UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 2002
Commission file number 1-2198
The registrant meets the conditions set forth in General Instruction H (1) (a)
and (b) of Form 10-Q and is, therefore, filing this Form with the reduced
disclosure format.
THE DETROIT EDISON COMPANY
Michigan
(State or other jurisdiction of incorporation or
organization)
38-0478650
(I.R.S. Employer
Identification No.)
2000 2nd Avenue, Detroit, Michigan
(Address of principal executive offices)
48226-1279
(Zip Code)
313-235-8000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
The Detroit Edison Company
Quarterly Report on Form 10-Q
Quarter Ended September 30, 2002
Table of Contents
2
Definitions
| Customer Choice | The choice program is a statewide initiative giving customers in Michigan the option to choose alternative suppliers for electricity. | |
| DTE Energy | DTE Energy Company and Subsidiary Companies | |
| Detroit Edison | The Detroit Edison Company (a wholly owned subsidiary of DTE Energy Company) and Subsidiary Companies | |
| Enterprises | DTE Enterprises Inc. (successor to MCN Energy), a wholly owned subsidiary of DTE Energy Company | |
| EPA | United States Environmental Protection Agency | |
| FERC | Federal Energy Regulatory Commission | |
| kWh | Kilowatthour | |
| MCN Energy | MCN Energy Group Inc. | |
| MichCon | Michigan Consolidated Gas Company | |
| MPSC | Michigan Public Service Commission | |
| MW | Megawatt | |
| MWh | Megawatthour | |
| PSCR | A power supply cost recovery mechanism authorized by the MPSC that allowed Detroit Edison to recover through rates its fuel, fuel-related and purchased power electric expenses. The clause was suspended under Michigan’s restructuring legislation signed into law June 5, 2000, which lowered and froze electric customer rates. | |
| SEC | Securities and Exchange Commission | |
| Securitization | A mechanism used by Detroit Edison to refinance specific stranded costs at lower interest rates through the sale of rate reduction bonds. | |
| SFAS | Statement of Financial Accounting Standards | |
| Stranded Costs | Costs incurred by utilities in order to serve customers in a regulated environment, but some of which may not be recoverable if customers switch to alternative suppliers of electricity. |
3
The Detroit Edison Company
Forward-Looking Statements
Certain information presented herein includes forward-looking statements. Forward-looking statements involve certain risks and uncertainties that may cause actual future results to differ materially from those contemplated, projected, estimated or budgeted in such forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to, interest rates, access to the capital markets and capital market conditions (including the effect on Detroit Edison’s pension plan investments), the level of borrowings, the effects of weather and other natural phenomena on operations, actual sales, economic climate and growth in the geographic areas in which Detroit Edison does business, the timing and extent of changes in commodity prices for electricity, unscheduled generation outages, maintenance or repairs, nuclear power plant performance, changes in the cost of fuel and purchased power due to the suspension of the PSCR mechanism, the effects of increased competition from other energy suppliers and the implementation of electric Customer Choice programs as well as alternative forms of energy, the implementation of electric utility restructuring in Michigan (which involves pending regulatory and related judicial proceedings, and actual and possible reductions in authorized rates and earnings), the effects of changes in governmental policies including income taxes, environmental compliance and nuclear requirements and the ability to recover these costs through rate increases, the impact of FERC and MPSC proceedings and existing and proposed regulations and the timing of the accretive effects of DTE Energy’s merger with MCN Energy.
Management’s Narrative Analysis of the Results of Operations
The Results of Operations discussion for Detroit Edison is presented in accordance with General Instruction H (2) (a) of Form 10-Q.
Detroit Edison reported net income of $105 million for the 2002 three-month period, compared to net income of $88 million for the same period in 2001. For the nine-month period, net income was $272 million compared to $124 million for the same period in 2001. The earnings comparability for the three- and nine-month periods is affected by $9 million ($5 million net of tax) and $184 million ($119 million net of tax), respectively, of merger and restructuring charges that were recorded in 2001.
New reporting alignment - Beginning in 2002, Detroit Edison’s parent company, DTE Energy, realigned its internal and external financial reporting structure into three strategic business units (Energy Resources, Energy Distribution and Energy Gas) that have both regulated and non-regulated operations. Based on this structure, management sets strategic goals, allocates resources and evaluates performance. The realignment resulted in the following two reportable segments for Detroit Edison:
Energy Resources includes the power generation services of Detroit Edison. Electricity is generated from Detroit Edison’s numerous fossil plants or its nuclear plant and sold throughout Southeastern Michigan to residential, commercial, industrial and wholesale customers.
Energy Distribution includes the electric distribution services of Detroit Edison. Energy Distribution distributes electricity generated by Energy Resources and alternative electric suppliers to Detroit Edison’s 2.1 million residential, commercial and industrial customers.
4
Management’s Narrative Analysis and Results of Operations
Three Months Ended
Nine Months Ended
September 30
September 30
(in
Millions)
2002
2001
2002
2001
$
38
$
30
$
150
$
120
67
63
122
123
105
93
272
243
—
(5
)
—
(119
)
$
105
$
88
$
272
$
124
Energy Resources
Earnings increased $8 million and $30 million during the 2002 three- and
nine-month periods, respectively, reflecting higher gross margins due to lower
purchased power costs. The lower purchased power costs reflect favorable energy
market prices in 2002. Mark to market accounting for forward and option contracts in 2001 impacted revenues and purchased power, resulting in a favorable impact on margins of $36
million in the 2001 third quarter, and an unfavorable impact on margins of $9 million in the 2001 nine-month period. Margins were
also impacted by higher revenues due to greater cooling demand in the 2002
third quarter and the loss of revenues resulting from customers switching to
alternative electric suppliers under the electric Customer Choice program.
Revenues for the 2002 nine-month period also were reduced due to the impact of
a 5% legislatively mandated, securitization based, rate reduction for
commercial and industrial customers that began in April 2001. The higher gross
margins were partially offset by increased employee benefit costs and higher
operations and maintenance expenses due to planned and unplanned reliability
and maintenance work done to improve the production and availability of the
generation fleet. Depreciation and amortization expense decreased in the
nine-month period reflecting the extension of the amortization period from 7
years to 15 years for certain regulatory assets that were securitized in 2001.
Three Months Ended
Nine Months Ended
September 30
September 30
2002
2001
2002
2001
$
784
$
766
$
2,052
$
2,172
365
397
780
974
$
419
$
369
$
1,272
$
1,198
$
38
$
30
$
150
$
120
5
Management’s Narrative Analysis and Results of Operations
System output and average fuel and purchased power costs were as follows:
Three Months Ended
Nine Months Ended
September 30
September 30
2002
2001
2002
2001
11,183
11,021
29,813
30,639
2,384
2,406
7,008
7,135
3,439
2,092
7,257
5,360
17,006
15,519
44,078
43,134
$
12.98
$
12.60
$
12.62
$
12.34
$
52.96
$
148.08
$
43.24
$
92.84
| (1) | Represents fuel costs associated with power plants. | |
| (2) | The average purchased power amounts include hedging activities. |
Outlook -Electric restructuring will continue to result in increased competition in the electric generation business. Effective January 1, 2002, the electric Customer Choice program in Michigan was expanded to allow all electric customers to choose to purchase their electricity from suppliers other than their local utility. Detroit Edison expects to lose between 5% to 8% of retail sales in 2002 and between 10% to 15% of such sales in 2003 as a result of customers choosing to participate in the electric Customer Choice program. To the extent Detroit Edison experiences net stranded costs as a result of customers switching to an alternative electric supplier, Michigan law allows the recovery of all amounts of such net stranded costs. Detroit Edison disagreed with the MPSC initial methodology for determining and recovering net stranded costs and has asked for rehearing, clarification and modification of the December 2001 order. In May 2002, the MPSC denied Detroit Edison’s request for rehearing and clarification on certain aspects of the order. In June 2002, Detroit Edison filed a claim of appeal of the December 2001 MPSC order with the Michigan Court of Appeals.
In May 2002, Detroit Edison filed a new net stranded cost case with the MPSC that seeks to refine the methodology approved by the MPSC in December 2001 and calculates actual net stranded costs for 2000 and 2001. The MPSC Staff and interveners submitted their net stranded cost filings in November 2002. Detroit Edison expects to record 2002 net stranded costs as a regulatory asset with the offsetting entry reducing expense in the fourth quarter of 2002. See Note 3.
Energy Distribution
Earnings increased $4 million during the 2002 three-month period and decreased $1 million during the 2002 nine-month period reflecting higher operating revenues which were offset by increased operation and maintenance expenses. Operating revenues increased due primarily to higher residential sales attributable to greater cooling demand. The increased operation and maintenance expenses are attributable to heat-related maintenance expenses due to prolonged periods of above normal temperatures and the related stress placed on the distribution system, higher employee benefit costs, and expenses associated with restoring power to customers who lost service during two storms in the 2002 nine-month period.
6
Management’s Narrative Analysis and Results of Operations
Three Months Ended
Nine Months Ended
September 30
September 30
2002
2001
2002
2001
$
416
$
355
$
1,040
$
965
$
67
$
63
$
122
$
123
Three Months Ended
Nine Months Ended
Electric Sales and Deliveries
September 30
September 30
2002
2001
2002
2001
5,131
4,415
12,377
11,321
5,076
5,115
14,135
14,370
3,472
3,641
10,342
10,964
578
506
1,670
1,623
100
90
298
277
14,357
13,767
38,822
38,555
935
322
2,577
894
15,292
14,089
41,399
39,449
Outlook - Regulated electric system deliveries are expected to continue to increase for the remainder of 2002 and into 2003 due to the economic recovery. Operating results will vary as a result of various external factors such as weather, changes in economic conditions and the severity and frequency of storms.
7
Management’s Narrative Analysis and Results of Operations
CAPITAL RESOURCES AND LIQUIDITY
Operating Activities
Net cash from operating activities decreased $193 million in the 2002
nine-month period compared to the same period in 2001. The decrease reflects a
$45 million decline in net income, after adjusting for non-cash items
(depreciation, depletion and amortization, merger and restructuring charges and
deferred taxes), and higher working capital levels. The working capital
requirements reflect lower accounts payable balances, to more normalized
levels, representing the internal focus on managing external payments and
taking greater advantage of purchase discounts.
Investing Activities
Net cash used for investing activities decreased $244 million in the 2002
nine-month period compared to the same period in 2001 due to lower investments
in regulatory assets associated with securitizing the company’s Fermi 2 power
generation facility in March 2001. Additionally, a significantly lower amount
of cash that was restricted for debt redemptions also affected the comparison.
Financing Activities
Net cash used for financing activities increased $237 million during the 2002
nine-month period compared to the same period in 2001. This change is due
primarily to the repurchase of more debt, net of issuances in the 2002 period.
Additionally, the repurchase of $846 million in common stock in 2001 also
contributed to the change.
PENSION AND POSTRETIREMENT COSTS
Detroit Edison’s costs of providing pension and postretirement benefits are
dependent upon a number of factors, such as the rates of return on plan assets,
the discount rate and the rate of increase in health care costs. The market
value of plan assets has been affected by sharp declines in the equity market
since 2000. As a result, at December 31, 2002, Detroit Edison could be required
to recognize an additional minimum pension liability as prescribed by SFAS No.
87 “Employers’ Accounting for Pensions” and SFAS No. 132 “Employers’
Disclosures about Pensions and Postretirement Benefits.” The offset to any
liability would be recorded as a reduction in shareholder’s equity, net of tax,
or as a regulatory asset. The additional minimum pension liability and related
accounting entries would be reversed on the balance sheet in future periods if
the fair value of plan assets exceeds the accumulated pension benefit
obligations. The additional minimum
8
Management’s Narrative Analysis and Results of Operations
pension liability recorded, if any, will depend upon actual returns and
interest rates in 2002, but could exceed $300 million pre-tax ($195 million
after tax). The recording of any minimum pension liability would not affect net
income or cash flow in 2002. Pension and postretirement costs and pension cash
funding requirements could increase in future years without a substantial
recovery in the equity markets. It is estimated that the increase in 2003
pension and postretirement costs could range from $80 million-$110
million, pre-tax, depending on actual plan asset returns, the
discount rate and other actuarial assumptions that will not be
determined until December 31, 2002. Detroit Edison
will initiate cost saving strategies to significantly offset the earnings
impact of higher pension and postretirement costs.
ENVIRONMENTAL MATTERS
EPA ozone transport regulations and new air quality standards relating to ozone
and particulate air pollution will impact the Company. Detroit Edison has
spent approximately $409 million through September 2002 and estimates that it
will incur an additional $400 to $450 million of future capital expenditures
over the next five years to comply.
NEW ACCOUNTING PRONOUNCEMENTS
During 2001, the Financial Accounting Standards Board (FASB) issued new
accounting pronouncements concerning business combinations, goodwill and other
intangible assets, asset retirement obligations and impairment or disposal of
long-lived assets. See Note 7 for a discussion of Detroit Edison’s evaluation
of the adoption of these new accounting pronouncements.
9
Controls and Procedures
10
The Detroit Edison Company
See Notes to Consolidated Financial Statements (Unaudited)
11
The Detroit Edison Company
See Notes to Consolidated Financial Statements (Unaudited)
12
The Detroit Edison Company
See Notes to Consolidated Financial Statements (Unaudited)
13
The Detroit Edison Company
See Notes to Consolidated Financial Statements (Unaudited)
14
The Detroit Edison Company
The following table displays comprehensive income for nine-month periods in
2002 and 2001:
See Notes to Consolidated Financial Statements (Unaudited)
15
The Detroit Edison Company
NOTE 1 — GENERAL
These consolidated financial statements should be read in conjunction with the
notes to consolidated financial statements included in the 2001 Annual Report
to the Securities and Exchange Commission on Form 10-K.
The accompanying consolidated financial statements were prepared in conformity
with accounting principles generally accepted in the United States of America.
In connection with their preparation, management makes estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
The consolidated financial statements are unaudited, but in the opinion of the
Company’s management, 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 AND RESTRUCTURING CHARGES
On May 31, 2001, Detroit Edison’s parent company, DTE Energy, completed the
acquisition of MCN Energy. Detroit Edison incurred merger-related charges and
restructuring charges associated with the acquisition. The merger-related
charges of $7 million ($4 million after tax) in the 2001 three-month period and
$19 million ($12 million after tax) in the 2001 nine-month period, consisted
primarily of system integration, relocation, legal, accounting and consulting
costs. Restructuring charges of $2 million ($1 million after tax) in the 2001
three-month period and $165 million ($107 million after tax) in the 2001
nine-month period, were primarily associated with a work force reduction plan.
The plan included early retirement incentives along with voluntary separation
arrangements for 890 employees, primarily in overlapping corporate support
functions. The merger and restructuring costs had the effect of decreasing
Detroit Edison’s earnings by $9 million ($5 million after tax) and $184 million
($119 million after tax) for the 2001 three- and nine-month periods,
respectively.
NOTE 3 — REGULATORY MATTERS
Electric Industry Restructuring
As required by 2000 Public Act (PA) 141, the MPSC conducted a proceeding to
develop a methodology for calculating the net stranded costs associated with
electric Customer Choice. In a December 2001 order, the MPSC determined that
Detroit Edison could recover net stranded costs associated with the fixed cost
component of its electric generation operations. Specifically, there would be
an annual filing with the MPSC comparing the actual revenues associated with
the fixed cost component of its generation services to the revenue requirement
for the fixed cost component of those services, inclusive of an allowance for
the cost of capital. Any resulting shortfall in recovery, net of mitigation,
would be considered a net stranded cost. The MPSC, in its December 2001 order,
also determined that Detroit Edison had no stranded costs in 2000 and
consequently established a zero net stranded cost transition charge for billing
purposes in 2002. The MPSC
16
Notes to Consolidated Financial Statements (Unaudited)
authorized Detroit Edison to establish a regulatory asset to defer recovery of
its incurred stranded costs after review in a subsequent annual net stranded
cost proceeding. The MPSC also determined that Detroit Edison should provide a
full and offsetting credit for the securitization and tax charges applied to
electric Customer Choice bills in 2002 and maintained an additional credit on
bills equivalent to the 5% rate reduction benefiting full service customers,
both funded by savings derived from securitization. The December 2001 order
when combined with lower wholesale power prices has encouraged additional
customer participation in the electric Customer Choice program and has resulted
in the loss of margins attributable to generation services. In May 2002, the
MPSC denied Detroit Edison’s request for rehearing and clarification. In June
2002, Detroit Edison filed an appeal of the MPSC order at the Michigan Court of
Appeals, challenging the legality of specific aspects of the MPSC order.
In May 2002, Detroit Edison submitted its 2002 net stranded cost filing with
the MPSC. The filing provides refinements to the MPSC Staff’s calculation of
net stranded costs that was adopted in the December 2001 order, seeks more
timely recovery of net stranded costs, and addresses issues raised by the
continuation of securitization offsets and rate reduction equalization credits.
Detroit Edison’s filing supports the following conclusions: (i) Detroit Edison
had no net stranded costs in 2000 and $13 million of recoverable net stranded
costs attributable to electric Customer Choice in 2001; (ii) Detroit Edison
requested recovery of 2001 net stranded costs through the use of excess
residual securitization savings; (iii) Detroit Edison expects to incur
additional net stranded costs in 2002 and 2003 as a result of increased
electric Customer Choice participation; and (iv) recommended that a pro-forma
or forward looking transition charge be approved for billing during the
remainder of 2002 and for 2003 to eliminate the time lag between the
occurrence and recovery of net stranded costs inherent in the methodology
approved in the December 2001 order. In November 2002, the MPSC Staff and
other interveners submitted their 2002 net stranded cost filings. Detroit
Edison expects to record 2002 net stranded costs as a regulatory asset with the
offsetting entry reducing expense in the fourth quarter of 2002.
In another December 2001 order, the MPSC finalized the prices, terms and
conditions contained in the Retail Access Service Tariff (RAST). Detroit
Edison requested rehearing and clarification on certain aspects of the order.
In an order issued in April 2002, the MPSC modified its December 2001 order
approving Detroit Edison’s RAST and reduced the requirements imposed on Detroit
Edison in the December 2001 order concerning meter installation, meter reading
and computer system enhancements for customers that elect to participate in the
electric Customer Choice program.
In several orders issued in June 2000, the MPSC determined that adjusting rates
for changes in fuel and purchased power expenses through continuance of the
PSCR clause would be inconsistent with the rate freeze required by PA 141.
Detroit Edison was not permitted to collect the 1998 PSCR under-recovery of $9
million, plus accrued interest of $3 million. Also, Detroit Edison was not
required to refund approximately $55 million of liabilities for over-recoveries
of PSCR expenses for 1999 and 2000, and disallowances under the Fermi 2
performance standard mechanism. In January and March 2002, the Michigan Court
of Appeals rejected appeals and motions for rehearing filed by parties opposing
the MPSC’s actions in this proceeding. In March 2002, the Michigan Attorney
General applied for leave to appeal at the Michigan Supreme Court. The court
has not yet determined whether or not it will hear the case.
17
Notes to Consolidated Financial Statements (Unaudited)
Other
In accordance with a November 1997 MPSC order, Detroit Edison reduced rates by
$53 million annually to reflect the scheduled reduction in the revenue
requirement for Fermi 2. The $53 million reduction was effective in January
1999. In addition, the November 1997 MPSC order authorized the deferral of $30
million of storm damage costs and amortization and recovery of the costs over a
24-month period commencing January 1998. After various legal appeals, the
Michigan Court of Appeals remanded the matter to the MPSC. In December 2000,
the MPSC issued an order reopening the case for hearing. The parties in the
case have agreed to a stipulation of fact and waiver of hearing. In June 2002,
the MPSC issued an order modifying in part, and reaffirming in part, previous
orders that authorized Detroit Edison to amortize and collect in rates the
storm damage costs incurred in 1997. The MPSC modified its 1997 order
regarding the calculation of the storm damage costs, and in doing so ordered
Detroit Edison to refund approximately $1.5 million after January 1, 2004. The
2004 refund will also include interest accrued from January 1, 2000 at Detroit
Edison’s authorized rate of return. In July 2002, the Michigan Attorney
General filed an appeal with the Michigan Court of Appeals regarding the June
2002 MPSC order.
Detroit Edison is unable to predict the outcome of the regulatory matters
discussed herein. Resolution of these matters is dependent upon future MPSC
orders, which may impact the financial position, results of operations and cash
flows of Detroit Edison.
NOTE 4 — CONTINGENCIES
Personal Property Taxes
Detroit Edison and other Michigan utilities have asserted that Michigan’s
valuation tables result in the substantial overvaluation of utility personal
property. Valuation tables established by the Michigan State Tax Commission
(STC) are used to determine the taxable value of personal property based on the
property’s age. In November 1999, the STC approved new valuation tables that
more accurately recognize the value of a utility’s personal property. The new
tables became effective in 2000 and are currently used to calculate property
tax expense. However, several local taxing jurisdictions have taken legal
action attempting to prevent the STC from implementing the new valuation tables
and have continued to prepare assessments based on the superseded tables. The
legal actions regarding the appropriateness of the new tables were before the
Michigan Tax Tribunal (MTT) which, in April 2002, issued its decision
essentially affirming the validity of the STC’s new tables. In June 2002,
petitioners in the case filed an appeal of the MTT’s decision with the Michigan
Court of Appeals.
Other
Detroit Edison purchases and sells electricity to numerous companies operating
in the steel, automotive, energy and retail industries. During 2001 and 2002,
a number of customers have filed for bankruptcy protection under Chapter 11 of
the U.S. Bankruptcy Code, including certain Enron Corporation affiliates and
National Steel Company. Management regularly reviews contingent matters
relating to purchase and sale contracts and records provisions for amounts
considered probable of loss. Management believes its previously accrued
amounts are adequate for losses that are probable of occurring. The final
resolution of these matters are not expected to have a material effect on
Detroit Edison’s financial statements in the period they are resolved.
18
Notes to Consolidated Financial
Statements (Unaudited)
NOTE 5 — LONG-TERM DEBT
On October 23, 2002, Detroit Edison issued $450 million of its senior notes
($225 million due 2012 at 5.20% and $225 million due 2032 at 6.35%). These
notes are collateralized by Detroit Edison’s General and Refunding Mortgage
Bonds.
Substantially all of the net utility property of Detroit Edison is subject to
the lien of a Mortgage and Deed of Trust (Mortgage). Should Detroit Edison
fail to timely pay its indebtedness under the Mortgage, such failure will
create cross defaults in substantially all of Detroit Edison’s indebtedness.
NOTE 6 — SHORT TERM CREDIT ARRANGEMENTS AND BORROWINGS
On October 25, 2002, Detroit Edison entered into a $135 million, 364-day
revolving credit facility and a $65 million, three-year revolving credit
facility with a syndicate of banks. These credit facilities may be utilized
for general corporate borrowings, but primarily are intended to provide
liquidity support for Detroit Edison’s commercial paper program up to $200
million in amount. These agreements require Detroit Edison to maintain a debt
to capitalization ratio of no more than 0.65 to 1 and an “earnings before
interest, taxes, depreciation and amortization” (EBITDA) to interest ratio of
no less than 2 to 1. Detroit Edison is currently in compliance with these
financial covenants.
NOTE 7 — NEW ACCOUNTING PRONOUNCEMENTS
Goodwill and Other Intangible Assets
- Effective January 1, 2002, Detroit
Edison adopted SFAS No. 142, “Goodwill and Other Intangible Assets,” which
addresses the financial accounting and reporting standards for the acquisition
of intangible assets outside of a business combination and for goodwill and
other intangible assets subsequent to their acquisition. As of the date of
adoption, Detroit Edison had no goodwill.
In connection with the adoption of SFAS No. 142, Detroit Edison also reassessed
the useful lives and the classification of identifiable intangible assets and
determined that they continue to be appropriate. Detroit Edison’s intangible
assets consist primarily of software and are subject to amortization.
Intangible assets amortization expense was approximately $9 million and $27
million in the third quarter and nine-month period, respectively, compared with
approximately $10 million and $29 million for the comparable 2001 periods.
There were no material acquisitions of intangible assets during the 2002
nine-month period. The gross carrying amount and accumulated amortization of
intangible assets at September 30, 2002 were $346 million and $261 million,
respectively. Amortization expense of intangible assets is estimated to be $36
million annually for 2002 through 2006.
Asset Retirement Obligations
- In June 2001, the FASB issued SFAS No. 143,
“Accounting for Asset Retirement Obligations.” This statement requires that
the fair value of an asset retirement obligation be recognized in the period in
which it is incurred. The associated asset retirement costs would be
capitalized as part of the carrying amount of the long-lived asset. It would
apply to legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset. This statement is effective for financial
statements issued for fiscal years beginning after June 15, 2002. Detroit
Edison will adopt this statement in January 2003 and has not yet determined the
impact of this statement on the consolidated financial statements.
19
Notes to Consolidated Financial Statements (Unaudited)
Long-Lived Assets
- On January 1, 2002, Detroit Edison adopted SFAS No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144
supersedes SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of,” but retains the fundamental
provisions for recognizing and measuring impairment of long-lived assets to be
held and used or disposed of by sale. The statement also supersedes the
accounting and reporting provisions for the disposal of a segment of a
business. SFAS No. 144 eliminates the conflict between accounting models for
treating the disposition of long-lived assets that existed between SFAS No. 121
and the guidance for a segment of a business accounted for as a discontinued
operation by adopting the methodology established in SFAS No. 121, and also
resolves implementation issues related to SFAS No. 121. The adoption of the
statement did not have an impact on the consolidated financial statements of
Detroit Edison.
NOTE 8 — SEGMENT INFORMATION
During 2002, Detroit Edison’s parent company, DTE Energy, realigned its
financial reporting structure into strategic business units that provide
various regulated and non-regulated energy services. The realignment resulted
in the following two reportable segments for Detroit Edison. Inter-segment
revenues are not material.
20
INDEPENDENT ACCOUNTANTS’ REPORT
To the Board of Directors and Shareholder of
We have reviewed the accompanying condensed consolidated statement of financial
position of The Detroit Edison Company and subsidiaries as of September 30,
2002, and the related condensed consolidated statement of operations for the
three-month and nine-month periods ended September 30, 2002 and 2001, the
condensed consolidated statement of cash flows for the nine-month periods ended
September 30, 2002 and 2001, and the condensed consolidated statement of
changes in shareholder’s equity for the nine-month period ended September 30,
2002. These financial statements are the responsibility of The Detroit Edison
Company’s management.
We conducted our review 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 review, 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 statement of
financial position of The Detroit Edison Company and subsidiaries as of
December 31, 2001, and the related consolidated statements of operations, cash
flows and changes in shareholder’s equity for the year then ended (not
presented herein); and in our report dated February 26, 2002 (September 17, 2002 as to Note 16),
we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
statement of financial position as of December 31, 2001 is fairly stated, in
all material respects, in relation to the consolidated statement of financial
position from which it has been derived.
/s/ DELOITTE & TOUCHE LLP
21
Exhibits and Reports on Form 8-K
On September 20, 2002, Detroit Edison filed a Report on Form 8-K, dated
September 17, 2002, containing updated information as of year-end 2001 with
respect to its two reporting segments.
22
Signature
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.
23
Nine Months Ended
September 30
2002
2001
$
556
$
749
(508
)
(752
)
(236
)
1
$
(188
)
$
(2
)
Table of Contents
Table of Contents
(a)
Evaluation of disclosure controls and procedures
Detroit Edison’s Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of Detroit Edison’s disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and 15d-14(d)) as of
a date within 90 days before the filing of this quarterly report, and have concluded that, as of the evaluation date, such controls and
procedures were effective at ensuring that required information will be
disclosed on a timely basis in reports filed under the Exchange Act.
(b)
Changes in internal controls
There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in Detroit
Edison’s internal controls or in other factors that could significantly
affect these controls subsequent to the evaluation date referenced in
paragraph (a) above.
Table of Contents
Consolidated Statement of Operations (Unaudited)
Three Months
Nine Months
Ended
Ended
September 30
September 30
2002
2001
2002
2001
$
1,200
$
1,121
$
3,092
$
3,137
386
414
841
1,037
341
279
937
813
164
164
449
498
69
56
206
207
—
9
—
184
960
922
2,433
2,739
240
199
659
398
76
75
232
225
—
—
(1
)
(3
)
(5
)
(11
)
(16
)
(50
)
10
16
34
63
81
80
249
235
159
119
410
163
54
31
138
36
105
88
272
127
—
—
—
(3
)
$
105
$
88
$
272
$
124
Table of Contents
Consolidated Statement of Financial Position
September 30
2002
December 31
(Unaudited)
2001
$
27
$
215
36
68
408
348
169
130
98
101
137
162
128
127
31
—
7
14
1,041
1,165
396
417
106
97
502
514
11,763
11,353
220
219
11,983
11,572
(5,268
)
(5,010
)
6,715
6,562
1,128
1,141
1,636
1,692
113
106
66
75
2,943
3,014
$
11,201
$
11,255
Table of Contents
Consolidated Statement of Financial Position
September 30
2002
December 31
(Unaudited)
2001
$
264
$
307
46
85
74
74
81
89
224
—
159
93
60
28
266
215
10
39
237
284
1,421
1,214
1,742
1,751
149
156
389
412
470
466
2,750
2,785
2,833
3,038
1,585
1,673
84
87
4,502
4,798
1,343
1,343
507
507
(44
)
(44
)
725
675
(3
)
(23
)
2,528
2,458
$
11,201
$
11,255
Table of Contents
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended
September 30
2002
2001
$
272
$
124
449
498
—
150
15
9
(57
)
(65
)
(39
)
47
25
52
(51
)
22
66
55
(28
)
(13
)
(32
)
33
(64
)
(163
)
556
749
(478
)
(503
)
32
(114
)
(62
)
(135
)
(508
)
(752
)
—
1,890
(240
)
(861
)
224
56
2
(6
)
—
(846
)
(222
)
(232
)
(236
)
1
(188
)
(2
)
215
24
$
27
$
22
$
271
$
231
55
80
—
327
Table of Contents
Consolidated Statement of Changes in Shareholder’s Equity (Unaudited)
Premium
Accumulated
Common Stock
On
Common
Other
Common
Stock
Retained
Comprehensive
Shares
Amount
Stock
Expense
Earnings
Loss
Total
134,288
1,343
507
(44
)
$
675
$
(23
)
$
2,458
—
—
—
—
272
—
272
—
—
—
—
(222
)
—
(222
)
—
—
—
—
—
20
20
134,288
1,343
$
507
$
(44
)
$
725
$
(3
)
$
2,528
2002
2001
$
272
$
124
—
13
(5
)
(54
)
25
20
20
(21
)
$
292
$
103
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Three Months Ended
Nine Months Ended
September 30
September 30
2002
2001
2002
2001
$
784
$
766
$
2,052
$
2,172
416
355
1,040
965
$
1,200
$
1,121
$
3,092
$
3,137
$
38
$
30
$
150
$
120
67
63
122
123
105
93
272
243
—
(5
)
—
(119
)
$
105
$
88
$
272
$
124
Table of Contents
The Detroit Edison Company
Detroit,
Michigan
November 4, 2002
Table of Contents
(a)
Exhibits.
Exhibit
Number
Description
4-230
Supplemental Indenture dated as of October 15, 2002, establishing the 2002
Series A and 2002 Series B Mortgage Bonds.
4-231
Tenth Supplemental Indenture, dated as of October 23, 2002, establishing
the 5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032.
15-22
Awareness Letter of Deloitte & Touche LLP.
99-3
364-Day Credit Agreement dated as of October 25, 2002
($135 million).
99-4
Three-Year Credit Agreement dated as of October 25, 2002
($65 million).
99-5
Chief Executive Officer Certification of Periodic Report.
99-6
Chief Financial Officer Certification of Periodic Report.
(b)
Reports on Form 8-K.
Table of Contents
THE DETROIT EDISON COMPANY
Date: November 13, 2002
By:
/s/ DANIEL G. BRUDZYNSKI
Daniel G. Brudzynski
Chief Accounting Officer,
Vice President and Controller
Table of Contents
FORM 10-Q CERTIFICATION
I, Anthony F. Earley, Jr., Chairman, President, Chief Executive and Chief Operating Officer of The Detroit Edison Company, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of The Detroit Edison Company; | |
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; | |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: |
| (a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; | ||
| (b) | evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and | ||
| (c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| (a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and | ||
| (b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and |
| 6. | The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
|
/s/ ANTHONY F. EARLEY, JR.
Anthony F. Earley, Jr. Chairman, President, Chief Executive and Chief Operating Officer of The Detroit Edison Company |
Date: November 13, 2002 |
24
FORM 10-Q CERTIFICATION
I, David E. Meador, Senior Vice President and Chief Financial Officer of The
Detroit Edison Company, certify that:
25
The Detroit Edison Company
Exhibit Index
1.
I have reviewed this quarterly report on Form 10-Q of The Detroit Edison
Company;
2.
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3.
Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4.
The registrant’s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(a)
designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b)
evaluated the effectiveness of the registrant’s disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the “Evaluation Date”); and
(c)
presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5.
The registrant’s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant’s auditors and the audit
committee of registrant’s board of directors (or persons performing the
equivalent function):
(a)
all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant’s
ability to record, process, summarize and report financial data and
have identified for the registrant’s auditors any material
weaknesses in internal controls; and
(b)
any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant’s
internal controls; and
6.
The registrant’s other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
/s/ DAVID E. MEADOR
David E. Meador
Senior Vice President and
Chief Financial Officer of
The Detroit Edison Company
Date: November 13, 2002
Table of Contents
Quarterly Report on Form 10-Q for Quarter Ended September 30, 2002
File No.1-2198
Exhibit
Number
Description
4-230
Supplemental Indenture dated as of October 15, 2002, establishing the
2002 Series A and 2002 Series B Mortgage Bonds
4-231
Tenth Supplemental Indenture, dated as of October 23, 2002, establishing
the 5.20% Senior Notes due 2012 and 6.35% Senior Notes due 2032
15.22
Awareness Letter of Deloitte & Touché
99.3
364-Day Credit Agreement dated as of October 25, 2002 ($135 million)
99.4
Three-Year Credit Agreement dated as of October 25, 2002 ($65 million)
99.5
Chief Executive Officer Certification of Periodic Report
99.6
Chief Financial Officer Certification of Periodic Report
INDENTURE
DATED AS OF October 15, 2002
THE DETROIT EDISON COMPANY
(2000 2ND AVENUE,
DETROIT, MICHIGAN 48226)
TO
BANK ONE, NATIONAL ASSOCIATION(153 W. 51st Street
NEW YORK, NEW YORK 10019)
AS TRUSTEE
SUPPLEMENTAL TO MORTGAGE AND DEED OF TRUST
DATED AS OF OCTOBER 1, 1924
PROVIDING FOR
(A) GENERAL AND REFUNDING MORTGAGE BONDS,
2002 SERIES A AND GENERAL AND REFUNDING MORTGAGE BONDS,
2002 SERIES B
AND
(B) RECORDING AND FILING DATA.
TABLE OF CONTENTS*
PAGE
----
PARTIES........................................................................................3
RECITALS.......................................................................................1
Original Indenture and Supplementals..................................................3
Issue of Bonds Under Indenture........................................................4
Bonds Heretofore Issued...............................................................4
Reason for Creation of New Series....................................................10
Bonds to be 2002 Series A and 2002 Series B..........................................10
Further Assurance....................................................................11
Authorization of Supplemental Indenture..............................................11
Consideration for Supplemental Indenture.............................................11
PART I. CREATION OF THREE HUNDRED THIRTY-FIRST SERIES OF BONDS. GENERAL AND REFUNDING
MORTGAGE BONDS,2002 SERIES A..................................................................11
Sec. 1. Terms of Bonds of 2002 Series A............................................12
Release....................................................................15
Sec. 2. Redemption of Bonds of 2002 Series A.......................................15
Sec. 3. Redemption of Bonds of 2002 Series A in event of acceleration of Notes.....16
Sec. 4. Form of Bonds of 2002 Series A.............................................17
Form of Trustee's Certificate..............................................23
PART II. CREATION OF THREE HUNDRED THIRTY-SECOND SERIES OF BONDS. GENERAL AND REFUNDING
MORTGAGE BONDS, 2002 SERIES B.................................................................23
Sec. 1. Terms of Bonds of 2002 Series B............................................23
Release....................................................................26
Sec. 2. Redemption of Bonds of 2002 Series B.......................................26
Sec. 3. Redemption of Bonds of 2002 Series B in event of acceleration of Notes.....27
Sec. 4. Form of Bonds of 2002 Series B.............................................28
Form of Trustee's Certificate..............................................33
PART III. RECORDING AND FILING DATA...........................................................34
Recording and Filing of Original Indenture...........................................34
Recording and Filing of Supplemental Indentures......................................34
Recording of Certificates of Provision for Payment...................................40
PART IV. THE TRUSTEE..........................................................................40
Terms and Conditions of Acceptance of Trust by Trustee...............................40
PART V. MISCELLANEOUS.........................................................................41
Confirmation of Section 318(c) of Trust Indenture Act................................41
Execution in Counterparts............................................................41
Testimonium..........................................................................41
Execution............................................................................42
Acknowledgment of Execution by Company...............................................43
Acknowledgment of Execution by Trustee...............................................45
Affidavit as to Consideration and Good Faith.........................................46
|
* 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 the 15th day of
October, in the year 2002, between THE DETROIT EDISON
COMPANY, a corporation organized and existing under
the laws of the State of Michigan and a public
utility (hereinafter called the "Company"), party of
the first part, and Bank One, National Association, a
trust company organized and existing under the laws
of the United States, having i a corporate trust
office at 153 W. 51st Street in the Borough of
Manhattan, The City and State of New York, as
successor Trustee under the Mortgage and Deed of
Trust hereinafter mentioned (hereinafter called the
"Trustee"), party of the second part.
