Edison and First Chicago Trust Company of New York, establishing the 2001 Series AP Mortgage Bonds.




4-223		First Supplemental Indenture, dated as of April 9, 2001, between DTE Energy and The Bank of New York, as trustee.




4-224		Second Supplemental Indenture, dated as of April 9, 2001, between DTE Energy and the Bank of New York, as trustee.




4-225		Third Supplemental Indenture, dated as of April 9, 2001, among DTE Capital Corporation, DTE Energy and The Bank of New York, as trustee




10-41*		Executive Vehicle Plan




10-42		Securitization Property Sale Agreement, dated March 9, 2001, between Detroit Edison and The Detroit Edison Securitization Funding LLC




10-43*		DTE Energy 2001 Stock Incentive Plan




10-44*		DTE Energy Annual Incentive Plan




11-22 -		DTE Energy Company Basic and Diluted Earnings Per Share of Common Stock.




12-30 -		DTE Energy Company Computation of Ratio of Earnings to Fixed Charges.




12-31 -		The Detroit Edison Company Computation of Ratio of Earnings to Fixed Charges.




15-16 -		Awareness Letter of Deloitte & Touche LLP regarding their report dated May 9, 2001.


Exhibit
Number





99-40		Assignment and Assumption Agreement, dated as of April 9, 2001, among DTE Capital, DTE Energy, Citibank, N.A., as agent for the Lenders Party to the Fourth Amended and Restated $400 million Credit Agreement, dated as of January 16, 2001.




99-41		Inter-Creditor Agreement dated as of March 9, 2001, among Citicorp North America, Inc., Citibank, N.A., The Bank of New York, The Detroit Edison Securitization Funding LLC and Detroit Edison.




99-42		Amendment, dated March 9, 2001, to Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended, among Detroit Edison, Citibank, N.A. and Citicorp North America, Inc.




99-43		Amended and Restated Trade Receivables Purchase and Sale Agreement, dated March 9, 2001, among Detroit Edison, Corporate Asset Funding Company, Inc., Citibank, N. A. and Citicorp North America, Inc.




(ii)		Exhibits incorporated herein by reference.




2(a) -		Agreement and Plan of Merger, among DTE Energy, MCN Energy Group, Inc. and DTE Enterprises, Inc., dated as of October 4, 1999 and amended as of November 12, 1999, as further amended as of February 28, 2001. (Exhibit 2-2 to Form 10-K for the year ended December 31, 2000.)




3(a) -		Amended and Restated Articles of Incorporation of DTE Energy Company 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 3-13 to Form 10-Q for quarter ended June 30, 1999.)




3(d) -		Articles of Incorporation of DTE Enterprises, Inc. (Exhibit 3.5 to Registration No. 333-89175.)




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 23, 1997.)


Exhibit
Number





3(f) -		Agreement and Plan of Exchange (Exhibit 1(2) to DTE Energy Form 8-B filed January 2, 1996, File No. 1-11607.)




3(g) -		Bylaws of DTE Energy Company, as amended through September 22, 1999. (Exhibit 3-3 to Registration No. 333-89175.)




3(h) -		Bylaws of The Detroit Edison Company, as amended through September 22, 1999. (Exhibit 3-14 to Form 10-Q for quarter ended September 30, 1999.)




3(i) -		Bylaws of DTE Enterprises, Inc. (Exhibit 3.6 to Registration No. 333-89175.)




4(a) -		Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison (File No. 1-2198) and First Chicago Trust Company of New York as Trustee (Exhibit B-1 to Registration No. 2-1630) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings as set forth below:


September 1, 1947		Exhibit B-20 to Registration No. 2-7136




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




December 1, 1989		Exhibit 4-211 to Form 10-K for year ended December 31, 2000




February 15, 1990		Exhibit 4-212 to Form 10-K for year ended December 31, 2000




April 1, 1991		Exhibit 4-15 to Form 10-K for year Ended December 31, 1996




November 1, 1991		Exhibit 4-181 to Form 10-K for year ended December 31, 1996




January 15, 1992		Exhibit 4-182 to Form 10-K for year ended December 31, 1996




February 29, 1992		Exhibit 4-187 to Form 10-Q for Quarter ended March 31, 1998




April 15, 1992		Exhibit 4-188 to Form 10-Q for quarter ended March 31, 1998




July 15, 1992		Exhibit 4-189 to Form 10-Q for Quarter ended March 31, 1998




November 30, 1992		Exhibit 213 to Form 10-K for year ended December 31, 2000




January 1, 1993		Exhibit 4-131 to Registration No. 33-56496




March 1, 1993		Exhibit 4-191 to Form 10-Q for quarter ended March 31, 1998




April 1, 1993		Exhibit 4-214 to Form 10-K for year ended December 31, 2000






April 26, 1993		Exhibit 4-215 to Form 10-K for Year ended December 31, 2000




May 31, 1993		Exhibit 4-148 to Registration No. 33-64296




June 30, 1993		Exhibit 4-216 to Form 10-K for year ended December 31, 2000 (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 4-217 to Form 10-K for Year ended December 31, 2000




March 1, 1994		Exhibit 4-163 to Registration No. 33-53207




June 15, 1994		Exhibit 4-218 to Form 10-K for year ended December 31, 2000




August 15, 1994		Exhibit 4-220 to Form 10-K for year Ended December 31, 2000




August 1, 1995		Exhibit 4-221 to Form 10-K for year ended December 31, 2000




August 1, 1999		Exhibit 4-204 to Form 10-Q for quarter ended September 30, 1999




August 15, 1999		Exhibit 4-205 to Form 10-Q for quarter ended September 30, 1999




January 1, 2000		Exhibit 4-205 to Form 10-K for year ended December 31, 1999




April 15, 2000		Exhibit 206 to Form 10-Q for quarter ended March 31, 2000.




August 1, 2000		Exhibit 4-210 to Form 10-Q for Quarter ended September 30, 2000


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) -		First Amendment, dated as of July, 2000, to the First Supplemental Indenture, dated as of June 30, 1993, to the Collateral Trust Indenture (Notes), dated as of June 30, 1993 (Exhibit 4-208 to Form 10-Q for quarter ended September 30, 2000).




4(e) -		Second Supplemental Note Indenture, dated as of September 15, 1993 (Exhibit 4-159 to Form 10-Q for quarter ended September 30, 1993).




4(f)		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(g) -		Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended September 30, 1994).




4(h) -		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(i) -		Sixth Supplemental Note Indenture, dated as of May 1, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.54% Quarterly Income Debt Securities (“QUIDS”), including form of QUIDS. (Exhibit 4-193 to Form 10-Q for quarter ended June 30, 1998.)




4(j)-		Seventh Supplemental Note Indenture, dated as of October 15, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.375% QUIDS, including form of QUIDS. (Exhibit 4-198 to Form 10-K for year ended December 31, 1998.)




4-(k)-		Eighth Supplemental Indenture, dated as of April 15, 2000, appointing Bank One Trust Company of New York as Trustee under the Detroit Edison Trust Indenture (Notes), dated as of June 30, 1993. (Exhibit 4-207 to form 10-Q for the quarter ended March 31, 2000.)




4(l)-		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.)




4(m)-		Amended and Restated Indenture, dated as of April 9, 2001, between DTE Energy Corporation and The Bank of New York, as Trustee. (Exhibit 4.1 to Registration No. 333-58834.)




99(a)-		Belle River Participation Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-5 to Registration No. 2-81501).




99(b)-		Belle River Transmission Ownership and Operating Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-6 to Registration No. 2-81501).




99(c)-		1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy Company (an unaffiliated company) (“Renaissance”) and Detroit Edison (Exhibit 99-6 to Registration No. 33-50325).






99(d) —		First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-7 to Registration No. 33-50325).




99(e) —		Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993, between Detroit Edison and Renaissance (Exhibit 99-8 to Registration No. 33-50325).




99(f) —		Third Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Loan Agreement between Detroit Edison and Renaissance. (Exhibit 99-22 to Form 10-Q for quarter ended September 30, 1997.)




99(g) —		$200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-12 to Registration No. 33-50325).




99(h) —		First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for quarter ended September 30, 1994).




99(i) —		Third Amendment, dated as of March 8, 1996, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-11 to Form 10-Q for quarter ended March 31, 1996).




99(j) —		Fourth Amendment, dated as of August 29, 1996, to $200,000,000 364-Day Credit Agreement as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Form 10-Q for quarter ended September 30, 1996).




99(k) —		Fifth Amendment, dated as of September 1, 1997, to $200,000,000 Multi-Year Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-24 to Form 10-Q for quarter ended September 30, 1997.)




99(l) —		Seventh Amendment, dated as of August 26, 1999, to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, as amended among The Detroit Edison Company, Renaissance Energy Company, the Banks parties thereto and Barclays Bank PLC, New York branch as Agent. (Exhibit 99-30 to Form 10-Q for quarter ended September 30, 1999.)






99(m)-		Eighth Amendment, dated as of August 24, 2000, to the $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank PLC, New York Branch, as agent. (Exhibit 99-36 to Form 10-Q for the quarter ended September 30, 2000.)




99(n)-		$200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Registration No. 33-50325).




99(o)-		First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement, dated as of September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q for quarter ended September 30, 1994).




99(p)-		Third Amendment, dated as of March 8, 1996, to $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-12 to Form 10-Q for quarter ended March 31, 1996).




99(q)-		Fourth Amendment, dated as of September 1, 1996, to $200,000,000 Multi-Year (formerly Three-Year) Credit Agreement, dated as of September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-14 to Form 10-Q for quarter ended September 30, 1996).




99(r)-		Fifth Amendment, dated as of August 28, 1997, to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-25 to Form 10-Q for quarter ended September 30, 1997.)




99(s)-		Sixth Amendment, dated as of August 27, 1998, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank PLC, New York Branch, as agent. (Exhibit 99-32 to Registration No. 333-65765.)




99(t)-		1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance (Exhibit 99-9 to Registration No. 33-50325).






99(u) —		First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-10 to Registration No. 33-50325).




99(v) —		Eighth Amendment, dated as of August 26, 1999 to 1988 Amended and Restated Nuclear Fuel heat Purchase Contract between Detroit Edison and Renaissance Energy Company. (Exhibit 99-31 to Form 10-Q for quarter ended September 30, 1999.)




99(w) —		U.S. $160,000,000 Standby Note Purchase Credit Facility, dated as of October 26, 1999, among Detroit Edison, the Bank’s signatory thereto, Barclays Bank PLC, as Administrative Agent and Barclays Capital Inc., Lehman Brothers Inc. and Banc One Capital Markets, Inc., as Remarketing Agents. (Exhibit 99-29 to Form 10-Q for quarter ended September 30, 1999.




99(x) —		Standby Note Purchase Credit Facility, dated as of September 12, 1997, among The Detroit Edison Company and the Bank’s Signatory thereto and The Chase Manhattan Bank, as Administrative Agent, and Citicorp Securities, Inc., Lehman Brokers, Inc., as Remarketing Agents and Chase Securities, Inc. as Arranger. (Exhibit 99-26 to Form 10-Q for quarter ended September 30, 1997.)




99(y) —		Fourth Amended and Restated Credit Agreement, Dated as of January 16, 2001 among DTE Capital Corporation, the Initial Lenders, Citibank, N.A., as Agent, and ABN AMRO Bank N.V., Bank One N.A., Barclays Bank PLC, Bayerische [Landesbank Girozertrale, Cayman Islands Branch, Comerica Bank and Den Daske Bank Aktieselskab], as Co-Agents.




99(z) —		Order, dated November 2, 2000, of the Michigan Public Service Commission in U-12478 (Exhibit 99-3780 to Form 10-Q for quarter ended September 30, 2000).




99(aa) —		Order, dated January 4, 2001, of the Michigan Public Service Commission in U-12478.

* Denotes management contract or compensatory plan or arrangement.

(b) On March 8, 2001, the Company filed a Current Report on Form 8-K giving post merger earnings guidance.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		DTE ENERGY COMPANY

		(Registrant)

		By /s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Vice President and Controller

Date	May 9, 2001	/s/ ELAINE M. GODFREY

		Elaine M. Godfrey
		Assistant Corporate Secretary

Date	May 9, 2001	/s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Vice President and Controller

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		THE DETROIT EDISON COMPANY

		(Registrant)

		By /s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Vice President and Controller

Date	May 9, 2001	/s/ ELAINE M. GODFREY

		Elaine M. Godfrey
		Assistant Corporate Secretary

Date	May 9, 2001	/s/ DANIEL G. BRUDZYNSKI

		Daniel G. Brudzynski
		Vice President and Controller

Exhibit Index


Exhibit
Number

4-222		Supplemental Indenture, dated as of March 15, 2001, between Detroit Edison and First Chicago Trust Company of New York, establishing the 2001 Series AP Mortgage Bonds.
















4-223		First Supplemental Indenture, dated as of April 9, 2001, between DTE Energy and The Bank of New York, as trustee.
















4-224		Second Supplemental Indenture, dated as of April 9, 2001, between DTE Energy and the Bank of New York, as trustee.
















4-225		Third Supplemental Indenture, dated as of April 9, 2001, among DTE Capital Corporation, DTE Energy and The Bank of New York, as trustee
















10-41*		Executive Vehicle Plan
















10-42		Securitization Property Sale Agreement, dated March 9, 2001, between Detroit Edison and The Detroit Edison Securitization Funding LLC
















10-43*		DTE Energy 2001 Stock Incentive Plan
















10-44*		DTE Energy Annual Incentive Plan
















11-22 —		DTE Energy Company Basic and Diluted Earnings Per Share of Common Stock.
















12-30 —		DTE Energy Company Computation of Ratio of Earnings to Fixed Charges.
















12-31 —		The Detroit Edison Company Computation of Ratio of Earnings to Fixed Charges.
















15-16 —		Awareness Letter of Deloitte & Touche LLP regarding their report dated May 9, 2001.






99-40		Assignment and Assumption Agreement, dated as of April 9, 2001, among DTE Capital, DTE Energy, Citibank, N.A., as agent for the Lenders Party to the Fourth Amended and Restated $400 million Credit Agreement, dated as of January 16, 2001.
















99-41		Inter-Creditor Agreement dated as of March 9, 2001, among Citicorp North America, Inc., Citibank, N.A., The Bank of New York, The Detroit Edison Securitization Funding LLC and Detroit Edison.
















99-42		Amendment, dated March 9, 2001, to Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended, among Detroit Edison, Citibank, N.A. and Citicorp North America, Inc.
















99-43		Amended and Restated Trade Receivables Purchase and Sale Agreement, dated March 9, 2001, among Detroit Edison, Corporate Asset Funding Company, Inc., Citibank, N. A. and Citicorp North America, Inc.
















(ii)		Exhibits incorporated herein by reference.
















2(a) —		Agreement and Plan of Merger, among DTE Energy, MCN Energy Group, Inc. and DTE Enterprises, Inc., dated as of October 4, 1999 and amended as of November 12, 1999, as further amended as of February 28, 2001. (Exhibit 2-2 to Form 10-K for the year ended December 31, 2000.)
















3(a) —		Amended and Restated Articles of Incorporation of DTE Energy Company 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 3-13 to Form 10-Q for quarter ended June 30, 1999.)
















3(d) —		Articles of Incorporation of DTE Enterprises, Inc. (Exhibit 3.5 to Registration No. 333-89175.)
















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 23, 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.)
















3(g) —		Bylaws of DTE Energy Company, as amended through September 22, 1999. (Exhibit 3-3 to Registration No. 333-89175.)
















3(h) —		Bylaws of The Detroit Edison Company, as amended through September 22, 1999. (Exhibit 3-14 to Form 10-Q for quarter ended September 30, 1999.)
















3(i) —		Bylaws of DTE Enterprises, Inc. (Exhibit 3.6 to Registration No. 333-89175.)
















4(a) —		Mortgage and Deed of Trust, dated as of October 1, 1924, between Detroit Edison (File No. 1-2198) and First Chicago Trust Company of New York as Trustee (Exhibit B-1 to Registration No. 2-1630) and indentures supplemental thereto, dated as of dates indicated below, and filed as exhibits to the filings as set forth below:


September 1, 1947		Exhibit B-20 to Registration No. 2-7136




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




December 1, 1989		Exhibit 4-211 to Form 10-K for year ended December 31, 2000




February 15, 1990		Exhibit 4-212 to Form 10-K for year ended December 31, 2000




April 1, 1991		Exhibit 4-15 to Form 10-K for year Ended December 31, 1996




November 1, 1991		Exhibit 4-181 to Form 10-K for year ended December 31, 1996




January 15, 1992		Exhibit 4-182 to Form 10-K for year ended December 31, 1996




February 29, 1992		Exhibit 4-187 to Form 10-Q for Quarter ended March 31, 1998




April 15, 1992		Exhibit 4-188 to Form 10-Q for quarter ended March 31, 1998




July 15, 1992		Exhibit 4-189 to Form 10-Q for Quarter ended March 31, 1998




November 30, 1992		Exhibit 213 to Form 10-K for year ended December 31, 2000




January 1, 1993		Exhibit 4-131 to Registration No. 33-56496




March 1, 1993		Exhibit 4-191 to Form 10-Q for quarter ended March 31, 1998




April 1, 1993		Exhibit 4-214 to Form 10-K for year ended December 31, 2000






April 26, 1993		Exhibit 4-215 to Form 10-K for Year ended December 31, 2000




May 31, 1993		Exhibit 4-148 to Registration No. 33-64296




June 30, 1993		Exhibit 4-216 to Form 10-K for year ended December 31, 2000 (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 4-217 to Form 10-K for Year ended December 31, 2000




March 1, 1994		Exhibit 4-163 to Registration No. 33-53207




June 15, 1994		Exhibit 4-218 to Form 10-K for year ended December 31, 2000




August 15, 1994		Exhibit 4-220 to Form 10-K for year Ended December 31, 2000




August 1, 1995		Exhibit 4-221 to Form 10-K for year ended December 31, 2000




August 1, 1999		Exhibit 4-204 to Form 10-Q for quarter ended September 30, 1999




August 15, 1999		Exhibit 4-205 to Form 10-Q for quarter ended September 30, 1999




January 1, 2000		Exhibit 4-205 to Form 10-K for year ended December 31, 1999




April 15, 2000		Exhibit 206 to Form 10-Q for quarter ended March 31, 2000.




August 1, 2000		Exhibit 4-210 to Form 10-Q for Quarter ended September 30, 2000


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) —		First Amendment, dated as of July, 2000, to the First Supplemental Indenture, dated as of June 30, 1993, to the Collateral Trust Indenture (Notes), dated as of June 30, 1993 (Exhibit 4-208 to Form 10-Q for quarter ended September 30, 2000).
















4(e) —		Second Supplemental Note Indenture, dated as of September 15, 1993 (Exhibit 4-159 to Form 10-Q for quarter ended September 30, 1993).
















4(f) —		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(g) —		Third Supplemental Note Indenture, dated as of August 15, 1994 (Exhibit 4-169 to Form 10-Q for quarter ended September 30, 1994).
















4(h) —		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(i) —		Sixth Supplemental Note Indenture, dated as of May 1, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.54% Quarterly Income Debt Securities (“QUIDS”), including form of QUIDS. (Exhibit 4-193 to Form 10-Q for quarter ended June 30, 1998.)
















4(j) —		Seventh Supplemental Note Indenture, dated as of October 15, 1998, between Detroit Edison and Bankers Trust Company, as Trustee, creating the 7.375% QUIDS, including form of QUIDS. (Exhibit 4-198 to Form 10-K for year ended December 31, 1998.)
















4-(k) —		Eighth Supplemental Indenture, dated as of April 15, 2000, appointing Bank One Trust Company of New York as Trustee under the Detroit Edison Trust Indenture (Notes), dated as of June 30, 1993. (Exhibit 4-207 to form 10-Q for the quarter ended March 31, 2000.)
















4(l) —		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.)
















4(m) —		Amended and Restated Indenture, dated as of April 9, 2001, between DTE Energy Corporation and The Bank of New York, as Trustee. (Exhibit 4.1 to Registration No. 333-58834.)
















99(a) —		Belle River Participation Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-5 to Registration No. 2-81501).
















99(b) —		Belle River Transmission Ownership and Operating Agreement between Detroit Edison and Michigan Public Power Agency, dated as of December 1, 1982 (Exhibit 28-6 to Registration No. 2-81501).
















99(c) —		1988 Amended and Restated Loan Agreement, dated as of October 4, 1988, between Renaissance Energy Company (an unaffiliated company) (“Renaissance”) and Detroit Edison (Exhibit 99-6 to Registration No. 33-50325).






99(d) —		First Amendment to 1988 Amended and Restated Loan Agreement, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-7 to Registration No. 33-50325).
















99(e) —		Second Amendment to 1988 Amended and Restated Loan Agreement, dated as of September 1, 1993, between Detroit Edison and Renaissance (Exhibit 99-8 to Registration No. 33-50325).
















99(f) —		Third Amendment, dated as of August 28, 1997, to 1988 Amended and Restated Loan Agreement between Detroit Edison and Renaissance. (Exhibit 99-22 to Form 10-Q for quarter ended September 30, 1997.)
















99(g) —		$200,000,000 364-Day Credit Agreement, dated as of September 1,1993, among Detroit Edison, Renaissance and Barclays Bank PLC, New York Branch, as Agent (Exhibit 99-12 to Registration No. 33-50325).
















99(h) —		First Amendment, dated as of August 31, 1994, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-19 to Form 10-Q for quarter ended September 30, 1994).
















99(i) —		Third Amendment, dated as of March 8, 1996, to $200,000,000 364-Day Credit Agreement, dated September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-11 to Form 10-Q for quarter ended March 31, 1996).
















99(j) —		Fourth Amendment, dated as of August 29, 1996, to $200,000,000 364-Day Credit Agreement as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Form 10-Q for quarter ended September 30, 1996).
















99(k) —		Fifth Amendment, dated as of September 1, 1997, to $200,000,000 Multi-Year Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-24 to Form 10-Q for quarter ended September 30, 1997.)
















99(l) —		Seventh Amendment, dated as of August 26, 1999, to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, as amended among The Detroit Edison Company, Renaissance Energy Company, the Banks parties thereto and Barclays Bank PLC, New York branch as Agent. (Exhibit 99-30 to Form 10-Q for quarter ended September 30, 1999.)






99(m) —		Eighth Amendment, dated as of August 24, 2000, to the $200,000,000 364-Day Credit Agreement, dated as of September 1, 1993, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank PLC, New York Branch, as agent. (Exhibit 99-36 to Form 10-Q for the quarter ended September 30, 2000.)
















99(n) —		$200,000,000 Three-Year Credit Agreement, dated September 1, 1993, among Detroit Edison, Renaissance and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-13 to Registration No. 33-50325).
















99(o) —		First Amendment, dated as of September 1, 1994, to $200,000,000 Three-Year Credit Agreement, dated as of September 1, 1993, among The Detroit Edison Company, Renaissance Energy Company, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-20 to Form 10-Q for quarter ended September 30, 1994).
















99(p) —		Third Amendment, dated as of March 8, 1996, to $200,000,000 Three-Year Credit Agreement, dated September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-12 to Form 10-Q for quarter ended March 31, 1996).
















99(q) —		Fourth Amendment, dated as of September 1, 1996, to $200,000,000 Multi-Year (formerly Three-Year) Credit Agreement, dated as of September 1, 1993, as amended among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank, PLC, New York Branch, as Agent (Exhibit 99-14 to Form 10-Q for quarter ended September 30, 1996).
















99(r) —		Fifth Amendment, dated as of August 28, 1997, to $200,000,000 364-Day Credit Agreement, dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks Party thereto and Barclays Bank PLC, New York Branch, as Agent. (Exhibit 99-25 to Form 10-Q for quarter ended September 30, 1997.)
















99(s) —		Sixth Amendment, dated as of August 27, 1998, to $200,000,000 364-Day Credit Agreement dated as of September 1, 1990, as amended, among Detroit Edison, Renaissance, the Banks party thereto and Barclays Bank PLC, New York Branch, as agent. (Exhibit 99-32 to Registration No. 333-65765.)
















99(t) —		1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated October 4, 1988, between Detroit Edison and Renaissance (Exhibit 99-9 to Registration No. 33-50325).










99(u) —		First Amendment to 1988 Amended and Restated Nuclear Fuel Heat Purchase Contract, dated as of February 1, 1990, between Detroit Edison and Renaissance (Exhibit 99-10 to Registration No. 33-50325).
















99(v) —		Eighth Amendment, dated as of August 26, 1999 to 1988 Amended and Restated Nuclear Fuel heat Purchase Contract between Detroit Edison and Renaissance Energy Company. (Exhibit 99-31 to Form 10-Q for quarter ended September 30, 1999.)
















99(w) —		U.S. $160,000,000 Standby Note Purchase Credit Facility, dated as of October 26, 1999, among Detroit Edison, the Bank’s signatory thereto, Barclays Bank PLC, as Administrative Agent and Barclays Capital Inc., Lehman Brothers Inc. and Banc One Capital Markets, Inc., as Remarketing Agents. (Exhibit 99-29 to Form 10-Q for quarter ended September 30, 1999.
















99(x) —		Standby Note Purchase Credit Facility, dated as of September 12, 1997, among The Detroit Edison Company and the Bank’s Signatory thereto and The Chase Manhattan Bank, as Administrative Agent, and Citicorp Securities, Inc., Lehman Brokers, Inc., as Remarketing Agents and Chase Securities, Inc. as Arranger. (Exhibit 99-26 to Form 10-Q for quarter ended September 30, 1997.)
















99(y) —		Fourth Amended and Restated Credit Agreement, Dated as of January 16, 2001 among DTE Capital Corporation, the Initial Lenders, Citibank, N.A., as Agent, and ABN AMRO Bank N.V., Bank One N.A., Barclays Bank PLC, Bayerische [Landesbank Girozertrale, Cayman Islands Branch, Comerica Bank and Den Daske Bank Aktieselskab], as Co-Agents.
















99(z) —		Order, dated November 2, 2000, of the Michigan Public Service Commission in U-12478 (Exhibit 99-3780 to Form 10-Q for quarter ended September 30, 2000).
















99(aa) —		Order, dated January 4, 2001, of the Michigan Public Service Commission in U-12478.

* Denotes management contract or compensatory plan or arrangement.

EXHIBIT 4-222

EXECUTED IN
COUNTERPARTS OF WHICH
THIS IS COUNTERPART NO. .

THE DETROIT EDISON COMPANY
(2000 Second Avenue,
Detroit, Michigan 48226)

TO
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
(14 Wall Street,
New York, New York 10005)

AS TRUSTEE

INDENTURE
Dated as of March 15, 2001

SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924

PROVIDING FOR

(a) GENERAL AND REFUNDING MORTGAGE BONDS, 2001 SERIES AP, DUE APRIL 1, 2011,

AND

(b) RECORDING AND FILING DATA

TABLE OF CONTENTS*

                                                                  PAGE
                                                                  ----
Parties..........................................................   1
Original Indenture and Supplementals.............................   1
Bonds heretofore issued..........................................   1
Bonds to be 2001 Series AP.......................................   5
Further Assurance................................................   6
Authorization of Supplemental Indenture..........................   6
Consideration for Supplemental Indenture.........................   6

                                    PART I.
                     CREATION OF THREE HUNDRED TWENTY-SIXTH
                                SERIES OF BONDS
                     GENERAL AND REFUNDING MORTGAGE BONDS,
                                 2001 SERIES AP

Sec. 1. Certain terms of Bonds of 2001 Series AP.................   6
Sec. 2. Redemption of Bonds of 2001 Series AP....................   8
Sec. 3. Redemption of Bonds of 2001 Series AP in event of
        Ambac Payment.............................................  9
Sec. 4. Form of Bonds of 2001 Series AP..........................  10
        Form of Trustee's Certificate............................  14

                                    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
Acknowledgement of execution by Company..........................  20
Acknowledgement of execution by Trustee..........................  21
Affidavit as to consideration and good faith.....................  22

* This Table of Contents shall not have any bearing upon the interpretation of any of the terms or provisions of this Indenture.

PARTIES.                SUPPLEMENTAL INDENTURE, dated as of March 15, 2001 among
                      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 FIRST CHICAGO TRUST COMPANY
                      of New York, a trust company organized and existing under
                      the laws of the State of New York, having its corporate
                      trust office at 14 Wall 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 INDENTURE      WHEREAS, the Company has heretofore executed and
AND SUPPLEMENTALS.    delivered its Mortgage and Deed of Trust (hereinafter
                      referred to as the "Original Indenture"), dated as of
                      October 1, 1924, to the Trustee, for the security of all
                      bonds of the Company outstanding thereunder, and pursuant
                      to the terms and provisions of the Original Indenture,
                      indentures dated as of, respectively, June 1, 1925, August
                      1, 1927, February 1, 1931, June 1, 1931, October 1, 1932,
                      September 25, 1935, September 1, 1936, November 1, 1936,
                      February 1, 1940, December 1, 1940, September 1, 1947,
                      March 1, 1950, November 15, 1951, January 15, 1953, May 1,
                      1953, March 15, 1954, May 15, 1955, August 15, 1957, June
                      1, 1959, December 1, 1966, October 1, 1968, December 1,
                      1969, July 1, 1970, December 15, 1970, June 15, 1971,
                      November 15, 1971, January 15, 1973, May 1, 1974, October
                      1, 1974, January 15, 1975, November 1, 1975, December 15,
                      1975, February 1, 1976, June 15, 1976, July 15, 1976,
                      February 15, 1977, March 1, 1977, June 15, 1977, July 1,
                      1977, October 1, 1977, June 1, 1978, October 15, 1978,
                      March 15, 1979, July 1, 1979, September 1, 1979, September
                      15, 1979, January 1, 1980, April 1, 1980, August 15, 1980,
                      August 1, 1981, November 1, 1981, June 30, 1982, August
                      15, 1982, June 1, 1983, October 1, 1984, May 1, 1985, 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, 1994, December 1, 1994, August 1, 1995, August 1,
                      1999, August 15, 1999, January 1, 2000, April 15, 2000 and
                      August 1, 2000 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

BONDS HERETOFORE        WHEREAS, Bonds in the principal amount of Eight billion,
ISSUED.               nine hundred eighty-three million one hundred sixty-seven
                      thousand dollars ($8,983,167,000) have heretofore been

issued under the indenture as follows, viz:

 (1)  Bonds of Series A                 --   Principal Amount  $26,016,000,

 (2)  Bonds of Series B                 --   Principal Amount  $23,000,000,

 (3)  Bonds of Series C                 --   Principal Amount  $20,000,000,

 (4)  Bonds of Series D                 --   Principal Amount  $50,000,000,

 (5)  Bonds of Series E                 --   Principal Amount  $15,000,000,

 (6)  Bonds of Series F                 --   Principal Amount  $49,000,000,

 (7)  Bonds of Series G                 --   Principal Amount  $35,000,000,

 (8)  Bonds of Series H                 --   Principal Amount  $50,000,000,

 (9)  Bonds of Series I                 --   Principal Amount  $60,000,000,

(10)  Bonds of Series J                 --   Principal Amount  $35,000,000,

(11)  Bonds of Series K                 --   Principal Amount  $40,000,000,

(12)  Bonds of Series L                 --   Principal Amount  $24,000,000,

(13)  Bonds of Series M                 --   Principal Amount  $40,000,000,

(14)  Bonds of Series N                 --   Principal Amount  $40,000,000,

(15)  Bonds of Series O                 --   Principal Amount  $60,000,000,

     (16)  Bonds of Series P                 --   Principal Amount  $70,000,000,

     (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,

 (99-107)  Bonds of Series KKP Nos. 1-9      --   Principal Amount  $34,890,000,

(108-122)  Bonds of Series LLP Nos. 1-15     --   Principal Amount  $8,850,000,

(123-143)  Bonds of Series NNP Nos. 1-21     --   Principal Amount  $47,950,000,

(144-161)  Bonds of Series OOP Nos. 1-18     --   Principal Amount  $18,880,000,

(162-180)  Bonds of Series QQP Nos. 1-19     --   Principal Amount  $13,650,000,

(181-195)  Bonds of Series TTP Nos. 1-15     --   Principal Amount  $3,800,000,

    (196)  Bonds of 1980 Series A            --   Principal Amount  $50,000,000,

(197-221)  Bonds of 1980 Series CP Nos.
           1-25                              --   Principal Amount  $35,000,000,

(222-232)  Bonds of 1980 Series DP Nos.
           1-11                              --   Principal Amount  $10,750,000,

(233-248)  Bonds of 1981 Series AP Nos.
           1-16                              --   Principal Amount  $124,000,000,

    (249)  Bonds of 1985 Series A            --   Principal Amount  $35,000,000,

    (250)  Bonds of 1985 Series B            --   Principal Amount  $50,000,000,

    (251)  Bonds of Series PP                --   Principal Amount  $70,000,000,

    (252)  Bonds of Series RR                --   Principal Amount  $70,000,000,

    (253)  Bonds of Series EE                --   Principal Amount  $50,000,000,

(254-255)  Bonds of Series MMP and MMP No.
           2                                 --   Principal Amount  $5,430,000,

    (256)  Bonds of Series T                 --   Principal Amount  $75,000,000,

    (257)  Bonds of Series U                 --   Principal Amount  $75,000,000,

    (258)  Bonds of 1986 Series B            --   Principal Amount  $100,000,000,

    (259)  Bonds of 1987 Series D            --   Principal Amount  $250,000,000,

    (260)  Bonds of 1987 Series E            --   Principal Amount  $150,000,000,

    (261)  Bonds of 1987 Series C            --   Principal Amount  $225,000,000,

    (262)  Bonds of Series V                 --   Principal Amount  $100,000,000,

    (263)  Bonds of Series SS                --   Principal Amount  $150,000,000,

    (264)  Bonds of 1980 Series B            --   Principal Amount  $100,000,000,

    (265)  Bonds of 1986 Series C            --   Principal Amount  $200,000,000,

    (266)  Bonds of 1986 Series A            --   Principal Amount  $200,000,000,

    (267)  Bonds of 1987 Series B            --   Principal Amount  $175,000,000,

    (268)  Bonds of Series X                 --   Principal Amount  $100,000,000,

    (269)  Bonds of 1987 Series F            --   Principal Amount  $200,000,000,

    (270)  Bonds of 1987 Series A            --   Principal Amount  $300,000,000,

    (271)  Bonds of Series Y                 --   Principal Amount  $60,000,000,

    (272)  Bonds of Series Z                 --   Principal Amount  $100,000,000,

    (273)  Bonds of 1989 Series A            --   Principal Amount  $300,000,000,

    (274)  Bonds of 1984 Series AP           --   Principal Amount  $2,400,000,

    (275)  Bonds of 1984 Series BP           --   Principal Amount  $7,750,000,

    (276)  Bonds of Series R                 --   Principal Amount  $100,000,000,

    (277)  Bonds of Series S                 --   Principal Amount  $150,000,000,

    (278)  Bonds of 1993 Series D            --   Principal Amount  $100,000,000,

    (279)  Bonds of 1992 Series E            --   Principal Amount  $50,000,000,

    (280)  Bonds of 1993 Series B            --   Principal Amount  $50,000,000,

    (281)  Bonds of 1989 Series BP           --   Principal Amount  $66,565,000,

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;

(282-287) Bonds of Series KKP Nos. 10-15 in the principal amount of One hundred seventy-nine million five hundred ninety thousand dollars ($179,590,000), of which Ninety million four hundred ninety thousand dollars ($90,490,000) principal amount have heretofore been retired and eighty-nine million one hundred thousand dollars ($89,100,000) principal amount are outstanding at the date hereof;

(288) 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 Sixty-nine million sixty-nine thousand dollars ($69,069,000) principal amount have heretofore been retired and One hundred twenty-five million five hundred eighty thousand dollars ($125,580,000) principal amount are outstanding at the date hereof;

(289) 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 One hundred four million six hundred seventy-six thousand dollars ($104,676,000) principal amount have heretofore been retired and One hundred fifty-two million two hundred fifty-six thousand dollars ($152,256,000) principal amount are outstanding at the date hereof;

(290) Bonds of 1990 Series C in the principal amount of Eighty-five million four hundred seventy-five thousand dollars ($85,475,000) of which Thirty-seven million six hundred nine thousand dollars ($37,609,000) principal amount have heretofore been retired and Forty-seven million eight hundred sixty-six thousand dollars ($47,866,000) principal amount are outstanding at the date hereof;

(291) 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;

(292) 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;

(293) 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;

(294) 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;

(295) 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;

(296) 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;

(297) 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;

(298) 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;

(299) Bonds of 1992 Series D in the principal amount of Three hundred million dollars ($300,000,000), of which One hundred three million four hundred fifty thousand dollars ($103,450,000) principal amount have heretofore been retired

and

One hundred ninety-six million ($196,550,000) principal amount are outstanding at the date hereof;

(300) 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;

(301) 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;

(302) Bonds of 1993 Series C in the principal amount of Two hundred twenty-five million dollars ($225,000,000), of which Sixty-one million six hundred thousand dollars ($61,600,000,000) principal amount have heretofore been retired and One hundred sixth-three million four hundred thousand dollars ($163,400,000) principal amount are outstanding at the date hereof;

(303) Bonds of 1993 Series E in the principal amount of Four hundred million dollars ($400,000,000), of which Two hundred thirteen million nine hundred thousand dollars ($213,900,000) principal amount have heretofore been retired and One hundred eighty-six million one hundred thousand dollars ($186,100,000) principal amount are outstanding at the date hereof;

(304) 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;

(305) Bonds of 1993 Series G in the principal amount of Two hundred twenty-five million dollars ($225,000,000), of which One hundred twenty-five million dollars ($125,000,000) principal amount have been retired and One hundred million dollars ($100,000,000) principal amount are outstanding at the date hereof;

(306) Bonds of 1993 Series J in the principal amount of Three hundred million dollars ($300,000,000), of which One hundred eleven million dollars ($111,000,000) principal amount have heretofore been retired and One hundred eighty-nine million dollars ($189,000,000) principal amount are outstanding at the date hereof;

(307) 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;

(308) 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;

(309) 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;

(310) 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;

(311) Bonds of 1994 Series AP in the principal amount of Seven million five hundred thirty-five thousand dollars ($7,535,000), all of which are outstanding at the date hereof;

(312) Bonds of 1994 Series BP in the principal amount of Twelve million nine hundred thirty-five thousand dollars ($12,935,000), all of which are outstanding at the date hereof;

(313) Bonds of 1994 Series C in the principal amount of Two hundred million dollars ($200,000,000), all of which are outstanding at the date hereof;

(314) Bonds of 1994 Series DP in the principal amount of Twenty-three million seven hundred thousand dollars ($23,700,000), all of which are outstanding at the date hereof;

(315) Bonds of 1995 Series AP in the principal amount of Ninety-seven million dollars ($97,000,000), all of which are outstanding at the date hereof;

(316) Bonds of 1995 Series BP in the principal amount of Twenty-two million, one hundred seventy-five thousand dollars ($22,175,000), all of which are outstanding at the date hereof;

(317) Bonds of 1999 Series AP in the principal amount of One hundred eighteen million three hundred sixty thousand dollars ($118,360,000), all of which are outstanding at the date hereof;

(318) Bonds of 1999 Series BP in the principal amount of Thirty-nine million seven hundred forty-five thousand dollars ($39,745,000), all of which are outstanding of the date hereof;

(319) Bonds of 1999 Series CP 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;

(320) Bonds of 1999 Series D in the principal amount of Forty million dollars ($40,000,000), all of which are outstanding at the date hereof;

(321) Bonds of 2000 Series A in the principal amount of Two Hundred Twenty million dollars ($220,000,000) of which Five million six hundred seventy thousand dollars ($5,670,000) principal amount have heretofore been retried and Two hundred fourteen million three hundred thirty thousand dollars ($214,330,000) principal amount are outstanding at the date hereof;

(322) Bonds of 2000 Series B in the principal amount of Fifty million seven hundred forty-five thousand dollars ($50,745,000), all of which are outstanding at the date hereof; and

accordingly, the Company has issued and has presently outstanding Two billion eight hundred fifty-five million nine hundred sixty-seven thousand dollars ($2,855,967,000) aggregate principal amount of its General and Refunding Mortgage Bonds (the "Bonds") at the date hereof; and

WHEREAS, The Economic Development Corporation of the County of Monroe, Michigan has issued and sold $31,000,000 principal amount of its Adjustable Rate Demand Limited Obligation Refunding Revenue Bonds (The Detroit Edison Company Project), Series 1992-CC; and subject to certain conditions, Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance company, has agreed to issue its financial guaranty insurance policy guaranteeing the scheduled payment of interest on and the purchase price of the Series 1992-CC Bonds during the period March 26, 2001 through April 1, 2011; and

WHEREAS, the Company, in order to induce Ambac to issue its financial guaranty insurance policy relating to the Series 1992-CC Bonds during the period March 26, 2001 through April 1, 2011, has agreed to issue its General and Refunding Mortgage Bonds under the Indenture to Ambac; and

WHEREAS, for such purposes the Company desires to issue 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
2001 SERIES AP. WHEREAS, the Company desires by this Supplemental Indenture to create such new series of bonds, to be designated "General and Refunding Mortgage Bonds, 2001 Series AP; and

FURTHER                        WHEREAS, the Original Indenture, by its terms,
ASSURANCE.               includes in the property subject to the lien thereof
                         all of the estates and properties, real, personal and
                         mixed, rights, privileges and franchises of every
                         nature and kind and wheresoever situate, then or
                         thereafter owned or possessed by or belonging to the
                         Company or to which it was then or at any time
                         thereafter might be entitled in law or in equity
                         (saving and excepting, however, the property therein
                         specifically excepted or released from the lien
                         thereof), and the Company therein covenanted that it
                         would, upon reasonable request, execute and deliver
                         such further instruments as may be necessary or proper
                         for the better assuring and confirming unto the Trustee
                         all or any part of the trust estate, whether then or
                         thereafter owned or acquired by the Company (saving and
                         excepting, however, property specifically excepted or
                         released from the lien thereof); and

AUTHORIZATION                  WHEREAS, the Company in the exercise of the
OF SUPPLEMENTAL          powers and authority conferred upon and reserved to it
INDENTURE.               under and by virtue of the provisions of the Indenture,
                         and pursuant to resolutions of its Board of Directors
                         has duly resolved and determined to make, execute and
                         deliver to the Trustee a supplemental indenture in the
                         form hereof for the purposes herein provided; and

                               WHEREAS, all conditions and requirements
                         necessary to make this Supplemental Indenture a valid
                         and legally binding instrument in accordance with its
                         terms have been done, performed and fulfilled, and the
                         execution and delivery hereof have been in all respects
                         duly authorized;

CONSIDERATION                  NOW, THEREFORE, THIS INDENTURE WITNESSETH: That
FOR SUPPLEMENTAL         The Detroit Edison Company, in consideration of the
INDENTURE.               premises and of the covenants contained in the
                         Indenture and of the sum of One Dollar ($1.00) and
                         other good and valuable consideration to it duly paid
                         by the Trustee at or before the ensealing and delivery
                         of these presents, the receipt whereof is hereby
                         acknowledged, hereby covenants and agrees to and with
                         the Trustee and its successors in the trusts under the
                         Original Indenture and in said indentures supplemental
                         thereto as follows:

                                                 PART I.
                                 CREATION OF THREE HUNDRED TWENTY-SIXTH
                                            SERIES OF BONDS.
                                  GENERAL AND REFUNDING MORTGAGE BONDS,
                                             2001 SERIES AP

CERTAIN TERMS                  SECTION 1. The Company hereby creates the Three
OF BONDS OF              hundred twenty-sixth series of bonds to be issued under
2001 SERIES AP.          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, 2001 Series AP"
                         (elsewhere herein referred to as the "bonds of 2001
                         Series AP"). The aggregate principal amount of bonds of
                         2001 Series AP shall be limited to Thirty-one million
                         dollars ($31,000,000), except as provided in Sections 7
                         and 13 of Article II of the Original Indenture with
                         respect to exchanges and replacements of bonds.

      Each bond of 2001 Series AP is to be issued and
registered to Ambac Assurance Corporation ("Ambac"), a
Wisconsin stock insurance company, in order to induce Ambac
to issue the Financial Guaranty Insurance Policy ("Series
1992-CC Insurance Policy") guaranteeing the scheduled
payment of interest during the period March 26, 2001 through
April 1, 2011 and the purchase price of tendered bonds on
April 1, 2011 with respect to The Economic Development
Corporation of the County of Monroe, Michigan ("EDC")
Adjustable Rate Demand Limited Obligation Refunding Revenue
Bonds (The Detroit Edison Company Project), Series 1992-CC
in the aggregate principal amount of Thirty-one million
dollars ($31,000,000) ("Series 1992-CC Bonds"), which Series
1992-CC Bonds were created and issued pursuant to a Trust
Indenture ("Indenture") dated as of April 1, 1992 between
the EDC and Bank One Trust Company, National Association
(successor to NBD Bank, N.A.), as trustee ("Trustee"). Under
a Loan Agreement, dated as of April 1, 1992, between the
Company and the EDC (the "Series 1992-CC Contract"), the
Company is obligated to make payments to the Trustee (or its
successor), for the Series 1992-CC Bonds in amounts and at
times equal and corresponding to the amount and time of
payments of principal, premium and interest due on the
Series 1992-CC Bonds.

      The bonds of 2001 Series AP shall be issued as
registered bonds without coupons in denominations of a
multiple of $5,000. The bonds of 2001 Series AP shall be
issued in the aggregate principal amount of $31,000,000,
shall mature on April 1, 2011 and shall bear interest,
payable semi-annually on April 1 and October 1 of each year
(commencing October 1, 2001), at the rate of 4.65%, to and
including April 1, 2011. Payments of interest on, or the
purchase price of, the Series 1992-CC Bonds shall constitute
the payments of interest and principal, respectively, on the
bonds of 2001 Series AP. In the event that Ambac shall make
a payment of interest or purchase price with respect to the
Series 1992-CC Bonds, then, the interest rate on any amounts
so paid shall be the prime rate announced by Citibank, N.A.,
from time to time, plus 2% per annum, and such rate shall
continue until such time as the Company shall reimburse
Ambac for any payments so paid.

      The bonds of 2001 Series AP shall be payable as to
principal, premium, if any, and interest as provided in the
Indenture during the Long Term Rate Mode, as defined in the
Indenture, ending April 1, 2011, but only to the extent and
in the manner herein provided. The bonds of 2001 Series AP
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 2001 Series AP
shall be dated the date of its authentication and interest
shall be payable on the principal represented thereby from
the April 1 or October 1 next preceding the date thereof to
which interest has been paid on bonds of 2001 Series AP,
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 April 1, 2001, in which case
interest shall be payable from March 26, 2001.

      The bonds of 2001 Series AP 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 2001 Series AP). Until bonds of 2001 Series AP 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 2001
Series AP in temporary form, as provided in Section 10 of
Article II of the Indenture. Temporary bonds of 2001 Series
AP, if any, may be printed and may be issued in authorized
denominations in substantially the form of definitive bonds
of 2001 Series AP, but with such omissions, insertions and
variations as may be appropriate for temporary bonds, all as
may be determined by the Company.

                               Bonds of 2001 Series AP shall not be assignable or
                         transferable except as may be required to effect a transfer
                         to any successor in interest to Ambac under the Series 1992-
                         CC Insurance Policy. 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 2001 Series AP
                         shall in the same manner be exchangeable for a like
                         aggregate principal amount of bonds of 2001 Series AP 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 2001 Series AP,
                         during any period of ten days next preceding any redemption
                         date for such bonds.

                               Bonds of 2001 Series AP, in definitive and temporary
                         form, may bear such legends as may be necessary to comply
                         with any law or with any rules or regulations made pursuant
                         thereto or as may be specified pursuant to the terms and
                         conditions specified herein.

                               Upon payment by the Company of both its obligations
                         under the Indenture for the Long Term Interest Rate Mode
                         commencing March 26, 2001 and ending April 1, 2011 and its
                         obligations, if any, to Ambac, the bonds of 2001 Series AP
                         shall be deemed fully paid and the obligation of the Company
                         thereunder to make payments thereunder shall forthwith cease
                         and be discharged, and, such bonds shall be surrendered for
                         cancellation or presented for appropriate notation to the
                         Trustee.

REDEMPTION                     SECTION 2. Bonds of 2001 Series AP shall be redeemed
OF BONDS                 on the respective dates and in the respective principal
OF 2001                  amounts which correspond to the redemption dates, if any,
SERIES AP.               for, and the principal amounts, if any, to be redeemed of,
                         the Series 1992-CC Bonds during the period March 26, 2001
                         through April 1, 2011.

                               In the event the Company elects to redeem any Series
                         1992-CC Bonds prior to maturity in accordance with the
                         provisions of the Indenture, the Company shall on the same
                         date redeem bonds of 2001 Series AP in principal amounts and
                         at redemption prices corresponding to the Series 1992-CC
                         Bonds so redeemed. The Company agrees to give the Trustee
                         notice of any such redemption of bonds of 2001 Series AP on
                         the same date as it gives notice of redemption of Series
                         1992-CC Bonds to the Trustee.

REDEMPTION                     SECTION 3. In the event that (1) Ambac makes payment
OF BONDS OF              under the Series 1992-CC Insurance policy as a result of the
2001 SERIES              Company's failure to make any of its required payments with
AP IN EVENT              respect to the Series 1992-CC Bonds, the bonds of 2001
OF AMBAC PAYMENT.        Series AP shall be payable or redeemable, or both, in an
                         amount corresponding to the payment of interest or the
                         purchase price, as the case may be or both, by Ambac or (2)
                         the Trustee has called for redemption the Series 1992-CC
                         Bonds as a result of an Event of Default under the
                         Indenture; then, upon receipt by the Trustee of a written
                         demand by Ambac, accompanied by a certification from the
                         Trustee as to the amount and type (principal, interest or
                         both) of payment by AMBAC ("Payment Demand") the bonds of
                         2001 Series AP shall be payable or redeemable, or both, in
                         an amount corresponding to the amount payable upon the
                         redemption of the Series 1992-CC Bonds, together in the case
                         of each of clause (1) and (2) above, with interest thereon
                         to the date of payment as provided below. The Trustee shall,
                         within five days after receiving such Payment Demand, mail a
                         copy thereof to the Company marked to indicate the date of
                         its receipt by the Trustee. Promptly upon receipt by the
                         Company of such copy of a Payment Demand, the Company shall
                         be obligated to pay such amount as may be deemed to be
                         interest and shall fix a date on which it will redeem the
                         bonds of said series so demanded to be redeemed (hereinafter
                         called the "Demand Redemption Date"). Interest shall accrue
                         to the date of payment. Notice of the date fixed as the
                         Demand Redemption Date shall be mailed by the Company to the
                         Trustee at least ten days prior to such Demand Redemption
                         Date. The date to be fixed by the Company as and for the
                         Demand Redemption Date may be any date up to and including
                         the earlier of (x) the 60th day after receipt by the Trustee
                         of the Payment Demand or (y) the maturity date of such bonds
                         first occurring following the 20th day after the receipt by
                         the Trustee of the Payment Demand; provided, however, that
                         if the Trustee shall not have received such notice fixing
                         the Demand Redemption Date on or before the 10th day
                         preceding the earlier of such dates, the Demand Redemption
                         Date shall be deemed to be the earlier of such dates. The
                         Trustee shall mail notice of the Demand Redemption Date
                         (such notice being hereinafter called the "Demand Redemption
                         Notice") to Ambac not more than ten nor less than five days
                         prior to the Demand Redemption Date.

                               Each bond of 2001 Series AP shall be redeemed by the
                         Company on the Demand Redemption Date therefore upon
                         surrender thereof by Ambac to the Trustee at a redemption
                         price equal to the principal amount thereof plus accrued
                         interest calculated as provided in Section 1 hereof from the
                         date of such payment to the Demand Redemption Date plus an
                         amount equal to the aggregate premium, if any, due and
                         payable on such Demand Redemption Date on a corresponding
                         amount of Series 1992-CC Bonds; provided, however, that in
                         the event of a receipt by the Trustee of a notice that Ambac
                         has terminated proceedings to enforce any right it may have
                         against the Company under the Series 1992-CC Insurance
                         Policy and the Bonds or both, then any Payment Demand shall
                         thereby be rescinded by Ambac, and no Demand Redemption
                         Notice shall be given, or, if already given, shall be
                         automatically annulled; but no such rescission or annulment
                         shall extend to or affect any subsequent default or impair
                         any right consequent thereon.

                               Anything herein contained to the contrary
                         notwithstanding, the Trustee is not authorized to take any
                         action pursuant to a Payment Demand and such Payment Demand
                         shall be of no force or effect, unless it is executed in the
                         name of Ambac by its President or one of its Managing
                         Directors or Vice Presidents.

FORM OF BONDS                  SECTION 4. The bonds of 2001 Series AP and the
OF 2001 SERIES AP.       form of Trustee's Certificate to be endorsed on such
                         bonds shall be substantially in the following forms,
                         respectively:

                                         [FORM OF FACE OF BOND]
                                       THE DETROIT EDISON COMPANY
                                   GENERAL AND REFUNDING MORTGAGE BOND
                                 2001 SERIES AP, 4.65% DUE APRIL 1, 2011

                               Notwithstanding any provisions hereof or in the
                         Indenture, this bond is not assignable or transferable
                         except as may be required to effect a transfer to any
                         successor insurance trustee under the Financial
                         Guaranty Insurance Policy, dated as of March 26, 2001
                         issued by Ambac Assurance Corporation and relating to
                         The Economic Development Corporation ("EDC") the
                         County of Monroe, Michigan Adjustable Rate Demand
                         Limited Obligation Refunding Revenue Bonds (The Detroit
                         Edison Company Project), Series 1992-CC, or to Ambac
                         Assurance Corporation pursuant to Part I, Section 1 of
                         the Supplemental Indenture dated as of March 15, 2001,
                         or, subject to compliance with applicable law.

                         $.........                                 No..........


                               THE DETROIT EDISON COMPANY (hereinafter called
                         the "Company"), a corporation of the State of Michigan,
                         for value received, hereby promises to pay to Ambac
                         Assurance Corporation, 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
                         Thirty-one million dollars ($31,000,000) in lawful
                         money of the United States of America on the date
                         specified in the title hereof and interest thereon at
                         the rate specified in the title hereof, in like lawful
                         money, from March 26, 2001, and after the first payment
                         of interest on bonds of this Series has been made or
                         otherwise provided for, from the most recent date to
                         which interest has been paid or otherwise provided for,
                         semi-annually on April 1 and October 1 of each year
                         (commencing April 1, 2001), until April 1, 2011, the
                         date the Company's obligations with respect to the Long
                         Term Interest Rate Mode ending April 1, 2011 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.
                         In the event that AMBAC shall make a payment of
                         interest or purchase price with respect to the Series
                         1992-CC Bonds, then, the interest rate on any amounts
                         so paid shall be the prime rate announced by Citibank,
                         N.A., from time to time, plus 2% per annum, and such
                         rate shall continue until such time as the Company
                         shall reimburse Ambac for any payments so paid.

                               Under a Trust Indenture ("Indenture"), dated as
                         of April 1, 1992, between the EDC and Bank One Trust
                         Company, National Association (successor to NBD Bank,
                         N.A.), as trustee ("Trustee"), the EDC has issued
                         Adjustable Rate Demand Limited Obligation Refunding
                         Revenue Bonds (The Detroit Edison Company Project),
                         Series 1992-CC (hereinafter called the "Series 1992-CC
                         Bonds") and Ambac Assurance Corporation ("Ambac") has
                         issued its Financial Guaranty Insurance Policy ("Series
                         1992-CC Insurance Policy") relating to the guarantee of
                         the scheduled payment of interest on and purchase price
                         of the Series 1992-CC Bond for the period March 26,
                         2001 through April 1, 2011. This bond is being issued
                         to induce Ambac to issue the Series 1992-CC Insurance
                         Policy for the period March 26, 2001 through April 1,
                         2011. Payments of interest on or the purchase price of,
                         the Series 1992-CC Bonds shall constitute like payments
                         of interest and principal on this bond as further
                         provided herein and in the supplemental indenture
                         pursuant to which this bond has been issued.

                               Reference is hereby made to such further
                         provisions of this bond set forth on the reverse hereof
                         and such further provisions shall for all purposes have
                         the same effect as though set forth at this place.

                               This bond shall not be valid or become obligatory
                         for any purpose until Bankers Trust Company, the
                         Trustee under the Indenture hereinafter mentioned on
                         the reverse hereof, or its successor thereunder, shall
                         have signed the form of certificate endorsed hereon.

      IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY has
caused this instrument to be executed by its Chairman of the
Board and its President or a Vice President, with their
manual or facsimile signatures, and its corporate seal, or a
facsimile thereof, to be impressed or imprinted hereon and
the same to be attested by its Corporate Secretary or an
Assistant Corporate Secretary with his manual or facsimile
signature.

Dated:                                     THE DETROIT EDISON COMPANY

                                           By ............................
                                               Vice President and Treasurer
............................
Assistant Corporate Secretary

[FORM OF REVERSE OF BOND]

This bond is one of an authorized issue of bonds of the Company, unlimited as to amount except as provided in the Indenture hereinafter mentioned or any indentures supplemental thereto, and is one of a series of General and Refunding Mortgage Bonds known as 2001 Series AP, limited to an aggregate principal amount of $31,000,000, except as otherwise provided in the Indenture hereinafter mentioned. This bond and all other bonds of said series are issued and to be issued under, and are all equally and ratably secured (except insofar as any sinking, amortization, improvement or analogous fund, established in accordance with the provisions of the Indenture hereinafter mentioned, may afford additional security for the bonds of any particular series and except as provided in Section 3 of Article VI of said Indenture) by an Indenture, dated as of October 1, 1924, duly executed by the Company to First Chicago Trust Company of New York, a trust company of the State of New York, as Trustee, to which Indenture and all indentures supplemental thereto (including the Supplemental Indenture dated as of March 15, 2001) 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 March 15, 2001, are hereinafter collectively called the "Indenture"). As provided in the Indenture, said bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as in said Indenture provided. With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of the bonds and the terms and provisions of the Indenture, or of any indenture supplemental thereto, may be modified or altered in certain respects by affirmative vote of at least eighty-five percent (85%) in amount of the bonds then outstanding, and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected by the action proposed to be taken, then also by affirmative vote of at least eighty-five percent (85%) in amount of the series of bonds so to be affected (excluding in every instance bonds disqualified from voting by reason of the Company's interest therein as specified in the Indenture); provided, however, that, without the consent of the holder hereof, no such modification or alteration shall, among other things, affect the terms of payment of the principal of or the interest on this bond, which in those respects is unconditional.

This bond is redeemable upon the terms and conditions set forth in the Indenture.

Under the Indenture, funds may be deposited with the Trustee (which shall have become available for payment), in advance of the redemption date of any of the bonds of 2001 Series AP (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.

      Upon payment by the Company as part of its obligations
under the Indenture of the principal of, or premium, if any,
or interest on, the Series 1992-CC Bonds, whether at
maturity or prior to maturity by redemption or otherwise or
upon provision for the payment thereof having been made in
accordance with the Indenture during the period March 26,
2001 through April 1, 2011, bonds of 2001 Series AP in a
principal amount equal to the principal amount of such
Series 1992-CC Bonds and having both a corresponding
maturity date and interest rate shall, to the extent of such
payment of principal, premium or interest, be deemed fully
paid and the obligation of the Company thereunder to make
such payment shall forthwith cease and be discharged, and,
in the case of the payment of principal and premium, if any,
such bonds of said series shall be surrendered for
cancellation or presented for appropriate notation to the
Trustee.

      This bond is not assignable or transferable except as
may be required to effect a transfer to any successor to
Ambac Assurance Corporation pursuant to the terms and
conditions set forth in Part I, Section I of the
Supplemental Indenture, dated as of March 15, 2001 or
subject to compliance with applicable law. Any such transfer
shall be made by the registered holder hereof, in person or
by his attorney duly authorized in writing, on the books of
the Company kept at its office or agency in the Borough of
Manhattan, The City and State of New York, upon surrender
and cancellation of this bond, and thereupon, a new
registered bond of the same series of authorized denomina-
tions 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.

                                    [FORM OF TRUSTEE'S CERTIFICATE]

FORM OF                        This bond is one of the bonds, of the series
TRUSTEE'S                designated therein, described in the within-mentioned
CERTIFICATE.             Indenture.


                                              FIRST CHICAGO TRUST COMPANY OF NEW
                                              YORK,
                                                                      as Trustee

                                              By ...........................
                                                Authorized Officer


                                                PART II.
                                        RECORDING AND FILING DATA

RECORDING AND                The Original Indenture and indentures supplemental
FILING OF ORIGINAL       thereto have been recorded and/or filed and
INDENTURE.               Certificates of Provision for Payment have been
                         recorded as hereinafter set forth.

                             The Original Indenture has been recorded as a real
                         estate mortgage and filed as a chattel mortgage in the
                         offices of the respective Registers of Deeds of certain
                         counties in the State of Michigan as set forth in the
                         Supplemental Indenture dated as of September 1, 1947,
                         has been recorded as a real estate mortgage in the
                         office of the Register of Deeds of Genesee County,
                         Michigan as set forth in the Supplemental Indenture
                         dated as of May 1, 1974, has been filed in the Office
                         of the Secretary of State of Michigan on November 16,
                         1951 and has been filed and recorded in the office of
                         the Interstate Commerce Commission on December 8, 1969.

