1
EXHIBIT 4.3.1
THE DETROIT EDISON SECURITIZATION FUNDING LLC,
Issuer
and
THE BANK OF NEW YORK,
Trustee
---------------------------------------
2001-1 SERIES SUPPLEMENT
Dated as of March 9, 2001
---------------------------------------
2
2001-1 SERIES SUPPLEMENT dated as of March 9, 2001 (this "Supplement"),
by and between THE DETROIT EDISON SECURITIZATION FUNDING LLC, a Michigan limited
liability company (the "Issuer"), and THE BANK OF NEW YORK, a New York banking
corporation (the "Trustee"), as Trustee under the Indenture dated as of March 9,
2001, between the Issuer and the Trustee (the "Indenture").
PRELIMINARY STATEMENT
Section 9.01 of the Indenture provides, among other things, that the
Issuer and the Trustee may at any time and from time to time enter into one or
more indentures supplemental to the Indenture for the purposes of authorizing
the issuance by the Issuer of a Series of Securitization Bonds and specifying
the terms thereof. The Issuer has duly authorized the execution and delivery of
this Supplement and the creation of a Series of Securitization Bonds with an
initial aggregate principal amount of $1,750,000,000 to be known as the Issuer's
Securitization Bonds, Series 2001-1 (the "Series 2001-1 Securitization Bonds").
All acts and all things necessary to make the Series 2001-1 Securitization
Bonds, when duly executed by the Issuer and authenticated by the Trustee as
provided in the Indenture and this Supplement and issued by the Issuer, the
valid, binding and legal obligations of the Issuer and to make this Supplement a
valid and enforceable supplement to the Indenture have been done, performed and
fulfilled and the execution and delivery hereof have been in all respects duly
and lawfully authorized. The Issuer and the Trustee are executing and delivering
this Supplement in order to provide for the Series 2001-1 Securitization Bonds.
In order to secure the payment of principal of and interest on the
Series 2001-1 Securitization Bonds issued and to be issued under the Indenture
and/or any Series Supplement, the Issuer hereby confirms the Grants to the
Trustee for the benefit of (i) the Holders of the Series 2001-1 Securitization
Bonds from time to time issued and Outstanding, and (ii) the Trustee, of all of
the Issuer's right, title and interest in, to and under the Collateral,
including, without limitation, the Securitization Property transferred by the
Seller to the Issuer as of the Initial Transfer Date pursuant to the Sale
Agreement and all proceeds thereof.
The Trustee, on behalf of the Holders of the Series 2001-1
Securitization Bonds, and acting on behalf of itself, acknowledges the
confirmation of such Grants, accepts the trusts hereunder in accordance with the
provisions hereof and agrees to perform its duties required in the Indenture and
this Supplement.
SECTION 1. DEFINITIONS.
All terms used in this Supplement that are defined in the Indenture,
either directly or by reference therein, have the meanings assigned to them
therein, except to the extent such terms are defined or modified in this
Supplement or the context clearly requires otherwise.
SECTION 2. OTHER DEFINITIONAL PROVISIONS.
Expected Amortization Schedule means Schedule A to this
Supplement.
3
Expected Final Payment Date means, with respect to any Class of
the Series 2001-1 Securitization Bonds, the expected final Payment Date
therefor, as specified in Section 4 of this Supplement.
Final Maturity Date means, with respect to any Class of the Series
2001-1 Securitization Bonds, the final maturity date thereof, as specified in
Section 4 of this Supplement.
Interest Rate has the meaning set forth in Section 4 of this
Supplement.
Overcollateralization Amount has the meaning set forth in Section
5(d) of this Supplement.
Payment Date has the meaning set forth in Section 5(a) of this
Supplement.
Record Date shall mean, with respect to any Payment Date, the
Business Day prior to such Payment Date or, with respect to any Definitive
Securitization Bonds, the last Business Day of the month preceding such Payment
Date.
Required Capital Amount has the meaning set forth in Section 5(e)
of this Supplement.