ORIGINAL INDENTURE AND WHEREAS, the Company has heretofore executed 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 and January 1, 2000, April 15, 2000,
August 1, 2000, March 15, 2001, May 1, 2001, August
15, 2001, September 15, 2001 and September 17, 2002
supplemental to the Original Indenture, have
heretofore been entered into between the Company and
the Trustee (the Original Indenture and all
indentures supplemental thereto together being
hereinafter sometimes referred to as the
"Indenture"); and
|
ISSUE OF BONDS WHEREAS, the Indenture provides that said bonds shall
UNDER INDENTURE. be issuable in one or more series, and makes
provision that the rates of interest and dates for
the payment thereof, the date of maturity or dates of
maturity, if of serial maturity, the terms and rates
of optional redemption (if redeemable), the forms of
registered bonds without coupons of any series and
any other provisions and agreements in respect
thereof, in the Indenture provided and permitted, as
the Board of Directors may determine, may be
expressed in a supplemental indenture to be made by
the Company to the Trustee thereunder; and
BONDS HERETOFORE WHEREAS, bonds in the principal amount of Nine
ISSUED. billion, nine hundred thirty-six million three
hundred seventy-two thousand dollars ($9,936,372,000)
have heretofore been issued under the indenture as
|
follows, viz:
(1) Bonds of -- Principal Amount $26,016,000,
Series A
(2) Bonds of -- Principal Amount $23,000,000,
Series B
(3) Bonds of -- Principal Amount $20,000,000,
Series C
(4) Bonds of -- Principal Amount $50,000,000,
Series D
(5) Bonds of -- Principal Amount $15,000,000,
Series E
(6) Bonds of -- Principal Amount $49,000,000,
Series F
(7) Bonds of -- Principal Amount $35,000,000,
Series G
(8) Bonds of -- Principal Amount $50,000,000,
Series H
(9) Bonds of -- Principal Amount $60,000,000,
Series I
(10) Bonds of -- Principal Amount $35,000,000,
Series J
(11) Bonds of -- Principal Amount $40,000,000,
Series K
(12) Bonds of -- Principal Amount $24,000,000,
Series L
(13) Bonds of -- Principal Amount $40,000,000,
Series M
(14) Bonds of -- Principal Amount $40,000,000,
Series N
(15) Bonds of -- Principal Amount $60,000,000,
Series O
(16) Bonds of -- Principal Amount $70,000,000,
Series P
(17) Bonds of -- Principal Amount $40,000,000,
Series Q
(18) Bonds of -- Principal Amount $50,000,000,
Series W
(19) Bonds of -- Principal Amount $100,000,000,
Series AA
(20) Bonds of -- Principal Amount $50,000,000,
Series BB
|
(21) Bonds of -- Principal Amount $50,000,000,
Series CC
(22) Bonds of -- Principal Amount 100,000,000,
Series UU
(23-31) Bonds of -- Principal Amount $14,305,000,
Series DDP
Nos. 1-9
(32-45) Bonds of -- Principal Amount $45,600,000,
Series FFR
Nos. 1-14
(46-67) Bonds of -- Principal Amount $42,300,000,
Series GGP
Nos. 1-22
(68) Bonds of -- Principal Amount $50,000,000,
Series HH
(69-90) Bonds of -- Principal Amount $3,750,000,
Series IIP
Nos. 1-22
(91-98) Bonds of -- Principal Amount $6,850,000,
Series JJP
Nos. 1-8
(99-107) Bonds of -- Principal Amount $34,890,000,
Series KKP
Nos. 1-9
(108-122) Bonds of -- Principal Amount $8,850,000,
Series LLP
Nos. 1-15
(123-143) Bonds of -- Principal Amount $47,950,000,
Series NNP
Nos. 1-21
(144-161) Bonds of -- Principal Amount $18,880,000,
Series OOP
Nos. 1-18
(162-180) Bonds of -- Principal Amount $13,650,000,
Series QQP
Nos. 1-19
(181-195) Bonds of -- Principal Amount $3,800,000,
Series TTP
Nos. 1-15
(196) Bonds of 1980 -- Principal Amount $50,000,000,
Series A
(197-221) Bonds of 1980 -- Principal Amount $35,000,000,
Series CP
Nos. 1-25
(222-232) Bonds of 1980 -- Principal Amount $10,750,000,
Series DP
Nos. 1-11
(233-248) Bonds of 1981 -- Principal Amount 124,000,000,
Series AP
Nos. 1-16
(249) Bonds of 1985 -- Principal Amount $35,000,000,
Series A
(250) Bonds of 1985 -- Principal Amount $50,000,000,
Series B
(251) Bonds of -- Principal Amount $70,000,000,
Series PP
|
(252) Bonds of -- Principal Amount $70,000,000,
Series RR
(253) Bonds of -- Principal Amount $50,000,000,
Series EE
(254-255) Bonds of -- Principal Amount $5,430,000,
Series MMP and
MMP No. 2
(256) Bonds of -- Principal Amount $75,000,000,
Series T
(257) Bonds of -- Principal Amount $75,000,000,
Series U
(258) Bonds of 1986 -- Principal Amount 100,000,000,
Series B
(259) Bonds of 1987 -- Principal Amount 250,000,000,
Series D
(260) Bonds of 1987 -- Principal Amount 150,000,000,
Series E
(261) Bonds of 1987 -- Principal Amount 225,000,000,
Series C
(262) Bonds of -- Principal Amount 100,000,000,
Series V
(263) Bonds of -- Principal Amount 150,000,000,
Series SS
(264) Bonds of 1980 -- Principal Amount 100,000,000,
Series B
(265) Bonds of 1986 -- Principal Amount 200,000,000,
Series C
(266) Bonds of 1986 -- Principal Amount 200,000,000,
Series A
(267) Bonds of 1987 -- Principal Amount 175,000,000,
Series B
(268) Bonds of -- Principal Amount 100,000,000,
Series X
(269) Bonds of 1987 -- Principal Amount 200,000,000,
Series F
(270) Bonds of 1987 -- Principal Amount 300,000,000,
Series A
(271) Bonds of -- Principal Amount $60,000,000,
Series Y
(272) Bonds of -- Principal Amount 100,000,000,
Series Z
(273) Bonds of 1989 -- Principal Amount 300,000,000,
Series A
(274) Bonds of 1984 -- Principal Amount $2,400,000,
Series AP
(275) Bonds of 1984 -- Principal Amount $7,750,000,
Series BP
(276) Bonds of -- Principal Amount 100,000,000,
Series R
(277) Bonds of -- Principal Amount 150,000,000,
Series S
(278) Bonds of 1993 -- Principal Amount 100,000,000,
Series D
(279) Bonds of 1992 -- Principal Amount $50,000,000,
Series E
|
(280) Bonds of 1993 -- Principal Amount $50,000,000,
Series B
(281) Bonds of 1989 -- Principal Amount $66,565,000,
Series BP
(282) Bonds of 1990 -- Principal Amount $194,649,000
Series A
(283) Bonds of 1993 -- Principal Amount $225,000,000
Series G
(284) Bonds of 1993 -- Principal Amount $160,000,000
Series K
(285) Bonds of 1991 -- Principal Amount $41,480,000
Series EP
(286) Bonds of 1993 -- Principal Amount $50,000,000
Series H
(287) Bonds of 1999 -- Principal Amount $40,000,000
Series D
(288) Bonds of 1991 -- Principal Amount $98,375,000
Series FP
|
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;
(289-294) 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;
(295) 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 twenty-three million seven hundred and eight thousand dollars ($123,708,000) principal amount have heretofore been retired and One hundred thirty-three million two hundred twenty-four thousand dollars ($133,224,000) principal amount are outstanding at the date hereof;
(296) Bonds of 1990 Series C in the principal amount of Eighty-five million four hundred seventy-five thousand dollars ($85,475,000) of which Forty-four million four hundred forty-seven thousand dollars ($44,447,000) principal amount have heretofore been retired and Forty-one million twenty eight thousand dollars ($41,028,000) principal amount are outstanding at the date hereof;
(297) 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;
(298) 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;
(299) 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;
(300) 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;
(301) 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;
(302) 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;
(303) Bonds of 1992 Series D in the principal amount of Three hundred million dollars ($300,000,000), of which Two hundred eighty million forty-five thousand dollars ($280,045,000) principal amount have heretofore been retired and Nineteen million nine hundred fifty-five thousand dollars ($19,955,000) principal amount are outstanding at the date hereof;
(304) 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;
(305) 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;
(306) Bonds of 1993 Series C in the principal amount of Two hundred twenty-five million dollars ($225,000,000), of which One hundred fifty-five million eight hundred fifty thousand dollars ($155,850,000) principal amount have heretofore been retired and sixty-nine million one hundred fifty thousand dollars ($69,150,000) principal amount are outstanding at the date hereof;
(307) Bonds of 1993 Series E in the principal amount of Four hundred million dollars ($400,000,000), of which Two hundred fifty-eight million one hundred twenty-five thousand dollars ($258,125,000) principal amount have heretofore been retired and One hundred forty-one million eight hundred seventy-five thousand dollars ($141,875,000) principal amount are outstanding at the date hereof;
(308) 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;
(309) Bonds of 1993 Series J in the principal amount of Three hundred million dollars ($300,000,000), of which One hundred ninety-seven million three hundred ninety-five thousand dollars ($197,395,000) principal amount have heretofore been retired and One hundred two million six hundred and five thousand dollars ($102,605,000) principal amount are outstanding at the date hereof;
(310) 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;
(311) 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;
(312) 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;
(313) 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;
(314) 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;
(315) 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;
(316) 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;
(317) 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;
(318) 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;
(319) 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;
(320) 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; and
(321) Bonds of 2000 Series A in the principal amount
of Two Hundred Twenty million dollars ($220,000,000)
of which One hundred twenty-three million eight
hundred ninety-five thousand dollars ($123,895,000)
principal amount have heretofore been retired and
Seventy-six million one hundred five thousand dollars
($76,105,000) 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;
(323) Bonds of 2001 Series AP in the principal amount
of Thirty-one million ($31,000,000), all of which are
outstanding at the date hereof;
(324) Bonds of 2001 Series BP in the principal amount
of Eighty-two million three hundred fifty thousand
($82,350,000) all of which are outstanding at the
date hereof;
(325) Bonds of 2001 Series CP in the principal amount
of One hundred thirty-nine million eight hundred
fifty-five thousand dollars ($139,855,000), all of
which are outstanding at the date hereof; and
(326) Bonds of 2001 Series D in the principal amount
of Two hundred million dollars ($200,000,000) all of
which are outstanding at the date hereof;
(327) Bonds of 2001 Series E in the principal amount
of Five hundred million dollars ($500,000,000) all of
which are outstanding at the date hereof; and
accordingly, the Company has issued and has presently
outstanding Two billion five hundred twenty-eight
million one hundred seventy-seven thousand dollars
($2,528,177,000) aggregate principal amount of its
General and Refunding Mortgage Bonds (the "Bonds") at
the date hereof; and
REASON FOR CREATION WHEREAS, the Company intends to issue the series of
OF NEW SERIES. Notes under the Note Indenture herein referred to,
and, pursuant to the Note Indenture, the Company has
agreed to issue its General and Refunding Mortgage
Bonds under the Indenture in order further to secure
its obligations with respect to the Notes; and
BONDS TO BE 2002 WHEREAS, for such purpose the Company desires by this
SERIES A AND 2001 Supplemental Indenture to create two new series of
SERIES B. bonds, to be designated "General and Refunding
Mortgage Bonds, 2002 Series A" and "General and
Refunding Mortgage Bonds, 2002 Series B",
respectively, in the aggregate principal amount of
Two Hundred twenty-five million dollars
($225,000,000) and Two Hundred and twenty-five
million ($225,000,000), respectively, to be
authenticated and delivered pursuant to Section 8 of
Article III of the Indenture; and
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FURTHER ASSURANCE. WHEREAS, the Original Indenture, by its terms,
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 OF WHEREAS, the Company in the exercise of the powers
SUPPLEMENTAL and authority conferred upon and reserved to it under
INDENTURE. 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 FOR NOW, THEREFORE, THIS INDENTURE WITNESSETH: That The
SUPPLEMENTAL 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
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supplemental thereto as follows:
PART I.
CREATION OF THREE HUNDRED THIRTY-FIRST SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS, 2002 SERIES A
TERMS OF BONDS OF SECTION 1. The Company hereby creates the three
2002 SERIES A. hundred thirty-first series of bonds to be issued
under and secured by the Original Indenture as
amended to date and as further amended by this
Supplemental Indenture, to be designated, and to be
distinguished from the bonds of all other series, by
the title "General and Refunding Mortgage Bonds, 2002
Series A" (elsewhere herein referred to as the "bonds
of 2002 Series A"). The aggregate principal amount of
bonds of 2002 Series A shall be limited to Two
hundred Twenty-Five million dollars ($225,000,000),
except as provided in Sections 7 and 13 of Article II
of the Original Indenture with respect to exchanges
and replacements of bonds, and except further that
the Company may, without the consent of the holders
of the bonds of 2002 Series A, "reopen" the bonds of
2002 Series A so as to increase the aggregate
principal amount outstanding to equal the aggregate
principal amount of Notes outstanding upon a
"reopening" of such series, so long as any additional
bonds of 2002 Series A have the same tenor and terms
as the bonds of 2002 Series A established hereby.
Subject to the release provisions set forth
below, each bond of 2002 Series A is to be
irrevocably assigned to, and registered in the name
of, Bank One Trust Company, National Association, as
trustee, or a successor trustee (said trustee or any
successor trustee being hereinafter referred to as
the "Note Indenture Trustee"), under the collateral
trust indenture, dated as of June 30, 1993 (the "Note
Indenture"), as supplemented, between the Note
Indenture Trustee and the Company, to secure payment
of the Company's 5.20% Senior Notes due 2012 (for
purposes of this Part, the "Notes").
The bonds of 2002 Series A shall be issued as
registered bonds without coupons in denominations of
a multiple of $1,000. The bonds of 2002 Series A
shall be issued in the aggregate principal amount of
$225,000,000, shall mature on October 15, 2012
(subject to earlier redemption or release) and shall
bear interest at the rate of 5.20% per annum, payable
semiannually in arrears on April 15 and October 15 of
each year (commencing April 15, 2003), until the
principal thereof shall have become due and payable
and thereafter until the Company's obligation with
respect to the payment of said principal shall have
been discharged as provided in the Indenture.
The bonds of 2002 Series A shall be payable as
to principal, premium, if any, and interest as
provided in the Indenture, but only to the extent and
in the manner herein provided. The bonds of 2002
Series A shall be payable, both as to principal and
interest, at the office or agency of the Company in
the Borough of Manhattan, The City and State of New
York, in any coin or currency of the United States of
America which at the time of payment is legal tender
for public and private debts.
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Except as provided herein, each bond of 2002 Series A 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 2002 Series A, 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 15, 2003, in which case interest shall be payable from October 23, 2002.
The bonds of 2002 Series A in definitive form shall be, at the election of the Company, fully engraved or shall be lithographed or printed in authorized denominations as aforesaid and numbered 1 and upwards (with such further designation as may be appropriate and desirable to indicate by such designation the form, series and denomination of bonds of 2002 Series A). Until bonds of 2002 Series A 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 2002 Series A in temporary form, as provided in Section 10 of Article II of the Indenture. Temporary bonds of 2002 Series A, if any, may be printed and may be issued in authorized denominations in substantially the form of definitive bonds of 2002 Series A, but without a recital of redemption prices and with such omissions, insertions and variations as may be appropriate for temporary bonds, all as may be determined by the Company.
Interest on any bond of 2002 Series A that is payable on any interest payment date and is punctually paid or duly provided for shall be paid to the person in whose name that bond, or any previous bond to the extent evidencing the same debt as that evidenced by that bond, is registered at the close of business on the regular record date for such interest, which regular record date shall be the fifteenth calendar day (whether or not a business day) next preceding such interest payment date. If the Company shall default in the payment of the interest due on any interest payment date on the principal represented by any bond of 2002 Series A, such defaulted interest shall forthwith cease to be payable to the registered holder of that bond on the relevant regular record date by virtue of his having been such holder, and such defaulted interest may be paid to the registered holder of that bond (or any bond or bonds of 2002 Series A issued upon transfer or exchange thereof) on the date of payment of such defaulted interest or, at the election of the Company, to the person in whose name that bond (or any bond or bonds of 2002 Series A issued upon transfer or exchange thereof) is registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the holders of bonds of 2002 Series A not less than ten (10) days preceding such subsequent record date, which subsequent record date shall be at least five (5) days prior to the payment date of such defaulted interest.
Bonds of 2002 Series A shall not be assignable
or transferable except as may be set forth under
Section 405 of the Note Indenture or in the
supplemental indenture relating to the Notes, or,
subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and
remedies consequent upon an Event of Default under
the Note Indenture. Any such transfer shall be made
upon surrender thereof for cancellation at the office
or agency of the Company in the Borough of Manhattan,
The City and State of New York, together with a
written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the
Company duly executed by the holder or by its duly
authorized attorney. Bonds of 2002 Series A shall in
the same manner be exchangeable for a like aggregate
principal amount of bonds of 2002 Series A 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 2002 Series A during any period of ten days next
preceding any redemption date for such bonds.
Bonds of 2002 Series A, in definitive and temporary form, may bear such legends as may be necessary to comply with any law or with any rules or regulations made pursuant thereto or as may be specified in the Note Indenture.
Upon payment of the principal or premium, if
any, or interest on the Notes, whether at maturity or
prior to maturity by redemption or otherwise, or upon
provision for the payment thereof having been made in
accordance with Article V of the Note Indenture,
bonds of 2002 Series A in a principal amount equal to
the principal amount of such Notes, shall, to the
extent of such payment of principal, premium or
interest, be deemed fully paid and the obligation of
the Company thereunder to make such payment shall
forthwith cease and be discharged, and, in the case
of the payment of principal and premium, if any, such
bonds shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
RELEASE From and after the Release Date (as defined in
the Note Indenture), the bonds of 2002 Series A shall
be deemed fully paid, satisfied and discharged and
the obligation of the Company thereunder shall be
terminated. On the Release Date, the bonds of 2002
Series A shall be surrendered to and canceled by the
Trustee. The Company covenants and agrees that, prior
to the Release Date, it will not take any action that
would cause the outstanding principal amount of the
bonds of 2002 Series A to be less than the then
outstanding principal amount of the Notes.
REDEMPTION OF SECTION 2. Bonds of 2002 Series A shall be
BONDS OF 2002 SERIES redeemed on the respective dates and in the
A. respective principal amounts which correspond to the
redemption dates for, and the principal amounts to be
redeemed of, the Notes.
In the event the Company elects to redeem any
Notes prior to maturity in accordance with the
provisions of the Note Indenture, the Company shall
on the same date redeem bonds of 2002 Series A in
principal amounts and at redemption prices
corresponding to the Notes so redeemed. The Company
agrees to give the Trustee notice of any such
redemption of bonds of 2002 Series A on the same date
as it gives notice of redemption of Notes to the Note
Indenture Trustee.
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REDEMPTION OF SECTION 3. In the event of an Event of Default
BONDS OF 2002 SERIES under the Note Indenture and the acceleration of all
A IN EVENT OF Notes, the bonds of 2002 Series A shall be redeemable
ACCELERATION OF in whole upon receipt by the Trustee of a written
NOTES. demand (hereinafter called a "Redemption Demand")
from the Note Indenture Trustee stating that there
has occurred under the Note Indenture both an Event
of Default and a declaration of acceleration of
payment of principal, accrued interest and premium,
if any, on the Notes, specifying the last date to
which interest on the Notes has been paid (such date
being hereinafter referred to as the "Initial
Interest Accrual Date") and demanding redemption of
the bonds of said series. The Trustee shall, within
five days after receiving such Redemption Demand,
mail a copy thereof to the Company marked to indicate
the date of its receipt by the Trustee. Promptly upon
receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will
redeem the bonds of said series so demanded to be
redeemed (hereinafter called the "Demand Redemption
Date"). Notice of the date fixed as the Demand
Redemption Date shall be mailed by the Company to the
Trustee at least ten days prior to such Demand
Redemption Date. The date to be fixed by the Company
as and for the Demand Redemption Date may be any date
up to and including the earlier of (x) the 60th day
after receipt by the Trustee of the Redemption Demand
or (y) the maturity date of such bonds first
occurring following the 20th day after the receipt by
the Trustee of the Redemption Demand; provided,
however, that if the Trustee shall not have received
such notice fixing the Demand Redemption Date on or
before the 10th day preceding the earlier of such
dates, the Demand Redemption Date shall be deemed to
be the earlier of such dates. The Trustee shall mail
notice of the Demand Redemption Date (such notice
being hereinafter called the "Demand Redemption
Notice") to the Note Indenture Trustee not more than
ten nor less than five days prior to the Demand
Redemption Date.
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Each bond of 2002 Series A shall be redeemed by
the Company on the Demand Redemption Date therefore
upon surrender thereof by the Note Indenture Trustee
to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest
thereon at the rate specified for such bond from the
Initial Interest Accrual Date to the Demand
Redemption Date plus an amount equal to the aggregate
premium, if any, due and payable on such Demand
Redemption Date on all Notes; provided, however, that
in the event of a receipt by the Trustee of a notice
that, pursuant to Section 602 of the Note Indenture,
the Note Indenture Trustee has terminated proceedings
to enforce any right under the Note Indenture, then
any Redemption Demand shall thereby be rescinded by
the Note Indenture Trustee, and no Demand Redemption
Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or
annulment shall extend to or affect any subsequent
default or impair any right consequent thereon.
Anything herein contained to the contrary
notwithstanding, the Trustee is not authorized to
take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or
effect, unless it is executed in the name of the Note
Indenture Trustee by its President or one of its Vice
Presidents.
FORM OF BONDS OF SECTION 4. The bonds of 2002 Series A and the
2002 SERIES A. form of Trustee's Certificate to be endorsed on such
bonds shall be substantially in the following forms,
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respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
2002 SERIES A
Notwithstanding any provisions hereof or in the Indenture, this bond is not assignable or transferable except as may be required to effect a transfer to any successor trustee under the Collateral Trust Indenture, dated as of June 30, 1993, as amended, and as further supplemented as of October 23, 2002, between The Detroit Edison Company and Bank One Trust Company, National Association, as Note Trustee, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under said Indenture.
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to Bank One Trust Company, National Association, as Note Trustee, or registered assigns, at the Company's office or agency in the Borough of Manhattan, The City and State of New York, the principal sum of Dollars ($ ) in lawful money of the United States of America on October 15, 2012 (subject to earlier redemption or release) and interest thereon at the rate of 5.20% per annum, in like lawful money, from October 23, 2002, 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 15 and October 15 of each year (commencing April 15, 2003), until the Company's obligation with respect to payment of said principal shall have been discharged, all as provided, to the extent and in the manner specified in the Indenture hereinafter mentioned on the reverse hereof and in the supplemental indenture pursuant to which this bond has been issued.
Under a Collateral Trust Indenture, dated as of June 30, 1993, as amended and as further supplemented as of October 23, 2002 (hereinafter called the "Note Indenture"), between the Company and Bank One Trust Company, National Association, as Note Trustee (hereinafter called the "Note Indenture Trustee"), the Company has issued its 5.20% Senior Notes due 2012 (the "Notes"). This bond was originally issued to the Note Indenture Trustee so as to secure the payment of the Notes. Payments of principal of, or premium, if any, or interest on, the Notes shall constitute like payments on this bond as further provided herein and in the supplemental indenture pursuant to which this bond has been issued.
Reference is hereby made to such further provisions of this bond set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until Bank One, National Association, 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 Vice President and Treasurer, with his 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 Assistant Corporate Secretary by manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
[SEAL]
[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 2002 Series A, limited to an aggregate principal amount of $225,000,000, 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 Bank One, National Association, as successor in interest to Bankers Trust Company, a corporation organized under the laws of the Untied States, as Trustee, to which Indenture and all indentures supplemental thereto (including the Supplemental Indenture dated as of October 15, 2002) reference is hereby made for a description of the properties and franchises mortgaged and conveyed, the nature and extent of the security, the terms and conditions upon which the bonds are issued and under which additional bonds may be issued, and the rights of the holders of the bonds and of the Trustee in respect of such security (which Indenture and all indentures supplemental thereto, including the Supplemental Indenture dated as of October 15, 2002, 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 be affirmative vote of at least eighty-five percent (85%) in amount of the series of bonds so to be affected (excluding in every instance bonds disqualified from voting by reason of the Company's interest therein as specified in the Indenture); provided, however, that, without the consent of the holder hereof, no such modification or alteration shall, among other things, affect the terms of payment of the principal of or the interest on this bond, which in those respects is unconditional.
This bond is redeemable upon the terms and conditions set forth in the Indenture, including provision for redemption upon demand of the Note Indenture Trustee following the occurrence of an Event of Default under the Note Indenture and the acceleration of the principal of the Notes.
Under the Indenture, funds may be deposited with the Trustee (which shall have become available for payment), in advance of the redemption date of any of the bonds of 2002 Series A (or portions thereof), in trust for the redemption of such bonds (or portions thereof) and the interest due or to become due thereon, and thereupon all obligations of the Company in respect of such bonds (or portions thereof) so to be redeemed and such interest shall cease and be discharged, and the holders thereof shall thereafter be restricted exclusively to such funds for any and all claims of whatsoever nature on their part under the Indenture or with respect to such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur, the principal of all the bonds issued thereunder may become or be declared due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.
Upon payment of the principal of, or premium, if any, or interest on, the Notes, whether at maturity or prior to maturity by redemption or Otherwise or upon provision for the payment thereof having been made in accordance with Article V of the Note Indenture, bonds of 2002 Series A in a principal amount equal to the principal amount of such Notes, and having both a corresponding maturity date and interest rate shall, to the extent of such payment of principal, premium or interest, be deemed fully paid and the obligation of the Company thereunder to make such payment shall forthwith cease and be discharged, and, in the case of the payment of principal and premium, if any, such bonds of said series shall be surrendered for cancellation or presented for appropriate notation to the Trustee.
This bond is not assignable or transferable except as set forth under Section 405 of the Note Indenture or in the supplemental indenture relating to the Notes, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under the Note Indenture. Any such transfer shall be made by the registered holder hereof, in person or by his attorney duly authorized in writing, on the books of the Company kept at its office or agency in the Borough of Manhattan, The City and State of New York, upon surrender and cancellation of this bond, and thereupon, a new registered bond of the same series of authorized denominations for a like aggregate principal amount will be issued to the transferee in exchange therefor, and this bond with others in like form may in like manner be exchanged for one or more new bonds of the same series of other authorized denominations, but of the same aggregate principal amount, all as provided and upon the terms and conditions set forth in the Indenture, and upon payment, in any event, of the charges prescribed in the Indenture.
From and after the Release Date (as defined in the Note Indenture), the bonds of 2002 Series A shall be deemed fully paid, satisfied and discharged and the obligation of the Company thereunder shall be terminated. On the Release Date, the bonds of 2002 Series A shall be surrendered to and cancelled by the Trustee. The Company covenants and agrees that, prior to the Release Date, it will not take any action that would cause the outstanding principal amount of the bond of 2002 Series A to be less than the then outstanding principal amount of the Notes.
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 art 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 TRUSTEE'S This bond is one of the bonds, of the series
CERTIFICATE. designated therein, described in the within-mentioned
Indenture.
BANK ONE, NATIONAL ASSOCIATION as Trustee
By
--------------------
Authorized Officer
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PART II.
CREATION OF THREE HUNDRED THIRTY-SECOND SERIES OF BONDS.
GENERAL AND REFUNDING MORTGAGE BONDS, 2002 SERIES B
TERMS OF BONDS OF SECTION 1. The Company hereby creates the three
2002 SERIES B. hundred thirty-second series of bonds to be issued
under and secured by the Original Indenture as
amended to date and as further amended by this
Supplemental Indenture, to be designated, and to be
distinguished from the bonds of all other series, by
the title "General and Refunding Mortgage Bonds, 2002
Series B" (elsewhere herein referred to as the "bonds
of 2002 Series B"). The aggregate principal amount of
bonds of 2002 Series B shall be limited to ($ Two
hundred and twenty-five million dollars
($225,000,000), except as provided in Sections 7 and
13 of Article II of the Original Indenture with
respect to exchanges and replacements of bonds, and
except further that the Company may, without the
consent of the holders of the bonds of 2002 Series B,
"reopen" the bonds of 2002 Series B so as to increase
the aggregate principal amount outstanding to equal
the aggregate principal amount of Notes outstanding
upon a "reopening" of such series, so long as any
additional bonds of 2002 Series B have the same tenor
and terms as the bonds of 2002 Series B established
hereby.
Subject to the release provisions set forth
below, each bond of 2002 Series B is to be
irrevocably assigned to, and registered in the name
of, Bank One Trust Company, National Association, as
trustee, or a successor trustee (said trustee or any
successor trustee being hereinafter referred to as
the "Note Indenture Trustee"), under the collateral
trust indenture, dated as of June 30, 1993 (the "Note
Indenture"), as supplemented, between the Note
Indenture Trustee and the Company, to secure payment
of the Company's 6.35% Senior Notes due 2032 (for
purposes of this Part, the "Notes").
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The bonds of 2002 Series B shall be issued as registered bonds without coupons in denominations of a multiple of $1,000. The bonds of 2002 Series B shall be issued in the aggregate principal amount of $225,000,000, shall mature on October 15, 2032 (subject to earlier redemption or release) and shall bear interest at the rate of 6.25% per annum, payable semiannually in arrears on April 15 and October 15 of each year (commencing April 15, 2003), until the principal thereof shall have become due and payable and thereafter until the Company's obligation with respect to the payment of said principal shall have been discharged as provided in the Indenture.
The bonds of 2002 Series B shall be payable as to principal, premium, if any, and interest as provided in the Indenture, but only to the extent and in the manner herein provided. The bonds of 2002 Series B 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 2002 Series B 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 2002 Series B, 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 15, 2003, in which case interest shall be payable from October 23, 2002.
The bonds of 2002 Series B, in definitive form shall be, at the election of the Company, fully engraved or shall be lithographed or printed in authorized denominations as aforesaid and numbered 1 and upwards (with such further designation as may be appropriate and desirable to indicate by such designation the form, series and denomination of bonds of 2002 Series B). Until bonds of 2002 Series B 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 2002 Series B in temporary form, as provided in Section 10 of Article II of the Indenture. Temporary bonds of 2002 Series B, if any, may be printed and may be issued in authorized denominations in substantially the form of definitive bonds of 2002 Series B, but without a recital of redemption prices and with such omissions, insertions and variations as may be appropriate for temporary bonds, all as may be determined by the Company.
Interest on any bond of 2002 Series B which is payable on any interest payment date and is punctually paid or duly provided for shall be paid to the person in whose name that bond, or any previous bond to the extent evidencing the same debt as that evidenced by that bond, is registered at the close of business on the regular record date for such interest, which regular record date shall be the fifteenth calendar day (whether or not a business day) next preceding such interest payment date. If the Company shall default in the payment of the interest due on any interest payment date on the principal represented by any bond of 2002 Series B, such defaulted interest shall forthwith cease to be payable to the registered holder of that bond on the relevant regular record date by virtue of his having been such holder, and such defaulted interest may be paid to the registered holder of that bond (or any bond or bonds of 2002 Series B issued upon transfer or exchange thereof) on the date of payment of such defaulted interest or, at the election of the Company, to the person in whose name that bond (or any bond or bonds of 2002 Series B issued upon transfer or exchange thereof) is registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the holders of bonds of 2002 Series B not less than ten (10) days preceding such subsequent record date, which subsequent record date shall be at least five (5) days prior to the payment date of such defaulted interest.
Bonds of 2002 Series B shall not be assignable
or transferable except as may be set forth under
Section 405 of the Note Indenture or in the
supplemental indenture relating to the Notes, or,
subject to compliance with applicable law, as may be
involved in the course of the exercise of rights and
remedies consequent upon an Event of Default under
the Note Indenture. Any such transfer shall be made
upon surrender thereof for cancellation at the office
or agency of the Company in the Borough of Manhattan,
The City and State of New York, together with a
written instrument of transfer (if so required by the
Company or by the Trustee) in form approved by the
Company duly executed by the holder or by its duly
authorized attorney. Bonds of 2002 Series B shall in
the same manner be exchangeable for a like aggregate
principal amount of bonds of 2002 Series B 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 2002 Series B during any period of ten days next
preceding any redemption date for such bonds.
Bonds of 2002 Series B, in definitive and
temporary form, may bear such legends as may be
necessary to comply with any law or with any rules or
regulations made pursuant thereto or as may be
specified in the Note Indenture.
Upon payment of the principal or premium, if
any, or interest on the Notes, whether at maturity or
prior to maturity by redemption or otherwise, or upon
provision for the payment thereof having been made in
accordance with Article V of the Note Indenture,
bonds of 2002 Series B in a principal amount equal to
the principal amount of such Notes, shall, to the
extent of such payment of principal, premium or
interest, be deemed fully paid and the obligation of
the Company thereunder to make such payment shall
forthwith cease and be discharged, and, in the case
of the payment of principal and premium, if any, such
bonds shall be surrendered for cancellation or
presented for appropriate notation to the Trustee.
RELEASE. From and after the Release Date (as defined in
the Note Indenture), the bonds of 2002 Series B shall
be deemed fully paid, satisfied and discharged and
the obligation of the Company thereunder shall be
terminated. On the Release Date, the bonds of 2002
Series B shall be surrendered to and canceled by the
Trustee. The Company covenants and agrees that, prior
to the Release Date, it will not take any action that
would cause the outstanding principal amount of the
bonds of 2002 Series B to be less than the then
outstanding principal amount of the Notes.
REDEMPTION OF SECTION 2. Bonds of 2002 Series B shall be
BONDS OF 2002 SERIES redeemed on the respective dates and in the
B. respective principal amounts which correspond to the
redemption dates for, and the principal amounts to be
redeemed of, the Notes.
In the event the Company elects to redeem any
Notes prior to maturity in accordance with the
provisions of the Note Indenture, the Company shall
on the same date redeem bonds of 2002 Series B in
principal amounts and at redemption prices
corresponding to the Notes so redeemed. The Company
agrees to give the Trustee notice of any such
redemption of bonds of 2002 Series B on the same date
as it gives notice of redemption of Notes to the Note
Indenture Trustee.
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REDEMPTION OF SECTION 3. In the event of an Event of Default
BONDS OF 2002 SERIES under the Note Indenture and the acceleration of all
B IN EVENT OF Notes, the bonds of 2002 Series B shall be redeemable
ACCELERATION OF NOTES. in whole upon receipt by the Trustee of a written
demand (hereinafter called a "Redemption Demand")
from the Note Indenture Trustee stating that there
has occurred under the Note Indenture both an Event
of Default and a declaration of acceleration of
payment of principal, accrued interest and premium,
if any, on the Notes, specifying the last date to
which interest on the Notes has been paid (such date
being hereinafter referred to as the "Initial
Interest Accrual Date") and demanding redemption of
the bonds of said series. The Trustee shall, within
five days after receiving such Redemption Demand,
mail a copy thereof to the Company marked to indicate
the date of its receipt by the Trustee. Promptly upon
receipt by the Company of such copy of a Redemption
Demand, the Company shall fix a date on which it will
redeem the bonds of said series so demanded to be
redeemed (hereinafter called the "Demand Redemption
Date"). Notice of the date fixed as the Demand
Redemption Date shall be mailed by the Company to the
Trustee at least ten days prior to such Demand
Redemption Date. The date to be fixed by the Company
as and for the Demand Redemption Date may be any date
up to and including the earlier of (x) the 60th day
after receipt by the Trustee of the Redemption Demand
or (y) the maturity date of such bonds first
occurring following the 20th day after the receipt by
the Trustee of the Redemption Demand; provided,
however, that if the Trustee shall not have received
such notice fixing the Demand Redemption Date on or
before the 10th day preceding the earlier of such
dates, the Demand Redemption Date shall be deemed to
be the earlier of such dates. The Trustee shall mail
notice of the Demand Redemption Date (such notice
being hereinafter called the "Demand Redemption
Notice") to the Note Indenture Trustee not more than
ten nor less than five days prior to the Demand
Redemption Date.
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Each bond of 2002 Series B shall be redeemed by
the Company on the Demand Redemption Date therefore
upon surrender thereof by the Note Indenture Trustee
to the Trustee at a redemption price equal to the
principal amount thereof plus accrued interest
thereon at the rate specified for such bond from the
Initial Interest Accrual Date to the Demand
Redemption Date plus an amount equal to the aggregate
premium, if any, due and payable on such Demand
Redemption Date on all Notes; provided, however, that
in the event of a receipt by the Trustee of a notice
that, pursuant to Section 602 of the Note Indenture,
the Note Indenture Trustee has terminated proceedings
to enforce any right under the Note Indenture, then
any Redemption Demand shall thereby be rescinded by
the Note Indenture Trustee, and no Demand Redemption
Notice shall be given, or, if already given, shall be
automatically annulled; but no such rescission or
annulment shall extend to or affect any subsequent
default or impair any right consequent thereon.
Anything herein contained to the contrary
notwithstanding, the Trustee is not authorized to
take any action pursuant to a Redemption Demand and
such Redemption Demand shall be of no force or
effect, unless it is executed in the name of the Note
Indenture Trustee by its President or one of its Vice
Presidents.
FORM OF BONDS OF SECTION 4. The bonds of 2002 Series B and the
2002 SERIES B. form of Trustee's Certificate to be endorsed on such
bonds shall be substantially in the following forms,
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respectively:
[FORM OF FACE OF BOND]
THE DETROIT EDISON COMPANY
GENERAL AND REFUNDING MORTGAGE BOND
2002 SERIES B
Notwithstanding any provisions hereof or in the Indenture, this bond is not assignable or transferable except as may be required to effect a transfer to any successor trustee under the Collateral Trust Indenture, dated as of June 30, 1993, as amended, and as further supplemented as of October 23, 2002, between The Detroit Edison Company and Bank One Trust Company, National Association, as Note Trustee, or, subject to compliance with applicable law, as may be involved in the course of the exercise of rights and remedies consequent upon an Event of Default under said Indenture.
THE DETROIT EDISON COMPANY (hereinafter called the "Company"), a corporation of the State of Michigan, for value received, hereby promises to pay to Bank One Trust Company, National Association, as Note Trustee, or registered assigns, at the Company's office or agency in the Borough of Manhattan, The City and State of New York, the principal sum of dollars ($ ) in lawful money of the United States of America on October 15, 2032 (subject to earlier redemption or release) and interest thereon at the rate of 6.35% per annum, in like lawful money, from October 23, 2002, 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 15 and October 15 of each year (commencing April 15, 2003), until the Company's obligation with respect to payment of said principal shall have been discharged, all as provided, to the extent and in the manner specified in the Indenture hereinafter mentioned on the reverse hereof and in the supplemental indenture pursuant to which this bond has been issued.
Under a Collateral Trust Indenture, dated as of June 30, 1993, as amended and as further supplemented as of October 23, 2002 (hereinafter called the "Note Indenture"), between the Company and Bank One Trust Company, National Association, as Note Trustee (hereinafter called the "Note Indenture Trustee"), the Company has issued its 6.35% Senior Notes due 2032 (the "Notes"). This bond was originally issued to the Note Indenture Trustee so as to secure the payment of the Notes. Payments of principal of, or premium, if any, or interest on, the Notes shall constitute like payments on this bond as further provided herein and in the supplemental indenture pursuant to which this bond has been issued.