RECORDING AND                Pursuant to the terms and provisions of the
FILING OF                Original Indenture, indentures supplemental thereto
SUPPLEMENTAL             heretofore entered into have been recorded as a real
INDENTURES.              estate mortgage and/or filed as a chattel mortgage or
                         as a financing statement in the offices of the
                         respective Registers of Deeds of certain counties in
                         the State of Michigan, the Office of the Secretary of
                         State of Michigan and the Office of the Interstate
                         Commerce Commission, as set forth in supplemental

indentures as follows:

                                                                     RECORDED AND/OR
                                                                  FILED AS SET FORTH IN
           SUPPLEMENTAL                      PURPOSE OF               SUPPLEMENTAL
            INDENTURE                       SUPPLEMENTAL                INDENTURE
           DATED AS OF                       INDENTURE                DATED AS OF:
           ------------                     ------------          ---------------------
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

                                                                     RECORDED AND/OR
                                                                  FILED AS SET FORTH IN
           SUPPLEMENTAL                      PURPOSE OF               SUPPLEMENTAL
            INDENTURE                       SUPPLEMENTAL                INDENTURE
           DATED AS OF                       INDENTURE                DATED AS OF:
           ------------                     ------------          ---------------------
May 1, 1953(a)....................  Series M Bonds                March 15, 1954
                                      and Subject Properties
March 15, 1954(a)(c)..............  Series N Bonds                May 15, 1955
                                      and Subject Properties
May 15, 1955(a)(c)................  Series O Bonds                August 15, 1957
                                      and Subject Properties
August 15, 1957(a)(c).............  Series P Bonds                June 1, 1959
                                      Additional Provisions and
                                      Subject Properties
June 1, 1959(a)(c)................  Series Q Bonds                December 1, 1966
                                      and Subject Properties
December 1, 1966(a)(c)............  Series R Bonds                October 1, 1968
                                      Additional Provisions and
                                      Subject Properties
October 1, 1968(a)(c).............  Series S Bonds                December 1, 1969
                                      and Subject Properties
December 1, 1969(a)(c)............  Series T Bonds                July 1, 1970
                                      and Subject Properties
July 1, 1970(c)...................  Series U Bonds                December 15, 1970
                                      and Subject Properties
December 15, 1970(c)..............  Series V and                  June 15, 1971
                                      Series W Bonds
June 15, 1971(c)..................  Series X Bonds                November 15, 1971
                                      and Subject Properties
November 15, 1971(c)..............  Series Y Bonds                January 15, 1973
                                      and Subject Properties
January 15, 1973(c)...............  Series Z Bonds                May 1, 1974
                                      and Subject Properties
May 1, 1974.......................  Series AA Bonds               October 1, 1974
                                      and Subject Properties
October 1, 1974...................  Series BB Bonds               January 15, 1975
                                      and Subject Properties
January 15, 1975..................  Series CC Bonds               November 1, 1975
                                      and Subject Properties
November 1, 1975..................  Series DDP Nos. 1-9 Bonds     December 15, 1975
                                      and Subject Properties
December 15, 1975.................  Series EE Bonds               February 1, 1976
                                      and Subject Properties
February 1, 1976..................  Series FFR Nos. 1-13 Bonds    June 15, 1976
June 15, 1976.....................  Series GGP Nos. 1-7 Bonds     July 15, 1976
                                      and Subject Properties
July 15, 1976.....................  Series HH Bonds               February 15, 1977
                                      and Subject Properties
February 15, 1977.................  Series MMP Bonds and Subject  March 1, 1977
                                      Properties
March 1, 1977.....................  Series IIP Nos. 1-7 Bonds,    June 15, 1977
                                      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 and   July 1, 1977
                                      Subject Properties

                                                                     RECORDED AND/OR
                                                                  FILED AS SET FORTH IN
           SUPPLEMENTAL                      PURPOSE OF               SUPPLEMENTAL
            INDENTURE                       SUPPLEMENTAL                INDENTURE
           DATED AS OF                       INDENTURE                DATED AS OF:
           ------------                     ------------          ---------------------
July 1, 1977......................  Series NNP Nos. 1-7 Bonds     October 1, 1977
                                      and Subject Properties
October 1, 1977...................  Series GGP Nos. 8-22 Bonds    June 1, 1978
                                      and Series OOP Nos. 1-17
                                      Bonds and Subject
                                      Properties
June 1, 1978......................  Series PP Bonds,              October 15, 1978
                                      Series QQP Nos. 1-9 Bonds
                                      and Subject Properties
October 15, 1978..................  Series RR Bonds               March 15, 1979
                                      and Subject Properties
March 15, 1979....................  Series SS Bonds               July 1, 1979
                                      and Subject Properties
July 1, 1979......................  Series IIP Nos. 8-22 Bonds,   September 1, 1979
                                      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 Bonds,  August 1, 1981
                                      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. 13-25     November 1, 1981
                                      Bonds and Subject
                                      Properties
November 1, 1981..................  1981 Series AP Nos. 1-12      June 30, 1982
                                      Bonds
June 30, 1982.....................  Article XIV Reconfirmation    August 15, 1982
August 15, 1982...................  1981 Series AP Nos. 13-14     June 1, 1983
                                      and Subject Properties
June 1, 1983......................  1981 Series AP Nos. 15-16     October 1, 1984
                                      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

                                                                     RECORDED AND/OR
                                                                  FILED AS SET FORTH IN
           SUPPLEMENTAL                      PURPOSE OF               SUPPLEMENTAL
            INDENTURE                       SUPPLEMENTAL                INDENTURE
           DATED AS OF                       INDENTURE                DATED AS OF:
           ------------                     ------------          ---------------------
October 15, 1985..................  Series KKP No. 9 Bonds and    April 1, 1986
                                      Subject Properties
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 1989    February 15, 1990
                                      Series BP
February 15, 1990.................  1990 Series A, 1990 Series    November 1, 1990
                                      B, 1990 Series C, 1990
                                      Series D, 1990 Series E
                                      and 1990 Series F
November 1, 1990..................  Series KKP No. 12             April 1, 1991
April 1, 1991.....................  1991 Series AP                May 1, 1991
May 1, 1991.......................  1991 Series BP and 1991       May 15, 1991
                                      Series CP
May 15, 1991......................  1991 Series DP                September 1, 1991
September 1, 1991.................  1991 Series EP                November 1, 1991
November 1, 1991..................  1991 Series FP                January 15, 1992
January 15, 1992..................  1992 Series BP                February 29, 1992 and
                                                                  April 15, 1992
February 29, 1992.................  1992 Series AP                April 15, 1992
April 15, 1992....................  Series KKP No. 13             July 15, 1992
July 15, 1992.....................  1992 Series CP                November 30, 1992
July 31, 1992.....................  1992 Series D                 November 30, 1992
April 1, 1986.....................  1986 Series A and 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 1989    February 15, 1990
                                      Series BP
February 15, 1990.................  1990 Series A, 1990 Series    November 1, 1990
                                      B, 1990 Series C, 1990
                                      Series D, 1990 Series E
                                      and 1990 Series F

                                                                     RECORDED AND/OR
                                                                  FILED AS SET FORTH IN
           SUPPLEMENTAL                      PURPOSE OF               SUPPLEMENTAL
            INDENTURE                       SUPPLEMENTAL                INDENTURE
           DATED AS OF                       INDENTURE                DATED AS OF:
           ------------                     ------------          ---------------------
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
November 30, 1992.................  1992 Series E and 1993        March 15, 1993
                                      Series D
December 15, 1992.................  Series KKP No. 14 and 1989    March 15, 1992
                                      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 Amendment   September 15, 1993
                                      of Article II, Section 5
May 31, 1993......................  1993 Series J                 September 15, 1993
September 15, 1993................  1993 Series K                 March 1, 1994
March 1, 1994.....................  1994 Series AP                June 15, 1994
June 15, 1994.....................  1994 Series BP                December 1, 1994
August 15, 1994...................  1994 Series C                 December 1, 1994
December 1, 1994..................  Series KKP No. 15 and 1994    August 1, 1995
                                      Series DP
August 1, 1995....................  1995 Series AP and 1995       August 15, 1999
                                      Series DP

(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.

RECORDING OF                 All the bonds of Series A which were issued under
CERTIFICATES             the Original Indenture dated as of October 1, 1924, and
OF PROVISION             of Series B, C, D, E, F, G, H, I, J, K, L, M, N, O, P,
FOR PAYMENT.             Q, R, S, W, Y, Z, AA, BB, CC, DDP Nos. 1-9, FFR Nos.
                         1-14, GGP Nos. 1-22, HH, IIP Nos. 1-22, JJP Nos. 1-8,
                         KKP Nos. 1-9, LLP Nos. 1-15, NNP Nos. 1-21, OOP Nos.
                         1-18, QQP Nos. 1-17, TTP Nos. 1-15, UU, 1980 Series A,
                         1980 Series CP Nos. 1-25, 1980 Series DP Nos. 1-11,
                         1981 Series AP Nos. 1-16, 1984 Series AP, 1984 Series
                         BP, 1985 Series A, 1985 Series B, 1987 Series A, PP,
                         RR, EE, MMP, MMP No. 2, 1989 Series A and 1993 Series D
                         which were issued under Supplemental Indentures dated
                         as of, respectively, June 1, 1925, August 1, 1927,
                         February 1, 1931, October 1, 1932, September 25, 1935,
                         September 1, 1936, December 1, 1940, September 1, 1947,
                         November 15, 1951, January 15, 1953, May 1, 1953, March
                         15, 1954, May 15, 1955, August 15, 1957, December 15,
                         1970, November 15, 1971, January 15, 1973, May 1, 1974,
                         October 1, 1974, January 15, 1975, November 1, 1975,
                         February 1, 1976, June 15, 1976, July 15, 1976, October
                         1, 1977, March 1, 1977, July 1, 1979, March 1, 1977,
                         March 1, 1977, March 1, 1977, September 1, 1979, July
                         1, 1977, July 1, 1979, September 15, 1979, October 1,
                         1977, June 1, 1978, October 1, 1977, July 1, 1979,
                         January 1, 1980, August 15, 1980, November 1, 1981,
                         October 1, 1984, May 1, 1985, May 15, 1985, January 31,
                         1987, June 1, 1978, October 15, 1978, December 15,
                         1975, February 15, 1977, September 1, 1979, June 15,
                         1989 and March 15, 1993 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
CONDITIONS OF            declared and provided, and agrees to perform the same
ACCEPTANCE OF            upon the terms and conditions in the Original
TRUST BY TRUSTEE.        Indenture, as amended to date and as supplemented by
                         this Supplemental Indenture, and in this Supplemental
                         Indenture set forth, and upon the following terms and
                         conditions:

                             The Trustee shall not be responsible in any manner
                         whatsoever for and in respect of the validity or
                         sufficiency of this Supplemental Indenture or the due
                         execution hereof by the Company or for or in respect of
                         the recitals contained herein, all of which recitals
                         are made by the Company solely.

                                                PART IV.
                                             MISCELLANEOUS.

CONFIRMATION OF              Except to the extent specifically provided therein,
SECTION 318(c) OF        no provision of this supplemental indenture or any
TRUST INDENTURE          future supplemental indenture is intended to modify,
ACT.                     and the parties do hereby adopt and confirm, the
                         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
COUNTERPARTS.            EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH
                         WHEN SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL; BUT
                         SUCH COUNTERPARTS SHALL TOGETHER CONSTITUTE BUT ONE AND
                         THE SAME INSTRUMENT.

TESTIMONIUM.                 IN WITNESS WHEREOF, THE DETROIT EDISON COMPANY AND
                         FIRST CHICAGO TRUST COMPANY OF NEW YORK 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:

                         ------------------------------------------------
                                          Jack L. Somers
                                  Assistant Corporate Secretary

                         Signed, sealed and delivered by THE
                         DETROIT EDISON COMPANY, in the presence of


                         ------------------------------------------------
                                           David Patria

                         ------------------------------------------------
                                        G. P. Crutchfield

STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE

ACKNOWLEDGMENT               On this 20th day of March, 2001, before me, the
OF EXECUTION             subscriber, a Notary Public within and for the County
BY COMPANY.              of 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 2nd
                         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)

FIRST CHICAGO TRUST COMPANY OF,
New York,

(Corporate Seal) By

Attest:

Signed, sealed and delivered by
FIRST CHICAGO TRUST COMPANY

of New York, in the presence of

STATE OF ILLINOIS
SS.:
COUNTY OF COOK

ACKNOWLEDGMENT          On this      day of March, 2001, before me, the
OF EXECUTION        subscriber, a Notary Public within and for the County of
BY TRUSTEE.         Cook, in the State of Illinois, personally appeared
                                     , to me personally known, who, being by me
                    duly sworn, did say that his business office is located at
                    One Bank One Plaza, Chicago, Illinois, and he is
                    of FIRST CHICAGO TRUST COMPANY of New York, 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
                    Steven M. Wagner acknowledged said instrument to be the
                    free act and deed of said corporation.


                    (Notarial Seal)
                                         ----------------------------------

STATE OF MICHIGAN
COUNTY OF WAYNE      SS.:



AFFIDAVIT AS TO              C. C. Arvani, being duly sworn, says: that he is
CONSIDERATION            the Assistant Treasurer of THE DETROIT EDISON COMPANY,
AND GOOD FAITH.          the 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
                         March, 2001

                           This instrument was drafted by Frances B. Rohlman,
                         Esq., 2000 2nd Avenue, Detroit, Michigan 48226

EXHIBIT 4-223

CONFORMED COPY

DTE ENERGY COMPANY

THE BANK OF NEW YORK

Trustee

AMENDED AND RESTATED

FIRST SUPPLEMENTAL INDENTURE

Dated as of April 9, 2001

Supplementing the Amended and Restated Indenture Dated as of April 9, 2001

Amending and Restating the First Supplemental Indenture Dated as of June 15, 1998

$100,000,000 Remarketed Notes, Series A due 2038

AMENDED AND RESTATED FIRST SUPPLEMENTAL INDENTURE, dated as of the 9th day of April, 2001 (the "First Supplemental Indenture"), between DTE ENERGY COMPANY, a corporation organized and existing under the laws of the State of Michigan (the "Company"), and THE BANK OF NEW YORK, a New York banking corporation, having its principal office in The City of New York, New York, as trustee (the "Trustee"), amending and restating the First Supplemental Indenture, dated as of June 15, 1998 (the "Predecessor First Supplemental Indenture"), between DTE Capital Corporation, a corporation organized and existing under the laws of the State of Michigan ("DTE Capital"), and the Trustee;

WHEREAS, DTE Capital has heretofore executed and delivered to the Trustee an Indenture dated as of June 15, 1998, the Predecessor First Supplemental Indenture and a Third Supplemental Indenture dated as of April 9, 2001 (the "Third Supplemental Indenture"), which, among other things, amended each of the foregoing (together, the "Predecessor Indenture");

WHEREAS, pursuant to and in compliance with Section 801 of the Predecessor Indenture, DTE Capital, the Company and the Trustee have entered into the Third Supplemental Indenture whereby the Company has assumed the obligations of DTE Capital and succeeded to and been substituted for DTE Capital as the "Company" with the same effect as if it had been named therein under the Predecessor Indenture;

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Amended and Restated Indenture dated as of April 9, 2001 (the "Original Indenture" and, together with this First Supplemental Indenture, the "Indenture"), including
Section 901 thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Amended and Restated First Supplemental Indenture, and all things necessary have been done as permitted by Sections 201 and 301 of the Predecessor 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 Predecessor Indenture in the aggregate principal amount of up to $100,000,000; and

WHEREAS, all things necessary to make the Securities the valid, binding and legal obligations of the Company and to make this First Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH that, for and in consideration of the premises and of the covenants contained in the Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed as follows:

ARTICLE ONE

DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION

Section 101. Definitions. Each capitalized term that is used herein and is defined in the Original Indenture shall have the meaning specified in the Original Indenture unless such term is otherwise defined herein.

"Administrative Agent" means the entity designated as such in the applicable Standby Note Purchase Agreement, if any.

"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 a day on which dealings in the Index Currency are transacted in the London 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 F hereto (which includes facsimile or appropriate electronic media) from the Company, that sets forth the applicable Note to which it relates, the new Interest Rate Mode (if applicable), the new Interest Rate Period, the Conversion Date, and with respect to any Long Term Rate Period, any optional redemption or repayment terms for such Note.

"Debt" of any Person at any date of determination means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables not overdue by more than 60 days incurred in the ordinary course of such Person's business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments, (d) all obligations of such Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (e) all obligations of such Person as lessee under leases that have been or should be, in accordance with GAAP, recorded as capital leases, (f) all obligations, contingent or otherwise, of such Person in respect of acceptances, letters of credit or similar extensions of credit, (g) all obligations of such Person in respect of interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements, (h) all Debt of others referred to in clauses (a) through (g) above or clause (i) below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed directly or indirectly by such person through an agreement (1) to pay or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt, (2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (4) otherwise to assure a creditor against loss, and (i) all Debt referred to in clauses (a) through (h) above secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Debt.

"DECO" means The Detroit Edison Company, a Michigan corporation and a regulated public utility.

"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 E to this First Supplemental Indenture.

"Floating Rate Maximum Interest Rate" and "Floating Rate Minimum Interest Rate" have the respective meanings specified in Section 204 hereof.

"Index Maturity" means the period to maturity of the instrument or obligation with respect to which the related Interest Rate Basis or Bases will be calculated.

"Initial Interest Rate" means the annual rate of interest applicable to the Notes during the Initial Interest Rate Period.

"Initial Interest Rate Adjustment Date" means June 15, 2003.

"Initial Interest Rate Period" means the period commencing on the date of issuance for the Notes and ending on the Business Day immediately preceding the Initial Interest Rate Adjustment Date.

"Insurer" means, with respect to the Initial Interest Rate Period, MBIA Insurance Corporation, and, with respect to any subsequent Interest Rate Period, such issuer of a financial guaranty insurance policy as may be purchased by the Company from time to time.

"Interest Determination Date" has the meaning specified in Section 204 hereof.

"Interest Rate Adjustment Date" means, for a particular Interest Rate Period in any Interest Rate Mode, each date, which shall be a Business Day, on which interest and, in the case of a floating interest rate, the Spread (if any) and the Spread Multiplier (if any) on the Notes subject thereto commences to accrue at the rate determined and announced by the applicable Remarketing Agent for such Interest Rate Period and for Notes bearing interest at the Initial Interest Rate (as hereinafter defined), the Business Day following the expiration of the Initial Interest Rate Period (as hereinafter defined).

"Interest Rate Basis" has the meaning specified in Section 204 hereof.

"Interest Rate Mode" means the mode in which the Interest Rate on a Note is being determined, i.e., the Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode.

"Interest Rate Period" means, with respect to any Note in the Commercial Paper Mode or Long Term Rate Mode, the period of time commencing on the Interest Rate Adjustment Date to, but not including, the immediately succeeding Interest Rate Adjustment Date during which such Note bears interest at a particular fixed interest rate or floating interest rate, and with respect to any Note in the SPURS Mode, a SPURS Rate Period.

"Interest Reset Date", "Initial Interest Reset Date" and "Interest Reset Period" have the respective meanings specified in Section 204 hereof.

"Lender" shall mean (i) any person, firm, corporation or other entity to which DTE Capital was, or the Company is, indebted for any Debt with respect to the Notes or which is acting as the Trustee or a trustee or authorized representative on behalf of such person, firm corporation or other entity or which is acting as SPURS Agent, and (ii) Citicorp Securities, Inc. and Salomon Brothers Inc, and their respective successors (the "Initial Purchasers"), with respect to Debt owing by DTE Capital to the Initial Purchasers in accordance with the terms of that certain Purchase Agreement, dated as of June 16, 1998, relating to the Notes.

"Liquidity Provider" means, any bank or other credit provider whose obligations such as those under the applicable Standby Note Purchase Agreement with respect to any Notes are exempt from registration under the Securities Act of 1933, as amended, with long term senior debt ratings from Standard & Poor's Ratings Services and Moody's Investors Service, Inc. at least equal to those of the Company as of the date of the Standby Note Purchase Agreement, and a minimum combined capital and surplus of at least $50,000,000, that has entered into a Standby Note Purchase Agreement with the Company for the purpose of purchasing unremarketed Notes on any Interest Rate Adjustment Date.

"Long Term Rate Mode" means, with respect to any Note, the Interest Rate Mode in which the interest rate on such Note is reset in a Long Term Rate Period and interest is paid as provided for such Interest Rate Mode in Section 204 hereof.

"Long Term Rate Period" means, with respect to any Note, any period of more than 364 days and not exceeding the remaining term to the Stated Maturity of such Note.

"Notes" or "Note" have the meaning specified in Section 201.

"Notification Date" means the Business Day not later than ten (10) days prior to the applicable SPURS Remarketing Date on which the SPURS Agent gives notice to the Company and the Trustee of its intention to purchase the Notes for remarketing.

"Optional Redemption" means the redemption of any Note prior to its maturity at the option of the Company as described herein.

"Optional Redemption Price" has the meaning set forth in Section 304(c) hereof.

"Person" means any individual, partnership, corporation (including a business trust), joint-stock company, trust, unincorporated association, joint venture, limited liability company or other entity or a government or any political subdivision or agency thereof.

"Policy" means, with respect to the Initial Interest Rate Period, the financial guaranty insurance policy issued by MBIA Insurance Corporation and attached as Exhibit D hereto, and, with respect to any subsequent Interest Rate Period, such financial guaranty insurance policy as may be purchased by the Company from an Insurer from time to time.

"Principal Financial Center" means the capital city of the country issuing the Index Currency, except that with respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese escudos, South African rand and Swiss francs, the Principal Financial Center shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich, respectively.

"Remarketing Agent" means such agent or agents, including any standby remarketing agent (each a "Standby Remarketing Agent"), as the Company may appoint from time to time for the purpose of remarketing of the Notes, as set forth in the remarketing agreement which the Company shall enter into prior to the remarketing of such Notes.

"Special Interest Rate" means the rate of interest equal to the rate per annum announced by Citibank, N.A., or such other nationally recognized bank located in the United States as the Company may select, as its prime lending rate.

"Special Mandatory Purchase" means the obligation of the Company (or, if applicable, a Liquidity Provider) to purchase Notes not successfully remarketed by the Remarketing Agent and the applicable Standby Remarketing Agent(s) by 12:00 o'clock noon, New York City time, on any Interest Rate Adjustment Date.

"Spread" means, with respect to any Note, the number of basis points to be added to or subtracted from the related Interest Rate Basis or Bases applicable to an Interest Rate Period for such Note.

"Spread Multiplier" means the percentage of the related Interest Rate Basis or Bases applicable to an Interest Rate Period by which such Interest Rate Basis or Bases will be multiplied to determine the applicable interest rate from time to time for an Interest Rate Period.

"SPURS Agent" means such Remarketing Agent as the Company may appoint from time to time for the purpose of remarketing Notes in the SPURS Mode.

"SPURS Mode" means, with respect to any Note, the Interest Rate Mode in which such Note shall bear interest and be subject to remarketing as "Structured PUtable Remarketable Securities" ("SPURS") as provided for in Article Three hereof.

"SPURS Rate Period" means an Interest Rate Period for any Note in the SPURS Mode established by the Company as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of such Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for such Note. The SPURS Rate Period shall consist of the period to and excluding the SPURS Remarketing Date and the period from and including the SPURS Remarketing Date to but excluding the next succeeding Interest Rate Adjustment Date.

"SPURS Remarketing Agreement" shall mean the agreement dated as of the Interest Rate Adjustment Date commencing the applicable SPURS Rate Period which sets forth the rights and

obligations of the Company and the applicable SPURS Agent with respect to the remarketing of the SPURS.

"SPURS Remarketing Date" means the date designated by the applicable SPURS Agent after consultation with the Company, upon which the applicable SPURS Agent may elect to remarket the Notes at the SPURS Interest Rate.

"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.

"Subsidiary" of any Person means any corporation, partnership, joint venture, limited liability company, trust or estate of which (or in which) more than 50% of (a) the issued and outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) the beneficial interest in such trust or estate is at the time directly owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person's other Subsidiaries.

"Voting Stock" means capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

"Weekly Rate Period" means a Commercial Paper Term Period with an Interest Rate Period of generally seven days.

Section 102. Section References. Each reference to a particular section set forth in this First Supplemental Indenture shall, unless the context otherwise requires, refer to this First Supplemental Indenture.

ARTICLE TWO

TITLE, RANKING AND TERMS OF THE NOTES

Section 201. Title and Ranking of the Notes. This First Supplemental Indenture hereby ratifies establishment of a series of senior Securities designated as the "Remarketed Notes, Series A due 2038" of the Company (referred to herein as the "Notes"), and shall rank equally with each other and all other senior and unsubordinated indebtedness of the Company. For purposes of the Original Indenture, the Notes shall constitute a single series of Securities.

Section 202. Variations in Terms of Notes. Subject to the terms and conditions set forth in the Original Indenture and in this First Supplemental Indenture, the terms of any

particular Note may vary from the terms of any other Note as contemplated by
Section 301. of the Original Indenture, and the terms for a particular Note will be set forth in such Note as delivered to the Trustee or an Authenticating Agent for authentication pursuant to Section 303. of the Original Indenture.

Section 203. Amount and Denominations; DTC. The aggregate principal amount of Notes that may be issued under this First Supplemental Indenture is limited to $100,000,000.

The Notes shall be issuable only in fully registered form and will initially be registered in the name of The Depository Trust Company, as depositary ("DTC"), or its nominee who is hereby designated as "U.S. Depositary" under the Original Indenture. The authorized denominations of Notes shall be $100,000 and integral multiples of $1,000 in excess thereof.

Section 204. Interest, Interest Rates and Interest Rate Modes. The Notes will initially bear interest at the Initial Interest Rate as set forth on Annex A thereof for the Initial Interest Rate Period. Thereafter, each Note at the option of the Company will bear interest in the Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode. Each Note may bear interest for designated Interest Rate Periods in the same or a different Interest Rate Mode from other Notes. The interest rate for the Notes will be established periodically as described herein by the applicable Remarketing Agent.

Interest will be payable on any Note at Maturity and (i) in the Initial Interest Rate Period, on the date or dates set forth on Annex A thereto; (ii) for any Interest Rate Period in the Commercial Paper Term Mode, on the Interest Rate Adjustment Date commencing the next succeeding Interest Rate Period for such Note and on such other dates (if any) as will be established upon conversion of such Note to the Commercial Paper Term Mode or upon remarketing of the Note in a new Interest Rate Period in the Commercial Paper Term Mode and set forth in the applicable Note; and (iii) in the Long Term Rate Mode or SPURS Mode, no less frequently than semiannually on such dates as will be established upon conversion of such Note to the Long Term Rate Mode or the SPURS Mode (or upon remarketing of the Note in a new Interest Rate Period in the Long Term Rate Mode or the SPURS Mode, as the case may be) and set forth in the applicable Note in the case of a fixed interest rate, or as described below under "Floating Interest Rates" in the case of a floating interest rate, and on the Interest Rate Adjustment Date commencing the next succeeding Interest Rate Period. Such interest will be payable to the Holder thereof as of the related Record Date, which, for any Note (x) in the Initial Interest Rate Period, is the date or dates set for therein; (y) in the Commercial Paper Term Mode, is the Business Day prior to the related Interest Payment Date; and (z) bearing interest in the Long Term Rate Mode or the SPURS Mode, is 15 days prior to the related Interest Payment Date. Except as provided below under "Floating Interest Rates," if any Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day, and no interest will accrue on such payment for the period from and after such Interest Payment Date to the date of such payment on the next succeeding Business Day. Interest on Notes bearing interest in the Commercial Paper Term

Mode or at a floating interest rate during an Interest Rate Period in the Long Term Rate Mode or the SPURS Mode will be computed on the basis of actual days elapsed over 360; provided that, if an applicable Interest Rate Basis is the CMT Rate or Treasury Rate (each as defined below), interest will be computed on the basis of actual days elapsed over the actual number of days in the year. Interest on Notes bearing interest at a fixed rate in the Long Term Rate Mode or SPURS Mode will be computed on the basis of a year of 360 days consisting of twelve 30-day months. Interest on Notes at the Initial Interest Rate will be computed on the basis of a year of 360 days consisting of twelve 30-day months.

Determination of Interest Rates.

General. The interest rate and, in the case of a floating interest rate, the Spread (if any) and the Spread Multiplier (if any) for any Note will be established by the applicable Remarketing Agent in a remarketing as described in Section 207 hereof or otherwise not later than each Interest Rate Adjustment Date for such Note as the minimum rate of interest and, in the case of a floating interest rate, Spread (if any) and Spread Multiplier (if any) necessary in the judgment of such Remarketing Agent to produce a par bid in the secondary market for such Note on the date the interest rate is established. Such rate will be effective for the next succeeding Interest Rate Period for such Note commencing on such Interest Rate Adjustment Date.

In the event that (i) the applicable Remarketing Agent has been removed or has resigned and no successor has been appointed, or (ii) such Remarketing Agent has failed to announce the appropriate interest rate, Spread, if any, or Spread Multiplier, if any, as the case may be, on the Interest Rate Adjustment Date for any Note for whatever reason, or (iii) the appropriate interest rate, Spread, if any, or Spread Multiplier, if any, as the case may be, or Interest Rate Period cannot be determined for any Note for whatever reason, then such Note shall be automatically converted to the Commercial Paper Term Mode with a Weekly Rate Period, determined as provided below under "Interest Rate Modes - Commercial Paper Term Period", and the rate of interest thereon shall be equal to the Special Interest Rate.

The Trustee shall, upon request of any Beneficial Owner of a Note, advise such Beneficial Owner or the applicable Remarketing Agent of the interest rate and, in the case of a floating interest rate, the Interest Rate Basis or Bases, Spread (if any) and Spread Multiplier (if any), and in each case the other terms applicable to such Beneficial Owner's Notes for the next Interest Rate Period. Neither the Trustee nor the Company will otherwise be required to advise Beneficial Owners of the applicable interest rate. The interest rate and other terms announced by the Remarketing Agent, absent manifest error, will be binding and conclusive upon the Beneficial Owners, the Company and the Trustee.

Floating Interest Rates.

While any Note bears interest in the Long Term Rate Mode or the SPURS Mode (with respect to the period from, and including, the Interest Rate Adjustment Date commencing such period to, but excluding, the SPURS Remarketing Date), the Company may elect a floating interest rate by providing notice, which will be in or promptly confirmed in writing (which

includes facsimile or appropriate electronic media), received by the Trustee and the Remarketing Agent for such Note (the "Floating Interest Rate Notice") not less than ten (10) days prior to the Interest Rate Adjustment Date for such Long Term Rate Period or SPURS Rate Period. The Floating Interest Rate Notice must identify by CUSIP number or otherwise the portion of the Note to which it relates and state the Interest Rate Period (or portion thereof, in the case of the SPURS Mode) therefor to which it relates. Each Floating Interest Rate Notice must also state the Interest Rate Basis or Bases, the Initial Interest Reset Date, the Interest Reset Period and Dates, the Interest Payment Period and Dates, the Index Maturity and the Floating Rate Maximum Interest Rate and/or Floating Rate Minimum Interest Rate, if any. If one or more of the applicable Interest Rate Bases is LIBOR or the CMT Rate, the Floating Interest Rate Notice shall also specify the Index Currency and Designated LIBOR Page or the Designated CMT Maturity Index and Designated CMT Telerate Page, respectively.

If any Note bears interest at a floating rate in a Long Term Rate Period or SPURS Rate Period, such Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any, specified by the Remarketing Agent, in the case of a Long Term Rate Period, or the SPURS Agent, in the case of a SPURS Rate Period, and recorded in Annex A to such Note. Commencing on the Interest Rate Adjustment Date for such Interest Rate Period, the rate at which interest on such Note shall be payable shall be reset as of each Interest Reset Date during such Interest Rate Period specified in the applicable Floating Interest Rate Notice.

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 specified 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 shall 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 Reset Date shall 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 determined as of the applicable Interest Determination Date. The "Interest Determination Date" with respect to the Federal Funds Rate and the Prime Rate will be the Business Day immediately preceding the applicable Interest Reset Date; the "Interest Determination Date" with respect to the CD Rate and the CMT 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 such Monday is a legal holiday, in which case the auction is normally held on the immediately succeeding Tuesday, although 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; provided, further, that if 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 "Interest Determination Date" pertaining to any Note, the interest rate of which is determined with reference to two or more Interest Rate Bases specified in the applicable Floating Interest Rate Notice, 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 applicable 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 that 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 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.

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 shall be determined as of the applicable Interest Determination Date (a "CD Rate Interest Determination Date") as 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 defined below) under the heading "CDs (secondary market)", or, if not so 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 as published in H.15 Update (as defined herein), 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 either 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 dollar certificates of deposit of major United States money center banks for negotiable United States dollar certificates of deposit with a remaining maturity closest to the Index Maturity 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 shall be determined as of the applicable Interest Determination Date (a "CMT Rate Interest Determination Date") as 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, 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 applicable 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 falls. If such rate is no longer displayed on the relevant page or is not so 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 bid 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 in The City of New York (which may include the Remarketing Agent or its affiliates) (each, a "Reference Dealer") 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 bid 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 bid 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 will obtain quotations for the Treasury Note with the shorter remaining term to maturity.

"Designated CMT Maturity Index" means the original period to maturity of the U.S. 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 or, if no such maturity is specified in the applicable Floating Interest Rate Notice, 2 years.

"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 such service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519) or, if no such page is specified in the applicable Floating Interest Rate Notice, page 7052.

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 shall be determined as of the applicable Interest Determination Date (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 (or any other page as may replace such page on such service) ("Telerate Page 120"), or, if such rate does not appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "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 United States dollar 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 shall be determined by the Calculation Agent as of the applicable Interest Determination Date (a "LIBOR Interest Determination Date") in accordance with the following provisions:

(i) With respect to any Interest Determination Date relating to a Floating Rate Note for which the interest rate is determined with reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will be either: (a) if "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; or (b) if "LIBOR Reuters" is specified in the applicable Floating Interest Rate Notice, the arithmetic mean of the offered rates (unless the Designated LIBOR Page by its terms provides only for a single rate, in which case such single rate shall 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. If fewer than two such offered rates so appear, or if no such rate so appears, as applicable, LIBOR on such LIBOR Interest Determination Date will be determined in accordance with the provisions described in clause (ii) below.

11:00 A.M., in the applicable Principal Financial Center, on such LIBOR Interest Determination Date by three major banks (which may include affiliates of the Remarketing Agent) 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 the 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 specified in the applicable Floating Interest Rate Notice as to which LIBOR shall be calculated or, if no such currency is specified in the applicable Floating Interest Rate Notice, 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 the applicable 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 the applicable 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.

Prime Rate. If an Interest Rate Basis for any Note is specified on the face hereto as the Prime Rate, the Prime Rate shall be determined as of the applicable Interest Determination Date (a "Prime Rate Interest Determination Date") as the rate on such date as such rate is published in H.15(519) under the caption "Bank Prime Loan" or, if not published by 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 US PRIME1 Page (as defined below) as such bank's prime rate or base lending rate as of 11:00 A.M. New York City time, on such Prime Rate Interest Determination Date. If fewer than four such rates so appear on the Reuters Screen US PRIME1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending 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 three major banks (which may include The Bank of New York or affiliates of the Remarketing Agent) in The City of New York selected by the Calculation Agent, after consultation with the

Company; 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 US PRIME1 Page" means the display on the Reuter Monitor Money Rates Service (or any successor service) on the "US PRIME1" page (or such other page as may replace the US PRIME1 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 shall be determined as of the applicable Interest Determination Date (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 "INVESTMENT RATE", on the display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any other page as may replace such page on such service) ("Telerate Page 56") or page 57 (or any other page as may replace such page on such service) ("Telerate Page 57") or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for 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/Auction High" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of such Treasury Bills as announced by the United States Department of the Treasury. In the event that the auction rate of Treasury Bills having the Index Maturity in the applicable Floating Interest Rate Notice is not so announced by the United States Department of the Treasury, or if no such Auction is held, then the Treasury Rate will be the Bond Equivalent Yield of the rate 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 the Bond Equivalent Yield 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 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.

"Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula:

Bond Equivalent Yield =    D x N
                          ------        X   100
                        360 - (D x M)

where "D" refers to the applicable per annum rate for Treasury Bills quoted on a bank discount basis, "N" refers to 365 or 366, as the case may be, and "M" refers to the actual number of days in the applicable Interest Reset Period.

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 such Note (in its best judgment in order to obtain the lowest interest cost for such Note). Each Commercial Paper Term Period will commence on the Interest Rate Adjustment Date therefor and end on the day preceding the date specified by such Remarketing Agent as the first day of the next Interest Rate Period for such Note. A "Weekly Rate Period" is a Commercial Paper Term Period and will be a period of seven days commencing on any Interest Rate Adjustment Date and ending on the day preceding the first day of the next Interest Rate Period for such Note. The interest rate for any Commercial Paper Term Period relating to a Note will be determined not later than 11:50 a.m., New York City time, on the Interest Rate Adjustment Date for such Note (subject to Section 207), which is the first day of each Interest Rate Period for such Note.

Long Term Rate Mode. The Interest Rate Period for any Note in the Long Term Rate Mode will be established by the Company (as described in Section 205 below) as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of such Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for such Note; and provided further that, if so provided in a Note in the Long Term Rate Mode and specified at the time of remarketing into a Long Term Rate Period, the Company may shorten the Interest Rate Period and provide for payment of a premium, if any, in respect thereof for any such Note upon written notice to the Remarketing Agent and the Trustee not less than thirty (30) days prior to the date upon which such shortened Interest Rate Period shall expire. Promptly upon receipt of such notice and, in any case, not later than the close of business on such date, the Trustee will transmit such information to DTC in accordance with DTC's procedures as in effect from time to time. In such case, the next Interest Rate Adjustment Date otherwise set forth in such Note shall instead be the Business Day immediately following the expiration of such Interest Rate Period. The interest rate, or Spread (if any) and Spread Multiplier (if any) for any Note in the Long Term Rate Mode will be determined not later than

11:50 a.m., New York City time, on the Interest Rate Adjustment Date for such Notes (subject to Section 207), which is the first day of the Interest Rate Period for such Note.

If any Note is subject to early remarketing as provided above, the Interest Rate Period may be shortened by the Company to end on any date on or after the Initial Early Remarketing Date, if any, specified in the Note, upon prior written notice as provided above. On or after the Initial Early Remarketing Date, if any, on the Interest Rate Adjustment Date relating to such shortened Interest Rate Period for such Note, the Company will pay a premium to the tendering Beneficial Owner of the Note, together with accrued interest, if any, thereon at the applicable rate payable to such Interest Rate Adjustment Date. Unless otherwise specified in the Note, the premium shall be an amount equal to the Initial Early Remarketing Premium specified therein (as adjusted by the Annual Early Remarketing Premium Percentage Reduction specified therein, if applicable), multiplied by the principal amount of the Note subject to early remarketing. The Initial Early Remarketing Premium, if any, shall decline at each anniversary of the Initial Early Remarketing Date by an amount equal to the applicable Annual Early Remarketing Premium Percentage Reduction, if any, specified in the Note until the premium is equal to 0.

SPURS Mode. So long as any Notes are in the SPURS Mode, the provisions set forth in Article Two applicable to the remarketing of Notes generally shall apply to such Notes only to the extent expressly provided in Article Three.

The Interest Rate Period for any Note in the SPURS Mode will be established by the Company (as described in Section 205 below) as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of such Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for such Note. The SPURS Rate Period shall consist of the period from and including the Interest Rate Adjustment Date commencing such Interest Rate Period to and excluding the SPURS Remarketing Date and the period from and including the SPURS Remarketing Date to, but excluding, the next succeeding Interest Rate Adjustment Date, as described in Article Three and subject to the conditions therein and otherwise herein described. The interest rate and, in the case of a floating interest rate, the Spread, if any, and the Spread Multiplier, if any, to the SPURS Remarketing Date for any Note in the SPURS Mode will be determined not later than 11:50 a.m., New York City time, on the Interest Rate Adjustment Date for such Note, which for the SPURS Mode is the first day of the Interest Rate Period for such Note.

Section 205. Conversion. The Company may change the Interest Rate Mode at its option in the manner described below.

(a) Conversion Between Commercial Paper Term Periods. Each Note in 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 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 and the applicable Remarketing Agent, revoke any Conversion Notice or Floating Interest Rate Notice or change the Interest Rate Mode to which such Conversion Notice relates or change any Floating Interest Rate Notice up to 9:30
a.m., New York City time, on the Conversion Date, subject to the provisions of subsection (f) below.

(f) Limitation on Conversion, Change of Conversion Notice or Floating Interest Rate Notice and Revocation. Notwithstanding the foregoing subsections (a), (b), (c), (d) and (e) the Company may not, without the consent of the applicable Remarketing Agent, convert any Note or revoke or change any Conversion Notice or Floating Interest Rate Notice at or after the time at which such Remarketing Agent has determined the interest rate, or Spread (if any) and Spread Multiplier (if any), for any Note being remarketed (i.e., the time at which such Note has been successfully remarketed, subject to settlement on the related Interest Rate Adjustment Date). The Remarketing Agent will advise the Company of indicative rates from time to time, or at any time upon the request of the Company, prior to making such determination of the interest rate, Spread or Spread Multiplier, as the case may be.

Section 206. Mandatory Tender of Notes. Each Note will be automatically tendered for purchase, or deemed tendered for purchase, on each Interest Rate Adjustment Date relating thereto. Notes will be purchased on the Interest Rate Adjustment Date relating thereto as described in Section 207. hereof.

Section 207. Remarketing. The interest rate on each Note will be established from time to time by each Remarketing Agent responsible for the remarketing thereof in accordance with the following procedures:

(a) Interest Rate Adjustment Date; Determination of Interest Rate. By 11:00 a.m., New York City time, on the Interest Rate Adjustment Date for any Note, the applicable Remarketing Agent will determine the interest rate for such Note being remarketed to the nearest one hundred-thousandth (0.00001) of one percent per annum for the next Interest Rate Period in the case of a fixed interest rate, and the Spread (if any) and Spread Multiplier (if any) in the case of a floating interest rate; provided, that between 11:00 a.m., New York City time, and 11:50 a.m., New York City time, the Remarketing Agent and the Standby Remarketing Agent(s), if any, shall use their reasonable efforts to determine the interest rate for any Notes not successfully remarketed as of the applicable deadline specified in this paragraph. In determining the applicable interest rate for such Note and other terms, such Remarketing Agent will, after taking into account market conditions as reflected in the prevailing yields on fixed and variable rate taxable debt securities, (i) consider the principal amount of all Notes tendered or to be tendered on such date and the principal amount of such Notes prospective purchasers are or may be willing to purchase and (ii) contact, by telephone or otherwise, prospective purchasers and ascertain the interest rates therefor at which they would be willing to hold or purchase such Notes.

(b) Notification of Results; Settlement. By 12:30 p.m., New York City time, on the Interest Rate Adjustment Date for any Notes, the applicable Remarketing Agent will notify the Company and the Trustee in writing (which may include facsimile or other electronic transmission), of (i) the interest rate or, in the case of a floating interest rate, the initial interest rate, the Spread and Spread Multiplier and the Initial Interest Reset Date, applicable to such Notes for the next Interest Rate Period, (ii) the Interest Rate Adjustment Date, (iii) the Interest Payment Dates, for any Notes in the Commercial Paper Term Mode (if other than the Interest Rate Adjustment Date), the Long Term Rate Mode or the SPURS Mode, (iv) the optional redemption terms, if any, and early remarketing terms, if any, in the case of a remarketing into a Long Term Rate Period, (v) the aggregate principal amount of tendered Notes and
(vi) the aggregate principal amount of such tendered Notes which such Remarketing Agent was able to remarket, at a price equal to 100% of the principal amount thereof plus accrued interest, if any. Immediately after receiving such notice, and in any case, not later than 1:30 p.m. New York City time, the Trustee will transmit such information and any other settlement information required by DTC to DTC in accordance with DTC's procedures as in effect from time to time.

By telephone at approximately 1:00 p.m., New York City time, on such Interest Rate Adjustment Date, the applicable Remarketing Agent will advise each purchaser of such Notes (or

the DTC participant of each such purchaser who it is expected in turn will advise such purchaser) of the principal amount of such Notes that such purchaser is to purchase.

Each purchaser of Notes in a remarketing will be required to give instructions to its DTC participant to pay the purchase price therefor in same day funds to the applicable Remarketing Agent against delivery of the principal amount of such Notes by book-entry through DTC by 3:00 p.m., New York City time, on the Interest Rate Adjustment Date.

All tendered Notes will be automatically delivered to the account of the Trustee (or such other account meeting the requirements of DTC's procedures as in effect from time to time), by book-entry through DTC against payment of the purchase price or redemption price therefor, on the Interest Rate Adjustment Date relating thereto.

The applicable Remarketing Agent will make, or cause the Trustee to make, payment to the DTC participant of each tendering Beneficial Owner of Notes subject to a remarketing, by book-entry through DTC by the close of business on the Interest Rate Adjustment Date against delivery through DTC of such Beneficial Owner's tendered Notes, of the purchase price for tendered Notes that have been sold in the remarketing. If any such Notes were purchased pursuant to a Special Mandatory Purchase, subject to receipt of funds from the Company or the Liquidity Provider, if any, as the case may be, the Trustee will make such payment of the purchase price of such Notes plus accrued interest, if any, to such date.

The transactions described above for a remarketing of any Notes will be executed on the Interest Rate Adjustment Date for such Notes through DTC in accordance with the procedures of DTC, and the accounts of the respective DTC participants will be debited and credited and such Notes delivered by book-entry as necessary to effect the purchases and sales thereof, in each case as determined in the related remarketing.

Except as otherwise set forth in Section 208 hereof, any Notes tendered in a remarketing will be purchased solely out of the proceeds received from purchasers of such Notes in such remarketing, and none of the Trustee, the applicable Remarketing Agent, any Standby Remarketing Agent or the Company will be obligated to provide funds to make payment upon any Beneficial Owner's tender in a remarketing.

Although tendered Notes will be subject to purchase by a Remarketing Agent in a remarketing, such Remarketing Agent and any Standby Remarketing Agent will not be obligated to purchase any such Notes.

The settlement and remarketing procedures described above, including provisions for payment by purchasers of tendered Notes or for payment to selling Beneficial Owners of tendered Notes, may be modified to the extent required by DTC. In addition, each Remarketing Agent may, without the consent of the Holders of the Notes, modify the settlement and remarketing procedures set forth above in order to facilitate the settlement and remarketing process.

As long as DTC's nominee holds the certificates representing the Notes in the book-entry system of DTC, no certificates for such Notes will be delivered by any selling Beneficial Owner to reflect any transfer of Notes effected in any remarketing.

The Trustee shall confirm to DTC the interest rate for the following Interest Rate Period in accordance with DTC's procedures as in effect from time to time.

The interest rate announced by the applicable Remarketing Agent, absent manifest error, shall be binding and conclusive upon the Beneficial Owners, the Company and the Trustee.

(c) Failed Remarketing. Notes not successfully remarketed will be subject to Special Mandatory Purchase by the Company (a "Special Mandatory Purchase"). The obligation of the Company to effect a Special Mandatory Purchase of the Notes (the "Special Mandatory Purchase Right") can be satisfied either directly by the Company or through a Liquidity Provider. By 12:00 o'clock noon, New York City time, on any Interest Rate Adjustment Date, the applicable Remarketing Agent will notify the Liquidity Provider, if any, the Trustee and the Company by telephone or facsimile, confirmed in writing, of the principal amount of Notes that such Remarketing Agent and the applicable Standby Remarketing Agent, if any, were unable to remarket on such date. In the event that the Company has entered into a Standby Note Purchase Agreement which is in effect on such date, such notice will constitute a demand for the benefit of the Company to the Liquidity Provider to purchase such unremarketed Notes at a price equal to the outstanding principal amount thereof pursuant to the terms of such Standby Note Purchase Agreement. If a Standby Note Purchase Agreement is not in effect on such date, or if the Liquidity Provider fails to advance funds under the Standby Note Purchase Agreement, the Company hereby agrees to purchase such unremarketed Notes. In each case the Company will pay all accrued and unpaid interest, if any, on unremarketed Notes to such Interest Rate Adjustment Date. Payment of the principal amount of unremarketed Notes by the Company or the Liquidity Provider, as the case may be, and payment of accrued and unpaid interest, if any, by the Company, shall be made by deposit of same-day funds with the Trustee (or such other account meeting the requirements of DTC's procedures as in effect from time to time) irrevocably in trust for the benefit of the Beneficial Owners of Notes subject to Special Mandatory Purchase by 3:00
p.m., New York City time, on such Interest Rate Adjustment Date.

Section 208. Purchase and Redemption of Notes.

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 First Supplemental Indenture until such time as the Company delivers the Notes to the Trustee for cancellation.

(b) Optional Redemption on any Interest Rate Adjustment Date. Each Note is subject to redemption at the option of the Company in whole or in part on any Interest Rate Adjustment Date, without notice to the Holders thereof, at a redemption price equal to the aggregate principal amount of such Notes to be redeemed plus accrued interest thereon to the redemption date.

(c) Redemption While Notes are in the Long Term Rate Mode. Any Notes in the Long Term Rate Mode are subject to redemption at the option of the Company at the times and upon the terms specified at the time of conversion to or within such Long Term Rate Mode.

(d) Notice of Redemption. In the case of any Note being redeemed on an Interest Rate Adjustment Date therefor, the Company shall give the applicable Remarketing Agent and the Trustee written notice of such redemption prior to the time the interest rate applicable to the next Interest Rate Period for such Note is established by such Remarketing Agent. In any other case, the Company shall give the Remarketing Agents and the Trustee written notice of redemption of any Note at least two Business Days prior to the date notice is required to be given to Holders. In addition, the Company shall give each Remarketing Agent with respect to any Note being repaid at the option of the Holder thereof and the Trustee notice as soon as practicable, and in any event not later than twelve Business Days prior to the next succeeding Interest Rate Adjustment Date therefor of each such Note which will be repaid by the Company at the option of the Holder thereof on or prior to such Interest Rate Adjustment Date. Each Remarketing Agent's obligation to remarket any Note shall terminate immediately upon receipt by it from the Company of any notice of redemption or repayment thereof.

(e) Allocation. Except in the case of a Special Mandatory Purchase, if the Notes are to be redeemed in part, DTC, after receiving notice of redemption specifying the 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 of such notice, will in turn determine the principal amount of Notes to be redeemed from the accounts of the Beneficial Owners of such Notes for which it serves as DTC participant, and give notice of such determination to the Remarketing Agent.

Section 209. Form and Other Terms of the Notes.

(a) Attached hereto as Exhibit A is the form of Note, which form is hereby established as the form in which Notes may be issued bearing interest at the Initial Interest Rate or in the Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode. Annex A to Exhibit A is deemed to be a part of such Note and such Annex may be changed upon the mutual agreement of the Company and the Trustee to reflect changes occasioned by remarketings. The Notes will initially bear legends indicating that they have not been registered under the Securities Act of 1933, as amended, and restricting transfers thereof.

(b) Attached hereto as Exhibit B is a form of Liquidity Provider Note, which form is hereby established as a form in which Notes held by the Liquidity Provider may be issued. The form of Liquidity Provider Note may be amended to reflect changes occasioned by remarketings upon the mutual agreement of the Company and the Trustee, but only with the consent of the applicable Administrative Agent.

(c) Subject to (a) and (b) above, any Note may be issued in such other form as may be provided by, or not inconsistent with, the terms of the Original Indenture and this First Supplemental Indenture.

ARTICLE THREE

THE SPURS MODE

Section 301. Applicability of Article. The provisions of this Article Three shall apply to any Note in the SPURS Mode. To the extent that any provision of this Article Three conflicts with any provision of Article Two, the provisions set forth in this Article Three shall govern.

Section 302. Interest To Remarketing Date. Each Note in the SPURS Mode shall bear interest at the annual interest rate established by the SPURS Agent from, and including the Interest Rate Adjustment Date commencing the Interest Rate Period for the SPURS Mode to, but excluding, the date (the "SPURS Remarketing Date") designated at such time by the SPURS Agent after consultation with the Company and set forth in Annex A to the applicable Note. Such interest rate will be the minimum rate of interest and, in the case of a floating interest rate, Spread (if any) and Spread Multiplier (if any) necessary in the judgment of such SPURS Agent to produce a par bid in the secondary market for such Note on the date the interest rate is established. The designated SPURS Remarketing Date shall be an Interest Payment Date within such Interest Rate Period.

Section 303. Tender; Remarketing. The SPURS Agent's obligations set forth herein shall be performed pursuant to the SPURS Remarketing Agreement.

(a) Mandatory Tender. Provided that the SPURS Agent gives notice to the Company and the Trustee on a Business Day not later than ten (10) days prior to the SPURS Remarketing Date of its intention to purchase the Notes for remarketing (the "Notification Date"), each Note shall be automatically tendered, or deemed tendered, to the SPURS Agent for remarketing on the SPURS Remarketing Date, except in the circumstances set forth in Section 304. The purchase price for the tendered Notes to be paid by the SPURS Agent shall equal 100% of the principal amount thereof. When the Notes are tendered for remarketing, the SPURS Agent may remarket the Notes for its own account at varying prices to be determined by the SPURS Agent at the time of each sale. From, and including, the SPURS Remarketing Date to, but excluding, the next succeeding Interest Rate Adjustment Date, the Notes shall bear interest at the SPURS Interest Rate. If the SPURS Agent elects to remarket the Notes, the obligation of the SPURS Agent to purchase the Notes on the SPURS Remarketing Date is subject to, among other things, the conditions specified in the applicable SPURS Remarketing Agreement. If the SPURS Agent for any reason does not purchase all tendered Notes on the SPURS Remarketing Date or if the SPURS Agent gives notice of its intention to remarket the Notes but for any reason does not purchase all tendered Notes on the SPURS Remarketing Date, then as of such date the Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date will constitute an Interest Rate Adjustment Date, and the Notes may be subject to remarketing on such date by a Remarketing Agent appointed by the Company in the Commercial Paper Mode or the Long Term Rate Mode or a new SPURS Mode established by the Company in accordance with the procedures set forth in
Section 205 hereof, provided that, in such case, the notice period required for conversion shall

be the lesser of ten (10) days and the period commencing the date that the SPURS Agent notifies the Company that it will not purchase the Notes for remarketing on the SPURS Remarketing Date or fails to so purchase, as the case may be.

(b) Remarketing. The SPURS Interest Rate shall be established by the SPURS Agent in accordance with the following procedures:

(i) The SPURS Interest Rate. Subject to the SPURS Agent's election to remarket the Notes as provided in subsection (a) above, the SPURS Interest Rate shall be determined by the SPURS Agent by 3:30 p.m., New York City time, on the third Business Day preceding the SPURS Remarketing Date (the "Determination Date") to the nearest one hundred-thousandth (0.00001) of one percent per annum, and shall be equal to the Base Rate established by the SPURS Agent, after consultation with the Company, at or prior to the commencement of the SPURS Mode (the "Base Rate"), plus the Applicable Spread (as defined below), which will be based on the Dollar Price (as defined below) of the Notes.

The "Applicable Spread" will be the lowest bid indication, expressed as a spread (in the form of a percentage or in basis points) above the Base Rate, obtained by the SPURS Agent on the Determination Date from the bids quoted by up to five Reference Corporate Dealers (as defined below) for the full aggregate principal amount of the Notes at the Dollar Price, but assuming (i) an issue date equal to the SPURS Remarketing Date, with settlement on such date without accrued interest, (ii) a maturity date equal to the next succeeding Interest Adjustment Date of the Notes and (iii) a stated annual interest rate, payable semiannually on each Interest Payment Date, equal to the Base Rate plus the spread bid by the applicable Reference Corporate Dealer. If fewer than five Reference Corporate Dealers bid as set forth in this subsection (b)(i) of
Section 303, then the Applicable Spread shall be the lowest of such bid indications obtained as set forth in this subsection (b)(i) of Section 303. The SPURS Interest Rate announced by the SPURS Agent, absent manifest error, shall be binding and conclusive upon the Beneficial Owners and Holders of the Notes, the Company and the Trustee.

"Dollar Price" shall mean, with respect to the Notes, the present value determined by the SPURS Agent, as of the SPURS Remarketing Date, of the Remaining Scheduled Payments (as defined below) discounted to the SPURS Remarketing Date, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the Treasury Rate (as defined below).

"Reference Corporate Dealers" means such Reference Corporate Dealers as shall be appointed by the SPURS Agent after consultation with the Company.

"Treasury Rate" shall mean, with respect to the SPURS Remarketing Date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) yield to maturity of the Comparable Treasury Issues (as defined below), assuming a price for the Comparable Treasury Issues (expressed as a percentage of its principal amount), equal to the Comparable Treasury Price (as defined below) for such SPURS Remarketing Date.

"Comparable Treasury Issues" shall mean the United States Treasury security or securities selected by the SPURS Agent as having an actual or interpolated maturity or maturities comparable or applicable to the remaining term to the next succeeding Interest Adjustment Date of the Notes being purchased.

"Comparable Treasury Price" means, with respect to the SPURS Remarketing Date, (a) the offer prices for the Comparable Treasury Issues (expressed in each case as a percentage of its principal amount) on the Determination Date, as set forth on "Telerate Page 500" (or such other page as may replace Telerate Page 500) or (b) if such page (or any successor page) is not displayed or does not contain such offer prices on such Determination Date,
(i) the average of the Reference Treasury Dealer Quotations (as defined below) for such SPURS Remarketing Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the SPURS Agent obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations. "Telerate Page 500" means the display designated as "Telerate Page 500" on 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 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.

Transactions involving the sale and purchase of Notes remarketed by the SPURS Agent on and after the SPURS Remarketing Date will settle in immediately available funds through DTC's Same-Day Funds Settlement System.

The tender and settlement procedures set forth above, including provisions for payment by purchasers of Notes in the remarketing or for payment to selling Beneficial Owners of tendered Notes, may be modified to the extent required by DTC or to the extent required to facilitate the tender and remarketing of Notes in certificated form, if the book-entry system is no longer available for the Notes at the time of the remarketing. In addition, the SPURS Agent may, without the consent of the Holders of the Notes, modify the settlement procedures set forth above in order to facilitate the tender and settlement process.

As long as DTC's nominee holds the certificates representing any Notes in the book-entry system of DTC, no certificates for such Notes will be delivered by any selling Beneficial Owner to reflect any transfer of such Notes effected in the remarketing.

Section 304. Conversion or Redemption Following Election by the SPURS Agent to Remarket.

(a) If the SPURS Agent elects to remarket the Notes on the SPURS Remarketing Date, the Notes will be subject to mandatory tender to the SPURS Agent for remarketing on such date, in each case subject to the conditions set forth in Section 303 hereof and to the Company's right to either convert the Notes to a new Interest Rate Mode on the SPURS Remarketing Date or to redeem the Notes from the SPURS Agent, in each case as described in the next sentence. The Company will notify the SPURS Agent and the Trustee, not later than the Business Day immediately preceding the Determination Date, if the Company irrevocably elects to exercise its right to either convert the Notes to a new Interest Rate Mode, or to redeem the Notes, in whole but not in part, from the SPURS Agent at the Optional Redemption Price, in each case on the SPURS Remarketing Date.

(b) In the event that the Company irrevocably elects to convert the Notes to a new Interest Rate Mode, then as of the SPURS Remarketing Date the Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date will constitute an Interest Rate Adjustment Date, and the Notes will be subject to remarketing on such date by a Remarketing Agent appointed by the Company in the Commercial Paper Term Mode or the Long Term Rate Mode or a new SPURS Mode established by the Company in accordance with the procedures 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

EVENTS OF DEFAULT

With respect to the Notes, subject to the provisions of the Indenture permitting amendment or modification in accordance, and subject to compliance, with the terms thereof, Sections 501, 502, 503, and 504 of the Original Indenture are replaced with and superseded by the following language:

"Section 501. Events of Default.

"Event of Default", wherever used herein with respect to the Notes, means any of the following events (whatsoever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(1) default in the payment of any interest upon any Note when such interest becomes due and payable, and continuance of such default for a period of 30 days; or

(2) default in the payment of the principal of (or any premium, if any, on) any Note at its Maturity; or

(3) default in the observance or performance of any covenant or agreement on its part to be observed or performed contained in the Indenture (other than a covenant or agreement a default in the performance of which is elsewhere in this Section specifically dealt with or which has expressly been included in the Indenture solely for the benefit of one or more series of Securities other than the Notes), and continuance of such default or breach for a period of ten (10) days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

(4) any event of default by the Company or any of its Subsidiaries as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any Debt of the Company or any of its Subsidiaries, as the case may be, whether such Debt now exists or shall hereafter be created, resulting in such Debt in principal amount of at least $10,000,000 becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, and such acceleration shall not be rescinded or annulled within a period of 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or

(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company or DECO in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company or DECO bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company or DECO under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or DECO or of any substantial part the property of the Company or DECO, or ordering the winding up or liquidation of the affairs of the Company or DECO, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by the Company or DECO of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or DECO or of any substantial part of their respective property, or the making by it of an assignment for the benefit of creditors, or the admission by the Company or DECO in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or DECO in furtherance of any such action; or

(7) final judgment of money in excess of $10,000,000, singularly or in the aggregate, shall be rendered against the Company or any of its Subsidiaries and shall remain undischarged for a period (during which execution shall not be effectively stayed) of 10 days after such judgment becomes final; or

(8) the Company shall, at any time, directly or indirectly cease to hold 100% of the Voting Stock of DECO; or

(9) default in the performance of the Company's obligation to purchase Notes held by the Liquidity Provider under the terms of the Standby Note Purchase Agreement, if any, and continuance of such default for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder."

"Section 502. Acceleration of Maturity: Rescission and Annulment.

If an Event of Default with respect to the Notes at the time Outstanding occurs and is continuing, then in every such case either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Outstanding Notes may declare the principal amount of all of the Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.

At any time after such a declaration of acceleration with respect to the Notes has been made, but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if

(1) the Company has paid or deposited with the Trustee a sum sufficient to pay

(A) all overdue interest on all Notes,

(B) the principal of (and premium, if any, on) any Notes which has become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Notes,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Notes, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(2) all Events of Default with respect to the Notes, other than the non-payment of the principal of, and any premium and interest on, Notes which has become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or, impair any right consequent thereon.

An Event of Default described in paragraph (5) or (6) of Section 501 shall cause the principal amount and accrued interest to become immediately due and payable without any declaration or other act by the Trustee or any Holder."

"Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company covenants that if

(1) default is made in payment of any interest on any Note when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium, if any, on) any Note at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Notes, the whole amount then due and payable on such Notes for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Notes and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

may enforce the same against the Company or any other obligor upon such Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Notes, wherever situated.

If an Event of Default occurs and is continuing with respect to the Notes, the Trustee may in its discretion proceed to protect and enforce its rights, including the rights of the Holders of the Notes, by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy including, without limitation, instituting a proceeding prior to any declaration of acceleration of the Maturity of the Notes for the collection of all amounts then due and unpaid on the Notes, prosecuting such proceeding to final judgment or decree and collecting out of the property, wherever situated, of the Company the moneys adjudged or decreed to be payable in the manner provided by law."

"Section 504. Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or DECO or any other obligor upon the Notes or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of any overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

(i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders of Notes allowed in such judicial proceeding, and

(ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such Judicial proceeding is hereby authorized by each Holder of Notes to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Notes, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 606.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Note any plan of reorganization, arrangement,

adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Note in any such proceeding."

In addition, for purposes of the foregoing provisions applicable to the Notes, the reference in Section 601 of the Original Indenture to Section 501 (4) shall be deemed to be to Section 501(3) set forth above.

ARTICLE FIVE

ADDITIONAL REPORTING AND INFORMATION REQUIREMENTS

Section 501. Rule 144A Information. At any time that the Company does not furnish information to the Commission in accordance with Rule 12g3-2(b) under or pursuant to Section 13 or 15(d) of the Exchange Act, the Company shall promptly furnish or cause to be furnished such information as is specified pursuant to Rule 144(d)(4) under the Securities Act (or any successor provision thereto) to any Holder or beneficial owner of a Note or to a prospective purchaser of a Note who is designated by such Holder or beneficial owner and is a qualified institutional buyer (as defined in Rule 144A), upon the request of such Holder or beneficial owner or prospective purchaser, in order to permit compliance by such Holder or beneficial owner with Rule 144A under the Securities Act.