SECTION 3. DESIGNATION; SERIES ISSUANCE DATES.
(a) Designation. The Series 2001-1 Securitization Bonds shall be
designated generally as the Issuer's Securitization Bonds, Series 2001-1, and
further denominated as Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and
Class A-6.
(b) Series Issuance Date. The Series 2001-1 Securitization Bonds
that are authenticated and delivered by the Trustee to or upon the order of the
Issuer on March 9, 2001 (the "Series Issuance Date") shall have as their date of
authentication March 9, 2001.
SECTION 4. INITIAL PRINCIPAL AMOUNT; INTEREST RATE; EXPECTED FINAL
PAYMENT DATE; FINAL MATURITY DATES.
The Securitization Bonds of each Class of the Series 2001-1
Securitization Bonds shall have the initial principal amounts, bear interest at
the Interest Rates and have Expected Final Payment Dates and Final Maturity
Dates as set forth below:
2
4
INITIAL
PRINCIPAL EXPECTED FINAL FINAL
CLASS AMOUNT INTEREST RATE PAYMENT DATE MATURITY DATE
--------- -------------- --------------- ------------------ -----------------
A-1 $124,540,305 5.180% 3/1/03 3/1/05
A-2 $179,037,815 5.510% 3/1/05 3/1/07
A-3 $322,791,421 5.875% 3/1/08 3/1/10
A-4 $406,722,416 6.190% 3/1/11 3/1/13
A-5 $326,236,780 6.420% 3/1/13 3/1/15
A-6 $390,671,263 6.620% 3/1/15 3/1/16
Interest for all Classes shall be computed on the basis of a 360-day
year of twelve 30 day months.
SECTION 5. PAYMENT DATES; EXPECTED AMORTIZATION SCHEDULE FOR PRINCIPAL;
INTEREST; OVERCOLLATERALIZATION AMOUNT; REQUIRED CAPITAL AMOUNT.
(a) Payment Dates. The Payment Dates for each Class of the Series
2001-1 Securitization Bonds are March 1 and September 1 of each year or, if any
such date is not a Business Day, the next succeeding Business Day, commencing on
September 1, 2001 and continuing until the earlier of repayment of such Class in
full and the applicable Final Maturity Date.
(b) Expected Amortization Schedule for Principal. Except in the
case of an optional redemption pursuant to Section 10.01 of the Indenture,
unless an Event of Default has occurred and is continuing and the unpaid
principal amount of all Series of Securitization Bonds has been declared to be
due and payable together with accrued and unpaid interest thereon, on each
Payment Date the Trustee shall distribute to the Series 2001-1 Securitization
Bondholders of record as of the related Record Date amounts payable in respect
of the Series 2001-1 Securitization Bonds pursuant to Section 8.02 of the
Indenture as principal, in accordance with the Expected Amortization Schedule.
Notwithstanding the foregoing, if one or more Classes did not receive principal
on any prior Payment Date in accordance with the Expected Amortization Schedule,
such shortfalls of principal shall be paid prior to the payment of principal
scheduled to be paid on the current Payment Date and shall be paid in the order
in which such amounts were scheduled to be paid previously pursuant to the
Expected Amortization Schedule; provided, however, that in no event shall a
principal payment pursuant to this Section 5(b) on any Class on a Payment Date
be greater than the amount that reduces the Outstanding Amount of such Class of
Series 2001-1 Securitization Bonds to the amount specified in the Expected
Amortization Schedule for such Class and Payment Date.
(c) Interest. On each Payment Date after the initial Payment Date,
interest will be payable on the Series 2001-1 Securitization Bonds in an amount
equal to the number of days (determined on the basis of a 360-day year of twelve
30-day months) from and including the preceding Payment Date to, but excluding,
the current Payment Date, divided by 360, times the product of:
(i) the applicable Interest Rate times
3
5
(ii) the Outstanding Amount of the related Class of
Securitization Bonds as of the close of business on the preceding Payment Date
after giving effect to all payments of principal made to the Holders of the
related Class of Series 2001-1 Securitization Bonds on such preceding Payment
Date.