Reference is hereby made to such further provisions of this bond set forth on the reverse hereof and such further provisions shall for all purposes have the same effect as though set forth at this place.
This bond shall not be valid or become obligatory for any purpose until Bank One, National Association, 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 Vice President and Treasurer, with his 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 Assistant Corporate Secretary by manual or facsimile signature.
Dated: THE DETROIT EDISON COMPANY
[SEAL]
[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 2002 Series B, limited to an aggregate principal amount of $225,000,000, 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 Bank One, National Association, as successor in interest to Bankers Trust Company, a corporation organized under the laws of the United States, as Trustee, to which Indenture and all indentures supplemental thereto (including the Supplemental Indenture dated as of October 15, 2002) reference is hereby made for a description of the properties and franchises mortgaged and conveyed, the nature and extent of the security, the terms and conditions upon which the bonds are issued and under which additional bonds may be issued, and the rights of the holders of the bonds and of the Trustee in respect of such security (which Indenture and all indentures supplemental thereto, including the Supplemental Indenture dated as of , are hereinafter collectively called the "Indenture"). As provided in the Indenture, said bonds may be for various principal sums and are issuable in series, which may mature at different times, may bear interest at different rates and may otherwise vary as in said Indenture provided. With the consent of the Company and to the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of the bonds and the terms and provisions of the Indenture, or of any indenture supplemental thereto, may be modified or altered in certain respects by affirmative vote of at least eighty-five percent (85%) in amount of the bonds then outstanding, and, if the rights of one or more, but less than all, series of bonds then outstanding are to be affected by the action proposed to be taken, then also be affirmative vote of at least eighty-five percent (85%) in amount of the series of bonds so to be affected (excluding in every instance bonds disqualified from voting by reason of the Company's interest therein as specified in the Indenture); provided, however, that, without the consent of the holder hereof, no such modification or alteration shall, among other things, affect the terms of payment of the principal
of or the interest on this bond, which in those respects is unconditional.
This bond is redeemable upon the terms and conditions set forth in the Indenture, including provision for redemption upon demand of the Note Indenture Trustee following the occurrence of an Event of Default under the Note Indenture and the acceleration of the principal of the Notes.
Under the Indenture, funds may be deposited with the Trustee (which shall have become available for payment), in advance of the redemption date of any of the bonds of 2002 Series B (or portions thereof), in trust for the redemption of such bonds (or portions thereof) and the interest due or to become due thereon, and thereupon all obligations of the Company in respect of such bonds (or portions thereof) so to be redeemed and such interest shall cease and be discharged, and the holders thereof shall thereafter be restricted exclusively to such funds for any and all claims of whatsoever nature on their part under the Indenture or with respect to such bonds (or portions thereof) and interest.
In case an event of default, as defined in the Indenture, shall occur, the principal of all the bonds issued thereunder may become or be declared due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.
Upon payment of the principal of, or Premium, if any, or interest on, the Notes, whether at maturity or prior to maturity by redemption or otherwise or upon provision for the Payment thereof having been made in accordance with Article V of the Note Indenture, bonds of 2002 Series B in a principal amount equal to the Principal amount of such Notes, and having both a corresponding maturity date and interest rate shall, to the extent of such payment of Principal, premium or interest, be deemed fully paid and the obligation of the Company thereunder to make such payment shall forthwith cease and be discharged, and, in the case of the payment of Principal and premium, if any, such bonds of said series shall be surrendered for cancellation or presented for appropriate notation to the Trustee.
This bond is not assignable or transferable
except as set forth under Section 405 of the Note
Indenture or in the supplemental indenture relating
to the Notes, or, subject to compliance with
applicable law, as may be Involved in the course of
the exercise of rights and remedies consequent upon
an Event of Default under the Note Indenture. Any
such transfer shall be made by the registered holder
hereof, in person or by his attorney duly authorized
in writing, on the books of the Company kept at its
office or agency in the Borough of Manhattan, The
City and State of New York, upon surrender and
cancellation of this bond, and thereupon, a new
registered bond of the same series of authorized
denominations for a like aggregate principal amount
will be issued to the transferee in exchange
therefor, and this bond with others in like form may
in like manner be exchanged for one or more new bonds
of the same series of other authorized denominations,
but of the same aggregate principal amount, all as
provided and upon the terms and conditions set forth
in the Indenture, and upon payment, in any event, of
the charges prescribed in the Indenture.
From and after the Release Date (as defined in
the Note Indenture), the bonds of 2002 Series B shall
be deemed fully paid, satisfied and discharged and
the obligation of the Company thereunder shall be
terminated. On the Release Date, the bonds of 2002
Series B shall be surrendered to and cancelled by the
Trustee. The Company covenants and agrees that, prior
to the Release Date, it will not take any action that
would cause the outstanding principal amount of the
bond of 2002 Series B to be less than the then
outstanding principal amount of the Notes.
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 TRUSTEE'S This bond is one of the bonds, of the series
CERTIFICATE. designated therein, described in the within-mentioned
Indenture.
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Bank One, National Association, as Trustee
PART III.
RECORDING AND FILING DATA
RECORDING AND The Original Indenture and indentures
FILING OF ORIGINAL supplemental thereto have been recorded and/or filed
INDENTURE. and 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, Series I Bonds, November 15, 1951
1947(a)(b)(c)............................... Subject
Properties and
Additional
Provisions
March 1, 1950(a)(b)(c)...................... Series.J Bonds and November 15, 1951
Additional
Provisions
November 15, Series K Bonds January 15, 1953
1951(a)(b)(c)............................... Additional
Provisions and
Subject Properties
January 15, 1953(a)(b)...................... Series.L Bonds May 1, 1953
May 1, 1953(a).............................. Series.M Bonds and March 15, 1954
Subject Properties
March 15, 1954(a)(c)........................ Series.N Bonds and May 15, 1955
Subject Properties
May 15, 1955(a)(c).......................... Series.O Bonds and August 15, 1957
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 and December 1, 1966
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 and December 1, 1969
Subject Properties
December 1, 1969(a)(c)...................... Series.T Bonds and July 1, 1970
Subject Properties
July 1, 1970(c)............................. Series.U Bonds and December 15, 1970
Subject Properties
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RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
December 15, 1970(c)........................ Series.V and June 15, 1971
Series W Bonds
June 15, 1971(c)............................ Series.X Bonds and November 15, 1971
Subject Properties
November 15, 1971(c)........................ Series.Y Bonds and January 15, 1973
Subject Properties
January 15, 1973(c)......................... Series.Z Bonds and May 1, 1974
Subject Properties
May 1, 1974................................. Series.AA Bonds and October 1, 1974
Subject Properties
October 1, 1974............................. Series.BB Bonds and January 15, 1975
Subject Properties
January 15, 1975............................ Series.CC Bonds and November 1, 1975
Subject Properties
November 1, 1975............................ Series.DDP Nos. 1-9 December 15, 1975
Bonds and Subject
Properties
December 15, 1975........................... Series.EE Bonds and February 1, 1976
Subject Properties
February 1, 1976............................ Series FFR Nos. 1-13 June 15, 1976
Bonds
June 15, 1976............................... Series GGP Nos. 1-7 July 15, 1976
Bonds and Subject
Properties
July 15, 1976............................... Series HH Bonds and February 15, 1977
Subject Properties
February 15, 1977........................... Series MMP Bonds and March 1, 1977
Subject Properties
March 1, 1977............................... Series IIP Nos. 1-7 June 15, 1977
Bonds, Series JJP
Nos. 1-7 Bonds,
Series KKP
Nos. 1-7 Bonds
and Series LLP
Nos. 1-7 Bonds
June 15, 1977............................... Series FFR No. 14 July 1, 1977
Bonds and
Subject Properties
July 1, 1977................................ Series NNP Nos. 1-7 October 1, 1977
Bonds and Subject
Properties
October 1, 1977............................. Series GGP Nos. 8-22 June 1, 1978
Bonds and
Series OOP
Nos. 1-17 Bonds and
Subject Properties
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RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
June 1, 1978................................ Series PP Bonds, October 15, 1978
Series QQP
Nos. 1-9 Bonds and
Subject Properties
October 15, 1978............................ Series RR Bonds and March 15, 1979
Subject Properties
March 15, 1979.............................. Series SS Bonds and July 1, 1979
Subject Properties
July 1, 1979................................ Series IIP Nos. 8-22 September 1, 1979
Bonds, Series NNP
Nos. 8-21 Bonds
and Series TTP
Nos. 1-15 Bonds and
Subject Properties
September 1, 1979........................... Series JJP No. 8 September 15,
Bonds, Series KKP 1979
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 April 1, 1980
and Subject
Properties
April 1, 1980............................... 1980 Series B Bonds August 15, 1980
August 15, 1980............................. Series QQP Nos. 10-19 August 1, 1981
Bonds,
1980 Series CP
Nos. 1-12 Bonds
and 1980
Series DP
No. 1-11 Bonds
and Subject
Properties
August 1, 1981.............................. 1980 Series CP November 1, 1981
Nos. 13-25 Bonds
and Subject
Properties
November 1, 1981............................ 1981 Series AP June 30, 1982
Nos. 1-12 Bonds
June 30, 1982............................... Article XIV August 15, 1982
Reconfirmation
|
RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
August 15, 1982............................. 1981 Series AP June 1, 1983
Nos. 13-14 and
Subject Properties
June 1, 1983................................ 1981 Series AP October 1, 1984
Nos. 15-16 and
Subject Properties
October 1, 1984............................. 1984 Series AP and May 1, 1985
1984 Series BP
Bonds and
Subject Properties
May 1, 1985................................. 1985 Series A Bonds May 15, 1985
May 15, 1985................................ 1985 Series B Bonds October 15, 1985
and Subject
Properties
October 15, 1985............................ Series KKP No. 9 April 1, 1986
Bonds and
Subject Properties
April 1, 1986............................... 1986 Series A and August 15, 1986
Subject Properties
August 15, 1986............................. 1986 Series B and November 30, 1986
Subject Properties
November 30, 1986........................... 1986 Series C January 31, 1987
January 31, 1987............................ 1987 Series A April 1, 1987
April 1, 1987............................... 1987 Series B and August 15, 1987
1987 Series C
August 15, 1987............................. 1987 Series D and November 30, 1987
1987 Series E and
Subject Properties
November 30, 1987........................... 1987 Series F June 15, 1989
June 15, 1989............................... 1989 Series A July 15, 1989
July 15, 1989............................... Series KKP No. 10 December 1, 1989
December 1, 1989............................ Series KKP No. 11 and February 15, 1990
1989 Series BP
February 15, 1990........................... 1990 Series A, 1990 November 1, 1990
Series B, 1990
Series C,
1990 Series D,
1990 Series E and
1990 Series F
November 1, 1990............................ Series KKP No. 12 April 1, 1991
April 1, 1991............................... 1991 Series AP May 1, 1991
May 1, 1991................................. 1991 Series BP and May 15, 1991
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
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RECORDED AND/OR
FILED AS SET FORTH
IN
SUPPLEMENTAL PURPOSE OF SUPPLEMENTAL
INDENTURE SUPPLEMENTAL INDENTURE
DATED AS OF INDENTURE DATED AS OF:
------------ ------------ ------------------
January 15, 1992............................ 1992 Series BP February 29, 1992
and April 15, 1992
February 29, 1992........................... 1992 Series AP April 15, 1992
April 15, 1992.............................. Series KKP No. 13 July 15, 1992
July 15, 1992............................... 1992 Series CP November 30, 1992
July 31, 1992............................... 1992 Series D November 30, 1992
November 30, 1992........................... 1992 Series E and March 15, 1993
1993 Series D
December 15, 1992........................... Series KKP No. 14 and March 15, 1992
1989 Series BP
No. 2
January 1, 1993............................. 1993 Series C April 1, 1993
March 1, 1993............................... 1993 Series E June 30, 1993
March 15, 1993.............................. 1993 Series D September 15,
1993
April 1, 1993............................... 1993 Series FP and September 15,
1993 Series IP 1993
April 26, 1993.............................. 1993 Series G and September 15,
Amendment of 1993
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 August 1, 1995
1994 Series DP
August 1, 1995.............................. 1995 Series AP and August 1, 1999
1995 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.
(c) See Supplemental Indenture dated as of May 1, 1974 for County of Genesee, Michigan recording and filing information.
RECORDING OF All the bonds of Series A which were issued under
CERTIFICATES OF the Original Indenture dated as of October 1, 1924,
PROVISION FOR and of Series B, C, D, E, F, G, H, I, J, K, L, M, N,
PAYMENT. O, P, 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, 1990 Series A, 1993 Series D, 1993
Series G and 1993 Series H 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, February
15, 1990, March 15, 1993, April 26, 1992 and
September 15, 1992 have matured or have been called
for redemption and funds sufficient for such payment
or redemption have been irrevocably deposited with
the Trustee for that purpose; and Certificates of
Provision for Payment have been recorded in the
offices of the respective Registers of Deeds of
certain counties in the State of Michigan, with
respect to all bonds of Series A, B, C, D, E, F, G,
H, K, L, M, O, W, BB, CC, DDP Nos. 1 and 2, FFR Nos.
1-3, GGP Nos. 1 and 2, IIP No. 1, JJP No. 1, KKP No.
1, LLP No. 1 and GGP No. 8.
PART IV
THE TRUSTEE.
TERMS AND The Trustee hereby accepts the trust hereby declared
CONDITIONS OF and provided, and agrees to perform the same upon
ACCEPTANCE OF the terms and conditions in the Original Indenture,
TRUST BY as amended to date and as supplemented by this
TRUSTEE. 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 V.
MISCELLANEOUS.
CONFIRMATION OF Except to the extent specifically provided
SECTION 318(C) OF therein, no provision of this supplemental indenture
TRUST INDENTURE or any future supplemental indenture is intended to
ACT. modify, and the parties do hereby adopt and confirm,
the provisions of Section 318(c) of the Trust
Indenture Act which amend and supersede provisions
of the Indenture in effect prior to November 15,
1990.
EXECUTION IN THIS SUPPLEMENTAL INDENTURE MAY BE
COUNTERPARTS. SIMULTANEOUSLY 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 BANK ONE, NATIONAL ASSOCIATION 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.
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THE DETROIT EDISON COMPANY,
EXECUTION. Attest:
Signed, sealed and delivered by
THE DETROIT EDISON COMPANY,
in the presence of
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE
Acknowledgement of On this 21st day of October, 2002, before me, the
Execution by subscriber, a Notary Public within and for the
Company County of Wayne, in the State of Michigan,
personally appeared D. R. Murphy, 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 D. R. Murphy acknowledged said
instrument to be the free act and deed of said
corporation.
(Notarial Seal)
---------------------------------
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Christina R. Jacobson, Notary
Wayne County, MI
My Commission Expires 3/5/05
BANK ONE, NATIONAL ASSOCIATION,
(Corporate Seal) By:
--------------------------------------
Name: Steven M. Wagner
Title: Vice President
Attest:
------------------------------------
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Name: Benita A. Pointer
Title: Account Executive
Signed, sealed and delivered by
BANK ONE, NATIONAL ASSOCIATION,
in the presence of
STATE OF ILLINOIS
SS.:
Acknowledgment of On this 21st day of October, 2002, before me, the
Execution by subscriber, a Notary Public within and for the
Trustee. County of Cook, in the State of Illinois, personally
appeared Steven M. Wagner, to me personally known,
who, being by me duly sworn, did say that his
business office is located at 1 Bank One Plaza,
Chicago, Illinois 60670, and he is Vice President of
BANK ONE, NATIONAL ASSOCIATION, 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)
-----------------------------------------------------
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Notary Public, State of Illinois
No.
Qualified in Cook County
Commission Expires 06/06/2005
STATE OF MICHIGAN
SS.:
COUNTY OF WAYNE.
Affidavit as to D.R. Murphy being duly sworn, says: that he is the
Condsideration and Assistant Treasurer of THE DETROIT EDISON COMPANY,
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.
-----------------------------
D.R. Murphy
|
Sworn to before me this 21st day of October,2002
(Notarial Seal)
This instrument was drafted by Frances B. Rohlman, Esq., 2000 2nd Avenue, Detroit, Michigan 48226
THE DETROIT EDISON COMPANY
AND
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
TRUSTEE
TENTH SUPPLEMENTAL INDENTURE
DATED AS OF OctobeR 23, 2002
SUPPLEMENTING THE COLLATERAL TRUST INDENTURE
DATED AS OF JUNE 30,1993
PROVIDING FOR
5.20% SENIOR NOTES DUE 2012
6.35% SENIOR NOTES DUE 2032
SUPPLEMENTAL INDENTURE, dated as of the 23rd day of October, 2002, between THE DETROIT EDISON COMPANY, a corporation organized and existing under the laws of the State of Michigan (the "Company"), and BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States of America, having its principal office in The City of Columbus, Ohio, as trustee (the "Trustee");
WHEREAS, the Company has heretofore executed and delivered to the Trustee a Collateral Trust Indenture dated as of June 30, 1993 (the "Original Indenture"), as supplemented, providing for the issuance by the Company from time to time of its debt securities; and
WHEREAS, the Company now desires to provide for the issuance of additional series of its senior debt securities pursuant to the Original Indenture; and
WHEREAS, the Company intends hereby to designate series of debt securities which shall have the benefit of the provisions of Article Four of the Original Indenture and the other related provisions of the Original Indenture relating to the grant of security, subject to the release provisions provided for herein, and which shall have the terms and variations from the provisions of the Original Indenture as set forth herein; and
WHEREAS, the Company, in the exercise of the power and authority conferred upon and reserved to it under the provisions of the Original Indenture, including Section 1001 thereof, and pursuant to appropriate resolutions of the Board of Directors, has duly determined to make, execute and deliver to the Trustee this Tenth Supplemental Indenture to the Original Indenture as permitted by Sections 201 and 301 of the Original Indenture in order to establish the form or terms of, and to provide for the creation and issue of, series of its debt securities under the Original Indenture, which shall be known as the 5.20% Senior Notes due 2012 and the 6.35% Senior Notes due 2032, respectively; and
WHEREAS, all things necessary to make such debt securities, when executed by the Company and authenticated and delivered by the Trustee or any Authenticating Agent and issued upon the terms and subject to the conditions hereinafter and in the Original Indenture set forth against payment therefor, the valid, binding and legal obligations of the Company and to make this Supplemental Indenture a valid, binding and legal agreement of the Company, have been done;
NOW, THEREFORE, THIS NINTH SUPPLEMENTAL INDENTURE WITNESSETH that, in order to establish the terms of series of debt securities, and for and in consideration of the premises and of the covenants contained in the Original Indenture and in this Tenth Supplemental Indenture and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, it is mutually covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions. Each capitalized term that is used herein and is defined in the Original Indenture shall have the meaning specified in the Original Indenture unless such term is otherwise defined herein. The following terms shall have the respective meanings set forth below:
"Business Day" means any day other than a day on which banking institutions in The State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.
"Capitalization" means the total of all the following items appearing on, or
included in, the consolidated balance sheet of the Company: (i) liabilities for
indebtedness maturing more than 12 months from the date of determination; and
(ii) common stock, common stock expense, accumulated other comprehensive income
or loss, preferred stock, preference stock, premium on capital stock and
retained earnings (however the foregoing may be designated), less, to the extent
not otherwise deducted, the cost of shares of capital stock of the Company held
in its treasury, if any. Subject to the foregoing, Capitalization shall be
determined in accordance with generally accepted accounting principles and
practices applicable to the type of business in which the Company is engaged and
approved by the independent accountants regularly retained by the Company, and
may be determined as of a date not more than 60 days prior to the happening of
the event for which the determination is being made.
"Debt" means any outstanding debt for money borrowed evidenced by notes, debentures, bonds or other securities, or guarantees of any debt.
"Net Tangible Assets" means the amount shown as total assets on the consolidated balance sheet of the Company, less (i) intangible assets including, but without limitation, such items as goodwill, trademarks, trade names, patents, unamortized debt discount and expense and other regulatory assets carried as an asset on the Company's consolidated balance sheet, and (ii) appropriate adjustments, if any, on account of minority interests. Net Tangible Assets shall be determined in accordance with generally accepted accounting principles and practices applicable to the type of business in which the Company is engaged and approved by the independent accountants regularly retained by the Company, and may be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made.
"Operating Property" means (i) any interest in real property owned by the Company and (ii) any asset owned by the Company that is depreciable in accordance with generally accepted accounting principles, excluding, in either case, any interest of the Company as lessee under any lease (except for a lease that results from a Sale and Lease-Back Transaction) that has been or would be capitalized on the books of the lessee in accordance with generally accepted accounting principles.
"Pledged Bonds" means the related series of Bonds and any other Mortgage Bonds issued to secure Securities subject to the release provisions provided herein or in any other supplemental indenture to the Original Indenture.
"Release Date" means the date as of which all Mortgage Bonds, (i) other than the Pledged Bonds, including the related series of Bonds, and (ii) other than outstanding Mortgage Bonds (exclusive of Pledged Bonds), which do not in aggregate principal amount exceed the greater of 5% of the Net Tangible Assets of the Company or 5% of the Capitalization of the Company, have been retired through payment, redemption or otherwise, provided that no default or Event of Default has occurred and, at such time, is continuing under the Original Indenture.
"Sale and Lease-Back Transaction" means any arrangement with any person providing for the leasing to the Company of any Operating Property (except for leases for a term, including any renewal or potential renewal, of not more than 48 months), which Operating Property has been or
is to be sold or transferred by the Company to the person; provided, however, Sale and Lease-Back Transaction shall not include any arrangement first entered into prior to the date hereof and shall not include any transaction pursuant to which the Company sells Operating Property to, and thereafter purchase energy or services from, any entity, which transaction is ordered or authorized by any regulatory authority having jurisdiction over the Company or its operations or is entered into pursuant to any plan or program of industry restructuring ordered or authorized by any such regulatory authority.
"Substitute Mortgage" means a mortgage indenture of the Company, other than the Mortgage, designated by the Company to the Trustee as a Substitute Mortgage pursuant to Section 4.03 hereof.
"Substitute Mortgage Bonds" means any mortgage bonds issued by the Company under a Substitute Mortgage and delivered to the Trustee pursuant to Section 4.03 hereof or pursuant to the comparable provision of any other supplemental indenture relating to Securities subject to the release provisions.
"Value" means, with respect to a Sale and Lease-Back Transaction, as of any particular time, the amount equal to the greater of (i) the net proceeds to the Company from the sale or transfer of the property leased pursuant to the Sale and Lease-Back Transaction or (ii) the net book value of the property, as determined by the Company in accordance with generally accepted accounting principles at the time of entering into the Sale and Lease-Back transaction, in either case multiplied by a fraction, the numerator of which shall be equal to the number of full years of the term of the lease that is part of the Sale and Lease-Back Transaction remaining at the time of determination and the denominator of which shall be equal to the number of full years of the term, without regard, in any case, to any renewal or extension options contained in the lease.
SECTION 1.02. Section References. Each reference to a particular section set forth in this Supplemental Indenture shall, unless the context otherwise requires, refer to this Supplemental Indenture.
ARTICLE TWO
TITLE AND TERMS OF THE SECURITIES
SECTION 2.01. Title of the Securities; Stated Maturity. This Supplemental Indenture hereby establishes two separate series of Securities, which shall be known as the Company's "5.20% Senior Notes due 2012" (the "5.20% Notes"), and the "6.35% Senior Notes due 2032" (the "6.35% Notes" and together with the 5.20% Notes, the "Notes"). For purposes of the Original Indenture, each series of the Notes shall separately constitute a single series of Securities. The Stated Maturity on which the principal of the 5.20% Notes shall be due and payable will be October 15, 2012. The Stated Maturity on which the principal of the 6.35% Notes shall be due and payable will be October 15, 2032.
SECTION 2.02. Certain Variations from the Original Indenture. (a) The Notes shall have the benefit of the provisions of Article Four of the Original Indenture and shall have the benefit of, or be subject to, the other related provisions of the Original Indenture relating to the grant of security, including (for avoidance of doubt and not for purposes of limitation) the Granting Clause, the definitions of "Deliverable Mortgage Bonds," "Deliverable Securities," "Designated Mortgage Bonds," "Grant," "Mortgage," "Mortgage Bonds," "Mortgage Trustee," "Previously Delivered
Mortgage Bonds," and "Trust Estate," Section 301 (20), Sections 301 (a) (v),
(ix), (x) and (xi), Sections 301 (b) (ii) and (iii), Section 301 (d), and
Sections 601(4) and (8), subject, in each case, to the release provisions
provided for in Section 4.02 herein. In addition, on and after the Release Date,
unless Substitute Mortgage Bonds are issued to secure the Notes, the Notes shall
have the benefit of the additional covenants set forth in Article Three hereof.
(b) Section 503 of the Original Indenture shall apply to the Notes. The
following shall be an additional condition to defeasance of the Notes under
Section 503: the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from the Internal Revenue
Service a letter ruling, or there has been published by the Internal Revenue
Service a Revenue Ruling, or (ii) since the date of execution of this
Supplemental Indenture, there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Outstanding Notes appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred, and, also, to the effect that, after the 123rd
day after the date of deposit, all money and other property as provided pursuant
to Section 503 of the Original Indenture (including the proceeds thereof)
deposited or caused to be deposited with the Trustee (or other qualifying
trustee) pursuant to Section 503 of the Original Indenture to be held in trust
will not be subject to any case or proceeding (whether voluntary or involuntary)
in respect of the Company under any Federal or State bankruptcy, insolvency,
reorganization or other similar law, or any decree or order for relief in
respect of the Company issued in connection therewith.
SECTION 2.03. Amount and Denominations; DTC.
(a) The aggregate principal amount of Notes that may be issued under this Supplemental Indenture is limited initially to $225,000,000 (in the case of the 5.20% Notes), and $225,000,000 (in the case of the 6.35% Notes) (except, in each case, as provided in Section 301(2) of the Original Indenture); provided that the Company may, without the consent of the Holders of the Outstanding Notes of any series, "reopen" each series of Notes so as to increase the aggregate principal amount of such Notes Outstanding in compliance with the procedures set forth in the Original Indenture, including Section 301 and Section 303 thereof, so long as any such additional Notes have the same tenor and terms (including, without limitation, rights to security and to receive accrued and unpaid interest) as the Notes of such series then Outstanding. No additional Notes of a series may be issued if an Event of Default has occurred with respect to the applicable series. The Notes shall be issuable only in fully registered form and, as permitted by Section 301 and Section 302 of the Original Indenture, in denominations of $1,000 and integral multiples thereof. The Notes will initially be issued in global form (the "Global Notes") under a book-entry system, registered in the name of The Depository Trust Company, as depository ("DTC"), or its nominee, which is hereby designated as "Depository" under the Indenture.
(b) Further to Section 305 of the Original Indenture, any Global Note shall be exchangeable for Notes registered in the name of, and a transfer of a Global Note of any series may be registered to, any Person other than the Depository for such Note or its nominee only if (i) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act, and, in either such case, the Company does not appoint a successor Depository within 90 days thereafter, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Note shall be so exchangeable and the transfer thereof so registrable or (iii) there shall have
occurred and be continuing an Event of Default or an event which, with the
giving of notice or lapse of time, or both, would constitute an Event of Default
with respect to the Notes of such series. Upon the occurrence in respect of any
Global Note of any series of any or more of the conditions specified in clause
(i), (ii) or (iii) of the preceding sentence, such Global Note may be exchanged
for Notes registered in the name of, and the transfer of such Global Note may be
registered to, such Persons (including Persons other than the Depository with
respect to such series and its nominees) as such Depository, in the case of an
exchange, and the Company, in the case of a transfer, shall direct.
SECTION 2.04. Certain Common Terms of the Notes.
(a) The 5.20% Notes shall bear interest at the rate of 5.20% per annum (), and the 6.35% Notes shall bear interest at the rate of 6.35% per annum on the respective principal amount thereof from October 23, 2002, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal of such series of Notes becomes due and payable, and on any overdue principal and premium and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during such overdue period. Interest on the Notes will be payable semiannually in arrears on April 15 and October 15 of each year (each such date, an "Interest Payment Date"), commencing April 15, 2003. The amount of interest payable for any period shall be computed on the basis of twelve 30-day months and a 360-day year.
(b) In the event that any Interest Payment Date, redemption date or other date of Maturity of the Notes is not a Business Day, then payment of the amount payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date with respect to any Note will, as provided in the Original Indenture, be paid to the person in whose name the Note (or one or more Predecessor Securities, as defined in said Indenture) is registered at the close of business on the relevant record date for such interest installment, which shall be the fifteenth calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date (the "Regular Record Date"). Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such Regular Record Date, and may either be paid to the person in whose name the Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of the applicable series of Notes not less than ten days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Original Indenture. The principal of, and premium, if any, and the interest on the Notes shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at the close of business on the Regular Record Date at such address as shall appear in the Security Register. Notwithstanding the foregoing, so long as the Notes are Global Notes and are held in book-entry form through the facilities of the Depository, payments on the Notes will be made to the Depository or its nominee in accordance with arrangements then in effect between the Trustee and the Depository.
(c) The Notes are not subject to repayment at the option of the Holders thereof and are not subject to any sinking fund. As provided in the forms of Note attached hereto as Exhibit A and Exhibit B, respectively, the Notes are subject to optional redemption, as a whole or in part, by the Company prior to Stated Maturity of the principal thereof on the terms set forth therein. Except as modified in the forms of the Notes, redemptions shall be effected in accordance with Article Twelve of the Original Indenture.
(d) The Notes shall have such other terms and provisions as are set forth in the form of Note attached hereto as Exhibit A and Exhibit B, as applicable (each of which are incorporated by reference in and made a part of this Supplemental Indenture as if set forth in full at this place).
SECTION 2.05. Form of Notes. Attached hereto as Exhibit A is the form of the definitive 5.20% Notes. Attached hereto as Exhibit B is the form of the definitive 6.35% Notes. If the Company elects to have the Notes secured by Substitute Mortgage Bonds on and after the Release Date, the terms of the Notes shall be amended to make appropriate reference to the Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the consent of Holders shall not be required in connection with such amendment.
ARTICLE THREE
ADDITIONAL COVENANTS
SECTION 3.01. Limitations on Liens. (a) From and after the Release Date, unless Substitute Mortgage Bonds are issued to secure the Notes, so long as any Notes are outstanding, the Company may not issue, assume, guarantee (including any contingent obligation to purchase) or permit to exist any Debt that is secured by any mortgage, security interest, pledge or lien ("Lien") of or upon any Operating Property owned by the Company, whether owned at the Release Date or subsequently acquired, without effectively securing the Notes (together with, if the Company shall so determine, any other indebtedness of the Company ranking equally with the Notes) equally and ratably with the Debt (but only so long as the Debt is so secured).
The foregoing restriction will not apply to:
(i) Liens on any Operating Property existing at the time of its acquisition and not created in contemplation of the acquisition;
(ii) Liens on Operating Property of a corporation existing at the time the corporation is merged into or consolidated with the Company, or at the time the corporation disposes of substantially all of its properties (or those of a division) to the Company, provided that the Lien is not extended to property owned by the Company immediately prior to the merger, consolidation or other disposition and is not created in contemplation of the merger, consolidation or other disposition;
(iii) Liens on Operating Property to secure the cost of acquisition, construction, development or substantial repair, alteration or improvement of such property or to secure indebtedness incurred to provide funds for any of these purposes or for reimbursement of funds previously expended for any of these purposes, provided the Liens are created or assumed contemporaneously with, or within 18 months after, the acquisition or the completion of substantial repair or alteration, construction, development or substantial improvement or
within 6 months thereafter pursuant to a commitment for financing arranged with a lender or investor within such 18-month period;
(iv) Liens in favor of the United States or any state or any department, agency or instrumentality or political subdivision of the United States or any state, or for the benefit of holders of securities issued by any of these entities, to secure any Debt incurred for the purpose of financing all or any part of the purchase price or the cost of substantially repairing or altering, constructing, developing or substantially improving the Operating Property of the Company; or
(v) Any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in the exceptions listed above, provided, however, that the principal amount of Debt secured thereby and not otherwise authorized by those exceptions listed above shall not exceed the principal amount of Debt, plus any premium or fee payable in connection with any such extension, renewal or replacement, so secured at the time of such extension, renewal or replacement.
(b) In addition, notwithstanding the foregoing restrictions, from and after
the Release Date, the Company may issue, assume or guarantee Debt secured by a
Lien which would otherwise be subject to the foregoing restrictions up to an
aggregate amount which, together with all other of the Company's secured Debt
(not including secured Debt permitted under any of the foregoing exceptions) and
the Value of Sale and Lease-Back Transactions existing at such time (other than
Sale and Lease-Back Transactions the proceeds of which have been applied to the
retirement of certain indebtedness, Sale and Lease-Back Transactions in which
the property involved would have been permitted to be subjected to a Lien under
any of the foregoing exceptions, and Sale and Lease-Back Transactions that are
permitted by the first sentence of Section 3.02 below), does not exceed the
greater of 10% of the Company's Net Tangible Assets or 10% of the Company's
Capitalization. The foregoing restrictions do not limit the Company's ability to
place Liens on (i) the capital stock of any of the Company's subsidiaries or
(ii) the assets of any of the Company's subsidiaries.
SECTION 3.02. Limitations on Sale and Lease-Back Transactions. So long as
the Notes are outstanding from and after the Release Date, unless Substitute
Mortgage Bonds are issued to secure the Notes, the Company may not enter into or
permit to exist any Sale and Lease-Back Transaction with respect to any
Operating Property (except for leases for a term, including any renewal or
potential renewal, of not more than 48 months), if the purchaser's commitment is
obtained more than 18 months after the later of the completion of the
acquisition, construction or development of the Operating Property or the
placing in operation of the Operating Property or of the Operating Property as
constructed or developed or substantially repaired, altered or improved. This
restriction will not apply if (a) the Company would be entitled pursuant to
Section 3.01(a) above to issue, assume, guarantee or permit to exist Debt
secured by a Lien on the Operating Property without equally and ratably securing
the Notes, (b) after giving effect to the Sale and Lease-Back Transaction,
pursuant to Section 3.01(b) above, the Company could incur, at least $1.00 of
additional Debt secured by Liens (other than Liens permitted by clause (a)), or
(c) the Company applies within 180 days an amount equal to, in the case of a
sale or transfer for cash, the net proceeds (not less than the fair value of the
Operating Property so leased), and, otherwise, an amount equal to the fair value
(as determined by the Board of Directors of the Company) of the Operating
Property so leased to the retirement of Notes or other Debt of the Company
ranking equally with the Notes; provided, however, that any such retirement of
Notes shall be in accordance with the terms and provisions of the Indenture and
the Notes; provided, further, that
the amount to be applied to such retirement of Notes or other Debt shall be reduced by an amount equal to the sum of (a) an amount equal to the redemption price with respect to Notes delivered within such one hundred eighty (180)-day period to the Trustee for retirement and cancellation and (b) the principal amount, plus any premium or fee paid in connection with any redemption in accordance with the terms of other Debt voluntarily retired by the Company within such one hundred eighty (180)-day period, excluding in each case retirements pursuant to mandatory sinking fund or prepayment provisions and payments at maturity.
SECTION 3.03. Waiver. Section 1109 of the Original Indenture shall apply to the covenants set forth in Sections 3.01 and 3.02 above at any time such covenants are in effect.
ARTICLE FOUR
SECURITY AND RELEASE PROVISIONS
SECTION 4.01. Security. Subject to Section 4.02 below, as provided in and pursuant to Article Four of the Original Indenture, each series of the Notes will be secured as to payments of principal, interest and premium, if any, by a series of Mortgage Bonds (the "General and Refunding Mortgage Bonds, 2002 Series A", in the case of the 5.20% Notes, and the "General and Refunding Mortgage Bonds, 2002 Series B", in the case of the 6.35% Notes, or, singly or collectively, the "Bonds," the "Bonds of the related series" or the "related series of Bonds") of the Company to be issued concurrently with the issuance of the Notes under and secured by a Mortgage and Deed of Trust, dated as of October 1, 1924, between the Company and Bank One, National Association, as successor trustee (the "Mortgage Trustee"), as amended and supplemented by various supplemental indentures, including the supplemental indenture, dated as of October 15, 2002 creating the Bonds (collectively, the "Mortgage"), pledged by the Company for the benefit of the Holders of the respective series of Notes to the Trustee under this Supplemental Indenture. The Bonds shall be issued in an aggregate principal amount equal to the aggregate principal amount of the Notes.
SECTION 4.02. Release. Until the Release Date and subject to Article Four of the Original Indenture, the Bonds of the related series issued and delivered to the Trustee shall serve as security for any and all obligations of the Company under all Notes of the applicable series from time to time Outstanding, including, but not limited to (1) the full and prompt payment of the principal and premium, if any, on such Notes when and as the same shall become due and payable in accordance with the terms and provisions of the Indenture or such Notes, either at the Stated Maturity thereof, upon acceleration of the maturity thereof, upon redemption, or otherwise, and (2) the full and prompt payment of any interest on such Notes when and as the same shall become due and payable in accordance with the terms and provisions of this Indenture or the Notes including, if and to the extent provided for in such Notes, interest on overdue installments of principal and (to the extent permitted by law) interest on overdue installments of interest.
Each supplemental indenture to the Mortgage pursuant to which any Bonds are issued shall contain a provision to the effect that any payment by the Company hereunder of principal of or premium or interest on Notes which shall have been authenticated and delivered in connection with the issuance and delivery to the Trustee of such Bonds (other than by the application of the proceeds of a payment in respect of such Bonds) shall to the extent thereof, be deemed to satisfy and discharge the obligation of the Company, if any, to make a payment of principal, premium or interest, as the case may be, in respect of such Bonds which is then due.
Notwithstanding anything in the Original Indenture to the contrary, from and after the Release Date, the obligation of the Company to make payment with respect to the principal of and premium, if any, and interest on the Bonds shall be deemed satisfied and discharged as provided in the supplemental indenture or indentures to the Mortgage creating such Bonds and the Bonds shall cease to secure in any manner Notes theretofore or subsequently issued; the Trustee shall thereupon surrender the Bonds to the Mortgage Trustee for cancellation and execute and deliver such proper instruments of release as may be required. From and after the Release Date, all Notes, whether theretofore or subsequently issued, shall, at the Company's option, either (i) become unsecured or (ii) be secured by Substitute Mortgage Bonds pursuant to Section 4.03 below, and any conditions to the issuance of Notes that refer or relate to Bonds or the Mortgage shall be inapplicable (except as such conditions shall be deemed to refer to Substitute Mortgage Bonds or a Substitute Mortgage pursuant to Section 4.03 below). From and after the Release Date, the Company shall not issue any additional Mortgage Bonds, including Pledged Bonds, under the Mortgage. Notice of the occurrence of the Release Date shall be given by the Trustee to the Holders of the Notes in the manner provided for in the Original Indenture not later than 30 days after the Company notifies the Trustee of the occurrence of the Release Date.