Section 502. Additional Reports. The Company shall furnish, or cause to be furnished, to the Trustee:

(a) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, a copy of the annual report to shareholders for such year for the Company and its Subsidiaries, containing the Consolidated balance sheet of the Company and its Subsidiaries as of the end of each fiscal year and Consolidated statements of income, cash flows and changes in shareholders' equity of the Company and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Deloitte & Touche LLP or other nationally recognized firm of independent public accountants having been prepared in accordance with GAAP;

(b) as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, the unaudited Consolidated balance sheet of the Company and its Subsidiaries as of the end of such quarter and unaudited Consolidated statements of income, cash flows and changes in shareholders' equity of the Company and its Subsidiaries for such quarter and for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by a financial officer of the Company as having been prepared in accordance with GAAP; and

(c) promptly after sending or filing thereof, copies of all other reports and registration statements that the Company or any of its Subsidiaries, if any, files with the Commission or any national securities exchange.

Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates).

ARTICLE SIX

AUTHENTICATION AND DELIVERY OF THE NOTES

Section 601. Authentication and Delivery. As provided in and pursuant to Section 303 of the Original Indenture, each time that the Company delivers Notes to the Trustee or Authenticating Agent for authentication, the Company shall deliver a Supplemental Company Order in the form of Exhibit C to this First Supplemental Indenture for the authentication and delivery of such Notes and the Trustee or such Authenticating Agent shall authenticate and deliver such Notes.

ARTICLE SEVEN

THE SUPPORT AGREEMENT

Section 701. The Support Agreement. The Support Agreement dated as of June 16, 1998, by and between DTE Capital and the Company, has been terminated as of April 9, 2001. Notwithstanding the foregoing, the Company agrees for the benefit of the Lenders as follows:

(a) The Company will own directly or indirectly all of the voting common stock of DECO now or hereafter issued and outstanding.

(b) The Company will not create or suffer to exist any lien, security interest or other charge of encumbrance, upon or with respect to any voting common stock of DECO from time to time owned directly or indirectly by the Company, provided, however, that any restriction on the payment of dividends by DECO contained in any subordinated debt instrument, preferred stock or preference stock of DECO shall not constitute a lien, security interest or other encumbrance.

Subject to the terms of this First Supplemental Indenture and the Original Indenture, the agreements of the Company set forth in this Section 701 shall terminate on the Initial Interest Rate Adjustment Date (provided that such termination shall not adversely affect the rights of the Initial Purchasers), effective commencing on such Initial Interest Rate Adjustment Date; provided that such termination shall not be applicable to the Notes until after the Notes have been tendered for remarketing and successfully remarketed on such date.

ARTICLE EIGHT

INSURANCE PROVISIONS

Section 801. Applicability of Article. During the Initial Interest Rate Period, the Notes shall be entitled to the benefit of a Policy issued by the Insurer. The form of Policy with respect to the Initial Interest Rate Period is attached as Exhibit D hereto. The provisions of this Article Eight shall be applicable to the Notes for the Initial Interest Rate Period and any subsequent Interest Rate Period so long as a Policy is in effect with respect to the Notes and the Insurer is not in default of its obligation to make payments thereunder.

Section 802. Rights of Insurer Controlling. Anything herein or under the Original Indenture to the contrary notwithstanding, if a Policy is in effect with respect to the Notes and the Insurer is not in default of its obligation to make payments thereunder, the Insurer shall be deemed to be the Holder of all Notes then Outstanding for all purposes under the Indenture and shall have the exclusive right to exercise or direct the exercise of remedies on behalf of the Holders of the Notes in accordance with the terms of the Indenture following an Event of Default, and the principal of all such Notes Outstanding may not be declared to be due and payable immediately without the prior written consent of the Insurer.

Section 803. Payments Under the Policy in Respect of the Initial Interest Rate Period. (a) If, as of the opening of business on any Interest Payment Date in the Initial Interest Rate Period, through and including the Initial Interest Rate Adjustment Date, the Trustee has not received payments from the Company pursuant to this First Supplemental Indenture in such amounts so that sufficient moneys are available under this First Supplemental Indenture to pay all interest due on the Notes on such Interest Payment Date, the Trustee shall promptly notify the Insurer or its designee by telephone, confirmed in writing by registered or certified mail, of the amount of the deficiency.

(b) If, as of 3:00 p.m. New York City time, on the Initial Interest Rate Adjustment Date in the event of a Special Mandatory Purchase, the Trustee has not received payments from the Company pursuant to this First Supplemental Indenture in such amounts so that sufficient moneys are available under this First Supplemental Indenture to pay 100% of the aggregate principal amount of the Notes subject to Special Mandatory Purchase on the Initial Interest Rate Adjustment Date, the Trustee shall promptly notify the Insurer or its designee by telephone, confirmed in writing by registered or certified mail, of the amount of the deficiency.

(c) If the deficiency in clause (a) or (b) is made up in whole or in part on the applicable payment or purchase date, the Trustee shall so notify the Insurer or its designee.

meaning of any applicable bankruptcy laws, then the Trustee shall notify the Insurer or its designee of such fact by telephone, confirmed in writing by registered or certified mail.

(e) The Trustee is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Notes as follows:

If and to the extent there is a deficiency in amounts required to pay interest on the Notes, the Trustee shall (A) execute and deliver to State Street Bank and Trust Company, N.A., or its successors under the Policy (the "Insurance Paying Agent"), in form provided by the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (B) receive as designee of the respective Holders in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned and (C) disburse the same at the written direction of the Insurance Paying Agent to such respective Holders;

(f) Irrespective of whether any such assignment is executed and delivered, the Company and the Trustee hereby agree for the benefit of the Insurer that:

(i) they recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Trustee), on account of interest on the Notes, the Insurer will be subrogated to the rights of such Holders to receive the amount of such interest from the Company, with interest thereon as provided and solely from the sources stated in this First Supplemental Indenture and the Notes; and

(ii) they will accordingly pay to the Insurer the amount of such interest (including interest recovered under subparagraph (ii) of the first paragraph of the Policy, which interest shall be deemed past due and not to have been paid), with interest thereon as provided in this First Supplemental Indenture and the Note, but only from the sources and in the manner provided herein for the payment of interest on the Notes to Holders and will otherwise treat the Insurer as the owner of such rights to the amount of such interest.

(g) On the date of purchase, the Company shall execute and the Trustee shall authenticate and make available for delivery to the Insurer or the Insurer's designee all Notes purchased with the proceeds under the Policy which Notes shall be registered and made available in the name of or as directed in writing by the Insurer.

(h) Payments with respect to claims for interest on and principal of Notes disbursed by the Trustee from proceeds of the Policy shall not be considered to discharge the obligation of the Company with respect to such Notes, and the Insurer shall become the owner of such unpaid Notes and claims for interest in accordance with the tenor of the assignment made to it under the provisions of this section.

Section 804. Payments Under a Policy in Respect of Subsequent Interest Rate Periods. Except as otherwise provided in an amendment or supplement to this First Supplemental Indenture on or prior to commencement of a subsequent Interest Rate Period, so long as a Policy is in effect with respect to the Notes and the Insurer is not in default of its obligations to make payments thereunder, the provisions of Section 803 shall apply to each such Interest rate Period, except that provisions in this Article Eight applicable to the "Initial Interest Rate Period" shall apply to such Interest Rate Period, and provisions in this Article Eight applicable to the "Initial Interest Rate Adjustment Date" shall apply to the Interest Rate Adjustment Date immediately succeeding such Interest Rate Period.

Section 805. Amendments. Copies of any amendments made to the documents executed in connection with the issuance of the Notes which are consented to by the Insurer shall be sent at the expense of the Company to the rating agencies then rating the Notes.

Section 806. Notice of Defaults. Notwithstanding Section 601 of the Original Indenture, the Insurer is to receive from the Trustee prompt notice of all defaults of which the Trustee has actual knowledge.

Section 807. Company Acting as Paying Agent. Notwithstanding anything to the contrary in the Indenture, so long as a Policy is in effect or the Insurer is the Holder of Notes, the Company shall not act as its own Paying Agent.

Section 808. Redemption of Insurer Notes. Notwithstanding
Section 1103 of the Original Indenture, all Notes of which the Insurer is the Holder shall be redeemed prior to any other Notes.

Section 809. Change in Trustee. The Insurer shall receive notice of the resignation or removal of the Trustee and the appointment of a successor thereto.

Section 810. Effect of Amendments. In determining whether any amendments or supplement to the Indenture may be made without the consent of the Holders or in determining whether any action should be taken the effect of such action on the rights of the Holders shall be considered as if the Policy were not in effect.

Section 811. Copies of Financial Statements. The Insurer shall receive a copy of all financial statements and reports to be delivered to the Trustee pursuant to Section 704 of the Original Indenture at the time such financial statements and reports are delivered to the Trustee. The address of the initial Insurer is MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504, Attention: Insured Portfolio Management--PF.

Section 812. Defeasance. Notwithstanding Section 403 of the Original Indenture, for so long as the Policy in effect and the Insurer is not in default of its obligation to make payments thereunder, the Company shall not exercise its rights to satisfy and discharge the entire indebtedness on the Notes without the consent of the Insurer, which consent shall not be unreasonably withheld.

Section 813. Notices to Holders. Any notice, certificate or report that is required to be given to a Holder of the Notes or to the Trustee pursuant to the Indenture shall also be provided by the Company to the Insurer. All notices, certificates or reports required to be given to the Insurer shall be in writing and shall be sent by registered or certified mail to such address as shall be designated in writing by the Insurer from time to time.

Section 814. Third Party Beneficiary. Notwithstanding Section 112 of the Original Indenture, so long as the Policy in effect and the Insurer is not in default of its obligation to make payments thereunder, the Insurer is an express third-party beneficiary of the Indenture.

ARTICLE NINE

AMENDMENTS

Section 901. Notwithstanding anything herein or in the Original Indenture to the contrary, this First Supplemental Indenture and the Original Indenture (in the case of the Original Indenture, with respect to any amendment of or affecting the Notes or the Insurer) may be amended at any time in accordance with the provisions of Article Nine of the Original Indenture, but subject to the consent of the Insurer (which consent shall not be unreasonably withheld) so long as the Policy is in effect and the Insurer is not in default of its obligation to make payments under the Policy.

ARTICLE TEN

MISCELLANEOUS PROVISIONS

The Trustee makes no undertaking or representations in respect of, and shall not be responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this First Supplemental Indenture or the proper authorization or the due execution hereof by the Company or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.

Except as expressly amended hereby, the Original Indenture shall continue in full force and effect in accordance with the provisions thereof and the Original Indenture is in all respects hereby ratified and confirmed. This First Supplemental Indenture and all its provisions shall be deemed a part of the Original Indenture in the manner and to the extent herein and therein provided.

This First Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated First Supplemental Indenture to be duly executed and attested, all as of the day and year first above written, with effect from June 15, 1998.

DTE ENERGY COMPANY

                                       By:  /s/ N.A. Khouri
                                          --------------------------------------
                                            Name:  N.A. Khouri
                                            Title: Vice President and Treasurer
ATTEST:



By: /s/ Jack. L. Somers
    ---------------------

THE BANK OF NEW YORK,
as Trustee

                                       By:  /s/ Terence Rawlins
                                          --------------------------------------
                                            Name:  Terence Rawlins
                                            Title: Assistant Vice President
ATTEST:


By: /s/ Stacey Poindexter
    ---------------------

Consented to as of the day and year
first above written by the undersigned

Insurer:

MBIA INSURANCE CORPORATION

By:  /s/ Amy R. Gonch
    -------------------------------------
Name:    Amy R. Gonch/Assistant Secretary

EXHIBIT A

FORM OF NOTE

(Attached)

A-1

THIS CERTIFICATE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THIS NOTE WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF.

THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (D) IN A TRANSACTION OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT UPON THE DELIVERY

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OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, SUBJECT IN EACH OF THE FOREGOING CASES, TO A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE BEING COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

THE HOLDER OF THIS NOTE (A) IS NOT ITSELF, AND IS NOT ACQUIRING THIS NOTE WITH "PLAN ASSETS" OF, AN EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY") OR (B) (1) IS ITSELF, OR IS ACQUIRING THIS NOTE WITH THE ASSETS OF, AN "INVESTMENT FUND" (WITHIN THE MEANING OF PART V(b) OF PTCE 84-14) MANAGED BY A "QUALIFIED PROFESSIONAL ASSET MANAGER" (WITHIN THE MEANING OF PART V(a) OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14) WHICH HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR SUCH FUND TO PURCHASE THIS NOTE, UNDER CIRCUMSTANCES SUCH AS PTCE 84-14 IS APPLICABLE TO THE PURCHASE AND HOLDING OF THIS NOTE, (2) IS ITSELF, OR IS ACQUIRING THIS NOTE WITH THE ASSETS OF, A PLAN MANAGED BY AN "IN-HOUSE ASSET MANAGER" (WITHIN THE MEANING OF

PART IV(a) OF PTCE 96-23) WHICH HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR

SUCH PLAN TO PURCHASE THIS NOTE, UNDER CIRCUMSTANCES SUCH THAT PTCE 96-23 IS APPLICABLE TO THE PURCHASE AND HOLDING OF THIS NOTE, (3) IS AN INSURANCE COMPANY POOLED SEPARATE ACCOUNT PURCHASING THIS NOTE PURSUANT TO PART I OF PTCE 90-1, OR A BANK COLLECTIVE INVESTMENT FUND PURCHASING THIS NOTE PURSUANT TO SECTION I OF PTCE 91-38, AND IN EITHER CASE, NO PLAN OWNS MORE THAN 10% OF THE ASSETS OF SUCH ACCOUNT OR COLLECTIVE FUND (WHEN AGGREGATED WITH OTHER PLANS OF THE SAME EMPLOYER (OR ITS AFFILIATES) OR EMPLOYEE ORGANIZATION) OR (4) IS AN INSURANCE COMPANY USING THE ASSETS OF ITS GENERAL ACCOUNT TO PURCHASE THIS NOTE PURSUANT TO PART I OF PTCE 95-60, IN WHICH CASE THE RESERVES AND LIABILITIES FOR THE GENERAL ACCOUNT CONTRACTS HELD BY OR ON BEHALF OF ANY PLAN, TOGETHER WITH ANY OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR ITS AFFILIATES) OR EMPLOYEE ORGANIZATION, DO NOT EXCEED 10% OF THE TOTAL RESERVES AND LIABILITIES OF THE INSURANCE COMPANY GENERAL ACCOUNT (EXCLUSIVE OF SEPARATE ACCOUNT LIABILITIES), PLUS SURPLUS AS SET FORTH IN THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONS ANNUAL STATEMENT FILED WITH THE STATE OF DOMICILE OF THE INSURER.

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No:

DTE ENERGY COMPANY
REMARKETED NOTE, SERIES A DUE 2038

THIS NOTE SHALL NOT BE VALID FOR ANY PURPOSE UNLESS PRESENTED TOGETHER WITH ANNEX A HERETO (INCLUDING ANY CONTINUATION THEREOF). REFERENCE IS MADE TO ANNEX A FOR CERTAIN TERMS OF THIS NOTE.

DTE ENERGY 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 June 15, 2038 (the "Stated Maturity"), upon the presentation and surrender hereof at the principal corporate trust office of The Bank of New York, or its successor in trust (the "Trustee") or such other office as the Trustee has designated in writing, and to pay interest on the unpaid principal balance hereof from, and including, the Original Issue Date specified in Annex A to, but excluding, the Initial Interest Rate Adjustment Date specified in Annex A (the "Initial Interest Rate Period") at the Initial Interest Rate specified therein payable on the related Interest Payment Date or Dates specified in Annex A, to the person in whose name this Note is registered at the close of business on the related Record Date. From and after the Initial Interest Rate Adjustment Date, this Note will bear interest in either the Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode, in each case as provided in this Note and set forth in Annex A, and interest will be payable on the Interest Payment Dates to the person in whose name this Note is registered at the close of business on the related Record Date as provided below or as set forth in Annex A. In each case, payments shall be made in accordance with the provisions hereof and Annex A, including any additional terms specified in Annex A, until the principal hereof is paid or duly made available for payment. References herein to "this Note", "hereof", "herein" and comparable terms shall include Annex A.

So long as this Note bears interest in the Commercial Paper Term Mode, interest will be payable on the Interest Rate Adjustment Date which commences the next succeeding Interest Rate Period for this Note and on such other dates (if any) as will be established by the Company and set forth in Annex A upon conversion of this Note to the Commercial Paper Term Mode or upon remarketing of this Note in a new Interest Rate Period in the Commercial Paper Term Mode. So long as this Note bears interest in the Long Term Rate Mode or the SPURS Mode, interest will be payable no less frequently than semiannually on such dates as will be established by the Company and set forth in Annex A upon conversion of this Note to the Long Term Rate Mode or the SPURS Mode (or upon remarketing of this Note in a new Interest Rate Period in the Long Term Rate Mode or the SPURS Mode, as the case may be) in the case of a fixed interest rate, or as set forth below under "Interest Rate" in the case of a floating interest rate and on the Interest Rate Adjustment Date commencing the next succeeding Interest Rate Period. Such

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interest will be payable to the Holder hereof as of the related Record Date, which, so long as this Note bears interest (i) in the Initial Interest Rate Period, are the dates specified in Annex A; (ii) in the Commercial Paper Term Mode, is the Business Day prior to the related Interest Payment Date; and (iii) in the Long Term Rate Mode or the SPURS Mode, is 15 days prior to the related Interest Payment Date. Except as provided below under "Interest Rate-Floating Interest Rates," if any Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding Business Day, and no interest will accrue on such payment for the period from and after such Interest Payment Date to the date of such payment on the next succeeding Business Day. Interest on this Note while bearing interest in the Commercial Paper Term Mode or at a floating interest rate during a Long Term Rate Period or a SPURS Rate Period will be computed on the basis of actual days elapsed over 360; provided that, if an applicable Interest Rate Basis is the CMT Rate or Treasury Rate (each as defined below), interest will be computed on the basis of actual days elapsed over the actual number of days in the year. Interest on this Note while bearing interest in the Long Term Rate Mode or the SPURS Mode will be computed on the basis of a year of 360 days consisting of twelve 30-day months. Interest on this Note while bearing interest at the Initial Interest Rate will be computed on the basis a year of 360 days consisting of twelve 30-day months.

Payment of the principal of and interest on this Note will be made at the office or agency maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the person in whose name this Note is registered at the close of business on the related Record Date.

This Note is one of a duly authorized series of Securities of the Company (herein called the "Notes") issued and to be issued under an Indenture, dated as of June 15, 1998, as supplemented by the First Supplemental Indenture, dated as of June 15, 1998, in each case as amended by the Third Supplemental Indenture dated as of April 9, 2001 and as further amended and restated as of April 9, 2001 (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.

If a Policy (as defined below) is in effect with respect to any Interest Rate Period, this Note shall be entitled to the benefit of such Policy for such Interest Rate Period to the extent and subject to the conditions set forth in the First Supplemental Indenture, as then amended. A copy of the Policy is on file at the office of the Trustee.

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DEFINITIONS

The following terms, as used herein, have the following meanings unless the context or use clearly indicates another or different meaning or intent:

"Applicable Spread" means the lowest bid indication, expressed as a spread (in the form of a percentage or in basis points) above the Base Rate, obtained by the SPURS Agent on the Determination Date from the bids quoted by up to five Reference Corporate Dealers for the full aggregate principal amount of this Note at the Dollar Price, but assuming (i) an issue date equal to the SPURS Remarketing Date, with settlement on such date without accrued interest, (ii) a maturity date equal to the next succeeding Interest Rate Adjustment Date and
(iii) a stated annual interest rate, payable semiannually on each Interest Payment Date, equal to the Base Rate plus the spread bid by the applicable Reference Corporate Dealer. If fewer than five Reference Corporate Dealers bid as set forth herein, then the Applicable Spread shall be the lowest of such bid indications obtained.

"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 a day on which dealings in the Index Currency are transacted in the London 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 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 E to the First Supplemental Indenture.

"Floating Rate Maximum Interest Rate" and "Floating Rate Minimum Interest Rate" have the respective meanings specified under "Interest Rate - (c) Floating Interest Rates" below.

"Index Maturity" means the period to maturity of the instrument or obligation with respect to which the related Interest Rate Basis or Bases will be calculated.

"Initial Interest Rate" means the annual rate of interest applicable to this Note during the Initial Interest Rate Period.

"Initial Interest Rate Adjustment Date" means June 15, 2003.

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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.

"Insurer" means, with respect to the Initial Interest Rate Period, MBIA Insurance Corporation, and, with respect to any subsequent Interest Rate Period, such issuer of a financial guaranty policy in respect of this Note as may be purchased by the Company from time to time.

"Interest Determination Date" has the meaning specified under "Interest Rate - (c) Floating Interest Rates" below.

"Interest Rate Adjustment Date" means for a particular Interest Rate Period in any Interest Rate Mode, each date, which shall be a Business Day, on which interest and, in the case of a floating interest rate, the Spread (if any) and the Spread Multiplier (if any) on this Note commences to accrue at the rate determined and announced by the applicable Remarketing Agent for such Interest Rate Periods, and if this Note is bearing interest at the Initial Interest Rate, the Business Day following the expiration of the Initial Interest Rate Period.

"Interest Rate Basis" has the meaning specified under "Interest Rate -
(c) Floating Interest Rates" below.

"Interest Rate Mode" means the mode in which the Interest Rate on this Note is being determined, i.e., the Commercial Paper Term Mode, the Long Term Rate Mode, or the SPURS Mode.

"Interest Rate Period" means, with respect to the Commercial Paper Term Mode or the Long Term Rate Mode, the period of time commencing on the Interest Rate Adjustment Date to, but not including, the immediately succeeding Interest Rate Adjustment Date during which this Note bears interest at a particular fixed interest rate or floating interest rate, and, with respect to an Interest Rate Period for this Note in the SPURS Mode, a SPURS Rate Period. So long as this Note bears interest in the Long Term Rate Mode, if so provided in Annex A at "Interest Rate Period Adjustment" and if specified by the Company at the time of remarketing into such Long Term Rate Period, the Company may shorten the Interest Rate Period and provide for payment of a premium in respect thereof for this Note upon written notice to the Remarketing Agent and the Trustee not less than thirty (30) days prior to the date upon which such shortened Interest Rate Period shall expire. Promptly upon receipt of such notice and, in any case, not later than the close of business on such date, the Trustee will transmit such information to DTC in accordance with DTC's procedures as in effect from time to time. In such case, the next Interest Rate Adjustment Date otherwise set forth in Annex A shall instead be the date upon which such Interest Rate Period shall expire.

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

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Interest Rate Period for this Note, the Company will pay a premium to the tendering beneficial owner of this Note, together with accrued interest, if any, hereon at the applicable rate payable to such Interest Rate Adjustment Date. Unless otherwise specified in Annex A, the premium shall be an amount equal to the Initial Early Remarketing Premium specified in Annex A, the premium shall be an amount equal to the Initial Early Remarketing Premium specified in Annex A (as adjusted by the Annual Early Remarketing Premium Percentage Reduction, if applicable), multiplied by the principal amount of this Note subject to early remarketing. The Initial Early Remarketing Premium, if any, shall decline at each anniversary of the Initial Early Remarketing Date by an amount equal to the applicable Annual Early Remarketing Premium Percentage Reduction, if any, specified in Annex A until the premium is equal to 0.

"Interest Reset Date", "Initial Interest Reset Date" and "Interest Reset Period" have the respective meanings specified under "Interest Rate - (c) Floating Interest Rates" below.

"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.

"Optional Redemption" means the redemption of this Note prior to its maturity at the option of the Company as described herein.

"Policy" means, with respect to the Initial Interest Rate Period, the financial guaranty insurance policy issued by MBIA Insurance Corporation and attached as Exhibit D to the First Supplemental Indenture, and, with respect to any subsequent Interest Rate Period, such financial guaranty insurance policy as may be purchased by the Company from time to time.

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francs, the Principal Financial Center shall be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich, respectively.

"Reference Corporate Dealers" means such Reference Corporate Dealers as shall be appointed by the SPURS Agent after consultation with the Company.

"Reference Treasury Dealer" shall mean such Reference Treasury Dealers as shall be appointed by the SPURS Agent after consultation with the Company.

"Reference Treasury Dealer Quotations" shall mean, with respect to each Reference Treasury Dealer and the SPURS Remarketing Date, the offer prices for the Comparable Treasury Issues (expressed in each case as a percentage of its principal amount) quoted in writing to the SPURS Agent by such Reference Treasury Dealer by 3:30 p.m. New York City time, on the Determination Date.

"Remaining Scheduled Payments" shall mean with respect to this Note the remaining scheduled payments of the principal hereof and interest hereon, calculated at the Base Rate only, that would be due after the SPURS Remarketing Date to and including the next succeeding Interest Rate Adjustment Date as determined by the SPURS Agent.

"Remarketing Agent" means such Remarketing Agent or agent, including any standby Remarketing Agent (each a "Standby Remarketing Agent"), appointed by the Company from time to time, for this Note.

"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.

"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.

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"SPURS Mode" means the Interest Rate Mode in which this Note shall bear interest and be subject to remarketing as "Structured PUtable Remarketable Securities" ("SPURS").

"SPURS Rate Period" means an Interest Rate Period in the SPURS Mode established by the Company as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of this Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for this Note. The SPURS Rate Period shall consist of the period to and excluding the SPURS Remarketing Date and the period from and including the SPURS Remarketing Date to but excluding the next succeeding Interest Rate Adjustment Date.

"SPURS Remarketing Agreement" shall mean the agreement dated as of the Interest Rate Adjustment Date commencing the applicable SPURS Rate Period which sets forth the rights and obligations of the Company and the applicable SPURS Agent with respect to the remarketing of Notes in the SPURS Mode.

"SPURS Remarketing Date" means the date designated by the applicable SPURS Agent, after consultation with the Company, within the SPURS Rate Period on which the applicable SPURS Agent may elect to remarket the Note at the SPURS Interest Rate.

"Standby Note Purchase Agreement" means the agreement, which the Company may, at its option, enter into from time to time with a Liquidity Provider for the purpose of purchasing unremarketed Notes.

"Treasury Rate" shall mean, with respect to the SPURS Remarketing Date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated (on a day count basis) yield to maturity of the Comparable Treasury Issues, assuming a price for the Comparable Treasury Issues (expressed as a percentage of its principal amount), equal to the Comparable Treasury Price for such SPURS Remarketing Date.

"Weekly Rate Period" means a Commercial Paper Term Period with an Interest Rate Period of generally seven days.

INTEREST RATE

(a) Initial Interest Rate. From the Original Issue Date set forth in Annex A to the Initial Interest Rate Adjustment Date set forth in Annex A, this Note will bear interest at the Initial Interest Rate specified therein. Thereafter, this Note will bear interest in the Commercial Paper Term Mode, the Long Term Rate Mode or the SPURS Mode.

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Remarketing Agent, to produce a par bid in the secondary market for this Note on the date the interest rate is established. Such rate will be effective for the next succeeding Interest Rate Period for this Note commencing on such Interest Rate Adjustment Date.

(c) Floating Interest Rates. While this Note bears interest in the Long Term Rate Mode or the SPURS Mode (with respect to the period from, and including, the Interest Rate Adjustment Date commencing such period to, but excluding, the SPURS Remarketing Date), the Company may elect a floating interest rate by providing notice, which will be in or promptly confirmed in writing (which includes facsimile or appropriate electronic media), received by the Trustee and the Remarketing Agent for this Note (the "Floating Interest Rate Notice") not less than ten (10) days prior to the Interest Rate Adjustment Date for such Long Term Rate Period or SPURS Rate Period. The Floating Interest Rate Notice must identify by CUSIP number or otherwise the portion of this Note to which it relates and state the Interest Rate Period (or portion thereof, in the case of the SPURS Mode) therefor to which it relates. Each Floating Interest Rate Notice must also state the Interest Rate Basis or Bases, the Initial Interest Reset Date, the Interest Reset Period and Dates, the Interest Payment Period and Dates, the Index Maturity, the Floating Rate Maximum Interest Rate and/or Floating Rate Minimum Interest Rate, if any, and the Day Count Convention. If one or more of the applicable Interest Rate Bases is LIBOR or the CMT Rate, the Floating Interest Rate Notice shall also specify the Index Currency and Designated LIBOR Page or the Designated CMT Maturity Index and Designated CMT Telerate Page, respectively.

If this Note bears interest at a floating rate in a Long Term Rate Period or a SPURS Rate Period, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any, specified by the Remarketing Agent, in the case of a Long Term Rate Period, or the SPURS Agent in the case of a SPURS Rate Period, and recorded in Annex A to this Note. Commencing on the Interest Rate Adjustment Date for such Interest Rate Period, the rate at which interest on this Note shall be payable shall be reset as of each Interest Reset Date during such Interest Rate Period specified in the applicable Floating Interest Rate Notice.

The applicable floating interest rate on this Note during any Interest Rate Period will be determined by reference to the applicable Interest Rate Basis or Interest Rate Bases, which may include (i) the CD Rate, (ii) the CMT Rate, (iii) the Federal Funds Rate, (iv) LIBOR, (v) the Prime Rate, (vi) the Treasury Rate, or (vii) such other Interest Rate Basis or interest rate formula as may be specified in the applicable Floating Interest Rate Notice (each, an "Interest Rate Basis").

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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 shall 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 Reset Date shall 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 interest rate applicable to each Interest Reset Period commencing on the related Interest Reset Date will be determined as of the applicable Interest Determination Date. The "Interest Determination Date" with respect to the Federal Funds Rate and the Prime Rate will be the Business Day immediately preceding the applicable Interest Reset Date; the "Interest Determination Date" with respect to the CD Rate and the CMT 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 such Monday is a legal holiday, in which case the auction is normally held on the immediately succeeding Tuesday, although 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; provided, further, that if 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 "Interest Determination Date" pertaining to this Note, the interest rate of which is determined with reference to two or more Interest Rate Bases specified in the applicable Floating Interest Rate Notice, 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

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Rate Basis shall be determined as of such date, and the applicable interest rate shall take effect on the applicable 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 permitted by New York law, as the same may be modified by United States laws of general application.

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if the floating interest rate is calculated with reference to two or more Interest Rate Bases, the interest factor will be calculated in each period in the same manner as if only one of the applicable Interest Rate Bases applied as specified in the applicable Floating Interest Rate Notice.

Unless otherwise specified in the applicable Floating Interest Rate Notice, The Bank of New York will be the "Calculation Agent." For any Remarketed Note bearing interest at a floating rate, the applicable Remarketing Agent will determine the interest rate in effect from the Interest Rate Adjustment Date for such Remarketed Note to the Initial Interest Reset Date. The Calculation Agent will determine the interest rate in effect for each Interest Reset Period thereafter. Upon request of the Beneficial Owner of a Note, after any Interest Rate Adjustment Date, the Calculation Agent or the Remarketing Agent shall disclose the interest rate and, in the case of a floating interest rate, Interest Rate Basis or Bases, Spread (if any) and Spread Multiplier (if any), and in each case the other terms applicable to such Note then in effect and, if determined, the interest rate that will become effective as a result of a determination made for the next succeeding Interest Reset Date with respect to such Note. Except as described herein with respect to a Note earning interest at floating rates, no notice of the applicable interest rate, Spread (if any) or Spread Multiplier (if any) shall be sent to the Beneficial Owner of any Note.

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 shall be determined as of the applicable Interest Determination Date (a "CD Rate Interest Determination Date") as 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 defined below) under the heading "CDs (secondary market)", or, if not so 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 as published in H.15 Update (as defined herein), 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 either 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 dollar certificates of deposit of major United States money center banks for negotiable United States dollar certificates of deposit with a remaining

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maturity closest to the Index Maturity 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.

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 shall be determined as of the applicable Interest Determination Date (a "CMT Rate Interest Determination Date") as 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, 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 applicable 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 falls. If such rate is no longer displayed on the relevant page or is not so 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 bid 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 in The City of New York (which may include the Remarketing Agent or its affiliates) (each, a "Reference Dealer") 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

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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 bid 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 bid 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 will obtain quotations for the Treasury Note with the shorter remaining term to maturity.

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on such Federal Funds Rate Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "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 United States dollar 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 this Note is specified in the applicable Floating Interest Rate Notice as LIBOR, LIBOR shall be determined by the Calculation Agent as of the applicable Interest Determination Date (a "LIBOR Interest Determination Date") in accordance with the following provisions:

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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 the 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 (which may include affiliates of the Remarketing Agent) 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 the 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.

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arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen US PRIME1 Page (as defined below) as such bank's prime rate or base lending rate as of 11:00 A.M. New York City time, on such Prime Rate Interest Determination Date. If fewer than four such rates so appear on the Reuters Screen US PRIME1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending 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 three major banks (which may include The Bank of New York or affiliates of the Remarketing Agent) in The City of New York selected by the Calculation Agent, after consultation with the Company; 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.

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 shall be determined as of the applicable Interest Determination Date (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 "INVESTMENT RATE", on the display on Bridge Telerate, Inc. (or any successor service) on page 56 (or any other page as may replace such page on such service) ("Telerate Page 56") or page 57 (or any other page as may replace such page on such service) ("Telerate Page 57") or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for 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/Auction High" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of such Treasury Bills as announced by the United States Department of the Treasury. In the event that the auction rate of Treasury Bills having the Index Maturity in the applicable Floating Interest Rate Notice is not so announced by the United States Department of the Treasury, or if no such Auction is held, then the Treasury Rate will be the Bond Equivalent Yield of the rate 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

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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 the Bond Equivalent Yield 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 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.

"Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula:

Bond Equivalent Yield =       D x N
                             ------      X   100
                          360 - (D x M)

(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.

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The interest rate announced by the Remarketing Agent, absent manifest error, is binding and conclusive upon the beneficial owner of this Note, the Company and the Trustee.

(f) Conversion. This Note may be converted at the option of the Company to the Commercial Paper Term Mode, Long Term Rate Mode or SPURS Mode on any Interest Rate Adjustment Date for this Note in accordance with the procedures set forth in the Indenture, and will be subject to mandatory tender by the beneficial owner hereof as described herein on such Interest Rate Adjustment Date. The beneficial owner of this Note will be deemed to have tendered such Note as of the Interest Rate Adjustment Date upon which such conversion occurs and will not be entitled to further accrual of interest on this Note after such date.

TENDER

This Note will be automatically tendered for purchase, or deemed tendered for purchase by the beneficial owner hereof, on each Interest Rate Adjustment Date relating hereto. Notes will be purchased on such Interest Rate Adjustment Date in accordance with the procedures set forth in "Remarketing and Settlement" or, as the case may be, "SPURS Mode" below.

REMARKETING AND SETTLEMENT

Interest Rate Adjustment Date; Determination of Interest Rate. By 11:00
a.m., New York City time on each Interest Rate Adjustment Date for this Note, the applicable Remarketing Agent will determine the interest rate hereon to the nearest one hundred-thousandth (0.00001) of one percent per annum for the next Interest Rate Period in the case of a fixed interest rate, and the Spread (if any) and Spread Multiplier (if any) in the case of a floating interest rate; provided, that between 11:00 a.m., New York City time and 11:50 a.m., New York City time, the Remarketing Agent and the Standby Remarketing Agent(s), if any, shall use their reasonable efforts to determine the interest rate for this Note if it is not successfully remarketed as of the applicable deadline specified in this paragraph. In determining the applicable interest rate for this Note and other terms, the Remarketing Agent will, after taking into account market conditions as reflected in the prevailing yields on fixed and variable rate taxable debt securities, (i) consider the principal amount of all Notes tendered or to be tendered on such date and the 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.

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any, and early remarketing terms, if any, in the case of remarketing into a Long Term Rate Period, (v) the aggregate principal amount of all Notes tendered for remarketing on such date, and (vi) the aggregate principal amount of such tendered Notes which such Remarketing Agent was able to remarket, at a price equal to 100% of the principal amount thereof plus accrued interest, if any. Immediately after receiving such notice and, in any case, not later than 1:30
p.m., New York City time, the Trustee will transmit such information and any other settlement information required by DTC to DTC in accordance with DTC's procedures as in effect from time to time.

By telephone at approximately 1:00 p.m., New York City time, on such Interest Rate Adjustment Date, the applicable Remarketing Agent will advise the purchaser of this Note (or the DTC participant of each such purchaser who it is expected in turn will advise such purchaser) of the principal amount of such Notes that such purchaser is to purchase.

The purchaser of this Note in a remarketing will be required to give instructions to its DTC participant to pay the purchase price therefor in same day funds to the applicable Remarketing Agent against delivery of the principal amount of this Note by book-entry through DTC by 3:00 p.m., New York City time, on the Interest Rate Adjustment Date.

When tendered, or deemed tendered, this Note will be automatically delivered to the account of the Trustee (or such other account meeting the requirements of DTC's procedures as in effect from time to time), by book-entry through DTC against payment of the purchase price or redemption price herefor, on the Interest Rate Adjustment Date relating hereto.

The applicable Remarketing Agent will make, or cause the Trustee to make, payment to the DTC participant of the tendering beneficial owner hereof subject to a remarketing, by book-entry through DTC by the close of business on the related Interest Rate Adjustment Date against delivery through DTC of the beneficial owner's tendered Note, of the purchase price for this Note. If this Note was purchased pursuant to a Special Mandatory Purchase, subject to receipt of funds from the Company or the Liquidity Provider (if any), as the case may be, the Trustee will make such payment of the purchase price for this Note plus accrued interest, if any, to such date.

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.

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The tender and settlement procedures described above, including provisions for payment by purchasers of this Note or for payment to the selling beneficial owners of this Note, may be modified to the extent required by DTC. In addition, each Remarketing Agent may, without the consent of the Holders of the Notes, modify the tender and settlement procedures set forth above in order to facilitate the settlement and remarketing process.

As long as DTC's nominee holds the certificates representing this Note in the book-entry system of DTC, no certificates for this Note will be delivered by any selling beneficial owner to reflect any transfer of this Note effected in any remarketing.

Failed Remarketing. If this Note is not successfully remarketed, this Note shall be subject to Special Mandatory Purchase by the Company (a "Special Mandatory Purchase"). The obligation of the Company to effect a Special Mandatory Purchase can be satisfied either directly by the Company or through a Liquidity Provider. By 12:00 o'clock noon, New York City time, on any Interest Rate Adjustment Date for this Note, the applicable Remarketing Agent will notify the Liquidity Provider, if any, the Trustee and the Company by telephone or facsimile, confirmed in writing, if it, or the Standby Remarketing Agent or Agents were unable to remarket all or a portion of the principal amount of this Note on such date. In the event that the Company has entered into a Standby Note Purchase Agreement which is in effect on such date, such notice will constitute a demand for the benefit of the Company to the Liquidity Provider, if any, to purchase this Note at a price equal to the outstanding principal amount hereof pursuant to the terms of such Standby Note Purchase Agreement. If a Standby Note Purchase Agreement is not in effect on such date, or if the Liquidity Provider fails to advance funds under the Standby Note Purchase Agreement, the Company hereby agrees to purchase this Note. In each case, the Company will pay all accrued and unpaid interest, if any, on this Note to such Interest Rate Adjustment Date. Payment of the principal amount of this Note by the Company or the Liquidity Provider, as the case may be, and payment of accrued and unpaid interest, if any, by the Company, shall be made by deposit of same-day funds in the account of the Trustee (or such other account meeting the requirements of DTC's procedures as in effect from time to time) irrevocably in trust for the benefit of the beneficial owners of this Note subject to Special Mandatory Purchase by 3:00 p.m., New York City time, on the related Interest Rate Adjustment Date.

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

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authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.

The Notes are issuable only in fully registered form in denominations of $100,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations set forth therein and herein, this Note is exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of any authorized denomination, as requested by the registered owner surrendering the same.

No service charge shall be made for any registration of transfer or exchange of this Note, but, subject to certain limitations set forth in the Indenture, the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Subject to the terms of the Indenture, prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note is overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

REDEMPTION AND ACCELERATION

Special Mandatory Purchase. If by 12:00 o'clock noon, New York City time, on any Interest Rate Adjustment Date for this Note, the applicable Remarketing Agent and the applicable Standby Remarketing Agent(s) have not remarketed this Note, this Note shall be subject to Special Mandatory Purchase. Either the Company or, subject to the terms and conditions of a Standby Note Purchase Agreement, if any, which may be in effect on such date, the Liquidity Provider (if any), will deposit same-day funds in the account of the Trustee (or such other account meeting the requirements of DTC's procedures as in effect from time to time) irrevocably in trust for the benefit of the beneficial owners of this Note subject to Special Mandatory Purchase by 3:00 p.m., New York City time, on such Interest Rate Adjustment Date. Such funds shall be in an amount sufficient to pay the aggregate purchase price of this Note, equal to 100% of the principal amount thereof. In the event a Standby Note Purchase Agreement is in effect but the Liquidity Provider shall fail to advance funds for whatever reason thereunder, the Company hereby agrees to purchase this Note on such Interest Rate Adjustment Date. The Company has agreed in the Indenture to pay the accrued interest, if any, on this Note by 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."

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Optional Redemption on any Interest Rate Adjustment Date. This Note is subject to Optional Redemption, at the direction of the Company and without notice to the Holders, on any Interest Rate Adjustment Date relating hereto, in whole or in part, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued and unpaid interest to the date set for redemption (the "Redemption Date").

Optional Redemption While This Note is in the Long Term Rate Mode. So long as this Note bears interest in the Long Term Rate Mode, this Note is subject to Optional Redemption at the written direction of the Company if so specified at the time of conversion to or within such Long Term Rate Mode (a) commencing on the Commencement Date, if any, specified in Annex A, in whole or in part at any time, at the applicable redemption prices for any Redemption Date (dates inclusive) (i) from the Commencement Date to but not including the first anniversary of the Commencement Date, (ii) from the first anniversary of the Commencement Date to but not including the second anniversary of the Commencement Date, and (iii) from the second anniversary of the Commencement Date and thereafter (expressed as percentage of the principal amount so redeemed) set forth in Annex A, plus accrued interest to the Redemption Date or
(b) otherwise as set forth in Annex A.

Notice of redemption shall be given by mail to the registered owner of this Note, 30 days prior to the Redemption Date, all as provided in the Indenture. As provided in the Indenture, notice of redemption as aforesaid may state that such redemption shall be conditioned upon the receipt by the Trustee of the redemption monies on or before the date fixed for such redemption; a notice of redemption so conditioned shall be of no force or effect if such money is not so received.

The Company shall not be required to (a) issue, register the transfer of or exchange Notes of this series during a period beginning at the opening of business 15 days before any selection of Notes of this series to be redeemed and ending at the close of business on the day of the mailing of the relevant notice of redemption or (b) register the transfer of or exchange any Notes selected for redemption, in whole or in part, except the unredeemed portion of any Note being redeemed in part.

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

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which it serves as DTC participant, and give notice of such determination to the Remarketing Agent.

Acceleration. If any Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

SPURS MODE

Notwithstanding anything herein to the contrary, the provisions of this section shall apply to this Note upon conversion to the SPURS Mode, and shall supersede any conflicting provisions of general applicability contained elsewhere herein, during the period from, and including, the Interest Rate Adjustment Date beginning a SPURS Rate Period to, but excluding, the next succeeding Interest Rate Adjustment Date (or if the SPURS Agent does not elect to purchase this Note on the SPURS Remarketing Date designated for such SPURS Mode or if after electing to so purchase this Note the SPURS Agent fails for any reason to so purchase this Note, to the SPURS Remarketing Date).

(a) Interest To SPURS Remarketing Date. The Interest Rate Period for this Note in the SPURS Mode will be established by the Company (as described in "Interest Rate" above) as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of this Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for this Note. The SPURS Rate Period shall consist of the period from and including the Interest Rate Adjustment Date commencing such Interest Rate Period to and excluding the date (the "SPURS Remarketing Date") designated at such time by the SPURS Agent after consultation with the Company and set forth in Annex A hereto. The interest rate and, in the case of a floating interest rate, the Spread, if any, and the Spread Multiplier, if any, to the SPURS Remarketing Date for this Note in the SPURS Mode will be determined not later than 11:50 a.m., New York City time, on the Interest Rate Adjustment Date for this Note, which for the SPURS Mode is the first day of the SPURS Rate Period for this Note. Such interest rate will be the minimum rate of interest and, in the case of a floating interest rate, Spread (if any) and Spread Multiplier (if any) necessary in the judgment of such SPURS Agent to produce a par 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

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SPURS Agent elects to remarket this Note, the obligation of the SPURS Agent to purchase this Note on the SPURS Remarketing Date is subject to, among other things, the conditions that, since the Notification Date, no material adverse change in the condition of the Company and its subsidiaries, considered as one enterprise, shall have occurred and that no Event of Default (as defined in the Indenture), or any event which, with the giving of notice or passage of time, or both, would constitute an Event of Default, with respect to this Note shall have occurred and be continuing.

(c) Remarketing; Establishing the SPURS Interest Rate. Subject to the SPURS Agent's election to remarket this Note, the SPURS Interest Rate shall be determined by the SPURS Agent by 3:30 p.m., New York City time, on the third Business Day immediately preceding the SPURS Remarketing Date (the "Determination Date") to the nearest one hundred-thousandth (0.00001) of one percent per annum, and shall be equal to the Base Rate established by the SPURS Agent, after consultation with the Company, at or prior to the commencement of the SPURS Mode (the "Base Rate") plus the Applicable Spread, which shall be based on the Dollar Price of this Note as of the SPURS Remarketing Date.

(d) Notification of Results; Settlement. Provided the SPURS Agent has previously notified the Company and the Trustee on the Notification Date of its intention to purchase this Note on the SPURS Remarketing Date, the SPURS Agent shall notify the Company, the Trustee and DTC by telephone, confirmed in writing, by 4:00 p.m., New York City time, on the Determination Date, of the SPURS Interest Rate, and this Note shall be automatically delivered to the account of the Trustee, by book-entry through DTC pending payment of the purchase price therefor, on the SPURS Remarketing Date.

In the event that the SPURS Agent purchases this Note on the SPURS Remarketing Date, the SPURS Agent shall make or cause the Trustee to make payment to the DTC participant of each tendering beneficial owner hereof, by book-entry through DTC by the close of business on the SPURS Remarketing Date against delivery through DTC of such beneficial owner's interest herein, of 100% of the principal amount for this Note. If the SPURS Agent does not purchase this Note on the SPURS Remarketing Date, the Company may attempt to convert this Note to a new Interest Rate Mode; the interest rate will be determined as provided above in "Interest Rate" and settlement will be effected as described under "Remarketing and Settlement" above. In any 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.

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The tender and settlement procedures set forth above, including provisions for payment by purchasers of this Note in the remarketing or for payment to selling beneficial owners of this Note, may be modified to the extent required by DTC or to the extent required to facilitate the tender and remarketing of this Note in certificated form, if the book-entry system is no longer available for this Note at the time of the remarketing. In addition, the SPURS Agent may, without the consent of the Holders of the Notes, modify the settlement procedures set forth above in order to facilitate the tender and settlement process.

As long as DTC's nominee holds the certificates representing this Note in the book-entry system of DTC, no certificates for this Note shall be delivered by any selling beneficial owner to reflect any transfer of such Notes effected in the remarketing.

(e) Conversion or Redemption Following Election by the SPURS Agent to Remarket. If the SPURS Agent elects to remarket this Note on the SPURS Remarketing Date, this Note will be subject to a mandatory tender to the SPURS Agent for remarketing on such date, in each case subject to the conditions set forth above and to the Company's right to either convert this Note to a new Interest Rate Mode on the SPURS Remarketing Date or to redeem this Note from the SPURS Agent, in each case as described in the next sentence. The Company will notify the SPURS Agent and the Trustee, not later than the Business Day immediately preceding the Determination Date, if the Company irrevocably elects to exercise its right to either convert the Notes to a new Interest Rate Mode, or to redeem the Notes, in whole but not in part, from the SPURS Agent at the Optional Redemption Price, in each case on the SPURS Remarketing Date.

In the event that the Company irrevocably elects to convert this Note to a new Interest Rate Mode, then as of the SPURS Remarketing Date the Notes will cease to be in the SPURS Mode, the SPURS Remarketing Date will constitute an Interest Rate Adjustment Date, and this Note will be subject to remarketing on such date by a Remarketing Agent appointed by the Company in the Commercial Paper Term Mode or the Long Term Rate Mode or a new SPURS Mode established by the Company in accordance with the procedures set forth herein; provided that in such case, the notice period required for conversion shall be the period commencing the Business Day immediately preceding the Determination Date. In such case, the Company shall pay to the SPURS Agent the excess of the Dollar Price of this Note over 100% of the principal amount of this Note in same-day funds by wire transfer to an account designated by the SPURS Agent on the SPURS Remarketing Date.

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Company elects to redeem this Note, it shall pay the redemption price therefor in same-day funds by wire transfer to an account designated by the SPURS Agent on the SPURS Remarketing Date.

If notice has been given as provided in the Indenture and funds for the redemption of any Notes called for redemption shall have been made available on the redemption date referred to in such notice, this Note shall cease to bear interest on the date fixed for such redemption specified in such notice and the only right of the SPURS Agent from and after the redemption date shall be to receive payment of the Optional Redemption Price upon surrender of this Note in accordance with such notice.

OTHER PROVISIONS

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the registered owners of the securities of each series thereunder to be affected under the Indenture at any time by the Company and the Trustee with the consent of the registered owners of not less than a majority in principal amount of such securities then Outstanding of each series to be affected. The Indenture also contains provisions permitting the registered owners of specified percentages in principal amount of the securities of each series thereunder at the time Outstanding, on behalf of the registered owners of all securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the registered owner of this Note shall be conclusive and binding upon such registered owner and upon all future registered owners of this Note issued upon the registration of transfer hereof or in exchange for or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

As set forth in, and subject to the provisions of, the Indenture, no registered owner of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such registered owner shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the registered owners of not less than 25% in principal amount of the Outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the registered owners of a majority in principal amount of the Outstanding Notes of this series a direction inconsistent with such request within such 60 day period; provided, however, that such limitations do not apply to a suit instituted by the registered owner hereof for the enforcement of payment of the principal of and premium, if any, or any interest on this Note on or after the respective due dates expressed herein.

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behalf of the Holders of this Note in accordance with the terms of the Indenture following an Event of Default, and the principal of this Note may not be declared due and payable immediately without the prior written consent of the Insurer.

No reference to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and any interest including additional amounts, on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York.

All terms used in this Note which are not defined herein and which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

This Note shall not be valid or become obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been executed by the Trustee.

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IN WITNESS WHEREOF, DTE ENERGY COMPANY has caused this instrument to be duly executed.

DTE ENERGY 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.

THE BANK OF NEW YORK,
as Trustee

By
Authorized Signatory

Date:

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ASSIGNMENT FORM AND CERTIFICATE OF TRANSFER

To assign this Note fill in the form below:

(I) or (we) assign and transfer this Note to

(Insert assignee's social security or tax identification number, if any)

(Print or type assignee's name, address and zip code)

Your signature:

(Sign exactly as your name appears on the other side of this Note)

Date:

Signature Guarantee:*

In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the date that is two years (or such shorter period as may then be applicable under Rule 144(k) of the United States Securities Act or 1933, as amended (the "Securities Act") (or any successor provision)) after the later of the date of original issuance of such Notes and the last date, if any, on which this Note is owned by the Company or any Affiliate (as defined in the Indenture) of the Company, the undersigned confirms that this Note is being transferred:

CHECK ONE BOX BELOW

(1)   :   to the Company or a Subsidiary thereof; or

(2)   :   pursuant to and in compliance with Rule 144A under the
          Securities Act; or

(3)   :   pursuant to Rule 144 under the Securities Act; or

(4)   :   pursuant to an effective registration statement under the
          Securities Act; or

(5)   :   pursuant to another available exemption from the registration
          requirements of the Securities Act.

* Signature must be guaranteed by a commercial bank, trust company or member firm or a major stock exchange.

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requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

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ANNEX A(1)

DTE ENERGY COMPANY

Remarketed Notes, Series A due 2038
Initial Interest Rate Period

CUSIP Number:              233331 AA 5

Principal Amount:          $100,000,000

Original Issue Date:       June 23, 1998

Issue Price:               100%

Stated Maturity:           June 15, 2038

Initial Interest Rate:     6.17% per annum

Interest Payment Dates:    June 15 and December 15, commencing December 15, 1998

Record Dates:              15 days prior to the related Interest Payment Date

Initial Interest Rate
  Adjustment Date:         June 15, 2003

Subsequent Interest Rate Period(s):

CUSIP Number:

Principal Amount:

Interest Rate Adjustment Date:

Record Date(s):

Interest Payment Date(s):

(1) Trustee may complete this Annex A or attach a copy of the applicable Conversion Notice or Floating Interest Rate Notice from the Company, or notice from the applicable Remarketing Agent containing all of the applicable terms set forth herein, as Annex A.

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Interest Rate Mode:

[ ] Commercial Paper Term Mode

[ ] Long Term Rate Mode

[ ] SPURS Mode

[   ]    SPURS Agent: _______________

[   ]    Base Rate: _________________

[   ]    SPURS Remarketing Date: ________________

[   ]    Reference Corporate Dealers:

[   ]    Reference Treasury Dealer: ________________

[   ]    SPURS Interest Rate: ___________

Interest Rate:

[ ] Fixed Rate:

[ ] Floating Rate:

Calculation Agent (if other than The Bank of New York):

Initial Interest Rate to Initial Interest Reset Date:

Interest Rate Basis(es):

[ ] CD Rate
Index Maturity:

[ ] CMT Rate
Index Maturity:

Designated CMT Telerate Page:

[ ] Commercial Paper Rate

Index Maturity:

[ ] Federal Funds Rate

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[ ] LIBOR
[ ] 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:

A-37

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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STATEMENT OF INSURANCE

The MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following provisions, such policy being on file at the office of The Bank of New York, New York, New York.

MBIA Insurance Corporation (the "Insurer"), in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to The Bank of New York or its successor (the "Paying Agent") of an amount equal to (i) the principal of the Obligations (as that term is defined below) on the initial mandatory tender date of June 15, 2003 and interest on the Obligations as such payments become due on and prior to such initial mandatory tender date but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption, or acceleration resulting from default or otherwise, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean:

$100,000,000 DTE Energy Company Remarketed Notes, Series A due 2038 through the Initial Interest Rate Adjustment Date of June 15, 2003

Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with State Street Bank and Trust Company, N.A., in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust Company, N.A. shall disburse to such owners, or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of

A-39

such Insured Amounts and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation.

As used herein, the term "owner" shall mean the registered owner of any Obligation as indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer for such purpose. The term owner shall not include the Issuer or any party whose agreement with the Issuer constitutes the underlying security for the Obligations.

Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street, Armonk, New York 10504 and such service of process shall be valid and binding.

This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations.

This policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.

MBIA INSURANCE CORPORATION

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EXHIBIT B

FORM OF LIQUIDITY PROVIDER NOTE

(Attached)

B-1

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

LIQUIDITY PROVIDER NOTE

No. $

DTE ENERGY COMPANY

REMARKETED NOTES,
SERIES A DUE 2038

 Facility
Expiration           Date of           Original
   Date             Maturity          Issue Date           CUSIP
   ----             --------          ----------           -----
                  June 15, 2038

DTE ENERGY 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

B-2

_______________________ or registered assigns, the principal sum of $________________ on June 15, 2038, upon the presentation and surrender hereof at the principal office of The Bank of New York, or its successor in trust (the "Trustee"), and to pay interest on the unpaid principal balance hereof from the Original Issue Date specified above or such date to which interest has been paid or duly provided for, until such principal balance has been paid in full, at such interest rates, and payable at such times, as are specified in the applicable Standby Note Purchase Agreement and are notified to the Trustee by the Administrative Agent under such Standby Note Purchase Agreement. Payment of the principal of and interest on this Note will be made at the office or agency maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the person in whose name this Note is registered at the close of business on the Record Date.

This Note is one of a duly authorized series of Securities of the Company (the "Notes"), issued and to be issued under an Indenture, dated as of June 15, 1998, as amended and supplemented by the First Supplemental Indenture, dated as of June 15, 1998, in each case as amended by the Third Supplemental Indenture dated as of April 9, 2001 and as further amended and restated as of April 9, 2001 (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.

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

B-3

Remarketing Agent nor the Company will be obligated to provide funds to make payment upon any beneficial owner's tender of this Note in a remarketing.

The settlement procedures described above, including provisions for payment by purchasers of this Note or for payment to the beneficial owner of this Note, may be modified to the extent required by DTC. In addition, the Remarketing Agent may, in accordance with the terms of the Indenture, modify the settlement procedures set forth above in order to facilitate the settlement process.

As long as DTC's nominee holds the certificates representing this Note in the book-entry system of DTC, no certificates for this Note will be delivered by the beneficial owner hereof to reflect any transfer of this Note effected in any remarketing.

TRANSFER OR EXCHANGE

As provided in the Indenture and subject to certain limitations set forth therein and herein, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, and any interest on this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to, the Company and the Security Register or any transfer agent duly executed, by the registered owner hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.

The Notes are issuable only in fully registered form in denominations of $100,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of any authorized denomination, as requested by the registered owner surrendering the same.

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.

B-4

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

As set forth in, and subject to the provisions of, the Indenture, no registered owner of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such registered owner shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the registered owners of not less than 25% in principal amount of the Outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the registered owners of a majority in principal amount of the Outstanding Notes of this series a direction inconsistent with such request within such 60-day period; provided, however, that such limitations do not apply to a suit instituted by the registered owner hereof for the enforcement of payment of the principal of and premium, if any, or any interest on this Note on or after the respective due dates expressed herein.

No reference to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and any interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York.

B-5

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.

B-6

IN WITNESS WHEREOF, DTE ENERGY COMPANY has caused this instrument to be duly executed.

DTE ENERGY COMPANY

By: _______________________________

Attest:

By:____________________________

This Note is one of the Notes of the series designated herein, referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK,

By: _______________________________
Authorized Signatory

Date:

B-7

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.

B-8

EXHIBIT C

DTE ENERGY COMPANY

REMARKETED NOTES, SERIES A DUE 2038
SUPPLEMENTAL COMPANY ORDER

Pursuant to Article Six of the Amended and Restated First Supplemental Indenture, dated as of April 9, 2001, to the Amended and Restated Indenture, dated as of April 9, 2001, 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______ __, ____.

Name:

Title:
DTE Energy Company

C-1

EXHIBIT D

[FORM OF POLICY]

(Attached)

D-1

EXHIBIT E

[DTE Energy Company Letterhead]

FLOATING INTEREST RATE NOTICE

[Date]

To: [Remarketing Agent(s)]
[Address]

The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration Telecopy: (212) 815-5915

Re: Remarketed Notes, Series A due 2038 (the "Notes")

Ladies and Gentlemen:

This Floating Interest Rate Notice relates to (i) $____________________ principal amount of the Notes (CUSIP No. ____________) and (ii) the proposed
[Long Term Rate Period] [SPURS Rate Period] of the Note (the "Interest Rate Period") commencing on ______________ and ending on ___________. Capitalized terms used and not otherwise defined herein shall have their respective meanings assigned to them in the Notes.

We hereby notify you that the above-referenced Notes will bear the following floating rate terms during the Interest Rate Period specified above:

1. The Interest Rate Basis(es) shall be:

[ ] CD Rate, where the Index Maturity will be _______________;

[ ] CMT Rate, where the Designated CMT Maturity Index will be ______________, and the Designated CMT Telerate Page will be _______________;

[ ] Federal Funds Rate;

[ ] LIBOR Reuters, where the Index Currency will be __________, and the Designated LIBOR Page will be ____________;

E-1

[ ] 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: [ ]

E-2

Each Beneficial Owner of the Note will be deemed to have tendered such Note as of the Interest Rate Adjustment Date and will not be entitled to further accrual of interest after the Interest Rate Adjustment Date.

DTE ENERGY COMPANY

By:

Name:

Title:

E-3

EXHIBIT F

[FORM OF CONVERSION NOTICE]

(Attached)

F-1

[DTE Energy Company Letterhead]

CONVERSION NOTICE

[Date]

To: [Remarketing Agent(s)]

THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, New York 10286

Attn: Jason Gregory

Re: Remarketed Notes, Series A due 2038

Dear Sirs:

This Conversion Notice relates to $ ______ principal amount of the Remarketed Notes (CUSIP No. ________), (the "Notes"). Capitalized terms used and not otherwise defined herein shall have their respective meanings assigned to them in the Notes.

We hereby notify you each of the following, to become effective for the Interest Rate Period commencing on _____________ (the "Conversion Date"):

Interest Rate Mode:

[ ] Commercial Paper Term Mode

[ ] Long Term Rate Mode

[ ] SPURS Mode

[   ]    SPURS Agent: _____________

[   ]    Base Rate: _________________

[   ]    SPURS Remarketing Date: ________________

[ ] Reference Corporate Dealers:

[ ] Reference Treasury Dealer: ________________

F-2

[ ] Interest Rate Period: ___________

[ ] Interest Rate Adjustment Date: _______________

[ ] Optional Redemption Provisions (Long Term Rate Mode):

[   ]    Commencement Date:

[   ]    Redemption Price:  (i)  __________________%
                           (ii)  __________________%

(iii) __________________%

[ ] Other or Alternative Terms of Optional Redemption:

[ ] Early Remarketing Provisions (Long Term Rate Mode):

[   ]    Initial Early Remarketing Date:  _________________

[   ]    Initial Early Remarketing Premium:  ______________

[   ]    Annual Early Remarketing Premium Percentage

Reduction: __________

[ ] Other or Alternative Terms of Early Remarketing:

Each beneficial owner of the Notes will be deemed to have tendered such Notes as of the Conversion Date and will not be entitled to further accrual of interest after the Conversion Date.