With respect to the initial Payment Date, interest will be payable in
an amount equal to the number of days (determined on the basis of a 360-day year
of twelve 30-day months) from and including the Series Issuance Date to, but
excluding, the initial Payment Date, divided by 360, times the product of (i)
the applicable Interest Rate for such Class multiplied by (ii) the initial
principal amount of such Class of Securitization Bonds as of the Series Issuance
Date;
(d) Overcollateralization Amount. The Overcollateralization Amount
for the Series 2001-1 Securitization Bonds shall be as set forth in Schedule B
hereto.
(e) Required Capital Amount; Series 2001-1 Capital Subaccount. The
Required Capital Amount for the Series 2001-1 Securitization Bonds shall be
$8,750,000.
(f) No Premium. No premium will be payable in connection with the
early redemption of the Series 2001-1 Securitization Bonds.
SECTION 6. AUTHORIZED DENOMINATIONS. The Series 2001-1 Securitization
Bonds shall be issuable in the Authorized Denominations.
SECTION 7. REDEMPTION.
(a) Mandatory Redemption. The Series 2001-1 Securitization Bonds
shall not be subject to mandatory redemption.
(b) Optional Redemption. The Issuer may redeem the Securitization
Bonds of Series 2001-1, at its option, on any Payment Date in accordance with
Section 10.01 of the Indenture if after giving effect to payments that would
otherwise be made on such Payment Date, the Outstanding Amount of such Series
has been reduced to less than five percent of the initial principal balance of
such Series.
SECTION 8. CREDIT ENHANCEMENT. No credit enhancement (other than the
Overcollateralization Amount, the Required Capital Amount and any adjustments to
the Securitization Charge approved by the MPSC as contemplated in the Servicing
Agreement) is provided for the Series 2001-1 Securitization Bonds.
SECTION 9. FUNDING ACCOUNT; DELIVERY AND PAYMENT FOR THE SERIES 2001-1
SECURITIZATION BONDS; FORM OF THE SERIES 2001-1 SECURITIZATION BONDS. Prior to
March 9, 2001, the Trustee shall open for the benefit of the Issuer and Xxxxxxx
Xxxxx Xxxxxx Inc., in the name of the Trustee, a segregated trust account (the
"Funding Account"), bearing a designation clearly indicating that the funds
deposited therein shall be held for the benefit of the Issuer and Xxxxxxx Xxxxx
Barney Inc. On March 9, 2001, Xxxxxxx Xxxxx Xxxxxx Inc. shall deposit
$1,740,713,272.93 into the Funding Account. The Trustee shall deliver the Series
2001-1 Securitization Bonds to the Issuer when authenticated in accordance with
Section 2.02 of the Indenture. The Issuer hereby directs the Trustee, following
the authentication and delivery of the
4
6
Series 2001-1 Securitization Bonds pursuant to the preceding sentence, to cause
the Series 2001-1 Securitization Bonds to be transferred to Xxxxxxx Xxxxx Barney
Inc. on the book-entry system of The Depository Trust Company. Immediately after
the Series 2001-1 Securitization Bonds are transferred to Xxxxxxx Xxxxx Xxxxxx
Inc. pursuant to the preceding sentence, the Trustee shall wire all amounts on
deposit in the Funding Account, in immediately available funds, in accordance
with the written wiring instructions provided by Issuer to the Trustee in
advance of such transfer. Notwithstanding any provision in this Section 9 to the
contrary, in the event the Trustee does not cause the Series 2001-1
Securitization Bonds to be transferred to Xxxxxxx Xxxxx Barney Inc. on the book
entry system of The Depository Trust Company by 2:00 p.m. New York time on March
9, 2001, the Trustee shall wire all amounts on deposit in the Funding Account,
in immediately available funds, to Xxxxxxx Xxxxx Xxxxxx Inc., pursuant to the
written wiring instructions provided by Xxxxxxx Xxxxx Barney Inc. to the Trustee
in advance of such transfer. The Series 2001-1 Securitization Bonds shall be in
the form of Exhibit A hereto.