In connection with the establishment of the occurrence of the Release Date, the Trustee shall be entitled to receive, may presume the correctness of, and shall be fully protected in relying upon, an Officers' Certificate designating the Release Date and stating that the conditions to the occurrence of the Release Date have been satisfied.
When the obligation of the Company to make payments with respect to the principal of, and premium, if any, and interest on all or any part of the Bonds shall be satisfied or deemed satisfied pursuant to the Original Indenture or pursuant to this Supplemental Indenture, the Trustee shall, upon written request of the Company, deliver to the Company without charge therefor all of the Bonds so satisfied or deemed satisfied, together with such appropriate instruments of transfer or release as may be reasonably requested by the Company. All Bonds delivered to the Company in accordance with this Section shall be delivered by the Company to the Mortgage Trustee for cancellation.
SECTION 4.03. Substitute Mortgage Bonds.
(a) The Company shall notify the Trustee not less than 90 days prior to the Release Date (or such shorter period as the Company and the Trustee may agree) that the Company has determined to deliver to the Trustee on the Release Date Substitute Mortgage Bonds in an aggregate principal amount equal to the aggregate principal amount of Notes and any other Securities subject to the release provisions Outstanding on the Release Date, in trust for the benefit of the Holders from time to time of the Notes and any other Securities subject to the release provisions issued under the Original Indenture, as supplemented, as security for any and all obligations of the Company under the Notes and any other Securities subject to the release provisions, including but not limited to, (1) the full and prompt payment of the principal of and premium, if any, on the Notes and any other Securities subject to the release provisions when and as the same shall become due and payable in accordance with the terms and provisions of the Original Indenture, as supplemented, or the Notes or such other Securities subject to the release provisions, either at the stated maturity thereof, upon acceleration of the maturity thereof or upon redemption, and (2) the full and prompt payment of any interest on the Notes and any other Securities subject to the release provisions when and as the same shall become due and payable in accordance with the terms and provisions of the Original Indenture, as supplemented, or the Notes or such other Securities subject to the release provisions.
(b) The Substitute Mortgage Bonds to be delivered pursuant to the notice described in Section 4.03(a) shall be delivered in separate series and issues corresponding to the series and issues of Notes and other Securities subject to the release provisions Outstanding on the Release Date, each series or issue of Substitute Mortgage Bonds having the same stated rate or rates of interest (or interest calculated in the same manner), Interest Payment Dates, stated maturity date and redemption provisions, and in the same aggregate principal amount, as the related series or issue of Notes or other Securities subject to the release provisions outstanding on the Release Date. The Company shall enter into a Substitute Mortgage for the issuance of Substitute Mortgage Bonds, and designate it as such in the notice.
(c) The notice described in Section 4.03(a) shall also state that on the Release Date the Company shall deliver to the Trustee a supplemental indenture to the Original Indenture that will provide, among other things, that upon the issuance of Notes and other Securities subject to the release provisions on or after the Release Date, the Company shall deliver to the Trustee in trust for the benefit of the Holders as described in Section 4.03(a) hereof, and the Trustee shall accept therefor, related series of Substitute Mortgage Bonds registered in the name of the Trustee and conforming to the requirements therein specified.
(d) The determination whether to deliver Substitute Mortgage Bonds shall be made in the Company's sole discretion and without any obligation to do so.
(e) In the event that the Company does not deliver the notice described in
Section 4.03(a), the Notes and other Securities subject to the release
provisions Outstanding on the Release Date shall, as of the Release Date, no
longer be entitled to the benefit of the pledge of the Pledged Bonds and shall
thereafter be general unsecured obligations of the Company.
(f) Article Four and related provisions of the Original Indenture shall apply to Substitute Mortgage Bonds pledged to the Trustee hereunder and the provisions thereof shall be deemed to refer to the Substitute Mortgage and the Substitute Mortgage Bonds. If the Company elects to have the Notes secured by Substitute Mortgage Bonds on and after the Release Date, Article Four and related provisions may be amended to make appropriate reference to the Substitute Mortgage and the Substitute Mortgage Bonds; provided, that the consent of Holders shall not be required in connection with such amendment.
SECTION 4.04. Events of Default.
(a) On and after the Release Date, Section 601(8) of the Original Indenture shall no longer apply to the Notes.
(b) On and after the Release Date, if the Notes become secured by Substitute
Mortgage Bonds pursuant to Section 4.03 above, the occurrence of a "default" (as
defined in the Substitute Mortgage) shall constitute an Event of Default under
Section 601 of the Original Indenture with respect to the Notes and the
references in Section 601(4) of the Original Indenture and related provisions to
"Mortgage Bonds" shall be deemed to refer to "Substitute Mortgage Bonds."
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
The Trustee makes no undertaking or representations in respect of, and shall not be responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this Tenth Supplemental Indenture or the proper authorization or the due execution hereof by the Company or for or in respect of the recitals and statements contained herein, all of which recitals and statements are made solely by the Company.
Except as expressly amended hereby and by the supplemental indenture appointing the Trustee as successor trustee, the Original Indenture shall continue in full force and effect in accordance with the provisions thereof and the Original Indenture is in all respects hereby ratified and confirmed. This Tenth 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 Tenth Supplemental Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
This Tenth 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 Tenth Supplemental Indenture to be duly executed and attested, all as of the day and year first above written.
THE DETROIT EDISON COMPANY
ATTEST:
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
ATTEST:
EXHIBIT A
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE DETROIT EDISON COMPANY
5.20% SENIOR NOTES DUE 2012
Principal Amount: $225,000,000
Authorized Denomination: $1,000
Regular Record Date: close of business on the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date
Original Issue Date: October 23, 2002
Stated Maturity: October 15, 2012
Interest Payment Dates: April 15 and October 15 of each year, commencing April 15, 2003
Interest Rate: 5.20 %per annum
THE DETROIT EDISON COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Company in The City of New York, New York, the principal sum of ____________________ ($_________________) on October 15, 2012, (the "Stated Maturity"), in the coin or currency of the United States, and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on April 15, 2003, and on the Stated Maturity at the rate per annum shown above (the "Interest Rate") until the principal hereof is paid or made
available for payment and on any overdue principal and premium and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered on the Regular Record Date as specified above next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and premium, if any, and, to the extent lawful, on overdue installments of interest at the rate per annum borne by this Note. In the event that any Interest Payment Date, Redemption Date or Maturity Date is not a Business Day, then the required payment of principal, premium, if any, and interest will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). "Business Day" means any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.
Payment of principal of, premium, if any, and interest on the Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Notes represented by a Global Note shall be made by wire transfer of immediately available funds to the Holder of such Global Note , provided that, in the case of payments of principal and premium, if any, such Global Note is first surrendered to the Paying Agent (as defined in the Indenture). If any of the Notes of this series are no longer represented by a Global Note, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying Agent upon surrender of such Securities to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.
UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED BY GENERAL AND REFUNDING MORTGAGE BONDS (THE "MORTGAGE BONDS") ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY'S SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 15, 2002, SUPPLEMENTING THE MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND BANK ONE, NATIONAL ASSOCIATION (THE "MORTGAGE TRUSTEE"), PLEDGED BY THE COMPANY FOR THE BENEFIT OF THE HOLDERS OF THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE "MORTGAGE"). ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, SHALL EITHER (1) BECOME UNSECURED GENERAL
OBLIGATIONS OF THE COMPANY OR (2) BE SECURED BY SUBSTITUTE MORTGAGE BONDS UNDER A SUBSTITUTE MORTGAGE.
This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by the Trustee or a duly appointed Authentication Agent referred to herein, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
This Note is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the "Notes"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to a Collateral Trust Indenture dated as of June 30, 1993 (the "Original Indenture") duly executed and delivered between the Company and Bank One Trust Company, National Association, as Trustee (herein referred to as the "Trustee"), as supplemented through and including a Tenth Supplemental Indenture dated as of October 23, 2002 (together with the Original Indenture, the "Indenture") between the Company and the Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the registered Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is not subject to repayment at the option of the Holder hereof. Except as provided below, this Note is not redeemable by the Company prior to maturity and is not subject to any sinking fund.
This Note will be redeemable at the option of the Company, in whole at any time or in part from time to time, (any such date of optional redemption, an "Optional Redemption Date," which shall be a "Redemption Date" for purposes of the Indenture), at an optional redemption price (which shall be a "Redemption Price" for purposes of the Indenture) equal to the greater of (i) 100% of the principal amount of this Note to be redeemed and (ii) the sum of the present values of the principal amount of this Note to be redeemed and the remaining scheduled payments of interest on the principal amount of this Note to be redeemed (exclusive of interest accrued to the related Optional Redemption Date) until Stated Maturity, in each case discounted from their respective scheduled payment dates to such Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as defined below) plus 30 basis points, as determined by the Reference Treasury Dealer, plus accrued interest thereon to the date of redemption.
Notwithstanding the foregoing, installments of interest on this Note that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the registered Holders as of the close of business on the relevant Record Date.
"Adjusted Treasury Rate" means, with respect to any Optional Redemption Date, the rate per annum equal to the semiannual yield to maturity of the Comparable Treasury Issue, calculated on the third Business Day preceding such Optional Redemption Date, using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Optional Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security determined by the Reference Treasury Dealer selected by the Company as having a maturity comparable to the remaining term of this Note that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity with the remaining term of this Note.
"Comparable Treasury Price" means, with respect to any Optional Redemption
Date, (i) the average of the Reference Treasury Dealer Quotations for such
Optional Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than two such
Reference Treasury Dealer Quotations, the average of all such quotations, or
(iii) if only one Reference Treasury Dealer Quotation is received, such
quotation.
"Reference Treasury Dealer" means each of: (i) Barclays Capital Inc. and Salomon Smith Barney Inc. (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of the foregoing cease to be a primary U.S. Government securities dealer in The City of New York (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer(s) selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any Optional Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Optional Redemption Date.
Notice of any optional redemption will be mailed at least 30 days but not more than 60 days before the Optional Redemption Date to the Holder hereof at its registered address.
Unless the Company defaults in payment of the applicable Redemption Price, on and after the applicable Redemption Date interest will cease to accrue on the principal amount of this Note called for redemption.
If money sufficient to pay the applicable Redemption Price with respect to the principal amount of and accrued interest on the principal amount of this Note to be redeemed on the applicable Redemption Date is deposited with the Trustee or Paying Agent on or before the related Redemption Date and certain other conditions are satisfied, then on or after such date, interest will cease to accrue on the principal amount of this Note called for redemption.
If the Notes are only partially redeemed by the Company, the Trustee shall select which Notes are to be redeemed in a manner it deems fair and appropriate in accordance with the terms of the Indenture.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the registered Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance by the Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the registered Holders of not less than a majority in aggregate principal amount of the outstanding Securities of each series affected at the time, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the registered Holders of the Securities; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate of or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the registered Holder of each Security so affected or (ii) reduce the aforesaid percentage of Securities, the registered Holders of which are required to consent to any such supplemental indenture, without the consent of the registered Holders of each Security then outstanding and affected thereby. The Indenture also contains provisions permitting (i) the registered Holders of at least 66 2/3% in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) the registered Holders of a majority in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such registered Holder and upon all future registered Holders and owners of this Note and of any Note issued in exchange hereof or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time and place and at the rate and in the coin or currency herein prescribed.
Prior to the Release Date, the Notes of this series shall be secured by a series of Mortgage Bonds (the "Related Series of Bonds"), delivered by the Company to the Trustee for the benefit of the Holders of the Notes. Reference is made to the Mortgage and the Indenture for a description of the rights of the Trustee as Holder of the Related Series of Bonds, the property mortgaged and pledged under the Mortgage and the rights of the Company and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Related Series of Bonds are secured and the circumstances under which additional Mortgage Bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS, INCLUDING THE RELATED SERIES OF BONDS, AND (2) MORTGAGE BONDS (EXCLUSIVE OF PLEDGED BONDS), WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT
NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE "RELEASE DATE"), THE RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any interest on this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by or accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Security Registrar or any transfer agent duly executed by the registered Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Note Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Note Registrar) for the purpose of receiving payment of or on account of the principal hereof and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any Paying Agent nor any Security Registrar shall be affected by any notice to the contrary.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $1,000 and any integral multiple thereof. This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the registered Holder surrendering the same.
As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the Holders of not less than 25% in principal amount of the outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the outstanding Notes of this series a direction inconsistent with such request within such 60-day period; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of or any interest on this Note on or after the respective due dates expressed herein.
All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be.
THE DETROIT EDISON COMPANY
ATTEST:
[Corporate Seal]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within mentioned Indenture.
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee
Date: October __, 2002
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
the within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorneys to transfer the within Note on the books of the Issuer, with full power of substitution in the premises.
NOTICE: The signature of this assignment must correspond with the name as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program ("STAMP"), the Stock Exchange, Inc. Medallion Signature Program ("MSP"). When assignment is made by a guardian, trustee, executor or administrator, an officer of a corporation, or anyone in a representative capacity, proof of his or her authority to act must accompany this Note.
EXHIBIT B
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
6.35% SENIOR NOTES DUE 2032
Authorized Denomination: $1,000
Regular Record Date: close of business on the 15th calendar day (whether or not a Business Day) prior to the relevant Interest Payment Date
Original Issue Date: October 23, 202
Stated Maturity: October 15, 2032
Interest Payment Dates: April 15 and October 15 of each year, commencing April 15, 2003
Interest Rate: 6.35% per annum
THE DETROIT EDISON COMPANY, a corporation duly organized and existing under the laws of the State of Michigan (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co. or registered assigns, at the office or agency of the Company in The City of New York, New York, the principal sum of _____________ ($________) on October 15, 2032, (the "Stated Maturity"), in the coin or currency of the United States, and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on April 15, 2003, and on the Stated Maturity at the rate per annum shown above (the "Interest Rate") until the principal hereof is paid or made available for payment and on any overdue principal and premium and on any overdue installment of interest. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered on the Regular Record Date as specified above next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and premium, if any, and, to the extent lawful, on overdue installments of interest at the rate per annum borne by this Note. In the event that any Interest Payment Date, Redemption Date or Maturity Date is not a Business Day, then the required payment of principal, premium, if any, and interest will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay). "Business Day" means any day other than a day on which banking institutions in the State of New York or the State of Michigan are authorized or obligated pursuant to law or executive order to close.
Payment of principal of, premium, if any, and interest on the Notes shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of principal of, premium, if any, and interest on Notes represented by a Global Note shall be made by wire transfer of immediately available funds to the Holder of such Global Note , provided that, in the case of payments of principal and premium, if any, such Global Note is first surrendered to the Paying Agent (as defined in the Indenture). If any of the Notes of this series are no longer represented by a Global Note, (i) payments of principal, premium, if any, and interest due at the Stated Maturity or earlier redemption of such Securities shall be made at the office of the Paying Agent upon surrender of such Securities to the Paying Agent, and (ii) payments of interest shall be made, at the option of the Company, subject to such surrender where applicable, by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.
UNTIL THE RELEASE DATE (AS DEFINED BELOW), THIS NOTE SHALL BE SECURED BY GENERAL AND REFUNDING MORTGAGE BONDS (THE "MORTGAGE BONDS") ISSUED AND DELIVERED BY THE COMPANY TO THE TRUSTEE (AS DEFINED BELOW) UNDER THE COMPANY'S SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 15, 2002, SUPPLEMENTING THE MORTGAGE AND DEED OF TRUST DATED AS OF OCTOBER 1, 1924 BETWEEN THE COMPANY AND BANK ONE, NATIONAL ASSOCIATION (THE "MORTGAGE TRUSTEE"), PLEDGED BY THE COMPANY FOR THE BENEFIT OF THE HOLDERS OF THE NOTES TO THE TRUSTEE UNDER THE INDENTURE (THE "MORTGAGE"). ON THE RELEASE DATE, THE NOTES SHALL CEASE TO BE SECURED BY SUCH MORTGAGE BONDS AND, AT THE COMPANY'S OPTION, SHALL EITHER (1) BECOME UNSECURED GENERAL OBLIGATIONS OF THE COMPANY OR (2) BE SECURED BY SUBSTITUTE MORTGAGE BONDS UNDER A SUBSTITUTE MORTGAGE.
This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been executed by the Trustee or a duly appointed Authentication Agent referred to herein, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
This Note is one of a duly authorized series of Securities of the Company (herein sometimes referred to as the "Notes"), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to a Collateral Trust Indenture dated as of June 30, 1993 (the "Original Indenture") duly executed and delivered between the Company and Bank One Trust Company, National Association, as Trustee (herein referred to as the "Trustee"), as supplemented through and including a Tenth Supplemental Indenture dated as of October 23, 2002 (together with the Original Indenture, the "Indenture") between the Company and the Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the registered Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is not subject to repayment at the option of the Holder hereof. Except as provided below, this Note is not redeemable by the Company prior to maturity and is not subject to any sinking fund.
This Note will be redeemable at the option of the Company, in whole at any time or in part from time to time, (any such date of optional redemption, an "Optional Redemption Date," which shall be a "Redemption Date" for purposes of the Indenture), at an optional redemption price (which shall be a "Redemption Price" for purposes of the Indenture) equal to the greater of (i) 100% of the principal amount of this Note to be redeemed and (ii) the sum of the present values of the principal amount of this Note to be redeemed and the remaining scheduled payments of interest on the principal amount of this Note to be redeemed (exclusive of interest accrued to the related Optional Redemption Date) until Stated Maturity, in each case discounted from their respective scheduled payment dates to such Optional Redemption Date on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury Rate (as defined below) plus 25 basis points, as determined by the Reference Treasury Dealer, plus accrued interest thereon to the date of redemption.
Notwithstanding the foregoing, installments of interest on this Note that are due and payable on Interest Payment Dates falling on or prior to a Redemption Date will be payable on the Interest Payment Date to the registered Holders as of the close of business on the relevant Record Date.
"Adjusted Treasury Rate" means, with respect to any Optional Redemption Date, the rate per annum equal to the semiannual yield to maturity of the Comparable Treasury Issue, calculated on the third Business Day preceding such Optional Redemption Date, using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Optional Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security determined by the Reference Treasury Dealer selected by the Company as having a maturity comparable to the
remaining term of this Note that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity with the remaining term of this Note.
"Comparable Treasury Price" means, with respect to any Optional Redemption
Date, (i) the average of the Reference Treasury Dealer Quotations for such
Optional Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer than two such
Reference Treasury Dealer Quotations, the average of all such quotations, or
(iii) if only one Reference Treasury Dealer Quotation is received, such
quotation.
"Reference Treasury Dealer" means each of: (i) Barclays Capital Inc. and Salomon Smith Barney Inc. (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of the foregoing cease to be a primary U.S. Government securities dealer in The City of New York (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer(s) selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any Optional Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Optional Redemption Date.
Notice of any optional redemption will be mailed at least 30 days but not more than 60 days before the Optional Redemption Date to the Holder hereof at its registered address.
Unless the Company defaults in payment of the applicable Redemption Price, on and after the applicable Redemption Date interest will cease to accrue on the principal amount of this Note called for redemption.
If money sufficient to pay the applicable Redemption Price with respect to the principal amount of and accrued interest on the principal amount of this Note to be redeemed on the applicable Redemption Date is deposited with the Trustee or Paying Agent on or before the related Redemption Date and certain other conditions are satisfied, then on or after such date, interest will cease to accrue on the principal amount of this Note called for redemption.
If the Notes are only partially redeemed by the Company, the Trustee shall select which Notes are to be redeemed in a manner it deems fair and appropriate in accordance with the terms of the Indenture.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the registered Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance by the Company with certain conditions set forth therein.
The Indenture contains provisions permitting the Company and the Trustee, with the consent of the registered Holders of not less than a majority in aggregate principal amount of the outstanding Securities of each series affected at the time, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the registered Holders of the Securities; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate of or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, without the consent of the registered Holder of each Security so affected or (ii) reduce the aforesaid percentage of Securities, the registered Holders of which are required to consent to any such supplemental indenture, without the consent of the registered Holders of each Security then outstanding and affected thereby. The Indenture also contains provisions permitting (i) the registered Holders of at least 66 2/3% in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) the registered Holders of a majority in aggregate principal amount of the Securities of all series at the time outstanding affected thereby, on behalf of the registered Holders of the Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such registered Holder and upon all future registered Holders and owners of this Note and of any Note issued in exchange hereof or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the time and place and at the rate and in the coin or currency herein prescribed.
Prior to the Release Date, the Notes of this series shall be secured by a series of Mortgage Bonds (the "Related Series of Bonds"), delivered by the Company to the Trustee for the benefit of the Holders of the Notes. Reference is made to the Mortgage and the Indenture for a description of the rights of the Trustee as Holder of the Related Series of Bonds, the property mortgaged and pledged under the Mortgage and the rights of the Company and of the Mortgage Trustee in respect thereof, the duties and immunities of the Mortgage Trustee and the terms and conditions upon which the Related Series of Bonds are secured and the circumstances under which additional Mortgage Bonds may be issued.
FROM AND AFTER SUCH TIME AS ALL BONDS, OTHER THAN (1) PLEDGED BONDS, INCLUDING THE RELATED SERIES OF BONDS, AND (2) MORTGAGE BONDS (EXCLUSIVE OF PLEDGED BONDS), WHICH DO NOT IN AGGREGATE PRINCIPAL AMOUNT EXCEED THE GREATER OF FIVE PERCENT (5%) OF NET TANGIBLE ASSETS OR FIVE PERCENT (5%) OF CAPITALIZATION, HAVE BEEN RETIRED THROUGH PAYMENT, REDEMPTION OR OTHERWISE (INCLUDING THOSE MORTGAGE BONDS THE PAYMENT FOR WHICH HAS BEEN PROVIDED FOR IN ACCORDANCE WITH THE MORTGAGE) AT, BEFORE OR AFTER THE MATURITY THEREOF, PROVIDED THAT NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING (THE
"RELEASE DATE"), THE RELATED SERIES OF BONDS SHALL CEASE TO SECURE THE NOTES IN ANY MANNER.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and any interest on this Note are payable or at such other offices or agencies as the Company may designate, duly endorsed by or accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and the Security Registrar or any transfer agent duly executed by the registered Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Note Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Note Registrar) for the purpose of receiving payment of or on account of the principal hereof and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any Paying Agent nor any Security Registrar shall be affected by any notice to the contrary.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $1,000 and any integral multiple thereof. This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the registered Holder surrendering the same.
As set forth in, and subject to the provisions of, the Indenture, no Holder of any Note will have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless (i) such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, (ii) the Holders of not less than 25% in principal amount of the outstanding Notes of this series shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, (iii) the Trustee shall have failed to institute such proceeding within 60 days and (iv) the Trustee shall not have received from the Holders of a majority in principal amount of the outstanding Notes of this series a direction inconsistent with such request within such 60-day period; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal of or any interest on this Note on or after the respective due dates expressed herein.
All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.
THE DETROIT EDISON COMPANY
Attest:
[Corporate Seal]
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the within mentioned Indenture.
BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION
as Trustee
Date: October __, 2002
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
the within Note and all rights thereunder, hereby irrevocably constituting and appointing such person attorneys to transfer the within Note on the books of the Issuer, with full power of substitution in the premises.
NOTICE: The signature of this assignment must correspond with the name as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatever and NOTICE: Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program ("STAMP"), the Stock Exchange, Inc. Medallion Signature Program ("MSP"). When assignment is made by a guardian, trustee, executor or administrator, an officer of a corporation, or anyone in a representative capacity, proof of his or her authority to act must accompany this Note.
EXHIBIT 15-22
November 13, 2002
The Detroit Edison Company
Detroit, Michigan
We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of The Detroit Edison Company and subsidiaries for the three-month and nine-month periods ended September 30, 2002 and 2001, as indicated in our report dated November 4, 2002; 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 September 30, 2002, is incorporated by reference in Registration Statement No. 333-100000 on Form S-3.
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.
/S/ DELOITTE & TOUCHE LLP Detroit, Michigan |
FINAL COPY
364-DAY
CREDIT AGREEMENT
DATED AS OF OCTOBER 25, 2002
AMONG
THE DETROIT EDISON COMPANY,
AS BORROWER
AND
THE INITIAL LENDERS NAMED HEREIN,
AS INITIAL LENDERS
AND
BARCLAYS BANK PLC,
as Administrative Agent
and
SALOMON SMITH BARNEY INC., BANC ONE CAPITAL MARKETS, INC.,
as Co-Syndication Agent as Co-Syndication Agent
and
o o
as Co-Documentation Agent as Co-Documentation Agent
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BARCLAYS CAPITAL BANC ONE CAPITAL MARKETS, INC.
as Co-Lead Arrangers and Joint Book Runners
SIDLEY AUSTIN BROWN & WOOD LLP
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
SECTION 1.01. Certain Defined Terms.........................................................1
SECTION 1.02. Computation of Time Periods..................................................12
SECTION 1.03. Accounting Terms.............................................................12
ARTICLE II AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES...................................................13
SECTION 2.01. The Revolving Credit Advances................................................13
SECTION 2.02. Making the Revolving Credit Advances.........................................13
SECTION 2.03. Fees.........................................................................14
SECTION 2.04. Termination or Reduction of the Commitments..................................15
SECTION 2.05. Repayment of Revolving Credit Advances.......................................15
SECTION 2.06. Interest on Revolving Credit Advances........................................15
SECTION 2.07. Interest Rate Determination..................................................16
SECTION 2.08. Optional Conversion of Revolving Credit Advances.............................17
SECTION 2.09. Prepayments of Revolving Credit Advances.....................................17
SECTION 2.10. Increased Costs..............................................................18
SECTION 2.11. Illegality...................................................................19
SECTION 2.12. Payments and Computations....................................................19
SECTION 2.13. Taxes........................................................................20
SECTION 2.14. Sharing of Payments, Etc.....................................................22
SECTION 2.15. Use of Proceeds..............................................................23
SECTION 2.16. Extensions of Revolver Termination Date......................................23
SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.................................24
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING.............................................................24
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01........................24
SECTION 3.02. Conditions Precedent to Each Borrowing.......................................26
SECTION 3.03. Determinations Under Section 3.01............................................26
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................................27
SECTION 4.01. Representations and Warranties of the Borrower...............................27
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SIDLEY AUSTIN BROWN & WOOD LLP
ARTICLE V COVENANTS OF THE BORROWER.............................................................................29
SECTION 5.01. Affirmative Covenants........................................................29
SECTION 5.02. Negative Covenants...........................................................31
ARTICLE VI EVENTS OF DEFAULT....................................................................................32
SECTION 6.01. Events of Default............................................................32
ARTICLE VII THE AGENT...........................................................................................35
SECTION 7.01. Authorization and Action.....................................................35
SECTION 7.02. Agent's Reliance, Etc........................................................35
SECTION 7.03. Barclays and Affiliates......................................................36
SECTION 7.04. Lender Credit Decision.......................................................36
SECTION 7.05. Indemnification..............................................................36
SECTION 7.06. Successor Agent..............................................................36
ARTICLE VIII MISCELLANEOUS......................................................................................37
SECTION 8.01. Amendments, Etc..............................................................37
SECTION 8.02. Notices, Etc.................................................................37
SECTION 8.03. No Waiver; Remedies..........................................................38
SECTION 8.04. Costs and Expenses...........................................................38
SECTION 8.05. Right of Set-off.............................................................39
SECTION 8.06. Binding Effect...............................................................40
SECTION 8.07. Assignments, Designations and Participations.................................40
SECTION 8.08. Confidentiality..............................................................44
SECTION 8.09. Governing Law................................................................44
SECTION 8.10. Execution in Counterparts....................................................44
SECTION 8.11. Jurisdiction, Etc............................................................44
SECTION 8.12. Waiver of Jury Trial.........................................................45
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SIDLEY AUSTIN BROWN & WOOD LLP
SCHEDULES AND EXHIBITS
Schedules
Schedule I - List of Applicable Lending Offices
Pricing Schedule
Exhibits
Exhibit A - Form of Note (If Requested)
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Certificate by Borrower
Exhibit E - Form of Opinion of Counsel to the Borrower
Exhibit F - Form of Compliance Certificate
SIDLEY AUSTIN BROWN & WOOD LLP
364-DAY CREDIT AGREEMENT dated as of October 25, 2002 among THE DETROIT EDISON COMPANY, a Michigan corporation (the "Borrower"), the banks, financial institutions and other institutional lenders (the "Initial Lenders") listed on the signature pages hereof, and BARCLAYS BANK PLC ("Barclays"), as Administrative Agent (the "Agent") and BANC ONE CAPITAL MARKETS, INC., as Co-Syndication Agent, and SALOMON SMITH BARNEY INC., as Co-Syndication Agent for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS.
The Borrower has requested that the Initial Lenders enter into this Agreement, and the Initial Lenders have indicated their willingness to enter into this Agreement upon the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereto hereby agree, subject to the satisfaction of the conditions set forth in Article III, as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the Agent at Barclays with its office at 222 Broadway, New York, New York 10038, Account No. 050-019104, Attention: Michele Fuimo and Mayerlin Jaramillo.
"Agents" means the Agent and each Co-Syndication Agent, collectively.
"Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, (i) with respect to all Base Rate Advances, 0.0% per annum, and (ii) with respect to all Eurodollar Rate Advances, the percentage rate per annum which is applicable at such time with respect to Eurodollar Rate Advances as set forth in the Pricing Schedule.
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"Applicable Percentage" means, as of any date, the percentage rate per annum at which Facility Fees are accruing on each Lender's Commitment (without regard to usage) at such time as set forth in the Pricing Schedule.
"Applicable Utilization Fee Rate" means, as of any date, the percentage rate per annum at which Utilization Fees accrue on all Revolving Credit Advances at such time as set forth in the Pricing Schedule.
"Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto.
"Audited Statements" means the Consolidated balance sheets of the Borrower as at December 31, 2001, and the related Consolidated statements of income and cash flows of the Borrower for the fiscal year then ended, accompanied by the opinion thereon of the Borrower's independent public accountants.
"Base Rate" means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the highest of:
(a) the rate of interest established by Barclays in New York, New York, from time to time, as Barclays' base rate;
(b) the sum (adjusted to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing (A) 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 (adjusted to the basis of a year of 360 days) being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Barclays 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 Barclays from three New York certificate of deposit dealers of recognized standing selected by Barclays, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period 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 Barclays with respect to liabilities consisting of or including (among other liabilities) three-month U.S. dollar non-personal time deposits in the United States, plus (iii) the average during such three-week period of the annual assessment rates estimated by Barclays for determining the then current annual assessment payable by Barclays to the Federal Deposit Insurance Corporation (or any successor) for insuring U.S. dollar deposits of Barclays in the United States; and
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(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to this Agreement.
"Borrowing" means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type and (in the case of Eurodollar Rate Advances) having the same Interest Period, made by each of the Lenders pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not required or authorized by law to close in New York City or Chicago, Illinois and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.
"Capitalization" means the sum of total net worth plus Consolidated Debt.
"Commitment" has the meaning specified in Section 2.01.
"Confidential Information" means information that the Borrower furnishes to the Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Lender from a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion of Revolving Credit Advances of one Type into Revolving Credit Advances of the other Type pursuant to Section 2.07 or 2.08.
"Debt" of any Person 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 Hedge 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)
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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. See the definition of "Nonrecourse Debt" below.
"Declining Lender" has the meaning specified in Section 2.16.
"Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.
"Designating Lender" has the meaning specified in Section 8.07(h).
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.
"DTE Energy" means DTE Energy Company, a Michigan corporation.
"EBITDA" means, for any period, net income (or net loss) plus the sum of (a) interest expense, (b) income tax expense, (c) depreciation expense and (d) amortization expense, in each case determined in accordance with GAAP for such period less the aggregate amount, if any, of securitization bond charges (or similar charges imposed on customers for the purpose of servicing Securitization Bonds) collected by or on behalf of the Securitization SPE, to the extent such charges are included in the calculation of net income (or net loss).
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank organized under the laws of the United States, or any State thereof, and having a combined capital and surplus of at least $250,000,000; (iv) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having a combined capital and surplus of at least $250,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having a combined capital and surplus of at least $250,000,000, so long as such bank is acting
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through a branch or agency located in the United States; (vi) the central bank of any country that is a member of the Organization for Economic Cooperation and Development; (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having a combined capital and surplus of at least $250,000,000; and (viii) any other Person approved by the Agent and, so long as no Event of Default shall be continuing, the Borrower, such approval not to be unreasonably withheld or delayed by either party; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, judgment, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the Borrower's controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum
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funding waiver with respect to a Plan; (c) the provision by the
administrator of any Plan of a notice of intent to terminate such Plan
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA);
(d) the cessation of operations at a facility of the Borrower or any
ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by the Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f)
the conditions for the imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of
an amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or
the occurrence of any event or condition described in Section 4042 of
ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered by the principal office of each of the Reference Banks 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 Interest Period in an amount approximately equal to such Reference Bank's Eurodollar Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. The Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest Period under
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regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City 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 Eurodollar Rate Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Hedging Debt" means all Debt arising under any Hedge Agreement in respect of fluctuations in commodity prices.
"Existing Credit Agreement" means that certain Credit Agreement, dated as of November 7, 2001, among the Borrower, the lenders parties thereto, and Barclays Bank PLC, as administrative agent, and Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as co-syndication agents, as the same has been amended, restated, supplemented or otherwise modified from time to time.
"Extending Lenders" has the meaning specified in Section 2.16.
"Facility Fee" has the meaning specified in Section 2.03(a).
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.
"Financial Officer" of any Person means the chief executive officer, president, chief financial officer, any vice president, controller, assistant controller, treasurer or any assistant treasurer of such Person.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means 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.
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"Insufficiency" means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect to Eurodollar Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months, as the Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends after the Revolver Termination Date then in effect;
(ii) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
"Junior Subordinated Debt" means (a) subordinated junior deferrable interest debentures of the Borrower, (b) the related preferred securities, if applicable, of Subsidiaries of the Borrower and (c) the related subordinated guarantees, if applicable, of the Borrower, in each case, from time to time outstanding.
"Lenders" means the Initial Lenders and each Person that shall become a party hereto pursuant to Section 8.07(a), (b) and (c).
"Lien" means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien
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or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.
"Loan Documents" means this Agreement and the Notes.
"Material Adverse Change" means any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent
or any Lender under any Loan Document or (c) the ability of the
Borrower to perform its obligations under any Loan Document to which it
is a party.
"Maximum Facility Amount" means $135,000,000.
"MichCon" means Michigan Consolidated Gas Company, a Michigan corporation, wholly owned (indirectly) by DTE Energy.
"Moody's" means Moody's Investors Service, Inc.
"Moody's Rating" is defined in the Pricing Schedule.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and at least one Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"Nonrecourse Debt" means Debt of the Borrower or any of its Subsidiaries in respect of which no recourse may be had by the creditors under such Debt against the Borrower or such Subsidiary in its individual capacity or against the assets of the Borrower or such Subsidiary, other than assets which were purchased by the Borrower or such Subsidiary with the proceeds of such Debt; it being understood that Securitization Bonds shall constitute Nonrecourse Debt for all purposes of the Loan Documents, except to the extent (and only to the extent) of any claims made against the Borrower in respect of its indemnification obligations relating to such Securitization Bonds.
"Note" has the meaning specified in Section 2.17.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
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"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"Person" means an 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.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pricing Schedule" means the Pricing Schedule identifying the Applicable Margin, the Applicable Percentage and the Applicable Utilization Fee Rate attached hereto identified as such.
"Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned by such Person.
"Receivables Purchase Documents" means those documents entered into in connection with the receivables purchase facility among the Borrower, Corporate Asset Funding Company, Inc., Citibank, N.A. and Citicorp North America, Inc. dated as of March 9, 2001 (including any amendments to or replacements of such facility) and those documents entered into in connection with any series of receivables purchase or sale agreements generally consistent with terms contained in comparable structured finance transactions pursuant to which the Borrower or any of its Subsidiaries, in their respective capacities as sellers or transferors of any receivables, sell or transfer to SPCs all of their respective rights, title and interest in and to certain receivables for further sale or transfer to other purchasers of or investors in such assets (and the other documents, instruments and agreements executed in connection therewith), as any such agreements may be amended, restated, supplemented or otherwise modified from time to time, or any replacement or substitution therefor
"Receivables Purchase Facility" means the receivables purchase facility among the Borrower, Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc. dated as of March 9, 2001 (including any amendments to or replacements of such facility) and any other securitization facility made available to the Borrower or any of its Subsidiaries, pursuant to which receivables of the Borrower or any of its Subsidiaries are transferred to one or more SPCs, and thereafter to certain investors, pursuant to the terms and conditions of the Receivables Purchase Documents
"Reference Banks" means Citibank, N.A., Barclays Bank PLC and Bank One, NA (Main Office - Chicago).
"Register" has the meaning specified in Section 8.07(d).
"Required Lenders" means at any time Lenders owed more than fifty percent (50%) of the then aggregate unpaid principal amount of the Revolving Credit Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having more than fifty percent (50%) of the Commitments.
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"Revolver Termination Date" means the earlier of (a) October 24, 2003 or, if extended pursuant to Section 2.16, the date that is 364 days after the Revolver Termination Date then in effect, and (b) the date of termination in whole of the Commitments pursuant to Section 2.04 or 6.01; provided, however, that the Revolver Termination Date of any Lender that is a Declining Lender to any requested extension pursuant to Section 2.16 shall be the Revolver Termination Date in effect immediately prior to the date on which such extension was granted for all purposes of this Agreement.
"Revolving Credit Advance" means an advance by a Lender to the Borrower as part of a Borrowing, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Revolving Credit Advance).
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.
"S&P Rating" is defined in the Pricing Schedule.
"SEC Reports" means the following reports and financial statements of the Borrower:
(i) the Borrower's Annual Report on Form 10-K for the year ended December 31, 2001, as filed with or sent to the Securities and Exchange Commission, including therein the Audited Statements of the Borrower, as updated in the Borrower's Current Report on Form 8-K dated September 17, 2002, as filed with or sent to the Securities and Exchange Commission; and
(ii) the Borrower's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, including therein the Unaudited Statements of the Borrower, and the Borrower's Current Reports on Form 8-K, if any, provided to the Lenders prior to the date of this Agreement.