DTE ENERGY COMPANY

By:

Name:

Title:

F-3

EXHIBIT 4-224

CONFORMED COPY

DTE ENERGY COMPANY

AND

THE BANK OF NEW YORK

Trustee

AMENDED AND RESTATED SECOND SUPPLEMENTAL INDENTURE

Dated as of April 9, 2001

Supplementing the Amended and Restated Indenture Dated as of April 9, 2001

Amending and Restating the Second Supplemental Indenture Dated as of November 1, 1998

$300,000,000 Remarketed Notes, 1998 Series B

AMENDED AND RESTATED SECOND SUPPLEMENTAL INDENTURE, dated as of the 9th day of April, 2001 (the "Second Supplemental Indenture"), between DTE ENERGY COMPANY, a corporation organized and existing under the laws of the State of Michigan (the "Company"), and THE BANK OF NEW YORK, a New York banking corporation, having its principal corporate trust office in The City of New York, New York, as trustee (the "Trustee"), amending and restating the Second Supplemental Indenture, dated as of November 1, 1998 (the "Predecessor Second Supplemental Indenture"), between DTE Capital Corporation, a corporation organized and existing under the laws of the State of Michigan ("DTE Capital"), and the Trustee;

WHEREAS, DTE Capital has heretofore executed and delivered to the Trustee an Indenture dated as of June 15, 1998, a First Supplemental Indenture dated as of June 15, 1998, the Predecessor Second Supplemental Indenture and a Third Supplemental Indenture dated as of April 9, 2001 (the "Third Supplemental Indenture"), which, among other things, amended each of the foregoing (together, the "Predecessor Indenture");

WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Amended and Restated Indenture dated as of April 9, 2001 (the "Original Indenture" and, together with this Second Supplemental Indenture, the "Indenture"), including
Section 901 thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Amended and Restated Second Supplemental Indenture, and all things necessary have been done as permitted by Sections 201 and 301 of the Predecessor 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 Predecessor Indenture in the aggregate principal amount of up to $300,000,000; and

WHEREAS, all things necessary to make the Securities the valid, binding and legal obligations of the Company and to make this Second Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;

NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH that, for and in consideration of the premises and of the covenants contained in the 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

"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 MAPS4 Agent, after consultation with the Company, as the applicable "Base Rate" at or prior to the commencement of the MAPS 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 MAPS 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 a day on which dealings in the Index Currency are transacted in the London 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 Period" means an Interest Rate Period of not less than one calendar day nor more than 364 consecutive calendar days, as determined by the Company, or if not so determined, by the Remarketing Agent.

MAPS4 is a servicemark of Salomon Smith Barney Inc.

"Conversion Date" has the meaning set forth in Section 205(d) hereof.

"DECO" means The Detroit Edison Company, a Michigan corporation and a regulated public utility.

"Determination Date" means the third Business Day preceding the applicable MAPS 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 E to this Second 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 November 15, 2003.

"Initial Interest Rate Period" means the period commencing on the date of issuance for the Notes and ending on the Business Day immediately preceding the Initial Interest Rate Adjustment Date.

"Insurer" means such issuer of a financial guaranty insurance policy in respect of the Notes as may be purchased by the Company from time to time.

"Interest Determination Date" has the meaning specified in
Section 204 hereof.

"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 MAPS Mode.

"Interest Reset Date", "Initial Interest Reset Date" and "Interest Reset Period" have the respective meanings specified in Section 204 hereof.

"Lender" shall mean (i) any person, firm, corporation or other entity to which DTE Capital was, or the Company is, indebted for any Debt with respect to the Notes or which is acting as the Trustee or a trustee or authorized representative on behalf of such person, firm, corporation or other entity or which is acting as MAPS Agent, and (ii) Salomon Smith Barney Inc., Chase Securities Inc., Barclays Capital Inc. and First Chicago Capital Markets, Inc., and

their respective successors (the "Initial Purchasers"), with respect to Debt owing by DTE Capital to the Initial Purchasers in accordance with the terms of that certain Purchase Agreement, dated as of November 18, 1998, relating to the Notes.

"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.

"MAPS Agent", or such other designation as may be used at the time of remarketing, means such Remarketing Agent as the Company may appoint from time to time for the purpose of remarketing Notes in the MAPS Mode.

"MAPS Mode", or such other designation as may be used at the time of remarketing, means, with respect to any Note, the Interest Rate Mode in which such Note shall bear interest and be subject to remarketing as "MAndatory Putable remarketable Securities" (or such other designation as may be used at the time of remarketing) ("MAPS") as provided for in Article Three hereof.

"MAPS Rate Period", or such other designation as may be used at the time of remarketing, means an Interest Rate Period for any Note in the MAPS 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 MAPS Rate Period shall consist of the period to and excluding the MAPS Remarketing Date and the period from and including the MAPS Remarketing Date to but excluding the next succeeding Interest Rate Adjustment Date.

"MAPS Remarketing Agreement", or such other designation as may be used at the time of remarketing, shall mean the agreement dated as of the Interest Rate Adjustment Date commencing the applicable MAPS Rate Period which sets forth the rights and obligations of the Company and the applicable MAPS Agent with respect to the remarketing of the MAPS.

"MAPS Remarketing Date", or such other designation as may be used at the time of remarketing, means the date designated by the applicable MAPS Agent after consultation with the Company, upon which the applicable MAPS Agent may elect to remarket the Notes at the MAPS Interest Rate.

"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 MAPS Remarketing Date on which the MAPS Agent gives notice to the Company and the Trustee of its intention to purchase the Notes for remarketing.

"Optional Redemption" means the redemption of any Note prior to its maturity at the option of the Company as described herein.

"Optional Redemption Price" has the meaning set forth in
Section 304(c) hereof.

"Policy" means such financial guaranty insurance policy as may be purchased by the Company from an Insurer from time to time in the form attached as Exhibit D hereto or such other form as may be adopted in any manner consistent with the requirements of this Second Supplemental Indenture and the Original Indenture.

"Principal Financial Center" means, except as otherwise specified in the applicable Floating Interest Rate Notice, the capital city of the country issuing the Index Currency, except that with respect to United States dollars, Australian dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire, Portuguese escudos, South African rand, and Swiss francs, the Principal Financial Center will be The City of New York, Sydney, Toronto, Frankfurt, Amsterdam, Milan, London, Johannesburg and Zurich, respectively.

"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.

"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 Second Supplemental Indenture shall, unless the context otherwise requires, refer to this Second Supplemental Indenture.

ARTICLE TWO

TITLE, RANKING AND TERMS OF THE NOTES

Section 201. Title and Ranking of the Notes. This Second Supplemental Indenture hereby ratifies establishment of a series of senior Securities designated as the "Remarketed Notes, 1998 Series B" 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 Second Supplemental Indenture, the terms of any particular Note may vary from the terms of any other Note as contemplated by Section 301. of the Original Indenture, and the terms for a particular Note will be set forth in such Note as delivered to the Trustee or an Authenticating Agent for authentication pursuant to Section
303. of the Original Indenture.

Section 203. Amount and Denominations; DTC. The aggregate principal amount of Notes that may be issued under this Second Supplemental Indenture is limited to $300,000,000.

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 MAPS 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.

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 MAPS 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 MAPS Mode (or upon remarketing of the Note in a new Interest Rate Period in the Long Term Rate Mode or the MAPS 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 MAPS 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 MAPS 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 MAPS 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.

Floating Interest Rates.

While any Note bears interest in the Long Term Rate Mode or the MAPS Mode (with respect to the period from, and including, the Interest Rate Adjustment Date commencing such period to, but excluding, the MAPS 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 MAPS 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 MAPS 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 MAPS 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 MAPS Agent, in the case of a MAPS 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.

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.

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 MAPS 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 MAPS 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.

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 defined below) under the heading "CDs (secondary market)", or, if not so 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 as published in H.15 Update (as defined herein), 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 either 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 dollar certificates of deposit of major United States money center banks for negotiable United States dollar certificates of deposit with a remaining maturity closest to the Index Maturity 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.

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 bid 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 in The City of New York (which may include the Remarketing Agent or its affiliates) (each, a "Reference Dealer") 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 bid 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 bid 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 will obtain quotations for the Treasury Note with the shorter remaining term to maturity.

Treasury Constant Maturities as reported in H.15(519) or, if no such page is specified in the applicable Floating Interest Rate Notice, page 7052.

if no such rate so 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 (which may include affiliates of the Remarketing Agent) 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 the 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 (which may include affiliates of the Remarketing Agent) 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 the 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.

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 US PRIME1 Page (as defined below) as such bank's prime rate or base lending rate as of 11:00 A.M. New York City time, on such Prime Rate Interest Determination Date. If fewer than four such rates so appear on the Reuters Screen US PRIME1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending 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 three major banks (which may include The Bank of New York or affiliates of the Remarketing Agent) in The City of New York selected by the Calculation Agent, after consultation with the Company; 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.

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 the Bond Equivalent Yield 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 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.

"Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula:

Bond Equivalent Yield =         D x N
                                -----       X   100
                             360 - (D x M)

Interest Rate Modes.

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.

MAPS Mode. So long as any Notes are in the MAPS 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 MAPS 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 MAPS Rate Period shall consist of the period from and including the Interest Rate Adjustment Date commencing such Interest Rate Period to and excluding the MAPS Remarketing Date and the period from and including the MAPS 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 MAPS Remarketing Date for any Note in the MAPS Mode will be determined not later than 11:50 a.m., New York City time, on the Interest Rate Adjustment Date for such Note, which for the MAPS 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.

(b) Conversion from the Commercial Paper Term Mode to the Long Term Rate Mode or the MAPS 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 MAPS 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 MAPS Mode to the Commercial Paper Term Mode or the MAPS 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 MAPS Mode, or from the MAPS Mode to a different MAPS 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.

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.

(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 MAPS Mode, (iv) the optional redemption terms, if any, and early remarketing terms, if any, in the case of a remarketing into a Long Term Rate Period, (v) the aggregate principal amount of tendered Notes and
(vi) the aggregate principal amount of such tendered Notes which such Remarketing Agent was able to remarket, at a price equal to 100% of the principal amount thereof plus accrued interest, if any. Immediately after receiving such notice, and in any case, not later than 1:30 p.m. New York City time, the Trustee will transmit such information and any other settlement information required by DTC to DTC in accordance with DTC's procedures as in effect from time to time.

By telephone at approximately 1:00 p.m., New York City time, on such Interest Rate Adjustment Date, the applicable Remarketing Agent will advise each purchaser of such

Notes (or the DTC participant of each such purchaser who it is expected in turn will advise such purchaser) of the principal amount of such Notes that such purchaser is to purchase.

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 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.

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.

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 Second Supplemental Indenture until such time as the Company delivers the Notes to the Trustee for cancellation.

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.

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 MAPS 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.

(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 Second Supplemental Indenture.

ARTICLE THREE

THE MAPS MODE

Section 301. Applicability of Article. The provisions of this Article Three shall apply to any Note in the MAPS 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 MAPS Mode shall bear interest at the annual interest rate established by the MAPS Agent from, and including the Interest Rate Adjustment Date commencing the Interest Rate Period for the MAPS Mode to, but excluding, the date (the "MAPS Remarketing Date") designated at such time by the MAPS

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 MAPS Agent to produce a par bid in the secondary market for such Note on the date the interest rate is established. The designated MAPS Remarketing Date shall be an Interest Payment Date within such Interest Rate Period.

Section 303. Tender; Remarketing. The MAPS Agent's obligations set forth herein shall be performed pursuant to the MAPS Remarketing Agreement.

(a) Mandatory Tender. Provided that the MAPS Agent gives notice to the Company and the Trustee on a Business Day not later than ten (10) days prior to the MAPS 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 MAPS Agent for remarketing on the MAPS Remarketing Date, except in the circumstances set forth in Section 304. The purchase price for the tendered Notes to be paid by the MAPS Agent shall equal 100% of the principal amount thereof. When the Notes are tendered for remarketing, the MAPS Agent may remarket the Notes for its own account at varying prices to be determined by the MAPS Agent at the time of each sale. From, and including, the MAPS Remarketing Date to, but excluding, the next succeeding Interest Rate Adjustment Date, the Notes shall bear interest at the MAPS Interest Rate. If the MAPS Agent elects to remarket the Notes, the obligation of the MAPS Agent to purchase the Notes on the MAPS Remarketing Date is subject to, among other things, the conditions specified in the applicable MAPS Remarketing Agreement. If the MAPS Agent for any reason does not purchase all tendered Notes on the MAPS Remarketing Date or if the MAPS Agent gives notice of its intention to remarket the Notes but for any reason does not purchase all tendered Notes on the MAPS Remarketing Date, then as of such date the Notes will cease to be in the MAPS Mode, the MAPS 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 MAPS 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 MAPS Agent notifies the Company that it will not purchase the Notes for remarketing on the MAPS Remarketing Date or fails to so purchase, as the case may be.

(b) Remarketing. The MAPS Interest Rate shall be established by the MAPS Agent in accordance with the following procedures:

(i) The MAPS Interest Rate. Subject to the MAPS Agent's election to remarket the Notes as provided in subsection (a) above, the MAPS Interest Rate shall be determined by the MAPS Agent by 3:30 p.m., New York City time, on the third Business Day preceding the MAPS 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 MAPS Agent, after consultation with the Company, at or prior to the commencement of the MAPS 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 MAPS 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 MAPS 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 MAPS Interest Rate announced by the MAPS 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 MAPS Agent, as of the MAPS Remarketing Date, of the Remaining Scheduled Payments (as defined below) discounted to the MAPS 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 MAPS Agent after consultation with the Company.

"Treasury Rate" shall mean, with respect to the MAPS 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 MAPS Remarketing Date.

"Comparable Treasury Issues" shall mean the United States Treasury security or securities selected by the MAPS 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 MAPS 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 MAPS Remarketing Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the MAPS 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 MAPS 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 MAPS 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 MAPS 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 MAPS Remarketing Date to and including the next succeeding Interest Adjustment Date as determined by the MAPS Agent.

(ii) Notification of Results; Settlement. Provided the MAPS Agent has previously notified the Company and the Trustee on the Notification Date of its intention to purchase all tendered Notes on the MAPS Remarketing Date, the MAPS 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 MAPS 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 MAPS Remarketing Date.

In the event that the MAPS Agent purchases the tendered Notes on the MAPS Remarketing Date, the MAPS 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 MAPS 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 MAPS Agent. If the MAPS Agent does not purchase all of the Notes on the MAPS 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 MAPS Remarketing Date by book-entry through DTC by the close of business on the MAPS Remarketing Date.

The transactions set forth in this Section 303 shall be executed on the MAPS 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.

Transactions involving the sale and purchase of Notes remarketed by the MAPS Agent on and after the MAPS Remarketing Date will settle in immediately available funds through DTC's Same-Day Funds Settlement System.

The tender and settlement procedures set forth above, including provisions for payment by purchasers of Notes in the remarketing or for payment to selling Beneficial Owners

of tendered Notes, may be modified to the extent required by DTC or to the extent required to facilitate the tender and remarketing of Notes in certificated form, if the book-entry system is no longer available for the Notes at the time of the remarketing. In addition, the MAPS 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.

Section 304. Conversion or Redemption Following Election by the MAPS Agent to Remarket.

(a) If the MAPS Agent elects to remarket the Notes on the MAPS Remarketing Date, the Notes will be subject to mandatory tender to the MAPS 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 MAPS Remarketing Date or to redeem the Notes from the MAPS Agent, in each case as described in the next sentence. The Company will notify the MAPS 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 MAPS Agent at the Optional Redemption Price, in each case on the MAPS 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 MAPS Remarketing Date the Notes will cease to be in the MAPS Mode, the MAPS 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 MAPS Mode established by the Company in accordance with the procedures 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 MAPS 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 MAPS Agent on the MAPS 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 MAPS 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 MAPS Agent on the MAPS Remarketing Date.

fixed for such redemption specified in such notice and the only right of the MAPS 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

EVENTS OF DEFAULT

With respect to the Notes, subject to the provisions of the Indenture permitting amendment or modification in accordance, and subject to compliance, with the terms thereof, Sections 501, 502, 503 and 504 of the Original Indenture are replaced with and superseded by the following language:

"Section 501. Events of Default.

(1) default in the payment of any interest upon any Note when such interest becomes due and payable, and continuance of such default for a period of 30 days; or

(2) default in the payment of the principal of (or any premium, if any, on) any Note at its Maturity; or

(6) the commencement by the Company or DECO of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company or DECO to the entry of a decree or order for relief in respect of it in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by the Company or DECO of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or DECO or of any substantial part of their respective property, or the making by it of an assignment for the benefit of creditors, or the admission by the Company or DECO in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company or DECO in furtherance of any such action; or

(8) the Company shall, at any time, directly or indirectly cease to hold 100% of the Voting Stock of DECO; or

"SECTION 502. Acceleration of Maturity: Rescission and Annulment.

(1) the Company has paid or deposited with the Trustee a sum sufficient to pay

(A) all overdue interest on all Notes,

(B) the principal of (and premium, if any, on) any Notes which has become due otherwise than by such declaration of acceleration and any interest thereon and at the rate or rates prescribed therefor in such Notes,

(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Notes, and

(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

No such rescission shall affect any subsequent default or, impair any right consequent thereon.

"SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.

The Company covenants that if

(1) default is made in payment of any interest on any Note when such interest becomes due and payable and such default continues for a period of 30 days, or

(2) default is made in the payment of the principal of (or premium, if any, on) any Note at the Maturity thereof,

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Notes, wherever situated.

If an Event of Default occurs and is continuing with respect to the Notes, the Trustee may in its discretion proceed to protect and enforce its rights, including the rights of the Holders of Notes, by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy including, without limitation, instituting a proceeding prior to any declaration of acceleration of the Maturity of the Notes for the collection of all amounts then due and unpaid on the Notes, prosecuting such proceeding to final judgment or decree and collecting out of the property, wherever situated, of the Company the moneys adjudged or decreed to be payable in the manner provided by law."

"SECTION 504. Trustee May File Proofs of Claim.

(ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same;

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Note any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Note in any such proceeding."

In addition, for purposes of the foregoing provisions applicable to the Notes, the reference in Section 601 of the Original Indenture to Section 501(4) shall be deemed to be to Section 501(3) set forth above.

ARTICLE FIVE

ADDITIONAL REPORTING AND INFORMATION REQUIREMENTS

Section 502. Additional Reports. The Company shall furnish, or cause to be furnished, to the Trustee:

each case accompanied by an opinion by Deloitte & Touche LLP or other nationally recognized firm of independent public accountants having been prepared in accordance with GAAP;

ARTICLE SIX

AUTHENTICATION AND DELIVERY OF THE NOTES

Section 601. Authentication and Delivery. As provided in and pursuant to Section 303 of the Original Indenture, each time that the Company delivers Notes to the Trustee or Authenticating Agent for authentication, the Company shall deliver a Supplemental Company Order in the form of Exhibit C to this Second Supplemental Indenture for the authentication and delivery of such Notes and the Trustee or such Authenticating Agent shall authenticate and deliver such Notes.

ARTICLE SEVEN

THE SUPPORT AGREEMENT

Section 701. The Support Agreement. The Support Agreement dated as of November 18, 1998, by and between DTE Capital and the Company, has been terminated as of April 9, 2001. Notwithstanding the foregoing, the Company agrees for the benefit of the Lenders as follows:

(a) The Company will own directly or indirectly all of the voting common stock of DECO now or hereafter issued and outstanding.

restriction on the payment of dividends by DECO contained in any subordinated debt instrument, preferred stock or preference stock of DECO shall not constitute a lien, security interest or other encumbrance.

Subject to the terms of this Second Supplemental Indenture and the Original Indenture, the agreements of the Company set forth in this Section 701 shall terminate on the Initial Interest Rate Adjustment Date (provided that such termination shall not adversely affect the rights of the Initial Purchasers) effective commencing on such Initial Interest Rate Adjustment Date; provided that such termination shall not be applicable to the Notes until after the Notes have been tendered for remarketing and successfully remarketed on such date.

ARTICLE EIGHT

INSURANCE PROVISIONS

Section 801. Applicability of Article. The provisions of this Article Eight shall be applicable to the Notes for any Interest Rate Period so long as a Policy is in effect with respect to the Notes and the Insurer is not in default of its obligation to make payments thereunder. The form of Policy is attached as Exhibit D hereto.

Section 803. Payments Under the Policy in Respect of the Applicable Interest Rate Period. Except as otherwise provided in an amendment or supplement to this Second Supplemental Indenture, so long as a Policy is in effect with respect to the Notes and the Insurer is not in default of its obligations to make payments thereunder,

(a) If, as of the opening of business on any Interest Payment Date in the applicable Interest Rate Period, through and including the applicable Interest Rate Adjustment Date, the Trustee has not received payments from the Company pursuant to this Second Supplemental Indenture in such amounts so that sufficient moneys are available under this Second Supplemental Indenture to pay all interest due on the Notes on such Interest Payment Date, the Trustee shall promptly notify the Insurer or its designee by telephone, confirmed in writing by registered or certified mail, of the amount of the deficiency.

(b) If, as of 3:00 p.m. New York City time, on the applicable Interest Rate Adjustment Date in the event of a Special Mandatory Purchase, the Trustee has not received payments from the Company pursuant to this Second Supplemental Indenture in such amounts so that sufficient moneys are available under this Second Supplemental Indenture to pay 100% of the aggregate principal amount of the Notes subject to Special Mandatory Purchase on such

Interest Rate Adjustment Date, the Trustee shall promptly notify the Insurer or its designee by telephone, confirmed in writing by registered or certified mail, of the amount of the deficiency.

(c) If the deficiency in clause (a) or (b) is made up in whole or in part on the applicable payment or purchase date, the Trustee shall so notify the Insurer or its designee.

(d) In addition, if the Trustee has notice that any of the Holders have been required to disgorge payments on Notes as described in clauses
(a) or (b) to the Company or to a trustee in bankruptcy for creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a voidable preference to such Holders within the meaning of any applicable bankruptcy laws, then the Trustee shall notify the Insurer or its designee of such fact by telephone, confirmed in writing by registered or certified mail.

(e) The Trustee is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Notes as follows:

If and to the extent there is a deficiency in amounts required to pay interest on the Notes, the Trustee shall (A) execute and deliver to an insurance paying agent designated by the Insurer (the "Insurance Paying Agent"), in form provided by the Insurance Paying Agent, an instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the claims for interest to which such deficiency relates and which are paid by the Insurer, (B) receive as designee of the respective Holders in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned and (C) disburse the same at the written direction of the Insurance Paying Agent to such respective Holders;

(f) Irrespective of whether any such assignment is executed and delivered, the Company and the Trustee hereby agree for the benefit of the Insurer that:

(ii) they will accordingly pay to the Insurer the amount of such interest (including interest recovered under subparagraph (ii) of the first paragraph of the Policy, which interest shall be deemed past due and not to have been paid), with interest thereon as provided in this Second Supplemental Indenture and the Note, but only from the sources and in the manner provided herein for the payment of interest on the Notes to Holders and will otherwise treat the Insurer as the owner of such rights to the amount of such interest.

Section 804. Amendments. Copies of any amendments made to the documents executed in connection with the issuance of the Notes which are consented to by the Insurer shall be sent at the expense of the Company to the rating agencies then rating the Notes.

Section 805. Notice of Defaults. Notwithstanding Section 601 of the Original Indenture, the Insurer is to receive from the Trustee prompt notice of all defaults of which the Trustee has actual knowledge.

Section 806. Company Acting as Paying Agent. Notwithstanding anything to the contrary in the Indenture, so long as a Policy is in effect or the Insurer is the Holder of Notes, the Company shall not act as its own Paying Agent.

Section 807. Redemption of Insurer Notes. Notwithstanding
Section 1103 of the Original Indenture, all Notes of which the Insurer is the Holder shall be redeemed prior to any other Notes.

Section 808. Change in Trustee. The Insurer shall receive notice of the resignation or removal of the Trustee and the appointment of a successor thereto.

Section 809. Effect of Amendments. In determining whether any amendments or supplement to the Indenture may be made without the consent of the Holders or in determining whether any action should be taken the effect of such action on the rights of the Holders shall be considered as if the Policy were not in effect.

Section 810. Copies of Financial Statements. The Insurer shall receive a copy of all financial statements and reports to be delivered to the Trustee pursuant to Section 704 of the Original Indenture at the time such financial statements and reports are delivered to the Trustee.

Section 811. Defeasance. Notwithstanding Section 403 of the Original Indenture, for so long as the Policy is in effect and the Insurer is not in default of its obligation to make payments thereunder, the Company shall not exercise its rights to satisfy and discharge the entire indebtedness on the Notes without the consent of the Insurer, which consent shall not be unreasonably withheld.

Section 812. Notices to Holders. Any notice, certificate or report that is required to be given to a Holder of the Notes or to the Trustee pursuant to the Indenture shall also be provided by the Company to the Insurer. All notices, certificates or reports required to be given to the Insurer shall be in writing and shall be sent by registered or certified mail to such address as shall be designated in writing by the Insurer from time to time.

Section 813. Third Party Beneficiary. Notwithstanding Section 112 of the Original Indenture, so long as the Policy is in effect and the Insurer is not in default of its

obligation to make payments thereunder, the Insurer is an express third-party beneficiary of the Indenture.

ARTICLE NINE

AMENDMENTS

Section 901. Notwithstanding anything herein or in the Original Indenture to the contrary, this Second Supplemental Indenture and the Original Indenture (in the case of the Original Indenture, with respect to any amendment of or affecting the Notes or the Insurer) may be amended at any time in accordance with the provisions of Article Nine of the Original Indenture, but subject to the consent of the Insurer (which consent shall not be unreasonably withheld) so long as the Policy is in effect and the Insurer is not in default of its obligation to make payments under the Policy.

ARTICLE TEN

MISCELLANEOUS PROVISIONS

The Trustee makes no undertaking or representations in respect of, and shall not be responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this Second 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 Second 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 Second Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

This Second Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Second Supplemental Indenture to be duly executed and attested, all as of the day and year first above written, with effect from November 1, 1998.

DTE ENERGY COMPANY

                                      By: /s/ N.A. Khouri
                                         --------------------------------------
                                           Name:  N.A. Khouri
                                           Title:  Vice President and Treasurer


ATTEST:



By: /s/ Jack L. Somers
    -------------------------

THE BANK OF NEW YORK,
as Trustee

                                      By:  /s/ Terence Rawlins
                                          -------------------------------------
                                           Name:  Terence Rawlins
                                           Title:  Assistant Vice President


ATTEST:


By: /s/ Stacey Poindexter
    -------------------------

EXHIBIT A

FORM OF NOTE

(Attached)

A-1

A-2

PART IV(a) OF PTCE 96-23) WHICH HAS MADE OR PROPERLY AUTHORIZED THE DECISION FOR

A-3

No:

DTE ENERGY COMPANY
REMARKETED NOTE, 1998 SERIES B

THIS NOTE SHALL NOT BE VALID FOR ANY PURPOSE UNLESS PRESENTED TOGETHER WITH ANNEX A HERETO (INCLUDING ANY CONTINUATION THEREOF). REFERENCE IS MADE TO ANNEX A FOR CERTAIN TERMS OF THIS NOTE.

DTE ENERGY 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 November 15, 2038 (the "Stated Maturity"), upon the presentation and surrender hereof at the principal corporate trust office of The Bank of New York, or its successor in trust (the "Trustee") or such other office as the Trustee has designated in writing, and to pay interest on the unpaid principal balance hereof from, and including, the Original Issue Date specified in Annex A to, but excluding, the Initial Interest Rate Adjustment Date specified in Annex A (the "Initial Interest Rate Period") at the Initial Interest Rate specified therein payable on the related Interest Payment Date or Dates specified in Annex A, to the person in whose name this Note is registered at the close of business on the related Record Date. From and after the Initial Interest Rate Adjustment Date, this Note will bear interest in either the Commercial Paper Term Mode, the Long Term Rate Mode or the MAPS4 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 MAPS 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 MAPS Mode (or upon remarketing of this Note in a new Interest Rate Period in the Long Term Rate Mode or the MAPS Mode, as the case may be) in the case of a fixed interest

MAPS4 is a service mark of Salomon Smith Barney Inc.

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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 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 MAPS 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 MAPS 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 at a fixed rate in the Long Term Rate Mode or the MAPS 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.

This Note is one of a duly authorized series of Securities of the Company (herein called the "Notes") issued and to be issued under an Indenture, dated as of June 15, 1998, as supplemented by the First Supplemental Indenture dated as of June 15, 1998 and the Second Supplemental Indenture, dated as of November 1, 1998, in each case as amended by the Third Supplemental Indenture dated as of April 9, 2001 and as further amended and restated as of April 9, 2001 (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.

If a Policy (as defined below) is in effect with respect to any Interest Rate Period, this Note shall be entitled to the benefit of such Policy for such Interest Rate Period to the extent and subject to the conditions set forth in the Second Supplemental Indenture, as then amended. A copy of any applicable Policy is on file at the office of the Trustee.

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DEFINITIONS

The following terms, as used herein, have the following meanings unless the context or use clearly indicates another or different meaning or intent:

"Applicable Spread" means the lowest bid indication, expressed as a spread (in the form of a percentage or in basis points) above the Base Rate, obtained by the MAPS 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 MAPS 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 MAPS Agent, after consultation with the Company, as the applicable "Base Rate" at or prior to the commencement of the MAPS Mode and set forth on Annex A hereto.

"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 MAPS 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 a day on which dealings in the Index Currency are transacted in the London interbank market.

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"Comparable Treasury Price" shall mean, with respect to the MAPS 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 MAPS Remarketing Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if the MAPS 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 MAPS Remarketing Date.

"Dollar Price" shall mean the present value determined by the MAPS Agent, as of the MAPS Remarketing Date, of the Remaining Scheduled Payments discounted to the MAPS 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 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 November 15, 2003.

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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.

"Insurer" means such issuer of a financial guaranty policy in respect of this Note as may be purchased by the Company from time to time.

"Interest Determination Date" has the meaning specified under "Interest Rate - (c) Floating Interest Rates" below.

"Interest Rate 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 MAPS 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 MAPS Mode, a MAPS Rate Period. So long as this Note bears interest in the Long Term Rate Mode, if so provided in Annex A at "Interest Rate Period Adjustment" and if specified by the Company at the time of remarketing into such Long Term Rate Period, the Company may shorten the Interest Rate Period and provide for payment of a premium in respect thereof for this Note upon written notice to the Remarketing Agent and the Trustee not less than thirty (30) days prior to the date upon which such shortened Interest Rate Period shall expire. Promptly upon receipt of such notice and, in any case, not later than the close of business on such date, the Trustee will transmit such information to DTC in accordance with DTC's procedures as in effect from time to time. In such case, the next Interest Rate Adjustment Date otherwise set forth in Annex A shall instead be the date upon which such Interest Rate Period shall expire.

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owner of this Note, together with accrued interest, if any, hereon at the applicable rate payable to such Interest Rate Adjustment Date. Unless otherwise specified in Annex A, the premium shall be an amount equal to the Initial Early Remarketing Premium specified in Annex A, the premium shall be an amount equal to the Initial Early Remarketing Premium specified in Annex A (as adjusted by the Annual Early Remarketing Premium Percentage Reduction, if applicable), multiplied by the principal amount of this Note subject to early remarketing. The Initial Early Remarketing Premium, if any, shall decline at each anniversary of the Initial Early Remarketing Date by an amount equal to the applicable Annual Early Remarketing Premium Percentage Reduction, if any, specified in Annex A until the premium is equal to 0.

"Interest Reset Date", "Initial Interest Reset Date" and "Interest Reset Period" have the respective meanings specified under "Interest Rate - (c) Floating Interest Rates" below.

"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.

"MAPS Interest Rate" means the rate equal to the Base Rate established by the MAPS Agent, after consultation with the Company, at or prior to the commencement of the MAPS Mode plus the Applicable Spread, which will be based on the Dollar Price.

"MAPS Mode", or such other designation as may be used at the time of remarketing, means the Interest Rate Mode in which this Note shall bear interest and be subject to remarketing as "MAndatory Putable/remarketable Securities" (or such other designation as may be used at the time of remarketing) ("MAPS").

"MAPS Rate Period", or such other designation as may be used at the time of remarketing, means an Interest Rate Period in the MAPS Mode established by the Company as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of this Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for this Note. The MAPS Rate Period shall consist of the period to and excluding the MAPS Remarketing Date and the period from and including the MAPS Remarketing Date to but excluding the next succeeding Interest Rate Adjustment Date.

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"MAPS Remarketing Date", or such other designation as may be used at the time of remarketing, means the date designated by the applicable MAPS Agent, after consultation with the Company, within the MAPS Rate Period on which the applicable MAPS Agent may elect to remarket the Note at the MAPS Interest Rate.

"Notification Date" means the Business Day not later than ten (10) days prior to the applicable MAPS Remarketing Date on which the MAPS Agent gives notice to the Company and the Trustee of its intention to purchase this Note for remarketing.

"Optional Redemption" means the redemption of this Note prior to its maturity at the option of the Company as described herein.

"Policy" means such financial guaranty insurance policy as may be purchased by the Company from time to time in the form attached as Exhibit D to the Second Supplemental Indenture or such other form as may be adopted in any manner consistent with the requirements of this Second Supplemental Indenture and the Original Indenture.

"Reference Corporate Dealers" means such Reference Corporate Dealers as shall be appointed by the MAPS Agent after consultation with the Company.

"Reference Treasury Dealer" shall mean such Reference Treasury Dealers as shall be appointed by the MAPS Agent after consultation with the Company.

"Reference Treasury Dealer Quotations" shall mean, with respect to each Reference Treasury Dealer and the MAPS 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 MAPS 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,

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that would be due after the MAPS Remarketing Date to and including the next succeeding Interest Rate Adjustment Date as determined by the MAPS 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.

"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.

"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 MAPS 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 MAPS Remarketing Date.

"Weekly Rate Period" means a Commercial Paper Term Period with an Interest Rate Period of generally seven days.

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INTEREST RATE

(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.

(c) Floating Interest Rates. While this Note bears interest in the Long Term Rate Mode or the MAPS Mode (with respect to the period from, and including, the Interest Rate Adjustment Date commencing such period to, but excluding, the MAPS 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 MAPS 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 MAPS 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 MAPS 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 MAPS Agent in the case of a MAPS 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.

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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 such Monday is a legal holiday, in which case the auction is normally held on the immediately succeeding Tuesday, although 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; provided, further, that if 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 "Interest Determination Date" pertaining to this Note, the interest rate of which is determined with reference to two or more Interest Rate Bases specified in the applicable Floating Interest Rate Notice, 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 applicable Interest Reset Date.

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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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negotiable United States dollar certificates of deposit of the Index Maturity as published in H.15 Update (as defined herein), 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 either 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 dollar certificates of deposit of major United States money center banks for negotiable United States dollar certificates of deposit with a remaining maturity closest to the Index Maturity 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.

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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 bid 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 in The City of New York (which may include the Remarketing Agent or its affiliates) (each, a "Reference Dealer") 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 bid 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 bid 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 will obtain 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

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other page as may replace such page on such service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519) or, if no such page is specified in the applicable Floating Interest Rate Notice, page 7052.

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 shall be determined as of the applicable Interest Determination Date (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 (or any other page as may replace such page on such service) ("Telerate Page 120"), or, if such rate does not appear on Telerate Page 120 or is not so published by 3:00 P.M., New York City time, on the related Calculation Date, the rate on such Federal Funds Rate Interest Determination Date for United States dollar federal funds as published in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, under the caption "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 United States dollar 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.

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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. If fewer than two such offered rates so appear, or if no such rate so appears, as applicable, LIBOR on such LIBOR Interest Determination Date will be determined in accordance with the provisions described in clause (ii) below.

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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 on the face hereto as the Prime Rate, the Prime Rate shall be determined as of the applicable Interest Determination Date (a "Prime Rate Interest Determination Date") as the rate on such date as such rate is published in H.15(519) under the caption "Bank Prime Loan" or, if not published by 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 US PRIME1 Page (as defined below) as such bank's prime rate or base lending rate as of 11:00 A.M. New York City time, on such Prime Rate Interest Determination Date. If fewer than four such rates so appear on the Reuters Screen US PRIME1 Page for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates or base lending 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 three major banks (which may include The Bank of New York or affiliates of the Remarketing Agent) in The City of New York selected by the Calculation Agent, after consultation with the Company; 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.

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New York City time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for 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/Auction High" or, if not so published by 3:00 P.M., New York City time, on the related Calculation Date, the Bond Equivalent Yield of the auction rate of such Treasury Bills as announced by the United States Department of the Treasury. In the event that the auction rate of Treasury Bills having the Index Maturity in the applicable Floating Interest Rate Notice is not so announced by the United States Department of the Treasury, or if no such Auction is held, then the Treasury Rate will be the Bond Equivalent Yield of the rate 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 the Bond Equivalent Yield 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 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.

"Bond Equivalent Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula:

Bond Equivalent Yield =                D x N
                                       -----       X   100
                                   360 - (D x M)

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(e) Notice of Interest Rate, Binding Effect. On each Interest Rate Adjustment Date of this Note, the Remarketing Agent or the MAPS Agent, as the case may be, will notify the Company and the Trustee of the interest rate, Spread, if any, or Spread Multiplier, if any, as the case may be, to be borne by this Note for the following Interest Rate Period. After such Interest Rate Adjustment Date, any beneficial owner of this Note may contact the Trustee or the Remarketing Agent in order to be advised of the applicable interest rate and, in the case of a floating interest rate, the Spread (if any) and the Spread Multiplier (if any). Immediately upon receipt of such notice, the Trustee will transmit such information to DTC in accordance with DTC's procedures as in effect from time to time and note such rate in Annex A. The Trustee shall confirm to DTC the interest rate for the following Interest Rate Period in accordance with DTC's procedures as in effect from time to time. No notice of the applicable interest rate will be sent to the beneficial owner of this Note.

The interest rate announced by the Remarketing Agent, absent manifest error, is binding and conclusive upon the beneficial owner of this Note, the Company and the Trustee.

(f) Conversion. This Note may be converted at the option of the Company to the Commercial Paper Term Mode, Long Term Rate Mode or MAPS 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 Company may also change the Interest Rate Period at its option in accordance with the procedures set forth in the Indenture. 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

REMARKETING AND SETTLEMENT

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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 MAPS 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.

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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.

A-24

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

REDEMPTION AND ACCELERATION

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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.

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selected for redemption, in whole or in part, except the unredeemed portion of any Note being redeemed in part.

MAPS MODE

Notwithstanding anything herein to the contrary, the provisions of this section shall apply to this Note upon conversion to the MAPS 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 MAPS Rate Period to, but excluding, the next succeeding Interest Rate Adjustment Date (or if the MAPS Agent does not elect to purchase this Note on the MAPS Remarketing Date designated for such MAPS Mode or if after electing to so purchase this Note the MAPS Agent fails for any reason to so purchase this Note, to the MAPS Remarketing Date).

(a) Interest To MAPS Remarketing Date. The Interest Rate Period for this Note in the MAPS Mode will be established by the Company (as described in "Interest Rate" above) as a period of more than 364 days and not exceeding the remaining term to the Stated Maturity of this Note; provided, however, that such Interest Rate Period must end on the day prior to an Interest Payment Date for this Note. The MAPS Rate Period shall consist of the period from, and including, the Interest Rate Adjustment Date commencing such Interest Rate Period to, but excluding, the date (the "MAPS Remarketing Date") designated at such time by the MAPS 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 MAPS Remarketing Date for this Note in the MAPS 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 MAPS Mode is the first day of the MAPS Rate Period for this Note. Such interest rate will

A-27

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 MAPS Agent to produce a par bid in the secondary market for this Note on the date the interest is established. The designated MAPS Remarketing Date shall be an Interest Payment Date within such Interest Rate Period.

(b) Mandatory Tender. Provided that the MAPS Agent gives notice to the Company and the Trustee on a Business Day not later than ten (10) days prior to the MAPS 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 MAPS Agent for purchase on the MAPS Remarketing Date, except in the circumstances described in "Redemption" below, for 100% of the principal amount hereof. Upon tender, the MAPS Agent may remarket this Note for its own account at varying prices to be determined by the MAPS Agent at the time of such sale. From, and including, the MAPS Remarketing Date to, but excluding, the next succeeding Interest Rate Adjustment Date, this Note shall bear interest at the MAPS Interest Rate. If the MAPS Agent elects to remarket this Note, the obligation of the MAPS Agent to purchase this Note on the MAPS 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 MAPS Interest Rate. Subject to the MAPS Agent's election to remarket this Note, the MAPS Interest Rate shall be determined by the MAPS Agent by 3:30 p.m., New York City time, on the third Business Day immediately preceding the MAPS 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 MAPS Agent, after consultation with the Company, at or prior to the commencement of the MAPS Mode (the "Base Rate") plus the Applicable Spread, which shall be based on the Dollar Price of this Note as of the MAPS Remarketing Date.

(d) Notification of Results; Settlement. Provided the MAPS Agent has previously notified the Company and the Trustee on the Notification Date of its intention to purchase this Note on the MAPS Remarketing Date, the MAPS 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 MAPS Interest Rate, and this Note shall be automatically delivered to the account of the Trustee, by book-entry through DTC pending payment of the purchase price therefor, on the MAPS Remarketing Date.

In the event that the MAPS Agent purchases this Note on the MAPS Remarketing Date, the MAPS 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 MAPS Remarketing Date against delivery through DTC of such beneficial owner's interest herein, of 100% of the principal amount for this Note. If the MAPS Agent does not purchase this

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Note on the MAPS 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 MAPS Remarketing Date by book-entry through DTC by the close of business on the MAPS Remarketing Date.

The transactions set forth above shall be executed on the MAPS 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 MAPS 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.

(e) Conversion or Redemption Following Election by the MAPS Agent to Remarket. If the MAPS Agent elects to remarket this Note on the MAPS Remarketing Date, this Note will be subject to a mandatory tender to the MAPS 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 MAPS Remarketing Date or to redeem this Note from the MAPS Agent, in each case as described in the next sentence. The Company will notify the MAPS 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 MAPS Agent at the Optional Redemption Price, in each case on the MAPS Remarketing Date.

In the event that the Company irrevocably elects to convert this Note to a new Interest Rate Mode, then as of the MAPS Remarketing Date the Notes will cease to be in the MAPS Mode, the MAPS 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 MAPS Mode established by the Company in accordance with the procedures set forth herein; provided

A-29

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 MAPS 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 MAPS Agent on the MAPS 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 MAPS 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 MAPS Agent on the MAPS 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 MAPS 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

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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.

Notwithstanding anything to the contrary contained herein, if a Policy is in effect with respect to this Note and the Insurer is not in default of its obligations to make payments thereunder, the Insurer shall be deemed to be the Holder of this Note for all purposes under the Indenture and shall have the exclusive right to exercise or direct the exercise of remedies on behalf of the Holders of this Note in accordance with the terms of the Indenture following an Event of Default, and the principal of this Note may not be declared due and payable immediately without the prior written consent of the Insurer.

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.

A-31

IN WITNESS WHEREOF, DTE ENERGY COMPANY has caused this instrument to be duly executed.

DTE ENERGY 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.

THE BANK OF NEW YORK,
as Trustee

By
Authorized Signatory

Date:

A-32

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:*

CHECK ONE BOX BELOW

         (1)   :    to the Company or a Subsidiary thereof; or

         (2)   :    pursuant to and in compliance with Rule 144A under the
                    Securities Act; or

         (3)   :    pursuant to Rule 144 under the Securities Act; or

         (4)   :    pursuant to an effective registration statement under the
                    Securities Act; or

         (5)   :    pursuant to another available exemption from the
                    registration requirements of the Securities Act.


-----------------

* Signature must be guaranteed by a commercial bank, trust company or member firm or a major stock exchange.

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Unless one of the boxes is checked, the Trustee will refuse to register this Note in the name of any person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Trustee (as instructed by the Company) and the Company may require, prior to registering any transfer of this Note, such certifications, legal opinions or other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

A-34

ANNEX A(1)

DTE ENERGY COMPANY

Remarketed Notes, 1998 Series B
Initial Interest Rate Period

CUSIP Number:              233331 AB 3

Principal Amount:          $300,000,000

Original Issue Date:       November 23 , 1998

Issue Price:               100%

Stated Maturity:           November 15, 2038

Initial Interest Rate:     7.11% per annum

Interest Payment Dates:    May 15 and November 15, commencing May 15, 1999

Record Dates:              15 days prior to the related Interest Payment Date

Initial Interest Rate
  Adjustment Date:         November 15, 2003


                      Subsequent Interest Rate Period(s):

CUSIP Number:

Principal Amount:

Interest Rate Adjustment Date:

Record Date(s):

Interest Payment Date(s):

A-35

Interest Rate Mode:

[   ]    Commercial Paper Term Mode

[   ]    Long Term Rate Mode

[   ]    MAPS Mode

         [   ]    MAPS Agent: _____________

         [   ]    Base Rate: _________________

         [   ]    MAPS Remarketing Date: ________________

[ ] Reference Corporate Dealers:

                  [   ]    Reference Treasury Dealer: ________________

                  [   ]    MAPS Interest Rate: ___________



Interest Rate:

[ ] Fixed Rate:

[ ] Floating Rate:

Calculation Agent (if other than The Bank of New York):

Initial Interest Rate to Initial Interest Reset Date:

Interest Rate Basis(es):

[ ] CD Rate
Index Maturity:

[ ] CMT Rate
Index Maturity:

Designated CMT Telerate Page:

[ ] Commercial Paper Rate

Index Maturity:

[ ] Federal Funds Rate

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[ ] LIBOR
[ ] 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:

A-37

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:

A-38

[FORM OF STATEMENT OF INSURANCE]

(the "Insurer") has issued a policy containing the following provisions, such policy being on file at the office of The Bank of New York, New York, New York.

[ ] (the "Insurer"), in consideration of the payment of the premium and subject to the terms of this policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter defined, of the following described obligations, the full and complete payment required to be made by or on behalf of the Issuer to The Bank of New York or its successor (the "Paying Agent") of an amount equal to (i) the principal of the Obligations (as that term is defined below) on the initial mandatory tender date of [ ] and interest on the Obligations as such payments become due on and prior to such initial mandatory tender date but shall not be so paid (except that in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption, or acceleration resulting from default or otherwise, the payments guaranteed hereby shall be made in such amounts and at such times as such payments of principal would have been due had there not been any such acceleration); and (ii) the reimbursement of any such payment which is subsequently recovered from any owner pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes an avoidable preference to such owner within the meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the preceding sentence shall be referred to herein collectively as the "Insured Amounts." "Obligations" shall mean:

[$ ]

Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an Insured Amount for which is then due, that such required payment has not been made, the Insurer on the due date of such payment or within one business day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an account with
[ ], in New York, New York, or its successor, sufficient for the payment of any such Insured Amounts which are then due. Upon presentment and surrender of such Obligations or presentment of such other proof of ownership of the Obligations, together with any appropriate instruments of assignment to evidence the assignment of the Insured Amounts due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations, such instruments being in a form satisfactory to [
] shall disburse to such owners, or the Paying Agent payment of the Insured Amounts due on such Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts

A-39

and legally available therefor. This policy does not insure against loss of any prepayment premium which may at any time be payable with respect to any Obligation.

Any service of process on the Insurer may be made to the Insurer at its offices located at [ ] and such service of process shall be valid and binding.

This policy is non-cancellable for any reason. The premium on this policy is not refundable for any reason including the payment prior to maturity of the Obligations.

This policy is not covered by the Property/Casualty Insurance Security Fund specified in Article 76 of the New York Insurance Law.

[INSURER]

A-40

EXHIBIT B

FORM OF LIQUIDITY PROVIDER NOTE

(Attached)

B-1

LIQUIDITY PROVIDER NOTE

No. $____________
DTE ENERGY COMPANY

REMARKETED NOTES,
1998 SERIES B

 Facility
Expiration                      Date of                     Original
   Date                        Maturity                    Issue Date                 CUSIP
   ----                        --------                    ----------                 -----
                           November 15, 2038

DTE ENERGY 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

B-2

_______________________ or registered assigns, the principal sum of $________________ on November 15, 2038, upon the presentation and surrender hereof at the principal office of The Bank of New York, or its successor in trust (the "Trustee"), and to pay interest on the unpaid principal balance hereof from the Original Issue Date specified above or such date to which interest has been paid or duly provided for, until such principal balance has been paid in full, at such interest rates, and payable at such times, as are specified in the applicable Standby Note Purchase Agreement and are notified to the Trustee by the Administrative Agent under such Standby Note Purchase Agreement. Payment of the principal of and interest on this Note will be made at the office or agency maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the person in whose name this Note is registered at the close of business on the Record Date.

This Note is one of a duly authorized series of Securities of the Company (the "Notes"), issued and to be issued under an Indenture, dated as of June 15, 1998, as amended and supplemented by the First Supplemental Indenture dated as of June 15, 1998 and the Second Supplemental Indenture, dated as of November 1, 1998, in each case as amended by the Third Supplemental Indenture dated as of April 9, 2001 and as further amended and restated as of April 9, 2001 (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.

REMARKETING, TENDER AND SETTLEMENT

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

B-3

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.

TRANSFER OR EXCHANGE

As provided in the Indenture and subject to certain limitations set forth therein and herein, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, and any interest on this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to, the Company and the Security Register or any transfer agent duly executed, by the registered owner hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.

The Notes are issuable only in fully registered form in denominations of $100,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of any authorized denomination, as requested by the registered owner surrendering the same.

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.

B-4

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

As set forth in, and subject to the provisions of, the Indenture, no registered owner of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such registered owner shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the registered owners of not less than 25% in principal amount of the Outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the registered owners of a majority in principal amount of the Outstanding Notes of this series a direction inconsistent with such request within such 60-day period; provided, however, that such limitations do not apply to a suit instituted by the registered owner hereof for the enforcement of payment of the principal of and premium, if any, or any interest on this Note on or after the respective due dates expressed herein.

No reference to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and any interest on this Note at the times, places and rate, and in the coin or currency, herein prescribed.

The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York.

B-5

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

This Note shall not be valid or become obligatory for any purpose until the Trustee's Certificate of Authentication hereon shall have been executed by the Trustee.

IN WITNESS WHEREOF, DTE ENERGY COMPANY has caused this instrument to be duly executed.

DTE ENERGY COMPANY

By:

Attest:

By:

This Note is one of the Notes of the series designated herein, referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK,

By:
Authorized Signatory

Date:

B-6

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:

B-7

EXHIBIT C

DTE ENERGY COMPANY

REMARKETED NOTES, 1998 SERIES B DUE 2038
SUPPLEMENTAL COMPANY ORDER

Pursuant to Article Six of the Amended and Restated Second Supplemental Indenture, dated as of April 9, 2001, to the Amended and Restated Indenture, dated as of April 9, 2001, as amended, you are instructed to prepare and authenticate a Note, of the series identified above, in the principal amount of $300,000,000. 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
, 2001.

                               ------------------------------------------
                               Name:
                               Title:
                               DTE Energy Company

C-1

EXHIBIT D

[FORM OF POLICY]

(Attached)

D-1

EXHIBIT E

[DTE Energy Company Letterhead]

FLOATING INTEREST RATE NOTICE

[Date]

To: [Remarketing Agent(s)]
[Address]

The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee Administration Telecopy: (212) 815-5915

Re: Remarketed Notes, 1998 Series B (the "Notes")

Ladies and Gentlemen:

This Floating Interest Rate Notice relates to (i) $300,000,000 principal amount of the Notes (CUSIP No. ____________) and (ii) the proposed
[Long Term Rate Period] [MAPS 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;

E-1

[ ] LIBOR Reuters, where the Index Currency will be __________, and the Designated LIBOR Page will be ____________;

[ ] LIBOR Telerate, where the Index Currency will be __________, and the Designated LIBOR Page will be ____________;

[ ] Prime Rate;

[ ] Treasury Rate ____________.

2. The floating interest rate will be reset as follows:

[ ] Initial Interest Reset Date will be _____________;

[ ] Interest Reset Dates will be _____________;

[ ] Interest Reset Period will be ______________.

3. The interest will be paid as follows:

[ ] Interest Payment Dates will be _____________;

[ ] Interest Payment Period will be _____________;

[ ] Index Maturity will be _____________;

[ ] Floating Rate Maximum Interest Rate will be _____________;

[ ] Floating Rate Minimum Interest Rate will be ______________.

4. Day Count Convention:

[ ] Actual/360 _____________;

[ ] Actual/Actual _____________;

[ ] 30/360.

Applicable Interest Rate Basis:

5. Other terms: [ ]

E-2

DTE ENERGY COMPANY

By:

Name:

Title:

E-3

EXHIBIT F

[FORM OF CONVERSION NOTICE]

(Attached)

F-1

[DTE Energy Company Letterhead]

CONVERSION NOTICE

[Date]

To: [Remarketing Agent(s)]

THE BANK OF NEW YORK
101 Barclay Street, Floor 21W
New York, New York 10286

Attn: Corporate Trust Administration

Re: Remarketed Notes, 1998 Series B

Dear Sirs:

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

[   ]    MAPS Mode

         [   ]    MAPS Agent: _____________

         [   ]    Base Rate: _________________

         [   ]    MAPS Remarketing Date: ________________

[ ] Reference Corporate Dealers:

F-2

[ ] Reference Treasury Dealer: ________________

[ ] Interest Rate Period: ___________

[   ]    Interest Rate Adjustment Date: _______________

[   ]    Optional Redemption Provisions (Long Term Rate Mode):

[   ]    Commencement Date:

[   ]    Redemption Price:  (i)  __________________%
                           (ii)  __________________%
                          (iii)  __________________%

[ ] Other or Alternative Terms of Optional Redemption:

[ ] Early Remarketing Provisions (Long Term Rate Mode):

[   ]    Initial Early Remarketing Date:  _________________

[   ]    Initial Early Remarketing Premium:  ______________

[   ]    Annual Early Remarketing Premium Percentage
         Reduction:  __________

[   ]    Other or Alternative Terms of Early
         Remarketing:  _____________

Each beneficial owner of the Notes will be deemed to have tendered such Notes as of the Conversion Date and will not be entitled to further accrual of interest after the Conversion Date.

DTE ENERGY COMPANY

By:

Name:

Title:

F-3

EXHIBIT 4-225

CONFORMED COPY

DTE CAPITAL CORPORATION

AND

DTE ENERGY COMPANY

THE BANK OF NEW YORK

Trustee

THIRD SUPPLEMENTAL INDENTURE

Dated as of April 9, 2001

Supplementing and amending the Indenture dated as of June 15, 1998 between DTE Capital Corporation and The Bank of New York, as Trustee, and the First Supplemental Indenture thereto dated as of June 15, 1998 and the Second Supplemental Indenture thereto dated as of November 1, 1998

THIRD SUPPLEMENTAL INDENTURE, dated as of the 9th day of April, 2001, among DTE CAPITAL CORPORATION, a corporation organized and existing under the laws of the State of Michigan ("DTE Capital"), DTE ENERGY COMPANY, a corporation organized and existing under the laws of the State of Michigan ("DTE Energy"), and THE BANK OF NEW YORK, a New York banking corporation, having its principal corporate trust office in The City of New York, New York, as trustee (the "Trustee");

WHEREAS, DTE Capital and the Trustee are parties to that certain Indenture dated as of June 15, 1998 (the "Original Indenture"), as supplemented by the First Supplemental Indenture dated as of June 15, 1998 (the "First Supplemental Indenture") and the Second Supplemental Indenture dated as of November 1, 1998 (the "Second Supplemental Indenture" and, together with the Original Indenture, the First Supplemental Indenture and this Third Supplemental Indenture, the "Indenture"; provided, that effective on the Effective Date (as defined below), subject to execution and delivery thereof by the parties thereto, the "Indenture" shall mean the amended and restated Indenture in the form attached hereto as Exhibit A);

WHEREAS, as of April 9, 2001 (the "Effective Date"), DTE Capital will merge with and into DTE Energy, which will be the surviving legal entity;

WHEREAS, DTE Capital and DTE Energy desire that, effective on the Effective Date, DTE Energy shall assume the obligations of DTE Capital under the Indenture and desire in furtherance thereof to amend and restate the Indenture in the form set forth in Exhibit A hereto;

WHEREAS, Section 801 of the Original Indenture requires DTE Energy to expressly assume the obligations of DTE Capital under the Indenture by a supplemental indenture;

WHEREAS, pursuant to and in compliance with Section 802 of the Original Indenture, DTE Energy shall succeed to and be substituted for DTE Capital under the Indenture as the "Company," with the same effect as if it had been named therein;

WHEREAS, Section 901 of the Original Indenture provides that, without the consent of the Holders of any Securities, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee may enter into indentures supplemental to the Indenture for the purpose of, among other things,
(i) evidencing the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company in the Indenture and in the Securities and (ii) amending or supplementing any provision contained in the Indenture or any supplemental indenture, provided that no such amendment or supplement shall adversely affect the interests of the Holders of any Securities then Outstanding in any material respect;

WHEREAS, the entry into this Third Supplemental Indenture by the parties hereto is in all respects authorized by the provisions of the Indenture; and

WHEREAS, all things necessary to make this Third Supplemental Indenture a valid indenture and agreement according to its terms have been done;

NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH that, for and in consideration of the premises and of the covenants contained in the Indenture and in this Third Supplemental Indenture and for other good and valuable

consideration the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed for the equal and proportionate benefit of the respective Holders from time to time of the Securities as follows:

ARTICLE ONE

AMENDMENT AND RESTATEMENT

Section 101. Amendment of First and Second Supplemental Indentures. Section 801 as set forth in Article Five of each of the First Supplemental Indenture and the Second Supplemental Indenture shall be, and hereby is, deleted, and is hereby superseded in its entirety by Section 801 of the Original Indenture.

Section 102. Amendment and Restatement. In furtherance of the assumption pursuant to Section 201 below, effective on the Effective Date, the Indenture (including each supplement thereto) shall be replaced, superseded and restated in its entirety in the form attached hereto as Exhibit A. Subject to execution and delivery thereof by the parties thereto, effective on the Effective Date, the "Indenture" shall mean the Indenture as so restated and amended.

ARTICLE TWO

ASSUMPTION

Section 201. Assumption of Obligations by DTE Energy. Effective on the Effective Date, DTE Energy, the successor in interest of DTE Capital, does hereby: (i) expressly assume the due and punctual payment of the principal of (and premium, if any) and interest (including all Additional Amounts, if any, payable pursuant to Section 1004 of the Indenture) on all the Securities according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture and the Securities to be performed or observed by the Company; and (ii) agree to succeed to and be substituted for the Company under the Indenture with the same effect as if it had been named therein. Thereafter, DTE Capital shall be relieved of all obligations and covenants under the Indenture and the Securities.

ARTICLE THREE

MISCELLANEOUS PROVISIONS

Section 301. Further Assurances. DTE Energy will, upon request by the Trustee, execute and deliver such further instruments and do such further acts as may reasonably be necessary or proper to carry out more effectively the purposes of this Third Supplemental Indenture.

Section 302. Other Terms of the Indenture. Except as expressly amended hereby and subject to the amendment and restatement provided for in Article One hereof, the Indenture shall continue in full force and effect in accordance with the provisions thereof and the Indenture is in all respects hereby ratified and confirmed.

Section 303. Terms Defined. Except as otherwise expressly stated herein, all terms defined elsewhere in the Indenture shall have the same meanings when used herein.

Section 304. Governing Law. This Third Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in such state.

Section 305. Multiple Counterparts. This Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original for all purposes, but all such counterparts shall together be deemed to constitute but one and the same instrument.

Section 306. Responsibility of Trustee. 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 Third 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.

Section 307. Agency Appointments. DTE Energy hereby confirms and agrees to all agency appointments made by DTE Capital under or with respect to the Indenture or the Securities and hereby expressly assumes the due and punctual performance and observance of all covenants and conditions to have been performed or observed by DTE Capital contained in any agency agreement entered into by DTE Capital under or with respect to the Indenture or the Securities.

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed and attested, all as of the day and year first above written.

DTE CAPITAL CORPORATION

                                        By:  /s/ C. Arvani
                                             -----------------------------------
                                             Name:  C. Arvani
                                             Title: Assistant Treasurer
ATTEST:


By:  /s/ Jack L. Somers
     -----------------------

DTE ENERGY COMPANY

                                        By:  /s/ N.A. Khouri
                                             -----------------------------------
                                             Name:  N.A. Khouri
                                             Title: Vice President and Treasurer
ATTEST:


By:  /s/ Jack L. Somers
     ------------------------

THE BANK OF NEW YORK,
as Trustee

                                        By:  /s/ Terence Rawlins
                                             -----------------------------------
                                             Name:  Terence Rawlins
                                             Title: Assistant Vice President
ATTEST:

By:  /s/ Stacey Poindexter
     ------------------------

Consented to pursuant to Section 901 of
the First Supplemental Indenture as of
the day and year first above written by the undersigned

Insurer:

MBIA INSURANCE CORPORATION

By:  /s/ Amy R. Gonch
     --------------------------------
Name:  Amy R. Gonch/Assistant Secretary

EXHIBIT A

FORM OF AMENDED AND RESTATED INDENTURE

(Attached)

A-1

Exhibit 10-41

DETROIT EDISON

EXECUTIVE VEHICLE PROGRAM

HUMAN RESOURCES
SEPTEMBER 1, 1999
(SUPERSEDES PUBLICATION DATED JULY 23, 1996 AS AMENDED)

DETROIT EDISON
EXECUTIVE VEHICLE PROGRAM

The Detroit Edison Executive Vehicle Program is designed to provide a vehicle for personal and business use by certain executives of The Detroit Edison Company ("Company" or "Detroit Edison") and participating affiliates.

ELIGIBILITY

Members of the Company's Senior Management and assistant vice presidents are eligible to participate in this program. The Company's Senior Management includes the chairman, presidents, executive vice presidents, senior vice presidents and vice presidents.

Persons performing executive level services for the Company or an affiliate thereof may be extended benefits under this Plan upon written approval of the Company's Chairman of the Board. The extension of this benefit is in no way indicative of an individual's employment status nor is it to be deemed a guarantee of continued employment or involvement with the Company or an affiliate thereof.

An executive who is reassigned to a position that is not a Senior Management, assistant vice president, or executive level position for the Company or an affiliate thereof may continue to participate in the program, but not longer than the period specified under "Vehicle Replacement".

VEHICLE SPECIFICATIONS

An eligible executive may select one vehicle of his/her choice within the following guidelines:

The vehicle must be a new production passenger automobile, van, light truck or similar vehicle.

Only options installed by the manufacturer or dealer will be allowed.

The amount paid by Detroit Edison or a participating affiliate, i.e., the cost of the vehicle including title fees and license plates minus the estimated residual cost of the vehicle after a two year period, will not exceed $12,500. The sales tax is an additional program cost paid by Detroit Edison or a participating affiliate. In the event the cost of the vehicle minus the estimated residual cost after two years exceed $12,500, a participating executive may elect to personally pay the amount that is in excess of $12,500. This personal payment, which will include the sales tax on any amount over $12,500, must be paid at the time of delivery. Neither Detroit Edison nor a participating affiliate will

reimburse the participating executive for this personal payment when the vehicle is replaced, returned, purchased, or sold except as noted under "Vehicle Replacement".

The Company reserves the right to modify or refuse any vehicle order or terminate any lease that in the opinion of the Company is not in keeping with the intent of this program.

The Company's Vice President -- Human Resources will from time to time review the maximum allowable cost to the Company and make appropriate recommendations.

INSURANCE

The Company or applicable participating affiliate will maintain an insured or self-insured insurance program for executive vehicles as required by law. Additionally, all physical damage and all liability associated with the operation of the vehicle will be provided. The deductible for all physical damage if $250.00. The Company or applicable participating affiliate will pay for any deductible expense incurred.

Should the vehicle be the only vehicle in the participating executive's household, the Company or applicable participating affiliate will provide supplemental coverage on the use of other vehicles.

MAINTENANCE

All maintenance and repairs for the vehicle will be the responsibility of the Company's Energy Delivery organization. Should the vehicle require service when it is not feasible to use the Company's Beech Street Garage, the participating executive will be reimbursed for such expenses provided proof of payment is submitted.