SECTION 10. ADMINISTRATION FEE. The Administrator shall be paid by the
Issuer a monthly fee of one-twelfth (1/12) of $250,000 with respect to the
Series 2001-1 Securitization Bonds in accordance with Section 8.02 of the
Indenture, which fee may be amended from time to time by the Issuer and the
Administrator without the consent of , or notice to, the Securitization
Bondholders.
SECTION 11. CONFIRMATION OF INDENTURE. As supplemented by this
Supplement, the Indenture is in all respects ratified and confirmed and the
Indenture, as so supplemented by this Supplement, shall be read, taken, and
construed as one and the same instrument.
SECTION 12. COUNTERPARTS. This Supplement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all of such counterparts shall together constitute but one and the same
instrument.
SECTION 13. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
5
7
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Supplement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
THE DETROIT EDISON SECURITIZATION
FUNDING LLC,
as Issuer
By: /s/ X.X. Xxxxxx
----------------------------
Name: X.X. Xxxxxx
Title: Manager
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
6
8
SCHEDULE A
Expected Amortization Schedule
Scheduled Amortization Requirement
All amounts are in United States Dollars
CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS A-5 CLASS A-6
PAYMENT DATE BALANCE BALANCE BALANCE BALANCE BALANCE BALANCE
------------ --------------- ------------- -------------- ------------- ------------- --------------
3/9/01 $124,540,305 $179,037,815 $322,791,421 $406,722,416 $326,236,780 $390,671,263
9/1/01 120,274,676 179,037,815 322,791,421 406,722,416 326,236,780 390,671,263
3/1/02 84,880,282 179,037,815 322,791,421 406,722,416 326,236,780 390,671,263
9/1/02 47,753,889 179,037,815 322,791,421 406,722,416 326,236,780 390,671,263
3/1/03 0 179,037,815 322,791,421 406,722,416 326,236,780 390,671,263
9/1/03 0 138,526,094 322,791,421 406,722,416 326,236,780 390,671,263
3/1/04 0 92,311,919 322,791,421 406,722,416 326,236,780 390,671,263
9/1/04 0 49,799,379 322,791,421 406,722,416 326,236,780 390,671,263
3/1/05 0 0 322,791,421 406,722,416 326,236,780 390,671,263
9/1/05 0 0 276,241,923 406,722,416 326,236,780 390,671,263
3/1/06 0 0 221,836,412 406,722,416 326,236,780 390,671,263
9/1/06 0 0 171,744,053 406,722,416 326,236,780 390,671,263
3/1/07 0 0 114,378,881 406,722,416 326,236,780 390,671,263
9/1/07 0 0 60,950,326 406,722,416 326,236,780 390,671,263
3/1/08 0 0 0 406,722,416 326,236,780 390,671,263
9/1/08 0 0 0 347,601,029 326,236,780 390,671,263
3/1/09 0 0 0 279,517,470 326,236,780 390,671,263
9/1/09 0 0 0 215,689,420 326,236,780 390,671,263
3/1/10 0 0 0 144,119,241 326,236,780 390,671,263
9/1/10 0 0 0 76,173,672 326,236,780 390,671,263
3/1/11 0 0 0 0 326,236,780 390,671,263
9/1/11 0 0 0 0 251,956,470 390,671,263
3/1/12 0 0 0 0 168,207,723 390,671,263
9/1/12 0 0 0 0 88,340,625 390,671,263
3/1/13 0 0 0 0 0 390,671,263
9/1/13 0 0 0 0 0 301,742,637
3/1/14 0 0 0 0 0 201,430,151
9/1/14 0 0 0 0 0 105,264,463
3/1/15 0 0 0 0 0 0
9
SCHEDULE B
Schedule of Overcollateralization Requirement
----------------------------------------------------------------------------------------------------
DATE OVERCOLLATERALIZATION DATE OVERCOLLATERALIZATION
---------- ACCOUNT BALANCE ------- ACCOUNT BALANCE