"SPC" means any special purpose entity established for the purpose of purchasing receivables in connection with a receivables securitization transaction permitted under the terms of this Agreement
"SPV" has the meaning specified in Section 8.07(h).
"Securitization Bonds" means Debt of the Securitization SPE, issued pursuant to Enrolled Senate Bill No. 1253, Public Act 142 of 2000 of the State of Michigan.
"Securitization SPE" means The Detroit Edison Securitization Funding LLC, a single-member limited liability company organized under the laws of the State of Michigan, all of the membership interest in which is held directly by the Borrower.
"Significant Subsidiary" means any Subsidiary of the Borrower (A) the total assets (after intercompany eliminations) of which exceed 30% of the total assets of the Borrower and its Subsidiaries or (B) the net worth of which exceeds 30% of the Consolidated Net Worth of the Borrower and its Subsidiaries, in each case as shown on
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the audited consolidated financial statements of the Borrower as of the end of the fiscal year immediately preceding the date of determination.
"Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.
"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.
"Three-Year Agreement" means that certain $65,000,000 three-year credit agreement dated as of October 25, 2002, by and among the Borrower, the Lenders and the Agents, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Unaudited Statements" means the unaudited condensed Consolidated balance sheets of the Borrower, as at June 30, 2002, and the related condensed Consolidated statements of income and cash flows of the Borrower for the six-month period then ended, duly certified by a Financial Officer of the Borrower.
"Utilization Fee" has the meaning specified in Section 2.03(c).
"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.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles
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consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
SECTION 2.01. The Revolving Credit Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Revolver Termination Date in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender's name on Schedule 1 hereto or, if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the Agent pursuant to Section 8.07(d), as such amount may be reduced pursuant to Section 2.04 (such Lender's "Commitment"). Each Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.09 and reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Credit Advances.
(a) Each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or 10:00 A.M. (New York City time) on the Business Day of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which shall give to each Lender prompt notice thereof by telecopier or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing, telecopier or telex in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Revolving Credit Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Revolving Credit Advance. Each Lender shall, before 12:00 noon (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent's Account, in same day funds, such Lender's ratable portion of such Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower at the Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.07 or 2.11 and (ii) at no time shall the sum of (x) all Borrowings comprising Eurodollar Rate Advances outstanding hereunder and (y) all "Borrowings" comprising "Eurodollar Rate Advances" outstanding under, and as such terms are defined in, the Three-Year Agreement, be greater than ten.
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(c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Revolving Credit Advance to be made by such Lender as part of such Borrowing when such Revolving Credit Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Agent such Lender's ratable portion of such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Revolving Credit Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender's Revolving Credit Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Revolving Credit Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Fees.
(a) Facility Fee. The Borrower agrees to pay to the Agent for the account of each Lender a facility fee (the "Facility Fee") on the aggregate amount of such Lender's Commitment from the date hereof in the case of each Initial Lender and from effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until all of the Revolving Credit Advances have been paid in full and the Commitments under this Agreement have been terminated at a rate per annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December, and on the Revolving Loan Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own account such fees as may from time to time be agreed between the Borrower and the Agent.
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(c) Utilization Fee. If the aggregate outstanding amount of
(i) all Revolving Credit Advances hereunder and (ii) all "Revolving Credit
Advances" under (and as defined in) the Three-Year Agreement exceeds
thirty-three percent (33%) of the aggregate amount of (x) all Commitments
hereunder and (y) all "Commitments" under (and as defined in) the Three-Year
Agreement then in effect on such date (or, if any of the Commitments or
"Commitments" have been terminated, the aggregate amount of all Commitments and
"Commitments" in effect immediately prior to such termination), the Borrower
will pay to the Agent for the ratable benefit of the Lenders a utilization fee
(the "Utilization Fee") at a per annum rate equal to the Applicable Utilization
Fee Rate in effect from time to time payable on the aggregate outstanding amount
of all Revolving Credit Advances on such date, payable in arrears quarterly on
the last day of each March, June, September and December, and on the Revolving
Loan Termination Date.
SECTION 2.04. Termination or Reduction of the Commitments.
(a) The Commitments shall be automatically terminated on the Revolver Termination Date.
(b) The Borrower shall have the right, upon at least three Business Days' notice to the Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders, provided that each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Once terminated, a Commitment or portion thereof may not be reinstated.
SECTION 2.05. Repayment of Revolving Credit Advances. The Borrower shall repay to the Agent for the ratable account of the Lenders on the Revolver Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding.
SECTION 2.06. Interest on Revolving Credit Advances.
(a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Lender from the date of such Revolving Credit Advance until such principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Revolving Credit Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time plus (y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Revolving Credit Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Revolving Credit Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest
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Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. (i) Upon the occurrence and during the continuance of an Event of Default, the Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above, and (ii) the Borrower shall pay, to the fullest extent permitted by law, the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.07. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Agent timely information for the purpose of determining each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Agent for the purpose of determining any such interest rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. The Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Agent for purposes of Section 2.06(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate under Section 2.06(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Agent that the Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will not adequately reflect the cost to such Required Lenders of making, funding or maintaining their respective Eurodollar Rate Advances for such Interest Period, the Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of "Interest Period" in Section 1.01, the Agent will forthwith so notify the Borrower and the Lenders and such Eurodollar Rate Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Eurodollar Rate Advances shall automatically Convert into Base Rate Advances.
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(e) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended.
(f) If fewer than two Reference Banks furnish timely information to the Agent for determining the Eurodollar Rate for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Eurodollar Rate Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.08. Optional Conversion of Revolving Credit Advances. The Borrower may on any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all Revolving Credit Advances of one Type comprising the same Borrowing into Revolving Credit Advances of the other Type (it being understood that such Conversion of a Revolving Credit Advance or of its Interest Period does not constitute a repayment or prepayment of such Revolving Credit Advance); provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result in more separate Borrowings than permitted under Section 2.02(b). Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Revolving Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Eurodollar Rate Advance. Each notice of Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.09. Prepayments of Revolving Credit Advances.
(a) Optional Prepayment. The Borrower may on any Business Day,
upon notice given to the Agent not later than 11:00 A.M. (New York City time),
(i) on the same day for Base Rate Advances and (ii) on the second Business Day
prior to the prepayment in the case of Eurodollar Rate Advances stating the
proposed date and aggregate principal amount of the prepayment (and if such
notice is given the Borrower shall) prepay the outstanding principal amount of
the Revolving Credit Advances comprising part of the same Borrowing in whole or
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ratably in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).
(b) Mandatory Prepayment. The Borrower shall, upon five Business Days notice from the Agent given at the request or with the consent of the Required Lenders, prepay the aggregate principal amount outstanding plus all interest thereon and all other amounts payable hereunder or under the Notes, in the event that: (i) any Person or two or more Persons acting in concert (other than DTE Energy or any of its Subsidiaries) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 20% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) any Person or two or more Persons acting in concert (other than DTE Energy or any of its Subsidiaries) shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower.
SECTION 2.10. Increased Costs.
(a) If, due to either (i) the introduction of or any change 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 any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances (excluding for purposes of this Section 2.10 any such increased costs resulting from (i) Taxes or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost. A certificate as to the amount of such increased cost, submitted to the Borrower and the Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender 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 capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of
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such Lender's commitment to lend hereunder. A certificate as to such amounts submitted to the Borrower and the Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) In the event that a Lender demands payment from the Borrower for amounts owing pursuant to subsection (a) or (b) of this Section 2.10, the Borrower may, upon payment of such amounts and subject to the requirements of Sections 8.04 and 8.07, substitute for such Lender another financial institution, which financial institution shall be an Eligible Assignee and shall assume the Commitments of such Lender and purchase the Revolving Credit Advances held by such Lender in accordance with Section 8.07, provided, however, that (i) no Default shall have occurred and be continuing, (ii) the Borrower shall have satisfied all of its obligations in connection with the Loan Documents with respect to such Lender, and (iii) if such assignee is not a Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall have paid the Agent a $3,000 administrative fee.
SECTION 2.11. Illegality. Notwithstanding any other provision of this Agreement, if any Lender shall notify 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 any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance or a Revolving Credit Advance that bears interest at the rate set forth in Section 2.06(a)(i), as the case may be, and (ii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.12. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under
the Notes not later than 11:00 A.M. (New York City time) on the day when due in
U.S. dollars to the Agent at the Agent's Account in same day funds and without
set off, deduction or counterclaim. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest,
facility fees or the Utilization Fee ratably (other than amounts payable
pursuant to Section 2.10, 2.13 or 8.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such Lender is not made when due hereunder or under the Note held by such Lender, to
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charge from time to time against any or all of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of facility fees and the Utilization Fee shall be made by the Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, facility fees or the Utilization Fee are payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, facility fee or the Utilization Fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes shall be made, in accordance with Section 2.12, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on its overall net income, and franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13) such Lender or the Agent (as the
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case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any taxes imposed by any jurisdiction on amounts payable under this Section 2.13) imposed on or paid by such Lender or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide each of the Agent and the Borrower with two original Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or the Notes. If the forms provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that, if at the date of the Assignment and Acceptance pursuant to which a Lender assignee becomes a party to this Agreement, the Lender assignor was entitled to payments under subsection (a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the
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future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender assignee on such date. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI, that the Lender reasonably considers to be confidential, the Lender shall give notice thereof to the Borrower and shall not be obligated to include in such form or document such confidential information.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section 2.13(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under the first sentence of subsection (e) above),
such Lender shall not be entitled to indemnification under Section 2.13(a) or
(c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.
(g) In the event that a Lender demands payment from the Borrower for amounts owing pursuant to subsection (a) or (b) of this Section 2.13, the Borrower may, upon payment of such amounts and subject to the requirements of Sections 8.04 and 8.07, substitute for such Lender another financial institution, which financial institution shall be an Eligible Assignee and shall assume the Commitments of such Lender and purchase the Revolving Credit Advances held by such Lender in accordance with Section 8.07, provided, however, that (i) no Default shall have occurred and be continuing, (ii) the Borrower shall have satisfied all of its obligations in connection with the Loan Documents with respect to such Lender, and (iii) if such assignee is not a Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall have paid the Agent a $3,000 administrative fee.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Credit Advances owing to it (other than pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share of payments on account of the Revolving Credit Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Revolving Credit Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.14 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.
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SECTION 2.15. Use of Proceeds. The proceeds of the Revolving Credit Advances shall be available (and the Borrower agrees that it shall use such proceeds) solely for general corporate purposes, including commercial paper liquidity, of the Borrower and its Subsidiaries.
SECTION 2.16. Extensions of Revolver Termination Date. No earlier than 45 days and no later than 30 days prior to the Revolver Termination Date in effect at any time, the Borrower may, by written notice to the Agent, request that such Revolver Termination Date be extended for a period of 364 days. Such request shall be irrevocable and binding upon the Borrower. The Agent shall promptly notify each Lender of such request. If a Lender agrees, in its individual and sole discretion, to so extend its Commitment (an "Extending Lender"), it shall deliver to the Agent a written notice of its agreement to do so no earlier than 30 days and no later than 20 days prior to such Revolver Termination Date and the Agent shall notify the Borrower of such Extending Lender's agreement to extend its Commitment no later than 15 days prior to such Revolver Termination Date. The Commitment of any Lender that fails to accept or respond to the Borrower's request for extension of the Revolver Termination Date (a "Declining Lender") shall be terminated on the Revolver Termination Date originally in effect (without regard to any extension by other Lenders) and on such Revolver Termination Date the Borrower shall pay in full the principal amount of all Revolving Credit Advances owing to such Declining Lender, together with accrued interest thereon to the date of such payment of principal and all other amounts payable to such Declining Lender under this Agreement. The Agent shall promptly notify each Extending Lender of the aggregate Commitments of the Declining Lenders. The Extending Lenders, or any of them, may offer to increase their respective Commitments by an aggregate amount up to the aggregate amount of the Declining Lenders' Commitments and any such Extending Lender shall deliver to the Agent a notice of its offer to so increase its Commitment no later than 15 days prior to such Revolver Termination Date. To the extent of any shortfall in the aggregate amount of extended Commitments, the Borrower shall have the right to require any Declining Lender to assign in full its rights and obligations under this Agreement to an Eligible Assignee designated by the Borrower and acceptable to the Agent, that agrees to accept all of such rights and obligations (a "Replacement Lender"), provided that (i) such increase and/or such assignment is otherwise in compliance with Section 8.07 (provided that the $3,000 processing and recording fee in respect of such assignment shall be payable by the Borrower), (ii) such Declining Lender receives payment in full of the principal amount of all Revolving Credit Advances owing to such Declining Lender, together with accrued interest thereon to the date of such payment of principal and all other amounts payable to such Declining Lender under this Agreement, and (iii) any such increase shall be effective on the Revolver Termination Date in effect at the time the Borrower requests such extension and any such assignment shall be effective on the date specified by the Borrower and agreed to by the Replacement Lender and the Agent. If Extending Lenders and Replacement Lenders provide Commitments in an aggregate amount at least equal to 51% of the aggregate amount of the Commitments outstanding 30 days prior to the Revolver Termination Date in effect at the time the Borrower requests such extension, the Revolver Termination Date shall be extended by 364 days for such Extending Lenders.
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SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Revolving Credit Advance made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the date and the amount of each Revolving Credit Advance made hereunder and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, (iii) the effective date and amount of each Assignment and Acceptance delivered to and accepted by it and the parties thereto pursuant to Section 8.07, (iv) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's share thereof, and (v) all other appropriate debits and credits as provided in this Agreement, including, without limitation, all fees, charges, expenses and interest.
(c) The entries maintained in the accounts maintained pursuant to clauses (a) and (b) above shall be prima facie evidence of the existence and amounts of the obligations hereunder and under the Notes therein recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay such obligations in accordance with their terms.
(d) Any Lender may request that its Revolving Credit Advances be evidenced by a promissory note representing its Revolving Credit Advances substantially in the form of Exhibit A (each, a "Note"). In such event, the Borrower shall prepare, execute and deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Revolving Credit Advances evidenced by each such Note and interest thereon shall at all times (including after any assignment pursuant to Section 8.07) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to Section 8.07, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Revolving Credit Advances once again be evidenced as described in clauses (a) and (b) above.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
date hereof (the "Effective Date"), provided that the following conditions
precedent have been satisfied on such date:
(a) There shall have occurred no Material Adverse Change since June 30, 2002.
(b) There shall exist no action, suit, investigation, litigation or proceeding affecting the Borrower or any of its Significant Subsidiaries pending or threatened before any
court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect other than the matters disclosed or contemplated in the SEC Reports (the "Disclosed Litigation") or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the transactions contemplated hereby and there shall have been no adverse change in the status, or financial effect on the Borrower or any of its Significant Subsidiaries of the Disclosed Litigation from that disclosed or contemplated in the SEC Reports.
(c) The Lenders shall have been given such access, as such Lenders have reasonably requested, to the management, records, books of account, contracts and properties of the Borrower and its Significant Subsidiaries as they shall have requested.
(d) All governmental and third party consents and approvals necessary in connection with the transactions contemplated hereby shall have been obtained (without the imposition of any conditions that are not acceptable to the Lenders) and shall remain in effect, and no law or regulation shall be applicable in the reasonable judgment of the Lenders that restrains, prevents or imposes materially adverse conditions upon the transactions contemplated by the Loan Documents.
(e) The Borrower shall have notified each Lender and the Agent in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and reasonable expenses of the Agent and the Lenders with respect to this Agreement for which the Agent shall have made reasonable demand in accordance with Section 8.04 on or prior to the Effective Date.
(g) On the Effective Date, the following statements shall be true and the Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a Default.
(iii) The Borrower shall have delivered a certificate, substantially in the form of Exhibit D hereto, signed on behalf of the Borrower by a Financial Officer of the Borrower.
(h) The Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Agent and (except for any Notes requested by the Lenders) in sufficient copies for each Lender:
(i) Notes, if any, to the order of each Lender requesting the issuance of a Note as of the Closing Date pursuant to Section 2.17.
(ii) Certified copies of the resolutions of the Board of Directors of the Borrower approving each Loan Document to which it is a party, and of all
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documents evidencing other necessary corporate action and governmental approvals, if any, with respect to each Loan Document to which it is a party.
(iii) A certificate of the Corporate Secretary or an Assistant Corporate Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign each Loan Document to which it is a party and the other documents to be delivered hereunder or thereunder.
(iv) Copies of the SEC Reports.
(v) A favorable opinion of T.A. Hughes, the General Counsel of the Borrower, substantially in the form of Exhibit E hereto and as to such other matters as any Lender through the Agent may reasonably request.
(vi) Evidence satisfactory to the Agent that the Existing Credit Agreement shall have been or shall simultaneously with the initial Revolving Credit Advance hereunder be terminated (except for those provisions that expressly survive the termination thereof) and all loans outstanding and other amounts owed to the lenders or agents thereunder shall have been simultaneously with the initial Revolving Credit Advance hereunder be paid in full.
(i) The Three-Year Agreement shall have been duly executed by all parties thereto.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation of each Lender to make a Revolving Credit Advance on the occasion of each Borrowing shall be subject to the conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing:
(a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in
Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though
made on and as of such date, and
(ii) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, that constitutes a Default; and
(b) the Agent shall have received such other approvals, opinions or documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each Lender shall be
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deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its objection thereto. The Agent shall promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by the Borrower of the Loan Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by the Borrower of this Agreement, the Notes or any other Loan Document to which it is a party.
(d) This Agreement has been, and each of the Notes and each of the other Loan Documents to which it is a party when delivered hereunder will have been, duly executed and delivered by the Borrower. This Agreement is, and each of the Notes and each of the other Loan Documents to which it is a party when delivered hereunder will be, the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors rights generally.
(e) The Audited Statements of the Borrower and the Unaudited Statements of the Borrower, copies of each of which have been furnished to each Lender, fairly present, subject in the case of Unaudited Statements to normal year-end audit adjustments, the Consolidated financial condition, results of operations and cash flows of the relevant Persons and entities, as at the dates and for the periods therein indicated, all in accordance with generally accepted accounting principles consistently applied. Since June 30, 2002, there has been no Material Adverse Change, except as shall have been disclosed or contemplated in the SEC Reports.
(f) There is no pending or threatened action, suit, investigation, litigation or proceeding, including, without limitation, any Environmental Action, affecting the Borrower or any of the Significant Subsidiaries before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect (other than the Disclosed
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Litigation) or (ii) purports to affect the legality, validity or enforceability of this Agreement, any Note or any other Loan Document or the consummation of the transactions contemplated hereby and there has been no adverse change in the status of any Disclosed Litigation, or its financial effect on the Borrower or any of the Significant Subsidiaries from that disclosed or contemplated in the SEC Reports that could be reasonably likely to have a Material Adverse Effect.
(g) The operations and properties of the Borrower and each of the Significant Subsidiaries comply in all material respects with all applicable Environmental Laws and Environmental Permits, all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs, except as disclosed or contemplated in the SEC Reports, and no circumstances exist that could be reasonably likely to (i) form the basis of an Environmental Action against the Borrower or any of the Significant Subsidiaries or any of their properties that could have a Material Adverse Effect or (ii) cause any such property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law that could have a Material Adverse Effect.
(h) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan.
(i) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.
(j) Neither the Borrower nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.
(k) Neither the Borrower nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.
(l) Except as set forth in the financial statements referred to in subsection (e) above, the Borrower and its Subsidiaries have no material liability with respect to "expected post retirement benefit obligations" within the meaning of Statement of Financial Accounting Standards No. 106.
(m) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Revolving Credit Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock; and after applying the proceeds of each Revolving Credit Advance hereunder, margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) constitutes less than twenty-five percent (25%) of the value of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale or pledge, or any other restriction hereunder.
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(n) Neither the Borrower nor any of its Subsidiaries is, or after the making of any Revolving Credit Advance or the application of the proceeds or repayment thereof, or the consummation of any of the other transactions contemplated hereby, will be, an "investment company", or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" (within the meaning of the Investment Company Act of 1940, as amended).
(o) The Borrower is a "public utility company" and a "subsidiary company" of DTE Energy, which is a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), and such "holding company" and the Borrower are currently exempt from the provisions of the 1935 Act (except Section 9 thereof).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Revolving Credit Advance shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties (including customary self-insurance) in the same general areas in which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Borrower shall not be required to preserve any right or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower and that the loss thereof is not disadvantageous in any material respect to the Borrower or the Lenders.
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(e) Visitation Rights. At any reasonable time and from time to time, permit the Agent or any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of the Significant Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of the Significant Subsidiaries with any of their officers or directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Significant Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Subject to clause (d) above, maintain and preserve, and cause each of its Significant Subsidiaries to maintain and preserve, all of their respective properties that are used or useful in the conduct of their respective businesses in good working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 65 days after the end of each of the first three quarters of each fiscal year of the Borrower, Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter;
(ii) as soon as available and in any event within 115 days after the end of each fiscal year of the Borrower, a copy of the Annual Report on Form 10-K for such year for the Borrower and its Consolidated Subsidiaries, as filed with or sent to the Securities and Exchange Commission, containing the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Deloitte & Touche LLP or other independent public accountants acceptable to the Required Lenders;
(iii) together with the financial statements required under clauses (i) or (ii) above, a compliance certificate in substantially the form of Exhibit F signed by a Financial Officer of the Borrower showing the then current information and calculations necessary to determine the Applicable Margin, the Applicable Percentage and the Applicable Utilization Fee Rate and compliance with this Agreement and stating that no Event of Default or Default exists, or if any Event of Default or Default exists, stating the nature and status thereof;
(iv) as soon as possible and in any event within five days after the occurrence of each Default continuing on the date of such statement, a statement
of a Financial Officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto;
(v) as soon as possible and in any event within five days after any change in the Borrower's Moody's Rating or S&P Rating, notice thereof;
(vi) reasonably promptly after the sending or filing thereof copies of all reports and registration statements that the Borrower or any Subsidiary filed with the Securities and Exchange Commission or any national securities exchange;
(vii) promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(f); and
(viii) such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request.
SECTION 5.02. Negative Covenants. At all times on and after the Effective Date so long as any Revolving Credit Advance shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;
(iii) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or its Subsidiaries;
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(v) Liens described in the SEC Reports;
(vi) Liens pursuant to the Borrower's Mortgage and Deed of Trust, dated as of October 1, 1924, as supplemented, as described therein;
(vii) Liens pursuant to the Borrower's Indenture, dated as of June 30, 1993, as supplemented, as described therein, in connection with the issuance of debt securities secured by mortgage bonds; and
(viii) Liens, including, without limitation, Liens arising in connection with a Receivables Purchase Facility or the issuance of Securitization Bonds, securing Debt of the Borrower (other than Debt of the Borrower owed to any Subsidiary) and/or securing Debt of the Borrower's Subsidiaries (other than Debt of any Subsidiary owed to the Borrower or any other Subsidiary), in an aggregate outstanding amount not to exceed ten percent (10%) of the consolidated assets of the Borrower and its Subsidiaries at any time.
(b) Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any Significant Subsidiary to do so, except that (i) any Significant Subsidiary may merge or consolidate with or into any other Significant Subsidiary, (ii) any Significant Subsidiary may merge into or dispose of assets to the Borrower, and (iii) the Borrower may merge or consolidate with (a) MichCon, so long as the Borrower shall be the surviving entity or MichCon shall expressly assume the obligations under this Agreement or (b) any other Person so long as the Borrower shall be the surviving entity and has, after giving effect to such merger or consolidation, senior unsecured Debt outstanding rated at least BBB- by S&P and Baa3 by Moody's; provided, in each case, that no Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.
(c) Change in Nature of Business. Make, or permit any of its Significant Subsidiaries to make, any material change in the nature of its business as carried on the date hereof, other than as disclosed or contemplated in the SEC Reports.
(d) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or permit, any change in accounting policies or reporting practices, except as required or permitted by generally accepted accounting principles.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Revolving Credit Advance when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Revolving Credit Advance or make any other payment of fees or other amounts payable
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under this Agreement or any Note within three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein, by the Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 2.09(b), 5.01(d), (e) or (h) or 5.02, or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 10 days after written notice thereof shall have been given to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or notional amount of at least $25,000,000 in the aggregate (but excluding Debt outstanding hereunder and Nonrecourse Debt) of the Borrower or such Significant Subsidiary (as the case may be), when the same becomes due and payable (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 event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition 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 or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries 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 Borrower or any of its Significant Subsidiaries 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, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, 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 the Borrower or any of its Significant Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money, individually or in the aggregate, in excess of $25,000,000 shall be rendered against the Borrower or any of its Significant Subsidiaries and either (i) enforcement proceedings shall have been commenced by
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any creditor upon such judgment or order or (ii) there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(g) Any non-monetary judgment or order shall be rendered against the Borrower or any of its Significant Subsidiaries that could be reasonably expected to have a Material Adverse Effect, and there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) (i) any Person or "group" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) shall either (A) acquire beneficial ownership of more than 25% of any outstanding class of common stock of DTE Energy having ordinary voting power in the election of directors of DTE Energy, or (B) obtain the power (whether or not exercised) to elect a majority of DTE Energy's directors, or (ii) DTE Energy shall at any time cease to hold 100% of the Voting Stock of the Borrower; or
(i) The Borrower or any of its ERISA Affiliates shall incur, or, in the reasonable opinion of the Required Lenders, shall be reasonably likely to incur liability in excess of $25,000,000 individually or in the aggregate as a result of one or more of the following: (i) the occurrence of any ERISA Event; (ii) the partial or complete withdrawal of the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or (iii) the reorganization or termination of a Multiemployer Plan; or
(j) The Borrower and its Subsidiaries, on a Consolidated basis, shall at any time cease to:
(i) Maintain a ratio of Consolidated EBITDA to interest expense on all Debt (excluding (A) all Nonrecourse Debt of the Borrower and its Subsidiaries, (B) Excluded Hedging Debt and (C) the Junior Subordinated Debt) of not less than 2:1 for each twelve-month period ending on the last day of September, December, March and June of each year, or
(ii) Maintain a ratio of Consolidated Debt (excluding (A) all Nonrecourse Debt of the Borrower and its Subsidiaries, (B) Excluded Hedging Debt and (C) the Junior Subordinated Debt) to Capitalization of not greater than .65:1; or
(k) any provision of any of the Loan Documents after delivery thereof pursuant to Section 3.01 shall for any reason cease to be valid and binding on or enforceable against the Borrower, or the Borrower shall so state in writing;
then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Revolving Credit Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Revolving Credit Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Revolving Credit
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Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Revolving Credit Advances shall automatically be terminated and (B) the Revolving Credit Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Revolving Credit Advances), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or all of the Lenders to the extent required by the terms of this Agreement), and such instructions shall be binding upon all Lenders and all holders of Revolving Credit Advances; provided, however, that the Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. 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 under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee in respect of any Revolving Credit Advance as the owner thereof until
the Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee in respect of such Revolving Credit Advance, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
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; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) 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 Borrower or
to inspect the property (including the books and records) of the Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished
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pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram or telex) believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Barclays and Affiliates. With respect to its Commitment, the Revolving Credit Advances made by it and any Note issued to it, Barclays shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Barclays in its individual capacity. Barclays and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if Barclays were not the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of their respective Revolving Credit Advances (or if no Revolving Credit Advances are at the time outstanding or if any Revolving Credit Advances are owing to Persons that are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of any Loan Document or any action taken or omitted by the Agent under any Loan Document, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, any Loan Document, to the extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall
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have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Revolving Credit Advances or
any fees or other amounts payable hereunder, (d) except as provided in Section
2.16, postpone any date fixed for any payment of principal of, or interest on,
the Revolving Credit Advances or any fees or other amounts payable hereunder,
(e) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Revolving Credit Advances, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder or (f) amend this Section 8.01; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Agent under this Agreement or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed or delivered, if to the Borrower, at its address at 2000 2nd Avenue, Detroit, MI 48226, Attention: Treasurer; if to any Initial Lender, at its Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; and if to the Agent, at its address at 222 Broadway, New York, NY 10038, Attention: Michele Fuimo and Mayerlin Jaramillo; or, as to the Borrower or the Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Agent. All such notices and communications shall, when mailed, telecopied, telegraphed or telexed, be effective when deposited in the mails, telecopied, delivered to the telegraph company or confirmed by telex answerback, respectively, except that notices and
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communications to the Agent pursuant to Article II, III or VII shall not be effective until received by the Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses.
(a) The Borrower agrees to pay on demand, upon presentation of a statement of account and absent manifest error, all reasonable costs and reasonable expenses of the Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Notes, each other Loan Document and the other documents to be delivered hereunder and thereunder, including, without limitation, (A) all due diligence, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, consultant, and audit expenses and (B) the reasonable fees and reasonable expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under the Loan Documents. The Borrower further agrees to pay on demand all reasonable costs and reasonable expenses of the Agent and the Lenders, if any (including, without limitation, reasonable internal and external counsel fees and expenses, provided such fees and expenses are not duplicative), in connection with the "workout", restructuring or enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for the Agent and each Lender in connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify, to the extent legally permissible, and hold harmless the Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with (i) the Notes, this Agreement, the other Loan Documents any of the transactions contemplated herein or therein or the actual or proposed use of the proceeds of the Revolving Credit Advances or (ii) the actual or alleged presence of Hazardous Materials on any property of the Borrower or any of its Subsidiaries or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries, in each case whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or
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willful misconduct. The Borrower also agrees not to assert any claim against the Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Notes, this Agreement, the other Loan Documents any of the transactions contemplated herein or therein or the actual or proposed use of the proceeds of the Revolving Credit Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Revolving Credit Advance, as a result of a payment or Conversion pursuant to Section 2.07(d) or (e), 2.09 or 2.11, acceleration of the maturity of the Revolving Credit Advances pursuant to Section 6.01, or for any other reason, the Borrower shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Revolving Credit Advance.
(d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Revolving Credit Advances due and payable pursuant to
the provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under the Loan Documents and any Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender and its Affiliates may
have.
SECTION 8.06. Binding Effect. This Agreement shall become effective (other than Section 2.01, which shall only become effective upon satisfaction of the conditions precedent set forth in Section 3.01) when it shall have been executed by the Borrower and the Agent and when the Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns, except that the
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Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders to any Person.
SECTION 8.07. Assignments, Designations and Participations.
(a) Each Lender may, with the prior consent of the Agent (which consent shall
not be unreasonably withheld) and (for so long as no Default has occurred and is
continuing) the Borrower (which consent shall not be unreasonably withheld)
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owed to it and any Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all rights and obligations under this Agreement
and, for so long as no Default has occurred and is continuing, shall be made
concurrently with an assignment in a ratable amount of such Lender's rights and
obligations under the Three-Year Agreement (including, without limitation, all
or a portion of its "Commitment", "Revolving Credit Advances" owed to it and any
"Note" or "Notes" held by it under (and as each such term is defined in) the
Three-Year Agreement), (ii) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender or an assignment of all
of a Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, and (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,000. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under this Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of the financial statements referred to in
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Section 4.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such assignee will, independently and without reliance upon the Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations that by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after the Borrower's receipt of such notice, if requested by the applicable
Lender, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, if requested by such assigning Lender, a new Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(d) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses and
Commitment of, and principal amount of Revolving Credit Advances owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Each Lender may sell participations to one or more banks
or other entities (other than the Borrower or any of its Affiliates) in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Revolving Credit
Advances owing to it and any Note or Notes held by it); provided, however, that
(i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the owner of
such Revolving Credit Advances for all purposes of this Agreement, (iv) the
Borrower, the Agent and the other Lenders shall continue to
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deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and (v) no participant under any such participation shall have any right to approve any amendment or waiver of any provision of this Agreement or any Note, or any consent to any departure by the Borrower therefrom, except to the extent that such amendment, waiver or consent would (A) reduce the principal of, or interest on, the Revolving Credit Advances or any fees or other amounts payable hereunder, or (B) increase the Commitments, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Revolving Credit Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation. Each participant shall be entitled to the benefits of Sections 2.10, 2.11 and 2.13 to the same extent as if it were a Lender and had acquired its interest under this Agreement by an assignment made pursuant to this Section 8.07, provided, however, that in no event shall the Borrower be obligated to make any payment with respect to such Sections that is greater than the amount that the Borrower would have otherwise made had no participations been sold under this Section 8.07(e).
(f) Any Lender may, in connection with any assignment, designation or participation or proposed assignment, designation or participation pursuant to this Section 8.07, disclose to the assignee, designee or participant or proposed assignee, designee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee, designee or participant or proposed assignee, designee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time (i) create a security interest in all or a portion of its rights under this Agreement (including, without limitation, the Revolving Credit Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or (ii) with notice to the Agent and the Borrower, assign all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Revolving Credit Advances owed to it and the Note or Notes held by it) to any of its Affiliates.
(h) Notwithstanding anything to the contrary contained herein, any Lender (a "Designating Lender") may grant to one or more special purpose funding vehicles (each an "SPV"), identified as such in writing from time to time by the Designating Lender to the Agent and the Borrower, the option to provide to the Borrower all or any part of any Revolving Credit Advance that such Designating Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPV to make any Revolving Credit Advance, (ii) if an SPV elects not to exercise such option or otherwise fails to provide all or any part of such Revolving Credit Advance, the Designating Lender shall be obligated to make such Revolving Credit Advance pursuant to the terms hereof, (iii) the Designating Lender shall remain liable for any indemnity or other payment obligation with respect to its Commitment hereunder and (iv) no SPV or Designating Lender shall be entitled to receive any greater amount under this Agreement than the Designating Lender would have been entitled to receive had the Designating Lender not otherwise granted such SPV the option to provide any Revolving Credit Advance to the Borrower. The making of a Revolving Credit Advance by an SPV hereunder shall utilize the Commitment of the Designating Lender to
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the same extent, and as if, such Revolving Credit Advance were made by such Designating Lender.
(i) Each party hereto hereby acknowledges and agrees that no SPV shall have the rights of a Lender hereunder, such rights being retained by the applicable Designating Lender. Accordingly, and without limiting the foregoing, each party hereby further acknowledges and agrees that no SPV shall have any voting rights hereunder and that the voting rights attributable to any Revolving Credit Advance made by an SPV shall be exercised only by the relevant Designating Lender and that each Designating Lender shall serve as the administrative agent and attorney-in-fact for its SPV and shall on behalf of its SPV receive any and all payments made for the benefit of such SPV and take all actions hereunder to the extent, if any, such SPV shall have any rights hereunder. No additional Note shall be required to evidence the Revolving Credit Advances or portion thereof made by an SPV; and the related Designating Lender shall be deemed to hold its Note or Notes, if any, as administrative agent for such SPV to the extent of the Revolving Credit Advances or portion thereof funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Designating Lender as administrative agent for such SPV.
(j) Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable so long as, and to the extent that, the related Designating Lender provides such indemnity or makes such payment; provided, with respect to such agreement by the Borrower that the related Designating Lender shall not be in breach of its obligation to make Revolving Credit Advances to the Borrower hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreements shall survive the termination of this Agreement) that prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof; provided, with respect to such agreement by the Borrower that the related Designating Lender shall not be in breach of its obligation to make Revolving Credit Advances to the Borrower hereunder. Notwithstanding the foregoing, the Designating Lender unconditionally agrees to indemnify the Borrower, the Agent and each Lender against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be incurred by or asserted against the Borrower, the Agent or such Lender, as the case may be, in any way relating to or arising as a consequence of any such forbearance or delay in the initiation of any such proceeding against its SPV.
(k) In addition, notwithstanding anything to the contrary contained in subsection 8.07(h), (i), (j) or (k) or otherwise in this Agreement, any SPV may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interest in any Revolving Credit Advances to the Designating Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Revolving Credit Advances and (ii) disclose on a confidential basis any non-public information relating to its Revolving Credit Advances to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancements to such SPV.
SIDLEY AUSTIN BROWN & WOOD LLP
Subsection 8.07(h), (i), (j) or (k) may not be amended without the written consent of any Designating Lender affected thereby.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of the Borrower, other than (a) to the Agent's or such Lender's Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 8.07(f), to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender and (d) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 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.
SECTION 8.11. 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 the Notes, 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 or the Notes 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 or the Notes 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.
SIDLEY AUSTIN BROWN & WOOD LLP
SECTION 8.12. Waiver of Jury Trial. Each of the Borrower, the Agent and the Lenders 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 Notes or the actions of the Agent or any Lender in the negotiation, administration, performance or enforcement thereof.