BUSINESS MILEAGE

A participating executive will be reimbursed at the rate of 5.5 cents per business mile to offset the cost of fuel. This rate will apply for all business mileage regardless of whether the executive drives the vehicle provided under this plan or another vehicle.

USE OF VEHICLE

Regular use of the vehicle is restricted to the executive and members of the immediate family who reside in the executive's household.

Use of the vehicle by other individuals on a regular or continuous basis is prohibited.

A participating executive cannot sublease, sell or in any way transfer the vehicle to any other person

VEHICLE REPLACEMENT

A participating executive must keep the vehicle for two years except in the vent of retirement, other employment termination, classification to an ineligible position, or discontinuation of involvement with the Company or participating affiliate.

A participating executive may then arrange to personally purchase the vehicle through the Company's Supply Chain Management as follows:

A. The resale price of the vehicle will be the Fair Market Value (FMV) as determined by the lessor or the lease balance, whichever is greater, and any penalties as set forth in paragraph three under "Retirement, Termination or Death of Executive".

B. If the executive made a non-reimbursable contribution to the original purchase price, the sale price will be described above except that the resale price will be reduced by the percentage of the executive's original contribution to the original purchase price.

Formulas:

Step 1
Company or affiliate contribution plus executive contribution = original purchase price

Step 2
Executive contribution divided by original purchase price = percentage reduction

Step 3
Resale price minus (resale price times percentage reduction) = resale price to executive

C. The executive will be responsible for all sales taxes, title fees and license plates on the purchase.

RETIREMENT, TERMINATION OR DEATH OF EXECUTIVE

Upon the retirement, termination, classification to an ineligible position, or discontinuation of involvement of a participating executive, the vehicle should be returned to the Company in sound condition subject to normal wear and tear unless purchase is elected.

In the event of the death of the participating executive, the Company will permit a surviving spouse to use the vehicle for up to two months.

At the option of the Company, the participating executive or surviving spouse may purchase the vehicle under the terms set forth in "Vehicle Replacement". Additionally, the executive or surviving spouse will be responsible for any lease-related penalties assessed by the lessor on a vehicle being purchased that has not been in the program for at least 12 months.

INCOME TAX GUIDELINES

Internal Revenue Service (IRS) regulations require that the annual lease value of the vehicle be included in the executive's income for income tax purposes. Under current IRS guidelines, the additional income to the executive will be determined by using the table in the Appendix. The Fair Market Value of the vehicle will be based on the lower of manufacturer" suggested retail price (reduced by rebates, if any) plus sales tax and title fees, less eight percent or dealer invoice price (reduced by rebates, if any) plus four percent. Fair Market Value will not be reduced by a participating executive's contributions. Rather, the amount of a participating executive's contributions will serve as a dollar-for-dollar reduction in the amount of income imputed to the contributing participating executive until the contribution is exhausted.

Each month, prorated amounts from the Appendix will be included in the participating executive's salary to determine the amount of federal income tax withholding. The annual amount to be included on the executive's Form W-2 will be based on the twelve-month period which runs from December 1 to November 30. However, the amount of gross income which will be reflected on a participating executive's Form W-2 as a result of his or her vehicle provided pursuant to this plan will be reduced to the extent that the vehicle is used for business purposes. The reduction to imputed income will be that percentage of the annual value of the automobile which is equal to the ratio of business miles driven to total miles driven over the twelve-month period which runs from December 1 to November 30.

ADMINISTRATION

The Company's Supply Chain Management is responsible for procuring and delivering the vehicles.

The Company's Energy Delivery organization is responsible for license plate renewals, maintenance and repairs to the vehicles, and disposing of the vehicles when released by the executives(s).

The Treasurer is responsible for providing the necessary insurance coverage, for obtaining insurance certificates for the vehicles and for coordinating insurance claims.

Questions regarding this program should be directed to the Company's Vice President -- Human Resources.

PROGRAM DURATION

The Company plans to continue to offer this program to eligible executives. However, the Company reserves the right to modify or terminate the program at any time.

EXHIBIT 10-42

CONFORMED COPY

SECURITIZATION PROPERTY SALE AGREEMENT

between

THE DETROIT EDISON SECURITIZATION FUNDING LLC
Issuer

and

THE DETROIT EDISON COMPANY
Seller

Dated as of March 9, 2001

                                Table of Contents
                                                                            Page
                                                                            ----

                                    ARTICLE I
                                   Definitions

Section 1.01   Definitions.....................................................1
Section 1.02   Other Definitional Provisions...................................1

                                   ARTICLE II
                      Conveyance of Securitization Property

Section 2.01   Conveyance of Initial Securitization Property...................2
Section 2.02   Conditions to Conveyance of Securitization Property.............3

                                   ARTICLE III
                    Representations and Warranties of Seller

Section 3.01   Organization and Good Standing..................................5
Section 3.02   Due Qualification...............................................5
Section 3.03   Power and Authority.............................................5
Section 3.04   Binding Obligation..............................................5
Section 3.05   No Violation....................................................5
Section 3.06   No Proceedings..................................................6
Section 3.07   Approvals.......................................................6
Section 3.08   The Securitization Property.....................................6
Section 3.09   Solvency........................................................8

                                   ARTICLE IV
                             Covenants of the Seller

Section 4.01   Seller's Existence..............................................9
Section 4.02   No Liens or Conveyances.........................................9
Section 4.03   Use of Proceeds.................................................9
Section 4.04   Delivery of Collections.........................................9
Section 4.05   Notice of Liens.................................................9
Section 4.06   Compliance with Law.............................................9
Section 4.07   Covenants Related to Securitization Property...................10
Section 4.08   Protection of Title............................................10
Section 4.09   Taxes..........................................................11
Section 4.10   Alternative Electric Suppliers.................................11
Section 4.11   Filings Pursuant to Financing Order............................12

                                    ARTICLE V
                      Additional Undertakings of the Seller

Section 5.01   Liability of the Seller; Indemnities...........................12


                                       i

Section 5.02   Merger or Consolidation of, or Assumption of the Obligations
               of, the Seller.................................................13
Section 5.03   Limitation on Liability of the Seller and Others...............14

                                   ARTICLE VI
                            Miscellaneous Provisions

Section 6.01   Amendment......................................................15
Section 6.02   Notices........................................................15
Section 6.03   Assignment by Seller...........................................16
Section 6.04   Assignment to Trustee..........................................16
Section 6.05   Limitations on Rights of Others................................16
Section 6.06   Severability...................................................16
Section 6.07   Separate Counterparts..........................................16
Section 6.08   Headings.......................................................16
Section 6.09   Governing Law..................................................16
Section 6.10   Nonpetition Covenant...........................................16


EXHIBIT A - Bill of Sale.....................................................A-1
EXHIBIT B - Opinion of Counsel...............................................B-1
EXHIBIT C - Opinion of Counsel...............................................C-1

APPENDIX A - Master Definitions

SECURITIZATION PROPERTY SALE AGREEMENT, dated as of March 9, 2001, by and between THE DETROIT EDISON SECURITIZATION FUNDING LLC, a Michigan limited liability company, as issuer (the "Issuer"), and THE DETROIT EDISON COMPANY, a Michigan corporation, as seller hereunder (in such capacity, the "Seller").

W I T N E S S E T H:

WHEREAS the Issuer desires to purchase from time to time Securitization Property created pursuant to the Statute and the Financing Order;

WHEREAS the Seller is willing to sell Securitization Property to the Issuer;

WHEREAS the Issuer, in order to finance the purchase of the Securitization Property, will from time to time issue Securitization Bonds under the Indenture; and

WHEREAS the Issuer, to secure its obligations under the Securitization Bonds and the Indenture, will pledge its right, title and interest and grant a security interest in, to and under the Securitization Property to the Trustee for the benefit of the Securitization Bondholders.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01 DEFINITIONS. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in Appendix A hereto.

SECTION 1.02 OTHER DEFINITIONAL PROVISIONS.

(a) "Agreement" means this Securitization Property Sale Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

(b) Non-capitalized terms used herein which are defined in the Statute, as the context requires, have the meanings assigned to such terms in the Statute, but without giving effect to amendments to the Statute after the date hereof which have a material adverse effect on the Issuer or the Securitization Bondholders.

(c) All terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(d) The words "hereof", "herein", "hereunder" and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; Section, Schedule and Exhibit references contained in this

Agreement are references to Sections, Schedules and Exhibits in or to this Agreement unless otherwise specified; and the term "including" means "including without limitation".

(e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms.

ARTICLE II

CONVEYANCE OF SECURITIZATION PROPERTY

SECTION 2.01 CONVEYANCE OF INITIAL SECURITIZATION PROPERTY.

(a) In consideration of the Issuer's payment to or upon the order of the Seller of $1,740,713,272.93 (the "Initial Purchase Price") by wire transfer of funds immediately available on the date hereof, subject to the conditions specified in Section 2.02, the Seller does hereby irrevocably sell, transfer, assign and otherwise convey to the Issuer, without recourse (subject to the obligations of the Seller herein), all right, title and interest of the Seller in, to and under the Initial Securitization Property identified in the Bill of Sale delivered pursuant to Section 2.02(a) on or prior to the Initial Transfer Date (such sale, transfer, assignment and conveyance of the Initial Securitization Property to include, to the fullest extent permitted by the Statute and the Michigan UCC, the assignment of all revenues, collections, claims, rights, payments, money or proceeds of or arising from the SB Charges related to the Initial Securitization Property, as the same may be adjusted from time to time). Such sale, transfer, assignment and conveyance of the Initial Securitization Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 10l of the Statute and the Financing Order, shall constitute a true sale of all of the Seller's right, title and interest, in, to and under, and not a borrowing secured by, the Initial Securitization Property. The preceding sentence is the statement referred to in
Section 10l of the Statute. The Seller agrees and confirms that upon payment of the Initial Purchase Price and the execution and delivery of this Agreement and the related Bill of Sale, the Seller shall have no right, title or interest in, to or under the Initial Securitization Property.

(b) Subject to the conditions specified in Section 2.02, the Issuer does hereby purchase the Initial Securitization Property from the Seller for the consideration set forth in paragraph (a) above.

(c) The Seller and the Issuer each acknowledge and agree that the purchase price for the Initial Securitization Property sold pursuant to this Agreement is equal to its fair market value at the time of sale.

(d) The Seller and the Issuer further agree that from time to time the Seller may offer to sell, and the Issuer may purchase, Subsequent Securitization Property as of Subsequent Transfer Dates, subject to the conditions specified in Section 2.02, in exchange for consideration to be agreed upon (in each case, the "Subsequent Purchase Price"). The Seller and the Issuer hereby agree that each such sale, transfer, assignment and conveyance of any Subsequent Securitization Property shall include, to the fullest extent permitted by the Statute and the Michigan UCC, the assignment of all revenues, collections, claims, rights, payments,

money or proceeds of or arising from the SB Charges related to the Subsequent Securitization Property, as the same may be adjusted from time to time. Such sale, transfer, assignment and conveyance of the Subsequent Securitization Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 10l of the Statute and the Financing Order, shall constitute a true sale of all of the Seller's right, title and interest, in, to and under, and not a borrowing secured by, the Subsequent Securitization Property. The preceding sentence is the statement referred to in Section 10l of the Statute. The Seller agrees and confirms that after giving effect to any sale contemplated by this paragraph (d) and the execution and delivery of the related Bill of Sale, it shall have no right, title or interest in, to or under the Subsequent Securitization Property.

(e) Notwithstanding the foregoing, if but only if, contrary to the agreement and intent of the parties and the Financing Order, any sale, transfer, assignment and conveyance of any Securitization Property is determined by a court not to be a true sale as contemplated by the parties hereto and by the Statute, then

(i) (A) the Seller hereby appoints the Issuer as the agent of the Seller ("Seller's Agent") for purposes of this clause
(e)(i), (B) the Issuer shall be deemed to have issued and sold the Securitization Bonds for and on behalf of the Seller as Seller's Agent pursuant to the Statute, the Financing Order, the Indenture and the Underwriting Agreement, and (C) the Issuer shall be deemed to have granted and does hereby grant, as of the date hereof, for and on behalf of the Seller as Seller's Agent, a valid and enforceable lien and security interest in the Securitization Property to the Trustee for the benefit of the Securitization Bondholders, pursuant to the Statute, the Financing Order and the Indenture in connection with the issuance of the Securitization Bonds; provided, however, that if a court of competent jurisdiction determines that the provision in this clause
(e)(i) does not create a valid and enforceable lien then,

(ii) such sale, transfer, assignment and conveyance shall be treated as a pledge of such Securitization Property and the Seller shall be deemed to have granted, and does hereby grant, as of the date hereof a security interest to the Issuer in such Securitization Property to secure a payment obligation incurred by the Seller in the amount paid by the Issuer for the Securitization Property.

SECTION 2.02 CONDITIONS TO CONVEYANCE OF SECURITIZATION PROPERTY. The obligation of the Seller to sell, and the obligation of the Issuer, to purchase Securitization Property upon any Transfer Date shall be subject to and conditioned upon the satisfaction or waiver of each of the following conditions:

(a) on or prior to the Transfer Date, the Seller shall deliver to the Issuer a duly executed Bill of Sale identifying the Securitization Property to be conveyed as of that date, substantially in the form of Exhibit A hereto;

(b) as of the Transfer Date, no breach by the Seller of its representations, warranties or covenants in this Agreement shall exist and the Seller shall have delivered to the Issuer and the Trustee an Officer's Certificate to such effect and no Servicer Default shall have occurred and be continuing;

(i) the Issuer shall have sufficient funds available to pay the purchase price for the Securitization Property to be conveyed on such date, and

(ii) all conditions set forth in the Indenture to the issuance of one or more Series of Securitization Bonds intended to provide such funds shall have been satisfied or waived;

(d) on or prior to the Transfer Date, the Seller shall have taken all actions required under the Statute, the Financing Order and the Michigan UCC, including, without limitation, filings under the Michigan UCC to transfer to the Issuer ownership of the Securitization Property to be conveyed on such date, free and clear of all Liens other than Liens created by the Issuer pursuant to the Indenture, and the Issuer shall have taken any action required for the Issuer to grant to the Trustee a first priority perfected security interest in the Collateral and maintain such security interest as of such date;

(e) in the case of any sale of Subsequent Securitization Property only, the Seller shall have provided the Issuer and each Rating Agency with a notice specifying the Subsequent Transfer Date for the Subsequent Securitization Property not later than 10 days prior to the Subsequent Transfer Date;

(f) the Seller shall have delivered to each Rating Agency and to the Issuer:

(i) an Opinion of Counsel to the Seller with respect to the transfer of the Securitization Property then being conveyed to the Issuer substantially in the form of Exhibit B hereto, and

(ii) an Opinion of Counsel to the Seller, substantially in the form of Exhibit C hereto;

(g) the Seller shall have delivered to the Trustee and the Issuer an Officer's Certificate confirming the satisfaction of each condition precedent specified in this Section 2.02;

(h) with respect to any Subsequent Sale, the Seller shall have obtained written notice from each Rating Agency that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any Outstanding Series or Class of Securitization Bonds; and

(i) the Seller shall have received the Initial Purchase Price or the Subsequent Purchase Price, as applicable, in funds immediately available on the applicable Transfer Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

As of the Transfer Date, the Seller makes the following representations and warranties on which the Issuer has relied and will rely in acquiring Securitization Property. The

following representations and warranties are made under existing law as in effect as of the Transfer Date. The Seller shall not be in breach of any representation or warranty herein as a result of a change in law occurring after the Transfer Date. The representations and warranties shall survive the sale of Securitization Property to the Issuer and the pledge thereof to the Trustee pursuant to the Indenture.

SECTION 3.01 ORGANIZATION AND GOOD STANDING. The Seller is a corporation duly organized and in good standing under the laws of the State of Michigan, with corporate power and authority to own its properties and conduct its business as currently owned or conducted.

SECTION 3.02 DUE QUALIFICATION. The Seller is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions, other than Michigan, in which the ownership or lease of property or the conduct of its business requires such qualifications, licenses or approvals (except where the failure to so qualify and to obtain such licenses and approvals would not be reasonably likely to have a material adverse effect on the Seller's business, operations, assets, revenues, properties or prospects).

SECTION 3.03 POWER AND AUTHORITY. The Seller has the corporate power and authority to execute and deliver this Agreement and to carry out its terms; the Seller has full corporate power and authority to own the Securitization Property and sell and assign the Securitization Property to the Issuer, and the Seller has duly authorized such sale and assignment to the Issuer by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary corporate action.

SECTION 3.04 BINDING OBLIGATION. This Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms subject to bankruptcy, receivership, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally from time to time in effect and to general principles of equity (regardless of whether considered in a proceeding in equity or at law).

SECTION 3.05 NO VIOLATION. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the Mortgage and Deed of Trust, dated October 1, 1924 (as amended and supplemented), of The Detroit Edison Company to First Chicago Trust Company of New York, as successor trustee (the "Mortgage and Deed of Trust"), the articles of incorporation or by-laws of the Seller, or any indenture, agreement or other instrument to which the Seller is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (except as contemplated in the Indenture and as set forth in Section 2.01(e) hereof); nor violate any law or any order, rule or regulation applicable to the Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties. The Securitization Property is not subject to any Lien thereon, including under the Mortgage and Deed of Trust, other than the Liens created pursuant to the Indenture and the Statute.

SECTION 3.06 NO PROCEEDINGS. Except as disclosed in writing by the Seller to the Issuer, there are no proceedings or investigations pending or, to the Seller's best knowledge, threatened, before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties:

(a) asserting the invalidity of any of the Basic Documents, the Securitization Bonds, the Statute or the Financing Order;

(b) seeking to prevent the issuance of the Securitization Bonds or the consummation of any of the transactions contemplated by the Basic Documents or the Securitization Bonds;

(c) challenging the Seller's treatment of the Securitization Bonds as debt of the Seller for federal and state tax purposes; or

(d) seeking any determination or ruling that could reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, the Basic Documents or the Securitization Bonds.

SECTION 3.07 APPROVALS. Except for the filing of financing statements and continuation statements under the Michigan UCC, no approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the execution and delivery by the Seller of this Agreement, the performance by the Seller of the transactions contemplated hereby or the fulfillment by the Seller of the terms hereof, except those that have been obtained or made and those that the Seller, in its capacity as Servicer under the Servicing Agreement, is required to make in the future pursuant to the Servicing Agreement and post closing filings required in connection therewith.

SECTION 3.08 THE SECURITIZATION PROPERTY.

(a) Information. All information provided by the Seller to the Issuer with respect to the Securitization Property is correct in all material respects.

(b) Effect of Transfer. Each sale, transfer, assignment and conveyance herein contemplated constitutes a sale or other absolute transfer, of all right, title and interest of the Seller in, to and under the Securitization Property from the Seller to the Issuer; upon execution and delivery of this Agreement and the related Bill of Sale, the Seller will have no right, title or interest in, to or under the Securitization Property; and the Securitization Property would not be part of the estate of the Seller as debtor in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law.

(c) Transfer Filings. The Seller is the sole owner of the Securitization Property sold to the Issuer on the Transfer Date; and the Securitization Property will have been validly sold, assigned, transferred and conveyed to the Issuer free and clear of all Liens other than Liens created by the Issuer pursuant to the Indenture. All actions or filings, including filings with the Michigan Secretary of State under the Michigan UCC, necessary in any jurisdiction to give the Issuer a valid first priority perfected ownership interest in the

Securitization Property and to grant to the Trustee a first priority perfected security interest in the Securitization Property, free and clear of all Liens of the Seller or anyone else have been taken or made.

(d) Financing Order Irrevocable; Process Valid; No Litigation; etc.

(i) The Financing Order has been issued by the MPSC in accordance with the Statute, and such order and the process by which it was issued comply with all applicable laws, rules and regulations. The Financing Order has become effective pursuant to the Statute and is, and as of the date of issuance of any Securitization Bonds will be, in full force and effect and final and non-appealable.

(ii) As of the Series Issuance Date, the Securitization Bonds of the related Series will be entitled to the protections provided by the Statute and, in accordance with the Statute, the Financing Order and the SB Charge authorized therein, subject to the Periodic Adjustments to the SB Charge provided for in the Financing Order, have become irrevocable.

(iii) (A) Under the Statute, the State of Michigan may not take or permit any action that would impair the value of Securitization Property, reduce or alter, except for Periodic Adjustments, or impair the SB Charges to be imposed, collected, and remitted to the Issuer, until the principal, interest and premium, and any other charges incurred and contracts to be performed in connection with the Securitization Bonds have been paid and performed in full (subject to the 15 year limitation upon the imposition of SB Charges pursuant to the Statute and the Financing Order); and

(B) under the contract clauses of the State of Michigan and the United States constitutions, the State of Michigan, including the MPSC, could not take any action that substantially impairs the rights of the Securitization Bondholders unless such action is a reasonable exercise of the State of Michigan's sovereign powers and of a character reasonable and appropriate to further a legitimate public purpose, and, under the takings clauses of the State of Michigan and the United States constitutions, the State of Michigan could not repeal or amend the Statute or take any other action in contravention of its pledge in Section 10n(2) of the Statute if such action constitutes a permanent appropriation of the property interest of Securitization Bondholders in the Securitization Property and deprives the Securitization Bondholders of their reasonable expectations arising from their investments in Securitization Bonds, unless just compensation, as determined by a court of competent jurisdiction, is provided to Securitization Bondholders.

(iv) There is no order by any court providing for the revocation, alteration, limitation or other impairment of the Statute, the Financing Order, the Securitization Property or the SB Charge, or any rights arising under any of them, or that seeks to enjoin the performance of any obligations under the Financing Order which in any way is adverse to the position of the Securitization Bondholders.

(v) No other approval, authorization, consent, order or other action of, or filing with, any court, federal or state regulatory body, administrative agency or other governmental instrumentality is required in connection with the creation or transfer of the Securitization Property, except those that have been obtained or made and those that the Seller, in its capacity as Servicer under the Servicing Agreement, is required to make in the future pursuant to the Servicing Agreement and post closing filings required in connection therewith.

(vi) Except as disclosed in current reports of the Seller filed with the Commission, (a) there are no proceedings or investigations pending, or to the best of the Seller's knowledge, threatened before any court, federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or the Issuer or their respective properties challenging the Statute or the Financing Order and (b) there is no voter referendum or initiative that has been filed with the Michigan Secretary of State or that, to the best of the Seller's knowledge, is being circulated among voters which attempts to amend, repeal or revoke the Statute in a manner that would impair the security of the Securitization Bondholders.

(e) Assumptions. The assumptions used in calculating the initial SB Charge pursuant to the Financing Order are reasonable and made in good faith.

(f) Creation of Securitization Property.

(i) For purposes of the Statute and the Michigan UCC, the Securitization Property constitutes a present property right;

(ii) the Securitization Property consists of (A) the irrevocable right of the Seller to impose, collect and receive SB Charges in the amount necessary to provide for full recovery of principal of and interest on the Securitization Bonds, together with Ongoing Other Qualified Costs; (B) the right under the Financing Order to obtain Periodic Adjustments of the SB Charges; and (C) all revenues, collections, payments, money and proceeds arising out of the rights and interests described in (A) and (B); and

(iii) the Financing Order, including the right to collect the SB Charge, has become irrevocable and not subject to reduction, impairment or adjustment by further action of the MPSC, except for Periodic Adjustments.

(g) Prospectus. As of the date hereof, the information describing the Seller under the caption "The Seller and Servicer of the Securitization Property" in the prospectus dated March 2, 2001 relating to the Securitization Bonds is correct in all material respects.

SECTION 3.09 SOLVENCY. After giving effect to the sale of any Securitization Property hereunder, the Seller:

(a) is solvent and expects to remain solvent;

(b) is adequately capitalized to conduct its business and affairs considering its size and the nature of its business and intended purposes;

(c) is not engaged and does not expect to engage in a business for which its remaining property represents an unreasonably small portion of its capital;

(d) reasonably believes that it will be able to pay its debts as they become due; and

(e) is able to pay its debts as they mature and does not intend to incur, or believes that it will incur, indebtedness that it will not be able to repay at its maturity.

ARTICLE IV

COVENANTS OF THE SELLER

SECTION 4.01 SELLER'S EXISTENCE. So long as any of the Securitization Bonds are outstanding, the Seller shall keep in full force and effect its existence as a corporation and remain in good standing under the laws of the jurisdiction of its organization, and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or will be necessary to protect the validity and enforceability of this Agreement and each other instrument or agreement to which the Seller is a party necessary to the proper administration of this Agreement and the transactions contemplated hereby.

SECTION 4.02 NO LIENS OR CONVEYANCES. Except for the conveyances hereunder, the Seller shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on, any of the Securitization Property, whether now existing or hereafter created, or any interest therein. The Seller shall not at any time assert any Lien against or with respect to any Securitization Property, and shall defend the right, title and interest of the Issuer and the Trustee, as assignee of the Issuer, in, to and under the Securitization Property, whether now existing or hereafter created, against all claims of third parties claiming through or under the Seller.

SECTION 4.03 USE OF PROCEEDS. The Seller shall use proceeds from the sale of the Securitization Property in accordance with the Financing Order.

SECTION 4.04 DELIVERY OF COLLECTIONS. If the Seller receives collections of the SB Charge with respect to the Securitization Property or the proceeds thereof, the Seller shall pay the Servicer all payments received by the Seller in respect thereof as soon as practicable after receipt thereof by the Seller, but in no event later than two Business Days after such receipt.

SECTION 4.05 NOTICE OF LIENS. The Seller shall notify the Issuer and the Trustee promptly after becoming aware of any Lien on any Securitization Property other than the conveyances hereunder or under the Indenture.

SECTION 4.06 COMPLIANCE WITH LAW. The Seller shall comply with its organizational or governing documents and all laws, treaties, rules, regulations and determinations of any governmental instrumentality applicable to the Seller, except to the extent that failure to so comply would not adversely affect the Issuer's or the Trustee's interests in the Securitization Property or under any of the Basic Documents or the Seller's performance of its obligations hereunder.

SECTION 4.07 COVENANTS RELATED TO SECURITIZATION PROPERTY. So long as any of the Securitization Bonds are outstanding, the Seller shall:

(i) treat the Securitization Bonds as debt of the Issuer and not the Seller, except for financial accounting or tax reporting purposes;

(ii) disclose in its financial statements that it is not the owner of the Securitization Property and that the assets of the Issuer are not available to pay creditors of the Seller or any of its Affiliates (other than the Issuer);

(iii) disclose the effects of all transactions between the Seller and the Issuer in accordance with generally accepted accounting principles; and

(iv) not own or purchase any Securitization Bonds.

(b) The Seller agrees that upon the sale by the Seller of the Securitization Property to the Issuer pursuant to this Agreement:

(i) to the fullest extent permitted by law, including the Statute and applicable MPSC Regulations, the Issuer shall have all of the rights originally held by the Seller with respect to the Securitization Property, including the right to collect any amounts payable by any Customer in respect of such Securitization Property, notwithstanding any objection or direction to the contrary by the Seller; and

(ii) any payment by any Customer to the Issuer shall discharge such Customer's obligations in respect of such Securitization Property to the extent of such payment, notwithstanding any objection or direction to the contrary by the Seller.

(i) in all proceedings relating directly or indirectly to the Securitization Property the Seller shall: (A) affirmatively certify and confirm that it has sold the Securitization Property to the Issuer (other than for financial accounting or tax reporting purposes), and (B) not make any statement or reference in respect of the Securitization Property that is inconsistent with the ownership thereof by the Issuer (other than as required for financial accounting or tax reporting purposes); and

(ii) the Seller shall not take any action in respect of the Securitization Property except as contemplated by the Basic Documents.

(iii) the Seller shall not sell Securitization Property under a separate financing order in connection with the issuance of additional securitization bonds unless it shall have obtained written notice from each Rating Agency that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any Outstanding Series or Class of Securitization Bonds.

SECTION 4.08 PROTECTION OF TITLE. The Seller shall execute and file such filings, and cause to be executed and filed such filings, and take all such actions, all in such

manner and in such places as may be required by law fully to preserve, maintain, and protect the interests of the Issuer and the Trustee in the Securitization Property, including all filings required under the Michigan UCC relating to the transfer of the ownership of the Securitization Property by the Seller to the Issuer and the pledge of the Securitization Property by the Issuer to the Trustee. The Seller shall deliver (or cause to be delivered) to the Issuer and the Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. The Seller shall institute any action or proceeding necessary to compel the performance by the MPSC or the State of Michigan of any of their obligations or duties under the Statute or the Financing Order, and the Seller agrees to take such legal or administrative actions, including defending against or instituting and pursuing legal actions and appearing or testifying at hearings or similar proceedings, as may be reasonably necessary:

(a) to protect the Issuer and the Securitization Bondholders from claims, state actions or other actions or proceedings of third parties which, if successfully pursued, would result in a breach of any representation set forth in Article III; or

(b) to block or overturn any attempts to cause a repeal of, modification of or supplement to the Statute, the Financing Order, or the rights of Securitization Bondholders by legislative enactment or constitutional amendment that would be adverse to the Issuer, the Trustee or the Securitization Bondholders.

The costs of any such actions or proceedings shall be reimbursed by the Issuer to the Seller from amounts on deposit in the Collection Account as an Operating Expense. The Seller's obligations pursuant to this Section 4.08 shall survive and continue notwithstanding that the payment of Operating Expenses pursuant to the Indenture may be delayed (it being understood and agreed that the Seller may be required to temporarily advance its own funds to satisfy its obligations hereunder). The Seller designates the Issuer as its agent and attorney-in-fact to execute any filings of financing statements, continuation statements or other instruments required of the Issuer pursuant to this Section, it being understood that the Issuer shall have no obligation to execute any such instruments.

SECTION 4.09 TAXES. So long as any of the Securitization Bonds are outstanding, the Seller shall, and shall cause each of its subsidiaries to, pay all material taxes, assessments and governmental charges imposed upon it or any of its properties or assets or with respect to any of its franchises, business, income or property before any penalty accrues thereon if the failure to pay any such taxes, assessments and governmental charges would, after any applicable grace periods, notices or other similar requirements, result in a Lien on the Securitization Property; provided that no such tax need be paid if the Seller or one of its Affiliates is contesting the same in good faith by appropriate proceedings promptly instituted and diligently conducted and if the Seller or such Affiliate has established appropriate reserves as shall be required in conformity with generally accepted accounting principles.

SECTION 4.10 ALTERNATIVE ELECTRIC SUPPLIERS. So long as any of the Securitization Bonds are outstanding, the Seller shall not permit any AES to bill or collect SB Charges on behalf of the Issuer unless required by applicable law or regulation and, to the extent permitted by applicable law or regulation, the Rating Agency Condition is satisfied.

SECTION 4.11 FILINGS PURSUANT TO FINANCING ORDER. The Seller shall comply with all filing requirements, including any making post closing filings, in accordance with the Financing Order.

ARTICLE V

ADDITIONAL UNDERTAKINGS OF THE SELLER

The Seller hereby undertakes the obligations contained in this Article V and agrees that the Issuer shall have the right to assign its rights with respect to such obligations to the Trustee for the benefit of the Securitization Bondholders.

SECTION 5.01 LIABILITY OF THE SELLER; INDEMNITIES.

(a) The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement.

(b) The Seller shall indemnify the Issuer and the Trustee, for itself and on behalf of the Securitization Bondholders, and each of the Issuer's and the Trustee's respective officers, directors, managers, employees and agents for, and defend and hold harmless each such Person from and against, any and all taxes (other than any taxes imposed on Securitization Bondholders solely as a result of their ownership of Securitization Bonds) that may at any time be imposed on or asserted against any such Person under existing law as of any Transfer Date as a result of the sale and assignment of the Securitization Property by the Seller to the Issuer, the acquisition or holding of the Securitization Property by the Issuer or the issuance and sale by the Issuer of the Securitization Bonds, including any sales, gross receipts, general corporation, single business, personal property, privilege, franchise or license taxes, but excluding any taxes imposed as a result of a failure of such person to properly withhold or remit taxes imposed with respect to payments on any Securitization Bond, it being understood that the Securitization Bondholders shall be entitled to enforce their rights against the Seller under this Section 5.01(b) solely through a cause of action brought for their benefit by the Trustee.

(c) The Seller shall indemnify the Issuer and the Trustee, for itself and on behalf of the Securitization Bondholders, and each of the Issuer's and the Trustee's respective officers, directors, managers, employees and agents for, and defend and hold harmless each such Person from and against, (i) any and all amounts of principal of and interest on the Securitization Bonds not paid when due or when scheduled to be paid in accordance with their terms and the amount of any deposits to the Issuer required to have been made in accordance with the terms of the Basic Documents which are not made when so required, in each case as a result of the Seller's breach of any of its representations, warranties or covenants contained in this Agreement, and (ii) any and all liabilities, obligations, claims, actions, suits or payments of any kind whatsoever that may be imposed on or asserted against any such Person, other than any liabilities, obligations or claims for or payments of principal of or interest on the Securitization Bonds, together with any reasonable costs and expenses incurred by such Person, as a result of the Seller's breach of any of its representations, warranties or covenants contained in this Agreement.

(d) The Seller shall pay any and all taxes levied or assessed upon all or any part of the Issuer's property or assets based on existing law as of the Transfer Date.

(e) Notwithstanding Section 5.01(b) and (c) above, the Seller shall not be liable for any consequential damages, including any loss of market value of the Securitization Bonds, resulting from any downgrade of the ratings of the Securitization Bonds.

(f) Indemnification under this Section 5.01 shall survive the resignation or removal of the Trustee and the termination of this Agreement and shall include reasonable fees and expenses of investigation and litigation (including reasonable attorneys' fees and expenses). The Seller shall not indemnify any party under this Section 5.01 for any changes in law after the Transfer Date.

(g) The indemnification obligation of the Seller under this
Section 5.01 shall be pari passu with all other general unsecured obligations of the Seller.

SECTION 5.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF, THE SELLER. Any Person:

(a) into which the Seller may be merged or consolidated and which succeeds to all or the major part of the electric distribution business of the Seller,

(b) which results from the division of the Seller into two or more Persons and which succeeds to all or the major part of the electric distribution business of the Seller,

(c) which may result from any merger or consolidation to which the Seller shall be a party and which succeeds to all or the major part of the electric distribution business of the Seller,

(d) which may succeed to the properties and assets of the Seller substantially as a whole and which succeeds to all or the major part of the electric distribution business of the Seller, or

(e) which may otherwise succeed to all or the major part of the electric distribution business of the Seller,

which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall be the successor to the Seller hereunder without the execution or filing of any document or any further act by any of the parties to this Agreement; provided, however, that

(i) immediately after giving effect to such transaction, no representation or warranty made pursuant to Article III shall have been breached and no Servicer Default, and no event that, after notice or lapse of time, or both, would become a Servicer Default, shall have occurred and be continuing,

(ii) the Seller shall have delivered to the Issuer and the Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation,

merger or succession and such agreement of assumption comply with this Section 5.02 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with,

(iii) the Seller shall have delivered to the Issuer and the Trustee an Opinion of Counsel either

(A) stating that, in the opinion of such counsel, all filings to be made by the Seller, including Michigan UCC filings, that are necessary fully to preserve and protect fully the respective interests of the Issuer and the Trustee in the Securitization Property have been executed and filed, and reciting the details of such filings, or

(B) stating that, in the opinion of such counsel, no such action is necessary to preserve and protect such interests,

(iv) the Rating Agencies shall have received prior written notice of such transaction; and

(v) the Seller shall have delivered to the Issuer and the Trustee an opinion of independent tax counsel (as selected by, and in form and substance reasonably satisfactory to, the Seller, and which may be based on a ruling from the Internal Revenue Service) to the effect that, for federal income tax purposes, such consolidation or merger will not result in a material adverse federal income tax consequence to the Seller, the Issuer, the Trustee or the holders of the Outstanding Securitization Bonds.

The Seller shall not consummate any transaction referred to in clauses (a), (b),
(c), (d) or (e) above except upon execution of the above described agreement of assumption and compliance with clauses (i), (ii), (iii), (iv) and (v) above. When any Person acquires the properties and assets of the Seller substantially as a whole and becomes the successor to the Seller in accordance with the terms of this Section 5.02, then upon the satisfaction of all of the other conditions of this Section 5.02, the Seller shall automatically and without further notice be released from its obligations hereunder.

SECTION 5.03 LIMITATION ON LIABILITY OF THE SELLER AND OTHERS. The Seller and any director, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person, respecting any matters arising hereunder. Subject to Section 4.08, the Seller shall not be under any obligation to appear in, prosecute or defend any legal action that is not incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 6.01 AMENDMENT.

(a) This Agreement may be amended by the Seller and the Issuer, with the consent of the Trustee and the satisfaction of the Rating Agency Condition. Promptly after the execution of any such amendment or consent, the Issuer shall furnish written notification of the substance of such amendment or consent to each of the Rating Agencies.

(b) Prior to the execution of any amendment to this Agreement, the Issuer and the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Issuer and the Trustee may, but shall not be obligated to, enter into any such amendment which affects their own rights, duties or immunities under this Agreement or otherwise.

SECTION 6.02 NOTICES. Unless otherwise specifically provided herein, all notices, directions, consents and waivers required under the terms and provisions of this Agreement shall be in English and in writing, and any such notice, direction, consent or waiver may be given by United States first-class mail, reputable overnight courier service, facsimile transmission or electronic mail (confirmed by telephone, United States first-class mail or reputable overnight courier service in the case of notice by facsimile transmission or electronic mail) or any other customary means of communication, and any such notice, direction, consent or waiver shall be effective when delivered or transmitted, or if mailed, five days after deposit in the United States first-class mail with proper postage for first-class mail prepaid:

(a) in the case of the Seller, at The Detroit Edison Company, 2000 2nd Avenue, Detroit, Michigan 48226-1279, Attention: Corporate Secretary,

(b) in the case of the Issuer, at The Detroit Edison Securitization Funding LLC, 2000 2nd Avenue, 937 WCB, Detroit, Michigan 48226-1279, Attention: Secretary,

(c) in the case of Moody's, at Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007,

(d) in the case of Standard & Poor's, at Standard & Poor's Ratings Services, 55 Water Street, New York, New York 10041, Attention: Asset Backed Surveillance Department,

(e) in the case of Fitch, at Fitch, Inc., 1 State Street Plaza, New York, New York 10004, Attention: ABS Surveillance, and

(f) in the case of the Trustee, at the address provided for notices or communications to the Trustee in the Indenture;

or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 6.03 ASSIGNMENT BY SELLER. Subject to Section 5.02, this Agreement may not be assigned by the Seller.

SECTION 6.04 ASSIGNMENT TO TRUSTEE. The Seller hereby acknowledges and consents to any pledge, assignment and grant of a security interest by the Issuer to the Trustee pursuant to the Indenture for the benefit of the Securitization Bondholders of all right, title and interest of the Issuer in, to and under the Securitization Property and the proceeds thereof and the assignment of any or all of the Issuer's rights hereunder to the Trustee.

SECTION 6.05 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this Agreement are solely for the benefit of the Seller, the Issuer and the Trustee, on behalf of itself and the Securitization Bondholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Collateral or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

SECTION 6.06 SEVERABILITY. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 6.07 SEPARATE COUNTERPARTS. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 6.08 HEADINGS. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

SECTION 6.09 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 6.10 NONPETITION COVENANT. Notwithstanding any prior termination of this Agreement or the Indenture, the Seller hereby covenants and agrees that it shall not, prior to the date which is one year and one day after the termination of the Indenture and the payment in full of the Securitization Bonds, any other amounts owed under the Indenture, including, without limitation, any amounts owed to third-party credit enhancers, and any amounts owed under any Hedge Agreement or Interest Rate Swap Agreement, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or, sustaining a case against, the Issuer under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial

part of the property of the Issuer, or ordering the winding up or liquidation of the affairs of the Issuer.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective duly authorized officers as of the date and year first above written.

THE DETROIT EDISON
SECURITIZATION FUNDING LLC,
as Issuer

By: /s/ Kathleen Hier
   -------------------------------------
   Name:  Kathleen Hier
   Title: Treasurer

THE DETROIT EDISON COMPANY,
as Seller

By: /s/ N.A. Khouri
   -------------------------------------
   Name:  N.A. Khouri
   Title: Vice President and Treasurer

EXHIBIT A

BILL OF SALE

For good and valuable consideration the receipt of which is hereby acknowledged, THE DETROIT EDISON COMPANY, a Michigan corporation (the "Seller"), does hereby sell, assign, transfer and convey to THE DETROIT EDISON SECURITIZATION FUNDING LLC, a Michigan limited liability company (the "Issuer"), without recourse except as provided in the Sale Agreement referred to below, all of the Seller's right, title and interest in, to and under the Securitization Property, which sale, assignment, transfer and conveyance of the Securitization Property shall include, as provided in the Statute, the sale, assignment, transfer and conveyance of all of the Seller's right, title and interest in, to and under all revenues, collections, payments, money or proceeds arising under or with respect to the SB Charge related to the Securitization Property, as such SB Charge may be adjusted from time to time in accordance with the Statute and the Financing Order, to have and to hold the same unto the Issuer and to the successors and assigns of the Issuer, forever.

The foregoing sale, transfer, assignment and conveyance of the Securitization Property is hereby expressly stated to be a sale or other absolute transfer and, pursuant to Section 10l of the Statute and Financing Order, shall constitute a true sale of all of the Seller's right, title and interest in, to and under, and not a borrowing secured by, the Securitization Property. The preceding sentence is the statement referred to in Section 10l of the Statute and in the Financing Order.

Capitalized terms used herein and not defined shall have the meanings set forth in the Securitization Property Sale Agreement dated as of
[ ], 2001 (the "Sale Agreement") between the Issuer and the Seller.

This Bill of Sale is governed by the laws of the State of Michigan.

IN WITNESS WHEREOF, the Seller has duly executed and delivered this Bill of Sale this [ ]th day of [ ], [ ].

THE DETROIT EDISON COMPANY,
as Seller

By:

Name:

Title:

Accepted this [ ]th day of [ ], [ ].

THE DETROIT EDISON SECURITIZATION FUNDING LLC

By:
Name:
Title:

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APPENDIX A

MASTER DEFINITIONS

To be used in connection with the Servicing Agreement, the Sale Agreement, the Administration Agreement and the Indenture.

The definitions contained in this Appendix A are applicable to the singular as well as the plural forms of such terms.

Act has the meaning specified in Section 11.03 of the Indenture.

Actual Charge-Off Percent means the Servicer's actual system-wide charge-off percentage.

Adjustment Request means any filing made with the MPSC by the Servicer on behalf of the Issuer for a Periodic Adjustment.

Administration Agreement means the Administration Agreement dated as of March 9, 2001, between the Administrator and the Issuer, as the same may be amended or supplemented from time to time.

Administrator means Detroit Edison, as administrator under the Administration Agreement, and each successor to Detroit Edison, in the same capacity, pursuant to Section 14 of the Administration Agreement.

AES means an alternative energy supplier pursuant to the Statute.

Affiliate means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, control when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.

Annual Accountant's Report has the meaning set forth in Section 3.04 of the Servicing Agreement.

Annual Reconciliation Report has the meaning set forth in Section 4.03(b) of the Servicing Agreement.

Authorized Denominations means, with respect to any Series or Class of Securitization Bonds, $1,000 and integral multiples of $1.00 above that amount, provided, however, that one bond of each Class may have a denomination of less than $1,000, or such other denominations as may be specified in the Series Supplement therefor.

Authorized Newspaper means the Luxemburger Wort or any other newspaper published in Luxembourg on a daily basis.

Authorized Officer means,

(a) with respect to the Issuer, (i) any Manager and (ii) any person authorized by the Managers pursuant to the Issuer LLC Agreement;

(b) with respect to the Servicer, the chief executive officer, the president, the vice chairman of the board, any vice president, the treasurer, any assistant treasurer, the secretary, any assistant secretary, the controller or any assistant controller of the Servicer;

(c) with respect to the Trustee, any officer assigned to the Corporate Trust Division (or any successor thereto), including any vice president, assistant vice president, trust officer, secretary, assistant secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers, in each case having direct responsibility for the administration of this Indenture; and

(d) with respect to any other corporation, the chief executive officer, chief operating officer, chief financial officer, chief information officer, president, executive vice president, any vice president, the secretary or the treasurer of such corporation; and with respect to any limited liability company, any manager thereof.

Basic Documents means the Formation Documents, the Sale Agreement, any Bills of Sale, the Servicing Agreement, the Administration Agreement, the Indenture, the Underwriting Agreement and any Interest Rate Swap Agreement, as each may be amended or supplemented from time to time.

Bill of Sale means any bill of sale issued by the Seller to the Issuer pursuant to the Sale Agreement evidencing the sale of Securitization Property by the Seller to the Issuer.

Billed SB Charges means the dollar amounts billed to Customers in respect of the SB Charge.

Bills means each of the regular monthly bills, summary bills and other bills issued to Customers by Detroit Edison on its own behalf and in its capacity as Servicer.

Book-Entry Securitization Bonds means beneficial interests in the Securitization Bonds, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.11 of the Indenture.

Business Day means any day other than a Saturday or Sunday or a day on which banking institutions in Detroit, Michigan, or in New York, New York or, with respect to any Securitization Bonds listed on the Luxembourg Stock Exchange, in Luxembourg, are required or authorized by law or executive order to remain closed.

Capital Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

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Certificate of Compliance has the meaning set forth in Section 3.03 of the Servicing Agreement.

Class means, with respect to any Series, any one of the classes of Securitization Bonds of that Series, as specified in the Series Supplement for that Series.

Class Final Maturity Date means the Final Maturity Date of a Class, as specified in the Series Supplement for the related Series.

Class Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Clearing Agency means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.

Clearing Agency Participant means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

Code means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

Collateral has the meaning specified in the Granting Clause of the Indenture.

Collection Account has the meaning specified in Section 8.02(a) of the Indenture.

Commission means the U.S. Securities and Exchange Commission, and any successor thereof.

Corporate Trust Office means the designated office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Indenture is located at 101 Barclay Street, Floor 12 East, New York, New York 10286, Attention: ABS Unit, or at such other address as the Trustee may designate from time to time by notice to the Securitization Bondholders and the Issuer, or the principal corporate trust office of any successor Trustee (the address of which the successor Trustee will notify the Securitization Bondholders and the Issuer in writing).

Covenant Defeasance Option has the meaning specified in Section 4.01(b) of the Indenture.

Customer means a person that is an electric customer taking delivery of electricity from Detroit Edison or from its successor on its MPSC-approved rate schedules or under special contracts.

Deemed SB Charge Payments means the amount, calculated by the Servicer on or before January 15 of each year, equal to the product of the Billed SB Charges for such Remittance Period multiplied by the result of one hundred percent (100%) less the Actual Charge-Off Percent.

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Default means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

Defeasance Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Definitive Securitization Bonds has the meaning specified in Section 2.11 of the Indenture.

Detroit Edison means The Detroit Edison Company, a Michigan corporation, or its successor.

DTC Agreement means the agreement between the Issuer, the Trustee and The Depository Trust Company, as the initial Clearing Agency, dated on or about March 9, 2001, relating to the Securitization Bonds, as the same may be amended or supplemented from time to time.

Eligible Guarantor Institution means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein):

(a) a bank;

(b) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer;

(d) a national securities exchange, registered securities association or clearing agency; or

(e) a savings association that is a participant in a securities transfer association.

Eligible Institution means:

(a) the corporate trust department of the Trustee, so long as any of the securities of the Trustee have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade, or

(b) a depositary institution organized under the laws of the United States of America or any state (or any domestic branch of a foreign bank), which

(i) has either

(A) with respect to any Eligible Investment having a maturity of greater than one month, a long-term unsecured debt rating of "AAA" by Standard & Poor's and Fitch and "Aaa" by Moody's, or

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(B) with respect to any Eligible Investment having a maturity of one month or less, a short-term or certificate of deposit rating of "A-1+" by Standard & Poor's and "P-1" by Moody's, or any other long-term, short-term or certificate of deposit rating acceptable to the Rating Agencies, and

(ii) whose deposits are insured by the FDIC.

Eligible Investments mean book-entry securities, negotiable instruments or securities represented by instruments in bearer or registered form which evidence:

(a) direct obligations of, and obligations fully and unconditionally guaranteed as to timely payment by, the United States of America;

(b) demand deposits, time deposits or certificates of deposit of any depository institution or trust company (any depositary institution or trust company being referred to in this definition as a "financial institution") incorporated under the laws of the United States of America or any state thereof (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depositary institution authorities; provided, however, that at the time of the investment or contractual commitment to invest therein, the commercial paper or other short-term unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depositary institution or trust company) thereof shall have a credit rating from each of the Rating Agencies in the highest investment category granted thereby;

(c) commercial paper or other short-term obligations of any corporation organized under the laws of the United States of America (other than Detroit Edison) whose ratings, at the time of the investment or contractual commitment to invest therein, from each of the Rating Agencies are in the highest investment category granted thereby;

(d) investments in money market funds having a rating from each of the Rating Agencies in the highest investment category granted thereby (including funds for which the Trustee or any of its Affiliates act as investment manager or advisor);

(e) bankers' acceptances issued by any depositary institution or trust company referred to in clause (b) above;

(f) repurchase obligations with respect to any security that is a direct obligation of, or fully guaranteed by, the United States of America or any agency or instrumentality thereof the obligations of which are backed by the full faith and credit of the United States of America, in either case entered into with a depositary institution or trust company (acting as principal) described in clause (b) above;

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(g) repurchase obligations with respect to any security or whole loan entered into with

(i) a financial institution (acting as principal) described in clause (b) above,

(ii) a broker/dealer (acting as principal) registered as a broker or dealer under Section 15 of the Exchange Act (any broker/dealer being referred to in this definition as a "broker/dealer"), the unsecured short-term debt obligations of which are rated P-1 by Moody's and A-1+ by Standard & Poor's at the time of entering into the repurchase obligation, or

(iii) an unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of a non-bank or bank holding company the unsecured short-term debt obligations of which are rated P-1 by Moody's and A-1+ by Standard & Poor's at the time of purchase; or

(h) any other investment permitted by each Rating Agency;

provided, however, that, with respect to Moody's only, the obligor related to clauses (b), (c), (d), (f), (g) and (h) above must have both a long term rating of at least Aa3 and a short term rating of at least P1, and provided further, that, unless otherwise permitted by each Rating Agency, upon the failure of any Eligible Institution to maintain any applicable rating set forth in this definition or the definition of Eligible Institution, the related investments at such institution shall be reinvested in Eligible Investments at a successor Eligible Institution within 10 days, and provided further, that any Eligible Investment must not:

(a) be sold, liquidated or otherwise disposed of at a loss, prior to the maturity thereof, or

(b) mature later than (i) the date on which the proceeds of such Eligible Investment will be required to be on deposit in the Collection Account in order for the Trustee to make all required and scheduled payments and deposits into Subaccounts under the Indenture, if such Eligible Investment is held by an Affiliate of the Trustee, or (ii) the Business Day prior to the date on which the proceeds of such Eligible Investment will be required to be on deposit in the Collection Account in order for the Trustee to make all required and scheduled payments and deposits into Subaccounts under the Indenture, if such Eligible Investment is not held by an Affiliate of the Trustee.

Eligible Securities Account means either:

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(a) a segregated trust account with an Eligible Institution or

(b) a segregated trust account with the corporate trust department of a depositary institution organized under the laws of the United States of America or any state (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depositary institution shall have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade.

Estimated Charge-Off Percent means the Servicer's good faith estimate of the Actual Charge-Off Percent.

Estimated SB Charge Payments means an amount equal to the product of the Billed SB Charges for a particular billing date multiplied by the result of one hundred percent (100%) less the Estimated Charge-Off Percent.

Event of Default has the meaning specified in Section 5.01 of the Indenture.

Event of Investment Ineligibility has the meaning specified in the Trade Receivables Purchase and Sale Agreement dated as of February 28, 1989, as later amended and restated, among The Detroit Edison Company, Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc., individually and as agent.

Event of Termination has the meaning specified in the Trade Receivables Purchase and Sale Agreement dated as of February 28, 1989, as later amended and restated, among The Detroit Edison Company, Citibank, N.A., and Citicorp North America, Inc., individually and as agent.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Expected Amortization Schedule means, with respect to each Series or, if applicable, each Class of Securitization Bonds, the expected amortization schedule for principal thereof, as specified in the Series Supplement therefor.

Expected Final Payment Date means, with respect to each Series or, if applicable, each Class of Securitization Bonds, the date when all interest and principal is scheduled to be paid with respect to that Series or Class in accordance with the Expected Amortization Schedule, as specified in the Series Supplement therefor.

FDIC means the Federal Deposit Insurance Corporation or its successor.

Final Maturity Date means, for each Series or, if applicable, each Class of Securitization Bonds, the date by which all principal of and interest on such Series or Class of Securitization Bonds is required to be paid, as specified in the Series Supplement therefor.

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Financing Issuance means an issuance of a new Series of Securitization Bonds under the Indenture to provide funds to finance the purchase by the Issuer of Securitization Property.

Financing Order means, collectively, the order of the MPSC, Case No. U-12478, issued on November 2, 2000, as clarified by the opinion and order of the MPSC issued on January 4, 2001.

Fitch means Fitch, Inc., or its successor.

Formation Documents means, collectively, the Issuer LLC Agreement and the Issuer Articles of Organization, as each may be amended or supplemented from time to time.

General Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Grant means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm. Grant, used as a noun, and Granting, used as an adjective, have correlative meanings consistent with preceding sentence. A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal, interest and other payments in respect of the Collateral or such other agreement or instrument and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto.

Holder or Securitization Bondholder means the Person in whose name a Securitization Bond of any Series or Class is registered in the Securitization Bond Register.

Indemnification Event means an event which triggers Detroit Edison's obligation to indemnify the Issuer and the Trustee, for itself and on behalf of the Securitization Bondholders, and each of their respective managers, officers, directors and agents, pursuant to Section 5.01 of the Sale Agreement.

Indemnity Amount means the amount of any indemnification obligation payable under the Basic Documents.

Indenture means the Indenture dated as of March 9, 2001, between the Issuer and the Trustee, as the same may be amended and supplemented from time to time by one or more Supplemental Indentures, and shall include each Series Supplement and the forms and terms of the Securitization Bonds established thereunder.

Independent means, when used with respect to any specified Person, that the Person

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(a) is in fact independent of the Issuer, any other obligor on the Securitization Bonds, Detroit Edison and any Affiliate of any of the foregoing Persons,

(b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, Detroit Edison or any Affiliate of any of the foregoing Persons, and

(c) is not connected with the Issuer, any such other obligor, Detroit Edison or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Independent Certificate means a certificate or opinion to be delivered to the Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Trustee in the exercise of reasonable care, and such certificate or opinion shall state that the signer has read the definition of "Independent" in this Appendix A and that the signer is Independent within the meaning thereof.

Independent Manager has the meaning set forth in the Issuer LLC Agreement.

Initial Securitization Property means the Securitization Property sold by the Seller to the Issuer as of the Initial Transfer Date pursuant to the Sale Agreement and the Bill of Sale delivered on or prior to the Initial Transfer Date as identified in such Bill of Sale.

Initial Transfer Date means the Series Issuance Date for the first Series of Securitization Bonds.

Insolvency Event means, with respect to a specified Person,

(a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days or

(b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any

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general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

Interest means, for any Payment Date for any Series or Class of Securitization Bonds, the sum, without duplication, of:

(a) an amount equal to the amount of interest accrued at the applicable Interest Rate from the prior Payment Date with respect to that Series or Class;

(b) any unpaid interest, to the extent permitted by applicable law, plus any interest accrued on such unpaid interest at the applicable Interest Rate, to the extent permitted by applicable law;

(d) with respect to a Series or Class to be redeemed prior to the next Payment Date, the amount of interest that will be payable as interest on such Series or Class upon such redemption.

Interest Rate means, with respect to each Series or Class of Securitization Bonds, the rate at which interest accrues on the principal balance of Securitization Bonds of such Series or Class, as specified in the Series Supplement therefor.

Interest Rate Swap Agreement means any ISDA Master Agreement, together with the related Schedule and Confirmation, between the Issuer and a Swap Counterparty, as same may be amended or supplemented from time to time.

Issuer means The Detroit Edison Securitization Funding LLC, a Michigan limited liability company, or its successor under the Indenture or the party named as such in the Indenture until a successor replaces it and, thereafter, means the successor.

Issuer Articles of Organization means the Articles of Organization of the Issuer which were filed with the Bureau of Commercial Services, Corporation Division, of the Michigan Department of Consumer and Industry Services (the "Department") on November 20, 2000, as amended by the Restated Articles of Organization of the Issuer, which were filed with the Department on March 8, 2001.

Issuer LLC Agreement means the Limited Liability Company Agreement between the Issuer, Detroit Edison, as sole Member, and the Managers dated as of November 20, 2000, as the same may be amended or supplemented from time to time.

Issuer Officer's Certificate means a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, and delivered to the Trustee.

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Unless otherwise specified, any reference in the Indenture to an Officer's Certificate shall be to an Issuer Officer's Certificate.

Issuer Opinion of Counsel means one or more written opinions of counsel who may, except as otherwise expressly provided in the Indenture, be an employee of or counsel to the Issuer or the Seller and who shall be reasonably satisfactory to the Trustee, and which opinion or opinions shall be addressed to the Trustee, and shall be in a form reasonably satisfactory to the Trustee.

Issuer Order or Issuer Request means a written order or request, respectively, signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Trustee.

Legal Defeasance Option has the meaning specified in Section 4.01(b) of the Indenture.

Lien means a security interest, lien, charge, pledge or encumbrance of any kind.

Losses means, collectively, any and all liabilities, obligations, losses, damages, payments, costs or expenses of any kind whatsoever.

Manager has the meaning set forth in the Issuer LLC Agreement.

Member means Detroit Edison, as the sole member of the Issuer, in its capacity as such member under the Issuer LLC Agreement.

Michigan UCC means the Uniform Commercial Code, as in effect in the State of Michigan, as amended from time to time.

Monthly Servicer Certificate has the meaning assigned to that term in
Section 4.01(d)(ii) of the Servicing Agreement.

Moody's means Moody's Investors Service, Inc., or its successor.

MPSC means the Michigan Public Service Commission and any successor thereto.

MPSC Regulations means any applicable regulations, orders or rules promulgated, issued or adopted by the MPSC, as in effect from time to time.

Non-Routine True-Up Adjustment has the meaning set forth in Section 4.01(c)(i) of the Servicing Agreement.

Non-Routine True-Up Adjustment Request means an Adjustment Request filed with the MPSC in accordance with the Financing Order with respect to any Non-Routine True-Up Adjustment, pursuant to which the related Non-Routine True-Up Adjustment will become effective upon the review and approval of the MPSC.

Officer's Certificate means a certificate of the Servicer signed by an Authorized Officer.

Ongoing Other Qualified Costs has the meaning assigned to that term in the Financing Order.

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Operating Expenses means, with respect to the Issuer, all fees, costs, expenses and indemnity payments owed by the Issuer, including, without limitation, all amounts owed by the Issuer to the Trustee, the Servicing Fee, the fees and expenses payable by the Issuer to the Administrator under the Administration Agreement, the fees and expenses payable by the Issuer to the Independent Managers and Special Members of the Issuer, fees of the Rating Agencies, legal fees and expenses of the Servicer pursuant to Section 5.02(d) of the Servicing Agreement, legal and accounting fees, costs and expenses of the Issuer, and legal, accounting or other fees, costs and expenses of the Seller (including, without limitation, any costs and expenses incurred by the Seller pursuant to Section 4.08 of the Sale Agreement) under or in connection with the Basic Documents or the Financing Order.

Opinion of Counsel means one or more written opinions of counsel who may be an employee of or counsel to Detroit Edison, the Issuer or any other Person (as the context may require), which counsel shall be reasonably acceptable to the Trustee, the Issuer or the Rating Agencies, as applicable, and which shall be in form reasonably satisfactory to the Trustee, if applicable, according to context.

Outstanding with respect to Securitization Bonds means, as of the date of determination, all Securitization Bonds theretofore authenticated and delivered under the Indenture except:

(a) Securitization Bonds theretofore canceled by the Securitization Bond Registrar or delivered to the Securitization Bond Registrar for cancellation;

(b) Securitization Bonds or portions thereof for the payment of which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent in trust for the Holders of such Securitization Bonds; provided, however, that if such Securitization Bonds are to be redeemed, notice of such redemption has been duly given pursuant to the Indenture or provision therefor, satisfactory to the Trustee, made; and

(c) Securitization Bonds in exchange for or in lieu of other Securitization Bonds which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Trustee is presented that any such Securitization Bonds are held by a protected purchaser;

provided that in determining whether the Holders of the requisite Outstanding Amount of the Securitization Bonds or any Series or Class thereof have given any request, demand, authorization, direction, notice, consent or waiver under any Basic Document, Securitization Bonds owned by the Issuer, any other obligor upon the Securitization Bonds, Detroit Edison or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securitization Bonds that the Trustee knows to be so owned shall be so disregarded. Securitization Bonds so owned that have been

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pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securitization Bonds and that the pledgee is not the Issuer, any other obligor upon the Securitization Bonds, Detroit Edison or any Affiliate of any of the foregoing Persons.

Outstanding Amount means the aggregate principal amount of all Outstanding Securitization Bonds or, if the context requires, all Securitization Bonds of a Series or Class Outstanding at the date of determination.

Overcollateralization means, with respect to any Payment Date, an amount that, if deposited to the Overcollateralization Subaccount, would cause the balance in such subaccount to equal the Scheduled Overcollateralization Level for such Payment Date.

Overcollateralization Amount means, with respect to any Series of Securitization Bonds, the amount specified as such in the Series Supplement therefor.

Overcollateralization Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Paying Agent means the Trustee or any other Person, including any Person appointed pursuant to Section 3.02(b) of the Indenture, that meets the eligibility standards for the Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make the payments of principal of or premium, if any, or interest on the Securitization Bonds on behalf of the Issuer.

Payment Date means, with respect to each Series or Class of Securitization Bonds, each date or dates respectively specified as Payment Dates for such Series or Class in the Series Supplement therefor.

Periodic Adjustment means each Routine True-Up Adjustment and Non-Routine True-Up Adjustment made pursuant to the terms of the Financing Order and in accordance with Section 4.01 of the Servicing Agreement.

Person means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), business trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof.

Predecessor Securitization Bond means, with respect to any particular Securitization Bond, every previous Securitization Bond evidencing all or a portion of the same debt as that evidenced by such particular Securitization Bond; and, for the purpose of this definition, any Securitization Bond authenticated and delivered under Section 2.06 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Securitization Bond shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Securitization Bond.

