diff --git a/nova/db/sqlalchemy/api.py b/nova/db/sqlalchemy/api.py
index ea82ae703b7a..f1c368a3e254 100644
--- a/nova/db/sqlalchemy/api.py
+++ b/nova/db/sqlalchemy/api.py
@@ -1521,9 +1521,6 @@ def instance_destroy(context, instance_uuid, constraint=None):
         session.query(models.InstanceMetadata).\
                  filter_by(instance_uuid=instance_uuid).\
                  soft_delete()
-        session.query(models.InstanceSystemMetadata).\
-                 filter_by(instance_uuid=instance_uuid).\
-                 soft_delete()
     return instance_ref
 
 
diff --git a/nova/tests/compute/test_compute_utils.py b/nova/tests/compute/test_compute_utils.py
index 21876eb41d89..2de9d0beba47 100644
--- a/nova/tests/compute/test_compute_utils.py
+++ b/nova/tests/compute/test_compute_utils.py
@@ -311,9 +311,8 @@ class UsageInfoTestCase(test.TestCase):
         self.assertEquals(payload['image_ref_url'], image_ref_url)
         self.compute.terminate_instance(self.context, instance)
 
-    def test_notify_usage_exists_fail_on_deleted_instance(self):
-        # notify_usage_exists should not work for a deleted VM. A
-        # notification should be done before the instance is deleted in the db.
+    def test_notify_usage_exists_deleted_instance(self):
+        # Ensure 'exists' notification generates appropriate usage data.
         instance_id = self._create_instance()
         instance = db.instance_get(self.context, instance_id)
         # Set some system metadata
@@ -325,8 +324,27 @@ class UsageInfoTestCase(test.TestCase):
         self.compute.terminate_instance(self.context, instance)
         instance = db.instance_get(self.context.elevated(read_deleted='yes'),
                                    instance_id)
-        self.assertRaises(KeyError, compute_utils.notify_usage_exists,
-                self.context, instance)
+        compute_utils.notify_usage_exists(self.context, instance)
+        msg = test_notifier.NOTIFICATIONS[-1]
+        self.assertEquals(msg['priority'], 'INFO')
+        self.assertEquals(msg['event_type'], 'compute.instance.exists')
+        payload = msg['payload']
+        self.assertEquals(payload['tenant_id'], self.project_id)
+        self.assertEquals(payload['user_id'], self.user_id)
+        self.assertEquals(payload['instance_id'], instance['uuid'])
+        self.assertEquals(payload['instance_type'], 'm1.tiny')
+        type_id = instance_types.get_instance_type_by_name('m1.tiny')['id']
+        self.assertEquals(str(payload['instance_type_id']), str(type_id))
+        for attr in ('display_name', 'created_at', 'launched_at',
+                     'state', 'state_description',
+                     'bandwidth', 'audit_period_beginning',
+                     'audit_period_ending', 'image_meta'):
+            self.assertTrue(attr in payload,
+                            msg="Key %s not in payload" % attr)
+        self.assertEquals(payload['image_meta'],
+                {'md_key1': 'val1', 'md_key2': 'val2'})
+        image_ref_url = "%s/images/1" % glance.generate_glance_url()
+        self.assertEquals(payload['image_ref_url'], image_ref_url)
 
     def test_notify_usage_exists_instance_not_found(self):
         # Ensure 'exists' notification generates appropriate usage data.
diff --git a/nova/tests/test_db_api.py b/nova/tests/test_db_api.py
index 62e15797cc53..f4075873a042 100644
--- a/nova/tests/test_db_api.py
+++ b/nova/tests/test_db_api.py
@@ -411,7 +411,7 @@ class DbApiTestCase(DbTestCase):
         system_meta = db.instance_system_metadata_get(ctxt, instance['uuid'])
         self.assertEqual('baz', system_meta['original_image_ref'])
 
-    def test_delete_instance_and_system_metadata_on_instance_destroy(self):
+    def test_delete_instance_metadata_on_instance_destroy(self):
         ctxt = context.get_admin_context()
 
         # Create an instance with some metadata
@@ -423,11 +423,8 @@ class DbApiTestCase(DbTestCase):
         self.assertEqual('meow', instance_meta['key1'])
         db.instance_destroy(ctxt, instance['uuid'])
         instance_meta = db.instance_metadata_get(ctxt, instance['uuid'])
-        instance_system_meta = db.instance_system_metadata_get(ctxt,
-                instance['uuid'])
-        # Make sure instance and system metadata is deleted as well
+        # Make sure instance metadata is deleted as well
         self.assertEqual({}, instance_meta)
-        self.assertEqual({}, instance_system_meta)
 
     def test_instance_update_unique_name(self):
         otherprojectcontext = context.RequestContext(self.user_id,