----------------------- ------------------------
----------------------------------------------------------------------------------------------------
3/9/01 $ 0 9/1/08 $4,687,500
----------------------------------------------------------------------------------------------------
9/1/01 312,500 3/1/09 5,000,000
----------------------------------------------------------------------------------------------------
3/1/02 625,000 9/1/09 5,312,500
----------------------------------------------------------------------------------------------------
9/1/02 937,500 3/1/10 5,625,000
----------------------------------------------------------------------------------------------------
3/1/03 1,250,000 9/1/10 5,937,500
----------------------------------------------------------------------------------------------------
9/1/03 1,562,500 3/1/11 6,250,000
----------------------------------------------------------------------------------------------------
3/1/04 1,875,000 9/1/11 6,562,500
----------------------------------------------------------------------------------------------------
9/1/04 2,187,500 3/1/12 6,875,000
----------------------------------------------------------------------------------------------------
3/1/05 2,500,000 9/1/12 7,187,500
----------------------------------------------------------------------------------------------------
9/1/05 2,812,500 3/1/13 7,500,000
----------------------------------------------------------------------------------------------------
3/1/06 3,125,000 9/1/13 7,812,500
----------------------------------------------------------------------------------------------------
9/1/06 3,437,500 3/1/14 8,125,000
----------------------------------------------------------------------------------------------------
3/1/07 3,750,000 9/1/14 8,437,500
----------------------------------------------------------------------------------------------------
9/1/07 4,062,500 3/1/15 8,750,000
----------------------------------------------------------------------------------------------------
3/1/08 4,375,000
----------------------------------------------------------------------------------------------------
10
Exhibit A to Series Supplement
Form of Bond
REGISTERED $
No. R-1 CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
THE PRINCIPAL OF THIS CLASS A-[ ] SECURITIZATION BOND WILL BE PAID IN
INSTALMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT
OF THIS CLASS A-[ ] SECURITIZATION BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF. THE HOLDER OF THIS CLASS A-[ ] SECURITIZATION BOND
HEREBY COVENANTS AND AGREES THAT PRIOR TO THE DATE WHICH IS ONE (1) YEAR AND ONE
(1) DAY AFTER THE PAYMENT IN FULL OF THE CLASS A-[ ] SECURITIZATION BONDS, IT
WILL NOT INSTITUTE AGAINST, OR JOIN ANY OTHER PERSON IN INSTITUTING AGAINST, THE
ISSUER ANY BANKRUPTCY, REORGANIZATION, ARRANGEMENT, INSOLVENCY OR LIQUIDATION
PROCEEDINGS OR OTHER SIMILAR PROCEEDING UNDER THE LAWS OF THE UNITED STATES OR
ANY STATE OF THE UNITED STATES. TRANSFERS OF THIS GLOBAL SECURITIZATION BOND
SHALL BE LIMITED TO TRANSFERS IN THE CLEARING AGENCY OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITIZATION BOND SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.
Exhibit A-1
11
THE DETROIT EDISON SECURITIZATION FUNDING LLC
SECURITIZATION BONDS, SERIES 2001-1, CLASS A-[ ].