Principal means, with respect to any Payment Date and each Series or Class of Securitization Bonds:

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(a) the amount of principal scheduled to be paid on such Payment Date in accordance with the Expected Amortization Schedule;

(b) the amount of principal due on the Final Maturity Date of such Series or Class if such Payment Date is the Final Maturity Date;

(c) the amount of principal due as a result of the occurrence and continuance of an Event of Default and acceleration of the Securitization Bonds;

(d) the amount of principal and premium, if any, due as a result of a redemption of Securitization Bonds on such Payment Date; and

(e) any overdue payments of principal.

Principal Balance means, as of any Payment Date, the Outstanding Amount of the Securitization Bonds.

Proceeding means any suit in equity, action at law or other judicial or administrative proceeding.

Projected Principal Balance means, as of any Payment Date, the projected Outstanding Amount for such Payment Date set forth in the Expected Amortization Schedule.

Qualified Costs means those qualified costs approved for recovery in the Financing Order.

Rating Agency means, as of any date, any rating agency rating the Securitization Bonds of any Class or Series at the time of original issuance thereof at the request of the Issuer, or any successor to such rating agency. If such organization or successor is no longer in existence, in lieu thereof "Rating Agency" means a nationally recognized statistical rating organization or other comparable Person designated by the Issuer, notice of which designation shall be given to the Trustee, the Member and the Servicer.

Rating Agency Condition means, with respect to any action, the notification to each Rating Agency and the Trustee of such action, and the notification from each of Fitch and S&P to the Trustee and the Issuer that such action will not result in a reduction or withdrawal of the then current rating by such Rating Agency of any Outstanding Series or Class of Securitization Bonds.

Reconciliation Period means the twelve-month period commencing on January 1 of each year and ending on December 31 of each year; provided, however, that the initial Reconciliation Period shall commence on the first Series Issuance Date and end on December 31, 2001.

Record Date has the meaning set forth in each Supplemental Indenture.

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Redemption Date means, with respect to each Series or Class of Securitization Bonds, the date for the redemption of the Securitization Bonds of such Series or Class pursuant to Sections 10.01 or 10.02 of the Indenture or the Series Supplement for such Series or Class, which in each case shall be a Payment Date.

Redemption Price has the meaning set forth in Section 10.01 or Section 10.02 of the Indenture, as applicable.

Refunding Issuance means an issuance of a new Series of Securitization Bonds under the Indenture to pay the cost of refunding, through redemption or payment on the Expected Final Payment Date for a Series or Class of Securitization Bonds, all or part of the Securitization Bonds of such Series or Class to the extent permitted by the terms thereof.

Registered Holder means, as of any date, the Person in whose name a Securitization Bond is registered in the Securitization Bond Register on such date.

Released Parties has the meaning specified in Section 6.02(f) of the Servicing Agreement.

Remittance means each remittance under the Servicing Agreement of Estimated SB Charge Payments by the Servicer to the Trustee.

Remittance Date means each Servicer Business Day on which a Remittance is to be made by the Servicer pursuant to Section 4.03 of the Servicing Agreement.

Remittance Excess means the amount, if any, calculated for a particular Reconciliation Period, by which all Estimated SB Charge Payments during such Reconciliation Period exceed Deemed SB Charge Payments during such Reconciliation Period.

Remittance Period means the twelve-month period commencing on January 1 of each year and ending on December 31 of each year; provided, however, that the initial Remittance Period shall commence on the first Series Issuance Date and end on December 31, 2001.

Remittance Shortfall means, the amount, if any, calculated for a particular Reconciliation Period, by which Deemed SB Charge Payments during such Reconciliation Period exceed Estimated SB Charge Payments during such Reconciliation Period.

Required Capital Amount means, with respect to any Series, the amount required to be deposited in the Capital Subaccount on the Series Issuance Date of such Series, as specified in the related Series Supplement.

Required Debt Service means, for any Remittance Period, the total dollar amount calculated by the Servicer in accordance with Section 4.01(b)(i) of the Servicing Agreement as necessary to be remitted to the Collection Account during such Remittance Period (after giving effect to (a) the allocation and distribution of amounts on deposit in the Reserve Subaccount at the time of calculation and which are available for payments on the Securitization Bonds, (b) any shortfalls in Required Debt Service for any prior

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Remittance Period, (c) the required payment or credit of any Remittance Excess or Remittance Shortfall during such Remittance Period and (d) any Remittances based upon the SB Charge in effect in the prior Remittance Period that are expected to be realized in such Remittance Period) in order to ensure that, as of the Payment Date immediately following the end of such period, (i) all accrued and unpaid interest on the Securitization Bonds then due shall have been paid in full, (ii) the Principal Balance of the Securitization Bonds is equal to the Projected Principal Balance of the Securitization Bonds for that Payment Date, (iii) the balance on deposit in the Capital Subaccount equals the aggregate Required Capital Amount, (iv) the balance on deposit in the Overcollateralization Subaccount equals the aggregate Scheduled Overcollateralization Level and (v) all other fees, expenses and indemnities due and owing and required or allowed to be paid under
Section 8.02 of the Indenture as of such date shall have been paid in full; provided, however, that, with respect to any Periodic Adjustment occurring after the last Expected Final Payment Date for any Securitization Bonds, the Required Debt Service shall be calculated to ensure that sufficient amounts will be collected to retire such Securitization Bonds in full as of the earlier of (x) the next Payment Date and (y) the Final Maturity Date for such Securitization Bonds.

Reserve Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Retirement of the Securitization Bonds means the day on which the final payment is made to the Trustee in respect of the last outstanding Securitization Bond.

Retiring Trustee means a Trustee that resigns or vacates the office of Trustee for any reason.

Routine True-Up Adjustment has the meaning set forth in Section 4.01(b)(iii) of the Servicing Agreement.

Routine True-Up Adjustment Request means an Adjustment Request filed with the MPSC in respect of a Routine True-Up Adjustment, substantially in the form of Exhibit B to the Servicing Agreement. Pursuant to the Financing Order, the Routine True-Up Adjustment Request will become effective within 45 days after the filing of such Routine True-Up Adjustment Request.

Sale Agreement means the Securitization Property Sale Agreement dated as of March 9, 2001, between the Seller and the Issuer, as the same may be amended and supplemented from time to time.

SB Charge means the securitization charge designated and approved pursuant to the Financing Order as constituting part of the Securitization Property, as the same may be adjusted from time to time as provided in the Servicing Agreement and in accordance the Financing Order.

Scheduled Overcollateralization Level means, with respect to each Series and any Payment Date, the amount with respect to such Series set forth as such in Schedule I of the Indenture, as such Schedule has been adjusted in accordance with Section 3.19 of the

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Indenture to reflect redemptions or defeasances of Securitization Bonds and issuances of additional Series of Securitization Bonds.

Securities Account Control Agreement means the securities account control agreement among The Detroit Edison Securitization Funding LLC, as debtor, the Trustee, as Secured Party, and The Bank of New York, in its capacity as securities intermediary thereunder.

Securitization Bond means any of the securitization bonds (as approved in the Financing Order) issued by the Issuer pursuant to the Indenture.

Securitization Bond Balance means, as of any date, the aggregate Outstanding Amount of all Series of Securitization Bonds on such date.

Securitization Bond Owner means, with respect to a Book-Entry Securitization Bond, the Person who is the beneficial owner of such Book-Entry Securitization Bond, as reflected on the books of the Clearing Agency, or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

Securitization Bond Register has the meaning specified in Section 2.05(a) of the Indenture.

Securitization Bond Registrar has the meaning specified in Section 2.05(a) of the Indenture.

Securitization Charge means the Securitization Charge authorized by the MPSC to be imposed on all Customers by Detroit Edison to recover Qualified Costs pursuant to the Financing Order.

Securitization Property means the Securitization Property that exists under the Financing Order and is sold by the Seller to the Issuer under the Sale Agreement.

Securitization Property Records has the meaning assigned to that term in Section 5.01 of the Servicing Agreement.

Seller means Detroit Edison, in its capacity as seller of the Securitization Property to the Issuer pursuant to the Sale Agreement.

Semiannual Servicer Certificate has the meaning assigned to that term in Section 4.01(d)(iii) of the Servicing Agreement.

Series means any series of Securitization Bonds issued by the Issuer and authenticated by the Trustee pursuant to the Indenture and the Financing Order, as specified in the Series Supplement therefor.

Series Capital Subaccount has the meaning set forth in Section 8.02(a) of the Indenture.

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Series Final Maturity Date means the Final Maturity Date for a Series.

Series Issuance Date means, with respect to the first Series of Securitization Bonds, March 9, 2001, and with respect to any other Series, the date on which the Securitization Bonds of such Series are to be issued in accordance with Section 2.10 of the Indenture and the Series Supplement for such Series.

Series Overcollateralization Subaccount has the meaning specified in
Section 8.02(a) of the Indenture.

Series Subaccount has the meaning specified in Section 8.02(a) of the Indenture.

Series Supplement means an indenture supplemental to the Indenture that authorizes a particular Series of Securitization Bonds, as the same may be amended or supplemented from time to time.

Servicer means Detroit Edison, as the servicer of the Securitization Property, and each successor to Detroit Edison (in the same capacity) pursuant to Section 6.03 or 7.04 of the Servicing Agreement.

Servicer Business Day means any Business Day on which the Servicer's offices in the State of Michigan are open for business.

Servicer Default means an event specified in Section 7.01 of the Servicing Agreement.

Servicer Policies and Practices means, with respect to the Servicer's duties under Annex I to the Servicing Agreement, the policies and practices of the Servicer applicable to such duties that the Servicer follows with respect to comparable assets that it services for itself or others, as in effect from time to time and in accordance with MPSC Regulations. The Servicer shall provide ten days' prior written notice to the Rating Agencies of any amendment to the Servicer Policies and Practices that would adversely affect in any material respect the Securitization Bondholders.

Servicing Agreement means the Servicing Agreement dated as of March 9, 2001, between the Issuer and the Servicer, as the same may be amended and supplemented from time to time.

Servicing Fee means the fee payable to the Servicer for services rendered, in accordance with Section 6.07 of the Servicing Agreement.

Special Member has the meaning set forth in the Issuer LLC Agreement.

Standard & Poor's, or S&P, means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, or its successor.

Statute means, collectively, Enrolled Senate Bill No. 937, 2000 PA 141 and Enrolled Senate Bill No. 1253, 2000 PA 142, both of which became effective June 5, 2000.

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Subaccount means any of the subaccounts of the Collection Account specified in Section 8.02 of the Indenture.

Subsequent Sale means the sale of additional Securitization Property by the Seller to the Issuer after the Initial Transfer Date, subject to the satisfaction of the applicable conditions specified in the Sale Agreement and the Indenture.

Subsequent Securitization Property means Securitization Property sold by the Seller to the Issuer as of a Subsequent Transfer Date pursuant to the Sale Agreement and the Bill of Sale delivered on or prior to the Subsequent Transfer Date, as identified in such Bill of Sale.

Subsequent Transfer Date means the date that a sale of Subsequent Securitization Property will be effective, as specified in a written notice provided by the Seller to the Issuer pursuant to the Sale Agreement.

Successor Servicer means a successor Servicer appointed by the Trustee pursuant to Section 7.04 of the Servicing Agreement which succeeds to all the rights and duties of the Servicer under the Servicing Agreement.

Supplemental Indenture means a supplemental indenture entered into by the Issuer and the Trustee pursuant to Article IX of the Indenture.

Swap Counterparty means, with respect to any Interest Rate Swap Agreement, the swap counterparty under that Interest Rate Swap Agreement.

Termination Notice has the meaning assigned to that term in Section 7.01 of the Servicing Agreement.

Transfer Date means the Initial Transfer Date or any Subsequent Transfer Date, as applicable.

Trust Indenture Act or TIA means the Trust Indenture Act of 1939, as in force on the date hereof, unless otherwise specifically provided.

Trustee means The Bank of New York, a New York banking corporation or its successor, as trustee under the Indenture, or any successor Trustee under the Indenture.

Underwriting Agreement means the Underwriting Agreement dated as of March 2, 2001, among the Seller, the Issuer and Salomon Smith Barney, Inc., on behalf of itself and as the representative of the several underwriters named therein.

U.S. Government Obligations means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the timely payment of which the full faith and credit of the United States of America is pledged and which are not callable at the issuer's option.

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Weighted Average Days Outstanding means the weighted average number of days Detroit Edison's monthly retail customer bills remain outstanding during the calendar year immediately preceding the calculation thereof pursuant to Section 4.01(b)(i) of the Servicing Agreement. The calculation of Weighted Average Days Outstanding pursuant to Section 4.01(b)(i) of the Servicing Agreement shall become effective on March 1 of each year. The initial Weighted Average Days Outstanding shall be 45 days until updated pursuant to Section 4.01(b)(i) of the Servicing Agreement.

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Exhibit 10.43

DTE Energy Company

2001 Stock Incentive Plan

ARTICLE I

Definitions

1.01. Accounting Firm

Accounting Firm means the public accounting firm retained as the Company’s independent auditor as of the date immediately prior to the Change in Control, unless another firm is designated by the Committee.

1.02. Administrator

Administrator means (i) the Board, with respect to awards made under this Plan to members of the Board who are not employees of the Company or a Subsidiary and (ii) the Committee or the Chief Executive Officer of the Company to the extent responsibilities are delegated to him by the Committee in accordance with Article III with respect to awards made under this Plan to all other persons.

1.03. Agreement

Agreement means a written agreement (including any amendment or supplement thereto) between the Company and a Participant specifying the terms and conditions of a Stock Award, an award of Performance Shares, an award of Performance Units or an Option granted to such Participant.

1.04. Board

Board means the Board of Directors of the Company.

1.05. Capped Parachute Payments

Capped Parachute Payments means the largest amount of Parachute Payments that may be paid to a Participant without liability for any excise tax under Code Section 4999.

1.06. Change in Control

Change in Control means the occurrence of any of the following events:

(i) The consummation of a transaction in which the Company is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such transaction less than 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such transaction is held in the aggregate by the holders of Voting Stock of the Company immediately prior to such transaction;

(ii) The consummation of a sale or transfer in which the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person, and as a result of such sale or transfer less than 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such sale or transfer is held in the aggregate (directly or through ownership of Voting Stock of the Company or a Subsidiary) by the holders of Voting Stock of the Company immediately prior to such sale or transfer; or

(iii) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

1.07. Code

Code means the Internal Revenue Code of 1986, as amended.

1.08. Committee

Committee means the Special Committee on Compensation, or such other Board committee as may be designated from time to time by the Board, provided that any such committee is composed solely of individuals who are “Non-Employee Directors,” as the term is used in Rule 16b-3 under the Exchange Act, and “Outside Directors,” as the term is used in Section 162(m) of the Code and Treasury Regulations promulgated thereunder.

1.09. Common Stock

Common Stock means common stock of the Company.

1.10. Company

Company means DTE Energy Company, a Michigan corporation, or any successor corporation.

1.11. Control Change Date

Control Change Date means the date on which a Change in Control occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions.

1.12. Exchange Act

Exchange Act means the Securities Exchange Act of 1934, as amended.

1.13. Fair Market Value

Fair Market Value means, on any given date, the average of the high and low sales prices of Common Stock as listed on the New York Stock Exchange Composite tape. If, on any given date, no share of Common Stock is traded, then Fair Market Value shall be determined with reference to the next preceding day that Common Stock was so traded.

1.14. Incentive Stock Option

Incentive Stock Option means an Option that satisfies the requirements of Section 422 of the Code and is intended by the Administrator to be an Incentive Stock Option.

1.15. Net After Tax Amount

Net After Tax Amount means the amount of any Parachute Payments or Capped Parachute Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and 4999 and any state or local income taxes applicable to a Participant with respect to such payments as in effect for the year for which the determination is made. The determination of the Net After Tax Amount shall be made using the highest combined marginal rate imposed by the foregoing taxes on income of the same character as the Parachute Payments or Capped Parachute Payments, as applicable, in effect for the year for which the determination is made.

1.16. Option

Option means a stock option that entitles the holder to purchase from the Company a stated number of shares of Common Stock at the price set forth in an Agreement.

1.17. Parachute Payment

Parachute Payment means a payment that is described in Code Section 280G(b)(2) (without regard to whether the aggregate present value of such payments exceeds the limit prescribed by Code Section 280G(b)(2)(A)(ii)). The amount of any Parachute Payment shall be determined in accordance with Code Section 280G and the Treasury Regulations promulgated thereunder, or, in the absence of final regulations, the proposed Treasury Regulations promulgated under Code Section 280G.

1.18. Participant

Participant means an employee of the Company or a Subsidiary, and any member of the Board, whether or not such Board member is an employee of the Company or a Subsidiary, who satisfies the requirements of Article IV and is selected by the Administrator to receive an award of Performance Shares, a Stock Award, an Option, an award of Performance Units or a combination thereof.

1.19. Performance Objectives

Performance Objectives means objectives stated with respect to (i) shareholder value growth based on stock price and dividends, (ii) customer price, (iii) customer satisfaction, (iv) growth based on increasing sales or profitability of one or more business units, (v) performance against the companies in the Dow Jones Electric Utility Industry Group index, the companies in the S&P 500 Electric Utility Industry index, a peer group or similar benchmark selected by the Committee, (vi) earnings per share growth, (vii) employee satisfaction, (viii) nuclear plant performance achievement, (ix) return on equity, (x) economic value added, (xi) cash flow, (xii) earnings growth, (xiii) integration success, (xiv) diversity, (xv) safety, or (xvi) production cost or such other measures as may be selected by the Administrator. Each of the Performance Objectives may be stated with respect to the performance of the Company, a Subsidiary or a division of the Company or a Subsidiary.

1.20. Performance Shares

Performance Shares means an award, in the amount determined by the Administrator, stated with reference to a specified number of shares of Common Stock, that in accordance with the terms of an Agreement entitles the holder to receive a cash payment or shares of Common Stock or a combination thereof.

1.21. Performance Units

Performance Units means an award with a face amount of $1.00 per Performance Unit that in accordance with the terms of an Agreement entitles the holder to receive a cash payment or shares of Common Stock or a combination thereof.

1.22. Plan

Plan means the DTE Energy Company 2001 Stock Incentive Plan.

1.23. Rule 16b-3

Rule 16b-3 means Rule 16b-3 under the Exchange Act.

1.24. Stock Awards

Stock Award means Common Stock awarded to a Participant under Article VII.

1.25. Subsidiary

Subsidiary means a corporation, partnership, joint venture, limited liability company, unincorporated association or other entity in which the Company has a direct or indirect ownership or other equity interest.

1.26. Voting Stock

Voting Stock means securities entitled to vote generally in the election of directors.

ARTICLE II

Purposes

The Plan is intended to assist the Company and its Subsidiaries in recruiting and retaining individuals with ability and initiative by enabling such persons to participate in the future success of the Company and its Subsidiaries and to associate their interests with those of the Company and its shareholders. The Plan is intended to permit the grant of Options qualifying as Incentive Stock Options and Options not so qualifying, the grant of Stock Awards, Performance Shares and Performance Units, and to permit the deferral of income with respect to grants and awards made under the Plan in accordance with the Plan and procedures that may be established by the Administrator. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option. The proceeds received by the Company from the sale of shares of Common Stock pursuant to this Plan shall be used for general corporate purposes.

ARTICLE III

Administration

The Plan shall be administered by the Administrator. The Administrator shall (to the extent of its delegated authority) have authority to grant Stock Awards, Performance Shares, Performance Units, and Options upon such terms (not inconsistent with the provisions of this Plan), as the Administrator may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan), on the exercisability of all or any part of an Option or on the transferability or forfeitability of Stock Awards, or an award of Performance Shares or Performance Units. Notwithstanding any such conditions, the Administrator may, in its discretion, accelerate the time at which any Option may be exercised, the time at which Stock Awards may become transferable or non-forfeitable, or the time at which an award of Performance Shares or Performance Units may be settled; and may suspend or waive the forfeiture of any award made under this Plan. In addition, the Administrator shall have complete authority to interpret all provisions of this Plan; to prescribe the form of Agreements and documents relating to the deferral of income under the Plan; to adopt, amend, and rescind rules and regulations pertaining to the administration of the Plan; to correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any award in the manner and to the extent the Administrator deems desirable; to authorize any one of its number or any officer of the Company to execute and deliver documents on its behalf; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made or action taken by the Administrator in connection with the administration of this Plan shall be final and conclusive. Neither the Administrator, any member of the Board or Committee, nor the Chief Executive Officer of the Company shall be liable for any act done in good faith with respect to this Plan or any Agreement, Option, or Stock Award, Performance Shares, or Performance Units. All expenses of administering this Plan shall be borne by the Company.

The Committee, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Committee’s authority and duties with respect to grants and awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. The Committee may

revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan.

ARTICLE IV

Eligibility

Any employee of the Company or a Subsidiary (including an entity that becomes a Subsidiary after the adoption of this Plan) or any member of the Board, whether or not such member is employed by the Company or a Subsidiary, is eligible to participate in this Plan if the Administrator, in its sole discretion, determines that such person has contributed significantly or can be expected to contribute significantly to the profits or growth of the Company or a Subsidiary. Notwithstanding the foregoing, Incentive Stock Options may be granted only to persons who are employees of the Company or of a “subsidiary,” as that term is defined in Section 424 of the Code, on the date of grant.

ARTICLE V

Common Stock Subject to Plan

5.01. Common Stock Issued or Delivered

Upon the award of Common Stock pursuant to a Stock Award or in settlement of an award of Performance Shares or Performance Units, or upon the exercise of an Option the Company may deliver Common Stock to the Participant (or his or her successor in interest or personal representative or, if the Participant so directs, his or her broker) (i) from its authorized but unissued Common Stock or (ii) outstanding Common Stock acquired by or on behalf of the Company in the name of a Participant (or his or her successor in interest, personal representative or broker) or a combination thereof.

5.02. Aggregate Limit

The maximum aggregate number of shares of Common Stock that may be issued or acquired and delivered under this Plan pursuant to the exercise of Options, the grant of Stock Awards, and the settlement of Performance Shares and Performance Units is 18,000,000 shares. The maximum aggregate number of shares of Common Stock that may be issued or delivered under this Plan shall be determined in accordance with Section 5.03 and subject to adjustment as provided in Article X.

In addition, (i) the number of shares of Common Stock that may be subject to Stock Awards and Performance Shares granted under the Plan (whether or not the Performance Shares ultimately are settled in cash) plus (ii) the number of shares of Common Stock equal in value (as of the date of grant) to the value of Performance Units granted under the Plan shall not exceed 20% of the total number of shares of Common Stock authorized for issuance or delivery under this Plan. To the extent that a portion of a Stock Award, award of Performance Shares or award of Performance Units is forfeited, the number of shares of Common Stock subject to the forfeited portion of the Stock Award or Performance Shares, and the number of shares equal in value (as of the date of grant) to the value of the forfeited portion of the Performance Units shall again be available for purposes of the limit described in the preceding sentence.

5.03. Reallocation of Shares

If an Option is terminated, in whole or in part, for any reason other than its exercise, the number of shares allocated to the Option or portion thereof may be reallocated to other Options, Performance Shares, Performance Units and Stock Awards to be granted under this Plan. If an award of Performance Shares is terminated, in whole or in part, for any reason other than its settlement with shares of Common Stock, the number of shares allocated to the Performance Share award or portion thereof may be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan. If a Stock Award is forfeited, in whole or in part, for any reason, the number of shares of Common Stock

allocated to the Stock Award or portion thereof may be reallocated to other Options, Performance Shares, Performance Units and Stock Awards to be granted under this Plan. If an award of Performance Units is terminated, in whole or in part, for any reason other than its settlement with shares of Common Stock, the number of shares allocated to the Performance Unit award or portion thereof may be reallocated to other Options, Performance Shares, Performance Units, and Stock Awards to be granted under this Plan.

Upon full or partial payment of any Option price or satisfaction of tax withholding obligations by transfer or relinquishment to the Company of Common Stock, or any other payment or benefit realized under the Plan by the transfer or relinquishment of Common Stock, there shall be deemed to have been issued or delivered under the Plan only the net number of shares of Common Stock actually issued or delivered by the Company; provided, however, that the number of shares of Common Stock issued or acquired and delivered by the Company upon the exercise of Options (determined, as to each Option, as if the Option price and tax withholding obligations had been paid in cash) shall not exceed the aggregate limit on the number of shares that may be issued or delivered under this Plan under Section 5.02.

ARTICLE VI

Options

6.01. Award

In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an Option is to be granted and will specify the number of shares of Common Stock covered by such awards; provided, however, that no Participant may be granted Options in any calendar year covering more than 500,000 shares.

6.02. Option Price

The price per share for shares of Common Stock purchased on the exercise of an Option shall be determined by the Administrator on the date of grant, but shall not be less than the Fair Market Value on the date the Option is granted.

6.03. Maximum Option Period

The maximum period in which an Option may be exercised shall be determined by the Administrator on the date of grant, except that no Option that shall be exercisable after the expiration of ten years from the date such Option was granted.

6.04. Non-transferability

Except as provided in Section 6.05, each Option granted under this Plan shall be non-transferable except by will or by the laws of descent and distribution. Except as provided in Section 6.05, during the lifetime of the Participant to whom the Option is granted, the Option may be exercised only by the Participant. No right or interest of a Participant in any Option shall be liable for, or subject to, any lien, obligation, or liability of such Participant.

6.05. Transferable Options

Section 6.04 to the contrary notwithstanding, if the Agreement provides, an Option that is not an Incentive Stock Option may be transferred by a Participant to such persons or entities permitted under Rule 16b-3 on such terms and conditions permitted under Rule 16b-3. The holder of an Option transferred pursuant to this Section shall be bound by the same terms and conditions that governed the Option during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Option except by will or the laws of descent and distribution.

6.06. Status as Employee or Director

For purposes of determining the applicability of Section 422 of the Code (relating to Incentive Stock Options), or in the event that the terms of any Option provide that it may be exercised only during employment or within a specified period of time after termination of employment or Board service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or Board service.

6.07. Exercise

Subject to the provisions of this Plan and the applicable Agreement, an Option may be exercised in whole at any time or in part from time to time at such times and in compliance with such requirements as the Administrator shall determine; provided, however, that Incentive Stock Options (granted under the Plan and all plans of the Company and its subsidiary corporations, as those terms are defined in Section 424 of the Code) may not be first exercisable in a calendar year for shares of Common Stock having a Fair Market Value (determined as of the date an Option is granted) exceeding $100,000. An Option granted under this Plan may be exercised with respect to any number of whole shares less than the full number for which the Option could be exercised. A partial exercise of an Option shall not affect the right to exercise the Option from time to time in accordance with this Plan and the applicable Agreement with respect to the remaining shares subject to the Option.

6.08. Payment

Subject to rules established by the Administrator and unless otherwise provided in an Agreement, payment of all or part of the Option price may be made in (i) cash or a cash equivalent acceptable to the Administrator, or (ii) unrestricted shares of Common Stock previously acquired by the Participant and, if those shares were acquired from the Company, that have been held by the Participant for at least six months. If shares of Common Stock are used to pay all or part of the Option price, the sum of the cash and cash equivalents and the Fair Market Value (determined as of the date of exercise) of the shares surrendered must not be less than the Option price of the shares for which the Option is being exercised. Payment in “cash” or “cash equivalents” includes delivery of cash or cash equivalents by a broker under a “cashless exercise” arrangement at the time of exercise or following the sale of shares to which the exercise relates.

6.09. Change in Control

Section 6.07 to the contrary notwithstanding, but subject to Section 12.11, each outstanding Option shall be fully exercisable (in whole or in part at the discretion of the holder) on and after a Control Change Date.

6.10. Shareholder Rights

No Participant shall have any rights as a shareholder with respect to shares subject to his or her Option until the date of exercise of such Option.

6.11. Disposition of Shares

A Participant shall notify the Company of any sale or other disposition of shares acquired pursuant to an Option that was an incentive stock option if such sale or disposition occurs (i) within two years of the grant of an Option or (ii) within one year of the issuance of shares to the Participant. Such notice shall be in writing and directed to the Corporate Secretary of the Company.

ARTICLE VII

Stock Awards

7.01. Award

In accordance with the provisions of Article IV, the Administrator will designate each individual to whom a Stock Award is to be made and will specify the number of shares covered by such awards; provided, however, that no Participant may receive Stock Awards in any calendar year for more than 150,000 shares.

7.02. Vesting

The Administrator, on the date of the award, may prescribe that a Participant’s rights in a Stock Award will be forfeitable or otherwise restricted for a period of time or subject to such conditions as may be set forth in the Agreement.

7.03. Performance Objectives

In accordance with Section 7.02, the Administrator may prescribe that Stock Awards will become vested or transferable or both based on Performance Objectives. In cases where a Stock Award will become non-forfeitable and transferable only upon the attainment of Performance Objectives and satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, then the shares subject to such Stock Award shall become non-forfeitable and transferable only to the extent that the Committee certifies that such Performance Objectives have been attained.

7.04. Status as Employee or Director

In the event that the terms of any Stock Award provide that shares may become transferable and non-forfeitable thereunder only after completion of a specified period of employment or Board service, the Administrator may decide in each case to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or Board service.

7.05. Change in Control

Sections 7.02, 7.03 and 7.04 to the contrary notwithstanding, but subject to Section 12.11, each outstanding Stock Award shall be transferable and non-forfeitable on and after a Control Change Date without regard to whether any Performance Objectives or other conditions to which the award is subject have been met.

7.06. Shareholder Rights

Prior to their forfeiture (in accordance with the applicable Agreement and while the shares of Common Stock granted pursuant to the Stock Award may be forfeited or are non-transferable), a Participant will have all rights of a shareholder with respect to a Stock Award, including the right to receive dividends and vote the shares; provided, however, that during such period (i) a Participant may not sell, transfer, pledge, exchange or otherwise dispose of shares granted pursuant to a Stock Award, (ii) the Company shall retain custody of the certificates evidencing shares granted pursuant to a Stock Award, and (iii) the Participant will deliver to the Company a stock power, endorsed in blank, with respect to each Stock Award. After the shares granted under the Stock Award are transferable and are no longer forfeitable, the limitations set forth in the preceding sentence shall not apply, and the Company shall deliver to the Participants certificates evidencing shares of Common Stock subject to the award as soon thereafter as possible.

ARTICLE VIII

Performance Share Awards

8.01. Award

In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an award of Performance Shares is to be made and will specify the number of shares covered by such awards; provided, however, that no Participant may receive awards of Performance Shares in any calendar year for more than 200,000 shares of Common Stock (based on the maximum payout under the awards).

8.02. Earning the Award

The Administrator, on the date of the grant of an award, may prescribe that the Performance Shares, or portion thereof, will be earned, and the Participant will be entitled to receive a payment pursuant to the award of Performance Shares, only upon the satisfaction of Performance Objectives during a performance measurement period of at least one year or such other criteria as may be prescribed by the Administrator. With respect to Performance Shares that will be earned only upon satisfaction of Performance Objectives, and as to which satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, a payment will be made pursuant to such Performance Shares only if, and to the extent that, the Committee certifies that such Performance Objectives have been attained.

8.03. Payment

In the discretion of the Administrator, the amount payable when an award of Performance Shares is earned may be settled in cash, by the issuance of shares of Common Stock, or a combination thereof. A fractional share of Common Stock shall not be deliverable when an award of Performance Shares is earned, but a cash payment will be made in lieu thereof. The Administrator will also determine when an award of Performance Shares that has been earned will be settled.

8.04. Shareholder Rights

No Participant shall, as a result of receiving an award of Performance Shares, have any rights as a shareholder until and to the extent that the award of Performance Shares is earned and settled in shares of Common Stock. After an award of Performance Shares is earned and settled in shares, a Participant will have all the rights of a shareholder as described in Section 7.06. Notwithstanding the foregoing, the Administrator may provide in an Agreement that the recipient of a Performance Share award is entitled to dividend equivalents with respect in the award, payable at the time or times, and on the terms, specified in the Agreement.

8.05. Non-Transferability

Except as provided in Section 8.06, Performance Shares granted under this Plan shall be non-transferable except by will or by the laws of descent and distribution. No right or interest of a Participant in any Performance Shares shall be liable for, or subject to, any lien, obligation, or liability of such Participant.

8.06. Transferable Performance Shares

Section 8.05 to the contrary notwithstanding, if the Agreement provides, an award of Performance Shares may be transferred by a Participant to such persons or entities permitted under Rule 16b-3 on such terms and conditions permitted under Rule 16b-3. The holder of Performance Shares transferred pursuant to this Section shall be bound by the same terms and conditions that governed the Performance Shares during the period that they were held by the Participant; provided, however that such transferee may not transfer Performance Shares except by will or the laws of descent and distribution.

8.07. Status as Employee or Director

In the event that the terms of any Performance Share award provide that no payment will be made unless the Participant completes a stated period of employment or Board service, the Administrator may decide to what extent leaves of absence for government or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or Board service.

8.08. Change in Control

Section 8.02 to the contrary notwithstanding, but subject to Section 12.11, on and after a Control Change Date, each outstanding Performance Share award shall be earned as of a Control Change Date and settled as soon thereafter as practicable; provided, that, for awards that will be earned on the basis of performance criteria (as opposed to other criteria only, such as continued service, which awards shall be earned in full), the amount earned with respect to each Performance Share award shall be the greater of the amount that would have been payable on attainment of (i) target levels of performance or (ii) actual levels of performance, using performance through the Control Change Date for purposes of determining actual levels of performance.

ARTICLE IX

Performance Units

9.01. Award

In accordance with the provisions of Article IV, the Administrator will designate each individual to whom an award of Performance Units is to be made and will specify the number of Performance Units covered by such awards; provided, however, that no Participant may receive an award of more than 1,000,000 Performance Units in any calendar year.

9.02. Earning the Award

The Administrator, on the date of grant of an award, shall prescribe that the Performance Units or a portion thereof will be earned and the Participant will be entitled to receive a payment pursuant to the award of Performance Units, only upon the satisfaction of Performance Objectives and such other criteria as may be prescribed by the Administrator during a performance measurement period of at least one year. With respect to Performance Units as to which satisfaction of the “performance based compensation” exception to the limit on executive compensation imposed by Code Section 162(m) is intended, a payment will be made pursuant to such Performance Units only if, and to the extent that, the Committee certifies that Performance Objectives have been attained.

9.03. Non-Transferability

Except as provided in Section 9.04, Performance Units granted under this Plan shall be non-transferable except by will or by the laws of descent and distribution. No right or interest of a Participant in an award of Performance Units shall be liable for, or subject to, any lien, obligation, or liability of such Participant.

9.04. Transferable Performance Units

Section 9.03 to the contrary notwithstanding, if provided in an Agreement, an award of Performance Units may be transferred by a Participant to such persons or entities permitted under Rule 16b-3 on such terms and conditions as may be permitted under Rule 16b-3. The holder of Performance Units transferred pursuant to this Section shall be bound by the same terms and conditions that governed the Performance Units during the period that it was held by the Participant; provided, however, that such transferee may not transfer the Performance Units except by will or the laws of descent and distribution.

9.05. Status as Employee or Director

If the terms of an award of Performance Units provide that a payment will be made thereunder only if the Participant completes a stated period of employment or Board service, the Administrator may decide to what extent leaves of absence for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or Board service.

9.06. Change in Control

Section 9.02 to the contrary notwithstanding, but subject to Section 12.11, any Performance Units shall be earned as of a Control Change Date and settled as soon thereafter as possible; provided, that the amount earned with respect to each award of Performance Units shall be the greater of the amount that would have been payable on attainment of (i) target levels of performance or (ii) actual levels of performance, using performance through the Control Change Date for purposes of determining actual levels of performance.

9.07. Shareholder Rights

No Participant shall, as a result of receiving an award of Performance Units, have any rights as a shareholder of the Company or any Subsidiary on account of such award.

ARTICLE X

Adjustment Upon Change in Common Stock

The maximum number and kind of shares as to which Options, Performance Shares, Performance Units and Stock Awards may be granted; the terms of outstanding Stock Awards, Options, Performance Shares, Performance Units; and the per individual limitations on the number of shares of Common Stock for which Options, Performance Shares, Performance Units and Stock Awards may be granted shall be adjusted as the Committee shall determine to be equitably required in the event that (i) the Company (A) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (B) engages in any transaction to which Section 424 of the Code applies, or (ii) there occurs any other event that, in the judgment of the Committee, necessitates such action. Notwithstanding the foregoing, the Committee in its sole discretion may elect not to adjust Performance Objectives under any award if it determines that such adjustment would cause such award to cease to qualify as performance-based compensation under Section 162(m) of the Code. In addition, the Committee may provide for the replacement of any outstanding awards under the Plan (or any portion of any award) with alternative consideration (including without limitation cash) as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all awards so replaced. Any determination, adjustment or replacement made under this Article X by the Committee shall be final and conclusive.

The issuance by the Company of stock of any class, or securities convertible into stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of stock or obligations of the Company convertible into such stock or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the maximum number of shares as to which Options, Performance Shares, Performance Units and Stock Awards may be granted; the per individual limitations on the number of shares for which Options, Performance Shares, Performance Units and Stock Awards may be granted; or the terms of outstanding Stock Awards, Options, Performance Shares, Performance Units.

The Committee may make Stock Awards and may grant Options, Performance Shares, and Performance Units in substitution for performance shares, phantom shares, stock awards, stock options, or similar awards held by an individual who becomes an employee or director of the Company or a Subsidiary in connection with a transaction described in the first paragraph of this Article X. Notwithstanding any provision of the Plan (other than the limitation of Section 5.02), the terms of such substituted Stock

Awards, Options, Performance Shares or Performance Units shall be as the Committee, in its discretion, determines is appropriate.

ARTICLE XI

Compliance With Law and Approval of

Regulatory Bodies

No Option shall be exercisable, no shares of Common Stock shall be issued, no certificates for shares of Common Stock shall be delivered, and no payment shall be made under this Plan except in compliance with all applicable Federal and state laws and regulations (including, without limitation, withholding tax requirements), any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. Any stock certificate issued to evidence shares of Common Stock when a Stock Award is granted, a Performance Share or Performance Unit is settled, or for which an Option is exercised may bear such legends and statements as the Administrator may deem advisable to assure compliance with Federal and state laws and regulations. No Option shall be exercisable, no Stock Award, Performance Shares or Performance Units shall be granted, no shares of Common Stock shall be issued, no certificate for shares of Common Stock shall be delivered, and no payment shall be made under this Plan until the Company has obtained such consent or approval as the Administrator may deem advisable from regulatory bodies having jurisdiction over such matters.

ARTICLE XII

General Provisions

12.01. Effect on Employment and Service

Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof), shall confer upon any individual any right to continue in the employ or service of the Company or a Subsidiary or in any way affect any right and power of the Company or a Subsidiary to terminate the employment or service of any individual at any time with or without assigning a reason therefor.

12.02. Unfunded Plan

The Plan, insofar as it provides for grants, shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by grants under this Plan. Any liability of the Company to any person with respect to any grant under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company.

12.03. Rules of Construction

Headings are given to the articles and sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law.

12.04. Restrictions on Repriced Options

The Administrator may not, without approval of the shareholders of the Company, authorize the amendment of any outstanding Option to reduce the Option price. Furthermore, no Option shall be cancelled and replaced with new awards having a lower Option price, where the economic effect would be the same as reducing the Option price of the Option, without approval of the shareholders of the Company.

12.05. Restrictions on Transfer of Shares Issued or Delivered

Notwithstanding any other provision of this Plan, an Agreement may provide that the Company has reserved a right of first refusal to purchase the Common Stock acquired on exercise of Options, or under a Stock Award or award of Performance Shares or Performance Units, at a price equal to the Fair Market Value per share repurchased determined as of the day preceding the day the Company notifies the Participant of its intention to repurchase the shares. If such right is reserved, the Participant must comply with the terms of the Agreement and any procedures established by the Administrator prior to any disposition of Common Stock acquired under the Agreement; provided, that the Company shall have a maximum of five days following the date on which Participant is required to notify the Company of his or her intent to dispose of the Common Stock to advise the Participant whether it will purchase the Common Stock.

The Administrator may provide in an Agreement that the shares of Common Stock that are to be issued or delivered on exercise of an Option or in settlement of an award of Performance Shares or Performance Units, or shares subject to a Stock Award that are no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Article VII, shall be subject to additional restrictions on transfer.

12.06. Effect of Acceptance of Award

By accepting an award under the Plan, a Participant and his or her successor in interest or personal representative shall be conclusively deemed to have indicated his or her acceptance or ratification of, and consent to, any action taken under the Plan by the Company or the Administrator.

12.07. Governing Law

The provisions of this Plan shall be interpreted and construed in accordance with the laws of the State of Michigan, other than its choice-of-law provisions.

12.08. Coordination with Other Plans

Participation in the Plan shall not affect an employee’s eligibility to participate in any other benefit or incentive plan of the Company or any Subsidiary. Income realized as a result of the exercise, vesting or settlement of awards under the Plan shall not be considered earnings for purposes of the Employee Savings Plan, any Company-sponsored or Subsidiary-sponsored Retirement Plan, insurance or other employee benefit programs.

12.09. Deferral

The Committee may require or permit Participants to elect to defer the settlement of awards in cash or the issuance or delivery of Common Stock pursuant to the Plan under such rules and procedures as it may establish from time to time.

12.10. Tax Withholding

The Company shall, if required by law, withhold or cause to be withheld, Federal, state and/or local income and employment taxes in connection with the exercise, vesting or settlement of an award under the Plan. Unless otherwise provided in the applicable Agreement, each Participant may satisfy any such tax withholding by any of the following means or by a combination of such means: (i) a cash payment; (ii) by delivery to the Company of a number of shares of Common Stock previously acquired by the Participant having a Fair Market Value, on the date the tax liability first arises, equal to the tax liability being paid and, if the shares were acquired from the Company, that have been held by the Participant for at least six months; or (iii) by authorizing the Company to withhold from the shares of Common Stock otherwise issuable to the Participant pursuant to the exercise, vesting or settlement of an award, the number of shares of Common Stock having a Fair Market Value, on the date the tax liability first arises,

equal to the minimum statutory withholding required for the Participant based on applicable law. If the amount required is not paid, the Company may refuse to issue or deliver shares or cash under the award.

12.11. Limitation on Benefits

Benefits, payments, accelerated vesting and other rights under this Plan may constitute Parachute Payments subject to the “golden parachute” rules of Code Section 280G and the excise tax under Code Section 4999. It is the Company’s intention to reduce any such Parachute Payments if, and only to the extent that, a reduction will allow the affected Participant to receive a greater Net After Tax Amount than he or she would receive absent a reduction. The remaining provisions of this Section describe how that intent will be effected.

The Accounting Firm will first determine the amount of any Parachute Payments that are payable to a Participant. The Accounting Firm will also determine the Net After Tax Amount attributable to that Participant’s total Parachute Payments. The Accounting Firm will next determine the amount of that Participant’s Capped Parachute Payments. Thereafter, the Accounting Firm will determine the Net After Tax Amount attributable to that Participant’s Capped Parachute Payments.

That Participant will receive the total Parachute Payments unless the Accounting Firm determines that the Capped Parachute Payments will yield a higher Net After Tax Amount, in which case that Participant will receive the Capped Parachute Payments. If a Participant receives Capped Parachute Payments, his or her benefits, payments, accelerated vesting or other rights under this Plan will be adjusted, if at all, in the manner determined by the Committee, in its sole discretion. The Accounting Firm will notify the Participant and the Company if it determines that the Parachute Payments must be reduced to the Capped Parachute Payments and will send the Participant and the Company a copy of its detailed calculations supporting that determination.

As a result of any uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determination under this Section 12.11, it is possible that amounts will have been paid, vested, earned or distributed that should not have been paid, vested, earned or distributed under this Section 12.11 (“Overpayments”), or that additional amounts should be paid, vested, earned, or distributed under this Section 12.11 (“Underpayments”). If the Accounting Firm determines, based on either controlling precedent, substantial authority or the assertion of a deficiency by the Internal Revenue Service against a Participant or the Company, which assertion the Accounting Firm believes has a high probability of success, that an Overpayment has been made, then the Participant shall have an obligation (i) to pay the Company upon demand an amount equal to the sum of the Overpayment plus interest on such Overpayment at the prime rate provided in Code Section 7872(f)(2) from the date of the Participant’s receipt of such Overpayment until the date of such repayment, or (ii) to agree to other arrangements that the Committee determines to be equitable in the circumstances; provided, however, that the Participant shall be obligated to make such repayment or agree to such other arrangements, if, and only to the extent, that the repayment or other arrangement would either reduce the amount on which the Participant is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial authority, that an Underpayment has occurred, the Accounting Firm will notify the Participant and the Company of that determination and the Company will (i) pay the amount of that Underpayment at the prime rate provided in Code Section 7872(f)(2) from the date such Underpayment should have been paid until actual payment, or (ii) take such other action as the Committee determines to be equitable in the circumstances.

All determinations made by the Accounting Firm under this Section 12.11 are binding on the Participant and the Company and must be made as soon as practicable but no later than thirty days after a Control Change Date.

Notwithstanding the foregoing, this Section 12.11 shall not apply to any Participant entitled to an indemnification of excise taxes incurred under Code Section 4999, pursuant to a Change in Control

Severance Agreement or other arrangement or agreement with the Company, with respect to Parachute Payments otherwise subject to limitation under this Section 12.11.

ARTICLE XIII

Amendment

The Board may amend this Plan from time to time or terminate it at any time; provided, however, that no amendment may become effective until shareholder approval is obtained if the amendment (i) increases the aggregate number of shares of Common Stock that may be issued or delivered under the Plan; or (ii) permits the exercise of an Option at an Option price less than the Fair Market Value on the date of grant of the Option. No amendment or termination shall, without a Participant’s consent, adversely affect the rights of such Participant under any award of Performance Shares or Performance Units, any Stock Award or any Option outstanding at the time such amendment is made or such termination occurs.

ARTICLE XIV

Duration of Plan

No Stock Award, Performance Shares, Performance Units or Option may be granted under this Plan as herein amended and restated more than ten years after the earlier of the adoption by the Board of such amendment and restatement, or its approval by the Company’s shareholders. Stock Awards, Performance Shares, Performance Units and Options granted before that date shall remain valid in accordance with their terms.

ARTICLE XV

Effective Date of Plan

Options, Stock Awards, Performance Shares and Performance Units may be granted under this Plan upon its adoption by the Board; provided that, unless amendments to this Plan presented to the Company’s shareholders at the Company’s 2001 annual meeting of shareholders are approved by shareholders at that meeting, none of such amendments that require shareholder approval under the terms of this Plan as in effect on September 15, 1999, shall be effective.

Exhibit 10.44

DTE Energy Company

Annual Incentive Plan

Overview

The Annual Incentive Plan (“Plan”) rewards eligible key executives of DTE Energy Company (“DTE”) and its Subsidiaries, as defined below, for accomplishment of financial and strategic objectives that improve DTE’s operating results and position DTE for long-term profitability and successful individual performance.

The Plan measures calendar year performance. The current year’s performance targets, performance measures and weights will be communicated annually. For purposes of the Plan, “Subsidiary” means a corporation, partnership, joint venture, limited liability company, unincorporated association or other entity in which DTE has a direct or indirect ownership or other equity interest.

Administration

The Plan shall be administered by the Special Committee on Compensation (“Committee”) of DTE’s Board of Directors (“Board”) or such other Board committee as may be designated from time to time by the Board, provided that any such committee is composed solely of individuals who are “Outside Directors” as that term is used in Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”) and Treasury Regulation promulgated thereunder. The Committee has the authority to interpret the provisions of the Plan and prescribe any regulations relating to its administration. The decisions of the Committee with respect to the administration of the Plan shall be conclusive, subject to the limitations on the Committee’s action.

The Committee, on an annual basis, will establish and report to the Board of Directors the specific criteria for eligibility, the type and timing of awards and the manner of payment of awards, the performance measures and related weights to be used in computing award amounts, and the performance levels for each performance measure. The Board of Directors reserves the right to amend, suspend or terminate the Plan at any time; provided, however , that on or after the occurrence of a Change in Control, as defined below, no amendment, suspension or termination of the Plan may be made that adversely affects the rights of any person under an outstanding Award without his or her prior written consent.

Outstanding awards are not payable until such time as the Committee has certified that the performance measures and levels entitling an individual to payment have been satisfied; provided, however , that notwithstanding the foregoing or any other provision of the Plan, after a Change in Control, as defined herein, such certification is not required with respect to any award in respect of a Plan year ending prior to a Change in Control or any outstanding at the time of a Change in Control. The Committee reserves the right to reduce (by up to 100%) the amount payable under any award or cancel any outstanding award if, in its sole discretion, it determines that such reduction or cancellation is in DTE’s best interests. If such a determination is made, the Plan may be terminated or substantially modified resulting in the termination or decrease in any award made hereunder. Notwithstanding the foregoing or any other provision of the Plan, no award in respect of a Plan year ending prior to the occurrence of a Change in Control, as defined herein nor any award outstanding at the time of the Change in Control, may be reduced by the Committee, modified or canceled, nor may the Plan be terminated or substantially modified in a way that adversely affects such an award, following the occurrence of a Change in Control, without the affected participant’s written consent.

The Treasurer will be responsible for making award payments, for maintaining deferred accounts for award recipients, and for maintaining all necessary records regarding the valuation and payment of awards.

Eligibility

Any key executive of DTE or a Subsidiary shall become a participant in the Plan if selected to receive an award by the Committee.

Participation in the Plan does not guarantee continued employment with DTE or a Subsidiary.

Plan Year

The Plan year will be the calendar year.

Performance Measures, Levels and Weights

The applicable percentages, e.g., target, minimum and maximum percentages; measures of performance; weights; and performance levels for each performance measure, for each Plan year, will be established by the Committee in writing, and communicated to all employees who have been selected to receive an award, no later than 90 days after the beginning of the Plan year. The measures of performance established by the Committee may include objectives stated with respect to (i) shareholder value growth based on stock price and dividends, (ii) customer price, (iii) customer satisfaction, (iv) growth based on increasing sales or profitability of one or more business units, (v) performance against the companies in the Dow Jones Electric Utility Industry Group index, the companies in the S&P 500 Electric Utility Industry index, a peer group or similar benchmark selected by the Committee, (vi) earnings per share growth, (vii) employee satisfaction, (viii) nuclear plant performance achievement, (ix) return on equity, (x) economic value added, (xi) cash flow, (xii) earnings growth, (xiii) integration success, (xiv) diversity, (xv) safety, or (xvi) production cost or such other measures as may be selected by the Committee. Each of the performance objectives described in the preceding sentence may be stated with respect to the performance of DTE, a Subsidiary or a division of DTE or a Subsidiary.

Award Payment

The payment, if any, under an award will be made as soon as practicable following certification by the Committee that applicable performance measures and levels entitling an individual to payment have been satisfied, and a determination by the Committee of the amount of payment due. The Committee’s determination may reflect its discretion to reduce the amount of any award otherwise payable as a result of attainment of applicable performance measures. The maximum amount that may be paid under this Plan to any participant in a single calendar year is $6,000,000.

Notwithstanding the foregoing, following a Change in Control, no certification shall be required with respect to an award for a Plan year ending prior to the Change in Control or outstanding at the time of the Change in Control. If no such certification is made within 30 (thirty) days after the end of the year to which the award relates, payment shall be made on such 30th day. As provided above under “Administration,” following a Change in Control, the Committee shall not have the discretion to reduce the amount of any such award.

Deferral of Awards

Participants may defer the receipt of awards earned under this Plan in accordance with procedures established by the Committee from time to time. Deferred awards are fully vested.

Forfeiture

A participant whose employment with DTE and its Subsidiaries terminates prior to the end of a Plan year forfeits any award to which he or she may have been entitled for such Plan year unless the termination is the result of (i) disability (where disability is defined as being eligible to receive a benefit under a long-term disability plan of DTE or a Subsidiary), (ii) death or (iii) retirement (a) at or after age 55 with at least 10 years of service with DTE and its Subsidiaries or (b) at or after age 65. In the event of termination due to disability, death or retirement in accordance with the preceding sentence, a participant

shall be eligible to receive a payment equal to a pro rata portion of the award he or she would have received absent his or her termination. The amount paid shall be (i) the amount of the award payable absent his or her termination, based on actual attainment of applicable performance measures, times (ii) a fraction, the numerator of which is the number of days in the year to which the award relates prior to the participant’s termination date, and the denominator of which is 365, subject to reduction in the Committee’s sole discretion based on the participant’s individual performance during his or her period of employment during the year of termination; provided, that no reduction shall be permitted following a Change in Control. Any such payment shall be made at the time the payment would have been made absent the termination.

Funding Status

Benefits under the Plan, including any deferred amounts, are payable solely from the general assets of the DTE and its Subsidiaries and shall remain unfunded and unsecured (under the Code and Title I of the Employee Retirement Income Security Act of 1974, as amended) during the entire period of the Plan’s existence. Each participant and the participant’s spouse or beneficiary are merely general creditors of DTE and its Subsidiaries and the obligations of the DTE and its Subsidiaries hereunder are contractual and are not funded or secured in any way. Nothing herein, however, shall preclude DTE and its Subsidiaries from segregating assets which are intended to be a source of payment of benefits under the Plan, provided that such assets remain subject to the general creditors of DTE and any Subsidiary that is an employer of a participant.

Non-Alienability and Non-Transferability

The right of a participant and the participant’s spouse or beneficiary to payment of any benefit or deferred compensation hereunder shall not be alienated, assigned, transferred, pledged or encumbered and shall not be subject to execution, attachment or similar process. No participant may borrow against a deferred account established for his or her benefit hereunder. No account shall be subject in any manner to alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, whether voluntary or involuntary, including but not limited to any liability which is for alimony or other payments for the support of a spouse or former spouse, or for any other relative of any employee. Any attempted assignment, pledge, levy or similar process shall be null and void and without effect.

Beneficiary Designation

Each eligible participant may name a beneficiary to whom awards under the Plan are to be paid in case of his or her death. Each designation revokes all prior designations by the eligible participant and shall be on a form prescribed by the Committee or its delegate and will be effective only when filed by the eligible participant with DTE. In the absence of any such designation, awards payable after the death of a participant shall be paid (i) to the participant’s beneficiary designated by the participant with respect to group life insurance maintained by DTE or a Subsidiary on the life of the participant, or, (ii) in the absence of a designated group life insurance beneficiary, to the participant’s estate.

Governing Law

The Plan shall be governed by the laws of the State of Michigan, except for its choice-of-law provisions.

Change In Control Definition

A change in control (“Change in Control”) for purposes of the Plan shall have occurred if at any time any of the following events shall occur:

(1) The consummation of a transaction in which DTE is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such transaction, less than 55% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors (“Voting Stock”) of such corporation or person immediately after

such transaction is held in the aggregate by the holders of Voting Stock of DTE immediately prior to such transaction;

(2) The consummation of a transaction in which DTE sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person and, as a result of such sale or transfer, less then 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such sale or transfer is held in the aggregate (directly or through ownership of Voting Stock of DTE or a Subsidiary) by the holders of Voting Stock of DTE immediately prior to such sale or transfer; or

(3) The approval by the shareholders of DTE of a complete liquidation or dissolution of DTE.

EXHIBIT 11-22

DTE ENERGY COMPANY
BASIC AND DILUTED EARNINGS PER SHARE
OF COMMON STOCK

                                                                                         Three Months Ended March 31, 2001
                                                                                      ---------------------------------------
                                                                                       (Thousands, except per share amounts)
BASIC:
     Net Income ................................................................                      $138,392
     Weighted average number of common
       shares outstanding (a) ..................................................                       141,872
     Earnings per share of Common Stock
       based on weighted average number
       of shares outstanding ...................................................                      $   0.98

DILUTED:
     Net Income ................................................................                      $138,392

     Weighted average number of common
       shares outstanding (a) ..................................................                       141,872
     Incremental shares from assumed exercise
       of options ..............................................................                           325
                                                                                                      --------
                                                                                                       142,197
                                                                                                      ========
    Earnings per share of Common Stock
       assuming exercise of options ............................................                      $   0.97

(a) Based on a daily average.

EXHIBIT 12-30

DTE ENERGY COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                                              Three                Year Ended December 31
                                                              Months       ------------------------------------------
                                                              Ended
                                                             3/31/01       2000              1999            1998
                                                             -------       ----              ----            ----

                                                                 (Millions, except for ratio and percent)

Net income.............................................   $       138    $       468      $       483     $       443
                                                          -----------    -----------      -----------     -----------

Taxes based on income:
   Income taxes........................................            19              9               60             154
   Municipal and state.................................             1              3                3               3
                                                           ----------    -----------      -----------     -----------
     Total taxes based on income.......................            20             12               63             157
                                                           ----------    -----------      -----------     -----------

Fixed charges:
   Interest on long-term debt..........................            71            260              279             279
   Amortization of debt discount, premium
     and expense.......................................             2             11               18              11
   Other interest......................................            18             65               47              29
   Interest factor of rents............................             9             34               34              34
   Preferred stock dividend factor.....................             -              -                -               7
                                                           ----------    -----------      -----------     -----------
     Total fixed charges...............................           100            370              378             360
                                                           ----------    -----------      -----------     -----------

Earnings before taxes based on income
   and fixed charges...................................   $       258    $       850      $      924      $       960
                                                          ===========    ===========      ===========     ===========

Ratio of earnings to fixed charges                               2.58           2.30            2.44             2.67

Preferred stock dividends..............................   $       N/A    $       N/A      $      N/A      $         6
Dividends meeting requirement of
   IRC Section 247.....................................   $       N/A    $       N/A      $      N/A      $         4
Percent deductible for income tax purposes.............           N/A            N/A             N/A            40.00%
Amount deductible......................................           N/A            N/A             N/A                2
Amount not deductible..................................           N/A            N/A             N/A                4
Ratio of pretax income to net income...................           N/A           N/A              N/A             1.35
Dividend factor for amount not deductible..............           N/A            N/A             N/A                5
Amount deductible......................................           N/A            N/A             N/A                2
                                                          -----------    -----------      -----------     -----------
     Total preferred stock dividend factor.............   $       N/A    $       N/A      $      N/A      $         7
                                                          ===========    ===========      ==========      ===========

EXHIBIT 12-31

THE DETROIT EDISON COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

                                                               Three                    Year Ended December 31
                                                              Months         ------------------------------------------
                                                               Ended
                                                              3/31/01         2000           1999            1998
                                                              -------         ----           ----            ----

                                                                       (Millions, except for ratio)

Net income ...........................................        $113            $411            $434            $418
                                                              ----            ----            ----            ----

Taxes based on income:
   Income taxes ......................................          54             172             211             260
   Municipal and state ...............................           1               3               3               3
                                                              ----            ----            ----            ----
     Total taxes based on income .....................          55             175             214             263
                                                              ----            ----            ----            ----

Fixed charges:
   Interest on long-term debt ........................          66             245             252             254
   Amortization of debt discount, premium
     and expense .....................................           2              10              17              11
   Other interest ....................................           3              22              19              13
   Interest factor of rents ..........................           9              34              34              34
                                                              ----            ----            ----            ----
     Total fixed charges .............................          80             311             322             312
                                                              ====            ====            ====            ====

Earnings before taxes based on income
   and fixed charges .................................        $248            $897            $970            $993
                                                              ====            ====            ====            ====

Ratio of earnings to fixed charges ...................        3.10            2.88            3.01            3.18

EXHIBIT 15-16

DTE Energy Company and
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 DTE Energy Company and subsidiaries and of The Detroit Edison Company and subsidiaries for the periods ended March 31, 2001 and 2000, as indicated in our report dated May 9, 2001. Because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, is incorporated by reference in the following Registration Statements:

FORM                               REGISTRATION NUMBER

DTE Energy Company
Form S-3                           33-57545
Form S-3                           333-58834
Form S-4                           333-89175
Form S-8                           333-00023

The Detroit Edison Company.
Form S-3                           33-53207
Form S-3                           33-64296
Form S-3                           333-65765

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

DELOITTE & TOUCHE LLP

Detroit, Michigan
May 9, 2001

EXHIBIT 99.40

ASSIGNMENT AND ASSUMPTION AGREEMENT

ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT"), dated as of April 9, 2001, among (i) DTE CAPITAL CORPORATION, a Michigan corporation (in its capacity as assignor hereunder, the "Assignor"), (ii) DTE ENERGY COMPANY, a Michigan corporation (in its capacity as the assignee hereunder, the "ASSIGNEE"), (iii) CITIBANK, N.A., as agent (the "AGENT") for the Lenders from time to time party to the Credit Agreement referred to below, and (iv) the Lenders listed on the signature pages hereof.

PRELIMINARY STATEMENTS:

WHEREAS, the Assignor is a party to, and, as of the date hereof, the Borrower under and as defined in, that certain Fourth Amended and Restated Credit Agreement, dated as of January 16, 2001 (said Agreement, as amended hereby and as it may hereafter be amended or otherwise modified from time to time, being the "CREDIT AGREEMENT", the terms defined therein and not otherwise defined herein being used herein as therein defined), among the Borrower, the Lenders named therein and Citibank, N.A., as Agent thereunder.

WHEREAS, in connection with the Credit Agreement, the Assignor has also executed and delivered Notes to the order of each under.

WHEREAS, under Section 5.02(b) of the Credit Agreement, the Parent must execute the Guaranty or the Assignment and Assumption Agreement if the Borrower merges or consolidates with or into any Person besides the Parent;

WHEREAS, the Assignee desires to accept all of the Assignor's right, title and interest in and to, and assume all of the Assignor's obligations, covenants, agreements and liabilities under, the Credit Agreement and the Notes.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, effective on and as of the Transfer Date, the Assignor and the Assignee hereby agree with and for the benefit of the Agent and the Lenders, and the Agent on its own behalf and on behalf of the Lenders agrees with and for the benefit of the Assignor and Assignee, as follows:

SECTION 1. ASSIGNMENT AND ASSUMPTION.

(a) Effective on and as of April 9, 2001, (such date and time being the "TRANSFER DATE"), the Assignor hereby sells, assigns and transfers to the Assignee, and the Assignee hereby accepts from the Assignor, all of the Assignor's right, title and interest in and to the Credit Agreement and the Notes.

(b) Effective on and as of the Transfer Date, subject to the terms and provisions hereof, the Assignee hereby unconditionally and irrevocably assumes all obligations, covenants and agreements to be performed by the Assignor under, and all liabilities of the Assignor arising under, out of or in connection with, the Credit

Agreement and the Notes, and in furtherance of said assumption, the Assignee agrees that on and after the Transfer Date, it shall be bound in all respects by all of the grants, terms, covenants, representations, warranties and conditions of the Credit Agreement and the Notes, as if the Assignee were the original Borrower under and as defined in the Credit Agreement and the Notes, without further action required on the part of any party hereto or thereto. In addition, on and after the Transfer Date, subject to the terms and provisions hereof, the Assignee assumes, agrees to observe and perform, and promises to pay all obligations, duties and liabilities of the Assignor, now or hereafter existing, arising out of, under or in connection with, the Credit Agreement and the Notes (including, without limitation, the punctual payment when due of the principal, interest and fees owing thereunder from time to time), in each case as though the Assignee were the original Borrower under and as defined therein. Further, subject to the terms and provisions hereof, the Assignor hereby confirms and agrees that each of the Credit Agreement and the Notes is, and the Assignee hereby confirms and agrees that each of the Credit Agreement and the Notes shall on and after the Transfer Date continue to be, in full force and effect in accordance with its terms, and the Assignee hereby ratifies and confirms in all respects, effective on and as of the Transfer Date, each of the Credit Agreement and the Notes.