REMAINDER OF PAGE INTENTIONALLY BLANK
SIDLEY AUSTIN BROWN & WOOD LLP
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE DETROIT EDISON COMPANY
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
Lenders
BARCLAYS BANK PLC, Individually and as
Administrative Agent
Title:
SALOMON SMITH BARNEY INC., as Co-Syndication
Agent
Title:
BANC ONE CAPITAL MARKETS, INC., as
Co-Syndication Agent
Title:
CITIBANK, N.A., as a Lender
Title:
BANK ONE, NA (MAIN OFFICE - CHICAGO), as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
THE BANK OF NEW YORK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
KEY BANK NATIONAL ASSOCIATION, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
UBS AG (STAMFORD BRANCH), as a Lender
Title:
UBS AG (STAMFORD BRANCH), as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
COMERICA BANK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON, as a Lender
Title:
CREDIT SUISSE FIRST BOSTON, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A., as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
BAYERISCHE LANDESBANK GIROZENTRALE (CAYMAN
ISLANDS BRANCH), as a Lender
Title:
BAYERISCHE LANDESBANK GIROZENTRALE (CAYMAN
ISLANDS BRANCH), as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
MELLON BANK, N.A., as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
FIFTH THIRD BANK (EASTERN MICHIGAN), as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
STANDARD FEDERAL BANK, N.A., as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
FIRST INDEPENDENCE BANK OF DETROIT, as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
MORGAN STANLEY BANK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY 364-DAY CREDIT AGREEMENT
SCHEDULE I
THE DETROIT EDISON COMPANY
APPLICABLE LENDING OFFICES
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE COMMITMENT
---------------------- ----------------------- ------------------------- ----------
Citibank, N.A. 388 Greenwich Street Same as Domestic Lending Office
21st Floor
New York, NY 10003
Attention: Dhaya Ranganathan
Telecopier: (212) 816-8098
Bank One, NA One Bank One Plaza Same as Domestic Lending Office
Suite 0634
Chicago, IL 60670
Attention: Gloria Steinbrenner
Telecopier: (312) 732-4840
Barclays Bank PLC 200 Park Avenue Same as Domestic Lending Office
New York, NY 10166
Attention: Sydney Dennis/
Mark Griffin
Telecopier: (212) 412-7680
The Bank of New York One Wall Street Same as Domestic Lending Office
New York, NY 10286
Attention: Kathy D'Elena
Telecopier: (212) 635-7923
The Bank of Nova Scotia 600 Peachtree Street NE Same as Domestic Lending Office
Suite 2700
Atlanta, GA 30308
Attention: Mystro Whatley
Telecopier: (404) 888-8998
Key Bank National Association 127 Public Square Same as Domestic Lending Office
Cleveland, OH 44114
Attention: Laura Binkley
Telecopier: (216)689-4981
UBS AG, Stamford Branch 577 Washington Boulevard Same as Domestic Lending Office
Stamford, CT 06901
Attention: Denise Conzo
Telecopier: (203) 719-3853
Comerica Bank 500 Woodward Avenue Same as Domestic Lending Office
MC 3268
Detroit, MI 48226
Attention: David C. Bird
Telecopier: (313) 222-9514
Credit Suisse First Boston 11 Madison Avenue Same as Domestic Lending Office
New York, NY 10010
Attention: Andrea Shkane
Telecopier: (212) 325-8309
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SIDLEY AUSTIN BROWN & WOOD LLP
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE COMMITMENT
---------------------- ----------------------- ------------------------- ----------
Union Bank of California, N.A. Energy Capital Services Same as Domestic Lending Office
445 S. Figueroa Street, 15th
Floor
Los Angeles, CA 90017
Attention: Dennis Blank
Telecopier: (213) 236-4096
Bayerische Landesbank 560 Lexington Avenue Same as Domestic Lending Office
Girozentrale, Cayman Islands 17th Floor
Branch New York, NY 10022
Attention: Sean O'Sullivan
Telecopier: (212) 310-9868
Mellon Bank, N.A. 3 Mellon Center - Room 1203 Same as Domestic Lending Office
Pittsburgh, PA 15259
Attention: Brenda Leiersapf
Telecopier: (412) 209-6146
Fifth Third Bank, Eastern c/o Madisonville Operations Same as Domestic Lending Office
Michigan Center
MD 1M0C2B
Cincinnati, OH 45263-5300
Attention: Gina Schmidt
Telecopier: (513) 358-0221
Standard Federal Bank, N.A. 2600 W. Big Beaver Same as Domestic Lending Office
Troy, MI 48084
Attention: Yvonne Hicks
Telecopier: (248) 637-5003
First Independence Bank of 44 Michigan Avenue Same as Domestic Lending Office
Detroit Detroit, MI 48226
Attention: Barbara W. Worden
Telecopier: (313) 256-8444
The Northern Trust Company 50 S. LaSalle Street Same as Domestic Lending Office
Chicago, IL 60675
Attention: Funding Contact
Telecopier: (312) 444-5055
Morgan Stanley Bank 2500 Lake Park Boulevard Same as Domestic Lending Office
Suite 300C
West Valley City, UT 84120
Attention:
Telecopier:
Total: $135,000,000
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SIDLEY AUSTIN BROWN & WOOD LLP
PRICING SCHEDULE
LEVEL I STATUS LEVEL II STATUS LEVEL III STATUS LEVEL IV STATUS LEVEL V STATUS
-------------- --------------- ---------------- --------------- --------------
Applicable 0.125% 0.150% 0.175% 0.250% 0.400%
Percentage
Applicable Margin 0.750% 0.850% 0.950% 1.125% 1.975%
(Eurodollar Rate)
Applicable 0.125% 0.125% 0.125% 0.125% 0.250%
Utilization Fee
Applicable Margin 0.0% 0.0% 0.0% 0.0% 0.0%
(Base Rate)
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For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's Moody's Rating is A3 or better or the Borrower's S&P Rating is A- or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status and (ii) the Borrower's Moody's Rating is Baa1 or better or the Borrower's S&P Rating is BBB+ or better.
"Level III Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the Borrower's Moody's Rating is Baa2 or better or the Borrower's S&P Rating is BBB or better.
"Level IV Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Borrower's Moody's Rating is Baa3 or better or the Borrower's S&P Rating is BBB- or better.
"Level V Status" exists at any date if, on such date, the Borrower has not qualified for Level I Status, Level II Status, Level III or Level IV Status.
"Moody's Rating" means, at any time, the rating issued by Moody's and then in effect with respect to the Borrower's senior unsecured long-term debt securities without third-party credit enhancement.
SIDLEY AUSTIN BROWN & WOOD LLP
"S&P Rating" means, at any time, the rating issued by S&P and then in effect with respect to the Borrower's senior unsecured long-term debt securities without third-party credit enhancement.
"Status" means Level I Status, Level II Status, Level III Status, Level IV Status or Level V Status.
The Applicable Margin, Applicable Utilization Fee and Applicable Percentage shall be determined in accordance with the foregoing table based on the Borrower's Status as determined from its then-current Moody's Rating and S&P Rating. The credit rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Borrower does not have both a Moody's Rating and an S&P Rating, Level V Status shall exist.
In the event that a split occurs between the two ratings, then the Status corresponding to the lower of the two ratings shall apply. However, if the split is greater than one level, then the pricing shall be based upon the Status one level above the Status corresponding to the lower of the two ratings.
SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT A
FORM OF REVOLVING CREDIT PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 2002
FOR VALUE RECEIVED, the undersigned, THE DETROIT EDISON COMPANY, a Michigan corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of _________________________ (the "Lender") for the account of its Applicable Lending Office on the Revolver Termination Date (each as defined in the Credit Agreement referred to below), the principal sum of U.S.$[amount of the Lender's Commitment in figures] or, if less, the aggregate principal amount of the Revolving Credit Advances made by the Lender to the Borrower pursuant to the 364-Day Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "Credit Agreement"; the terms defined therein being used herein as therein defined) among the Borrower, the Lender and certain other lenders parties thereto, and Barclays Bank PLC, as Agent for the Lender and such other lenders outstanding on the Revolver Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Advance from the date of such Revolving Credit Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United States of America to Barclays Bank PLC, as Agent, at 222 Broadway, New York, NY 10038, Account No. 050-019104, Attention: Michele Fuimo and Mayerlin Jaramillo, in same day funds. Each Revolving Credit Advance owing to the Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of Revolving Credit Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Credit Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
THE DETROIT EDISON COMPANY
SIDLEY AUSTIN BROWN & WOOD LLP
ADVANCES AND PAYMENTS OF PRINCIPAL
AMOUNT OF AMOUNT OF PRINCIPAL PAID OR UNPAID PRINCIPAL NOTATION
DATE ADVANCE PREPAID BALANCE MADE BY
---- --------- --------------------------- ---------------- --------
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SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT B
FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Barclays Bank PLC, as Agent for the Lenders parties
to the Credit Agreement referred to below
222 Broadway
New York, NY 10038
Attention: Michele Fuimo and Mayerlin Jaramillo [Date]
Ladies and Gentlemen:
The undersigned, THE DETROIT EDISON COMPANY, refers to the 364-Day Credit Agreement, dated as of October 25, 2002 (as amended or modified from time to time, the "Credit Agreement"; the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders parties thereto and Barclays Bank PLC, as Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _______________, ____.
(ii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Section 4.01 of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, that constitutes a Default.
SIDLEY AUSTIN BROWN & WOOD LLP
Very truly yours,
THE DETROIT EDISON COMPANY
SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "364-Day Credit Agreement") and to the Three-Year Credit Agreement dated October 25, 2002 (as amended or modified from time to time, the "Three-Year Credit Agreement", and together with the 364-Day Credit Agreement, the "Credit Agreements") each among The Detroit Edison Company, a Michigan corporation (the "Borrower"), the Lenders (as defined in the Credit Agreements) and Barclays Bank PLC, as agent for the Lenders (the "Agent"). Terms defined in each of the Credit Agreements are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, (a) an interest in and to the Assignor's rights and obligations under the 364-Day Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the 364-Day Credit Agreement, and (b) an interest in and to the Assignor's rights and obligations under the Three-Year Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the Three-Year Credit Agreement. After giving effect to such sale and assignment, the Assignee's Commitment and the amount of the Revolving Credit Advances owing to the Assignee under each of the Credit Agreements will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with each of the Credit Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of each of the Credit Agreements or any other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under each of the Credit Agreements or any other instrument or document furnished pursuant thereto; and (iv) attaches the Note or Notes held by the Assignor, if any, and requests that the Agent exchange such Note or Notes for a new Note or Notes payable to the order of the Assignee in an amount equal to the Commitment assumed by the Assignee pursuant hereto and the applicable Credit Agreement or new Notes payable to the order of the Assignee in an amount equal to the Commitment assumed by the Assignee pursuant hereto and the applicable Credit Agreement and the Assignor in an amount equal to the Commitment retained by the Assignor under the applicable Credit Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of each of the Credit Agreements, together with copies of the financial statements referred to in each Section 4.01
SIDLEY AUSTIN BROWN & WOOD LLP
thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under each of the Credit Agreements; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under each of the Credit Agreements as are delegated to the Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of each of the Credit Agreements are required to be performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms required under Section 2.13 of each of the Credit Agreements.
4. Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance and recording by the Agent. The effective date for this Assignment and Acceptance (the "Effective Date") shall be the date of acceptance hereof by the Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective Date, (i) the Assignee shall be a party to each of the Credit Agreements and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under each of the Credit Agreements.
6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the Agent shall make all payments under each of the Credit Agreements and the Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, facility fees and the Utilization Fee with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under each of the Credit Agreements and the Notes for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon.
SIDLEY AUSTIN BROWN & WOOD LLP
Schedule 1 to Assignment and Acceptance
364-Day Three-Year
Credit Credit
Agreement Agreement
--------- ----------
Percentage interest assigned: _______________% _______________%
Assignee's Commitment: $_______________ $_______________
Aggregate outstanding principal amount of Revolving Credit Advances
assigned: $_______________ $_______________
Principal amount of Revolving Credit Advances payable to Assignee: $_______________ $_______________
Principal amount of Revolving Credit Advances payable to Assignor: $_______________ $_______________
Effective Date(1): $_______________ $_______________
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[NAME OF ASSIGNOR], as Assignor
Dated:
[NAME OF ASSIGNEE], as Assignee
Dated:
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
(1) This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance to the Agent.
SIDLEY AUSTIN BROWN & WOOD LLP
THE DETROIT EDISON COMPANY
(2) Required if the Assignee is an Eligible Assignee solely by reason of clause
(viii) of the definition of "Eligible Assignee".
(3) To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT D
FORM OF CERTIFICATE
DTE ENERGY COMPANY
THE DETROIT EDISON COMPANY
MICHIGAN CONSOLIDATED GAS COMPANY
OFFICER'S CERTIFICATE
I, D.R. Murphy, Assistant Treasurer of DTE ENERGY COMPANY
("DTE"), THE DETROIT EDISON COMPANY ("DECO") and MICHIGAN CONSOLIDATED GAS
COMPANY ("MichCon"), each a Michigan corporation (each a "Borrower" and
collectively the "Borrowers"), DO HEREBY CERTIFY, pursuant to Section 3.01 of
each of (i) the 364-Day and Three-Year Credit Agreements, dated as of October
25, 2002 among DTE, the financial institutions from time to time parties thereto
(the "DTE Lenders"), and Citibank, N.A., as agent for said DTE Lenders (the "DTE
Credit Agreements"), (ii) the 364-Day and Three-Year Credit Agreements, dated as
of October 25, 2002, among DECO, the financial institutions from time to time
parties thereto (the "DECO Lenders") and Barclays Bank PLC, as agent for said
DECO Lenders (the "DECO Credit Agreements"), and (iii) the 364-Day and
Three-Year Credit Agreements, dated as of October 25, 2002, among MichCon, the
financial institutions from time to time parties thereto (the "MichCon Lenders",
and, together with the DTE Lenders and the DECO Lenders, the "Lenders") and Bank
One, NA, as agent for said Lenders (the "MichCon Credit Agreements", and
together with the DTE Credit Agreements and the DECO Credit Agreements, the
"Credit Agreements"), that the terms defined in the Credit Agreements are used
herein as herein defined and, further, that:
1. The Effective Date shall be October 25, 2002.
2. The representation and warranties contained in Section 4.01 of each of the Credit Agreements are true and current on and as of the date hereof.
3. No event has occurred and is continuing that constitutes a Default.
4. Each Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan.
5. The execution, delivery and performance by each Borrower of the Loan Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, are within each Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) each Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting each Borrower.
6. All governmental and third party consents and approvals necessary in connection with the transactions contemplated by the Loan Documents to which each Borrower is a party have been obtained, including in the case of DECO, the orders of the Federal Energy Regulatory Commission (without the imposition of any conditions that are not acceptable to the Lenders),
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and remain in effect, and no law or regulation is applicable that restrains, prevents or imposes materially adverse conditions upon each Borrower with respect to the transactions contemplated by the Loan Documents to which it is a party.
7. Each of the Loan Documents to which each of the Borrowers is a party when delivered pursuant to each of the Credit Agreements has been duly executed and delivered by each Borrower. Each of the other Loan Documents to which each Borrower is a party when delivered hereunder will be, the legal, valid and binding obligation of each Borrower enforceable against each Borrower in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally.
8. The Consolidated balance sheets of each of DTE, DECO, MichCon and their respective Subsidiaries as at December 31, 2001, and the related Consolidated statements of income and cash flows of each of DTE, DECO, MichCon and their respective Subsidiaries for the fiscal year then ended, accompanied by an opinion of Deloitte & Touche LLP, independent public accountants, and the condensed Consolidated balance sheets of each of DTE, DECO, MichCon and their respective Subsidiaries as at June 30, 2002 and the related condensed Consolidated statements of income and cash flows of each of DTE, DECO, MichCon and their respective Subsidiaries for the six months then ended, copies of which have been furnished to each Lender, attached hereto as Annex A-1 through A-6 are hereby duly certified by the undersigned, as fairly presenting, subject in the case of said balance sheet as at June 30, 2002, and said statements of income and cash flows for the six months then ended, to year-end audit adjustments, the Consolidated financial condition of each of DTE, DECO, MichCon and their respective Subsidiaries, as applicable, as at such dates and the Consolidated results of the operations of each of DTE, DECO, MichCon and their respective Subsidiaries, as applicable, for the periods ended on such dates, all in accordance with generally accepted accounting principles consistently applied, and the respective reports in which such financial statements are contained are hereby designated as the "SEC Reports" for purposes of the Credit Agreements. Since June 30, 2002 there has been no Material Adverse Change with respect to any of the Borrowers.
9. None of the Borrowers is a party to an indenture, loan or credit agreement, lease, guarantee, mortgage, security agreement, bond, note or other agreement or instrument, and there are no orders, writs, judgments, awards, injunctions or decrees, that affect or purport to affect each Borrower's right to borrow money or each Borrower's obligations under the Loan Documents to which it is a party.
10. Each of the Existing Credit Agreements is terminated (except for those provisions that expressly survive the termination thereof) upon effectiveness of the Credit Agreements on the Effective Date; as of the date hereof, there are no loans outstanding under any of the Existing Credit Agreements and all amounts owed to the lender or agents thereunder have been paid in full.
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Dated as of the ___ day of October, 2002.
DTE ENERGY COMPANY
THE DETROIT EDISON COMPANY
MICHIGAN CONSOLIDATED GAS COMPANY
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EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE BORROWER
[Date]
To each of the Lenders set forth
in Schedule A hereto
DTE Energy Company
The Detroit Edison Company
Michigan Consolidated Gas Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to (i) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among DTE Energy Company ("DTE"), the financial institutions from time to time parties thereto (the "DTE Lenders"), and Citibank, N.A., as agent for said DTE Lenders, Barclays Bank PLC and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Salomon Smith Barney Inc., as Lead Arranger and Sole Book Runner (the "DTE Credit Agreements"), (ii) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among The Detroit Edison Company ("DECO"), the financial institutions parties thereto (the "DECO Lenders") and Barclays Bank PLC, as agent for said DECO Lenders, Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Barclays Capital and Banc One Capital Markets, Inc., as Co-Lead Arrangers and Joint Book Runners (the "DECO Credit Agreements"), and (iii) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among Michigan Consolidated Gas Company ("MichCon"), the financial institutions parties thereto (the "MichCon Lenders", and together with the DTE Lenders and the DECO Lenders, the "Lenders") and Bank One, NA, as agent for said Lenders, Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital, as Co-Lead Arrangers and Joint Book Runners (the "MichCon Credit Agreements", and together with the DTE Credit Agreements and the DECO Credit Agreements, the "Credit Agreements"). Terms defined in each Credit Agreement are used herein as therein defined.
I am the Associate General Counsel of DTE, and the Vice President and General Counsel of both DECO and MichCon, and have acted as counsel for each of the Borrowers in connection with the preparation, execution and delivery of the Loan Documents.
In that connection, I, in conjunction with the members of my staff, have examined:
(i) Each Loan Document, executed by each of the parties thereto.
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(ii) The other documents furnished by each of the Borrowers pursuant to Article III of each of the Credit Agreements.
(iii) The Restated Articles of Incorporation of DTE, the Restated Articles of Incorporation of DECO, and the Restated Articles of Incorporation of MichCon and all amendments thereto (the "Charters").
(iv) The By-Laws of each of the Borrowers and all amendments thereto (the "By-Laws").
(v) Certificates from the State of Michigan attesting to the continued corporate existence and good standing of each of the Borrowers.
I have also examined the originals, or copies certified to my satisfaction, of the documents listed in a certificate of a Financial Officer of each of the Borrowers, dated the date hereof (the "Certificate"), certifying that the documents listed in such certificate are all of the indentures, loan or credit agreements, leases, guarantees, mortgages, security agreements, bonds, notes and other agreements or instruments, and all of the orders, writs, judgments, awards, injunctions and decrees, that affect or purport to affect each Borrower's right to borrow money or each Borrower's obligations under the Loan Documents to which it is party. In addition, I have examined the originals, copies certified to my satisfaction, of such other corporate records of each Borrower, certificates of public officials and of officers of each Borrower, and agreements, instruments and other documents, as we have deemed necessary as a basis for the opinions expressed below. As to questions of fact material to such opinions, I have, when relevant facts were not independently established by me, relied upon certificates of public officials. I have assumed the due execution and delivery, pursuant to due authorization, of each of the Credit Agreements by the Lenders and the applicable Agent.
My opinions expressed below are limited to the law of the State of Michigan and the federal law of the United States.
Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the following opinion:
1. Each of the Borrowers is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan.
2. The execution, delivery and performance by each of the Borrowers of the Loan Documents to which it is party, and the consummation of the transactions contemplated thereby, are within each Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Charters or the By-Laws of each Borrower or (ii) any law, rule or regulation applicable to each of the Borrowers (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System) or (iii) any contractual or legal restriction contained in any document listed in the Certificate or, to the best of my knowledge (after due inquiry), contained in any other similar document.
3. No authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due
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execution, delivery, recordation, filing or performance by each Borrower of the Loan Documents to which each is a party, except such as have been obtained, including, in the case of DECO, the orders of the Federal Energy Regulatory Commission.
4. Each Loan Document has been duly executed and delivered on behalf of the Borrower thereto.
5. Except as may have been disclosed to you in the SEC Reports designated in the Certificate, to the best of my knowledge (after due inquiry) there are no pending or overtly threatened actions or proceedings affecting each Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect or (ii) purport to affect the legality, validity, binding effect or enforceability of any Loan Documents or the consummation of the transactions contemplated thereby.
6. In a properly presented case, a Michigan court or a federal court sitting in the State of Michigan applying Michigan choice of law rules should give effect to the choice of law provisions of the Loan Documents and should hold that such Loan Documents are to be governed by the laws of the State of New York rather than the laws of the State of Michigan. In rendering the foregoing opinion, I note that by their terms the Loan Documents expressly select New York law as the laws governing their interpretation and that the Loan Documents governed by New York law were delivered by the parties thereto to the Agent in New York. The choice of law provisions of the Loan Documents are not voidable under the laws of the State of Michigan.
7. If, despite the provisions of Section 8.09 of each of the Credit Agreements wherein the parties thereto agree that the Loan Documents shall be governed by, and construed in accordance with, the laws of the State of New York, a court of the State of Michigan or a federal court sitting in the State of Michigan were to hold that the Loan Documents are governed by, and to be construed in accordance with the laws of the State of Michigan, the respective Loan Documents would be, under the laws of the State of Michigan, legal, valid and binding obligations of the applicable Borrower, enforceable against such Borrower in accordance with their respective terms.
8. Neither the Borrowers nor any of their Subsidiaries is an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; DECO is a "public utility company" and a "subsidiary company" of DTE, which is a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), and such "holding company" and DECO are currently exempt from the provisions of the 1935 Act (except Section 9 thereof); and MichCon is a "public utility company" and a "subsidiary company" of MichCon Holdings, Inc., which is a "holding company" and a "subsidiary company" of DTE Enterprises, Inc., which is a "holding company" and a "subsidiary company" of DTE, as such terms are defined in the 1935 Act, and such "holding companies" and MichCon are currently exempt from the provisions of the 1935 Act (except Section 9 thereof);
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The opinions set forth above are subject to the following qualifications:
(a) My opinion in paragraph 7 above as to enforceability is subject to the effect of any applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar law affecting creditors' rights generally.
(b) My opinion in paragraph 7 above as to enforceability is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law).
(c) I express no opinion as to participation and the effect of the law of any jurisdiction other than the State of Michigan wherein any Lender may be located or wherein enforcement of the Loan Documents may be sought that limits the rates of interest legally chargeable or collectible.
Very truly yours,
SIDLEY AUSTIN BROWN & WOOD LLP
Schedule A
Each of the Lenders party to the 364-Day
Credit Agreement, dated as of October 25,
2002, among DTE, Citibank, N.A., as Lender
and Agent, and Banc One Capital Markets,
Inc. and Barclays Bank PLC, as
Co-Syndication Agents, and with Salomon
Smith Barney Inc., as Lead Arranger and Sole
Book Runner.
Each of the Lenders party to the Three-Year
Credit Agreement, dated as of October 25,
2002, among DTE, Citibank, N.A., as Lender
and Agent, and Banc One Capital Markets,
Inc. and Barclays Bank PLC, as
Co-Syndication Agents, and with Salomon
Smith Barney Inc., as Lead Arranger and Sole
Book Runner.
Each of the Lenders party to the 364-Day
Credit Agreement, dated as of October 25,
2002, among DECO, Barclays Bank PLC, as
Lender and Agent, and Salomon Smith Barney
Inc. and Banc One Capital Markets, Inc., as
Co-Syndication Agents, and with Barclays
Capital and Banc One Capital Markets, Inc.,
as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the Three-Year
Credit Agreement, dated as of October 25,
2002, among DECO, Barclays Bank PLC, as
Lender and Agent, and Salomon Smith Barney
Inc. and Banc One Capital Markets, Inc., as
Co-Syndication Agents, and with Barclays
Capital and Banc One Capital Markets, Inc.,
as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the 364-Day Credit Agreement, dated as of October 25, 2002, among MichCon, Bank One, NA, as Lender and Agent, and Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital,
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as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the Three-Year Credit Agreement, dated as of October 25, 2002, among MichCon, Bank One, NA, as Lender and Agent, and Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital, as Co-Lead Arrangers and Joint Book Runners.
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EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
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364-Day Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "Agreement"; the terms defined therein being used herein as therein defined) among The Detroit Edison Company, a Michigan corporation (the "Borrower"), the lenders parties thereto, and Barclays Bank PLC, as Agent for the lenders. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:
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The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this __ day of __________, ____.
THE DETROIT EDISON COMPANY
Title:
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SCHEDULE 1 TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Section 5.01(h) of
the Agreement
FINANCIAL COVENANTS
Ratio of Consolidated EBITDA to Interest Expense on Debt (Section 6.01(j)(i)).
(A) Numerator: Consolidated EBITDA: $_____
(B) Denominator:
(i) Interest Expense on Debt: $_____
(ii) Minus: Interest Expense on all Nonrecourse Debt of the
Borrower and its Subsidiaries: -$____
(iii) Minus: Interest Expense on Excluded Hedging Debt: -$____
(iv) Minus: Interest Expense on Junior Subordinated Debt: -$____
(v) Denominator: (B)(i) minus (B)(ii) through (B)(iv): $_____
(C) State whether the ratio of (A) to (B)(v) was not less than 2:1 for the
twelve-month period ending on the last day of __________: YES/NO
Ratio of Consolidated Debt to Capitalization (Section 6.01(j)(ii)).
(B) Numerator:
(i) Consolidated Debt: $_____
(ii) Minus: Nonrecourse Debt of the Borrower and its
Subsidiaries: -$____
(iii) Minus: Excluded Hedging Debt: -$____
(iv) Minus: Junior Subordinated Debt: -$____
(v) Numerator: (A)(i) minus (A)(ii) through (A)(iv): $_____
(B) Denominator: Capitalization: $_____
(C) State whether the ratio of (A)(v) to (B) was not greater than .65:1: YES/NO
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FINAL COPY
THREE-YEAR
CREDIT AGREEMENT
Dated as of October 25, 2002
Among
THE DETROIT EDISON COMPANY,
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN,
as Initial Lenders
and
BARCLAYS BANK PLC,
as Administrative Agent
and
SALOMON SMITH BARNEY INC., BANC ONE CAPITAL MARKETS, INC.,
as Co-Syndication Agent as Co-Syndication Agent
and
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as Co-Documentation Agent as Co-Documentation Agent
BARCLAYS CAPITAL BANC ONE CAPITAL MARKETS, INC.
as Co-Lead Arrangers and Joint Book Runners
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
SECTION 1.01. Certain Defined Terms...............................................................1
SECTION 1.02. Computation of Time Periods........................................................12
SECTION 1.03. Accounting Terms...................................................................12
ARTICLE II AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES...................................................13
SECTION 2.01. The Revolving Credit Advances......................................................13
SECTION 2.02. Making the Revolving Credit Advances...............................................13
SECTION 2.03. Fees...............................................................................14
SECTION 2.04. Termination or Reduction of the Commitments........................................15
SECTION 2.05. Repayment of Revolving Credit Advances.............................................15
SECTION 2.06. Interest on Revolving Credit Advances..............................................15
SECTION 2.07. Interest Rate Determination........................................................16
SECTION 2.08. Optional Conversion of Revolving Credit Advances...................................17
SECTION 2.09. Prepayments of Revolving Credit Advances...........................................17
SECTION 2.10. Increased Costs....................................................................18
SECTION 2.11. Illegality.........................................................................19
SECTION 2.12. Payments and Computations..........................................................19
SECTION 2.13. Taxes..............................................................................20
SECTION 2.14. Sharing of Payments, Etc...........................................................22
SECTION 2.15. Use of Proceeds....................................................................23
SECTION 2.16. Reserved...........................................................................23
SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.......................................23
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING.............................................................23
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01..............................23
SECTION 3.02. Conditions Precedent to Each Borrowing.............................................25
SECTION 3.03. Determinations Under Section 3.01..................................................26
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ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................................26
SECTION 4.01. Representations and Warranties of the Borrower.....................................26
ARTICLE V COVENANTS OF THE BORROWER.............................................................................28
SECTION 5.01. Affirmative Covenants..............................................................28
SECTION 5.02. Negative Covenants.................................................................30
ARTICLE VI EVENTS OF DEFAULT....................................................................................32
SECTION 6.01. Events of Default..................................................................32
ARTICLE VII THE AGENT...........................................................................................34
SECTION 7.01. Authorization and Action...........................................................34
SECTION 7.02. Agent's Reliance, Etc..............................................................34
SECTION 7.03. Barclays and Affiliates............................................................35
SECTION 7.04. Lender Credit Decision.............................................................35
SECTION 7.05. Indemnification....................................................................35
SECTION 7.06. Successor Agent....................................................................36
ARTICLE VIII MISCELLANEOUS......................................................................................36
SECTION 8.01. Amendments, Etc....................................................................36
SECTION 8.02. Notices, Etc.......................................................................36
SECTION 8.03. No Waiver; Remedies................................................................37
SECTION 8.04. Costs and Expenses.................................................................37
SECTION 8.05. Right of Set-off...................................................................38
SECTION 8.06. Binding Effect.....................................................................39
SECTION 8.07. Assignments, Designations and Participations.......................................39
SECTION 8.08. Confidentiality....................................................................43
SECTION 8.09. Governing Law......................................................................43
SECTION 8.10. Execution in Counterparts..........................................................43
SECTION 8.11. Jurisdiction, Etc..................................................................43
SECTION 8.12. Waiver of Jury Trial...............................................................44
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ii SIDLEY AUSTIN BROWN & WOOD LLP
SCHEDULES AND EXHIBITS
Schedules Schedule I - List of Applicable Lending Offices Pricing Schedule Exhibits Exhibit A - Form of Note (If Requested) Exhibit B - Form of Notice of Borrowing Exhibit C - Form of Assignment and Acceptance Exhibit D - Form of Certificate by Borrower Exhibit E - Form of Opinion of Counsel to the Borrower Exhibit F - Form of Compliance Certificate |
iii SIDLEY AUSTIN BROWN & WOOD LLP
THREE-YEAR CREDIT AGREEMENT dated as of October 25, 2002 among THE DETROIT EDISON COMPANY, a Michigan corporation (the "Borrower"), the banks, financial institutions and other institutional lenders (the "Initial Lenders") listed on the signature pages hereof, and BARCLAYS BANK PLC ("Barclays"), as Administrative Agent (the "Agent") and BANC ONE CAPITAL MARKETS, INC., as Co-Syndication Agent, and SALOMON SMITH BARNEY INC., as Co-Syndication Agent for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENTS.
The Borrower has requested that the Initial Lenders enter into this Agreement, and the Initial Lenders have indicated their willingness to enter into this Agreement upon the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, the parties hereto hereby agree, subject to the satisfaction of the conditions set forth in Article III, as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person or is a director or officer of such Person. For purposes of this definition, the term "control" (including the terms "controlling", "controlled by" and "under common control with") of a Person means the possession, direct or indirect, of the power to vote 5% or more of the Voting Stock of such Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of Voting Stock, by contract or otherwise.
"Agent's Account" means the account of the Agent maintained by the Agent at Barclays with its office at 222 Broadway, New York, New York 10038, Account No. 050-019104, Attention: Michele Fuimo and Mayerlin Jaramillo.
"Agents" means the Agent and each Co-Syndication Agent, collectively.
"Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office in the case of a Base Rate Advance and such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, as of any date, (i) with respect to all Base Rate Advances, 0.0% per annum, and (ii) with respect to all Eurodollar Rate Advances, the percentage rate per annum which is applicable at such time with respect to Eurodollar Rate Advances as set forth in the Pricing Schedule.
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"Applicable Percentage" means, as of any date, the percentage rate per annum at which Facility Fees are accruing on each Lender's Commitment (without regard to usage) at such time as set forth in the Pricing Schedule.
"Applicable Utilization Fee Rate" means, as of any date, the percentage rate per annum at which Utilization Fees accrue on all Revolving Credit Advances at such time as set forth in the Pricing Schedule.
"Assignment and Acceptance" means an assignment and acceptance entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in substantially the form of Exhibit C hereto.
"Audited Statements" means the Consolidated balance sheets of the Borrower as at December 31, 2001, and the related Consolidated statements of income and cash flows of the Borrower for the fiscal year then ended, accompanied by the opinion thereon of the Borrower's independent public accountants.
"Base Rate" means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the highest of:
(a) the rate of interest established by Barclays in New York, New York, from time to time, as Barclays' base rate;
(b) the sum (adjusted to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, to the next higher 1/16 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing (A) 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 (adjusted to the basis of a year of 360 days) being determined weekly on each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the three-week period ending on the previous Friday by Barclays 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 Barclays from three New York certificate of deposit dealers of recognized standing selected by Barclays, by (B) a percentage equal to 100% minus the average of the daily percentages specified during such three-week period 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 Barclays with respect to liabilities consisting of or including (among other liabilities) three-month U.S. dollar non-personal time deposits in the United States, plus (iii) the average during such three-week period of the annual assessment rates estimated by Barclays for determining the then current annual assessment payable by Barclays to the Federal Deposit Insurance Corporation (or any successor) for insuring U.S. dollar deposits of Barclays in the United States; and
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(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of parties to this Agreement.
"Borrowing" means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type and (in the case of Eurodollar Rate Advances) having the same Interest Period, made by each of the Lenders pursuant to Section 2.01.
"Business Day" means a day of the year on which banks are not required or authorized by law to close in New York City or Chicago, Illinois and, if the applicable Business Day relates to any Eurodollar Rate Advances, on which dealings are carried on in the London interbank market.
"Capitalization" means the sum of total net worth plus Consolidated Debt.
"Commitment" has the meaning specified in Section 2.01.
"Confidential Information" means information that the Borrower furnishes to the Agent or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Agent or such Lender from a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion of Revolving Credit Advances of one Type into Revolving Credit Advances of the other Type pursuant to Section 2.07 or 2.08.
"Debt" of any Person 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 Hedge 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)
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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. See the definition of "Nonrecourse Debt" below.
"Default" means any Event of Default or any event that would constitute an Event of Default but for the requirement that notice be given or time elapse or both.
"Designating Lender" has the meaning specified in Section 8.07(h).
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"Domestic Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.
"DTE Energy" means DTE Energy Company, a Michigan corporation.
"EBITDA" means, for any period, net income (or net loss) plus the sum of (a) interest expense, (b) income tax expense, (c) depreciation expense and (d) amortization expense, in each case determined in accordance with GAAP for such period less the aggregate amount, if any, of securitization bond charges (or similar charges imposed on customers for the purpose of servicing Securitization Bonds) collected by or on behalf of the Securitization SPE, to the extent such charges are included in the calculation of net income (or net loss).
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; (iii) a commercial bank organized under the laws of the United States, or any State thereof, and having a combined capital and surplus of at least $250,000,000; (iv) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof, and having a combined capital and surplus of at least $250,000,000; (v) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or has concluded special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, and having a combined capital and surplus of at least $250,000,000, so long as such bank is acting through a branch or agency located in the United States; (vi) the central bank of any country that is a member of the Organization for Economic Cooperation and
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Development; (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having a combined capital and surplus of at least $250,000,000; and (viii) any other Person approved by the Agent and, so long as no Event of Default shall be continuing, the Borrower, such approval not to be unreasonably withheld or delayed by either party; provided, however, that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment, including, without limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any governmental or regulatory authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign statute, law, ordinance, rule, regulation, code, order, judgment, decree or judicial or agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including, without limitation, those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number, license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the Borrower's controlled group, or under common control with the Borrower, within the meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of ERISA
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(including any such notice with respect to a plan amendment referred to
in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of the Borrower or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a
plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for the imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to
any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer,
a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the office of such Lender specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Lender (or, if no such office is specified, its Domestic Lending Office), or such other office of such Lender as such Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the rate per annum at which deposits in U.S. dollars are offered by the principal office of each of the Reference Banks 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 Interest Period in an amount approximately equal to such Reference Bank's Eurodollar Rate Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period. The Eurodollar Rate for any Interest Period for each Eurodollar Rate Advance comprising part of the same Borrowing shall be determined by the Agent on the basis of applicable rates furnished to and received by the Agent from the Reference Banks two Business Days before the first day of such Interest Period, subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all Eurodollar Rate Advances comprising part of the same Borrowing means the reserve percentage applicable two Business Days before the first day of such Interest 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,
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without limitation, any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City 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 Eurodollar Rate Advances is determined) having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excluded Hedging Debt" means all Debt arising under any Hedge Agreement in respect of fluctuations in commodity prices.
"Existing Credit Agreement" means that certain Credit Agreement, dated as of November 7, 2001, among the Borrower, the lenders parties thereto, and Barclays Bank PLC, as administrative agent, and Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as co-syndication agents, as the same has been amended, restated, supplemented or otherwise modified from time to time.
"Facility Fee" has the meaning specified in Section 2.03(a).
"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.
"Financial Officer" of any Person means the chief executive officer, president, chief financial officer, any vice president, controller, assistant controller, treasurer or any assistant treasurer of such Person.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means (a) petroleum and petroleum products, by-products or breakdown products, radioactive materials, asbestos-containing materials, polychlorinated biphenyls and radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any Environmental Law.
"Hedge Agreements" means 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.
"Insufficiency" means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
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"Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect to Eurodollar Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by the Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months, as the Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends after the Revolver Termination Date then in effect;
(ii) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
"Junior Subordinated Debt" means (a) subordinated junior deferrable interest debentures of the Borrower, (b) the related preferred securities, if applicable, of Subsidiaries of the Borrower and (c) the related subordinated guarantees, if applicable, of the Borrower, in each case, from time to time outstanding.
"Lenders" means the Initial Lenders and each Person that shall become a party hereto pursuant to Section 8.07(a), (b) and (c).
"Lien" means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor and any easement, right of way or other encumbrance on title to real property.
"Loan Documents" means this Agreement and the Notes.
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"Material Adverse Change" means any material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent
or any Lender under any Loan Document or (c) the ability of the
Borrower to perform its obligations under any Loan Document to which it
is a party.
"Maximum Facility Amount" means $65,000,000.
"MichCon" means Michigan Consolidated Gas Company, a Michigan corporation, wholly owned (indirectly) by DTE Energy.
"Moody's" means Moody's Investors Service, Inc.
"Moody's Rating" is defined in the Pricing Schedule.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and at least one Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
"Nonrecourse Debt" means Debt of the Borrower or any of its Subsidiaries in respect of which no recourse may be had by the creditors under such Debt against the Borrower or such Subsidiary in its individual capacity or against the assets of the Borrower or such Subsidiary, other than assets which were purchased by the Borrower or such Subsidiary with the proceeds of such Debt; it being understood that Securitization Bonds shall constitute Nonrecourse Debt for all purposes of the Loan Documents, except to the extent (and only to the extent) of any claims made against the Borrower in respect of its indemnification obligations relating to such Securitization Bonds.
"Note" has the meaning specified in Section 2.17.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited
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liability company or other entity, or a government or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pricing Schedule" means the Pricing Schedule identifying the Applicable Margin, the Applicable Percentage and the Applicable Utilization Fee Rate attached hereto identified as such.
"Property" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned by such Person.