Initial Principal Expected Final Final Maturity
Interest Rate Amount Payment Date Date
------------------- --------------------- ------------------ ----------------
The Detroit Edison Securitization Funding LLC, a limited liability
company formed and existing under the laws of the State of Michigan (herein
referred to as the "Issuer"), for value received, hereby promises to pay to the
Registered Holder hereof, or registered assigns, the initial principal amount
shown above in semiannual instalments on the Payment Dates (as defined below)
and in the amounts determined as specified on the reverse hereof or, if less,
the amounts determined pursuant to Section 8.02 of the Indenture, in each year,
commencing on [ ], 2001 and ending on or before the Final Maturity Date, to pay
the entire unpaid principal hereof on the Final Maturity Date and to pay
interest, at the Interest Rate shown above at a fixed rate, on each March 1 and
September 1, and if any such day is not a Business Day, the next succeeding
Business Day, commencing on September 1, 2001 and continuing until the earlier
of the payment of the principal hereof and the Final Maturity Date (each a
"Payment Date"), on the principal amount of this Class A-[ ] Securitization Bond
outstanding from time to time. Interest will be computed (i) for the first
Payment Date, on the basis of the number of days (determined on the basis of a
360-day year of twelve 30-day months) from and including the Series Issuance
Date, to but excluding the initial Payment Date, divided by 360, multiplied by [
]%, multiplied by the initial principal amount of the Class A-[ ] Securitization
Bonds, and (ii) for each succeeding Payment Date, the number of days (determined
on the basis of a 360-day year of twelve 30-day months) from and including the
preceding Payment Date to, but excluding, the current Payment Date, divided by
360, multiplied by [ ]%, multiplied by the Outstanding Amount of the Class A-[ ]
Securitization Bonds as of the close of business on the preceding Payment Date
after giving effect to all payments of principal made to the Holders of the
Class A-[ ] Securitization Bonds on such preceding Payment Date. Such principal
of and interest on this Class A-[ ] Securitization Bond shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Class A-[ ] Securitization Bond
are payable 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. All
payments made by the Issuer with respect to this Class A-[ ] Securitization Bond
shall be applied first to interest due and payable on this Class A-[ ]
Securitization Bond as provided above and then to the unpaid principal of this
Class A-[ ] Securitization Bond, all in the manner set forth in Section 8.02 of
the Indenture.
Exhibit A-2
12
Reference is made to the further provisions of this Class A-[ ]
Securitization Bond set forth on the reverse hereof, which shall have the same
effect as though fully set forth on the face of this Class A-[ ] Securitization
Bond.
Unless the certificate of authentication hereon has been executed by
the Trustee whose name appears below by manual signature, this Class A-[ ]
Securitization Bond shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
Exhibit A-3
13
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by an authorized Manager of the Issuer.
Dated:
THE DETROIT EDISON SECURITIZATION
FUNDING LLC
By:
----------------------------
Name:
Title: Manager
Exhibit A-4
14
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Class A-[ ] Securitization Bonds of the Series
2001-1 Securitization Bonds, designated above and referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee,
By:
------------------------------------
Name:
Title:
Exhibit A-5
15
REVERSE OF SECURITIZATION BOND
This Class A-[ ] Securitization Bond is one of a duly authorized issue
of Securitization Bonds of the Issuer, designated as its Securitization Bonds,
Series 2001-1 (herein called the "Securitization Bonds"), issued and to be
issued in one or more Series, which Series are issuable in one or more Classes.
The Series 2001-1 Securitization Bonds consist of six Classes, including the
Series 2001-1 Securitization Bonds, Class A-[ ] (herein called the "Class A-[ ]
Securitization Bonds"). The Class A-[ ] Securitization Bonds have been issued
under an indenture dated as of [ ], 2001, and a series supplement thereto dated
as of [ ], 2001 (such series supplement, as supplemented or amended, the "Series
Supplement" and, collectively with such indenture, as supplemented or amended,
the "Indenture"), each between the Issuer and the Bank of New York, as Trustee
(the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the Collateral pledged, the nature and extent of the
security, the respective rights, obligations and immunities thereunder of the
Issuer, the Trustee and the Holders of the Securitization Bonds and the terms
and conditions under which additional Securitization Bonds may be issued. All
terms used in this Class A-[ ] Securitization Bond that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in the Indenture.
[The Class A-[ ] Securitization Bonds, the other Classes of Series
2001-1 Securitization Bonds and any other Series of Securitization Bonds issued
by the Issuer are and will be equally and ratably secured by the Collateral
pledged as security therefor as provided in the Indenture.]