SECTION 2. REPRESENTATIONS AND WARRANTIES. The Assignor and the Assignee each represents and warrants that it has received copies of and has reviewed the Loan Documents. Effective on and as of the Transfer Date, the Assignee makes each of the representations and warranties of the Borrower set forth in the Credit Agreement all as if Assignee were the original Borrower under and as defined therein and had originally executed and delivered the Credit Agreement and the Notes, and confirms that each such representation and warranty is true and correct on and as of the Transfer Date, and that no Default has occurred and is continuing on and as of the Transfer Date.

SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ASSIGNEE. The Assignee represents and warrants, as of the date hereof, as follows:

(a) The Assignee is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of it incorporation.

(b) The execution, delivery and performance by the Assignee of this Agreement are within the Assignee's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Assignee's charter or by-laws or (ii) any applicable law or any contractual restriction binding on or affecting the Assignee.

(d) This Agreement has been duly executed and delivered by the Assignee and is a legal, valid and binding obligation of the Assignee enforceable against the Assignee in accordance with its terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors rights generally.

SECTION 4. REFERENCE TO AND EFFECT ON THE ASSIGNED AGREEMENTS. The Assignee further confirms and agrees that, effective on and as of the Transfer Date, each reference in each of the Credit Agreement and the Notes to the "Borrower" or any like term shall be deemed to refer to the Assignee to the extent the context permits.

SECTION 5. EFFECT OF THE AGREEMENT. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, the Assignor shall remain fully liable to the Agent and the Lenders for any breach of the representations and warranties made by it in the Loan Documents on the date thereof or upon the date of each Borrowing.

SECTION 6. COSTS AND EXPENSES. The Assignee agrees to pay on demand all reasonable costs and expenses in connection with the preparation, execution, delivery, modification and amendment of this Agreement, and all costs and expenses, if any (including, without limitation, counsel fees and expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement. The Assignee also agrees to indemnify the Agent and each Lender 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 Agent or any Lender (as the case may be) in any way relating to or arising out of this Agreement or any action taken or omitted by the Agent or any Lender hereunder, except for such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Person seeking such indemnity.

SECTION 7. GOVERNING LAW, ETC. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to any conflicts of law principles, and shall be binding upon the Assignee, the Assignor and their respective successors and assigns; provided, that the parties hereto shall have no right to assign any rights, obligations or liabilities hereunder except in accordance with the terms of the Loan Documents.

SECTION 8. WAIVER OF JURY TRIAL. Each of the Assignor and the Assignee irrevocably waives hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of the Assignor and the Assignee, as the case may be, in the negotiation, administration, performance or enforcement thereof.

SECTION 9. JURISDICTION, ETC.

(a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State

court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction.

(b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

SECTION 10. THIRD PARTY BENEFICIARIES. This Agreement is for the sole benefit of the Assignor, the Assignee, the Agent, the Lenders and their permitted successors and assigns and nothing herein, express or implied, is intended to or shall confer on any other Person any legal or equitable benefit or remedy under or by reason of this Agreement.

SECTION 11. NOTICES. All notices and other communications provided for hereunder shall be in writing (including telecopy transmission) and (except when particular means are specified) mailed, faxed or delivered, if to the Assignor or the Assignee, at its address at 2000 2nd Avenue, Detroit, MI 48226, Attention: Christopher C. Arvani, telecopy: 313-235-0170; and if to the Agent, at its address at Two Penns Way, Suite 200, Newcastle, Delaware 19720, Attention: Christian Laughton, telecopy: (302) 894-6120, with a copy to J. Nicholas McNee, 399 Park Avenue, New York, New York 10043, telecopy (212) 792-6130; 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 or telecopied, be effective when deposited in the mails or transmitted, respectively.

[Signatures on next page]

IN WITNESS WHEREOF, the Assignor and the Assignee have each caused this Agreement to be duly executed and delivered by an officer thereunto duly authorized as of the date first above written.

DTE CAPITAL CORPORATION

By /s/ C. C. Arvani
  --------------------------
  Name: C. C. Arvani
  Title: Assistant Treasurer

DTE ENERGY COMPANY

By /s/ N. A. Khouri
  --------------------------
  Name: N. A. Khouri
  Title: Vice President and Treasurer

ACCEPTED BY:

CITIBANK, N.A., as Agent

By
Name:
Title:

EXHIBIT 99-41

INTER-CREDITOR AGREEMENT

INTER-CREDITOR AGREEMENT dated as of March 9th, 2001 among CITICORP NORTH AMERICA, INC., a Delaware corporation with an office at 388 Greenwich Street, New York, New York 10013 ("CNAI"), individually and as Agent for the Investor, the Owners and the Bank under the RPA's (as hereinafter defined), CITIBANK, N.A., a national banking association with an office at 388 Greenwich Street, New York, New York 10013 (the "Bank"), THE BANK OF NEW YORK, a New York banking corporation, with an office at 101 Barclay Street, Floor 21W, New York, New York 10286 (the "Trustee"), THE DETROIT EDISON SECURITIZATION FUNDING LLC, a Michigan limited liability company with an office at 2000 2nd Avenue, 937 WCB, Detroit, Michigan 48226-1279 (the "Issuer") and THE DETROIT EDISON COMPANY, a Michigan corporation with an office at 2000 2nd Avenue, Detroit, Michigan 48226-1279 ("Detroit Edison").

WHEREAS, pursuant to the terms of (i) that certain Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended and restated as of October 1, 1991 and as further amended and restated as of March 9, 2001 among Detroit Edison, CORPORATE ASSET FUNDING COMPANY, INC. (the "Investor"), the Bank and CNAI, individually and as agent for the Investor and the Owners and (ii) that certain Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended and restated as of October 1, 1991, and further amended through and including the amendment dated as of March 9, 2001, among Detroit Edison, the Bank and CNAI, individually and as agent for itself and the Bank (said agreements as the same now exist and as they may hereafter from time to time be amended, restated or modified, being the "RPA's"; CNAI, individually and as Agent under the RPA's, being hereinafter referred to as "Agent"; certain terms which are capitalized and used throughout this Agreement (in addition to those defined herein) having the meanings ascribed thereto on this date in the RPA's), Detroit Edison has sold and may hereafter sell interests in its accounts receivable referred to as Eligible Assets to the Investor or the Bank, as the case may be; and

WHEREAS, pursuant to the terms of that certain Securitization Property Sale Agreement, dated as of March 9, 2001, between Detroit Edison and the Issuer (said agreement as the same now exists and as it may hereafter from time to time be amended, restated or modified, being the "Sale Agreement"), Detroit Edison has sold to the Issuer certain assets known as Securitization Property (as defined in the Sale Agreement) which includes the SB Charges (as defined in the Servicing Agreement); and

WHEREAS, pursuant to the terms of that certain Indenture dated as of March 9, 2001 between the Issuer and the Trustee (said indenture as the same now exists and as it may hereafter from time to time be amended, restated or modified and as supplemented from time to time by one or more Series Supplements (the "Series Supplements"; the Series Supplements and the Indenture being the "Indenture"), the Issuer, among other things, has granted to the Trustee a security interest in certain of its assets to secure certain Securitization Bonds issued pursuant to the Indenture ("Securitization Bonds"); and

WHEREAS, pursuant to the terms of that certain Securitization Property Servicing Agreement, dated as of March 9, 2001 between the Issuer and Detroit Edison, as servicer (said agreement, as the same now exists and as it may hereafter from time to time be amended, restated or modified, being the "Servicing Agreement"), Detroit Edison has agreed to provide for the benefit of the Issuer servicing functions with respect to the collection of SB Charges; and

WHEREAS, pursuant to the terms of the RPA's, Detroit Edison has agreed to provide for the benefit of the Investor or the Bank, as the case may be, servicing functions with respect to Collections related to Eligible Assets; and

WHEREAS, Collections with respect to Eligible Assets and collections with respect to SB Charges and related bank accounts as to which the same may be deposited are the subject of the RPA's, the Sale Agreement, the Indenture and the Servicing Agreement; and

WHEREAS, the parties hereto wish to agree upon their respective rights relating to such Collections, collections and bank accounts, as well as other matters of common interest to them which arise under or result from the coexistence of the RPA's, the Sale Agreement, the Indenture and the Servicing Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows:

1. The Agent and the Bank hereby acknowledge the ownership interest of the Issuer in the SB Charges including revenues, collections, payments, money and proceeds arising therefrom (the "Issuer Assets") and the security interest in favor of the Trustee in such assets (the "Trustee Collateral") as granted by the Issuer for itself or as agent for Detroit Edison in the Granting Clause of the Indenture. The Trustee and the Issuer hereby acknowledge the ownership interest of the Investor, the Owners, the Bank and the Agent in the Eligible Assets. The Agent and the Bank further acknowledge that, notwithstanding anything in the RPA's to the contrary, none of the Agent, the Bank, the Investor or the Owners has any interest in the Issuer Assets or the Trustee Collateral and each of the Trustee and the Issuer further acknowledge that, notwithstanding anything in the Sale Agreement or the Indenture to the contrary, it has no interest in the Eligible Assets.

2. The Agent, the Bank and the Trustee acknowledge that Collections relating to the Eligible Assets shall be initially deposited into either (a) account no. 1000-909620 at Comerica Bank, 500 Woodward Avenue, Detroit, Michigan 48226, ABA #072-000096 or (b) account no. 11028-23 at Bank One, Michigan at 611 Woodward Avenue, Detroit Michigan 48226, ABA #072-000326 (each, a "Deposit Account") and that collections with respect to SB Charges, as servicer under the Servicing Agreement, will also initially be deposited into the Deposit Accounts. The Trustee and the Issuer waive any interest in deposits to the Deposit Accounts to the extent that they relate to Collections on account of Eligible Assets and the Agent and the Bank waive any interest in deposits to the Deposit Accounts to the extent that they relate to collections on account of SB Charges (as defined in the RPA's). Each of the parties hereto

acknowledges the respective security interests of the others in the Deposit Accounts to the extent of their respective interests as described in this Agreement.

3. The Agent and the Bank hereby acknowledge that, notwithstanding anything in the RPA's to the contrary, all collections of Issuer Assets are property of the Issuer pledged to the Trustee for the benefit of the Trustee and Securitization Bondholders and any Swap Counterparty (each as defined in the Indenture). Each of the Issuer and the Trustee hereby acknowledge that, notwithstanding anything in the Sale Agreement or the Indenture to the contrary, all Collections related to Eligible Assets, are the property of the Bank, the Investor and the Owners, as the case may be, subject to the terms of the RPA's.

4. The acknowledgments contained in Paragraphs 1, 2 and 3 of this Agreement are applicable irrespective of the time or order of attachment or perfection of security or ownership interests or the time or order of filing or recording of financing statements or mortgages.

5. The parties hereto recognize the existence of rights in favor of the Trustee and the Agent under the Indenture and the RPA's, as the case may be, to (i) replace Detroit Edison as servicer thereunder and (ii) to take control over Collections relating to Eligible Assets and collections relating to Issuer Assets by means, among other things, of notifying customers of Detroit Edison to stop making payments to Detroit Edison on account of Eligible Assets or Issuer Assets, as the case may be, and to direct that such payments be made to a Person or a lock-box or bank account selected by the relevant party (whether by means of court ordered sequestration or otherwise), in each case subject to the terms of this paragraph 5.

In the event that either the Trustee or the Agent is entitled to and desires (i) to exercise its right to replace Detroit Edison or its successor as servicer, the party desiring to exercise such right will consult with the other with respect to the Person who would replace Detroit Edison or its successor and/or (ii) to exercise its rights referred to in clause (ii) of the prior paragraph, any redirection of funds will be either to (A) a replacement servicer agreed to by both the Trustee and the Agent in accordance with the terms hereof or (B) to an account designated by the Trustee or the Agent, as the case may be, which shall be governed by the following:

Subject to satisfaction of the Rating Agency Condition (as defined below) and the consent, if required by law or the Financing Order (as defined in the Indenture), of the MPSC, the Trustee and the Agent shall appoint an independent third party (which shall be a financial institution having minimum capital of $50,000,000 or a nationally-recognized, independent accounting firm) to (i) allocate and remit funds from such account on a daily basis to the persons entitled thereto, being the Trustee in the case of all collections relating to the Issuer Assets and the Agent in the case of all Collections relating to the Eligible Assets, and (ii) maintain records as to the amounts deposited into such account, the amounts remitted therefrom and the allocation as provided in clause (i). The Trustee and the Agent agree not to take any action to contest or interfere with the actions of the independent third party provided in the preceding clauses (i) or (ii); provided that, subject to the foregoing, each such party reserves the right to require an

accounting of collections, allocations and remittances by the independent third party in order to preserve the respective property rights recognized under this Agreement. The parties hereto agree that such account shall meet the requirements of an "Eligible Securities Account," as such term is defined in the Indenture.

If in accordance with the previous paragraph a replacement servicer cannot be agreed upon within five Business Days, each of the Trustee and the Agent at their own expense will appoint a Person to select a replacement servicer for them and such Persons shall agree upon a replacement servicer. Such replacement servicer shall be an "eligible" servicer which is a Person (i) which is a financial institution having minimum capital of $50,000,000, experienced in collecting utility company receivables and (ii) whose appointment is subject to the Rating Agency Condition.

Anything in this Agreement to the contrary notwithstanding, any action taken by either the Trustee or the Agent pursuant to this paragraph 5 shall be subject to the Rating Agency Condition and the consent, if required by law or the Financing Order, of the MPSC. For the purposes of this Agreement, the Rating Agency Condition means, with respect to any such action, notification to each rating agency then rating any class or series of the Securitization Bonds of such action, and the receipt of notification from each of Fitch and S&P (each as defined in the Indenture) that such action will not result in a reduction or withdrawal of their rating on such Securitization Bonds. The parties hereto acknowledge and agree that the approval or the consent of the rating agencies which is required in order to satisfy the Rating Agency Condition is not subject to any standard of commercial reasonableness, and the parties are bound to satisfy this condition whether or not the rating agencies are unreasonable or arbitrary.

6. The Agent, the Trustee and Detroit Edison agree to cooperate with each other and make available to each other or any replacement servicer any and all records and other data relevant to the Issuer Assets and Eligible Assets hereinabove mentioned which it may from time to time receive from Detroit Edison (or its successor) or, in the case of Detroit Edison, possess, including, without limitation, any and all computer programs, data files, documents, instruments, files and records and any receptacles and cabinets containing the same.

7. Nothing herein contained shall be deemed as effecting a joint venture among the Agent, the Bank, Detroit Edison, the Issuer, the Investor, the Owners and the Trustee.

8. For the purpose of this Agreement only, the Agent and the Bank hereby consent and agree to the method of (a) adjustment set forth in
Section 4.01 of the Servicing Agreement and (b) calculation and allocation of payments set forth in Section 4.03(a) of the Servicing Agreement and irrevocably waive any right to object to or enjoin such adjustment, calculation, payment or allocation. Such consent and agreement shall not relieve Detroit Edison of any of its obligations to make payments in accordance with the terms of the RPA's.

9. This Agreement shall terminate upon the payment in full of either the Securitization Bonds or the obligations under the RPA's, except that the understandings and

acknowledgments contained in paragraphs 1, 2, 3 and 4 shall survive the termination of this Agreement.

10. This Agreement shall be governed by the laws of the State of New York.

11. The Agent, the Bank, Detroit Edison, the Issuer and the Trustee agree to execute any and all agreements, instruments, financing statements, releases and any and all other documents reasonably requested by the other in order to effectuate the intent of this Agreement. In each case where a release is to be given pursuant to this Agreement, the term release shall include any documents or instruments necessary to effect a release, as contemplated by this Agreement. All releases, subordinations and other instruments submitted to the executing party are to be prepared at no expense to such party.

12. This Agreement is solely for the benefit of the Agent, the Bank, Detroit Edison, the Issuer, the Investor, the Owners and the Trustee for the benefit of the Securitization Bondholders, the Trustee and any Swap Counterparty and no other person or entity shall have any rights, benefits, priority or interest under or because of the existence of this Agreement.

13. This Agreement 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 instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

CITICORP NORTH AMERICA, INC.,
Individually and as Agent

By: /s/ Joseph A. Farina
   -----------------------------
   Name: Joseph A. Farina
   Vice President

CITIBANK, N.A.

By: /s/ Joseph A. Farina
   -----------------------------
   Name: Joseph A. Farina
   Vice President

THE DETROIT EDISON COMPANY

By: /s/ N.A. Khouri
   -----------------------------
   Name: N.A. Khouri
   Title: Vice President and Treasurer

THE BANK OF NEW YORK
as Trustee

By: /s/ Mauro Palladino
   -----------------------------
   Name: Mauro Palladino
   Title: Vice President

THE DETROIT EDISON SECURITIZATION
FUNDING LLC

By: /s/ Kathleen Hier
   -----------------------------
   Name: Kathleen Hier
   Title: Treasurer

EXHIBIT 99-42

AMENDMENT

Dated as of March 9th, 2001

This AMENDMENT among THE DETROIT EDISON COMPANY, a Michigan corporation (the "Seller"), CITIBANK, N.A. ("Citibank"), and CITICORP NORTH AMERICA, INC., as agent (the "Agent") for itself and Citibank.

PRELIMINARY STATEMENTS:

(1) The Seller, Citibank, and the Agent have entered into a Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, and an Amendment and Restatement thereof, dated as of October 1, 1991, and as further amended by an Amendment dated as of February 28, 1994, an Amendment dated as of February 1, 1999, an Amendment dated as of January 27, 2000 and an Amendment dated as of January 25, 2001 (said Trade Receivables Purchase and Sale Agreement, as so amended and restated, being the "Agreement"; the terms defined therein being used herein as therein defined unless otherwise defined herein).

(2) The Seller, Citibank and the Agent have agreed to amend the Agreement as hereinafter set forth.

SECTION 2. Amendments to Agreement. (a) The definition of "CAFCO Agreement" set forth in Section 1.01 of the Agreement is, effective as of the date hereof, hereby amended to read as follows:

"CAFCO Agreement" means the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended and restated as of October 1, 1991 and as further amended and restated as of March 9, 2001, among the Seller, Corporate Asset Funding Company, Inc., Citibank and CNAI, as Agent, as the same may, from time to time, be amended, modified, supplemented or restated."

(b) Section 5.01 of the Agreement is amended by eliminating the period at the end thereof and adding the phrase ", except that each reference in said Section 5.01(h) to an "Event of Investment Ineligibility" shall be deemed to be a reference to an Event of Termination."

(c) Section 6.01 of the Agreement is amended by adding the phrase "after the occurrence of an Event of Termination" after the word "time" in line 9 thereof.

(d) Section 6.02 through 6.05 are amended in their entity to read as follows:

"Sections 6.02 through 6.05. Incorporation by Reference. Each of Section 6.02 through 6.05 of the CAFCO Agreement is hereby incorporated herein by this

reference, except that (i) the reference in said Section 6.02(b) to the "Facility Termination Date" shall be deemed to be a reference to the Commitment Termination Date and (ii) the reference in said Section 6.03(a) to an "Event of Investment Ineligibility" shall be deemed to be a reference to an Event of Termination."

(e) Section 7.01(h) is amended by deleting the year "1990" in line 3 thereof and replacing it with "1999".

(f) Section 10.01 is amended by striking the period at the end of clause (xii) thereof, replacing it with "; or" and adding new clause
(xiii) thereto to read as follows:

"(xiii) any claim brought by any Swap Counterparty (as that term is defined in the Indenture) arising out of or in connection with the Intercreditor Agreement."

SECTION 3. Representations and Warranties of the Seller. The Seller represents and warrants as follows:

(a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Michigan.

(b) The execution, delivery and performance by the Seller of this Amendment and the Agreement, as amended hereby, and the transactions contemplated hereby and thereby are within the Seller's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) the Seller's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Seller and, except to the extent contemplated by the Agreement, do not result in or require the creation of any lien, security interest or other charge or encumbrance 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 or regulatory body is required for the due execution, delivery and performance by the Seller of this Amendment or the Agreement, as amended hereby, except for the filing from time to time of continuation statements continuing the effectiveness of the UCC Financing Statements referred to in Article III of the Agreement, which continuation statements have been duly filed and are in full force and effect on the date hereof.

(d) This Amendment and the Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms.

SECTION 4. Reference to and Effect on the Agreement; Consent of the Agent. (a) On and after the date hereof, each reference in the Agreement to "this Agreement", "hereunder",

"hereof" or words of like import referring to the Agreement, shall mean and be a reference to the Agreement as amended hereby.

(b) Except as specifically amended above, the Agreement is and shall continue to be in full force and effect and is 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 the Seller, Citibank or the Agent under the Agreement, nor constitute a waiver of any provision of the Agreement.

(d) In accordance with the provisions of Section 1.02 of the Agreement, the Agent hereby consents to the terms of the CAFCO Agreement, as amended and restated as of this date.

SECTION 5. Costs, Expenses and Taxes. The Seller agrees to pay on demand all costs and expenses in connection with the preparation, execution, delivery and administration of this Amendment and the other documents to be delivered in connection therewith, including, without limitation, the reasonable fees and reasonable out-of-pocket expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities hereunder and thereunder, and all costs and expenses, if any (including, without limitation, reasonable counsel fees and reasonable expenses), in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Amendment and the other documents to be delivered in connection therewith. In addition, the Seller shall pay any and all stamp and other taxes payable or determined to be payable in connection with the execution and delivery of this Amendment and the other documents to be delivered in connection therewith, and agrees to indemnify the Agent, the Owner, Citibank, CNAI and their respective Affiliates against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes.

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. Delivery of an executed counterpart of a signature page to this Amendment by telecopier shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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.

THE DETROIT EDISON COMPANY

By: /s/ N.A. Khouri
   -----------------------------
   Title: N.A. Khouri
          Vice President and
          Treasurer

CITICORP NORTH AMERICA, INC.,
Individually and as Agent

By /s/ Joseph A. Farina
   -----------------------------
         Vice President

CITIBANK, N.A.

By /s/ Joseph A. Farina
   -----------------------------
         Vice President

EXHIBIT 99-43

U.S. $200,000,000

TRADE RECEIVABLES
PURCHASE AND SALE AGREEMENT

Dated as of February 28, 1989

As AMENDED and RESTATED as of October 1, 1991

As FURTHER AMENDED and RESTATED as of March 9, 2001 Among

THE DETROIT EDISON COMPANY

as Seller

and

CORPORATE ASSET FUNDING COMPANY, INC.

and

CITIBANK, N.A.

and

CITICORP NORTH AMERICA, INC.

Individually and as Agent

TABLE OF CONTENTS

Section                                                   Page
-------                                                   ----
PRELIMINARY STATEMENTS. . . . . . . . . . . . . . . . . .   1



                           ARTICLE I

                          DEFINITIONS

SECTION  1.01. Certain  Defined  Terms  . . . . . . . . .   1
        Adverse Claim . . . . . . . . . . . . . . . . . .   2
        Affiliate . . . . . . . . . . . . . . . . . . . .   2
        Affiliated Obligor  . . . . . . . . . . . . . . .   2
        Agent's Account . . . . . . . . . . . . . . . . .   2
        Alternate Base Rate . . . . . . . . . . . . . . .   2
        Assessment Rate . . . . . . . . . . . . . . . . .   2
        Assignee Rate . . . . . . . . . . . . . . . . . .   3
        Average Maturity  . . . . . . . . . . . . . . . .   4
        Business Day  . . . . . . . . . . . . . . . . . .   4
        Capital . . . . . . . . . . . . . . . . . . . . .   4
        CD Reserve Percentage . . . . . . . . . . . . . .   4
        Certificate . . . . . . . . . . . . . . . . . . .   5
        Citibank Agreement  . . . . . . . . . . . . . . .   5
        Collection Agent  . . . . . . . . . . . . . . . .   5
        Collection Agent Fee  . . . . . . . . . . . . . .   5
        Collection Agent Fee Reserve  . . . . . . . . . .   5
        Collections . . . . . . . . . . . . . . . . . . .   5
        Concentration Account . . . . . . . . . . . . . .   5
        Concentration Limit . . . . . . . . . . . . . . .   5
        Contract  . . . . . . . . . . . . . . . . . . . .   6
        Credit and Collection Policy  . . . . . . . . . .   6
        Debt  . . . . . . . . . . . . . . . . . . . . . .   6
        Default Ratio . . . . . . . . . . . . . . . . . .   6
        Defaulted Receivable  . . . . . . . . . . . . . .   6
        Default-to-Delinquency Ratio  . . . . . . . . . .   7
        Delinquency Ratio . . . . . . . . . . . . . . . .   7
        Delinquent Receivable . . . . . . . . . . . . . .   7
        Designated Account  . . . . . . . . . . . . . . .   7
        Designated Obligor  . . . . . . . . . . . . . . .   7
        Eligible Asset  . . . . . . . . . . . . . . . . .   7
        Eligible Receivable . . . . . . . . . . . . . . .   8
        ERISA . . . . . . . . . . . . . . . . . . . . . .  10
        Eurocurrency Liabilities  . . . . . . . . . . . .  10
        Eurodollar Rate . . . . . . . . . . . . . . . . .  10
        Eurodollar Rate Reserve Percentage  . . . . . . .  10
        Event of Investment Ineligibility . . . . . . . .  10

                                                          Page
                                                          ----
        Event of Purchase Ineligibility . . . . . . . . .  10
        Facility  . . . . . . . . . . . . . . . . . . . .  10
        Facility Termination Date . . . . . . . . . . . .  11
        Fixed Period  . . . . . . . . . . . . . . . . . .  11
        Fixed Rate  . . . . . . . . . . . . . . . . . . .  12
        Investor  . . . . . . . . . . . . . . . . . . . .  14
        Investor Rate . . . . . . . . . . . . . . . . . .  14
        Investor Report . . . . . . . . . . . . . . . . .  14
        Liquidation Day . . . . . . . . . . . . . . . . .  15
        Liquidation Fee . . . . . . . . . . . . . . . . .  15
        Liquidation Yield . . . . . . . . . . . . . . . .  15
        Loss Percentage . . . . . . . . . . . . . . . . .  15
        Loss Reserve  . . . . . . . . . . . . . . . . . .  15
        Mortgage  . . . . . . . . . . . . . . . . . . . .  16
        Net Receivables Pool Balance  . . . . . . . . . .  16
        Obligor . . . . . . . . . . . . . . . . . . . . .  16
        Origination Fee . . . . . . . . . . . . . . . . .  16
        Original Agreement. . . . . . . . . . . . . . . .  16
        Outstanding Balance . . . . . . . . . . . . . . .  16
        Owner . . . . . . . . . . . . . . . . . . . . . .  16
        Person  . . . . . . . . . . . . . . . . . . . . .  16
        Pool Receivable . . . . . . . . . . . . . . . . .  16
        Provisional Liquidation Day . . . . . . . . . . .  16
        Purchase  . . . . . . . . . . . . . . . . . . . .  16
        Purchase Limit  . . . . . . . . . . . . . . . . .  17
        Receivable  . . . . . . . . . . . . . . . . . . .  17
        Receivables Pool  . . . . . . . . . . . . . . . .  17
        Reinvestment Termination Date . . . . . . . . . .  17
        Related Security  . . . . . . . . . . . . . . . .  17
        Settlement Period . . . . . . . . . . . . . . . .  17
        Special Account . . . . . . . . . . . . . . . . .  18
        Special Account Bank  . . . . . . . . . . . . . .  18
        Tariff  . . . . . . . . . . . . . . . . . . . . .  18
        Termination Date  . . . . . . . . . . . . . . . .  18
        UCC . . . . . . . . . . . . . . . . . . . . . . .  18
        Yield . . . . . . . . . . . . . . . . . . . . . .  18
        Yield Reserve . . . . . . . . . . . . . . . . . .  19
SECTION 1.02. Other Terms . . . . . . . . . . . . . . . .  19
SECTION 1.03. Computation of Time Periods . . . . . . . .  19

                             ARTICLE II

                   AMOUNTS AND TERMS OF THE PURCHASES
SECTION 2.01. Facility  . . . . . . . . . . . . . . . . .  20
SECTION 2.02. Making Purchases  . . . . . . . . . . . . .  20
SECTION 2.03. Termination or Reduction of the Purchase
        Limit . . . . . . . . . . . . . . . . . . . . . .  20

                                                          Page
                                                          ----
SECTION 2.04. Eligible Asset  . . . . . . . . . . . . . .  21
SECTION 2.05. Non-Liquidation Settlement Procedures . . .  21
SECTION 2.06. Liquidation Settlement Procedures . . . . .  22
SECTION 2.07. General Settlement Procedures . . . . . . .  23
SECTION 2.08. Payments and Computations, Etc  . . . . . .  24
SECTION 2.09. Dividing or Combining of Eligible
        Assets  . . . . . . . . . . . . . . . . . . . . .  24
SECTION 2.10. Fees  . . . . . . . . . . . . . . . . . . .  25
SECTION 2.11. Increased Costs . . . . . . . . . . . . . .  26
SECTION 2.12. Additional Yield on Eligible Assets
        Bearing a Eurodollar Rate . . . . . . . . . . . .  27

                         ARTICLE III

                   CONDITIONS OF PURCHASES
SECTION 3.01. Conditions Precedent to Initial Purchase
        . . . . . . . . . . . . . . . . . . . . . . . . .  28
SECTION 3.02. Conditions Precedent to All Purchases
        and Reinvestments . . . . . . . . . . . . . . . .  29
SECTION 3.03. Conditions Subsequent to Initial
        Purchase  . . . . . . . . . . . . . . . . . . . .  30

                         ARTICLE IV

               REPRESENTATIONS AND WARRANTIES
 SECTION 4.01. Representations and Warranties of the
         Seller . . . . . . . . . . . . . . . . . . . . .  30

                          ARTICLE V

               GENERAL COVENANTS OF THE SELLER
SECTION 5.01. Affirmative Covenants of the Seller . . . .  33
SECTION 5.02. Reporting Requirements of the Seller  . . .  35
SECTION 5.03. Negative Covenants of the Seller  . . . . .  36

                         ARTICLE VI

                ADMINISTRATION AND COLLECTION
SECTION 6.01. Designation of Collection Agent . . . . . .  37
SECTION 6.02. Duties of Collection Agent  . . . . . . . .  37
SECTION 6.03. Rights of the Agent . . . . . . . . . . . .  39
SECTION 6.04. Responsibilities of the Seller  . . . . . .  39
SECTION 6.05. Further Action Evidencing Purchases . . . .  40

                        ARTICLE VII

             EVENTS OF INVESTMENT INELIGIBILITY

iii

                                                          Page
                                                          ----
SECTION 7.01. Events of Investment Ineligibility  . . . .  40

                       ARTICLE VIII

                        THE AGENT
SECTION 8.01. Authorization and Action  . . . . . . . . .  43
SECTION 8.02. Agent's Reliance, Etc.  . . . . . . . . . .  43
SECTION 8.03. CNA and  Affiliates . . . . . . . . . . . .  44
SECTION 8.04. Investor's Purchase Decision  . . . . . . .  44

                        ARTICLE IX

               ASSIGNMENT OF ELIGIBLE ASSETS
SECTION 9.01. Assignability . . . . . . . . . . . . . . .  44
SECTION 9.02. Authorization of Agent  . . . . . . . . . .  45

                        ARTICLE X

                     INDEMNIFICATION
SECTION 10.01. Indemnities by the Seller  . . . . . . . .  45

                       ARTICLE XI

                      MISCELLANEOUS
SECTION 11.01. Amendments,  Etc.  . . . . . . . . . . . .  47
SECTION 11.02. Notices,  Etc. . . . . . . . . . . . . . .  47
SECTION 11.03. No Waiver;  Remedies . . . . . . . . . . .  47
SECTION 11.04. Binding  Effect; Assignability . . . . . .  48
SECTION 11.05. Governing Law  . . . . . . . . . . . . . .  48
SECTION 11.06. Costs, Expenses and Taxes  . . . . . . . .  48
SECTION 11.07. No Proceedings . . . . . . . . . . . . . .  49
SECTION 11.08. Confidentiality  . . . . . . . . . . . . .  49
SECTION 11.09. Execution in Counterparts  . . . . . . . .  50

LIST OF EXHIBITS

EXHIBIT A                  Form of Assignment

EXHIBIT B                  Form of Certificate

EXHIBIT C                  Form of Investor Report

EXHIBIT D                  Form of Opinion of Leon S. Cohan, General Counsel
                           for the Seller

EXHIBIT E                  Form of Notice of Purchase for a Fixed Period at a
                           Fixed Rate

SCHEDULE I                 List of Offices of the Seller where Records are
                           Kept

SCHEDULE II                List of Special Account Banks

SCHEDULE III               Description of Credit and Collection Policy

SCHEDULE IV                Form(s) of Contracts

AMENDED AND RESTATED
TRADE RECEIVABLES
PURCHASE AND SALE AGREEMENT

Dated as of February 28, 1989

As AMENDED and RESTATED as of October 1, 1991

As FURTHER AMENDED and RESTATED as of March 9, 2001

THE DETROIT EDISON COMPANY, a Michigan corporation (the "Seller"), CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation (the "Investor"), CITIBANK, N.A., a national banking association ("Citibank"), and CITICORP NORTH AMERICA, INC., a Delaware corporation ("CNAI"), individually and as agent for itself, the Owner and Citibank (the "Agent"), agree as follows:

PRELIMINARY STATEMENTS. (1) Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement.

(2) The Seller has, and expects to have, Pool Receivables in which the Seller intends to sell interests referred to herein as Eligible Assets.

(3) The Investor desires to purchase Eligible Assets from the Seller.

(4) In consideration of the reinvestment in Pool Receivables of daily Collections (other than with regard to accrued Yield and Collection Agent Fee) attributable to an Eligible Asset, the Seller will sell to the Owner of such Eligible Asset additional interests in the Pool Receivables as part of such Eligible Asset until such reinvestment is terminated. It is intended that such daily reinvestment of Collections be effected by an automatic daily adjustment to the Owner's Eligible Assets.

(5) CNAI has been requested and is willing to act as Agent.

(6) The Act and the Financing Order have become effective and the Securitization Bonds have been issued, the effect of which is to require several changes to the Original Agreement.

(7) This Agreement is an amendment and restatement of the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, as amended as of February 16, 1990, August 3,

1990 and June 14, 1991, as amended and restated as of October 1, 1991, and further amended from time to time from February 28, 1994 through January 25, 2001, among the Seller, the Investor, Citibank and CNAI (the "Original Agreement").

NOW, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

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):

"Act" means the Michigan Customer Choice and Electric Reliability Act, Enrolled Senate Bill No. 937, 2000 PA 141 and Enrolled Senate Bill No. 1253, 2000 PA142, each enacted June 5, 2000 and shall also include all rules, regulations and orders promulgated thereunder or related thereto issued from time to time.

"Adjustment Request" has the meaning assigned to that term in the Servicing Agreement and relates to and sets forth the recalculation and adjustment of the SB Charges.

"Adverse Claim" means a lien, security interest, charge or encumbrance, or other right or claim of any Person.

"Affiliate" when used with respect to a Person means any other Person controlling, controlled by or under common control with such Person.

"Affiliated Obligor" means any Obligor which is an Affiliate of another Obligor.

"Agent's Account" means the special account (account number 4051-7549) of the Agent maintained at the office of Citibank at 399 Park Avenue, New York, New York.

"Alternate Base Rate" means 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 publicly by Citibank in New York, New York, from time to time as Citibank's base rate; or

(b) 1/2 of one percent above the latest three-week moving average of secondary market morning offering rates in the United States for three-month certificates of deposit of major United States money market banks, such three-week moving average being determined weekly by Citibank on the basis of such rates reported by certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such publication shall be suspended or terminated, on the basis of quotations for such rates received by Citibank from three New York certificate of deposit dealers of recognized standing, in either case adjusted to the nearest 1/4 of one percent or, if there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent.

"Assessment Rate" for any Fixed Period means the annual assessment rate per annum estimated by Citibank on the Business Day immediately preceding the first day of such Fixed Period for determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any successor) for such Corporation's (or such successor's) insuring U.S. dollar deposits of Citibank in the United States.

"Assignee Rate" for any Fixed Period for any Eligible Asset means an interest rate per annum equal to

(x) the sum of:

(a) the rate per annum obtained by dividing (i) the consensus bid rate determined by Citibank (rounded upward to the nearest whole multiple of 1/100 of 1% per annum, if such consensus bid rate is not such a multiple) for the bid rates per annum, at 9:00 A.M. (New York City time) (or as soon thereafter as practicable) on the Business Day immediately preceding the first day of such Fixed Period of New York certificate of deposit dealers of recognized standing selected by Citibank for the purchase at face value of certificates of deposit of Citibank in New York City in an amount approximately equal or comparable to the Capital of such Eligible Asset on such first day and with a maturity equal to such Fixed Period, by (ii) a percentage equal to 100% minus the CD Reserve Percentage for such Fixed Period, plus (b) the Assessment Rate for such Fixed Period, plus

(b) the Assessment Rate for such Fixed Period, plus

(c) at any time that any of the Seller's long-term public senior debt securities shall be rated less than BBB- by Standard & Poor's Corporation or less than Baa3 by Moody's Investors Service, Inc. (or, if none of the Seller's long-term public senior debt securities are publicly rated at such time, the Agent shall have determined, in its sole discretion, that any of such securities would receive such ratings if they were publicly rated), a rate of 1% per annum;

or,

(y) at the option of the Agent, upon notice to the Seller, 0.875% per annum above the Eurodollar Rate for such Fixed Period plus the amount set forth in clause (x)(c) above;

provided, however, that (i) for any Fixed Period on or prior to the first day on which the Owner shall have notified the 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 the Owner to fund such Eligible Asset at the Assignee Rate set forth above (and the Owner shall not have subsequently notified the Agent that such circumstances no longer exist), (ii) in the case of any Fixed Period of one to (and including) 29 days, (iii) in the case of any Fixed Period as to which the Agent does not receive notice by 12:00 noon (New York City time) on the third Business Day preceding the first day of such Fixed Period, that the related Eligible Asset will not be funded by issuance of commercial paper, and (iv) in the case of any Fixed Period for an Eligible Asset the Capital of which allocated to the Owner is less than $500,000, the "Assignee Rate" for such Fixed Period shall be an interest rate per annum equal to the Alternate Base Rate in effect on the first day of such Fixed Period; provided further that the Agent and the Seller may agree in writing from time to time upon a different "Assignee Rate".

"Average Maturity" means, on any day, that period (expressed in days) equal to the average maturity of the Pool Receivables as shall be calculated by the Collection Agent as set forth in the most recent Investor Report in accordance with the provisions thereof; provided, however, that, if the Agent shall disagree with any such calculation, the Agent may recalculate the Average Maturity for such day.

"Bond Trustee" means The Bank of New York, a New York banking corporation.

"Business Day" means any day on which (i) banks are not authorized or required to close in New York City and (ii) if this definition of "Business Day" is utilized in connection with the Eurodollar Rate, dealings are carried out in the London interbank market.

"Capital" of any Eligible Asset means the original amount paid to the Seller for such Eligible Asset at the time of its acquisition by the Investor pursuant to Sections 2.01 and 2.02, reduced from time to time by Collections received and distributed on account of such Capital pursuant to Section 2.06; provided, however, that such Capital of such Eligible Asset shall not be reduced by any distribution of any portion of Collections if at any time such distribution is rescinded or must otherwise be returned for any reason.

"CD Reserve Percentage" for any Fixed Period is that percentage which is specified on the Business Day immediately preceding the first day of such Fixed Period 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, but not limited to, any emergency, supplemental or other marginal reserve requirement) for Citibank with respect to liabilities consisting of or including (among other liabilities) U.S. dollar non-personal time deposits in the United States each in an amount of $100,000 or more and with a maturity equal to such Fixed Period.

"Certificate" means a certificate of assignment, by the Seller to the Agent, in the form of Exhibit B hereto, evidencing each Eligible Asset.

"Citibank Agreement" means the Trade Receivables Purchase and Sale Agreement, dated as of February 28, 1989, among the Seller, Citibank and CNAI, individually and as

Agent, as the same may, from time to time, be amended, modified, supplemented or restated.

"Collection Agent" means at any time the Person (including the Agent) then authorized pursuant to Article VI to service, administer and collect Pool Receivables.

"Collection Agent Fee" has the meaning assigned to that term in Section 2.10.

"Collection Agent Fee Reserve" for any Eligible Asset at any time means the unpaid Collection Agent Fee relating to such Eligible Asset accrued to such time.

"Collections" means, with respect to any Pool Receivable all cash collections and other cash proceeds of such Pool Receivable, including, without limitation, all cash proceeds of Related Security with respect to such Pool Receivable, and any Collection of such Pool Receivable deemed to have been received pursuant to Section 2.07.

"Concentration Account" means the special account (account number 1000-909620) of the Seller maintained at the office of Comerica Bank at 500 Woodward Avenue, Detroit, MI 48226, or the special account (account number 11028-23) of the Seller maintained at the office of Bank One, Michigan at 611 Woodward, Detroit, MI 48226.

"Concentration Limit" for any Obligor means at any time an amount equal to 4% of the Capital of all Eligible Assets, or such other amount or percentage ("Special Concentration Limit") for any Obligor designated by the Agent in a writing delivered to the Seller; provided, however, that in the case of an Obligor with any Affiliated Obligor, the Concentration Limit, the Receivables related thereto and the Outstanding Balance thereof shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor; provided, however, that the Agent may cancel any Special Concentration Limit upon three Business Days' notice to the Seller.

"Contract" means (i) an agreement between the Seller and an Obligor, in substantially the form of one of the forms of written contract set forth in Schedule Iv hereto or otherwise approved by the Agent, or in the case of an open account agreement, as evidenced by one of the forms of invoices set forth in Schedule IV hereto or otherwise approved by the Agent, pursuant to or under which such Obligor shall be obligated to pay for merchandise, insurance or services from time to time and (ii) the Tariff.

"CP Fixed Period Date" means, for any Eligible Asset, the date of Purchase of such Eligible Asset and thereafter the last day of each calendar month (or, if such day is not a Business Day, the immediately succeeding Business Day) or any other day as shall have been agreed to in writing by the Agent and the Seller prior to the first day of the preceding Fixed Period for such Eligible Asset or, if there is no preceding Fixed Period, prior to the first day of such Fixed Period.

"Credit and Collection Policy" means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Receivables described in Schedule III hereto, as modified in compliance with Section 5.03(c).

"Debt" means (i) indebtedness for borrowed money or for the deferred purchase price of property or services, (ii) obligations as lessee under leases which shall 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 clause (i) or (ii) above, and (iv) liabilities in respect of unfunded vested benefits under plans covered by Title IV of ERISA. Debt shall not include indebtedness under the Securitization Bonds.

"Default Ratio" means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Pool Receivables that were Defaulted Receivables on such date or would have been Defaulted Receivables on such date had they not been written off the books of the Seller during such month by (ii) the aggregate Outstanding Balance of all Pool Receivables on such date.

"Defaulted Receivable" means a Receivable: (i) as to which any payment, or part thereof, remains unpaid for 69 days from the original due date for such payment, (ii) as to which the Obligor thereof has taken any action, or suffered any event to occur, of the type described in Section 7.01(g), (iii) which, consistent with the Credit and Collection Policy, would be written off the Seller's books as uncollectible or (iv) as to which there is any failure by the Obligor to timely and fully perform and comply with all

material provisions, covenants and other promises required to be observed by it under any Contract related to the Receivable.

"Default-to-Delinquency Ratio" means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Pool Receivables that were Defaulted Receivables on such date or would have been Defaulted Receivables on such date had they not been written off the books of the Seller during such month by (ii) the aggregate Outstanding Balance of all Pool Receivables that were Delinquent Receivables at the end of such month.

"Delinquency Ratio" means the ratio (expressed as a percentage) computed as of the last day of each calendar month by dividing (i) the aggregate Outstanding Balance of all Pool Receivables that were Delinquent Receivables at the end of such month by (ii) the aggregate Outstanding Balance of all Pool Receivables on such date.

"Delinquent Receivable" means a Receivable:

(i) as to which any payment, or part thereof, remains unpaid for 9 days from the original due date for such payment; or

(ii) which, consistent with the Credit and Collection Policy, would be classified as delinquent by the Seller.

"Designated Account" means an account in the name of, and owned by, CNAI, as Agent, designated by the Agent for the purpose of receiving Collections of Pool Receivables.

"Designated Obligor" means, at any time, all Obligors; provided, however, that any Obligor shall cease to be a Designated Obligor upon three Business Days' notice by the Agent to the Seller.

"Eligible Asset" means, at any time, an undivided percentage ownership interest at such time in (i) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.04, (ii) all Related Security with respect to such Pool Receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided

percentage interest for such Eligible Asset shall be computed as

C + YR + LR + CAFR

NRPB

where:

C    =   the Capital of such Eligible Asset at the time of
         such computation,

YR   =   the Yield Reserve of such Eligible Asset at the time
         of such computation,

LR   =   the Loss Reserve of such Eligible Asset at the time
         of such computation,

CAFR =   the Collection Agent Fee Reserve of such Eligible
         Asset at the time of such computation,

NRPB =   the Net Receivables Pool Balance at the time of such
         computation.

Each Eligible Asset shall be determined from time to time pursuant to the provisions of Section 2.04.

"Eligible Receivable" means, at any time and with respect to any Eligible Asset, a Receivable:

(i) the Obligor of which (A) is a United States resident, (B) is not an Affiliate of any of the parties hereto, and (C) is not the federal government or a federal governmental subdivision or agency (except in the case of this clause (C) for such Receivables as shall not, in the aggregate for all federal governmental Obligors, have an Outstanding Balance at such time in excess of $2,000,000);

(ii) the Obligor of which at the time of the initial creation of an interest therein hereunder is a Designated Obligor;

(iii) the Obligor of which at the time of the initial creation of an interest therein hereunder is not the Obligor of any Defaulted Receivables;

(iv) which at the time of the initial creation of an interest therein hereunder is not a Defaulted Receivable;

(v) which, according to the Contract related thereto, is required to be paid in full within 45 days of the original billing date therefor;

(vi) which is an account receivable representing all or part of the sales price of merchandise, insurance and services within the meaning of Section 3(c)(5) of the Investment Company Act of 1940, as amended;

(vii) a purchase of which with the proceeds of notes would constitute a "current transaction" within the meaning of
Section 3(a)(3) of the Securities Act of 1933, as amended;

(viii) which is an "account" within the meaning of
Section 9-106 of the UCC of the State of Michigan;

(ix) which is denominated and payable only in United States dollars in the United States;

(x) which (A) arises under a Contract which has been duly authorized, (B) together with such Receivable, is in full force and effect and constitutes the legal, valid and binding obligation of the Obligor of such Receivable enforceable against such Obligor in accordance with its terms, and (C) is not subject to any dispute, offset, counterclaim or defense whatsoever (except the discharge in bankruptcy of such Obligor) unless the aggregate amount of all disputes, offsets, counterclaims and defenses with respect to all Receivables then in the Receivables Pool does not exceed $2,000,000;

(xi) which, together with the Contract related thereto, does not contravene in any material respect any laws, rules or regulations applicable thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy) and with respect to which no party to the Contract related thereto is in violation of any such law, rule or regulation in any material respect;

(xii) which (A) satisfies all applicable requirements of the Credit and Collection Policy and (B) complies with such other criteria and requirements (other than those relating to the collectibility of such Receivable) as the Agent may from time to time specify to the Seller upon 30 days' notice;

(xiii) which is free and clear of any Adverse Claim except for the lien, if applicable, referred to in Section 4.01(h); and

(xiv) as to which, at or prior to the time of the initial creation of an interest therein through a Purchase, the Agent has not notified the Seller that the Agent has determined, in its sole discretion, that such Receivable (or class of Receivables) is not acceptable for purchase by the Investor hereunder.

"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.

"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 Rate" means, for any Fixed Period, an interest rate per annum equal to the rate per annum at which deposits in U.S. dollars are offered by the principal office of Citibank, N.A. in London, England to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Fixed Period in an amount substantially equal to the Capital associated with such Fixed Period on such first day and for a period equal to such Fixed Period.

"Eurodollar Rate Reserve Percentage" of any Owner for any Fixed Period in respect of which Yield is computed by reference to the Eurodollar Rate means the reserve percentage applicable two Business Days before the first day of such Fixed Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) (or if more than one such percentage shall be applicable, the daily average of such percentages for those days in such Fixed Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Owner with respect to liabilities or assets consisting of or including Eurocurrency Liabilities

(or with respect to any other category of liabilities that includes deposits by reference to which the interest rate on Eurocurrency Liabilities is determined) having a term equal to such Fixed Period.

"Event of Investment Ineligibility" has the meaning assigned to that term in Section 7.01.

"Event of Purchase Ineligibility" means any failure to satisfy the conditions set forth in Section 3.02(b)(iii) or (iv).

"Facility" means the willingness of the Investor to consider, in its sole discretion pursuant to Article II, the purchase from the Seller of undivided percentage interests in Pool Receivables by making Purchases of Eligible Assets from time to time.

"Facility Termination Date" means the earlier of January 25, 2004 or the date of termination of the Facility pursuant to Section 2.03 or Section 7.01.

"Financing Order" means collectively, the orders of the MPSC dated November 2, 2000 and January 4, 2001, issued in conjunction with Case No. U-12478, captioned "In the matter of the application of The Detroit Edison Company for a financing order.", as amended from time to time.

"Fixed Period" means with respect to any Eligible Asset:

(a) in the case of any Fixed Period in respect of which Yield is computed by reference to the Investor Rate referred to in paragraph (a) of the definition of `Investor Rate', each successive period commencing on each CP Fixed Period Date for such Eligible Asset and ending on the next succeeding CP Fixed Period Date for such Eligible Asset; and

(b) in the case of any Fixed Period in respect of which Yield is computed by reference to the Assignee Rate, each successive period of from one to and including 14 days, or a period of 21, 30, 60, 90, or 180 days (or, if such Assignee Rate is computed by reference to the Eurodollar Rate, a period of one, two or three months), as the Seller shall select and the Agent shall approve on notice by the Seller received by the Agent (including notice by telephone, confirmed in writing) not later than 11:00 A.M. (New York City time)

on the day which occurs three Business Days before the first day of such Fixed Period, each such Fixed Period for such Eligible Asset to commence on the last day of the immediately preceding Fixed Period for such Eligible Asset (or, if there is no such Fixed Period, on the date of Purchase of such Eligible Asset), except that if the Agent shall not have received such notice or the Agent and the Seller shall not have so mutually agreed before 11:00 A.M. (New York City time) on such day, such Fixed Period shall be one day;

provided, that:

(i) Yield with respect to any Fixed Period at a Fixed Rate shall be computed by reference to a monthly, quarterly, or semi-annual interest period as the Seller may select and the Agent shall approve on notice by the Seller received by the Agent (including telephone, confirmed in writing) not later then 11:00 A.M. on the day which occurs seven Business Days before the first day of such Fixed Period;

(ii) any Fixed Period (other than of one day) which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day, except that if such Fixed Period relates to the Eurodollar Rate, and such extension would cause the last day of such Fixed Period to occur in the next succeeding month, the last day of such Fixed Period shall occur on the immediately preceding Business Day;

(iii) in the case of Fixed Periods of one day for any Eligible Asset, (a) if such Fixed Period is such Eligible Asset's initial Fixed Period, such Fixed Period shall be the day of the related Purchase; (b) any subsequently occurring Fixed Period which is one day shall, if the immediately preceding Fixed Period is more than one day, be the last day of such immediately preceding Fixed Period, and, if the immediately preceding Fixed Period is one day, be the day next following such immediately preceding Fixed Period; and (c) if such Fixed Period occurs on a day immediately preceding a day which is not a Business Day, such Fixed Period shall be extended to the next succeeding Business Day; and

(iv) in the case of any Fixed Period for such Eligible Asset which commences before the Termination Date for such Eligible Asset or the acceleration date

of any note the proceeds of which fund or maintain such Eligible Asset and would otherwise end on a date occurring after such Termination Date or such acceleration date, such Fixed Period shall end on such Termination Date, or such acceleration date, and the duration of each Fixed Period which commences on or after the Termination Date for such Eligible Asset or such acceleration date with respect to any note the proceeds of which fund or maintain such Eligible Asset shall be of such duration as shall be selected by the Agent.

"Fixed Rate" means for any Fixed Period the rate per annum determined by the Agent for funding by the Owner of the Purchase or maintenance of an Eligible Asset for such Fixed Period as agreed between the Agent and the Seller; provided, however, if the rate as agreed between the Agent and the Seller and the Owner with regard to any Fixed Period for any Eligible Asset is a discount rate, the "Fixed Rate" for such Fixed Period shall be the rate resulting from converting such discount rate to an interest-bearing equivalent rate per annum. The Seller understands that upon the agreement between the Seller and Agent of a Fixed Rate for a Fixed Period, the Agent on behalf of the Owner intends to enter into funding arrangements with third parties on terms and conditions which could result in loss to the Owner if the Capital with respect to such Fixed Period does not remain outstanding at the Fixed Rate for the entire Fixed Period at the amount of Capital paid to the Seller for such Eligible Asset at the time of its purchase. Therefore, if (i) the Capital of such Eligible Asset paid to such Seller with respect to such Eligible Asset at the time of its purchase shall be reduced prior to the end of such Fixed Period or (ii) the Termination Date for such Eligible Asset shall occur before the end of such Fixed Period, the Seller shall indemnify and hold harmless the Owner or the Agent for all losses, liabilities, costs and expenses related thereto (including, but not limited to attorneys' fees and expenses and the cost of interest rate swaps, collars, forward agreements and futures contracts in connection with the Owner's funding or maintenance of any Eligible Asset at a Fixed Rate) and shall pay two
(2) Business Days after the Fee Determination Date (as defined below), to the Owner, as liquidated damages a fee equal to the product of

[CLA x (F-R)] x [1 - (1+R/f)-n] f R/f

where:

CLA = Capital Liquidation Amount, as hereinafter defined.

F   =   Fixed Rate for such Eligible Asset for such Fixed
        Period.

R   =   Redeployment Rate, as hereinafter defined.

f   =   Fixed Rate payment frequency per annum.

n   =   Number of interest payment periods remaining from Fee
        Determination Date to end of Fixed Period.

The parties hereto acknowledge that the cost of any early termination of any funding arrangement with third parties prior to the originally scheduled termination date thereof, including, without limitation, interest rate swaps, collars, forward agreement and futures contracts could result in a payment by the Agent on behalf of the Owner to the third party providing such funding arrangement. Any such breakage cost will be determined by such third party providing such funding arrangement in its sole discretion, and such amount will be included in the losses, liabilities, costs and expenses payable by the Seller to the Owner or the Agent in connection with the occurrence of the events described in the immediately preceding sentence or otherwise.

Redeployment Rate shall mean the rate of interest at which the Agent is able to reinvest the Capital Liquidation Amount for a period comparable to the period from the Fee Determination Date to the last day of such Fixed Period in compliance with the Owner's investment policy. "Fee Determination Date" means the date on which the Capital is not so maintained or the date on which an amount of Capital of such Eligible Asset was paid. "Capital Liquidation Amount" means, the total amount of Capital of such Eligible Asset not so maintained or the total amount of Capital of such Eligible Asset paid. For purposes of this definition of Fixed Rate, the Fixed Period shall be computed without regard to clause (iv) of the definition of Fixed Period. The Agent's determination of the Redeployment Rate shall be conclusive, absent manifest error. The indemnification provided for herein shall be continuing and shall survive any termination of the Agreement.

         "Indenture" means that certain Indenture dated as of March   ,
2001, between the Issuer and the Bond Trustee, as the same may, from
time to time, be amended, modified, supplemented or restated.

         "Intercreditor Agreement" means that certain Intercreditor
Agreement dated March   , 2001, among the Bond Trustee, the Seller (in
its capacities as the Seller under this Agreement and as the Servicer
under the Servicing Agreement), the Issuer, Citibank and the Agent, as
the same may from time to time, be amended, modified, supplemented or
restated.

"Investor" shall include Corporate Asset Funding Company, Inc. and any successor or assign of the Investor that is a receivables investment company which in the ordinary course of its business issues commercial paper or other securities to fund its acquisition and maintenance of receivables.

"Investor Rate" for any Fixed Period for any Eligible Asset means:

(a) the per annum rate equivalent to the weighted average of the per annum rates paid or payable by the Owner from time to time as interest on or otherwise (by means of interest rate hedges or otherwise) in respect of those promissory notes issued by the Owner that are allocated, in whole or in part, by the Agent (on behalf of the Owner) to fund the Purchase or maintenance of such Eligible Asset during such Fixed Period, as determined by the Agent (on behalf of the Owner) and reported to the Seller and, if the Collection Agent is not the Seller, the Collection Agent, which rates shall reflect and give effect to the commissions of placement agents and dealers in respect of such promissory notes, to the extent such commissions are allocated, in whole or in part, to such promissory notes by the Agent (on behalf of the Owner); provided that, if any component of such rate is a discount rate, in calculating the `Investor Rate' for such Fixed Period, the Agent shall for such component use the rate resulting from converting such discount rate to an interest-bearing equivalent rate per annum; and

(b) the rate equivalent to the Fixed Rate as agreed between the Agent and the Seller; or

(c) if no Fixed Rate is agreed to between the Agent and the Seller and such Owner is not able to fund its Purchase or maintenance of such Eligible Asset for such Fixed Period by issuing promissory notes referred to in paragraph (a) above, a rate equal to the Assignee Rate for such Fixed Period or such other rate as the Agent and the Seller shall agree to in writing;

provided that, if such Owner so requests and the Seller consents thereto, the `Investor Rate' for any Fixed Period of one day shall be the Assignee Rate for such Fixed Period.

"Investor Report" means a report, in substantially the form of Exhibit C hereto, furnished by the Collection Agent to the Agent pursuant to Section 2.07.

"Issuer" means The Detroit Edison Securitization Funding LLC, a Michigan limited liability company.

"Liquidation Day" for any Eligible Asset means either (i) each day during any Settlement Period for such Eligible Asset on which the conditions set forth in Section 3.02 are not satisfied (or such failure of conditions is not waived by the Agent), provided that such conditions are also not satisfied (or such failure of conditions is not waived by the Agent) on any succeeding day during such Settlement Period, or (ii) each day which occurs on or after the Termination Date for such Eligible Asset.

"Liquidation Fee" means, for each Eligible Asset for any Fixed Period (computed without regard to clause (iv) of the definition of "Fixed Period") during which any Liquidation Day or Termination Date for such Eligible Asset occurs, the amount, if any, by which (i) the additional Yield (calculated without taking into account any Liquidation Fee) which would have accrued on the reductions of Capital of such Eligible Asset during such Fixed Period (as so computed) if such reductions had remained as Capital, exceeds (ii) the income, if any, received by the Owner of such Eligible Asset from such Owner's investing the proceeds of such reductions of Capital.

"Liquidation Yield" means, for any Eligible Asset at any date, an amount equal to the product of (i) the Capital

of such Eligible Asset as at such date and (ii) the product of (a) the Assignee Rate for such Eligible Asset for a Fixed Period deemed to commence at such time for a period of 30 days and (b) a fraction having as its numerator the Average Maturity (as in effect at such date) and 360 as its denominator.

"Loss Percentage" means, for any Eligible Asset at any date, the greater of (i) three times the Default Ratio as of the last day of the preceding month or (ii) 12%.

"Loss Reserve" means, for any Eligible Asset at any date, an amount equal to

LP x (C)+ YR)

where:

LP   =   the Loss Percentage for such Eligible Asset at the
         close of business of the Collection Agent on such
         date,

C    =   the Capital of such Eligible Asset at the close of
         business of the Collection Agent on such date,

YR   =   the Yield Reserve for such Eligible Asset at the
         close of business of the Collection Agent on such
         date.

"Mortgage" has the meaning assigned to that term in Section 4.01(h).

"MPSC" means the Michigan Public Service Commission.

"Net Receivables Pool Balance" means at any time the Outstanding Balance of the Eligible Receivables in the Receivables Pool at such time reduced by the sum of (i) the aggregate Outstanding Balance of the Defaulted Receivables in the Receivables Pool at such time and (ii) the aggregate amount by which the Outstanding Balance of all Pool Receivables of each Obligor exceeds the Concentration Limit for such Obligor at such time.

"Obligor" means a Person obligated to make payments pursuant to a Contract.

"Original Agreement" means the Trade Receivables Purchase and Sale Agreement dated as of February 28, 1989, as amended as of February 16, 1990, August 3, 1990 and June 14, 1991, as amended and restated as of October 1, 1991, and further amended from time to time from February 28, 1994 through January 27, 2000, among the Seller, the Investor, Citibank and CNAI.

"Outstanding Balance" of any Receivable at any time means the then outstanding principal balance thereof.

"Owner" means the Investor and all other owners by assignment or otherwise of an Eligible Asset and, to the extent of the undivided interests so purchased, shall include any participants.

"Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity.

"Pool Receivable" means a Receivable in the Receivables Pool.

"Provisional Liquidation Day" means any day which could be a Liquidation Day but for the proviso in clause (i) of the definition of "Liquidation Day".

"Purchase" means a purchase by the Investor of an Eligible Asset from the Seller pursuant to Article II.

"Purchase Limit" means $200,000,000, as such amount may be reduced pursuant to Section 2.03.

"Receivable" means the indebtedness (whether or not billed) of any Obligor under a Contract arising from a sale by the Seller of retail electric services, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto, but excludes the SB Charges.

"Receivables Pool" means at any time the aggregation of each then outstanding Receivable in respect of which the Obligor is a Designated Obligor or, as to any Receivable in existence on such date, was a Designated Obligor on the date of any Purchase or reinvestment pursuant to Section 2.05.

"Reinvestment Termination Date" for any Eligible Asset means that Business Day which the Seller designates or, if the conditions precedent in Section 3.02 are not satisfied,

such Business Day which the Agent designates, as the Reinvestment Termination Date for such Eligible Asset by notice to the Agent (if the Seller so designates) or to the Seller (if the Agent so designates) at least one Business Day prior to such Business Day.

"Related Security" means with respect to any Receivable:

(i) all of the Seller's interest in the merchandise (including returned merchandise), if any, relating to the sale which gave rise to such Receivable;

(ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements signed by an Obligor describing any collateral securing such Receivable;

(iii) all guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise; and

(iv) all deposit accounts into which Collections are deposited.

"Sale Agreement" means the Securitization Property Sale Agreement dated March 9, 2001, between the Seller, as the seller, and the Issuer, as the purchaser, as the same may, from time to time, be amended, modified, supplemented or restated.