"Receivables Purchase Documents" means those documents entered into in connection with the receivables purchase facility among the Borrower, Corporate Asset Funding Company, Inc., Citibank, N.A. and Citicorp North America, Inc. dated as of March 9, 2001 (including any amendments to or replacements of such facility) and those documents entered into in connection with any series of receivables purchase or sale agreements generally consistent with terms contained in comparable structured finance transactions pursuant to which the Borrower or any of its Subsidiaries, in their respective capacities as sellers or transferors of any receivables, sell or transfer to SPCs all of their respective rights, title and interest in and to certain receivables for further sale or transfer to other purchasers of or investors in such assets (and the other documents, instruments and agreements executed in connection therewith), as any such agreements may be amended, restated, supplemented or otherwise modified from time to time, or any replacement or substitution therefor
"Receivables Purchase Facility" means the receivables purchase facility among the Borrower, Corporate Asset Funding Company, Inc., Citibank, N.A., and Citicorp North America, Inc. dated as of March 9, 2001 (including any amendments to or replacements of such facility) and any other securitization facility made available to the Borrower or any of its Subsidiaries, pursuant to which receivables of the Borrower or any of its Subsidiaries are transferred to one or more SPCs, and thereafter to certain investors, pursuant to the terms and conditions of the Receivables Purchase Documents
"Reference Banks" means Citibank, N.A., Barclays Bank PLC and Bank One, NA (Main Office - Chicago).
"Register" has the meaning specified in Section 8.07(d).
"Required Lenders" means at any time Lenders owed more than fifty percent (50%) of the then aggregate unpaid principal amount of the Revolving Credit Advances owing to Lenders, or, if no such principal amount is then outstanding, Lenders having more than fifty percent (50%) of the Commitments.
"Revolver Termination Date" means the earlier of (a) October 25, 2005 and (b) the date of termination in whole of the Commitments pursuant to Section 2.04 or 6.01.
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"Revolving Credit Advance" means an advance by a Lender to the Borrower as part of a Borrowing, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Revolving Credit Advance).
"S&P" means Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc.
"S&P Rating" is defined in the Pricing Schedule.
"SEC Reports" means the following reports and financial statements of the Borrower:
(i) the Borrower's Annual Report on Form 10-K for the year ended December 31, 2001, as filed with or sent to the Securities and Exchange Commission, including therein the Audited Statements of the Borrower, as updated in the Borrower's Current Report on Form 8-K dated September 17, 2002, as filed with or sent to the Securities and Exchange Commission; and
(ii) the Borrower's Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, including therein the Unaudited Statements of the Borrower, and the Borrower's Current Reports on Form 8-K, if any, provided to the Lenders prior to the date of this Agreement.
"SPC" means any special purpose entity established for the purpose of purchasing receivables in connection with a receivables securitization transaction permitted under the terms of this Agreement
"SPV" has the meaning specified in Section 8.07(h).
"Securitization Bonds" means Debt of the Securitization SPE, issued pursuant to Enrolled Senate Bill No. 1253, Public Act 142 of 2000 of the State of Michigan.
"Securitization SPE" means The Detroit Edison Securitization Funding LLC, a single-member limited liability company organized under the laws of the State of Michigan, all of the membership interest in which is held directly by the Borrower.
"Significant Subsidiary" means any Subsidiary of the Borrower (A) the total assets (after intercompany eliminations) of which exceed 30% of the total assets of the Borrower and its Subsidiaries or (B) the net worth of which exceeds 30% of the Consolidated Net Worth of the Borrower and its Subsidiaries, in each case as shown on the audited consolidated financial statements of the Borrower as of the end of the fiscal year immediately preceding the date of determination.
"Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower or any ERISA Affiliate and no Person other than the Borrower and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower or any ERISA Affiliate could
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have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.
"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.
"364-Day Agreement" means that certain $135,000,000 364-day credit agreement dated as of October 25, 2002, by and among the Borrower, the Lenders and the Agents, as the same may be amended, restated, supplemented or otherwise modified from time to time.
"Unaudited Statements" means the unaudited condensed Consolidated balance sheets of the Borrower, as at June 30, 2002, and the related condensed Consolidated statements of income and cash flows of the Borrower for the six-month period then ended, duly certified by a Financial Officer of the Borrower.
"Utilization Fee" has the meaning specified in Section 2.03(c).
"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.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements referred to in Section 4.01(e) ("GAAP").
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ARTICLE II
AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES
SECTION 2.01. The Revolving Credit Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Advances to the Borrower from time to time on any Business Day during the period from the Effective Date until the Revolver Termination Date in an aggregate amount not to exceed at any time outstanding the amount set forth opposite such Lender's name on Schedule 1 hereto or, if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the Agent pursuant to Section 8.07(d), as such amount may be reduced pursuant to Section 2.04 (such Lender's "Commitment"). Each Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments. Within the limits of each Lender's Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.09 and reborrow under this Section 2.01.
SECTION 2.02. Making the Revolving Credit Advances.
(a) Each Borrowing shall be made on notice, given not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate Advances, or 10:00 A.M. (New York City time) on the Business Day of the proposed Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which shall give to each Lender prompt notice thereof by telecopier or telex. Each such notice of a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing, telecopier or telex in substantially the form of Exhibit B hereto, specifying therein the requested (i) date of such Borrowing, (ii) Type of Revolving Credit Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Revolving Credit Advance. Each Lender shall, before 12:00 noon (New York City time) on the date of such Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent's Account, in same day funds, such Lender's ratable portion of such Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower at the Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000 or if the obligation of the Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to Section 2.07 or 2.11 and (ii) at no time shall the sum of (x) all Borrowings comprising Eurodollar Rate Advances outstanding hereunder and (y) all "Borrowings" comprising "Eurodollar Rate Advances" outstanding under, and as such terms are defined in, the 364-Day Agreement, be greater than ten.
(c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be
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comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date specified in such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Revolving Credit Advance to be made by such Lender as part of such Borrowing when such Revolving Credit Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Agent such Lender's ratable portion of such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such ratable portion available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at (i) in the case of the Borrower, the interest rate applicable at the time to Revolving Credit Advances comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender's Revolving Credit Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Revolving Credit Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Revolving Credit Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Revolving Credit Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Fees.
(a) Facility Fee. The Borrower agrees to pay to the Agent for the account of each Lender a facility fee (the "Facility Fee") on the aggregate amount of such Lender's Commitment from the date hereof in the case of each Initial Lender and from effective date specified in the Assignment and Acceptance pursuant to which it became a Lender in the case of each other Lender until all of the Revolving Credit Advances have been paid in full and the Commitments under this Agreement have been terminated at a rate per annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December, and on the Revolving Loan Termination Date.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own account such fees as may from time to time be agreed between the Borrower and the Agent.
(c) Utilization Fee. If the aggregate outstanding amount of
(i) all Revolving Credit Advances hereunder and (ii) all "Revolving Credit
Advances" under (and as defined in) the 364-Day Agreement exceeds thirty-three
percent (33%) of the aggregate amount of (x) all
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Commitments hereunder and (y) all "Commitments" under (and as defined in) the 364-Day Agreement then in effect on such date (or, if any of the Commitments or "Commitments" have been terminated, the aggregate amount of all Commitments and "Commitments" in effect immediately prior to such termination), the Borrower will pay to the Agent for the ratable benefit of the Lenders a utilization fee (the "Utilization Fee") at a per annum rate equal to the Applicable Utilization Fee Rate in effect from time to time payable on the aggregate outstanding amount of all Revolving Credit Advances on such date, payable in arrears quarterly on the last day of each March, June, September and December, and on the Revolving Loan Termination Date.
SECTION 2.04. Termination or Reduction of the Commitments.
(a) The Commitments shall be automatically terminated on the Revolver Termination Date.
(b) The Borrower shall have the right, upon at least three Business Days' notice to the Agent, to terminate in whole or reduce ratably in part the unused portions of the respective Commitments of the Lenders, provided that each partial reduction shall be in the aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Once terminated, a Commitment or portion thereof may not be reinstated.
SECTION 2.05. Repayment of Revolving Credit Advances. The Borrower shall repay to the Agent for the ratable account of the Lenders on the Revolver Termination Date the aggregate principal amount of the Revolving Credit Advances then outstanding.
SECTION 2.06. Interest on Revolving Credit Advances.
(a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Lender from the date of such Revolving Credit Advance until such principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such Revolving Credit Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in effect from time to time plus (y) the Applicable Margin in effect from time to time, payable in arrears quarterly on the last day of each March, June, September and December during such periods and on the date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Revolving Credit Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Revolving Credit Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.
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(b) Default Interest. (i) Upon the occurrence and during the continuance of an Event of Default, the Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above, and (ii) the Borrower shall pay, to the fullest extent permitted by law, the amount of any interest, fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.07. Interest Rate Determination.
(a) Each Reference Bank agrees to furnish to the Agent timely information for the purpose of determining each Eurodollar Rate. If any one or more of the Reference Banks shall not furnish such timely information to the Agent for the purpose of determining any such interest rate, the Agent shall determine such interest rate on the basis of timely information furnished by the remaining Reference Banks. The Agent shall give prompt notice to the Borrower and the Lenders of the applicable interest rate determined by the Agent for purposes of Section 2.06(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for the purpose of determining the interest rate under Section 2.06(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required Lenders notify the Agent that the Eurodollar Rate for any Interest Period for such Eurodollar Rate Advances will not adequately reflect the cost to such Required Lenders of making, funding or maintaining their respective Eurodollar Rate Advances for such Interest Period, the Agent shall forthwith so notify the Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of "Interest Period" in Section 1.01, the Agent will forthwith so notify the Borrower and the Lenders and such Eurodollar Rate Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $5,000,000, such Eurodollar Rate Advances shall automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of Default, (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest
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Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended.
(f) If fewer than two Reference Banks furnish timely information to the Agent for determining the Eurodollar Rate for any Eurodollar Rate Advances:
(i) the Agent shall forthwith notify the Borrower and the Lenders that the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) with respect to Eurodollar Rate Advances, each such Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance (or if such Eurodollar Rate Advance is then a Base Rate Advance, will continue as a Base Rate Advance), and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.08. Optional Conversion of Revolving Credit Advances. The Borrower may on any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.07 and 2.11, Convert all Revolving Credit Advances of one Type comprising the same Borrowing into Revolving Credit Advances of the other Type (it being understood that such Conversion of a Revolving Credit Advance or of its Interest Period does not constitute a repayment or prepayment of such Revolving Credit Advance); provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than the minimum amount specified in Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result in more separate Borrowings than permitted under Section 2.02(b). Each such notice of a Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion, (ii) the Revolving Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Eurodollar Rate Advance. Each notice of Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.09. Prepayments of Revolving Credit Advances.
(a) Optional Prepayment. The Borrower may on any Business Day,
upon notice given to the Agent not later than 11:00 A.M. (New York City time),
(i) on the same day for Base Rate Advances and (ii) on the second Business Day
prior to the prepayment in the case of Eurodollar Rate Advances stating the
proposed date and aggregate principal amount of the prepayment (and if such
notice is given the Borrower shall) prepay the outstanding principal amount of
the Revolving Credit Advances comprising part of the same Borrowing in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate
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principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant to Section 8.04(c).
(b) Mandatory Prepayment. The Borrower shall, upon five Business Days notice from the Agent given at the request or with the consent of the Required Lenders, prepay the aggregate principal amount outstanding plus all interest thereon and all other amounts payable hereunder or under the Notes, in the event that: (i) any Person or two or more Persons acting in concert (other than DTE Energy or any of its Subsidiaries) shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Stock of the Borrower (or other securities convertible into such Voting Stock) representing 20% or more of the combined voting power of all Voting Stock of the Borrower; or (ii) any Person or two or more Persons acting in concert (other than DTE Energy or any of its Subsidiaries) shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower.
SECTION 2.10. Increased Costs.
(a) If, due to either (i) the introduction of or any change 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 any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances (excluding for purposes of this Section 2.10 any such increased costs resulting from (i) Taxes or Other Taxes (as to which Section 2.13 shall govern) and (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or by the foreign jurisdiction or state under the laws of which such Lender is organized or has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall from time to time, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender additional amounts sufficient to compensate such Lender for such increased cost. A certificate as to the amount of such increased cost, submitted to the Borrower and the Agent by such Lender, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender 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 capital required or expected to be maintained by such Lender or any corporation controlling such Lender and that the amount of such capital is increased by or based upon the existence of such Lender's commitment to lend hereunder and other commitments of this type, then, upon demand by such Lender (with a copy of such demand to the Agent), the Borrower shall pay to the Agent for the account of such Lender, from time to time as specified by such Lender, additional amounts sufficient to compensate such Lender or such corporation in the light of such circumstances, to the extent that such Lender reasonably determines such increase in capital to be allocable to the existence of such Lender's commitment to lend hereunder. A certificate as to such amounts submitted to the
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Borrower and the Agent by such Lender shall be conclusive and binding for all purposes, absent manifest error.
(c) In the event that a Lender demands payment from the Borrower for amounts owing pursuant to subsection (a) or (b) of this Section 2.10, the Borrower may, upon payment of such amounts and subject to the requirements of Sections 8.04 and 8.07, substitute for such Lender another financial institution, which financial institution shall be an Eligible Assignee and shall assume the Commitments of such Lender and purchase the Revolving Credit Advances held by such Lender in accordance with Section 8.07, provided, however, that (i) no Default shall have occurred and be continuing, (ii) the Borrower shall have satisfied all of its obligations in connection with the Loan Documents with respect to such Lender, and (iii) if such assignee is not a Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall have paid the Agent a $3,000 administrative fee.
SECTION 2.11. Illegality. Notwithstanding any other provision of this Agreement, if any Lender shall notify 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 any Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (i) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance or a Revolving Credit Advance that bears interest at the rate set forth in Section 2.06(a)(i), as the case may be, and (ii) the obligation of the Lenders to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrower and the Lenders that the circumstances causing such suspension no longer exist.
SECTION 2.12. Payments and Computations.
(a) The Borrower shall make each payment hereunder and under
the Notes not later than 11:00 A.M. (New York City time) on the day when due in
U.S. dollars to the Agent at the Agent's Account in same day funds and without
set off, deduction or counterclaim. The Agent will promptly thereafter cause to
be distributed like funds relating to the payment of principal or interest,
facility fees or the Utilization Fee ratably (other than amounts payable
pursuant to Section 2.10, 2.13 or 8.04(c)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent payment owed to such Lender is not made when due hereunder or under the Note held by such Lender, to
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charge from time to time against any or all of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and all computations of interest based on the Eurodollar Rate or the Federal Funds Rate and of facility fees and the Utilization Fee shall be made by the Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, facility fees or the Utilization Fee are payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, facility fee or the Utilization Fee, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. Taxes.
(a) Any and all payments by the Borrower hereunder or under the Notes shall be made, in accordance with Section 2.12, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Lender and the Agent, taxes imposed on its overall net income, and franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction under the laws of which such Lender or the Agent (as the case may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes imposed on its overall net income, and franchise taxes imposed on it in lieu of net income taxes, by the jurisdiction of such Lender's Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or under the Notes being hereinafter referred to as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13) such Lender or the Agent (as the
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case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for the full amount of Taxes or Other Taxes (including, without limitation, any taxes imposed by any jurisdiction on amounts payable under this Section 2.13) imposed on or paid by such Lender or the Agent (as the case may be) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Lender or the Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the United States, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Lender and on the date of the Assignment and Acceptance pursuant to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as requested in writing by the Borrower (but only so long as such Lender remains lawfully able to do so), shall provide each of the Agent and the Borrower with two original Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or the Notes. If the forms provided by a Lender at the time such Lender first becomes a party to this Agreement indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Lender provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that, if at the date of the Assignment and Acceptance pursuant to which a Lender assignee becomes a party to this Agreement, the Lender assignor was entitled to payments under subsection (a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the
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future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Lender assignee on such date. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service Form W-8BEN or W-8ECI, that the Lender reasonably considers to be confidential, the Lender shall give notice thereof to the Borrower and shall not be obligated to include in such form or document such confidential information.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section 2.13(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under the first sentence of subsection (e) above),
such Lender shall not be entitled to indemnification under Section 2.13(a) or
(c) with respect to Taxes imposed by the United States by reason of such
failure; provided, however, that should a Lender become subject to Taxes because
of its failure to deliver a form required hereunder, the Borrower shall take
such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.
(g) In the event that a Lender demands payment from the Borrower for amounts owing pursuant to subsection (a) or (b) of this Section 2.13, the Borrower may, upon payment of such amounts and subject to the requirements of Sections 8.04 and 8.07, substitute for such Lender another financial institution, which financial institution shall be an Eligible Assignee and shall assume the Commitments of such Lender and purchase the Revolving Credit Advances held by such Lender in accordance with Section 8.07, provided, however, that (i) no Default shall have occurred and be continuing, (ii) the Borrower shall have satisfied all of its obligations in connection with the Loan Documents with respect to such Lender, and (iii) if such assignee is not a Lender, (A) such assignee is acceptable to the Agent and (B) the Borrower shall have paid the Agent a $3,000 administrative fee.
SECTION 2.14. Sharing of Payments, Etc. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Revolving Credit Advances owing to it (other than pursuant to Section 2.10, 2.13 or 8.04(c)) in excess of its ratable share of payments on account of the Revolving Credit Advances obtained by all the Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the Revolving Credit Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such Lender's ratable share (according to the proportion of (i) the amount of such Lender's required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.14 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.
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SECTION 2.15. Use of Proceeds. The proceeds of the Revolving Credit Advances shall be available (and the Borrower agrees that it shall use such proceeds) solely for general corporate purposes, including commercial paper liquidity, of the Borrower and its Subsidiaries.
SECTION 2.16. Reserved.
SECTION 2.17. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Revolving Credit Advance made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the date and the amount of each Revolving Credit Advance made hereunder and the Interest Period, if any, applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder, (iii) the effective date and amount of each Assignment and Acceptance delivered to and accepted by it and the parties thereto pursuant to Section 8.07, (iv) the amount of any sum received by the Agent hereunder from the Borrower and each Lender's share thereof, and (v) all other appropriate debits and credits as provided in this Agreement, including, without limitation, all fees, charges, expenses and interest.
(c) The entries maintained in the accounts maintained pursuant to clauses (a) and (b) above shall be prima facie evidence of the existence and amounts of the obligations hereunder and under the Notes therein recorded; provided, however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay such obligations in accordance with their terms.
(d) Any Lender may request that its Revolving Credit Advances be evidenced by a promissory note representing its Revolving Credit Advances substantially in the form of Exhibit A (each, a "Note"). In such event, the Borrower shall prepare, execute and deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Revolving Credit Advances evidenced by each such Note and interest thereon shall at all times (including after any assignment pursuant to Section 8.07) be represented by one or more Notes payable to the order of the payee named therein or any assignee pursuant to Section 8.07, except to the extent that any such Lender or assignee subsequently returns any such Note for cancellation and requests that such Revolving Credit Advances once again be evidenced as described in clauses (a) and (b) above.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section
2.01. Section 2.01 of this Agreement shall become effective on and as of the
date hereof (the
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"Effective Date"), provided that the following conditions precedent have been satisfied on such date:
(a) There shall have occurred no Material Adverse Change since June 30, 2002.
(b) There shall exist no action, suit, investigation, litigation or proceeding affecting the Borrower or any of its Significant Subsidiaries pending or threatened before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect other than the matters disclosed or contemplated in the SEC Reports (the "Disclosed Litigation") or (ii) purports to affect the legality, validity or enforceability of any Loan Document or the consummation of the transactions contemplated hereby and there shall have been no adverse change in the status, or financial effect on the Borrower or any of its Significant Subsidiaries of the Disclosed Litigation from that disclosed or contemplated in the SEC Reports.
(c) The Lenders shall have been given such access, as such Lenders have reasonably requested, to the management, records, books of account, contracts and properties of the Borrower and its Significant Subsidiaries as they shall have requested.
(d) All governmental and third party consents and approvals necessary in connection with the transactions contemplated hereby shall have been obtained (without the imposition of any conditions that are not acceptable to the Lenders) and shall remain in effect, and no law or regulation shall be applicable in the reasonable judgment of the Lenders that restrains, prevents or imposes materially adverse conditions upon the transactions contemplated by the Loan Documents.
(e) The Borrower shall have notified each Lender and the Agent in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and reasonable expenses of the Agent and the Lenders with respect to this Agreement for which the Agent shall have made reasonable demand in accordance with Section 8.04 on or prior to the Effective Date.
(g) On the Effective Date, the following statements shall be true and the Agent shall have received for the account of each Lender a certificate signed by a duly authorized officer of the Borrower, dated the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that constitutes a Default.
(iii) The Borrower shall have delivered a certificate, substantially in the form of Exhibit D hereto, signed on behalf of the Borrower by a Financial Officer of the Borrower.
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(h) The Agent shall have received on or before the Effective Date the following, each dated such day, in form and substance satisfactory to the Agent and (except for any Notes requested by the Lenders) in sufficient copies for each Lender:
(i) Notes, if any, to the order of each Lender requesting
the issuance of a Note as of the Closing Date pursuant to
Section 2.17.
(ii) Certified copies of the resolutions of the Board of Directors of the Borrower approving each Loan Document to which it is a party, and of all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to each Loan Document to which it is a party.
(iii) A certificate of the Corporate Secretary or an Assistant Corporate Secretary of the Borrower certifying the names and true signatures of the officers of the Borrower authorized to sign each Loan Document to which it is a party and the other documents to be delivered hereunder or thereunder.
(iv) Copies of the SEC Reports.
(v) A favorable opinion of T.A. Hughes, the General Counsel of the Borrower, substantially in the form of Exhibit E hereto and as to such other matters as any Lender through the Agent may reasonably request.
(vi) Evidence satisfactory to the Agent that the Existing Credit Agreement shall have been or shall simultaneously with the initial Revolving Credit Advance hereunder be terminated (except for those provisions that expressly survive the termination thereof) and all loans outstanding and other amounts owed to the lenders or agents thereunder shall have been simultaneously with the initial Revolving Credit Advance hereunder be paid in full.
(i) The 364-Day Agreement shall have been duly executed by all parties thereto.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation of each Lender to make a Revolving Credit Advance on the occasion of each Borrowing shall be subject to the conditions precedent that the Effective Date shall have occurred and on the date of such Borrowing:
(a) the following statements shall be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Borrower that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in
Section 4.01 are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though
made on and as of such date, and
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(ii) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, that constitutes a Default; and
(b) the Agent shall have received such other approvals, opinions or documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of determining compliance with the conditions specified in Section 3.01, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to the Lenders unless an officer of the Agent responsible for the transactions contemplated by this Agreement shall have received notice from such Lender prior to the date that the Borrower, by notice to the Lenders, designates as the proposed Effective Date, specifying its objection thereto. The Agent shall promptly notify the Lenders of the occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.
(b) The execution, delivery and performance by the Borrower of the Loan Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting the Borrower.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by the Borrower of this Agreement, the Notes or any other Loan Document to which it is a party.
(d) This Agreement has been, and each of the Notes and each of the other Loan Documents to which it is a party when delivered hereunder will have been, duly executed and delivered by the Borrower. This Agreement is, and each of the Notes and each of the other Loan Documents to which it is a party when delivered hereunder will be, the legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors rights generally.
(e) The Audited Statements of the Borrower and the Unaudited Statements of the Borrower, copies of each of which have been furnished to each Lender, fairly present, subject in the case of Unaudited Statements to normal year-end audit adjustments, the Consolidated
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financial condition, results of operations and cash flows of the relevant Persons and entities, as at the dates and for the periods therein indicated, all in accordance with generally accepted accounting principles consistently applied. Since June 30, 2002, there has been no Material Adverse Change, except as shall have been disclosed or contemplated in the SEC Reports.
(f) There is no pending or threatened action, suit, investigation, litigation or proceeding, including, without limitation, any Environmental Action, affecting the Borrower or any of the Significant Subsidiaries before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect (other than the Disclosed Litigation) or (ii) purports to affect the legality, validity or enforceability of this Agreement, any Note or any other Loan Document or the consummation of the transactions contemplated hereby and there has been no adverse change in the status of any Disclosed Litigation, or its financial effect on the Borrower or any of the Significant Subsidiaries from that disclosed or contemplated in the SEC Reports that could be reasonably likely to have a Material Adverse Effect.
(g) The operations and properties of the Borrower and each of the Significant Subsidiaries comply in all material respects with all applicable Environmental Laws and Environmental Permits, all past non-compliance with such Environmental Laws and Environmental Permits has been resolved without ongoing obligations or costs, except as disclosed or contemplated in the SEC Reports, and no circumstances exist that could be reasonably likely to (i) form the basis of an Environmental Action against the Borrower or any of the Significant Subsidiaries or any of their properties that could have a Material Adverse Effect or (ii) cause any such property to be subject to any restrictions on ownership, occupancy, use or transferability under any Environmental Law that could have a Material Adverse Effect.
(h) No ERISA Event has occurred or is reasonably expected to occur with respect to any Plan.
(i) Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan, copies of which have been filed with the Internal Revenue Service, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status.
(j) Neither the Borrower nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan.
(k) Neither the Borrower nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganization or to be terminated, within the meaning of Title IV of ERISA.
(l) Except as set forth in the financial statements referred to in subsection (e) above, the Borrower and its Subsidiaries have no material liability with respect to "expected post retirement benefit obligations" within the meaning of Statement of Financial Accounting Standards No. 106.
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(m) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any Revolving Credit Advance will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock; and after applying the proceeds of each Revolving Credit Advance hereunder, margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System) constitutes less than twenty-five percent (25%) of the value of those assets of the Borrower and its Subsidiaries which are subject to any limitation on sale or pledge, or any other restriction hereunder.
(n) Neither the Borrower nor any of its Subsidiaries is, or after the making of any Revolving Credit Advance or the application of the proceeds or repayment thereof, or the consummation of any of the other transactions contemplated hereby, will be, an "investment company", or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company" (within the meaning of the Investment Company Act of 1940, as amended).
(o) The Borrower is a "public utility company" and a "subsidiary company" of DTE Energy, which is a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), and such "holding company" and the Borrower are currently exempt from the provisions of the 1935 Act (except Section 9 thereof).
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Revolving Credit Advance shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable laws, rules, regulations and orders, such compliance to include, without limitation, compliance with ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its property; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar
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businesses and owning similar properties (including customary self-insurance) in the same general areas in which the Borrower or such Subsidiary operates.
(d) Preservation of Corporate Existence, Etc. Preserve and maintain its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Borrower shall not be required to preserve any right or franchise if the Board of Directors of the Borrower or such Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Borrower and that the loss thereof is not disadvantageous in any material respect to the Borrower or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time, permit the Agent or any of the Lenders or any agents or representatives thereof, to examine and make copies of and abstracts from the records and books of account of, and visit the properties of, the Borrower and any of the Significant Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower and any of the Significant Subsidiaries with any of their officers or directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Significant Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Subject to clause (d) above, maintain and preserve, and cause each of its Significant Subsidiaries to maintain and preserve, all of their respective properties that are used or useful in the conduct of their respective businesses in good working order and condition, ordinary wear and tear excepted.
(h) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 65 days after the end of each of the first three quarters of each fiscal year of the Borrower, Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such quarter and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter;
(ii) as soon as available and in any event within 115 days after the end of each fiscal year of the Borrower, a copy of the Annual Report on Form 10-K for such year for the Borrower and its Consolidated Subsidiaries, as filed with or sent to the Securities and Exchange Commission, containing the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of the Borrower and its Subsidiaries for such fiscal year, in each case accompanied by an opinion by Deloitte & Touche LLP or other independent public accountants acceptable to the Required Lenders;
(iii) together with the financial statements required under clauses (i) or (ii) above, a compliance certificate in substantially the form of Exhibit F signed
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by a Financial Officer of the Borrower showing the then current information and calculations necessary to determine the Applicable Margin, the Applicable Percentage and the Applicable Utilization Fee Rate and compliance with this Agreement and stating that no Event of Default or Default exists, or if any Event of Default or Default exists, stating the nature and status thereof;
(iv) as soon as possible and in any event within five days after the occurrence of each Default continuing on the date of such statement, a statement of a Financial Officer of the Borrower setting forth details of such Default and the action that the Borrower has taken and proposes to take with respect thereto;
(v) as soon as possible and in any event within five days after any change in the Borrower's Moody's Rating or S&P Rating, notice thereof;
(vi) reasonably promptly after the sending or filing thereof copies of all reports and registration statements that the Borrower or any Subsidiary filed with the Securities and Exchange Commission or any national securities exchange;
(vii) promptly after the commencement thereof, notice of all actions and proceedings before any court, governmental agency or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 4.01(f); and
(viii) such other information respecting the Borrower or any of its Subsidiaries as any Lender through the Agent may from time to time reasonably request.
SECTION 5.02. Negative Covenants. At all times on and after the Effective Date so long as any Revolving Credit Advance shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create, incur, or suffer to exist any Lien in, of or on the Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on its Property if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure payment of obligations not more than sixty (60) days past due or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books;
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(iii) Liens arising out of pledges or deposits under worker's compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of the same or interfere with the use thereof in the business of the Borrower or its Subsidiaries;
(v) Liens described in the SEC Reports;
(vi) Liens pursuant to the Borrower's Mortgage and Deed of Trust, dated as of October 1, 1924, as supplemented, as described therein;
(vii) Liens pursuant to the Borrower's Indenture, dated as of June 30, 1993, as supplemented, as described therein, in connection with the issuance of debt securities secured by mortgage bonds; and
(viii) Liens, including, without limitation, Liens arising in connection with a Receivables Purchase Facility or the issuance of Securitization Bonds, securing Debt of the Borrower (other than Debt of the Borrower owed to any Subsidiary) and/or securing Debt of the Borrower's Subsidiaries (other than Debt of any Subsidiary owed to the Borrower or any other Subsidiary), in an aggregate outstanding amount not to exceed ten percent (10%) of the consolidated assets of the Borrower and its Subsidiaries at any time.
(b) Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, any Person, or permit any Significant Subsidiary to do so, except that (i) any Significant Subsidiary may merge or consolidate with or into any other Significant Subsidiary, (ii) any Significant Subsidiary may merge into or dispose of assets to the Borrower, and (iii) the Borrower may merge or consolidate with (a) MichCon, so long as the Borrower shall be the surviving entity or MichCon shall expressly assume the obligations under this Agreement or (b) any other Person so long as the Borrower shall be the surviving entity and has, after giving effect to such merger or consolidation, senior unsecured Debt outstanding rated at least BBB- by S&P and Baa3 by Moody's; provided, in each case, that no Default shall have occurred and be continuing at the time of such proposed transaction or would result therefrom.
(c) Change in Nature of Business. Make, or permit any of its Significant Subsidiaries to make, any material change in the nature of its business as carried on the date hereof, other than as disclosed or contemplated in the SEC Reports.
(d) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or permit, any change in accounting policies or reporting practices, except as required or permitted by generally accepted accounting principles.
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Revolving Credit Advance when the same becomes due and payable; or the Borrower shall fail to pay any interest on any Revolving Credit Advance or make any other payment of fees or other amounts payable under this Agreement or any Note within three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein, by the Borrower (or any of its officers) in connection with this Agreement shall prove to have been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 2.09(b), 5.01(d), (e) or (h) or 5.02, or (ii) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed if such failure shall remain unremedied for 10 days after written notice thereof shall have been given to the Borrower by the Agent or any Lender; or
(d) The Borrower or any of its Significant Subsidiaries shall fail to pay any principal of or premium or interest on any Debt that is outstanding in a principal or notional amount of at least $25,000,000 in the aggregate (but excluding Debt outstanding hereunder and Nonrecourse Debt) of the Borrower or such Significant Subsidiary (as the case may be), when the same becomes due and payable (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 event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition 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 or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or
(e) The Borrower or any of its Significant Subsidiaries 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 Borrower or any of its Significant Subsidiaries 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, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted
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against it (but not instituted by it), either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, 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 the Borrower or any of its Significant Subsidiaries shall take any corporate action to authorize any of the actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money, individually or in the aggregate, in excess of $25,000,000 shall be rendered against the Borrower or any of its Significant Subsidiaries and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(g) Any non-monetary judgment or order shall be rendered against the Borrower or any of its Significant Subsidiaries that could be reasonably expected to have a Material Adverse Effect, and there shall be any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) (i) any Person or "group" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) shall either (A) acquire beneficial ownership of more than 25% of any outstanding class of common stock of DTE Energy having ordinary voting power in the election of directors of DTE Energy, or (B) obtain the power (whether or not exercised) to elect a majority of DTE Energy's directors, or (ii) DTE Energy shall at any time cease to hold 100% of the Voting Stock of the Borrower; or
(i) The Borrower or any of its ERISA Affiliates shall incur, or, in the reasonable opinion of the Required Lenders, shall be reasonably likely to incur liability in excess of $25,000,000 individually or in the aggregate as a result of one or more of the following: (i) the occurrence of any ERISA Event; (ii) the partial or complete withdrawal of the Borrower or any of its ERISA Affiliates from a Multiemployer Plan; or (iii) the reorganization or termination of a Multiemployer Plan; or
(j) The Borrower and its Subsidiaries, on a Consolidated basis, shall at any time cease to:
(i) Maintain a ratio of Consolidated EBITDA to interest
expense on all Debt (excluding (A) all Nonrecourse Debt of the
Borrower and its Subsidiaries, (B) Excluded Hedging Debt and
(C) the Junior Subordinated Debt) of not less than 2:1 for
each twelve-month period ending on the last day of September,
December, March and June of each year, or
(ii) Maintain a ratio of Consolidated Debt (excluding (A) all Nonrecourse Debt of the Borrower and its Subsidiaries, (B) Excluded Hedging Debt and (C) the Junior Subordinated Debt) to Capitalization of not greater than .65:1; or
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(k) any provision of any of the Loan Documents after delivery thereof pursuant to Section 3.01 shall for any reason cease to be valid and binding on or enforceable against the Borrower, or the Borrower shall so state in writing;
then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the obligation of each Lender to make Revolving Credit Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare the Revolving Credit Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Revolving Credit Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to make Revolving Credit Advances shall automatically be terminated and (B) the Revolving Credit Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement as are delegated to the Agent by the terms hereof, together with such powers and discretion as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the Revolving Credit Advances), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders (or all of the Lenders to the extent required by the terms of this Agreement), and such instructions shall be binding upon all Lenders and all holders of Revolving Credit Advances; provided, however, that the Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to this Agreement or applicable law. The Agent agrees to give to each Lender prompt notice of each notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. 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 under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee in respect of any Revolving Credit Advance as the owner thereof until
the Agent receives and accepts an Assignment and Acceptance entered into by the
Lender that is the payee in respect of such Revolving Credit Advance, as
assignor, and an Eligible Assignee, as assignee, as provided in Section 8.07;
(ii) may consult with legal counsel (including counsel for the Borrower),
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
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with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement; (iv) 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 Borrower or to inspect the property (including the books and records) of the Borrower; (v) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the perfection or priority of any lien or security interest created or purported to be created under or in connection with, any Loan Document or any other instrument or document furnished pursuant hereto; and (vi) shall incur no liability under or in respect of this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram or telex) believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Barclays and Affiliates. With respect to its Commitment, the Revolving Credit Advances made by it and any Note issued to it, Barclays shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include Barclays in its individual capacity. Barclays and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept investment banking engagements from and generally engage in any kind of business with, the Borrower, any of its Subsidiaries and any Person who may do business with or own securities of the Borrower or any such Subsidiary, all as if Barclays were not the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 4.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the Agent (to the extent not reimbursed by the Borrower), ratably according to the respective principal amounts of their respective Revolving Credit Advances (or if no Revolving Credit Advances are at the time outstanding or if any Revolving Credit Advances are owing to Persons that are not Lenders, ratably according to the respective amounts of their Commitments), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of any Loan Document or any action taken or omitted by the Agent under any Loan Document, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Agent in connection with the preparation, execution, delivery,
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administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, any Loan Document, to the extent that the Agent is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower and may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving of notice of resignation or the Required Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, (b) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(c) reduce the principal of, or interest on, the Revolving Credit Advances or
any fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Revolving Credit Advances or any
fees or other amounts payable hereunder, (e) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Revolving Credit
Advances, or the number of Lenders, that shall be required for the Lenders or
any of them to take any action hereunder or (f) amend this Section 8.01; and
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement or any
Note.
SECTION 8.02. Notices, Etc. All notices and other communications provided for hereunder shall be in writing (including telecopier, telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed or delivered, if to the Borrower, at its address at 2000 2nd Avenue, Detroit, MI 48226, Attention: Treasurer; if to any Initial Lender, at its
36 SIDLEY AUSTIN BROWN & WOOD LLP
Domestic Lending Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic Lending Office specified in the Assignment and Acceptance pursuant to which it became a Lender; and if to the Agent, at its address at 222 Broadway, New York, NY 10038, Attention: Michele Fuimo and Mayerlin Jaramillo; or, as to the Borrower or the Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to the Borrower and the Agent. All such notices and communications shall, when mailed, telecopied, telegraphed or telexed, be effective when deposited in the mails, telecopied, delivered to the telegraph company or confirmed by telex answerback, respectively, except that notices and communications to the Agent pursuant to Article II, III or VII shall not be effective until received by the Agent. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or the Notes or of any Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or the Agent to exercise, and no delay in exercising, any right hereunder or under any Note shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses.
(a) The Borrower agrees to pay on demand, upon presentation of a statement of account and absent manifest error, all reasonable costs and reasonable expenses of the Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Notes, each other Loan Document and the other documents to be delivered hereunder and thereunder, including, without limitation, (A) all due diligence, syndication (including printing, distribution and bank meetings), transportation, computer, duplication, appraisal, consultant, and audit expenses and (B) the reasonable fees and reasonable expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under the Loan Documents. The Borrower further agrees to pay on demand all reasonable costs and reasonable expenses of the Agent and the Lenders, if any (including, without limitation, reasonable internal and external counsel fees and expenses, provided such fees and expenses are not duplicative), in connection with the "workout", restructuring or enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the Notes and the other documents to be delivered hereunder, including, without limitation, reasonable fees and expenses of counsel for the Agent and each Lender in connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify, to the extent legally permissible, and hold harmless the Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an "Indemnified Party") from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of, or in connection with the preparation for a defense of, any investigation, litigation or proceeding arising out of, related to or in connection with (i) the Notes, this Agreement, the other Loan Documents any of the transactions contemplated herein or therein or the actual or proposed use of the proceeds of the
37 SIDLEY AUSTIN BROWN & WOOD LLP
Revolving Credit Advances or (ii) the actual or alleged presence of Hazardous Materials on any property of the Borrower or any of its Subsidiaries or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries, in each case whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct. The Borrower also agrees not to assert any claim against the Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Notes, this Agreement, the other Loan Documents any of the transactions contemplated herein or therein or the actual or proposed use of the proceeds of the Revolving Credit Advances.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by the Borrower to or for the account of a Lender other than on the last day of the Interest Period for such Revolving Credit Advance, as a result of a payment or Conversion pursuant to Section 2.07(d) or (e), 2.09 or 2.11, acceleration of the maturity of the Revolving Credit Advances pursuant to Section 6.01, or for any other reason, the Borrower shall, upon demand by such Lender (with a copy of such demand to the Agent), pay to the Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Lender to fund or maintain such Revolving Credit Advance.