The principal of this Class A-[ ] Securitization Bond shall be payable
on each Payment Date only to the extent that amounts in the Collection Account
are available therefor, and only until the outstanding principal balance of the
Class A-[ ] Securitization Bonds on such Payment Date (after giving effect to
all payments of principal, if any, made on such Payment Date) has been reduced
to the principal balance specified in the Expected Amortization Schedule which
is attached to the Series Supplement as Schedule A, unless payable earlier
either because
(i) an Event of Default has occurred and is continuing and the
Trustee or the Holders of Securitization Bonds representing a majority
of the Outstanding Amount of the Securitization Bonds of all Series
have declared the Securitization Bonds to be immediately due and
payable in accordance with Section 5.02 of the Indenture, or
(ii) the Issuer, at its option, has called for the redemption
of the Series 2001-1 Securitization Bonds in whole pursuant to Section
7(b) of the Series Supplement and Section 10.01 of the Indenture.
However, actual principal payments may be made in lesser than expected
amounts and at later than expected times as determined pursuant to Section 8.02
of the Indenture. The entire unpaid principal amount of this Class A-[ ]
Securitization Bond shall be due and payable on the earlier of the Final
Maturity Date hereof and the Redemption Date, if any. Notwithstanding the
foregoing, the entire unpaid principal amount of the Securitization Bonds shall
be due and payable, if not then previously paid, on the date on which an Event
of Default shall have
Exhibit A-6
16
occurred and be continuing and the Trustee or the Holders of the Securitization
Bonds of all Series representing not less than a majority of the Outstanding
Amount of the Securitization Bonds have declared the Securitization Bonds to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Class A-[ ] Securitization Bonds shall
be made pro rata to the Class A-[ ] Securitization Bondholders entitled thereto
based on the respective principal amounts of the Class A-[ ] Securitization
Bonds held by them.
Payments of interest on this Class A-[ ] Securitization Bond due and
payable on each Payment Date, together with the instalment of principal payable
on this Class A-[ ] Securitization Bond on such Payment Date shall be made by
check mailed first-class, postage prepaid, to the Person whose name appears as
the Registered Holder of this Class A-[ ] Securitization Bond (or one or more
predecessors of such Securitization Bond) in the Securitization Bond Register as
of the close of business on the Record Date or in such other manner as may be
provided in the Series Supplement, except that with respect to Class A-[ ]
Securitization Bonds registered on the Record Date in the name of a Clearing
Agency or its nominee, payments will be made by wire transfer in immediately
available funds to the account designated by such Clearing Agency and except for
the final instalment of principal payable with respect to this Class A-[ ]
Securitization Bond on a Payment Date which shall be payable as provided below.
Such checks shall be mailed to the Person entitled thereto at the address of
such Person as it appears in the Securitization Bond Register as of the
applicable Record Date without requiring that this Class A-[ ] Securitization
Bond be submitted for notation of payment. Any reduction in the principal amount
of this Class A-[ ] Securitization Bond (or any one or more predecessors to such
Securitization Bond) effected by any payments made on any Payment Date shall be
binding upon all future Holders of this Class A-[ ] Securitization Bond and of
any Class A-[ ] Securitization Bond issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in
full of the then remaining unpaid principal amount of this Class A-[ ]
Securitization Bond on a Payment Date, then the Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date immediately preceding such Payment Date by notice
mailed no later than ten days prior to such final Payment Date and shall specify
that such final instalment will be payable to the Registered Holder hereof as of
the Record Date immediately preceding such final Payment Date and only upon
presentation and surrender of this Class A-[ ] Securitization Bond and shall
specify the place where this Class A-[ ] Securitization Bond may be presented
and surrendered for payment of such instalment.
The Issuer shall pay interest on overdue instalments of interest on
this Class A-[ ] Securitization Bond at the Interest Rate for Class A-[ ] to the
extent lawful.
As provided in the Indenture, the Class A-[ ] Securitization Bonds may
be redeemed, in whole, but not in part, in certain circumstances as provided in
Section 7(b) of the Series Supplement and Section 10.01 of the Indenture.