"SB Charges" has the meaning assigned to that term in the Act to securitization charges and which are permitted to be charged by the Financing Order except that it will be used herein to refer to the combined securitization bond charge and the securitization bond tax charge as set forth in footnote 3 on Page 5 of the Financing Order including, in the case of special contract customers, the portion of the contract charges allocated to SB Charges, and, as used herein, SB Charges shall include the revenues, collections, payments, money and proceeds arising out of the SB Charges.

"Securitization Bonds" means that certain bond series designated "The Detroit Edison Securitization Funding LLC $1,750,000,000 Securitization Bonds, Series 2000-1" issued pursuant to the Indenture.

"Securitization Property" has the meaning assigned to that term in the Sale Agreement.

"Servicing Agreement" means the Securitization Property Servicing Agreement dated March 9, 2001, between the Issuer and the Seller, as servicer, as the same may, from time to time, be amended, modified, supplemented or restated.

"Settlement Period" for any Eligible Asset means each period commencing on the first day of each Fixed Period for such Eligible Asset and ending on the last day of such Fixed Period or in the case of a Fixed Period for a Fixed Rate on such other day as the Owner and the Agent may mutually agree; and, on and after the Termination Date for such Eligible Asset, such period (including, without limitation, a daily period) as shall be selected from time to time by the Agent or, in the absence of any selection, each period of thirty days from the last day of the immediately preceding Settlement Period.

"Special Account" means an account maintained at a Special Account Bank for the purpose of receiving Collections.

"Special Account Bank" means any of the banks holding one or more Special Accounts.

"Tariff" means the tariff pursuant to which the Seller shall provide service to certain Obligors from time to time and pursuant to which such Obligors shall be obligated to pay for such service from time to time.

"Termination Date" for any Eligible Asset means the earlier of
(i) the Reinvestment Termination Date for such Eligible Asset and (ii) the Facility Termination Date.

"UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction.

"Yield" means:

(i) for each Eligible Asset for any Fixed Period to the extent the Owner will be funding such

Eligible Asset on the first day of such Fixed Period through the issuance of commercial paper or through the issuance of notes at a Fixed Rate,

IR x C x ED + LF

360

(ii) for each Eligible Asset for any Fixed Period to the extent the Owner will not be funding such Eligible Asset on the first day of such Fixed Period through the issuance of commercial paper or notes,

AR x C x ED + LF

360

where:

         AR   =   the Assignee Rate for such Eligible Asset for such
                  Fixed Period.

         C    =   the Capital of such Eligible Asset during such Fixed
                  Period.

         IR   =   the Investor Rate for such Eligible Asset for such
                  Fixed Period.

         ED   =   the actual number of days elapsed during (a) such
                  Fixed Period or (b) in the case of Fixed Period at a
                  Fixed Rate the fraction shall be adjusted to
                  correspond to the calculation of interest on any note
                  the proceeds of which fund or maintain the Capital of
                  such Eligible Asset.

         LF   =   the Liquidation Fee, if any, for such Eligible Asset
                  for such Fixed Period;

provided, however, with respect to any Fixed Period in respect of which Yield is computed by reference to a Fixed Rate, Yield shall be the aggregate of all such computations for such Fixed Period for the applicable monthly, quarterly, or semi-annual interest period as the Seller may have selected and the Agent shall have approved; and provided, further, that no provision of this Agreement or the Certificate shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; and provided, further, that Yield for any Eligible Asset shall not be considered paid by any distribution if at any time such distribution is rescinded

or must otherwise be returned for any reason; and provided, further, that, without limiting the obligation of the Seller to pay the costs, expenses, commissions, taxes, fees and other amounts specified in
Section 11.06 (the "Costs, Expenses and Taxes"), certain of the Costs, Expenses and Taxes may, subject to the approval of the Seller and the Agent, be added to, and included in, the Yield for any Eligible Asset.

"Yield Reserve" for any Eligible Asset at any time means the sum of (i) the Liquidation Yield at such time for such Eligible Asset, and (ii) the accrued and unpaid Yield for such Eligible Asset.

SECTION 1.02. Other Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

SECTION 1.03. Computation of Time Periods. Unless otherwise stated in this Agreement, in the computation of a period 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".

ARTICLE II

AMOUNTS AND TERMS OF THE PURCHASES

SECTION 2.01. Facility. On the terms and conditions hereinafter set forth, the Investor may, in its sole discretion, make Purchases from time to time during the period from the date hereof to the Facility Termination Date. Under no circumstances shall the Investor make any Purchase if, after giving effect to such Purchase, the aggregate outstanding Capital of Eligible Assets, together with the aggregate outstanding "Capital" of "Eligible Assets" under the Citibank Agreement, would exceed the Purchase Limit. The Owner of each Eligible Asset shall, with the proceeds of Collections attributable to such Eligible Asset, reinvest, pursuant to Section 2.05, in additional undivided percentage interests in the Pool Receivables by marking an

appropriate readjustment of such Eligible Asset. Nothing in this Agreement shall be deemed to be or construed as a commitment by the Investor (or CNAI or Citibank) to purchase any Eligible Asset at any time.

SECTION 2.02. Making Purchases. Each Purchase shall be made on at least three Business Days' notice (and in the case of a Fixed Period at a Fixed Rate seven (7) Business Days' written notice) from the Seller to the Agent. Each such notice of a Purchase for a Fixed Period at a Fixed Rate shall be substantially in the form of Exhibit E hereto and shall be by telecopier, telex or cable and confirmed in writing. Each such notice of a proposed Purchase shall specify the desired amount (which shall not be less than $1,000,000), date and duration of the initial Fixed Period for the Eligible Asset to be purchased. The Investor shall promptly notify the Agent whether it has determined to make such Purchase. The Agent shall promptly thereafter notify the Seller whether the Investor has determined to make such Purchase and whether the desired duration of the initial Fixed Period for the Eligible Asset to be purchased is acceptable. On the date of each Purchase, the Investor shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Agent the amount of its Purchase by deposit of such amount in same day funds to the Agent's Account, and, after receipt by the Agent of such funds, the Agent will cause such funds to be made immediately available to the Seller at Citibank's office at 399 Park Avenue, New York, New York. The Investor shall on the date of each Purchase, and the Owner of each Eligible Asset shall on the first day of each Fixed Period (other than the initial Fixed Period) for such Eligible Asset, notify the Agent of the Investor Rate for such Fixed Period.

SECTION 2.03. Termination or Reduction of the Purchase Limit. The Seller may, upon at least five Business Days' notice to the Agent, terminate in whole or reduce in part the unused portion of the Purchase Limit; provided, however, that each partial reduction shall be in an amount equal to $1,000,000 or an integral multiple thereof.

SECTION 2.04. Eligible Asset. (a) Each Eligible Asset shall be initially computed as of the opening of business of the Collection Agent on the date of Purchase of such Eligible Asset. Thereafter until the Termination Date for such Eligible Asset, such Eligible Asset shall be automatically recomputed as of the close of business of the Collection Agent on each day (other than a Liquidation Day). Such Eligible Asset shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such

recomputation, if any, shall be made. Any Eligible Asset, as computed as of the day immediately preceding the Termination Date for such Eligible Asset, shall remain constant at all times on and after such Termination Date. Such Eligible Asset shall become zero at such time as the Owner of such Eligible Asset shall have received the accrued Yield for such Eligible Asset and shall have recorded the Capital of such Eligible Asset, and the Collection Agent shall have received the accrued Collection Agent Fee for such Eligible Asset.

(b) If any Eligible Asset would otherwise be reduced on any day on account of Receivables arising as or becoming Pool Receivables, the Owner of such Eligible Asset may prevent such reduction by giving notice to the Collection Agent, before the close of business of the Collection Agent on such day, that such Eligible Asset's interest in such Receivables is to be limited so as to prevent such reduction. If such notice is given for any day for any Eligible Asset, the Receivables Pool for such Eligible Asset, and the Net Receivables Pool Balance for such Eligible Asset, will include, with respect to Receivables arising as or becoming Pool Receivables on such day, only such number of such Receivables or such portion of such Receivables as shall cause such Eligible Asset to remain constant, such Receivables or portion thereof being included in the Receivables Pool for such Eligible Asset in the order of the Seller's account numbers for such Receivables up to an aggregate amount so as to cause such Eligible Asset to remain constant, and the remainder of such Receivables or portion thereof shall be treated as Receivables arising on the next succeeding Business Day.

SECTION 2.05. Non-Liquidation Settlement Procedures. On each day (other than a Liquidation Day or a Provisional Liquidation Day) during each Settlement Period for each Eligible Asset, the Collection Agent shall: (i) out of Collections of Pool Receivables attributable to such Eligible Asset received on such day, set aside and hold in trust for the Owner of such Eligible Asset an amount equal to the Yield and Collection Agent Fee accrued through such day for such Eligible Asset and not so previously set aside and (ii) reinvest the remainder of such Collections, for the benefit of such Owner, by recomputation of such Eligible Asset pursuant to Section 2.04 as of the end of such day and the payment of such remainder to the Seller; provided, however, that, to the extent that the Agent or any Owner shall be required for any reason to pay over any amount of Collections which shall have been previously reinvested for the account of such Owner pursuant hereto, such amount shall be deemed not to have been so applied but rather to have been retained by the Seller and paid over for the account of such Owner and, notwithstanding any provision hereof to the contrary,

such Owner shall have a claim for such amount. On the last day of each Settlement Period for each Eligible Asset, the Collection Agent shall deposit to the Agent's Account for the account of the Owner of such Eligible Asset the amounts set aside as described in clause (i) of the first sentence of this
Section 2.05. Upon receipt of such funds by the Agent, the Agent shall distribute them to the Owner of such Eligible Asset in payment of the accrued Yield for such Eligible Asset and to the Collection Agent in payment of the accrued Collection Agent Fee payable with respect to such Eligible Asset. If there shall be insufficient funds on deposit for the Agent to distribute funds in payment in full of the aforementioned amounts, the Agent shall distribute funds, first, in payment of the accrued Yield for such Eligible Asset, and second, in payment of the accrued Collection Agent Fee payable with respect to such Eligible Asset.

SECTION 2.06. Liquidation Settlement Procedures. On each Liquidation Day and on each Provisional Liquidation Day during each Settlement Period for each Eligible Asset, the Collection Agent shall set aside and hold in trust for the Owner of such Eligible Asset the Collections of Pool Receivables attributable to such Eligible Asset received on such Day. On the last day of each Settlement Period for each Eligible Asset, the Collection Agent shall deposit to the Agent's Account for the account of the Owner of such Eligible Asset the amounts set aside pursuant to the preceding sentence but not to exceed the sum of (i) the accrued Yield for such Eligible Asset, (ii) the Capital of such Eligible Asset, (iii) the accrued Collection Agent Fee payable with respect to such Eligible Asset and (iv) the aggregate amount of other amounts owed hereunder by the Seller to the Owner of such Eligible Asset. Any amounts set aside pursuant to the first sentence of this Section 2.06 and not required to be deposited to the Agent's Account pursuant to the preceding sentence shall be paid to the Seller by the Collection Agent; provided, however, that if amounts are set aside pursuant to the first sentence of this Section 2.06 on any Provisional Liquidation Day which is subsequently determined not to be a Liquidation Day, such amounts shall be applied pursuant to clause (ii) of the first sentence of Section 2.05 on the day of such subsequent determination. Upon receipt of funds deposited to the Agent's Account pursuant to the preceding sentence, the Agent shall distribute them (i) to the Owner of such Eligible Asset (a) in payment of the accrued Yield for such Eligible Asset, (b) in reduction (to zero) of the Capital of such Eligible Asset and (c) in payment of any other amounts owed by the Seller hereunder to such Owner and (ii) to the Collection Agent in payment of the accrued Collection Agent Fee payable with respect to such Eligible Asset. If there shall be insufficient funds on deposit for the Agent to distribute funds in payment in full of the

aforementioned amounts, the Agent shall distribute funds, first, in payment of the accrued Yield for such Eligible Asset, second, in reduction of Capital of such Eligible Asset, third, in payment of other amounts payable to such Owner, and fourth, in payment of the accrued Collection Agent Fee payable with respect to such Eligible Asset.

SECTION 2.07. General Settlement Procedures. If on any day the Outstanding Balance of a Pool Receivable is either (a) reduced as a result of any defective, rejected or returned merchandise, insurance or services, any cash discount, or any adjustment by the Seller, or (b) reduced or cancelled as a result of a setoff in respect of any claim by the Obligor thereof against the Seller (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation. If on any day any of the representations or warranties in Section 4.01(h) are no longer true with respect to a Pool Receivable, the Seller shall be deemed to have received on such day a Collection in full of such Pool Receivable. Except as stated in the preceding sentences of this Section 2.07 and except as required by the Financing Order and as provided in the Servicing Agreement (with respect to the application of partial payments) or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Receivable shall be applied to Receivables then outstanding of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, except if payment is designated by such Obligor for application to specific Receivables. Prior to the twentieth day of each month, the Collection Agent shall prepare and forward to the Agent (i) an Investor Report, relating to each Eligible Asset, as of the close of business of the Collection Agent on the last day of the immediately preceding month, and (ii) upon the request of the Agent, a listing by Obligor of all Pool Receivables, together with an analysis as to the aging of such Receivables. On or prior to the day the Collection Agent is required to make a deposit with respect to a Settlement Period pursuant to Section 2.05 or 2.06, the Seller will advise the Agent of each Liquidation Day and each Provisional Liquidation Day occurring during such Settlement Period and of the allocation of the amount of such deposit to each outstanding Eligible Asset; provided, however, that, if the Seller is not the Collection Agent, the Seller shall advise the Collection Agent of the occurrence of each such Liquidation Day and each Provisional Liquidation Day occurring during such Settlement Period on or prior to such day.

SECTION 2.08. Payments and Computations, Etc. All amounts to be paid or deposited by the Seller hereunder shall be paid or deposited in accordance with the terms hereof no later than 11:00 A.M. (New York City time) on the day when due in lawful money of the United States of America in same day funds to the Agent's Account. The Seller shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited when due hereunder at 2% per annum above the Alternate Base Rate, payable on demand; provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. Such interest shall be retained by the Agent except to the extent that such failure to make a timely payment or deposit has continued beyond the date for distribution by the Agent of such overdue amount to an Owner of an Eligible Asset, in which case such interest accruing after such date shall be for the account of, and distributed by the Agent to, the Owners ratably in accordance with their respective interests in such overdue amount. All computations of interest and all computations of Yield, Liquidation Yield and fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

SECTION 2.09. Dividing or Combining of Eligible Assets. The Seller may, on notice received by the Agent not later than 11:00 A.M. (New York City time) three Business Days before the last day of any Fixed Period for any then existing Eligible Asset ("Existing Eligible Asset"), divide such Existing Eligible Asset on such last day into two or more new Eligible Assets, each such new Eligible Asset having Capital as designated in such notice and all such new Eligible Assets collectively having aggregate Capital equal to the Capital of such Existing Eligible Asset. The Seller may, on notice received by the Agent not later than 11:00 A.M. (New York City time) three Business Days before the last day of any Fixed Periods ending on the same day for two or more Existing Eligible Assets owned by the same Owner or the date of any proposed Purchase (if the last day of such Fixed Period is the date of such proposed Purchase), either
(i) combine such Existing Eligible Assets or (ii) combine such Existing Eligible Asset or Eligible Assets, if owned by the Owner, and such proposed Eligible Asset to be purchased, on such last day into one new Eligible Asset, such new Eligible Asset having Capital equal to the aggregate Capital of such Existing Eligible Assets, or such Existing Eligible Asset or Eligible Assets and such proposed Eligible Asset, as the case may be. On and after any division or combination of Eligible Assets as described above, each of the new Eligible Assets resulting from such division, or the new Eligible Asset resulting from such combination, as the case may be, shall be a separate Eligible Asset having Capital as set forth above, and shall take the place

of such Existing Eligible Asset or Eligible Assets or proposed Eligible Asset, as the case may be, in each case under and for all purposes of this Agreement, and the Agent shall annotate the Certificate accordingly.

SECTION 2.10. Fees. (a) The Seller shall pay fees pursuant to a letter agreement.

(b) Each Owner shall pay to the Collection Agent a collection fee (the "Collection Agent Fee") of 1/4 of 1% per annum on the average daily amount of Capital of each Eligible Asset owned by such Owner, from the date thereof until the later of the Facility Termination Date or the date on which such Capital is reduced to zero, payable on the last day of each Settlement Period for such Eligible Asset; provided, however, that, upon three Business Days' notice to the Agent, the Collection Agent may (if not the Seller) elect to be paid, as such fee, another percentage per annum on the average daily amount of Capital of each such Eligible Asset, but in no event in excess of 110% of the costs and expenses referred to in Section 6.02(b); and provided, further, that such fee shall be payable only from Collections pursuant to, and subject to the priority of payment set forth in, Sections 2.05 and 2.06.

SECTION 2.11. Increased Costs. (a) If CNAI, the Owner, any entity which enters into a commitment to purchase Eligible Assets or interests therein, or any of their respective Affiliates (each an "Affected Person") determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of the capital required or expected to be maintained by such Affected Person and such Affected Person determines that the amount of such capital is increased by or based upon the existence of any commitment to make purchases of or otherwise to maintain the investment in Pool Receivables or interests therein related to this Agreement or to the funding thereof and other commitments of the same type, then, upon demand by such Affected Person (with a copy to the Agent), the Seller shall immediately pay to the Agent, for the account of such Affected Person (as a third-party beneficiary), from time to time as specified by such Affected Person, additional amounts sufficient to compensate such Affected Person in the light of such circumstances, to the extent that such Affected Person reasonably determines such increase in capital to be allocable to the existence of any of such commitments; provided, however, that with respect to Affected Persons other than Citibank, CNAI, the Investor or their respective Affiliates, payment will be provided only for increases in capital resulting from changes in laws, regulations

or guidelines from and after June 14, 1991. A certificate as to such amounts submitted to the Seller and the Agent by such Affected Person shall be conclusive and binding for all purposes, absent manifest error.

(b) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements referred to in Section 2.12) in or in the interpretation of any law or regulation or (ii) the compliance with any guideline or request from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to the Owner of agreeing to purchase or purchasing, or maintaining the ownership of Eligible Assets in respect of which Yield is computed by reference to the Eurodollar Rate, then, upon demand by the Owner (with a copy to the Agent), the Seller shall immediately pay to the Agent, for the account of the Owner (as a third-party beneficiary), from time to time as specified, additional amounts sufficient to compensate for such increased costs. A certificate as to such amounts submitted to the Seller and the Agent shall be conclusive and binding for all purposes, absent manifest error.

SECTION 2.12. Additional Yield on Eligible Assets Bearing a Eurodollar Rate. The Seller shall pay to the Owner, so long as the Owner 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 Yield on the unpaid Capital of each Eligible Asset of the Owner during each Fixed Period in respect of which Yield is computed by reference to the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all times during such Fixed Period to the remainder obtained by subtracting (i) the Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing such Eurodollar Rate referred to in clause (i) above by that percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of the Owner for such Fixed Period, payable on each date on which Yield is payable on such Eligible Asset. Such additional Yield shall be determined by the Owner and notified to the Seller through the Agent within 60 days after any Yield payment is made with respect to which such additional Yield is requested. A certificate as to such additional Yield submitted to the Seller and the Agent shall be conclusive and binding for all purposes, absent manifest error.

ARTICLE III

CONDITIONS OF PURCHASES

SECTION 3.01. Conditions Precedent to Initial Purchase. The initial Purchase under the Original Agreement of an Eligible Asset was subject to the conditions precedent that the Agent shall have (i) completed a review, satisfactory to it in its sole discretion, of the Seller's billing, collection and reporting systems relating to the Receivables, including without limitation the Credit and Collection Policy, and (ii) received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Agent:

(a) The Certificate;

(b) A copy of the resolutions adopted by the Board of Directors of the Seller approving the Original Agreement, the Certificate and the other documents to be delivered by it hereunder and the transactions contemplated hereby, certified by its Secretary or Assistant Secretary;

(c) A certificate of the Secretary or Assistant Secretary of the Seller certifying the names and true signatures of the officers authorized on its behalf to sign the Original Agreement, the Certificate and the other documents to be delivered by it hereunder (on which certificate the Agent and each Owner may conclusively rely until such time as the Agent shall receive from the Seller a revised certificate meeting the requirements of this subsection (c));

(d) Secured Party's copies of proper Financing Statements (Form UCC-1), dated a date reasonably near to the date of the initial Purchase, naming the Seller as the assignor of Receivables and CNAI, as Agent, as assignee, or other, similar instruments or documents, as may be necessary or, in the opinion of the Agent, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the ownership interests in all Receivables in which an interest may be assigned hereunder;

(e) Secured Party's copies of proper Financing Statements (Form UCC-3), if any, necessary to release all security interests and other rights, except the lien, if applicable, referred to in Section 4.01(h), of any person in the Receivables previously granted by the Seller;

(f) A favorable opinion of Leon S. Cohan, General Counsel for the Seller, in substantially the form of Exhibit D hereto and as to such other matters as the Agent may reasonably request;

(g) A favorable opinion of Shearman & Sterling, counsel for the Agent, as the Agent may reasonably request; and

(h) An opinion of Shearman & Sterling, counsel for the Agent, addressed to the Investor and the dealer for the commercial paper of the Investor, as to the correctness of the representation and warranty of the Seller set forth in Section 4.01(m), in substantially the form previously delivered by the Agent to such counsel.

SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments. Each Purchase (including the initial Purchase) hereunder and the right of the Collection Agent to reinvest in Pool Receivables those Collections attributable to an Eligible Asset pursuant to Sections 2.05 or 2.06 shall be subject to the further conditions precedent that (a) with respect to any such Purchase, on or prior to the date of such Purchase, the Collection Agent shall have delivered to the Agent, in form and substance satisfactory to the Agent, a completed Investor Report, dated within 20 days prior to the date of such Purchase and, upon the request of the Agent, a listing by Obligor of all Pool Receivables and such additional information as may be reasonably requested by the Agent, and (b) on the date of such Purchase or reinvestment the following statements shall be true (and the Seller by accepting the amount of such Purchase or by receiving the proceeds of such reinvestment shall be deemed to have certified that):

(i) The representations and warranties contained in Section 4.01 are correct on and as of such date as though made on and as of such date,

(ii) No event has occurred and is continuing, or would result from such Purchase or reinvestment, which constitutes an Event of Investment Ineligibility or would constitute an Event of Investment Ineligibility but for the requirement that notice be given or time elapse or both,

(iii) The Agent shall not have delivered to the Seller a notice that the Investor shall not make any further Purchases hereunder and/or that the Collection Agent shall not reinvest in any Pool Receivables on behalf of the Owner, and

(iv) On such date, all of the Seller's long-term public senior debt securities are rated at least BBB- by Standard & Poor's Rating Service, a division of McGraw-Hill Companies, Inc., and Baa3 by Moody's Investors Service, Inc., or, if such debt securities are not publicly rated on such date, the Agent has determined, in its sole discretion, that such debt securities would receive such ratings if they were publicly rated,

and (c) the Agent shall have received such other approvals, opinions or documents as the Agent may reasonably request.

SECTION 3.03. Conditions Subsequent to Initial Purchase. The Seller agreed that not later than 45 days after the date of the initial Purchase, it would deliver to the Agent, in form and substance satisfactory to the Agent:

(a) Certified copies of Requests for Information or Copies (Form UCC-11) (or a similar search report certified by a party acceptable to the Agent), listing all effective financing statements (including those referred to in Section 3.01(d)) which name the Seller (under its present name and any previous name) as debtor and which are filed in the jurisdictions in which filings were made pursuant to
Section 3.01(d), together with copies of such financing statements (none of which (except those filed pursuant to Section 3.01(f)) shall cover any Receivables or Contracts); and

(b) Acknowledgment copies of proper Financing Statements (Form UCC-3), if any, necessary to release all security interests and other rights, except the lien, if applicable, referred to in Section 4.01(h), of any Person in the Receivables previously granted by the Seller; and

(c) Acknowledgment copies of proper Financing Statements (Form UCC-1), dated a date reasonably near to the date of the initial Purchase, naming the Seller as the assignor of Receivables and CNAI, as Agent, as assignee, or other, similar instruments or documents, as may be necessary or, in the opinion of the Agent, desirable under the UCC of all appropriate jurisdictions or any comparable law to perfect the ownership interests in all Receivables in which an interest may be assigned hereunder.

SECTION 3.04. Conditions Precedent to the Restatement. The restatement of the Original Agreement is subject to the condition precedent that the Agent shall have received on or before the date of the effective date of such restatement the

following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Agent:

(a) A copy of the resolutions adopted by the Board of Directors of the Seller approving this Agreement; and the other documents to be delivered by it hereunder and the transactions contemplated hereby, certified by its Secretary or Assistant Secretary;

(b) A certificate of the Secretary or Assistant Secretary of the Seller certifying the names and true signatures of the officers authorized on its behalf to sign this Agreement; and the other documents to be delivered by it hereunder (on which certificate the Agent and each Owner may conclusively rely until such time as the Agent shall receive from the Seller a revised certificate meeting the requirements of this subsection (b));

(c) Acknowledgment copies of proper Financing Statements (Form UCC-3) amending the existing Financing Statements filed in 1989 pursuant to subsection (d) of Section 3.01 of the predecessor to the Original Agreement to reflect the exclusion of SB Charges, in all jurisdictions where the original forms UCC-1 were filed.

(d) Copies of the Basic Documents (as defined in the Indenture, certified as true by an appropriate officer of the Seller.

(e) The Intercreditor Agreement.

(f) Copies of the Tariff and the Credit and Collection Policy which, in the case of the Credit and Collection Policy will become Schedules III and IV to this Agreement and replace the current Schedules III and IV.

(g) An amendment to the Citibank Agreement.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.01. Representations and Warranties of the Seller. The Seller represents and warrants as follows:

(a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Michigan and is duly qualified to do business, and

is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified.

(b) The execution, delivery and performance by the Seller of this Agreement, the Certificate and all other instruments and documents to be delivered hereunder (including the use by the Seller of the proceeds of Purchases), and the transactions contemplated hereby and thereby, are within the Seller's corporate powers, have been duly authorized by all necessary corporate action, do not contravene (i) the Seller's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Seller and do not result in or require the creation of any lien, security interest or other charge or encumbrance upon or with respect to any of its properties; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law.

(c) No 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, delivery and performance by the Seller of this Agreement, the Certificate or any other document or instrument to be delivered hereunder except for the filing of the UCC Financing Statements referred to in Article III, all of which, at the time required in Article III, shall have been duly made and shall be in full force and effect.

(d) This Agreement constitutes, and the Certificate when delivered hereunder shall constitute, the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with their respective terms.

(e) The consolidated balance sheet of the Seller and its consolidated subsidiaries as at December 31, 1999, and the related consolidated statements of income and retained earnings of the Seller and its consolidated subsidiaries for the fiscal year then ended, certified by Deloitte & Touche LLP, independent public accountants, a copy of which has been furnished to the Agent, fairly presents the consolidated financial condition of the Seller and its consolidated subsidiaries as at such date and the consolidated results of the operations of the Seller and its consolidated subsidiaries for the period ended on such date, all in accordance with generally accepted accounting principles, and since December 31, 1999, there has been no material adverse change in the business, condition (financial or otherwise), results of operations or

properties of the Seller or of the Seller and its consolidated subsidiaries.

(f) There are no actions, suits or proceedings pending, or to the knowledge of the Seller threatened, against or affecting the Seller or any subsidiary, or the property of the Seller or of any subsidiary, in any court, or before any arbitrator of any kind, or before or by any governmental body, which may materially adversely affect the financial condition of the Seller or the Seller and its consolidated subsidiaries taken as a whole (except to the extent specifically described in the Seller's Consolidated Financial Statements for the year ended December 31, 1999) or which may materially adversely affect the ability of the Seller to perform its obligations under this Agreement or the Certificate; neither the Seller nor any subsidiary is in default with respect to any order of any court, arbitrator or governmental body except for defaults with respect to orders of governmental agencies which defaults are not material to the business or operations of the Seller or any subsidiary.

(g) No proceeds of any Purchase will be used by the Seller to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934.

(h) Each Pool Receivable is (i) together with the Contract related thereto owned by the Seller free and clear of any Adverse Claim except as provided for herein and (ii) an Eligible Receivable; upon each Purchase or reinvestment, the Owner making such Purchase or reinvestment will acquire a valid and perfected first priority undivided percentage ownership interest, subject only to the lien, if applicable, of the Mortgage and Deed of Trust, dated as of October 1, 1924, as amended, between the Seller and First Chicago Trust Company of New York, as successor Trustee (the "Mortgage"), to the extent of the pertinent Eligible Asset in each Pool Receivable then existing or thereafter arising and in the Related Security and Collections with respect thereto free and clear of any Adverse Claim except as provided hereunder; and no effective financing statement or other instrument similar in effect covering any Pool Receivable or the Related Security or Collections with respect thereto is on file in any recording office except for the financing statement, if applicable, filed with respect to the Mortgage, and except such as may be filed in favor of CNAI, as Agent, in accordance with this Agreement.

(i) Each Investor Report (if prepared by the Seller, or to the extent that information contained therein is supplied by the Seller), information, exhibit, financial statement, document, book, record or report (including descriptions of the Seller's credit and collection policies, billing systems and reporting systems) furnished at any time by the Seller to the Agent or any Owner in connection with this Agreement is accurate in all material respects as of its date or (except as otherwise disclosed to the Agent or such Owner, as the case may be, at such time) as of the date so furnished, and no such document contains any material misstatement of fact or omits to state a material fact or any fact necessary to make the statements contained therein not materially misleading.

(j) The chief place of business and chief executive office of the Seller are located at the address of the Seller referred to in
Section 11.02 hereof and the offices where the Seller keeps all its books, records and documents evidencing Pool Receivables or the related Contracts are located at the addresses specified in Schedule I hereto (or at such other locations, notified to the Agent in accordance with
Section 5.01(f), in jurisdictions where all action required by Section 6.05 has been taken and completed).

(k) The names and addresses of all the Special Account Banks, together with the account numbers of the Special Accounts of the Seller at such Special Account Banks, are specified in Schedule II hereto (or at such other Special Account Banks and/or with such other Special Accounts as have been notified to the Agent in accordance with Section 5.03(d)).

(l) Neither the Seller nor any Affiliate of the Seller has any direct or indirect ownership or other financial interest in any Obligor.

(m) Each purchase of an Eligible Asset hereunder, and each reinvestment of Collections in Pool Receivables made hereunder, will constitute (i) a "current transaction" within the meaning of Section 3(a)(3) of the Securities Act of 1933, as amended, and (ii) a purchase or other acquisition of notes, drafts, acceptances, open accounts receivable or other obligations representing part or all of the sales price of merchandise, insurance or services within the meaning of
Section 3(c)(5) of the Investment Company Act of 1940, as amended.

ARTICLE V

GENERAL COVENANTS OF THE SELLER

SECTION 5.01. Affirmative Covenants of the Seller. Until the later of the Facility Termination Date and the date upon which no Capital for any Eligible Asset shall be existing, the Seller will, unless the Agent shall otherwise consent in writing:

(a) Compliance with Laws, Etc. Comply in all material respects with all applicable laws, rules, regulations and orders with respect to it, its business and properties and all Pool Receivables and related Contracts.

(b) Preservation of Corporate Existence. Preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification would materially adversely affect the interests of the Owner or the Agent hereunder or in the Pool Receivables, or the ability of the Seller or the Collection Agent to perform their respective obligations hereunder.

(c) Audits. At any time and from time to time during regular business hours, permit the Agent, or its agents or representatives, (i) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks) in the possession or under the control of the Seller relating to Pool Receivables, including, without limitation, the related Contracts, and
(ii) to visit the offices and properties of the Seller for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to Pool Receivables or the Seller's performance hereunder with any of the officers or employees of the Seller having knowledge of such matters.

(d) Keeping of Records and Books of Account. Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain, all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without

limitation, records adequate to permit the daily identification of each new Pool Receivable and all Collections of and adjustments to each existing Pool Receivable).

(e) Performance and Compliance with Receivables and Contracts. At its expense timely and fully perform and comply with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables.

(f) Location of Records. Keep its chief place of business and chief executive office, and the offices where it keeps its records concerning the Pool Receivables and all Contracts related thereto (and all original documents relating thereto), at the address(es) of the Seller referred to in Section 4.01(j) or, upon 30 days' prior written notice to the Agent, at such other locations in a jurisdiction where all action required by Section 6.05 shall have been taken and completed.

(g) Credit and Collection Policies. Comply in all material respects with its Credit and Collection Policy in regard to each Pool Receivable and the related Contract.

(h) Collections. Upon the request of the Agent after the occurrence of an Event of Investment Ineligibility, (i) instruct all Obligors to cause all Collections to be deposited directly either to a Special Account or to a Concentration Account, (ii) deposit, or cause to be deposited, all Collections in the Special Accounts to the Concentration Accounts, and (iii) at all times after receipt of a written request from the Agent to such effect, deposit, or cause to be deposited, all Collections in the Concentration Accounts to the Designated Account. At all times, segregate collections received on account of SB Charges and on account of any other charges from Collections within 48 hours after the receipt thereof.

SECTION 5.02. Reporting Requirements of the Seller. Until the later of the Facility Termination Date and the date upon which no Capital for any Eligible Asset shall be existing, the Seller will, unless the Agent shall otherwise consent in writing, furnish to the Agent:

(a) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Seller, consolidated balance sheets of the Seller and its consolidated subsidiaries as of the

end of such quarter, and consolidated statements of income and retained earnings of the Seller and its consolidated subsidiaries each for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, certified by the chief financial officer or chief accounting officer of the Seller;

(b) as soon as available and in any event within 120 days after the end of each fiscal year of the Seller, a copy of the consolidated balance sheets of the Seller and its consolidated subsidiaries as of the end of such year and the related consolidated statements of income and retained earnings of the Seller and its consolidated subsidiaries for such year, each reported on by Deloitte & Touche LLP or any other nationally recognized independent public accountants of similar standing;

(c) promptly after the sending or filing thereof, copies of all reports which the Seller sends to any of its security holders and copies of all reports and registration statements which the Seller files with the Securities and Exchange Commission or any national securities exchange, other than registration statements relating to employee benefit plans and to registrations of securities for selling security holders;

(d) promptly after the filing or receiving thereof, copies of all reports and notices with respect to any Reportable Event defined in Article IV of ERISA which the Seller or any subsidiary files under ERISA with the Internal Revenue Service or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or which the Seller or any subsidiary receives from such Corporation;

(e) as soon as possible and in any event within five days after the occurrence of each Event of Investment Ineligibility or each event which, with the giving of notice or lapse of time or both, would constitute an Event of Investment Ineligibility, the statement of the chief financial officer or chief accounting officer of the Seller setting forth details of such Event of Investment Ineligibility or event and the action which the Seller proposes to take with respect thereto; and

(f) promptly, from time to time, such other information, documents, records or reports respecting the Receivables or the conditions or operations, financial or otherwise, of the Seller, or any subsidiary as the Agent may from time to time request in order to protect the Owner's or

the Agent's interests under or contemplated by this Agreement or the Certificate.

(g) promptly, upon the delivery thereof pursuant to the Servicing Agreement, a copy of each Adjustment Request and each notice of a Servicer Default (as that term is defined in the Servicing Agreement) and notice of its intention to assign its servicing obligations pursuant to Section 6.04 of the Servicing Agreement;

(h) promptly, upon the request of the Agent, copies of all reports and certificates to be furnished pursuant to the Servicing Agreement;

(i) not less than 30 days before it becomes final and unappealable, furnish the Agent with a copy of each amendment to the Financing Order issued pursuant to the Act; and

(j) not less than 30 days before it shall occur, furnish the Agent in detail reasonably acceptable to the Agent with notice of the commencement by a Person other than the Seller of the billing and/or collecting on behalf of the Seller of charges which constitute Receivables.

SECTION 5.03. Negative Covenants of the Seller. Until the later of the Facility Termination Date and the date upon which no Capital for any Eligible Asset shall be existing, the Seller will not, without the written consent of the Agent:

(a) Sales, Liens, Etc. Except as otherwise provided herein (including Section 4.01(h)), or pursuant to the Citibank Agreement or (with respect to receivables to the extent subsumed therein) the sale of SB Charges with relation to the Securitization Bonds, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim upon or with respect to, the Seller's undivided interest in any Pool Receivable, related Contract, Related Security or Collections, or upon or with respect to the Concentration Account or to any Designated Account or Special Account, or assign any right to receive income in respect thereof.

(b) Extension or Amendment of Receivables. Except as otherwise permitted in Section 6.02, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto.

(c) Change in Business or Credit and Collection Policy. Make any change in the character of its business or in the Credit and Collection Policy, which change would, in either case, impair the collectibility of any Pool Receivable.

(d) Change in Payment Instructions to Obligors. Add or terminate any bank as a Special Account Bank from those listed in Schedule II hereto or make any change in its instructions to Obligors regarding payments to be made to the Seller or payments to be made to any Special Account Bank or to the Concentration Account, unless the Agent shall have received notice of such addition, termination or change, or, in the case such a change in instructions relates to actions taken in conjunction with the Securitization Bonds, the Agent shall have consented thereto.

(e) Deposits to Special Accounts, Concentration Account and Designated Accounts. Deposit or otherwise credit, or cause or permit to be so deposited or credited, to the Designated Account (or, if instructed by the Agent, to the Special Accounts or the Concentration Accounts) cash or cash proceeds other than Collections of Pool Receivables.

(f) Servicing Agreement and Sale Agreement. Amend any provision of the Servicing Agreement or the Sale Agreement in a manner that will have a material adverse effect on the collectibility of the Receivables or the ability of the Seller to perform hereunder.

ARTICLE VI

ADMINISTRATION AND COLLECTION

SECTION 6.01. Designation of Collection Agent. The servicing, administering and collection of the Pool Receivables shall be conducted by such Person (the "Collection Agent") so designated from time to time in accordance with this Section 6.01. Until the Agent gives notice to the Seller of a designation of a new Collection Agent, the Seller is hereby designated as, and hereby agrees to perform the duties and obligations of, the Collection Agent pursuant to the terms hereof. The Agent may at any time after the occurrence of an Event of Investment Ineligibility designate as Collection Agent any Person (including itself) to succeed the Seller or any successor Collection Agent, on the condition in each case that any such Person so designated shall agree to perform the duties and obligations of the Collection Agent pursuant to the terms

hereof. The Collection Agent may, with the prior consent of the Agent, subcontract with any other Person for servicing, administering or collecting the Pool Receivables, provided that the Collection Agent shall remain liable for the performance of the duties and obligations of the Collection Agent pursuant to the terms hereof.

SECTION 6.02. Duties of Collection Agent. (a) The Collection Agent shall take or cause to be taken all such actions as may be necessary or advisable to collect each Pool Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. Each of the Seller, the Owner, Citibank, CNAI and the Agent hereby appoints as its agent the Collection Agent, from time to time designated pursuant to Section 6.01, to enforce its respective rights and interests in and under the Pool Receivables, the Related Security and the Contracts. The Collection Agent shall set aside and hold in trust for the account of the Seller and each Owner their respective allocable shares of the Collections of Pool Receivables in accordance with Sections 2.05 and 2.06 but shall not be required (unless otherwise requested by the Agent) to segregate the funds constituting such portion of such Collections prior to the remittance thereof in accordance with said Sections. If instructed by the Agent, the Collection Agent shall segregate and deposit with a bank (which may be Citibank) designated by the Agent such allocable share of Collections of Pool Receivables, set aside for each Owner, on the first Business Day following receipt by the Collection Agent of such Collections. Provided no Event of Investment Ineligibility or Event of Purchase Ineligibility shall have occurred and be continuing, the Seller, while it is the Collection Agent, may, in accordance with the Credit and Collection Policy, extend the maturity or adjust the Outstanding Balance of any Defaulted Receivable as the Seller may determine to be appropriate to maximize Collections thereof. The Seller shall deliver to the Collection Agent, and the Collection Agent shall hold in trust for the Seller and each Owner in accordance with their respective interests, all documents, instruments and records (including, without limitation, computer tapes or disks) which evidence or relate to Pool Receivables.

(b) The Collection Agent shall, as soon as practicable following receipt, turn over to the Seller (i) that portion of Collections of Pool Receivables representing its undivided interest therein, less, in the event the Seller is not the Collection Agent, all reasonable and appropriate out-of-pocket costs and expenses of such Collection Agent of servicing, collecting and administering the Pool Receivables to the extent not covered by the Collection Agent Fee received by it and (ii)

the Collections of any Receivable which is not a Pool Receivable. The Collection Agent, if other than the Seller, shall as soon as practicable upon demand deliver to the Seller all documents, instruments and records in its possession which evidence or relate to Receivables of the Seller other than Pool Receivables, and copies of documents, instruments and records in its possession which evidence or relate to Pool Receivables. The Collection Agent's authorization under this Agreement shall terminate, after the Facility Termination Date, upon receipt by each Owner of an Eligible Asset of an amount equal to the Capital plus accrued Yield for such Eligible Asset plus all other amounts owed to the Agent, each Owner and the Seller and (unless otherwise agreed by the Agent and the Collection Agent) the Collection Agent under this Agreement.

SECTION 6.03. Rights of the Agent. (a) After the occurrence of an Event of Investment Ineligibility, the Agent is hereby authorized at any time to instruct the Obligors of Pool Receivables, or any of them, to make payment of all amounts payable under any Pool Receivable to a Designated Account or the Seller shall, promptly at the Agent's request, send notices to the Obligors of Pool Receivables, or any of them, instructing them to make payment in the manner requested by the Agent. Further, the Agent may notify at any time and at the Seller's expense the Obligors of Pool Receivables, or any of them, of the ownership of Eligible Assets by the Owner.

(b) At any time following the designation of a Collection Agent other than the Seller pursuant to Section 6.01:

(i) The Agent may direct the Obligors of Pool Receivables, or any of them, that payment of all amounts payable under any Pool Receivable be made directly to the Agent or its designee.

(ii) The Seller shall, at the Agent's request and at the Seller's expense, give notice of such ownership to each said Obligor and direct that payments be made directly to the Agent or its designee.

(iii) The Seller shall, at the Agent's request, (A) assemble all of the documents, instruments and other records (including, without limitation, computer tapes and disks) which evidence the Pool Receivables, and the related Contracts and Related Security, or which are otherwise necessary or desirable to collect such Pool Receivables, and shall make the same available to the Agent at a place selected by the Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time

to time constituting Collections of Pool Receivables in a manner acceptable to the Agent and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee.

(iv) Each of the Seller and the Owner, Citibank and CNAI hereby authorizes the Agent to take any and all steps in the Seller's name and on behalf of the Seller, and the Owner necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Pool Receivables, including, without limitation, endorsing the Seller's name on checks and other instruments representing Collections and enforcing such Pool Receivables and the Related Contracts.

SECTION 6.04. Responsibilities of the Seller. Anything herein to the contrary notwithstanding:

(a) The Seller shall perform all of its obligations under the Contracts related to the Pool Receivables to the same extent as if Eligible Assets had not been sold hereunder and the exercise by the Agent of its rights hereunder shall not relieve the Seller from such obligations or its obligations with respect to Pool Receivables; and

(b) Neither the Agent nor the Owner shall have any obligation or liability with respect to any Pool Receivables or related Contracts, nor shall either of them be obligated to perform any of the obligations of the Seller thereunder.

SECTION 6.05. Further Action Evidencing Purchases. The Seller agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Agent may reasonably request in order to perfect, protect or more fully evidence the Eligible Assets purchased by the Investor hereunder, or to enable the Owner or the Agent to exercise or enforce any of their respective rights hereunder or under the Certificate. Without limiting the generality of the foregoing, the Seller will upon the request of the Agent: (i) execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; (ii) mark conspicuously each invoice evidencing each Pool Receivable and the related Contract with a legend, acceptable to the Agent, evidencing that such Eligible Assets have been sold in accordance with this Agreement; and (iii) mark its master data processing records evidencing such Pool Receivables and related Contracts with such legend. The

Seller hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Pool Receivables and the Related Security now existing or hereafter arising without the signature of the Seller where permitted by law. If the Seller fails to perform any of its agreements or obligations under this Agreement, the Agent may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the expenses of the Agent incurred in connection therewith shall be payable by the Seller as provided in Section 10.01.

ARTICLE VII

EVENTS OF INVESTMENT INELIGIBILITY

SECTION 7.01. Events of Investment Ineligibility. If any of the following events ("Events of Investment Ineligibility") shall occur and be continuing:

(a) The Collection Agent (if other than the Agent) (i) shall fail to perform or observe any term, covenant or agreement hereunder (other than as referred to in clause (ii) of this Section 7.01(a)) and such failure shall remain unremedied for three Business Days or (ii) shall fail to make any payment or deposit to be made by it hereunder when due; or

(b) The Seller shall fail to perform or observe any term, covenant or agreement contained in Section 5.03(e) or Section 6.03(a); or

(c) Any representation or warranty made or deemed to be made by the Seller (or any of its officers) under or in connection with this Agreement, the Original Agreement or any Investor Report or other information or report delivered pursuant hereto or to the Original Agreement shall prove to have been false or incorrect in any material respect when made; or

(d) The Seller shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and any such failure shall remain unremedied for ten Business Days after written notice thereof shall have been given by the Agent to the Seller; or

(e) The Seller shall fail to pay any Debt, 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; or any other default under any agreement or instrument relating to any such Debt, or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be 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

(f) Any Purchase or any reinvestment pursuant to Section 2.05 shall for any reason, except to the extent permitted by the terms hereof (including Section 4.01(h)), cease to create, or any Eligible Asset shall for any reason cease to be, a valid and perfected first priority undivided percentage ownership interest to the extent of the pertinent Eligible Asset in each applicable Pool Receivable and the Related Security and Collections with respect thereto or the Certificate shall for any reason cease to evidence in the Owner of such Eligible Asset legal and equitable title to, and ownership of, an undivided percentage ownership interest in Pool Receivables and Related Security to the extent of such Eligible Asset; or

(g) (i) The Seller shall generally not pay its debts as such debts become due, or 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 Seller 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 for any substantial part of its property and, if instituted against the Seller, either such proceeding shall not be stayed or dismissed for 45 days or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against it or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property) shall occur; or
(ii) the Seller shall take any corporate action to

authorize any of the actions set forth in clause (i) above in this subsection (g); or

(h) The Delinquency Ratio as at the last day of any calendar month shall exceed 45% or the Default-to-Delinquency Ratio as at the last day of any calendar month shall exceed 50%; or

(i) The Net Receivables Pool Balance shall for a period of five consecutive Business Days be less than 115% of the sum of the aggregate outstanding Capital of all Eligible Assets and of the aggregate outstanding "Capital" of all "Eligible Assets" under the Citibank Agreement; or

(j) There shall have been any material adverse change in the financial condition or operations of the Seller since December 31, 1999, or there shall have occurred any event which materially adversely affects the collectibility of the Pool Receivables, or there shall have occurred any other event which materially adversely affects the ability of the Seller to collect Pool Receivables or the ability of the Seller to perform hereunder; or

(k) The sum of the Eligible Assets plus the "Eligible Assets" under the Citibank Agreement shall for a period of five consecutive Business Days be greater than 100%; or

(l) A "Servicer Default" shall occur under the Servicing Agreement; or the Seller exercises its right to assign its servicing obligations pursuant to Section 6.04 of the Servicing Agreement; or the Seller shall resign as servicer pursuant to Section 6.06 of the Servicing Agreement; or

(m) The Seller shall be required to pay indemnity payments under Section 5.01(c) of the Sale Agreement; or

(n) The Bond Trustee commences action to enforce the security interest under the Indenture; or, the Bond Trustee requests the MPSC to order the sequestration and payment to the holders of the Securitization Bonds of all revenues arising with respect to the securitization property; or

(o) The Act or the Financing Order is amended in a manner which materially affects the ability of the Seller to collect Pool Receivables or the ability of the Seller to perform hereunder.

then, and in any such event, the Agent may, by notice to the Seller declare the Facility Termination Date to have occurred, except that, in the case of any event described above in clause (i) of subsection (g) or described above in subsection (f), the Facility Termination Date shall be deemed to have occurred automatically upon the occurrence of such event. Upon any such termination of the Facility, the Agent and the Owner shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the UCC of the applicable jurisdiction and other applicable laws, which rights shall be cumulative. Without limiting the foregoing or the general applicability of Article IX hereof, any Owner may elect to assign any Eligible Asset owned by such Owner pursuant to Section 9.01 following the occurrence of any Event of Investment Ineligibility.

ARTICLE VIII

THE AGENT

SECTION 8.01. Authorization and Action. Each of the Owner, Citibank and CNAI hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Agent by the terms hereof, together with such powers as are reasonably incidental thereto.

SECTION 8.02. Agent's Reliance, Etc. Neither the 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 as Agent under or in connection with this Agreement (including, without limitation, the Agent's servicing, administering or collecting Pool Receivables as Collection Agent pursuant to
Section 6.01), except for its or their own gross negligence or willful misconduct. Without limiting the foregoing, the Agent: (i) may consult with legal counsel (including counsel for the Seller), 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 the Owner and shall not be responsible to the Owner for any statements, warranties or representations 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 Seller or to inspect the property (including the books and records) of the Seller; (iv) shall not be responsible to the

Owner for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, the Certificate 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 (including notice by telephone), consent, certificate or other instrument or writing (which may be by telex) believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 8.03. CNAI and Affiliates. With respect to any Eligible Asset owned by CNAI, CNAI shall have the same rights and powers under this Agreement as would the Owner and may exercise the same as though it were not the Agent. CNAI and its Affiliates may generally engage in any kind of business with the Seller or any Obligor, any of their respective affiliates and any Person who may do business with or own securities of the Seller or any Obligor or any of their respective Affiliates, all as if CNAI were not the Agent and without any duty to account therefor to the Owner.

SECTION 8.04. Investor's Purchase Decision. The Investor acknowledges that it has, independently and without reliance upon the Agent, any of its Affiliates or the Owner and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and, if it so determines, to purchase an undivided ownership interest in Pool Receivables hereunder. Each Owner also acknowledges that it will, independently and without reliance upon the Agent, any of its Affiliates or any other Owner and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement.

ARTICLE IX

ASSIGNMENT OF ELIGIBLE ASSETS

SECTION 9.01. Assignability. (a) This Agreement and the Owner's rights and obligations herein (including ownership of each Eligible Asset) shall be assignable by the Owner and its successors and assigns to Citibank, CNAI, any of their Affiliates, any person managed by Citibank, CNAI or any of their Affiliates or any financial or other institution acceptable to the Agent and approved by the Seller, which approval shall not be unreasonably withheld.

(b) The amount being assigned pursuant to each assignment shall in no event be less than the lesser of 5% of outstanding Capital and the assignor's remaining balance.

(c) Each assignor of an Eligible Asset or any interest therein shall notify the Agent and the Seller of any such assignment.

SECTION 9.02. Authorization of Agent. Each of the Owner, Citibank and CNAI authorizes the Agent, and the Agent agrees that it shall, annotate the Certificate to reflect any assignments made pursuant to Section 9.01 or otherwise.

ARTICLE X

INDEMNIFICATION

SECTION 10.01. Indemnities by the Seller. Without limiting any other rights which the Agent, the Owner, Citibank or CNAI or any Affiliate thereof may have hereunder or under applicable law, the Seller hereby agrees to indemnify each of the Agent, the Owner, Citibank and CNAI and each Affiliate thereof from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable attorneys' fees and disbursements (all of the foregoing being collectively referred to as "Indemnified Amounts"), awarded against or incurred by any of them arising out of or as a result of this Agreement or the ownership of Eligible Assets or in respect of any Receivable or any Contract, excluding, however, (i) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of the Agent, the Owner, Citibank or CNAI or any such Affiliate or (ii) recourse (except as otherwise specifically provided in this Agreement) for uncollectible Receivables. Without limiting the foregoing, the Seller shall pay on demand to the Agent, the Owner, Citibank or CNAI or any Affiliate thereof any and all amounts necessary to indemnify the Agent, the Owner, Citibank and CNAI and each Affiliate thereof for Indemnified Amounts relating to or resulting from:

(i) the creation of an undivided percentage ownership interest in any Receivable which is not at the date of the creation of such interest an Eligible Receivable or which thereafter ceases to be an Eligible Receivable;

(ii) reliance on any representation or warranty made by the Seller (or any of its officers) under or in connection with this Agreement, the Original Agreement, any Investor

Report or any other information or report delivered by the Seller pursuant hereto or to the Original Agreement, which shall have been false or incorrect in any material respect when made or deemed made;

(iii) the failure by the Seller to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract, or the nonconformity of any Pool Receivable or the related Contract with any such applicable law, rule or regulation;

(iv) the failure to vest in the Owner of an Eligible Asset an undivided percentage ownership interest, to the extent of such Eligible Asset, in the Receivables in, or purporting to be in, the Receivables Pool, free and clear of any Adverse Claim except for the lien, if applicable, referred to in Section 4.01(h);

(v) the failure to file, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivables in, or purporting to be in, the Receivables Pool, whether at the time of any Purchase or reinvestment or at any subsequent time;

(vi) any failure by the Seller to timely and duly perform and comply with all material provisions, covenants and other promises required to be observed by it under any Contract related to the Pool Receivables;

(vii) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable in, or purporting to be in, the Receivables Pool (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Receivable or the furnishing or failure to furnish such merchandise or services;

(viii) any failure of the Seller, as Collection Agent or otherwise, to perform its duties or obligations in accordance with the provisions of Article VI;

(ix) any products liability claim arising out of or in connection with merchandise, insurance or services which are the subject of any Contract;

(x) the commingling of Collections of Pool Receivables at any time with other funds;

(xi) the enforcement or legal recognition of any prior interest under the Mortgage in or to any Receivables or the proceeds thereof; or

(xii) any breakage and other expenses, if any, of the Investor or the Owner (including, without limitation, attorneys' fees, disbursements and accrued interest) of interest rate swaps, collars, forward agreements and future contracts in connection with the funding or maintenance of any Eligible Asset and the costs and expenses specifically set forth in the definition of Fixed Rate; or

(xii) any claim brought by any Swap Counterparty (as that term is defined in the Indenture) arising out of or in connection with the Intercreditor Agreement.

ARTICLE XI

MISCELLANEOUS

SECTION 11.01. Amendments, Etc. No amendment or waiver of any provision of this Agreement or consent to any departure by the Seller therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, as agent for the Owner, Citibank and CNAI, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. This Agreement contains a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.

SECTION 11.02. Notices, Etc. All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including telex communication) and mailed or telexed or delivered, as to each party thereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall be effective, in the case of notice by mail, when deposited in the mails, and, in the case of notice by telex, when telexed, in each case addressed as aforesaid, except that notices and communications to the Agent pursuant to Article II shall not be effective until received.

SECTION 11.03. No Waiver; Remedies. No failure on the part of the Agent, Citibank, the Owner or CNAI to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder 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. Without limiting the foregoing, Citibank is hereby authorized by the Seller 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 Citibank to or for the credit or the account of the Seller against any and all of the obligations of the Seller, now or hereafter existing under this Agreement to the Agent, the Owner, Citibank or CNAI or their respective successors and assigns, irrespective of whether or not any demand shall have been made under this Agreement and although such obligations may be unmatured. Citibank agrees promptly to notify the Seller after any such set-off and application; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.

SECTION 11.04. Binding Effect; Assignability. This Agreement shall be binding upon and inure to the benefit of the Seller, the Agent, the Owner, Citibank, CNAI and their respective successors and assigns; provided, however, that the Seller may not assign its rights or obligations hereunder or any interest herein without the prior written consent of the Agent. This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Facility Termination Date, as no Capital of any Eligible Asset shall be outstanding; provided, however, that rights and remedies with respect to any breach of any representation and warranty made by the Seller pursuant to Article IV and the provisions of Article X and Sections 11.06, 11.07 and 11.08 shall be continuing and shall survive any termination of this Agreement.

SECTION 11.05. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, except to the extent that the validity or perfection of the interests of the Owner in the Receivables, or remedies hereunder, in respect thereof, are governed by the laws of a jurisdiction other than the State of New York.

SECTION 11.06. Costs, Expenses and Taxes. (a) In addition to the rights of indemnification granted to the Agent, the Owner, Citibank, CNAI and their respective Affiliates under

Article X hereof, the Seller agrees to pay on demand all costs and expenses in connection with the preparation, execution, delivery and administration (including periodic auditing) of this Agreement, the Certificate and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent, the Investor, Citibank, CNAI and their respective Affiliates with respect thereto and with respect to advising the Agent, the Investor, Citibank, CNAI and their respective Affiliates as to their respective rights and remedies under this Agreement, and all costs and expenses, if any (including reasonable counsel fees and expenses), of the Agent, the Owner, Citibank, CNAI and their respective Affiliates in connection with the enforcement of this Agreement, the Certificate and the other documents to be delivered hereunder.

(b) In addition, the Seller shall pay any and all commissions of placement agents and commercial paper dealers in respect of commercial paper notes of the Investor issued to fund the Purchase or maintenance of any Eligible Asset and any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement, the Certificate or the other documents to be delivered hereunder, and agrees to indemnify the Agent, the Owner, Citibank, CNAI and their respective Affiliates against any liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees; provided, however, that the aggregate amount of the Seller's liability for commissions of placement agents and commercial paper dealers shall not exceed in any year (commencing on the date hereon and commencing on each anniversary thereof) 8/100 of 1% of the amount of the entire Purchase Limit (whether used or unused) as in effect at the commencement of such year.

(c) In addition, the Seller shall pay on demand all other costs, expenses and taxes (excluding income taxes) incurred by the Investor or any shareholder of the Investor ("Other Costs"), including, without limitation, the cost of auditing the Investor's books by certified public accountants, the cost of rating the Investor's commercial paper by independent financial rating agencies, the taxes (excluding income taxes) resulting from the Investor's operations, and the reasonable fees and out-of-pocket expenses of counsel for the Investor or any counsel for any shareholder of the Investor with respect to
(i) advising the Investor or shareholder as to its rights and remedies under this Agreement, (ii) the enforcement of this Agreement, the Certificate and the other documents to be delivered hereunder, or (iii) advising the Investor or such shareholder as to matters relating to the Investor's operations; provided, however, that if

the Investor enters into agreements for the purchase of interests in receivables from one or more other Persons ("Other Sellers"), the Seller and such Other Sellers shall each be liable for such Other Costs ratably in accordance with the usage under the respective facilities of the Investor to purchase receivables or interests therein from the Seller and each Other Seller; and provided, further, that if such Other Costs are attributable to the Seller and not attributable to any Other Seller, the Seller shall be solely liable for such Other Costs.

SECTION 11.07. No Proceedings. Each of the Seller, the Agent, Citibank, CNAI and each assignee of an Eligible Asset or any interest therein and each entity which enters into a commitment to purchase Eligible Assets or interests therein hereby agrees that it will not institute against the Investor any proceeding of the type referred to in clause (i) of Section 7.01(g) so long as any commercial paper issued by the Investor shall be outstanding or there shall not have elapsed one year plus one day since the last day on which any such commercial paper shall have been outstanding.

SECTION 11.08. Confidentiality. Except to the extent otherwise required by applicable law, the Seller agrees to maintain the confidentiality of this Agreement (and all drafts thereof) in communications with third parties and otherwise; provided, however, that the Agreement may be disclosed to third parties to the extent such disclosure is (i) required in connection with a sale of securities of the Seller, (ii) made solely to persons who are legal counsel for the purchaser or underwriter of such securities, (iii) limited in scope to the provisions of Articles V, VII, X and, to the extent defined terms are used in Articles V, VII and X, such terms defined in Article I of this Agreement and
(iv) made pursuant to a written agreement of confidentiality in form and substance reasonably satisfactory to the Agent; provided, further, however, that the Agreement may be disclosed to the Seller's legal counsel pursuant to an agreement of the type referred to in clause (iv), above; and provided, further, however, that the Seller shall have no obligation of confidentiality in respect of any information which may be generally available to the public or becomes available to the public through no fault of the Seller. The Agent, Citibank, CNAI and each assignee of an Eligible Asset or any interest therein and each entity which enters into a commitment to purchase Eligible Assets or interests therein may, in connection with any assignment or participation or proposed assignment or participation disclose to the assignee or participant or proposed assignee or participant any information relating to the Seller furnished to such entity by or on behalf of the Seller or by the Agent; provided, that prior to any such disclosure, the assignee

or participant or proposed assignee or participant agrees to preserve the confidentiality of any confidential information relating to the Seller received by it from any of the foregoing entities.

SECTION 11.09. 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 when taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties 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 /s/ Christopher C. Arvani
  ------------------------------
   Title: Assistant Treasurer -
          Banking

2000 Second Avenue Detroit, MI 48226

CORPORATE ASSET FUNDING
COMPANY, INC.,

By: Citicorp North America, Inc.
as Attorney-in-Fact

By /s/ Joseph A. Farina
   -------------------------
   Vice President

450 Mamaroneck Avenue Harrison, N.Y. 10528 Attention: President (Telex No. 127001 Route to Citiswitch Terminal NYEQF)

CITICORP NORTH AMERICA, INC.
Individually and as Agent

By /s/ Joseph A. Farina
   -------------------------
   Vice President

450 Mamaroneck Avenue Harrison, N.Y. 10528 Attention: Corporate Asset Funding Department (Telex No. 127001 Route to Citiswitch Terminal NYEQF)

CITIBANK, N.A.

By /s/ Joseph A. Farina
  -----------------------
   Vice President

450 Mamaroneck Avenue Harrison, N.Y. 10528 Attention: Corporate Asset Funding Department (Telex No. 127001 Route to Citiswitch Terminal NYEQF)


	(i) The consummation of a transaction in which the Company is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such transaction less than 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such transaction is held in the aggregate by the holders of Voting Stock of the Company immediately prior to such transaction;

	(ii) The consummation of a sale or transfer in which the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person, and as a result of such sale or transfer less than 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such sale or transfer is held in the aggregate (directly or through ownership of Voting Stock of the Company or a Subsidiary) by the holders of Voting Stock of the Company immediately prior to such sale or transfer; or

	(iii) The approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.


(1)	The consummation of a transaction in which DTE is merged, consolidated or reorganized into or with another corporation or other legal person, and as a result of such transaction, less than 55% of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors (“Voting Stock”) of such corporation or person immediately after


	such transaction is held in the aggregate by the holders of Voting Stock of DTE immediately prior to such transaction;

(2)	The consummation of a transaction in which DTE sells or otherwise transfers all or substantially all of its assets to another corporation or other legal person and, as a result of such sale or transfer, less then 55% of the combined voting power of the then-outstanding Voting Stock of such corporation or person immediately after such sale or transfer is held in the aggregate (directly or through ownership of Voting Stock of DTE or a Subsidiary) by the holders of Voting Stock of DTE immediately prior to such sale or transfer; or

(3)	The approval by the shareholders of DTE of a complete liquidation or dissolution of DTE.