(d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in Sections 2.10, 2.13 and 8.04 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Revolving Credit Advances due and payable pursuant to
the provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under the Loan Documents and any Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its Affiliates under this
Section are in addition to other rights and remedies
38 SIDLEY AUSTIN BROWN & WOOD LLP
(including, without limitation, other rights of set-off) that such Lender and its Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective (other than Section 2.01, which shall only become effective upon satisfaction of the conditions precedent set forth in Section 3.01) when it shall have been executed by the Borrower and the Agent and when the Agent shall have been notified by each Initial Lender that such Initial Lender has executed it and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent and each Lender and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders to any Person.
SECTION 8.07. Assignments, Designations and Participations.
(a) Each Lender may, with the prior consent of the Agent (which consent shall
not be unreasonably withheld) and (for so long as no Default has occurred and is
continuing) the Borrower (which consent shall not be unreasonably withheld)
assign to one or more Persons all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Revolving Credit Advances owed to it and any Note or Notes held
by it); provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of all rights and obligations under this Agreement
and, for so long as no Default has occurred and is continuing, shall be made
concurrently with an assignment in a ratable amount of such Lender's rights and
obligations under the 364-Day Agreement (including, without limitation, all or a
portion of its "Commitment", "Revolving Credit Advances" owed to it and any
"Note" or "Notes" held by it under (and as each such term is defined in) the
364-Day Agreement), (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, and (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,000. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with
39 SIDLEY AUSTIN BROWN & WOOD LLP
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an Eligible
Assignee, together with any Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after the Borrower's receipt of such notice, if requested by the applicable
Lender, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, if requested by such assigning Lender, a new Note to the order of the
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A hereto.
(d) The Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses and
Commitment of, and principal amount of Revolving Credit Advances owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
40 SIDLEY AUSTIN BROWN & WOOD LLP
(e) Each Lender may sell participations to one or more banks
or other entities (other than the Borrower or any of its Affiliates) in or to
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Revolving Credit
Advances owing to it and any Note or Notes held by it); provided, however, that
(i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the owner of
such Revolving Credit Advances for all purposes of this Agreement, (iv) the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent
would (A) reduce the principal of, or interest on, the Revolving Credit Advances
or any fees or other amounts payable hereunder, or (B) increase the Commitments,
in each case to the extent subject to such participation, or postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation. Each participant shall be entitled to the
benefits of Sections 2.10, 2.11 and 2.13 to the same extent as if it were a
Lender and had acquired its interest under this Agreement by an assignment made
pursuant to this Section 8.07, provided, however, that in no event shall the
Borrower be obligated to make any payment with respect to such Sections that is
greater than the amount that the Borrower would have otherwise made had no
participations been sold under this Section 8.07(e).
(f) Any Lender may, in connection with any assignment, designation or participation or proposed assignment, designation or participation pursuant to this Section 8.07, disclose to the assignee, designee or participant or proposed assignee, designee or participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the assignee, designee or participant or proposed assignee, designee or participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any Lender may at any time (i) create a security interest in all or a portion of its rights under this Agreement (including, without limitation, the Revolving Credit Advances owing to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors of the Federal Reserve System or (ii) with notice to the Agent and the Borrower, assign all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment, the Revolving Credit Advances owed to it and the Note or Notes held by it) to any of its Affiliates.
(h) Notwithstanding anything to the contrary contained herein, any Lender (a "Designating Lender") may grant to one or more special purpose funding vehicles (each an "SPV"), identified as such in writing from time to time by the Designating Lender to the Agent and the Borrower, the option to provide to the Borrower all or any part of any Revolving Credit Advance that such Designating Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by
41 SIDLEY AUSTIN BROWN & WOOD LLP
any SPV to make any Revolving Credit Advance, (ii) if an SPV elects not to exercise such option or otherwise fails to provide all or any part of such Revolving Credit Advance, the Designating Lender shall be obligated to make such Revolving Credit Advance pursuant to the terms hereof, (iii) the Designating Lender shall remain liable for any indemnity or other payment obligation with respect to its Commitment hereunder and (iv) no SPV or Designating Lender shall be entitled to receive any greater amount under this Agreement than the Designating Lender would have been entitled to receive had the Designating Lender not otherwise granted such SPV the option to provide any Revolving Credit Advance to the Borrower. The making of a Revolving Credit Advance by an SPV hereunder shall utilize the Commitment of the Designating Lender to the same extent, and as if, such Revolving Credit Advance were made by such Designating Lender.
(i) Each party hereto hereby acknowledges and agrees that no SPV shall have the rights of a Lender hereunder, such rights being retained by the applicable Designating Lender. Accordingly, and without limiting the foregoing, each party hereby further acknowledges and agrees that no SPV shall have any voting rights hereunder and that the voting rights attributable to any Revolving Credit Advance made by an SPV shall be exercised only by the relevant Designating Lender and that each Designating Lender shall serve as the administrative agent and attorney-in-fact for its SPV and shall on behalf of its SPV receive any and all payments made for the benefit of such SPV and take all actions hereunder to the extent, if any, such SPV shall have any rights hereunder. No additional Note shall be required to evidence the Revolving Credit Advances or portion thereof made by an SPV; and the related Designating Lender shall be deemed to hold its Note or Notes, if any, as administrative agent for such SPV to the extent of the Revolving Credit Advances or portion thereof funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Designating Lender as administrative agent for such SPV.
(j) Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Agreement for which a Lender would otherwise be liable so long as, and to the extent that, the related Designating Lender provides such indemnity or makes such payment; provided, with respect to such agreement by the Borrower that the related Designating Lender shall not be in breach of its obligation to make Revolving Credit Advances to the Borrower hereunder. In furtherance of the foregoing, each party hereto hereby agrees (which agreements shall survive the termination of this Agreement) that prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any State thereof; provided, with respect to such agreement by the Borrower that the related Designating Lender shall not be in breach of its obligation to make Revolving Credit Advances to the Borrower hereunder. Notwithstanding the foregoing, the Designating Lender unconditionally agrees to indemnify the Borrower, the Agent and each Lender against all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be incurred by or asserted against the Borrower, the Agent or such Lender, as the case may be, in any way relating to or arising as a consequence of any such forbearance or delay in the initiation of any such proceeding against its SPV.
42 SIDLEY AUSTIN BROWN & WOOD LLP
(k) In addition, notwithstanding anything to the contrary contained in subsection 8.07(h), (i), (j) or (k) or otherwise in this Agreement, any SPV may (i) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interest in any Revolving Credit Advances to the Designating Lender or to any financial institutions providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Revolving Credit Advances and (ii) disclose on a confidential basis any non-public information relating to its Revolving Credit Advances to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancements to such SPV. Subsection 8.07(h), (i), (j) or (k) may not be amended without the written consent of any Designating Lender affected thereby.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender shall disclose any Confidential Information to any other Person without the consent of the Borrower, other than (a) to the Agent's or such Lender's Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 8.07(f), to actual or prospective assignees and participants, and then only on a confidential basis, (b) as required by any law, rule or regulation or judicial process, (c) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender and (d) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 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.
SECTION 8.11. 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 the Notes, 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 or the Notes in the courts of any jurisdiction.
43 SIDLEY AUSTIN BROWN & WOOD LLP
(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 or the Notes 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 8.12. Waiver of Jury Trial. Each of the Borrower, the Agent and the Lenders 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 Notes or the actions of the Agent or any Lender in the negotiation, administration, performance or enforcement thereof.
REMAINDER OF PAGE INTENTIONALLY BLANK
44 SIDLEY AUSTIN BROWN & WOOD LLP
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE DETROIT EDISON COMPANY
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
Lenders
BARCLAYS BANK PLC, Individually and as
Administrative Agent
Title:
SALOMON SMITH BARNEY INC., as
Co-Syndication Agent
Title:
BANC ONE CAPITAL MARKETS, INC., as
Co-Syndication Agent
Title:
CITIBANK, N.A., as a Lender
Title:
BANK ONE, NA (MAIN OFFICE - CHICAGO),
as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
THE BANK OF NEW YORK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
KEY BANK NATIONAL ASSOCIATION, as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
UBS AG (STAMFORD BRANCH), as a Lender
Title:
UBS AG (STAMFORD BRANCH), as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
COMERICA BANK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
CREDIT SUISSE FIRST BOSTON, as a Lender
Title:
CREDIT SUISSE FIRST BOSTON, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A., as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
BAYERISCHE LANDESBANK GIROZENTRALE
(CAYMAN ISLANDS BRANCH), as a Lender
Title:
BAYERISCHE LANDESBANK GIROZENTRALE
(CAYMAN ISLANDS BRANCH), as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
MELLON BANK, N.A., as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
FIFTH THIRD BANK (EASTERN MICHIGAN),
as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
STANDARD FEDERAL BANK, N.A., as a
Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
FIRST INDEPENDENCE BANK OF DETROIT, as
a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
THE NORTHERN TRUST COMPANY, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
MORGAN STANLEY BANK, as a Lender
Title:
SIDLEY AUSTIN BROWN & WOOD LLP
SIGNATURE PAGE TO THE DETROIT EDISON COMPANY THREE-YEAR CREDIT AGREEMENT
SCHEDULE I
THE DETROIT EDISON COMPANY
APPLICABLE LENDING OFFICES
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE COMMITMENT
---------------------- ----------------------- ------------------------- ----------
Citibank, N.A. 388 Greenwich Street Same as Domestic Lending Office
21st Floor
New York, NY 10003
Attention: Dhaya Ranganathan
Telecopier: (212) 816-8098
Bank One, NA One Bank One Plaza Same as Domestic Lending Office
Suite 0634
Chicago, IL 60670
Attention: Gloria Steinbrenner
Telecopier: (312) 732-4840
Barclays Bank PLC 200 Park Avenue Same as Domestic Lending Office
New York, NY 10166
Attention: Sydney Dennis/
Mark Griffin
Telecopier: (212) 412-7680
The Bank of New York One Wall Street Same as Domestic Lending Office
New York, NY 10286
Attention: Kathy D'Elena
Telecopier: (212) 635-7923
The Bank of Nova Scotia 600 Peachtree Street NE Same as Domestic Lending Office
Suite 2700
Atlanta, GA 30308
Attention: Mystro Whatley
Telecopier: (404) 888-8998
Key Bank National Association 127 Public Square Same as Domestic Lending Office
Cleveland, OH 44114
Attention: Laura Binkley
Telecopier: (216)689-4981
UBS AG, Stamford Branch 577 Washington Boulevard Same as Domestic Lending Office
Stamford, CT 06901
Attention: Denise Conzo
Telecopier: (203) 719-3853
Comerica Bank 500 Woodward Avenue Same as Domestic Lending Office
MC 3268
Detroit, MI 48226
Attention: David C. Bird
Telecopier: (313) 222-9514
Credit Suisse First Boston 11 Madison Avenue Same as Domestic Lending Office
New York, NY 10010
Attention: Andrea Shkane
Telecopier: (212) 325-8309
Union Bank of California, N.A. Energy Capital Services Same as Domestic Lending Office
445 S. Figueroa Street, 15th
Floor
Los Angeles, CA 90017
Attention: Dennis Blank
Telecopier: (213) 236-4096
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SIDLEY AUSTIN BROWN & WOOD LLP
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE COMMITMENT
---------------------- ----------------------- ------------------------- ----------
Bayerische Landesbank 560 Lexington Avenue Same as Domestic Lending Office
Girozentrale, Cayman Islands 17th Floor
Branch New York, NY 10022
Attention: Sean O'Sullivan
Telecopier: (212) 310-9868
Mellon Bank, N.A. 3 Mellon Center - Room 1203 Same as Domestic Lending Office
Pittsburgh, PA 15259
Attention: Brenda Leiersapf
Telecopier: (412) 209-6146
Fifth Third Bank, Eastern c/o Madisonville Operations Same as Domestic Lending Office
Michigan Center
MD 1M0C2B
Cincinnati, OH 45263-5300
Attention: Gina Schmidt
Telecopier: (513) 358-0221
Standard Federal Bank, N.A. 2600 W. Big Beaver Same as Domestic Lending Office
Troy, MI 48084
Attention: Yvonne Hicks
Telecopier: (248) 637-5003
First Independence Bank of 44 Michigan Avenue Same as Domestic Lending Office
Detroit Detroit, MI 48226
Attention: Barbara W. Worden
Telecopier: (313) 256-8444
The Northern Trust Company 50 S. LaSalle Street Same as Domestic Lending Office
Chicago, IL 60675
Attention: Funding Contact
Telecopier: (312) 444-5055
Morgan Stanley Bank 2500 Lake Park Boulevard Same as Domestic Lending Office
Suite 300C
West Valley City, UT 84120
Attention:
Telecopier:
Total: $65,000,000
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2 SIDLEY AUSTIN BROWN & WOOD LLP
PRICING SCHEDULE
LEVEL I STATUS LEVEL II STATUS LEVEL III STATUS LEVEL IV STATUS LEVEL V STATUS
-------------- --------------- ---------------- --------------- --------------
Applicable 0.150% 0.175% 0.200% 0.275% 0.425%
Percentage
Applicable Margin
(Eurodollar Rate) 0.725% 0.825% 0.925% 1.100% 1.955%
Applicable 0.125% 0.125% 0.125% 0.125% 0.250%
Utilization Fee
Applicable Margin 0.0% 0.0% 0.0% 0.0% 0.0%
(Base Rate)
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For the purposes of this Schedule, the following terms have the following meanings, subject to the final paragraph of this Schedule:
"Level I Status" exists at any date if, on such date, the Borrower's Moody's Rating is A3 or better or the Borrower's S&P Rating is A- or better.
"Level II Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status and (ii) the Borrower's Moody's Rating is Baa1 or better or the Borrower's S&P Rating is BBB+ or better.
"Level III Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status or Level II Status and (ii) the Borrower's Moody's Rating is Baa2 or better or the Borrower's S&P Rating is BBB or better.
"Level IV Status" exists at any date if, on such date, (i) the Borrower has not qualified for Level I Status, Level II Status or Level III Status and (ii) the Borrower's Moody's Rating is Baa3 or better or the Borrower's S&P Rating is BBB- or better.
"Level V Status" exists at any date if, on such date, the Borrower has not qualified for Level I Status, Level II Status, Level III or Level IV Status.
"Moody's Rating" means, at any time, the rating issued by Moody's and then in effect with respect to the Borrower's senior unsecured long-term debt securities without third-party credit enhancement.
"S&P Rating" means, at any time, the rating issued by S&P and then in effect with respect to the Borrower's senior unsecured long-term debt securities without third-party credit enhancement.
1 SIDLEY AUSTIN BROWN & WOOD LLP
"Status" means Level I Status, Level II Status, Level III
Status, Level IV Status or Level V Status.
The Applicable Margin, Applicable Utilization Fee and
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Applicable Percentage shall be determined in accordance with the foregoing table based on the Borrower's Status as determined from its then-current Moody's Rating and S&P Rating. The credit rating in effect on any date for the purposes of this Schedule is that in effect at the close of business on such date. If at any time the Borrower does not have both a Moody's Rating and an S&P Rating, Level V Status shall exist.
In the event that a split occurs between the two ratings, then the Status corresponding to the lower of the two ratings shall apply. However, if the split is greater than one level, then the pricing shall be based upon the Status one level above the Status corresponding to the lower of the two ratings.
2 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT A
FORM OF REVOLVING CREDIT PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 2002
FOR VALUE RECEIVED, the undersigned, THE DETROIT EDISON COMPANY, a Michigan corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of _________________________ (the "Lender") for the account of its Applicable Lending Office on the Revolver Termination Date (each as defined in the Credit Agreement referred to below), the principal sum of U.S.$[amount of the Lender's Commitment in figures] or, if less, the aggregate principal amount of the Revolving Credit Advances made by the Lender to the Borrower pursuant to the Three-Year Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "Credit Agreement"; the terms defined therein being used herein as therein defined) among the Borrower, the Lender and certain other lenders parties thereto, and Barclays Bank PLC, as Agent for the Lender and such other lenders outstanding on the Revolver Termination Date.
The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Advance from the date of such Revolving Credit Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United States of America to Barclays Bank PLC, as Agent, at 222 Broadway, New York, NY 10038, Account No. 050-019104, Attention: Michele Fuimo and Mayerlin Jaramillo, in same day funds. Each Revolving Credit Advance owing to the Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of Revolving Credit Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Credit Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified.
THE DETROIT EDISON COMPANY
3 SIDLEY AUSTIN BROWN & WOOD LLP
ADVANCES AND PAYMENTS OF PRINCIPAL
UNPAID
AMOUNT OF AMOUNT OF PRINCIPAL PRINCIPAL NOTATION
DATE ADVANCE PAID OR PREPAID BALANCE MADE BY
---- --------- ------------------- ---------- --------
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4 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT B
FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Barclays Bank PLC, as Agent for the Lenders parties
to the Credit Agreement referred to below
222 Broadway
New York, NY 10038
Attention: Michele Fuimo and Mayerlin Jaramillo [Date]
Ladies and Gentlemen:
The undersigned, THE DETROIT EDISON COMPANY, refers to the Three-Year Credit Agreement, dated as of October 25, 2002 (as amended or modified from time to time, the "Credit Agreement"; the terms defined therein being used herein as therein defined), among the undersigned, certain Lenders parties thereto and Barclays Bank PLC, as Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _______________, ____.
(ii) The Type of Advances comprising the Proposed Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in Section 4.01 of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, that constitutes a Default.
5 SIDLEY AUSTIN BROWN & WOOD LLP
Very truly yours,
THE DETROIT EDISON COMPANY
6 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "364-Day Credit Agreement") and to the Three-Year Credit Agreement dated October 25, 2002 (as amended or modified from time to time, the "Three-Year Credit Agreement", and together with the 364-Day Credit Agreement, the "Credit Agreements") each among The Detroit Edison Company, a Michigan corporation (the "Borrower"), the Lenders (as defined in the Credit Agreements) and Barclays Bank PLC, as agent for the Lenders (the "Agent"). Terms defined in each of the Credit Agreements are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, (a) an interest in and to the Assignor's rights and obligations under the 364-Day Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the 364-Day Credit Agreement, and (b) an interest in and to the Assignor's rights and obligations under the Three-Year Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the Three-Year Credit Agreement. After giving effect to such sale and assignment, the Assignee's Commitment and the amount of the Revolving Credit Advances owing to the Assignee under each of the Credit Agreements will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with each of the Credit Agreements or the execution, legality, validity, enforceability, genuineness, sufficiency or value of each of the Credit Agreements or any other instrument or document furnished pursuant thereto; (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under each of the Credit Agreements or any other instrument or document furnished pursuant thereto; and (iv) attaches the Note or Notes held by the Assignor, if any, and requests that the Agent exchange such Note or Notes for a new Note or Notes payable to the order of the Assignee in an amount equal to the Commitment assumed by the Assignee pursuant hereto and the applicable Credit Agreement or new Notes payable to the order of the Assignee in an amount equal to the Commitment assumed by the Assignee pursuant hereto and the applicable Credit Agreement and the Assignor in an amount equal to the Commitment retained by the Assignor under the applicable Credit Agreement, respectively, as specified on Schedule 1 hereto.
7 SIDLEY AUSTIN BROWN & WOOD LLP
3. The Assignee (i) confirms that it has received a copy of each of the Credit Agreements, together with copies of the financial statements referred to in each Section 4.01 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under each of the Credit Agreements; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under each of the Credit Agreements as are delegated to the Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations that by the terms of each of the Credit Agreements are required to be performed by it as a Lender; and (vi) attaches any U.S. Internal Revenue Service forms required under Section 2.13 of each of the Credit Agreements.
4. Following the execution of this Assignment and Acceptance, it will be delivered to the Agent for acceptance and recording by the Agent. The effective date for this Assignment and Acceptance (the "Effective Date") shall be the date of acceptance hereof by the Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective Date, (i) the Assignee shall be a party to each of the Credit Agreements and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under each of the Credit Agreements.
6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the Agent shall make all payments under each of the Credit Agreements and the Notes in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest, facility fees and the Utilization Fee with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under each of the Credit Agreements and the Notes for periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as delivery of a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this Assignment and Acceptance to be executed by their officers thereunto duly authorized as of the date specified thereon.
8 SIDLEY AUSTIN BROWN & WOOD LLP
Schedule 1 to Assignment and Acceptance
364-Day Three-Year
Credit Credit
Agreement Agreement
------------ -------------
Percentage interest assigned: % %
--------------- ---------------
Assignee's Commitment: $ $
--------------- ---------------
Aggregate outstanding principal amount of Revolving Credit Advances
assigned: $ $
--------------- ---------------
Principal amount of Revolving Credit Advances payable to Assignee: $ $
--------------- ---------------
Principal amount of Revolving Credit Advances payable to Assignor: $ $
--------------- ---------------
Effective Date(1): $ $
--------------- ---------------
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[NAME OF ASSIGNOR], as Assignor
Dated:
[NAME OF ASSIGNEE], as Assignee
Dated:
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
(1) This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance to the Agent.
9 SIDLEY AUSTIN BROWN & WOOD LLP
Accepted [and Approved](2) this
day of
, As Agent
-------------------------------------------
By:
--------------------------------------------------
Title:
[Approved this [ ] day of
-------------------------
THE DETROIT EDISON COMPANY
By:
--------------------------------------------------
Title: ](3)
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(2) Required if the Assignee is an Eligible Assignee solely by reason of clause (viii) of the definition of "Eligible Assignee".
(3) To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
10 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT D
FORM OF CERTIFICATE
DTE ENERGY COMPANY
THE DETROIT EDISON COMPANY
MICHIGAN CONSOLIDATED GAS COMPANY
OFFICER'S CERTIFICATE
I, D.R. Murphy, Assistant Treasurer of DTE ENERGY COMPANY
("DTE"), THE DETROIT EDISON COMPANY ("DECO") and MICHIGAN CONSOLIDATED GAS
COMPANY ("MichCon"), each a Michigan corporation (each a "Borrower" and
collectively the "Borrowers"), DO HEREBY CERTIFY, pursuant to Section 3.01 of
each of (i) the 364-Day and Three-Year Credit Agreements, dated as of October
25, 2002 among DTE, the financial institutions from time to time parties thereto
(the "DTE Lenders"), and Citibank, N.A., as agent for said DTE Lenders (the "DTE
Credit Agreements"), (ii) the 364-Day and Three-Year Credit Agreements, dated as
of October 25, 2002, among DECO, the financial institutions from time to time
parties thereto (the "DECO Lenders") and Barclays Bank PLC, as agent for said
DECO Lenders (the "DECO Credit Agreements"), and (iii) the 364-Day and
Three-Year Credit Agreements, dated as of October 25, 2002, among MichCon, the
financial institutions from time to time parties thereto (the "MichCon Lenders",
and, together with the DTE Lenders and the DECO Lenders, the "Lenders") and Bank
One, NA, as agent for said Lenders (the "MichCon Credit Agreements", and
together with the DTE Credit Agreements and the DECO Credit Agreements, the
"Credit Agreements"), that the terms defined in the Credit Agreements are used
herein as herein defined and, further, that:
1. The Effective Date shall be October 25, 2002.
2. The representation and warranties contained in Section 4.01 of each of the Credit Agreements are true and current on and as of the date hereof.
3. No event has occurred and is continuing that constitutes a Default.
4. Each Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan.
5. The execution, delivery and performance by each Borrower of the Loan Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, are within each Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) each Borrower's charter or by-laws or (ii) law or any contractual restriction binding on or affecting each Borrower.
6. All governmental and third party consents and approvals necessary in connection with the transactions contemplated by the Loan Documents to which each Borrower is a party have been obtained, including in the case of DECO, the orders of the Federal Energy Regulatory Commission (without the imposition of any conditions that are not acceptable to the Lenders),
11 SIDLEY AUSTIN BROWN & WOOD LLP
and remain in effect, and no law or regulation is applicable that restrains, prevents or imposes materially adverse conditions upon each Borrower with respect to the transactions contemplated by the Loan Documents to which it is a party.
7. Each of the Loan Documents to which each of the Borrowers is a party when delivered pursuant to each of the Credit Agreements has been duly executed and delivered by each Borrower. Each of the other Loan Documents to which each Borrower is a party when delivered hereunder will be, the legal, valid and binding obligation of each Borrower enforceable against each Borrower in accordance with their respective terms, subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally.
8. The Consolidated balance sheets of each of DTE, DECO, MichCon and their respective Subsidiaries as at December 31, 2001, and the related Consolidated statements of income and cash flows of each of DTE, DECO, MichCon and their respective Subsidiaries for the fiscal year then ended, accompanied by an opinion of Deloitte & Touche LLP, independent public accountants, and the condensed Consolidated balance sheets of each of DTE, DECO, MichCon and their respective Subsidiaries as at June 30, 2002 and the related condensed Consolidated statements of income and cash flows of each of DTE, DECO, MichCon and their respective Subsidiaries for the six months then ended, copies of which have been furnished to each Lender, attached hereto as Annex A-1 through A-6 are hereby duly certified by the undersigned, as fairly presenting, subject in the case of said balance sheet as at June 30, 2002, and said statements of income and cash flows for the six months then ended, to year-end audit adjustments, the Consolidated financial condition of each of DTE, DECO, MichCon and their respective Subsidiaries, as applicable, as at such dates and the Consolidated results of the operations of each of DTE, DECO, MichCon and their respective Subsidiaries, as applicable, for the periods ended on such dates, all in accordance with generally accepted accounting principles consistently applied, and the respective reports in which such financial statements are contained are hereby designated as the "SEC Reports" for purposes of the Credit Agreements. Since June 30, 2002 there has been no Material Adverse Change with respect to any of the Borrowers.
9. None of the Borrowers is a party to an indenture, loan or credit agreement, lease, guarantee, mortgage, security agreement, bond, note or other agreement or instrument, and there are no orders, writs, judgments, awards, injunctions or decrees, that affect or purport to affect each Borrower's right to borrow money or each Borrower's obligations under the Loan Documents to which it is a party.
10. Each of the Existing Credit Agreements is terminated (except for those provisions that expressly survive the termination thereof) upon effectiveness of the Credit Agreements on the Effective Date; as of the date hereof, there are no loans outstanding under any of the Existing Credit Agreements and all amounts owed to the lender or agents thereunder have been paid in full.
12 SIDLEY AUSTIN BROWN & WOOD LLP
Dated as of the ___ day of October, 2002.
DTE ENERGY COMPANY
THE DETROIT EDISON COMPANY
MICHIGAN CONSOLIDATED GAS COMPANY
By
-------------------------------------
Name: D.R. Murphy
Title: Assistant Treasurer
13 SIDLEY AUSTIN BROWN & WOOD LLP
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EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE BORROWER
[Date]
To each of the Lenders set forth
in Schedule A hereto
DTE Energy Company
The Detroit Edison Company
Michigan Consolidated Gas Company
Ladies and Gentlemen:
This opinion is furnished to you pursuant to (i) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among DTE Energy Company ("DTE"), the financial institutions from time to time parties thereto (the "DTE Lenders"), and Citibank, N.A., as agent for said DTE Lenders, Barclays Bank PLC and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Salomon Smith Barney Inc., as Lead Arranger and Sole Book Runner (the "DTE Credit Agreements"), (ii) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among The Detroit Edison Company ("DECO"), the financial institutions parties thereto (the "DECO Lenders") and Barclays Bank PLC, as agent for said DECO Lenders, Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Barclays Capital and Banc One Capital Markets, Inc., as Co-Lead Arrangers and Joint Book Runners (the "DECO Credit Agreements"), and (iii) Section 3.01(h)(v) of each of the 364-Day and Three-Year Credit Agreements, dated as of October 25, 2002, among Michigan Consolidated Gas Company ("MichCon"), the financial institutions parties thereto (the "MichCon Lenders", and together with the DTE Lenders and the DECO Lenders, the "Lenders") and Bank One, NA, as agent for said Lenders, Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital, as Co-Lead Arrangers and Joint Book Runners (the "MichCon Credit Agreements", and together with the DTE Credit Agreements and the DECO Credit Agreements, the "Credit Agreements"). Terms defined in each Credit Agreement are used herein as therein defined.
I am the Associate General Counsel of DTE, and the Vice President and General Counsel of both DECO and MichCon, and have acted as counsel for each of the Borrowers in connection with the preparation, execution and delivery of the Loan Documents.
In that connection, I, in conjunction with the members of my staff, have examined:
(i) Each Loan Document, executed by each of the parties thereto.
14 SIDLEY AUSTIN BROWN & WOOD LLP
(ii) The other documents furnished by each of the
Borrowers pursuant to Article III of each of the Credit
Agreements.
(iii) The Restated Articles of Incorporation of DTE,
the Restated Articles of Incorporation of DECO, and the
Restated Articles of Incorporation of MichCon and all
amendments thereto (the "Charters").
(iv) The By-Laws of each of the Borrowers and all
amendments thereto (the "By-Laws").
(v) Certificates from the State of Michigan
attesting to the continued corporate existence and good
standing of each of the Borrowers.
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I have also examined the originals, or copies certified to my satisfaction, of the documents listed in a certificate of a Financial Officer of each of the Borrowers, dated the date hereof (the "Certificate"), certifying that the documents listed in such certificate are all of the indentures, loan or credit agreements, leases, guarantees, mortgages, security agreements, bonds, notes and other agreements or instruments, and all of the orders, writs, judgments, awards, injunctions and decrees, that affect or purport to affect each Borrower's right to borrow money or each Borrower's obligations under the Loan Documents to which it is party. In addition, I have examined the originals, copies certified to my satisfaction, of such other corporate records of each Borrower, certificates of public officials and of officers of each Borrower, and agreements, instruments and other documents, as we have deemed necessary as a basis for the opinions expressed below. As to questions of fact material to such opinions, I have, when relevant facts were not independently established by me, relied upon certificates of public officials. I have assumed the due execution and delivery, pursuant to due authorization, of each of the Credit Agreements by the Lenders and the applicable Agent.
My opinions expressed below are limited to the law of the State of Michigan and the federal law of the United States.
Based upon the foregoing and upon such investigation as I have deemed necessary, I am of the following opinion:
1. Each of the Borrowers is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan.
2. The execution, delivery and performance by each of the Borrowers of the Loan Documents to which it is party, and the consummation of the transactions contemplated thereby, are within each Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Charters or the By-Laws of each Borrower or (ii) any law, rule or regulation applicable to each of the Borrowers (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System) or (iii) any contractual or legal restriction contained in any document listed in the Certificate or, to the best of my knowledge (after due inquiry), contained in any other similar document.
3. No authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for the due
15 SIDLEY AUSTIN BROWN & WOOD LLP
execution, delivery, recordation, filing or performance by each Borrower of the Loan Documents to which each is a party, except such as have been obtained, including, in the case of DECO, the orders of the Federal Energy Regulatory Commission.
4. Each Loan Document has been duly executed and delivered on behalf of the Borrower thereto.
5. Except as may have been disclosed to you in the SEC Reports designated in the Certificate, to the best of my knowledge (after due inquiry) there are no pending or overtly threatened actions or proceedings affecting each Borrower or any of its Subsidiaries before any court, governmental agency or arbitrator that (i) could be reasonably likely to have a Material Adverse Effect or (ii) purport to affect the legality, validity, binding effect or enforceability of any Loan Documents or the consummation of the transactions contemplated thereby.
6. In a properly presented case, a Michigan court or a federal court sitting in the State of Michigan applying Michigan choice of law rules should give effect to the choice of law provisions of the Loan Documents and should hold that such Loan Documents are to be governed by the laws of the State of New York rather than the laws of the State of Michigan. In rendering the foregoing opinion, I note that by their terms the Loan Documents expressly select New York law as the laws governing their interpretation and that the Loan Documents governed by New York law were delivered by the parties thereto to the Agent in New York. The choice of law provisions of the Loan Documents are not voidable under the laws of the State of Michigan.
7. If, despite the provisions of Section 8.09 of each of the Credit Agreements wherein the parties thereto agree that the Loan Documents shall be governed by, and construed in accordance with, the laws of the State of New York, a court of the State of Michigan or a federal court sitting in the State of Michigan were to hold that the Loan Documents are governed by, and to be construed in accordance with the laws of the State of Michigan, the respective Loan Documents would be, under the laws of the State of Michigan, legal, valid and binding obligations of the applicable Borrower, enforceable against such Borrower in accordance with their respective terms.
8. Neither the Borrowers nor any of their Subsidiaries is an "investment company," or an "affiliated person" of, or "promoter" or "principal underwriter" for, an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; DECO is a "public utility company" and a "subsidiary company" of DTE, which is a "holding company" as such terms are defined in the Public Utility Holding Company Act of 1935, as amended (the "1935 Act"), and such "holding company" and DECO are currently exempt from the provisions of the 1935 Act (except Section 9 thereof); and MichCon is a "public utility company" and a "subsidiary company" of MichCon Holdings, Inc., which is a "holding company" and a "subsidiary company" of DTE Enterprises, Inc., which is a "holding company" and a "subsidiary company" of DTE, as such terms are defined in the 1935 Act, and such "holding companies" and MichCon are currently exempt from the provisions of the 1935 Act (except Section 9 thereof);
The opinions set forth above are subject to the following qualifications:
16 SIDLEY AUSTIN BROWN & WOOD LLP
(a) My opinion in paragraph 7 above as to
enforceability is subject to the effect of any applicable
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar law affecting creditors' rights
generally.
(b) My opinion in paragraph 7 above as to
enforceability is subject to the effect of general principles
of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or
at law).
(c) I express no opinion as to participation and the
effect of the law of any jurisdiction other than the State of
Michigan wherein any Lender may be located or wherein
enforcement of the Loan Documents may be sought that limits
the rates of interest legally chargeable or collectible.
Very truly yours,
17 SIDLEY AUSTIN BROWN & WOOD LLP
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Schedule A
Each of the Lenders party to the 364-Day Credit Agreement, dated as of October 25, 2002, among DTE, Citibank, N.A., as Lender and Agent, and Banc One Capital Markets, Inc. and Barclays Bank PLC, as Co-Syndication Agents, and with Salomon Smith Barney Inc., as Lead Arranger and Sole Book Runner.
Each of the Lenders party to the Three-Year Credit Agreement, dated as of October 25, 2002, among DTE, Citibank, N.A., as Lender and Agent, and Banc One Capital Markets, Inc. and Barclays Bank PLC, as Co-Syndication Agents, and with Salomon Smith Barney Inc., as Lead Arranger and Sole Book Runner.
Each of the Lenders party to the 364-Day Credit Agreement, dated as of October 25, 2002, among DECO, Barclays Bank PLC, as Lender and Agent, and Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Barclays Capital and Banc One Capital Markets, Inc., as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the Three-Year Credit Agreement, dated as of October 25, 2002, among DECO, Barclays Bank PLC, as Lender and Agent, and Salomon Smith Barney Inc. and Banc One Capital Markets, Inc., as Co-Syndication Agents, and with Barclays Capital and Banc One Capital Markets, Inc., as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the 364-Day Credit Agreement, dated as of October 25, 2002, among MichCon, Bank One, NA, as Lender and Agent, and Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital,
18 SIDLEY AUSTIN BROWN & WOOD LLP
as Co-Lead Arrangers and Joint Book Runners.
Each of the Lenders party to the Three-Year Credit Agreement, dated as of October 25, 2002, among MichCon, Bank One, NA, as Lender and Agent, and Barclays Bank PLC and Salomon Smith Barney Inc., as Co-Syndication Agents, and with Banc One Capital Markets, Inc. and Barclays Capital, as Co-Lead Arrangers and Joint Book Runners.
19 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
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Three-Year Credit Agreement dated as of October 25, 2002 (as amended or modified from time to time, the "Agreement"; the terms defined therein being used herein as therein defined) among The Detroit Edison Company, a Michigan corporation (the "Borrower"), the lenders parties thereto, and Barclays Bank PLC, as Agent for the lenders. Unless otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the transactions and conditions of the Borrower and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no knowledge of, the existence of any condition or event which constitutes an Event of Default or Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations evidencing the Borrower's compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of , .
THE DETROIT EDISON COMPANY
Title:
20 SIDLEY AUSTIN BROWN & WOOD LLP
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of Section 5.01(h) of
the Agreement
FINANCIAL COVENANTS
Ratio of Consolidated EBITDA to Interest Expense on Debt (Section 6.01(j)(i)).
(A) Numerator: Consolidated EBITDA: $
------
(B) Denominator:
(i) Interest Expense on Debt: $
------
(ii) Minus: Interest Expense on all Nonrecourse Debt of the Borrower
and its Subsidiaries:
-$
------
(iii) Minus: Interest Expense on Excluded Hedging Debt: -$
------
(iv) Minus: Interest Expense on Junior Subordinated Debt: -$
------
(v) Denominator: (B)(i) minus (B)(ii) through (B)(iv): $
------
(C) State whether the ratio of (A) to (B)(v) was not less than 2:1 for the
twelve-month period ending on the last day of __________: YES/NO
Ratio of Consolidated Debt to Capitalization (Section 6.01(j)(ii)).
(A) Numerator:
(i) Consolidated Debt: $
------
(ii) Minus: Nonrecourse Debt of the Borrower and its
Subsidiaries: -$
------
(iii) Minus: Excluded Hedging Debt: -$
------
(iv) Minus: Junior Subordinated Debt: -$
------
(v) Numerator: (A)(i) minus (A)(ii) through (A)(iv): $
------
(B) Denominator: Capitalization: $
------
(C) State whether the ratio of (A)(v) to (B) was not greater than .65:1: YES/NO
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21 SIDLEY AUSTIN BROWN & WOOD LLP
EXHIBIT 99-5
CERTIFICATION OF PERIODIC REPORT
I, Anthony F. Earley, Jr., Chairman, President, Chief Executive and Chief Operating Officer of The Detroit Edison Company (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of my knowledge and belief:
(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 13, 2002 /s/ ANTHONY F. EARLEY, JR.
----------------------------------------
Anthony F. Earley, Jr.
Chairman, President, Chief Executive and
Chief Operating Officer of
The Detroit Edison Company
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EXHIBIT 99-6
CERTIFICATION OF PERIODIC REPORT
I, David E. Meador, Senior Vice President and Chief Financial Officer of The Detroit Edison Company (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of my knowledge and belief:
(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2002 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 13, 2002 /s/ DAVID E. MEADOR
-----------------------------------------
David E. Meador
Senior Vice President and
Chief Financial Officer of
The Detroit Edison Company
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