This Class A-[ ] Securitization Bond is a Securitization Bond as such
term is defined in the Statute. Principal and interest due and payable on this
Securitization Bond are payable from and secured primarily by securitization
property authorized by a financing order issued by the
Exhibit A-7
17
Michigan Public Service Commission pursuant to the Statute. Securitization
property includes the irrevocable right to impose and collect certain
non-bypassable charges (defined in the Statute as "Securitization charges") to
be included in electric utility bills of all electric service retail customers
of The Detroit Edison Company, a Michigan electric utility.
The Statute provides that:
The state pledges, for the benefit and protection of the
financing parties and the electric utility, that it will not
take or permit any action that would impair the value of
securitization property, reduce or alter, except as allowed
under [the Statute in connection with periodic adjustments to
the SB Charge], or impair the securitization charges to be
imposed, collected, and remitted to financing parties, until
the principal, interest and premium, and any other charges
incurred and contracts to be performed in connection with the
related securitization bonds have been paid and performed in
full. Any party issuing securitization bonds is authorized to
include this pledge in any documentation relating to those
bonds.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A-[ ] Securitization Bond may be
registered in the Securitization Bond Register upon surrender of this Class A-[
] Securitization Bond for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an Eligible Guarantor Institution,
and thereupon one or more new Class A-[ ] Securitization Bonds of any Authorized
Denominations and in the same aggregate initial principal amount will be issued
to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Class A-[ ] Securitization
Bond, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange.
Prior to the due presentment for registration of transfer of this Class
A-[ ] Securitization Bond, the Issuer, the Trustee and any agent of the Issuer
or the Trustee may treat the Person in whose name this Class A-[ ]
Securitization Bond is registered (as of the day of determination) as the owner
hereof for the purpose of receiving payments of principal of and interest on
this Class A-[ ] Securitization Bond and for all other purposes whatsoever,
whether or not this Class A-[ ] Securitization Bond may be overdue, and neither
the Issuer, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Securitization Bonds under the
Indenture at any time by the Issuer with the consent of the Holders of
Securitization Bonds representing a majority of the Outstanding Amount of all
Securitization Bonds at the time Outstanding of each Series or Class to be
affected and upon satisfaction of the Rating Agency Condition. The Indenture
also contains provisions permitting the Holders of Securitization Bonds
representing specified percentages of the Outstanding Amount of the
Securitization Bonds of all Series, on behalf of the Holders of all the
Exhibit A-8
18
Securitization Bonds, to waive compliance by the Issuer with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Class A-[ ]
Securitization Bond (or any one of more predecessors of such securitization
bonds) shall be conclusive and binding upon such Holder and upon all future
Holders of this Class A-[ ] Securitization Bond and of any Class A-[ ]
Securitization Bond issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Class A-[ ] Securitization Bond. The Indenture also
permits the Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Securitization Bonds issued
thereunder.
The term "Issuer" as used in this Class A-[ ] Securitization Bond
includes any successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Trustee and the Holders of
Securitization Bonds under the Indenture.
The Class A-[ ] Securitization Bonds are issuable only in registered
form in Authorized Denominations as provided in the Indenture and the Series
Supplement, subject to certain limitations therein set forth.
This Class A-[ ] Securitization Bond and the Indenture shall be
construed in accordance with the laws of the State of Michigan, without
reference to its conflict of laws provisions, and the obligations, rights and
remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this Class A-[
] Securitization Bond or of the Indenture shall alter or impair the obligation
of the Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class A-[ ] Securitization Bond at the times and rate and in
the currency herein prescribed.
Exhibit A-9
19
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___
(name and address of assignee)
the within Class A-[ ] Securitization Bond and all rights thereunder, and hereby
irrevocably constitutes and appoints
(name and address of appointee)
attorney, to transfer said Class A-[ ] Securitization Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated:
*
------------------ --------------------------------------------
Signature Guaranteed:
------------------ --------------------------------------------
* NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Class A-[ ]
Securitization Bond in every particular, without alteration, enlargement
or any change whatsoever.
Exhibit A-10
